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#Written by David Tam, 1996. #
#davidkftam@netscape.net Copyright 1999#
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David Tam
Tuesday, November 26, 1996.
Business Press Review
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Powers, Gordon. "High-tech entrepreneurs grow up". The Globe and Mail.
Thursday, November 21, 1996. B16. ------------------
This article focuses on the entrepreneurial adventures of a successful,
small, Ottawa-based internet consulting company, Ingenia Communications Corp.
This company was founded by six Carleton University engineering students in
1992. In the 1995-96 fiscal year, its revenues reached $2.8 million. Long
before the internet popularity explosion, these entrepreneurial engineers
discovered and conquered the power and potential of the internet. Prior to
starting the company, they had worked as volunteers with Ottawa's Freenet.
Realizing the potential of the internet, the group talked its way into linking
12 Ottawa-area schools through a small Industry Canada project. This project
eventually evolved into SchoolNet, a national network linking schools across
this country. Leveraging on this experience, Ingenia was able to obtain
consulting contracts with Industry Canada, Newbridge Networks Corp., and the
House of Commons.
By having an extremely early start in the "internet" game (long before the
rest of the world had even heard of such a word), Ingenia had a developed deal
of experience which helped fuel its rapid growth when the internet boom
occurred. However, this pace of growth had its toll on the company. Karen
Kostaszek, president and one of the founders, had difficulty finding a lender
willing to support a group of entrepreneurs who had no business plan, no credit
history, and no collateral. The entrepreneurs eventually received financial
backing from nervous parents' credit cards.
More trouble was unveiled when one of its founding members decided leave
the company and return to school. The remaining members were had a problem:
"Who owns what and how much is it all worth so a departing partner can be
compensated?" The members had no knowledge of shareholder agreements, and
buy-sell arrangements.
After having resolved the problem, the remaining members realized their
lack of business and accounting expertise. Consequently, they decided to hire
a chief financial officer. David Laird, who was appointed this role, brought
about more financial structure to the company. Besides having better
accounting records, Ingenia also took a close look at its corporate structure
to ensure that both management and research and development were up to
standards. Eventually, this meant more structured meetings and even job
descriptions. The youth, energy, and "whatever-it-takes" attitude was
harnessed to handle more growth and success.
Ingenia also devotes a lot of resources to competitive research and
development, as mentioned by Karen Kostaszek. By becoming the first Canadian
company to be granted the secrets of Netscape's software line (they were given
the source code), Ingenia has been able to rapidly develop new,
network-oriented software that utilizes the powers of Netscape's browser
software. The initial results of this partnership with Netscape is an
application called iMeet, an application that helps meeting and convention
planners with scheduling and reservations. Ingenia is currently working on
long-distance learning applications for use in Canadian universities.
In summary, Ingenia went through a lot of changes that are necessary for a
young startup company's development. The adhoc methods worked very well when
Ingenia was a small company, but now, as it grows larger, it must develop a
solid structure to support growth. This article presents an excellent example
of entrepreneurial engineers would have tasted success. It mentions many of
the topics discussed in class, such as startup, financing, research and
development issues, and corporate culture. I believe most of us in the class
will someday become involved in creating small, successful high-tech companies.
This article shows the many growing pains that us entrepreneurs will hopefully
face.
(
geocities.com/siliconvalley/campus/9640/2ndYear) (
geocities.com/siliconvalley/campus/9640) (
geocities.com/siliconvalley/campus) (
geocities.com/siliconvalley)