Talking business. Yardstick’s path to a Billion Learners.

As I have mentioned in my most recent “life” update, I was dealt (and dealt myself) some shitty cards in 2015. None of these bad cards seem to make it into my business hand, and Yardstick celebrated many great milestones in 2015.

I am sure there was a correlation between publically losing an election and then coming back to my happy place (work) and doubling the effort to make our year great. Not that it was all just my efforts doubled, but certainly I had a chip on my shoulder and a huge debt of gratitude to pay to my business partners, our staff and customers.

I have encountered many lessons working on the development of Yardstick from just an idea, to over $20M in revenues and 75 employees. As is often the case with founder-led companies, building this business has mostly been instinctual and opportunistic; entrepreneurial of course. As we point our company towards the $100M revenue mark, (Or a Billion Learners as our BHAG instructs) I find it’s time to be more strategic and thoughtful about people development, transitions to scale, and eventually what a globally sized Yardstick might look like. Expansion to other markets, governance, even my own transition away from CEO, these are all thoughts I will spend time developing.

Finally, on the topic of business, I hope to write much more about the ideas of others I encounter. I have personally invested in several Edmonton companies over the last 4-5 years and will continue to cheerlead for them, plus feature and talk about some other ideas I see percolating in our City and Province. Hopefully in doing so, I will find the opportunity to meet smart entrepreneurs from whom I can selfishly draw inspiration from.

Edmonton is disproportionately more entrepreneurial than most cities in this great Country, and Alberta has a long way to go to diversify our economy and survive the transition away from a solely energy economy. So it goes without saying that Edmonton can be the epicenter of the diversification of Alberta’s economy. A driver at least.

I believe strongly in free-market capitalism and the role of the entrepreneurs to drive us towards prosperity… I can’t wait to talk more about it here.

…and of course in the Politics section 😉

Create opportunity through growth and fair profit

For the 7th time in 8 years, our company Yardstick has been recognized as one of the 50 fastest growing companies in the Province by Alberta Venture Magazine. I admit that the excitement of something like this can be worn down by the years of stress, work and the constant pivoting required to maintain a rapid growth rate.

Don’t get me wrong; it is a nice feeling to be recognized, as it helps with our company’s narrative, which ironically helps us maintain even further growth. In simple marketing and storytelling terms, growing is often equated to a better product or a bigger more reliable service. I suppose in some ways that is even true. We certainly are more resilient as our company framework grows and our balance sheet becomes more formidable.

But these are not the reasons I find most appealing about constant and accelerated growth. The reasons for growth in my mind are found in the ability to share the bounty with others and create opportunity.

When we founded the company, at least in our very early years, our team created a set of values from which we found guidance for several years. The company’s values have changed modestly as we have grown, but one of our earlier ones came directly from me and my experience in a past career working for another growth oriented industry. This is what I valued then… and still continue to, even if it’s not still typewritten on our company walls.

“Create opportunity through growth and fair profit.”

I worked for the same man most of my 16 years in the waste/environmental industry. He was to many, a hard-crusted autocrat who seemed to only value the bottom-line and the financial rewards that came from it. But as I spent time learning what he, the person, valued, I saw in him what many did not. He was most proud of his track record of growth and profit, when he could provide opportunity for those who worked with him, and promote people into constantly new and bigger roles. He bragged his greatest achievement was promoting over 30 staff into the desired role of District Manager in that industry.

This is the true meaning of growth to me.

I take great personal pride when given the opportunity to add members to our team. I like to hope that Yardstick is a desired employer, and it is especially rewarding to create roles for new team members on a regular basis. Beyond that, it is especially exciting when we can promote our people into more challenging and lucrative roles, when they can buy that new car they always wanted, or make that down-payment on their first home. Or bigger home as their family grows. It may not always be a monetary accomplishment, but simply the satisfaction that comes with greater responsibility or challenge.

These things are only sustainable in the updraft of a growing business. The saying that is often overused, “if your not growing, you’re dying”, holds a great deal of truth to me. A stagnating company will eventually run out of places to promote their best performers; and without that, you simply can not attract or keep the best and brightest in your company. In that way, growth fuels not only more growth, but also a culture of performance. If your team can see a place for them in the future of a bigger and stronger organization, most will be the best version of themselves, in pursuit of the personal achievement that comes with it.

So, for that reason, we grow for our employees and because of them. That’s why I love growth. It is also why this year will be like all the others; one of dramatic growth. Stay tuned as we create more opportunity for our existing staff and a few more this year.

Office Space Update – A worthy cause

Last June I posted a blog entry, looking to find an innovative use for our old Yardstick Software office space. Since we had a year left on our lease, and it was looking to be very difficult to find a sub-tenant for such a short period, we decided to try and find a tenant that may not have the funds, but would benefit by having access to this type of space.

I am very pleased to announce that since August 1st, we have been able to donate the space to Christian Immigrant Support Services. Here is a small bit on what they do to help new Canadians in our community:

We are an organization that understands the challenges and struggles with relocating to a new country. It can be overwhelming to try to understand a new land, new people, new languages, and new ways of doing things.

It is our mandate to help all immigrants receive available services to make their transition easier. We also exist to help build a better community by reducing crime through positive role-modeling, a caring environment and training. We also aim to collaborate with existing organizations to help immigrants receive complete, and holistic care.

Services Include:

  • Basic computer training and typing skills
  • Homework help for students
  • Liason between families and schools
  • Helping find employment and affordable housing
  • Assistance in resume writing and job applications
  • Summer camps for children
  • Orientation to life and culture in Edmonton and Canada
  • Language interpretors
  • Referrals to community services
  • Various workshops in the areas of health, adjusting to a new culture, family violence, youth violence and the gang, employment (how to get a job and keep it)

We are happy to have had the chance to meet the CISS team, and special recogntion to Ruth Moore of Edmonton, who connected us with this great cause. Good luck CISS, your work is valuable and appreciate by many new Edmontonians.

It takes balls…. basketballs.

I am no basketball afficianado, but I do know a thing or two about taking an organization into and through a tough battle. Sometimes getting your supporters off a fence of self-doubt means making bold statements and even bolder predictions.

In today’s much hyped announcement by Lebron James, about his decision to excercise his free agency and move to the Miami Heat, he left behind him a City and franchise in Cleveland who felt betrayed. I am under no illusion that this is just a game, and no one should make too big deal of it, but I would argue that it is also about business. So today the majority owner of the Cavaliers, Dan Gilbert, decided that he would step up and defend his brand, which is not just his team, but his City.

I LOVE this letter to his City and I really respect that he has used a significant blow to his franchise as a chance to focus himself, his organization and to hopefully bring the City on side with him. It has a VERY good chance of failing, as the challenge of winning any major sports championship is a complicated and low percentage likelyhood on a good day. BUT in so many difficult pursuits, and especially in sport where emotions can tip the scale, you have to win their hearts first.

Here is the text of the letter. Good luck to the Cavaliers; I think I will be pulling for them myself now.

Dear Cleveland, All Of Northeast Ohio and Cleveland Cavaliers Supporters Wherever You May Be Tonight;

As you now know, our former hero, who grew up in the very region that he deserted this evening, is no longer a Cleveland Cavalier.

This was announced with a several day, narcissistic, self-promotional build-up culminating with a national TV special of his “decision” unlike anything ever “witnessed” in the history of sports and probably the history of entertainment.

Clearly, this is bitterly disappointing to all of us.

The good news is that the ownership team and the rest of the hard-working, loyal, and driven staff over here at your hometown Cavaliers have not betrayed you nor NEVER will betray you.

There is so much more to tell you about the events of the recent past and our more than exciting future. Over the next several days and weeks, we will be communicating much of that to you.

You simply don’t deserve this kind of cowardly betrayal.

You have given so much and deserve so much more.

In the meantime, I want to make one statement to you tonight:

“I PERSONALLY GUARANTEE THAT THE CLEVELAND CAVALIERS WILL WIN AN NBA CHAMPIONSHIP BEFORE THE SELF-TITLED FORMER ‘KING’ WINS ONE”

You can take it to the bank.

If you thought we were motivated before tonight to bring the hardware to Cleveland, I can tell you that this shameful display of selfishness and betrayal by one of our very own has shifted our “motivation” to previously unknown and previously never experienced levels.

Some people think they should go to heaven but NOT have to die to get there.

Sorry, but that’s simply not how it works.

This shocking act of disloyalty from our home grown “chosen one” sends the exact opposite lesson of what we would want our children to learn. And “who” we would want them to grow-up to become.

But the good news is that this heartless and callous action can only serve as the antidote to the so-called “curse” on Cleveland, Ohio.

The self-declared former “King” will be taking the “curse” with him down south. And until he does “right” by Cleveland and Ohio, James (and the town where he plays) will unfortunately own this dreaded spell and bad karma.

Just watch.

Sleep well, Cleveland.

Tomorrow is a new and much brighter day….

I PROMISE you that our energy, focus, capital, knowledge and experience will be directed at one thing and one thing only:

DELIVERING YOU the championship you have long deserved and is long overdue….

Dan Gilbert
Majority Owner
Cleveland Cavaliers

Organic growth challenges

Keeping with my topic of yesterday and what will develop into a theme this week, is a topic that I have struggled with for the last year or so. External growth. My background is not running a small company, but actually running divisions/regions of much larger, publicly traded growth companies. In my previous industry (solid waste collection, landfills and environmental services); organic growth and operational excellence was important, but external growth through acquisition was much more important to increasing shareholder value.

If you can, imagine if Fedex bought UPS; the operational and administrative syngergies would be immense. Well buying and “tucking-in” garbage companies is along the same line. In the same market, usually all the garbage companies would need to travel the same streets, employ the same number of sales and admin staff, etc. so imagine the benefit of just having twice as many stops on the same route. Or better yet, if you were lucky enough to own a vertically integrated disposal or handling facility, then adding more volume to it was nearly 100% incremental profit.

Fortunately and at the same time unfortunately, when you are building a fast growth company that is in a very tight and emerging niche, like Yardstick operates in, there are far fewer overlapping companies and much less opportunity to grow your company through external growth measures. This creates challenges as we have to focus our efforts on organic growth, which although rapid in our case, has limitations. This is especially challenging when all of your growth comes from your customers adoption of emerging technology as opposed to coming from competitor organizations. It’s often the case that we are working with potential clients for months and even years before they adopt a web-based examination or training protocol, and this is exacerbated by the fact that we are dealing with regulators and certification / licensure organizations.

I am not complaining, trust me. We love the space that we are in, and especially proud of our ability to become a pre-eminent Canadian provider of online certification testing services for our clients. Also, our other niches of e-commerce enabled training partnerships has proven fantastic as well.

The challenge becomes learning to control your focus on what you do well, and then redeploy your cash flows into other non-related ventures, or look for opportunities that are vertically integrated with our existing offerings, selling different things to our current customer verticals, or entering into new spaces with different versions of our application.

We tackle this issue on a daily basis, and it will command more and more of my time. Is the distraction and increased risk worth it? Only time will tell.

Customers as partners

Our company has seen some tremendous growth over our first five years, with our revenues set to hit $5M this year. Luckily for us, 80% of this revenue is derived from recurring monthly charges, and from over 250 happy customers. Sitting and reflecting tonight how we did that, it came to me pretty quickly that we started in 2005 with our first customer as a partner.

Now I am not talking about using empty euphemisms to make our customers feel better about us taking their money. (Like when big companies call their employees “associates”). I mean really partnering with them in value-added revenue sharing partnerships, or pay-per-use license agreements, which place the risk and reward of their success on both of us.

Now it helps that when we got our start as a software company, our application was perfectly suited for organizations that wanted to SELL online exams, exam prep or training. But not every company does it this way, and most companies are simpy trying to sell the customer something, extracting their revenue and hopefully profit from the relationship, often before the customer does.

The obvious benefit of a risk based partnership for the customer is a dramatically reduced up-front cost and lowered risk as they start up their project, and then sharing in the success as the site grows. The nature of our application (multi-tenant web-application) still assured the customer that even after the site was a success, they would still be paying less than if they tried to tackle the project themselves.

The downside to us, is that we have built many projects where we have never received a penny of revenue, as the risk we shared with the customer was a bad one. Not always a bad idea, but perhaps bad timing, a change in market condition, and yes even the selection of a bad partner.

But this is not the single biggest reason we have found success with this model. The number one reason it has helped us, is that we are always working to help and improve the success the customer gets from our service. If they succeed, we succeed. This dramatically reduces any animosity between parties that inevitably happens when the vendor gets paid for something that doesn’t work for the customer, and vice versa.

Now if revenue sharing doesn’t work for your business model, that doesn’t mean that you shouldn’t still consider a model that pays you for your customers success. Every effort should be made to structure a win/win model, no matter how you charge. In the world of software especially, everyone is hurt when large up-front investments are made and the relationship turns to pay for service, instead of pay for success. For our non e-commerce partners, we use a low-cost per usage license model, ensuring that the customer only pays when the product is adopted and used by it’s stakeholders. The abandonment rate of software usage within an organization is alarming, and this means much risk to a pay-per-use model like ours, but I can guarantee you that if the product’s value quotient is correct, then the customer will be happy to pay when it gets used.

Something to consider when you are pricing your product. Take some risk and believe in your solution, if you’re right, everybody wins.

Soho Hair Salon is Launched by our Good Friend Carole Lemire

Both Jill and I are very excited and proud for our long-time friend Carole Lemire, who is about to realize her dream.

When Jill and I were in New York City, celebrating Jill’s birthday, we were lucky to be able to share the trip with my good friend and co-worker, Greg Kureluk and his fiance Carole. Of course her title of fiance was added that weekend as Greg proposed to Carole in New York’s Central Park on a snowy, but romance filled Valentines Day (and Jill’s Birthday!).

As mentioned on her first blog post, it is while in New York, sitting at the back of a trendy bar in New York’s Soho District, we listened to Carole as she described her vision for creating a hair salon that matched her passion for hair styling. It was easy to offer her our encouragement because unlike many people who set out to start a business, her focus was dead-set on changing the customer experience. Her goal wasn’t set on making more money, working less hours, or “being the boss”; it was all about taking her 13 years of training and experience, and combine it to bring a unique experience for her customers.

As we have gotten to know Carole, her most endearing quality is her passion for the creative side of her business. She has paid to train herself at the Vidal Sasoon Academy in London, and lives and breath new styles and trends. When she was building the salon (Jill and I are investors), she was thinking through every detail. Wall paint has to be a colour which is a “neutral-pallete” for style viewing, the lighting system is speciality built for stylists, even the chairs are designed for customer and stylist comfort.

Carole will be joined at the salon by fellow stylist Sandy Nault, and Carole’s sister Josee. A starting line-up of expertise which will be providing a new styling experience to Edmonton on June 1st. Good luck and congratulations ladies, both Jill and I are very happy for you!

Soho is found at www.SohoHair.ca and on facebook and Twitter as well. Give them a follow.

Stock Market vs. Individual Stocks

Today was a riveting day for North American Stocks. Also, if you don’t have much of a stomach and have a bunch of money in the markets, you probably found it extremely discouraging. But days like today are made for investing in the long term.

In total, the combined market value of all stocks on the US based markets fell by hundreds of billions, if not trillions. The reasons are really threefold, and yet none of these reasons at the individual stock level should have moved the broader market the way it has.

Basically the market sold-off because of:

1) The continued debt pressures on Greece and the European Union in supporting it

2) The devastating spread of the BP oil spill in the Gulf of Mexico

3) Continued uncertainty about how the US Federal Government will regulate the banking sector

Of course in each of these stories, there is a definite market impact on certain companies, but for the same reason, many of the great companies who are seeing a real rebound in the economy, will continue to see healthy growth on their bottom and top lines.

One of the market darlings, Apple Inc. (AAPL) announce this morning that they have sold 1 million iPads in the last few weeks since their launch. The company BLEW their last easrnings estimate out of the water and are showing an unprecedented growth. Today’s action WIPED $800 Million of value off the company. Microsoft, which also also has shown fantastic growth, lost an amazing $8 Billion in market cap.

These are great companies which trade at different multiples based on their growth, but neither of which will be affected by the news of the day.

Another example, closer to home, is Precision Drilling. A $2 Billion company, has lost over $200 Million in market value since the BP oil spill. As North America’s busiest driller, and a company which recently reported great earnings, the example is even more pronounced. By rights, Precision and most other conventional oil drillers (non off-shore) have every reason to benefit from the BP catastrophe.

So when you are investing, always do your homework, and have a reason to be invested in every stock you own. Always understand how it is valued, which is ususally based on existing or future cash flows. When opportunities like today present themselves, jump on quality stocks which will rebound quickly.

On a sidenote, the companies like BP, who will see an impact on their future cash flows, are also worth a look. If you look at the loss in company value (Market Cap) of BP since the accident, it is down an amazing $30 Billion in value. There is no way in the world that BP will ever pay that in clean-up, fines and lost profits, and so will some day return to loftier value. That said, there is a saying in the stock market which is worth repeating. Beware trying to catch a falling knofe, and that is what BP is right now. I think BP will see dontinued downward pressure until the spill is cleaned-up and we know the impact on their profits, but rest assured it will return.

So be confident in what you have invested in, and buy when presented with such great opportunities.

 

Flexible in the face of change. UnTech10 Unconference.

Below is an hour-long webinar we presented to over 100 various certification and licensure association executives on the topic of transitioning their certification testing and training program from an offline setting into an online one. I wouldn’t normally post it here, as we will make it available on our ProExams.com website, but I found this event to be interesting for a couple of reasons, which are worth commenting on.

Basically, this webinar event was never meant to happen and was established in response to the cancellation of the American Society of Association Executives Technology Conference which our company was planning to attend in Washington DC at the beginning of February. The event was cancelled 2-days prior to the show’s expected launch date due to one of the largest snow-storms to hit the city in the last 100 years. We had planned to have 5 people at the show, had shipped our booth and even had one employee stranded in DC when they made the call to cancel.

What I found amazing, in light of the last minute cancellation, was that there was an immediate effort by some of the Social Media enlightened in the ASAE group to create an “Un-Conference”. There were of course people already in the DC area who had planned to attend the event, plus thousands who couldn’t make it due to the weather, who still wanted to enjoy the connections of the conference. Within 24 hours of the cancellation, there was a website, twitter hashtag, Flickr photos, Slideshare account, basically an entire online community created around the UnTech10. Interestingly the community that was created online at that time has continued to persist with real relationships and business opportunities happening.

At the same time, the group recognized that many of the exhibitors of the planned conference will have missed the opportunity to present their company to the delegates, and a business opportunity was born. A company called Peach New Media which specializes in webinar, live training and online community work for associations created what they called the Technology Toolbox Seminar series and allowed 12 of the exhibitors to sponsor and present an online learning session on the topic of their choice. These new webinars were FREE to viewers and were marketed to tens fo thousands of association professionals.

So, from a weather related disaster, to a very well attended webinar event whose audience was perfectly aligned with our product. NO TRAVEL COSTS, NO COST TO THE AUDIENCE, and DOZENS MORE SALES LEADS for us vs. the traditional trade show experience. In my opinion this is the future of conferencing and education. Of course attending trade shows will always be important, as shaking hands and looking into the eyes of our potential clients is important, but this is a very price effective second choice and will be used more and more to replace events.

If you have an interest in losing an hour of your life and learning about Psychometrics and Online Testing, fill your boots.

If you would prefer to read more about how UnTech10 happened, I recommend this great blog post.

 

Webinar Summary

Yardstick Software Inc. operates two business that specialize in helping Associations bring their examination / testing programs and online continuing education online. We hope to share with our listeners the fundamentals of an assessment program (online or paper-based), psychometrics 101, why online delivery works, and in some cases why online delivery may never work. We also plan to review some of the technical details that you should consider when making an investment in web-based exam and e-learning applications, and finally a rough idea of pricing for program delivery.

Seminar Objectives
1) Assessment Program Fundamentals & Psychometrics 101
2) Things to consider when transition from a paper-based to web-based program
3) How do you choose between online delivery vs. offline delivery
4) Technical / IT considerations when looking to take your programs online
5) Budgetary pricing ideas for online exam and online training programs

Speakers
Greg Sadesky, PhD, Senior Psychometrician – VP – ProExams As the big man on campus for our ProExams™ Professional Testing Service, Greg applies his expertise to ensure that your tests are fair, sound, and interpretable. He works with our partners to demystify the process at any stage of the assessment cycle. An avid hacky sack athlete, Greg is passionate about rock climbing and loves to play the upright bass.

Chris LaBossiere – Co-CEO of ProExams.com & ProTraining.com As one of the founders of Yardstick software, Chris works to see our company grow through satisfied customers and strategic partnerships. A pilot and motorcycle junkie, Chris is happiest when he’s riding around town or flying above it, hunting with his dog Murphy, hanging with his family, or simply enjoying coffee and the morning paper.

Capitalism – Oliver Stone style

I won’t bother trying to describe the anticipation I have for the release of Oliver Stone’s sequel to the 1987 hit Wall Street (Trailer below). At the time of that movie, my devotion to capitalism was being formed. Back then, I naively ignored the message in the original movie as much as I was allured to the power and cunning of the main character, Gordon Gecko. At the time, and I was ONLY 16, I assumed that capitalism was a zero-sum game. You had to have losers, to have winners. Of course the entire premise of a stock or bond trade is based on such things, but again, the moral message of the movie was lost on me. I suppose I would have consciously noticed it, but repelled it like any other less than sexy do-gooder message at the time. In fact the charm of the movie to me included the young, naive win at all costs upstart, Bud Fox, played by Charlie Sheen.

The new movie, Wall Street – Money Never Sleeps, promises to be a modern day re-telling of the “Greed is Good” mentality of the original. What makes my skin crawl with excitement, is that we have had 20 years of amazing capitalism themed real-life headlines. Many of those headlines were of course because there are in real life, people like Gordon Gecko. We had the likes of Enron, Tyco, Worldcom, Bernie Maddof and the near full collapse of the financial markets due to a sketchy and unregulated Shadow Banking System (2008, 2009).

Since 1987, almost 25 years ago, this is what we have seen happen in real life:

Also, as this was all taking place, I was learning a thing or two about capitalism myself. I have learned that without capitalism, none of the economic growth which fuels common-good programs and protections simply couldn’t happen. I have learned that I can take from the system, for my own enjoyment and betterment, but at the same time contribute to the greater financial and governance eco-system through creating employment for others, and GASP paying taxes. (we’ll save the debate about inefficiencies in government and waste of tax-payers money to another blog).

SO, to summarize, you can see why I might get so excited about this movie. With all of these great truths to base the story, the fiction has never had a better chance. Like another great Oliver Stone movie, JFK, we have to suspend reality just enough to enjoy the premise of his movies, but nobody walks the line between truth and fiction better, and certainly no one makes what is morally questionable still seem to be scintillatingly sexy. (regrets to Hugh Hefner, who comes a close second).

Just watching the trailer makes me want to frickin pummel some do-gooder union types and acquire my 10 largest competitors. Luckily I am no-longer so naive. Barely.

Trailer – Wall Street, Money Never Sleeps

Bonus Video Clip  –  Gordon Gecko at his orginal best – “Greed is Good Clip”