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bi-weekly column with timely,
relevant and possibly irreverent
insight into the BC technology
industry.
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Something Ventured:
April 4th, 2008
By
Brent Holliday
Greenstone Venture Partners
Thirty
Six Hundred Days of Tech
“I
was down on a frown
When the messenger brought me a letter.
I was raised by the praise
Of a fan who said I upset her.
Any girl in the world could
Have easily known me better.
She said, You're strange, but don't change, and I let
her.” – Neil Young, Mr. Soul
You know you have been around too long
when... How should I finish that line? Let’s see.
When you have 250 columns still posted on the Internet
for any search engine to find... When your wife has
stopped complaining about the very late Thursday nights
or very early Friday mornings every couple of weeks...
When the Premier of the province was Glen Clark and
Priceline.com went public the same day as your first
column... When the Canucks used to miss the playoffs
with regularity (oh, sorry... that’s quite current!)...
So here we are. Thanks for coming.
Hands up any of you that read my April 6th,
1998 column... on April 6th, 1998. OK, none
of you. Well if you had, among the many pearls of
wisdom my 31 year old brain had contrived was the fact
that BC’s technology industry needed big anchor
companies to thrive. Duh. What penetrating insight I
had. My favourite part of that first column was that I
thought, at the time, we should bet big on hydrogen as
the next gold rush. That Ballard Power was the next
Intel. Ummm. With apologies to the many fine engineers
and staff at Ballard, it didn’t quite turn out that
way. Hydrogen is still a peripheral green technology 10
years hence. Other clean technology has leapt to the
fore.
Now you know why my venture capital
career veered away from clean technologies soon
thereafter.
Ten years went by in a flash, it seems.
Or did it. Think about what you were doing in the
spring of 1998. The dot com explosion was on. Bill
Clinton was humping interns. Downtown Vancouver’s
skyline was missing a thousand condos or so. It was a
LONG time ago in some respects. In the technology
universe we hadn’t even heard of Google, 360 Networks,
Infowave or Worldcom and no one was paying attention to
PMC-Sierra, JDS Fitel or our current largest technology
company MDA (possibly because it had been tucked under a
US company called Orbital Sciences).
In 1998, BC’s technology industry
represented just under 3% of the provincial GDP. It was
an impressive step up from 1.3% in 1984. Despite the
total meltdown of technology in 2001, the dramatic
reduction in jobs in the sector in the following years
and the drying up of capital, the sector is now at 5.3%
(2006) and growing. That’s 75% up, despite swinging way
down for a few years. Nice job entrepreneurs.
Over the years I have made predictions
that, well, frankly were wrong (I called the end to the
dotcom bubble... a year and a half early. I wrote a very
bullish column in July of 2000 saying that the best was
yet to come... what I should have said was five years
from now). But those were mere timing issues, really.
Some of the columns are downright funny in their
complete miss of what really transpired. For instance,
in early 2000 I told you about new business models on
the Internet and totally dismissed advertising as a
business model... I’m glad the guys at Google
listened! At the time everyone wanted to be an
intermediary. Remember the mad rush to create on-line
marketplaces for business to business transactions? We
should all be slapped for that craziness...
But my worst timing for a prediction, as
it turned out, was 10 days before September 11th,
2001. None of us could have known, but it was odd and
coincidental that I picked an end of summer time to make
predictions about how we would pull out of what was
already a disastrous year for technology. The most
difficult column I wrote was the next one on September
14th. What the hell could you talk about?
As I said in that column, talking business seemed a bit
insensitive and trite at that moment.
My favourite columns, without a doubt,
are the stories of the successes and the people.
Writing about Cecil Green, founder of Texas Instruments
and his connections to Vancouver was special. From
Radical Entertainment, HotHaus, Abatis, Creo, Active
State, Class Software, Convedia and Club Penguin, I was
able to give you a little more insight into what
happened at these companies to become as successful as
they did. I enjoy that part of the writing immensely.
If I was to become a writer full time, it would be the
non-fiction war stories and personal stories that I
would find easiest to write.
I would like to thank Mike Boeur, owner
of this fine web site, for his patience with me missing
deadlines, having typos in my “finished” work and for
giving me the opportunity to hone my craft on an
unsuspecting crowd of people looking for information
about BC’s technology industry. I guess we can tell
them now Mike... I had never published any writing
before that first column in 1998. And it still shows!
I thought I would celebrate this
milestone by picking a few of my favourite moments that
occurred on my watch over the past decade in BC’s tech
industry...
Biggest $$$ Win In Technology – HotHaus –
In the immediate moments after a successful M&A
announcement or IPO, people look really wealthy on
paper. But over time, the actual dollars that came out
of some of the bigger tech deals (Abatis, Sierra
Wireless, 360 Networks, Octiga Bay) were much smaller
due to the downturn in the tech stocks. Hothaus sold to
Broadcom in the summer of 1999. Its split adjusted
price in June of 1999 was $37 a share. It’s $21 a share
today, but was as high as $40 just 8 months ago. It
didn’t drop below $37 for almost two years after the
Hothaus acquisition. Plenty of time for the VCs and
founders to sell their stock. I think that the
shareholders made at least the $415M in announced deal
value...
Honorable mention goes to Club Penguin at
$350M in cash. In time, they may pull $700M out of
Disney and would top my list.
Best Product of the Decade – Crystal
Reports – This product preceded my decade by almost
another decade and will probably go on in its new
incarnations with SAP. Without a doubt, it is the
biggest, most well known technology product to be “Made
In BC” over this time frame.
Honorable mention goes to MPR Teltech’s
ATM Access switch which was bought by Newbridge and went
on to make hundreds of millions of dollars of sales for
Newbridge over many years. One of the alumni can
correct me here, but I believe it was unloaded in 1997
for about $5M. Nice deal BC Tel!
Forrest Gump Award for the Company that
just keeps on running – This has to go to MDA. Over the
last decade, they have steadily grown up and to the
right. They have not had spectacular gains or
spectacular crashes. They just kept going until
suddenly they are the biggest technology company in the
land, leaving such high fliers as Ballard, Angiotech,
QLT and Sierra Wireless sick from the roller coaster
ride they have been on.
Honorable mention to Electronic Arts
Canada, the mother ship of game development studios.
Through the entire decade they have been there, churning
out great games, great earnings and great people.
Those are my choices. I’m sure yours may
be different. There are plenty of other successes and
even more failures. But that’s life in the technology
business. It has been a great ride, despite the
sickening drop in the middle. I look forward to another
decade in the technology business and hopefully another
significant gain in the industry’s share of the
provincial GDP. Excuse me now, I have to go blow out
some candles...
What Do You Think? Talk Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
myself, thanks).
Something Ventured Archive
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