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Arnold Leung, CEO of Appnovation Technologies (SAUDER SCHOOL OF BUSINESS)
Arnold Leung, CEO of Appnovation Technologies (SAUDER SCHOOL OF BUSINESS)

Case Study

Success comes from reshaping, not reinventing, the wheel Add to ...

THE CHALLENGE

When Arnold Leung started Appnovation Technologies in 2007 at the lean age of 21, his mission was to create websites and mobile applications for other organizations to improve their efficiency and productivity. He also aimed to grow his company on a global scale.

However, Mr. Leung soon discovered that being a startup trying to stand out from the crowd in a competitive Web services marketplace was tough.

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“Being new and not yet having a huge portfolio of work was challenging,” he says. “In our industry, that’s crucial because it’s harder to sell Web services than something tangible like a car.”

He was also struggling to differentiate Appnovation from competitors in lower-cost countries, such as China and India, that were undercutting his rates.

THE BACKGROUND

Vancouver-based Appnovation’s story began during Mr. Leung’s bachelor of commerce studies at the Sauder School of Business at the University of British Columbi a, where he specialized in finance. After leading Enterprize Canada, one of the country’s biggest undergraduate entrepreneurship conferences, he took an internship with BMO Nesbitt Burns in its retail banking division.

During his internship, Mr. Leung began to help investment advisers develop their websites. By the time he graduated from Sauder, he was equipped with the Web development skills and experience to start his own venture.

“I’ve always been interested in computer programming and understanding how things work,” Mr. Leung says. “Now I had to decide between finding a job or turning this passion into a startup. I gave myself six months to see if the startup worked out.”

THE SOLUTION

Mr. Leung realized that, in order to differentiate and grow Appnovation, he didn’t need to reinvent the wheel. He just needed to reshape it for a smoother, faster ride.

Instead of creating websites and mobile applications from scratch, like many of his competitors, Mr. Leung decided to customize existing open-source software used to develop websites. This customization would enable him to come up with improved products in a faster time frame for his clients.

To achieve this, Mr. Leung formed alliances with five influential software companies: Acquia, Alfresco, Strobe, Sencha and Mulesoft.

By using their existing enterprise open-source software, he was able to create customized Web, mobile and intranet solutions at an accelerated rate.

He was also able to quickly expand his client base to include customers of his software partners, taking on brands like the Canadian Cancer Society, Kobo and Elle Decor.

“Customizing our partner software to create websites, intranets and apps that are tailored specifically for clients has made the whole process faster and ultimately more efficient,” Mr. Leung says.

THE RESULT

The alliances with the software companies have helped enable Appnovation’s growth to a 45-employee operation, with revenues of $4.2-million in 2011.

Together, they have recently combined other open-source software to come up with an in-house technology called “Canopy” that further speeds up the Web application development process.

“We tripled our revenue since 2010. And that’s thanks to our strong partnerships and using their software to create customized websites and apps,” Mr. Leung says.

He is now taking Appnovation into global markets where the partners are already established. “We have an office in Atlanta, Georgia, where Alfresco is based, and we are setting up in the UK, where both Alfresco and Acquia have offices,” Mr. Leung says.

His bold business moves won him the Business Development Bank of Canada’s Young Entrepreneur Award in 2011. He is also the youngest person to appear on Business in Vancouver’s top forty under 40 ranking, and has been included twice on Profit magazine’s Hot 5o List, which ranks Canada’s emerging growth companies.

Special to The Globe and Mail

Jeff Kroeker is a lecturer in the accounting division at the Sauder School of Business at the University of British Columbia.

This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.

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