Bruce Croxon and his partners, now prospective multimillionaires as a result of a takeover deal, began applying technology to the lonely singles market so long ago that people weren't using voice mail, let alone e-mail, the Toronto entrepreneur recalled last night.
In 1987, the four were 23 to 25 years old and working in a cable-strewn office above a plant store at Bay and Scollard streets in Toronto's Yorkville area. They were developing what became Lavalife Inc. ("Where singles click"), a phone and Internet dating service that a U.S. company agreed to buy yesterday for $152.5-million, paying for a slice of a market that some people suggest rivals pornography as the biggest category of paid on-line content.
Their early system, Telepersonals, was strictly phone-based.
"We started using technology to set up voice mailboxes and get people to leave messages for each other," Mr. Croxon said, "and that was really the first commercial application of interactive voice response."
The operation as "fairly chaotic," he said, "a lot of keyboards and half computers lying around, telephone lines running into desktop computers -- which is really what the technology was at the time -- and a fairly communal open space, no real offices or anything. We had a little retail section where customers could come in and drop off cash to buy time on the system."
Nowadays, Lavalife claims 700,000 U.S., Canadian and Australian clients. It lets them post pictures and descriptions for nothing but charges $1.20 (U.S.) or more when one of them wants to send a first e-mail to another. Replies are free.
If all goes as planned, Lavalife's deal with MemberWorks Inc. of Stamford, Conn., will close around April 1. It is not clear how rich the four men will be because they won't say how much of Lavalife they own. Other people bought into the Toronto company in private financings in the late 1990s.
The four, now in their early 40s, are:
Mr. Croxon, Lavalife's chief executive officer;
Ed Lum, whose title is chief product officer;
Nick Paine, a vice-president now based in London, and
Dave Chamandy, who is no longer active in the company but still owns a piece of it.
All are originally from Toronto except Mr. Paine, who is from North Bay, Ont., Mr. Croxon said. Mr. Chamandy is involved in a Montreal software startup company, he said.
Mr. Croxon credits a fifth man -- Kenyan-born entrepreneur Rasool Verjee -- with "actually creating the idea" on which the company is based, and praises Mr. Lum and Mr. Chamandy for "brainstorming the technology" of the original system.
"Really we were there because of Rasool," he said. "My partner at the time, Nick, and I were doing some work with him, and Dave and Ed were doing some work with him, and it was through Rasool that the five of us got together. But Rasool didn't stick with it very long. He is a true-blue entrepreneur and moved on quickly and the four of us stayed and built a company around it."
Except for Mr. Paine, they were short on educational qualifications, he said. "I don't think I picked up my degree, Nick had a business-school degree and the other two guys I'm not even sure they finished, so we were pretty entrepreneurial. None of us were particularly technical. Ed Lum is a good product-design guy, understanding what the technology can do."
Their company, which began calling itself Lavalife only two years ago, has more than 300 employees, most in the Toronto area, and they do not see themselves as selling out to Americans, he said. "The company's still going to be located in Toronto. It's still going to have 90-odd per cent of its employees as Canadians."
It has been on its own "for many years, and specifically the last five, as a lot of larger, better-backed, better-funded U.S. companies have entered the fray -- a lot of household names such as Yahoo and AOL. . . . I'm quite happy to take American money to help us continue to be one of the leaders."