Bruce Croxon likes a fighter. So much so that Round13, the company he started to back early-stage technology startups, is actually named for the 1975 heavyweight fight between Joe Frazier and Muhammad Ali.
The serial entrepreneur and investor, best known for co-founding online dating service Lavalife and now a rookie dragon on Dragons’ Den, really does believe that “stick-to-it-ess” is a necessary ingredient for success that allows you to get through the failures every entrepreneur faces along the way.
“There’s no replacement for it,” says the 51-year-old, who co-founded Lavalife in 1987 and led its sale in 2010 to First Media Group Inc. for $180-million.
He shares his insights on Lavalife’s rapid rise to the top, what he looks for in entrepreneurs and what it takes to make a good pitch.
Q: How did Lavalife come about?
A: People tend to think it was a product of the Internet boom, but our first brand was Telepersonals in the late eighties that morphed into Lava. The idea really came from two of my partners, right before voice-mail technology hit, who decided to use that technology as a way to meet people. They designed a system that allowed people to call in and leave an ad, send or pick up messages, versus the old archaic way of writing in to The Globe and Mail at the back of the classifieds. Then, we launched Webpersonals in 1997, one of the first social media/dating sites and rebranded both of those platforms into Lavalife in 2001.
Q: Was there a vision from the beginning or did you just adapt as the technology became available?
A: I’d say both are true. Our vision was clear. We wanted to provide a place where singles, specifically women, could feel safe interacting with people they wanted to meet for a date or a longer relationship, so the vision was consistent. As new technologies and ways for people to interact came onboard, we were the first mover.
Q: With four co-founders, how did your role develop?
A: We had a very consensus-based partnership right the way through until we took investment in, when the investors demanded more of a traditional hierarchy. We had taken the company from 0 to $60-million to $65 million in sales with basically each of us handling our own area, without a CEO title amongst us. I was always marketing and business development, one partner was finance, another was product development and one was operations out in the field setting up call centres and hiring people in every city we opened in. That’s how it was done in the old days.
As we grew up as a company, my role evolved to be more the CEO. The abilities were just in different areas. I was more of a generalist, I guess. But the partnerships for the most part stayed together and we’re still excellent friends today. It’s a great example of how four guys working together could achieve way more than any one of us could on their own.
Q: Were you pretty informal about how you worked?
A: No. We were pretty buttoned down in terms of our organizational development with systems for everything. We met every Tuesday starting at 3 and ending somewhere around midnight. Most of the major decisions from anybody’s area were made as a consensus, with one of us having to convince the other three that this was the direction to go. The cost was that things tended to move a little slower, but the benefit, which to me outweighs the cost, was that we made very good decisions.
Q: What was the toughest challenge in developing the company?
A: I’ve never encountered a situation like it before or since. We were in an area where there wasn’t a lot of competition, the margins were insanely high and it was new. Plus the technology that we developed was a lot more expensive to do than it would be today, so there was a technology barrier to entry to the business that we were in as well.
Our challenges were really around managing the rapid growth. We peaked out at 600 employees at one time and it was the first job for a lot of those young people. So we felt it was incumbent on us to be good at giving them direction and be very clear on what they were trying to achieve every day. We were a very inclusive culture, so we enrolled everybody in the decision-making process, and that required a good deal of organization.