T-Net British Columbia: Home

Member Login | Employer Login 

Tech News Tech Events Tech Careers Tech Directory Tech Stocks
T-Net 100 T-Net Members Feedback Advertising About T-Net

A bi-weekly column with timely, relevant and possibly irreverent insight into the BC technology industry.

Something Ventured:
April 18th, 2008

By Brent Holliday
Greenstone Venture Partners

Above The RIM


“Off on your way,
Hit the open road,
There is magic at your fingers.
For the spirit ever lingers,
Undemanding contact,

In your happy solitude.” – Rush, Spirit of the Radio


Pop Quiz: What is the largest Canadian company by market capitalization? Second largest?  You might be thinking Royal Bank.  Wrong! Fourth place for the former largest Canadian company.  You might be thinking oil patch companies like Encana or Suncor.  Wrong! 3rd and 5th respectively...

Second largest is Potash Corp from Saskatchewan.  Yup.  Fertilizer.  It might soon be number one, so get ready Canada... we might be known around the world for being the biggest pile of nitrogen rich sh*t anywhere!

The first place, for now, goes to Research in Motion.  After the credit crisis knocked our venerable financial institutions down a few pegs, the little technology company that could from Waterloo, ON is now the biggest in the land.  Not since Nortel led the pack in 2000, has a technology company been biggest in Canada.  Interesting, huh?

Here’s some more interesting stuff about our new national icon, the Blackberry and its maker, RIM:

  • RIM’s market capitalization of $69B is 8.2x the total market capitalization of all of the top 20 public technology companies in BC.  Alone.


  • The company sold $6B worth of Blackberries and associated services last year and should approach $10B this year.  That is up from $300M in revenue in 2003.  Does your business plan say that you will grow 20x in five years? Ok, so it does... but how many companies actually deliver on those lofty hockey stick projections?  I mean, really... the lowest year over year revenue growth they had since 2003... the LOWEST, was 47%.
  • There are 14 million Blackberry subscribers out there... and 4 million devices shipped in Q4 2007.  Sounds like a lot, right?  Well, umm, Nokia shipped 435 million phones in all of 2007 and 18.8M smartphones (RIM only sells “smartphones”) in Q4 2007.  Either RIM has a long way to go to catch Nokia, or there is a huge market opportunity in front of them, depends on your perspective.
  • RIM does not grow through acquisition.  They have never bought a “full valued” company, electing to purchase only very early stage companies or ones that are struggling.  Mike Lazaridis is a self-confessed bottom feeder preferring to focus only on the capabilities of his own engineering team.  RIM has acquired five companies in the last five years, all with terms not disclosed... which is M&A speak for too low to show you without embarrassing someone.  For comparison, Nokia has bought six companies in the past eight months!
  • Jim Ballsillie and Mike Lazaridis each own about 36M shares of RIM.  That makes them worth about $4.4B each these days.  You can buy a pretty nice house in Waterloo, ON for that kind of scratch.  I would think you could buy all of Waterloo, ON for not much more.
  • Reason to be hopeful about RIM going forward? My 60 something mother has a Pearl... and loves it.


The most amazing part of the RIM story is the number of times that the press and pundits in Canada, and sometimes on Wall Street, have counted them out.  It is innumerable.  I don’t remember Nortel ever taking heat like RIM has.  Until the Nortel meltdown in 2001 and then there was an awful lot of “I told you so”.  When the Blackberry was a glorified pager in the late 1990’s (my first one was a pager with three readable lines and the wheel on the front beside the screen) everyone assumed that the established cell phone carriers would eat their lunch.  Didn’t happen.  Then Microsoft threatened to dominate the wireless e-mail market.  After all, a simple extension of Outlook/Exchange should have been easy for the company that controls 95% of corporate e-mail...  Didn’t happen.  Palm threatened with the Treo.  Motorola tried to usurp the Blackberry with the Q (personally, that was my favourite of the pretenders). No we have the iPhone... surely Apple will crush RIM with their superior design.  Not happening.  Even a crippling patent infringement case with NTP, botched by RIM management and hugely costly in PR, let alone cash... Didn’t stop the run.

Why are we so fond of bashing RIM?  From a product point of view, it doesn’t seem that sending and receiving e-mail over wireless networks is particularly hard.  Since we are not network engineers and e-mail is so ingrained in our lives, we all figure that someone else can surely make e-mail work to any number of wireless devices.  If that has always been their bread and butter at RIM, how have they been able to stay ahead?  Well, for starters, it is hard.  And RIM engineers were the first to make it work and have made it work better and better over a variety of networks ahead of any other engineering team on the planet.  Second, they made the implementation easy with the Blackberry server.  They did the work that Microsoft should have done ten years ago and made the server product easy to install and simple to use.  Plug it in and forget it.

And the bashing is not done... the latest reason that RIM will collapse?  Their new 9000 series is an iPhone rip-off and there are some battery problems.  Sell!  Sell!  Sell!

Potash notwithstanding, we should be celebrating RIM and canonizing the RIM team... this is a huge technology success story, a global phenomenon and with our love of wireless devices and attachment to the Internet’s most killer application, e-mail, the future is very bright. 

Letters From Last Time:

There were some congratulations on my 10th anniversary column from last time:

Hi Brent, I read your bi-weekly column today.  I want to offer my congratulations to you on an incredible achievement.  I have written extensively in my career.  I know from personal experience how challenging it is to make the commitment to write a regular column and then stick to it.  I also have great respect for the writing you do and the thinking you put into it. Well done!

David Greer

Happy Anniversary! I’ve always liked your writing style by the way. There are very few people who write like they speak. Reading those people feels more like a conversation. Keep up the good work!

Joe Timlin

Brent, I’m sure I read your first one, and just about every one since. I’m looking forward to another ten years of your columns. Good thing you’re still a youngster!

Tom O'Flaherty

Allo Brent, You know Aline and I have always liked your style and dat use of the music lyric, even when you criticize me and my record. Keep up the good work.

Jean Chretien

This one is from Barry Guld who was somehow flipping through his e-mails from 2000 and came across this spoof that I had sent him… the date?  April 20th, 2000. A week after the big dotcom meltdown…

Sing this to "American Pie."

Humble Pie

A long, long week ago
I can still remember how the market used to make me smile
What I'd do when I had the chance
Is get myself a cash advance
And add another tech stock to the pile. 

But Alan Greenspan made me shiver
With every speech that he delivered
Bad news on the rate front
Still I'd take one more punt
I can't remember if I cried
When I heard about the CPI
I lost my fortune and my pride
The day the NASDAQ died   

So bye-bye to my piece of the pie
Now I'm gettin' calls for margin
'Cause my cash account's dry
It's just two weeks from a new all-time high
And now we're right back where we were in July
We're right back where we were in July   

Did you buy stocks you never heard of?
QCOM at 150 or above?
'Cos George Gilder told you so
Now do you believe in Home Depot?
Can Wal-Mart save your portfolio?
And can you teach me what's a P/E ratio?   

Well, I know that you were leveraged too
So you can't just take a long-term view
Your broker shut you down
No more margin could be found   

I never worried on the whole way up
Buying dot coms from the back of a pickup truck
But Friday I ran out of luck
It was the day the NAAAASDAQ died   

I started singin'
Bye-bye to my piece of the pie
Now I'm gettin' calls for margin
'Cause my cash account's dry
It's just two weeks from a new all-time high
And now we're right back where we were in July
Yeah we're right back where we were in July...

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

Printable edition