There’s a certain freedom that comes with being a billionaire.
This much seemed clear when Sir Terry Matthews, one of Canada’s most accomplished tech titans, took the podium at the Waterloo Inn for a lunchtime event on Wednesday.
Matthews is the 71-year-old Welsh-Canadian who helped put the Ottawa area on the global tech map when he co-founded Mitel with Michael Cowpland in the early 1970s. He went on to start Newbridge Networks and more than 100 other tech companies.
Hosted by Canada’s Technology Triangle, Matthews’ speech, “Strong Companies = Successful Cities,” made only a passing glance at its title. Instead, the blunt-spoken serial entrepreneur delivered an off-the-cuff retrospective of his career, sharing a string of disparate but illuminating pearls of wisdom about business, technology and success, topped off with some thoughts on the future.
The free-wheeling talk, before a who’s who of Waterloo Region business, politics and academia, is best summed up in the quotes Matthews delivered, the best of which follow here.
“You’ll notice that I don’t have a presentation. I often find that if you run a presentation, people just stare at the presentation and don’t listen to the speaker.” - On his refusal to use slides to illustrate his speeches
“I couldn’t even give them away. I was knocking on doors with this silent lawnmower, and nobody showed interest.” - On the cordless electric lawnmowers he and Cowpland tried to sell to Canadians after they launched Mitel in 1972
“We pulled in $120,000 and that fired up enough working capital to make the first units, and the company took off, more than doubling every year for the next 10 years. We went public in 1977 and I became very wealthy. I could have retired, no question about it.” - On Mitel’s quick and early success after the company ditched the lawnmowers and developed a new and less expensive type of tone receiver for touchtone phones
“The first half a dozen people worked for nothing, but I gave them ownership. That changed the formula. That changed the relationship. We came out with products so fast you would never believe it.” - On how Mitel hired recent university grads during its startup phase and paid them in shares, a practice Matthews has carried on in subsequent ventures
“They work even harder and persuade people to put even more money in, because of the attachment. The truth is, it was wrong from the get-go.” - On startup founders who become so enamoured of their ideas that they overlook the fact that customers don’t want their product
“You have to take the planet with the technology you’ve got, because some other rotten sod who’s only got 80 per cent of what you’ve got might already be in England, Germany, France, the U.S., New Zealand, Australia, China, and you’re dead. It’s only a matter of time before you’re going to be wiped out by a company that doesn’t have a product as strong as yours, but nevertheless they’ve gone global fast. They’ve taken the low-hanging fruit and you’re gone.” - On the importance of going global quickly
“Every $1 share in Mitel in 1973, for these young people who worked for nothing, turned into $2.5 million. Nobody complained.” - On how Mitel’s introduction of stock options motivated its workforce and forced larger competitors to follow suit
Terry Matthews: “Opportunities are through the roof for those who get it right.”
(Communitech photo: Anthony Reinhart)
“I never start companies or have ownership and say, ‘It’s my baby, you can’t have it.’ Business is business. You have to be practical, pragmatic. And if somebody wants to pay way over what it’s worth, why are you fighting it? Move on and do something else.” - On being willing to let go of a company you founded when the time is right
“My enjoyment these days is taking young people, who often don’t know what they don’t know – they think they know everything, but they don’t – and you take people with a little greying hair . . . people who have been through it before, to guide them, and you can get success beyond belief.” - On the value of a little senior supervision for young startup teams
“We live in a future where you expect to have video on demand; you expect to pass over pictures to God knows how many friends and family. The networking of pictures and video and communications by enterprises and individuals has just exploded beyond belief.” - On why the expansion of the world’s broadband networks will continue to present big opportunities to entrepreneurs
“In 40 years, it’s gone from bankruptcy to the most valuable company in the world, and here’s the rub: They don’t actually make anything. They design stuff, they sell stuff, but they don’t make anything.” - On the stratospheric success of Apple (though his timeline was a bit off – Apple, founded in 1976, came closest to bankruptcy in 1997.)
“I personally tend to avoid it, even though I have tons of friends there, because really, it’s a little sharks’ nest there. You go in thinking you’re smart; you’re looking maybe for some people to put some VC funding in, and you explain what you’re doing and they pass it along within the hour to potential competitors.” - On Silicon Valley
“If you don’t spend money on R and D, you will definitely die.” - On the importance of investing in research and development
“If you take a look at where I live in Kanata, in Ottawa, there are now 22,000 tech workers. When I started Mitel with Mike Cowpland in 1972, if you’d said ‘this is a high-tech area,’ you’d have to be joking. It would be a joke. It’s no joke now.” - On Ottawa’s growth as a technology hub
“And that’s what’s going on in Waterloo. I just encourage you to remember, it’s got to be part of the DNA to share. Just remember that.” - On the importance of large tech companies fostering ecosystems of smaller companies in their communities
“The competition is ferocious. Can Canadians win? Yes they can. We need more companies popping through a billion dollars. Valuations tend to be a little light here. I really don’t like that.” - On the performance of the tech sector in Canada relative to the U.S.
“I mean, should ladies be in high tech? I’m just wondering . . .” - On women in technology, in an apparent stab at self-satire
“By the way, just to address something I said earlier: Some of the best engineers I ever hired were female engineers. Some of the best CEOs with the hardest work ethic were female CEOs. Just in case you got that wrong.” - See previous quote
“Quite a lot of people get attracted a little bit to higher salaries in the Valley, but they come back. It’s not just about salaries; it’s about quality of life, and it isn’t just about living in sun every day. I mean, California’s pretty close to a desert, and the traffic congestion is beyond belief.” - On why Ottawa, Waterloo Region and other tech communities are able to compete with Silicon Valley for talent
“My favourite sort of person is somebody who is recently retired from an auditing company. Very early on, make sure you have some good mentors to come on as board members.” - On why startups need sound board governance to attract investors
“You never use the word ‘awesome.’ If you see ‘very,’ take ‘very’ out. Big is still big; very big is still big. Never put ‘very’ in. It has to be controlled; more along the lines of ‘I am pleased to report . . .’ More along the lines of ‘as expected,’ or ‘as planned.’ These are words which show there’s control, not something that just was happenstance.” - On the importance of getting the wording right in quarterly reports to key stakeholders
“Opportunities are through the roof for those who get it right, and if you think that the opportunities have ended, you’d be very, very much mistaken. The opportunity is like going into a candy store. I mean, whatever you want. It’s just full of opportunities.” - On the future
