You’ve climbed aboard a startup rocket and ridden it into orbit and back. Didn’t blow up on lift-off. Didn’t burn up on re-entry.
So what do you do for an encore?
Well, you climb right back in and you go to Mars.
Welcome to Sortable, the Waterloo Region-based digital ad optimization powerhouse that’s taken the advertising world by storm and is even now provisioning for a more ambitious sequel.
In less than two years, Sortable has grown from three people and whole lot of question marks into a company with more than 50 employees and an expected $50 million in revenue this year. Two months ago it reached No. 14 on Profitguide.com’s list of the 500 fastest growing companies in Canada. Fair to say its second birthday celebration today will be a happy one.
“We’re blessed,” says Sortable’s 39-year-old CEO and founder Chris Reid.
“We’ve been very fortunate. We’re highly profitable, we make a lot of money, we’re growing fast, and it’s a fun place to work.”
Sortable sells advertising optimization, ensuring the right ad gets to the right publisher for the right audience at the right time. It utilizes an engine that works behind the scenes to make real-time decisions that determine which ad networks should fill a client’s ad space.
Its motto? “Sortable, making ads suck less.”
The company hardly had a conventional beginning, even by the chaotic standards of the startup universe. Its roots trace to another Reid-led company called Snapsort, a web portal that allows users to leverage the collective knowledge of the online community to make buying decisions easier, arming purchasers with laser-relevant product information and product recommendations.
Snapsort, which launched in 2009, was successful, so much so it was bought in July of 2012 by Waterloo’s Rebellion Media. The marriage initially seemed to be one made in tech heaven, but changing investor priorities and parent company pressures soon put Reid in the position of having to fire 23 of his people. The process, as he outlined in blog post last January, “was awful.”
But Snapsort was making money and, determined not to see its core code and culture “rot away,” Reid decided he would buy the company back, pivot to a new venture, and Sortable was born.
“A lot of people thought that was crazy,” Reid says, speaking from his company’s current headquarters inside a former Kitchener sushi restaurant. “It’s unorthodox to buy back a company, period.
“It’s more unorthodox to buy back a company and then tell your investors, ‘By the way, I’m going to completely ignore this company I just bought in order to start a new business that’s totally unproven – and I’m going to pour every dollar that this business I’m buying back makes, into this new, unproven idea.”
“Our goal is to empower creators with technology and retain their relevancy.”
But crazy is a relative term and Reid was convinced, for a lot of reasons, it was the right move. To paraphrase former major league baseball pitcher Dizzy Dean, it ain’t bragging if you can back it up, and back it up Reid quickly did. He and his core team moved into the University of Waterloo’s Velocity Garage “to help us reboot the culture and be around other small startups,” and watched as the music unfolded – with the volume turned on high.
The priority now is to juggle the problems associated with lightning-fast startup growth – sorting management processes, hiring people and maintaining culture – even while simultaneously hammering on the product and growth throttle.
“Typically, with companies at our point, we’d be expected to do double or less (in terms of growth) next year,” says Reid. “But we’re (aiming to go) to three or five times (growth).”
And where will that growth come from? Reid won’t divulge specifics – “We’ve got nothing to announce,” he says – but he made it clear that he and his team have trained their eye on a particular prize: They’ve made millions of dollars finding and implementing a solution for a broken advertising model; now they’re focused on the other side of the ledger: content.
“Publishing is broken,” says Reid. “Publishers are not technology companies. Distribution and content, to me there’s no final word on how content gets discovered and distributed in the future, on who owns it, and how creators are rewarded.
“I think there’s a lot of opportunity there. It’s open season. There’s going to be a complete, utter 180 (degree turn in thinking).”
For bleeding – and in some cases, sinking – legacy publishers, for struggling freelance writers, and for those engaged in the chaotic war being waged for clicks and eyes online, that can only sound like a pretty sweet tune.
“Our goal is to empower creators with technology and retain their relevancy,” says Reid. “From the person publishing videos on YouTube, to the person with a Facebook following, to the legacy Toronto Star(s of the world), to the little blog owners.
“Everyone who wants to produce and have a voice needs to be able to maintain some level of independence and they need to be able to make money.”
Publishers and content producers, Reid passionately says, are currently making the same mistake with content that they made with advertising – handing control over to the big aggregators.
“Publishers literally handed over their classifieds to technology companies,” he says. “Over and over they handed over their businesses and their margin. So they shouldn’t be surprised with the positions they’re in.” And the same mistakes, he says, are being made with content.
“(Publishers and creators) are handing (content for free) over to, for example, Google News and complaining at the same time they still want it to be indexed (on Google’s search engine). They’ve been speaking out of both sides of their mouths.
“Our sole goal is to give publishers back everything they’ve given up and be fair about it, and help them make money. Our goal is to return some power back to the hands of the publishers and the creators.”
Resistance, he hopes, will be futile.
“(Publishers) don’t necessarily want to be helped. They’re so focused on marginal revenue increases, they don’t know what they’re doing to themselves. We’re going to have a tough time convincing them not to chase short-term gains for long-term pain.
“(But) we’re largely focused on helping publishers make money (on the advertising side), which is part of the solution. It’s easier to sell them on other things when you can help them make money.
“That will be a big theme for us in 2017.”
He acknowledges talent and people will quickly need to be put in place in order to execute the plan. Team build-out is expected to begin soon. “We’re going to build up our expertise in media and we’re going to do it here. We’re going to be making a lot of hires that will make us look a lot more like a media organization.”
"We’re uniquely fortunate in Waterloo. There are probably no small towns with as much firepower per capita."
As for talent, Reid, who started at University of Waterloo, remains a stalwart believer in the Waterloo tech ecosystem.
“We have a community here with a lot of smart people. RIM (now BlackBerry) set a foundation. We’re uniquely fortunate in Waterloo. There are probably no small towns with as much firepower per capita.”
And he bucks the prevailing notion that the region is running short on talent, or that he needs to poach from Silicon Valley, or that he can’t disrupt the publishing industry from the Waterloo-Toronto corridor.
“People have this pre-conceived notion about what you can do in Waterloo and what you can’t.
“We’ve managed to do everything from Waterloo so far because we’ve managed to grow talent here. From a talent point of view, do you build, or do you buy? I think people can get a lot more done here than they think they can.
“(Bringing talent back from the Valley) sounds great. And I’m all for accelerating the learning cycle.
“But if you compare the knowledge we can bring back to the amount of knowledge we can create, the amount we can create is vastly superior by an order of magnitude.
“If I bring somebody from the Valley I pay through the nose and I run the risk that they’re not as good as they think they are.
“So I’m not convinced by this notion that you can bring people back and instantly get lift – or that that’s even really the main choke-point.”
It was Sortable that recently posted ads riffing off the perceived discontent with Donald Trump that invited Americans to move north and work for Sortable. The ads generated plenty of media interest, but no hires.
“That was primarily to have fun,” says Reid. “It was hacking the news cycle, which is an interesting marketing tactic. It was good PR buzz. It was good for visibility. It was fun for the marketing team.”
The ads did generate two U.S. candidates. “But we learned how hard it is to bring an American up here if they don’t fit the government’s point system.
“One, a programmer, was self-taught – just like Mark Zuckerberg. The inference was that this person is clearly incapable because they didn’t graduate from college. Guess what? Bill Gates is another guy who didn’t graduate from college, and he did OK.”
Success breeds imitation. But Reid isn’t losing sleep from the inevitable emergence of competition.
“Well, I’ll say this. We were first. We have a different approach. We’re unorthodox.
“It’s hard to replicate all the development work we’ve done. There’s a lot to build. I hope you hire as well as we did. I hope your team gels as well as ours. And we have the benefit of being very profitable and we don’t have to raise money.
“And guess what, the market isn’t static.”
Which is precisely why he and his team are focused instead on their next move.
“We have big dreams for the future. I’m not saying there aren’t problems. And I’m not naïve. Rocket ships blow up. Rocket ships go off course.”
And sometimes they reach warp drive and keep going to places no one has gone before.
