Local software startups grapple with rapid growth

Traction on Demand, Clio both employing unique ways to manage HR challenges  
Greg Malpass at the Traction 2015 cloud computing conference in Vancouver. The Traction on Demand founder and CEO says he’ll never sell his software company | Submitted 

Greg Malpass is playing around with ideas for his new business cards. The founder of Vancouver-based Traction on Demand is particularly fond of the idea of putting a new job title beneath his name.

“I’m going to put ‘CEO’ [on the business cards] and then cross it out. And then it’s going to be ‘enabler,’” said Malpass, whose software firm helps companies implement marketing strategies using the Salesforce.com customer relationship management service. “The team needs to know that my job is to support them.”

Traction on Demand’s growth was at a “juggernaut” pace after going from five employees in 2010 to 130 workers in 2015, according to Malpass.

He decided the best way to support his employees was by ripping up the company’s organizational structure last summer.

“At 100 people you’re at the point where you can’t possibly know everybody and what they’re doing,” said Malpass, adding that he had witnessed different departments become stratified in their respective roles as Traction on Demand grew rapidly.

Last August he eliminated all those different departments.

On a corporate retreat in the woods, management drafted the workforce into squads of 20 to 30 people operating like miniature versions of the startup, each with the same abilities but supporting different clients.

“Our September revenue was exactly consistent, so we had no drop. And then we had an immediate improvement of 20%.”

Malpass added that the head count has since grown to 200 workers and the company has plans to hire another 100 in 2016.

“Now we’re on this trajectory where we’ve been consistently 20% over any target.”

Such a corporate shakeup isn’t something he believes would have been tenable to investors. The only thing that allowed the CEO/enabler to do it was that Traction on Demand is entirely employee-owned, and Malpass said he has no plans to sell the startup.

But George Psiharis, vice-president of business development at Vancouver-based Clio, said securing investors is often the only way to get startups on the right track for growth.

After launching its first product in 2009, the software firm specializing in management tools for law firms has grown to a global workforce of 200 people – an expansion that is about the same as Traction on Demand’s over a similar period of time.

“Why I think we became an interesting partner for a lot of venture capital funds and investment opportunity over the years was that we could experiment quickly,” Psiharis said.

Those experiments include hiring a lawyer-in-residence to write content for clients and developing partnerships with law societies and bar associations that might recommend the software to members.

“One of the things we’ve had to do is reinvent the company at different stages,” Psiharis said.

While Clio workers weren’t taken to a campground for an organizational upheaval like Traction on Demand’s workforce, Psiharis said the company has relied significantly on an employee referral program.

“It’s a culture that grows quickly and effectively doubles year-over-year in terms of head count,” he said. “Just tapping into those we knew were like-minded and could thrive and succeed in a culture like Clio’s was one of those force-multipliers for us.”

torton@biv.com

@reporton
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