How is Edmonton doing in “diversifying” its manufacturing base, lessening our dependence — as so many politicians keep saying must be done — on industries based on oil and gas?
This series of Hicks on Biz columns is an attempt to understand the size of the challenge. In previous and upcoming columns, I’ve visited Edmonton companies not directly tied to the fortunes of the oil patch, to find out the challenges and advantages of making and selling non-oil-related products out of Edmonton.
Chris LaBoissiere, co-founder and CEO of the rapidly growing online testing and training company Yardstick, has long been an active business leader in Edmonton.
He brings valuable perspective of the city’s information technology (IT) sector as a whole, and the challenges of growing Yardstick Testing and Training in particular.
The company is a leader in the complex business of providing online training, testing and certification, especially for regulated businesses where safety and standards must be of the highest order.
LaBoissiere and co-founder/chief technical officer Don Riep has grown Yardstick at about 25 per cent per year. Currently about 100 highly skilled IT employees are on staff.
“The business environment here is neutral compared to other jurisdictions,” says LaBoissiere, echoing what other executives of non-oil related companies have said in this series of columns.
In other words, Yardstick’s ability to raise capital, pay its taxes, attract skilled employees, and cover labour and transportation costs is about the same as it’d be in cities of similar size across North America.
“The federal government offers tax credits for research, which is an advantage,” says LaBoissiere. “The Americans don’t think of us as foreigners. A low Canadian dollar helps us — a third of our sales are in the USA, five per cent currently in Europe.”
Finding skilled IT specialists and managers in Edmonton has much improved — up to a point. With other Edmonton companies like Jobber, Intuit, Granify, Bioware and Gfycat, IT has grown into an identifiable cluster, with sufficient job openings that executives have career opportunities without the need to move — “like quarterbacks in the Canadian Football League,” jokes LaBoissiere.
“Specialized IT talent is available here. Yardstick has 10 PhDs on staff, all doing specialty work. Half of them work from their homes.”
In general, LaBoissiere would like to see local governments taking a chance, purchasing and using locally made software products as a means of encouraging business development in Edmonton and Alberta.
Has the business environment and quality of life in Edmonton improved over the last five to 10 years?
“Yes,” says LaBoissiere without hesitation. “Dramatically: But remember, the same thing is happening in lots of other cities across Canada and United States.”
In retrospect, building an Edmonton-based software company from startup, from $0 revenue in 2005 to a satisfying $32 million in sales last year, wasn’t that difficult, reflects LaBoissiere.
The great challenge now is to bring Yardstick into the big leagues of software companies.
Now able to raise capital from reputable lenders and investment firms, Yardstick is accelerating its growth through the purchase and merger of existing software companies — mostly out of town.
And Yardstick is about to launch LearnerVerified, a new product to combat online learner fraud.
Online learner fraud is a huge problem in the online testing industry. Yardstick believes it has the solution, able to stop “learner fraud” as part of any online testing or training program.
LaBoissiere and Riep believe LearnerVerified and other new products can lift Yardstick from $32 million to $100 million annually in sales, in three to five years.
Problem: Going global, finding and servicing customers the world over, means Yardstick must bring in internationally experienced, top-notch, IT business development executives with global networks.
“Up until now, we — our long-time executive team — were the talent,” says LaBoissiere. “But now, to keep growing, we need to bring in world-class IT executive talent.
“Those are the people we have difficulty attracting to Edmonton,” says LaBoissiere. “That’s the single greatest challenge to growing a world-class company in this city.”