Traditionally, launching a business involves an army of investors, consultants and government agencies; software and books provide further ammunition. But I’m seeing more entrepreneurs winging it these days. Starting on a wing and a prayer, they offer a service, market as best they can and explore while they’re running their businesses, not before. That can be quite a thrill when the business is young and you’re happy to be earning enough to pay your bills. But eventually the realities of running a growing business catch up with you.
THE PROBLEM
In 2000 19-year-old Harry Chemko and partner Mark Williams, both fresh out of a university entrepreneurship program, decided to start a business. The two had neither resources nor a real idea what they were going to do, but they had an aptitude for web programming, so they founded Elastic Path Software Inc., which would eventually supply e-commerce tools to websites.
The two entrepreneurs borrowed $15,000 from the Canadian Youth Business Foundation and began marketing themselves as website designers. Within two years, they had a small client list and a customized e-commerce application they had developed. The original software offered clients a flexible, low-cost e-commerce platform they could add to their websites. The partners had found a niche, but they were still running the company by the seat of their pants.
THE SOLUTION
By 2004 the Elastic Path founders realized they needed to be less ad hoc and more proactive, so they sought advisers to help them understand their market positioning. Within a year, they created velocity, especially after one of the advisers, software veteran Gord Janzen, became chief operating officer. Soon the company started adding marketing-oriented features to the platform to capture the attention of marketing executives – the people who have a say in the purchase of third-party e-commerce software.
By 2007 the duo decided to also move up the customer ladder. Top e-commerce companies usually build their own e-commerce applications and look to outside sources for enhancements. So Elastic Path developed a platform to provide these enhancements. But unlike big competitors, which protect all their code, thus forcing ongoing and expensive consultation, Chemko and Williams added flexibility.
Elastic Path’s flexible, open-source and customizable software is aimed at enterprises with unique business models, selling channels or product offerings that can’t be handled by traditional off-the-shelf e-commerce platforms. Working with an array of deployment and technical partners, Elastic Path generated $10 million in revenue in 2008, and the founders expect to double that in 2009. The company has expanded to the United Kingdom, and it’s still private.
In 2007 Elastic Path won its bid to create an online “store” for the 2010 Olympics, and now plans to spin that system into another line of business – fully installable e-commerce stores. The company’s growth has not gone unrecognized. Chemko was recently named one of B.C.’s top 40 under 40 businesspeople. Last year Profit magazine listed Elastic Path No. 23 in its annual ranking of Canada’s 100 fastest-growing companies. Chemko has been feted in the National Post and by his alma mater Royal Roads University.
LESSONS
• Be the captain of your own ship. Elastic Path is still private, which allowed it to find its own way instead of being forced into a hot market.
• Get into your customers’ skin. Many say it; few do it. Elastic Path tries to think like a buyer, not a provider.
• Find the right advisers. Instead of anyone with money, Elastic Path sought those with specific knowledge.
