Back in the mid-nineties, when biologist Edward Quilty realized how technology was disrupting the water monitoring market, he headed back to school for a PhD in hydro-informatics at the University of British Columbia.
Instead of collecting samples in bottles for analysis in a laboratory, aquatic ecologists could now collect data continuously from monitoring equipment installed directly in the natural environment – in rivers, lakes and oceans. The flood of data changed the industry.
"You were getting one sample every minute rather than one a month," says the 42-year-old Mr. Quilty. "Instead of a snapshot, it was like looking at an entire movie."
Mr. Quilty seized the opportunity. Before even finishing his degree, he founded Aquatic Informatics Inc. – a Vancouver-based company that makes the Aquarius brand software to manage and analyze water data – in 2003. Previously, Mr. Quilty worked for the B.C. environment ministry as a stream ecologist and had also run his own consulting business.
A private company, Aquatic Informatics grew its revenues by 30 per cent last year, to $10-million annually, and doubled the company's size to 80 people by adding 40 new employees over the past 18-months. Customers include the U.S. Geological Survey and Water Survey of Canada as well as hundreds of government agencies and water authorities, hydropower operators, mining companies, consulting and engineering organizations, and academic groups in 40 countries around the world.
Aquatic Informatics has won an Environmental Business Journal award for the past two years for outstanding technology innovation and business performance in the environmental industry.
Q: What prompted your expansion?
A: Two years ago we won an $8-million plus project with the U.S. Geological Survey. That prompted the additional hiring and our expansion globally. We also put an office in Australia and hired there. Even though our first clients were in B.C., our focus early on was the much larger U.S. market. Our prime competition was from overseas in Europe so we thought we'd have a bit of an advantage going into the U.S. but knew it would be tough. It's very conservative market with a high barrier for entry so we had to work hard to get going. But we thought globally from the get go.
Q: Why is the water market so conservative?
A: We sell largely to government agencies and hydropower companies that run mission critical systems for generating hydropower and flood forecasting where life and property are at risk, and then there's drinking water and water allocation for farmers, so the stakes are really high. In arid regions, such as in California, Nevada and Arizona, really accurate water information is very important. There's also billions of dollars involved in hydropower.
Q: How big is your market?
A: The whole water market includes pipes, pumps and treatment systems but our market for data analytics and management of water data is more like $500-million for the total global market. North America a about a quarter of that.
Q: You're a scientist first. How did you launch your own company?
A: I was already quite entrepreneurial. Since I had my own consulting firm previously, I had some experience. We were lucky to have an early version of the software that we wrote right out of grad school so I was able to get some revenue from previous clients such as BC Environment, our first customer. So software sales and government grants such as one from the National Research Council's IRAP (Industrial Research Assistance) program helped get the company off the ground initially. Then we went out and did an early round for a bit of love money – from mum and dad, brothers, friends and the guys on my hockey team. It was enough to get us through the first year.
We got really fortunate in 2004 when an request for proposal (RFP) came out with the U.S. Geological Survey. We bid on it and won, to our surprise at the time. It was worth a half million dollars so it really got us going. That was our first project with them, basically building a tool set for more accurately determining how much flow is in a river. They're leaders in the world in that space. We owned the IP and took that to market, which was great.
Q: What was your biggest learning curve in becoming an entrepreneur?
A: Going from being a scientist to a business person was very different. You're building a team, running the finances. I did the same kind of thing as when I went back to grad school to get the skill set for processing data. After starting the company, I joined a business training program in Vancouver – sort of like an MBA but taught by other CEOs. We met for a full day once a month for three years. That was extremely practical for learning the best practices in business. I also built up a large network in the business community which I didn't have working in the scientific community. Ten years later, I still meet monthly with that original group of about 10 CEOs.
Q: What were the biggest lessons from that group?
A: Hiring thoroughbreds. I learned early not to be afraid to hire the best people and pay for it. When you're a startup, it can be a little painful hiring expensive people, but you get what you pay for.
Second is to get to revenues quickly so you can build the business off revenues as much as you can. Pretty early on, we were an agile culture where we'd work very closely with customers like the U.S. Geological Survey. So rather than building something and taking it to market to test it, we'd work closely with the customer and build little pieces at a time. So it was very collaborative and agile.
Third was to think globally. We have customers in 40 countries now including Afghanistan, Sri Lanka and the Philippines. We're always keen to get out there and go after other markets.
Q: Have you have taken on investors?
A: We have. We've mostly grown off revenue organically but with high growth, we needed some growth capital two years ago, so we took on an investment from Renewal Funds, which is through Renewal Partners, a Vancouver-based social environmental venture fund. It was a mutual good fit because they looked equally at financial returns and the environmental returns. As the majority owner of the company, I was quite worried – you do worry about losing control or bringing in people who could damage the business – but they've been very supportive – a great partner.
Q: Why did you decide to offer employees shares in the company?
A: We made that decision almost from the beginning because we thought it was an important way to attract talent, especially in the early days when we were competing with the big software players in the market. We've continued that as we've grown. It's important, particularly for key staff, to keep them interested and reward them for putting in extra effort.
Q: How do you hire?
A: There are a lot of large software companies here like Salesforce, Facebook and Amazon, so it's quite competitive. We were worried a year and a half ago that we wouldn't be able to meet our hiring objectives, but we competed with all the big dogs in town largely based on two things. One is our appealing culture and the other is because we're working in a really important space. There's nothing more important than water, so staff want to come and join a mission rather than work in something like gaming or social media. There's a bit of soul to protecting the environment and flood forecasting. People can make difference. We found that was really our competitive edge to attract people. Some people called it a more adult career.
Q: How long is you interview process?
A: We have a pretty thorough process but we move quickly. We try to hire in days if we can. A candidate will go through multiple interviews with upwards of 10 people by the end, but we try to do it all within one week. People in software development are snapped up quickly in Vancouver, so we move fast.
Q: What's the deciding factor?
A: After specific technical skills, there's cultural fit which is hard to put a finger on. It's tricky but ultimately, it's the beer test. Do you want to sit down and have a beer with this person? Often we'll go to a pub and have lunch with the person as a final test. That's usually where I join the interview.
Q: What's your culture like?
A: It's very collegial with lots of laughter and team spirit. Much comes from the leadership group of people we hired early on. We do a lot for our staff – yoga, company lunches and barbecues. We have espresso machines and organic food delivered every week so it's pretty comfortable.
Q: How much do you travel?
A: Probably about 50 per cent of the time. I love breaking down the doors of new markets but in the last year, we've really built up our management team on the international side so it's provided some relief for me. I also have a nine-month-old baby now so I'm staying at home a bit more. But I've travelled my whole life and never got tired of it.
Q: Do you have some advice on entering foreign markets?
A: We originally focused on what we thought were safer markets such as the U.S., Australia and New Zealand, U.K. and Ireland. That's where we got our experience. As we moved into Asia and Latin America, we had to become more aware of cultural differences. Originally we went directly into a lot of those markets but have found it better to go through partners who know the local culture and dynamics about how things work underground. That makes it a little safer.
Q: What's different now about the company compared to the start?
We're much better now at product management and figuring out what the market needs. Number one is that we're focused more on getting data from the market rather than going on opinion. We really do our research, get a lot of surveys and try to collect data. We've evolved from being opinion or gut focused to data driven.