Scaleup Q&A: SOTI CEO Carl Rodrigues on growing a global tech powerhouse through constant fine-tuning

SOTI may be the homegrown tech titan that most Canadians haven’t heard of, but other countries are paying attention. With 17,000 enterprise customers in 178 countries, the Mississauga-based provider of business-critical mobility solutions is frequently courted by world leaders, and for good reason: SOTI boasts 98 consecutive quarters of profitability, all without ever taking outside investment. 

In this first interview in our series of conversations with executives of scaleup companies, CEO Carl Rodrigues explains how he built his international company by always evolving, what he does to grow his talent pool, and why Ottawa needs to catch up with what he and other Canadian scaleups are doing.

RE$EARCH MONEY: You famously launched SOTI as a one-person startup in your basement. How did you initially identify the business opportunity that you wanted to pursue?

Carl Rodrigues: I could almost smell that the mobility space was going to take off at that time, and I was actually interested in it. The vision was pretty simple: Can I leverage my skills in a manner where I was really interested and passionate about what I was doing? 

My thought was to see if I could create a new mobility thing that was really going to explode. The company was incorporated 1995, and I was doing consulting out of it at that time. But in 2001 I decided to try and build a product. Mobility was in its infancy. There was no iPhone, there were no Android devices. But I could see the writing on the wall, that the PDA, or personal digital assistant, was going to get melded into a feature phone, and then evolve into a smartphone. I wanted to be part of it and I wanted to build some software that I was really passionate about. 

R$: So the uptake of the PDA had been enough that you could see that the market was ready for you to roll out a software solution for that device?

CR: It wasn't that the PDA uptake was that great. It was that if the PDA merged into the phone, you wouldn't need the PDA. Why would anybody buy any other kind of phone? Now you can have all your data with you, all your notes with you, all your apps with you, and you can make phone calls. We would be able to do this in a form that was pretty small, that you have in your pocket. 

R$: At one point you received an order for 20,000 units when you were still operating solo. It sounds like you had to grow really quickly. What were the early growth strategies that were successful for you?

CR: Initially I was just trying to have fun and see if I could manage to work from home. Then I created a product that became a worldwide number-one best selling product in its category. So things exploded. You know, it turns out that when you're passionate and you're actually building something you really love, you can do a pretty good job at it. When the product started getting international reviews, I couldn't keep up with what I could do myself. I'm maintaining the website, I'm taking support calls, I'm writing the code, I'm trying to do my primitive marketing. I was working pretty much 24/7.

I was worried about hiring someone because I thought, Maybe this is a mirage, and maybe it will stop. I didn't want to hire someone and then not be able to pay their salary. It was a huge step for me. I resisted that and I kept just working harder and harder. Though honestly it didn't feel like a lot of work, because I was having fun.

I hired a couple of guys and we managed to do more things. We got up to four or five people in the basement. Then we moved to a strip mall office. Within a year we were up to about 20 people in that little strip mall office. And so we kept growing and growing, because the product was very hot. I was getting orders from around the world.

R$: It sounds like your growth strategy was mainly a response to the success of your product. The uptake was so natural and the market was so receptive that you almost didn't have to plan to grow.

CR: No no. If anybody tells you that stuff happens automatically, they don't know what they're talking about. I kept pivoting and adjusting. That means understanding what's going on and constantly fine-tuning. So the first product I created was Pocket Controller. It was a consumer product. Then I created a more advanced version of that, which was called Pocket Controller Enterprise, because the market told me that they wanted that technology but more on the enterprise side. From there I saw that there was a new category of product called an MDM (Mobile Device Management) that seemed like a good fit to merge with this new technology I had created. The MDM products did not have the remote-control capability that I was creating. 

In those days, a lot of traditional products from the desktop era were being used. Companies were trying to evolve to do a little bit mobile, but they didn’t really understand the nuances of mobile. They were trying to fix the problem with a tool that's not designed for that problem. I saw that a different set of tools was needed. I wasn't coming at it from a legacy point of view. I was looking at what's needed in this market. So I was evolving and we are still evolving. Every single day I look at what doesn't work and I tune it.

R$: It's my understanding that you didn't take any external financing in the beginning and never have. Why did you make that decision?

CR: What saved me again and again was my experience. By the time I started, I was in my thirties. What I'd seen was that a lot of companies had taken VC funding and the moment they came in, they started steering the company for an exit. The companies stopped being innovative because the VCs didn't have that innovation culture. They didn't understand what innovation was, and they didn't have any product vision. VCs are just trying to make money. But if your motivation is just money and you don't understand the technology, you don't understand the market, you don't understand the business, those guys usually screw up your company. 

I saw that happening and I was acutely aware of what my success was based on. We focus on building the best, most innovative, most creative products that solve real business problems and excite our customers. That's it. That's what drives us. Every day we're not really looking at the bank account and that's what VCs do. I stayed away from them because I saw VCs as being the plague of success.

R$: You had an offer by Microsoft to buy you out in 2006. Was that a temptation or was it easy to turn them down?

CR: It was kind of scary. I had to think about it. I was nervous. Everybody advised me to take the money. I asked myself, what am I doing here? Am I doing this for the money? When I thought about it, I knew that I was doing this because I enjoy it, and the customers enjoy our product and see the value. So it wasn't about the money, and when that clicked in my head, it was easy to tell Microsoft to go away. It was interesting. They said, Well, if you don't take the money, we can build a knock-off of your product. Which they tried to do and they failed. 

Once we crossed that bridge, there were many others over the years who have been interested to buy SOTI for much, much larger amounts. But it became very easy for me after that point.

R$: What were some of the other difficulties that you faced when growing SOTI in the early years?

CR: I come from a software engineering background. I didn’t have any particular skills on salesmanship or marketing. That was one of the biggest problems. I was more nerdy than all the soft skills required to grow a company. I had to learn how to negotiate a contract. I had to learn about laws in America and Europe, how to localize my product into other countries, how to find talented people to sell my products. There was a ridiculous amount of problems to solve. But if you listen really carefully and you are constantly adjusting, you rarely end up with failure, because you're watching it at every step. 

R$: Describe the ramp of taking your products internationally and growing as a global leader?

CR: Again, experience was a big factor. Right from day one, I did not focus on selling in Canada. I had no interest in selling in Canada. The reason was that I saw the U.S. as the largest unified market in the world. Culturally, it's pretty much all the same. They speak English, I can relate to them immediately, and it's a huge market. So I started working on the U.S. right from the beginning. One hundred percent of my customer base was in the U.S. for many years.

Even today our products are way better known in the U.S. and other parts of the world than in Canada. Again, if you want to be successful, why wouldn't you go after the place that has the biggest market for your product? Next I wanted to go after places where I understood the culture, that were closely mapped to what I knew, which was Western Europe. So then I started to go after western Europe, starting with the UK, and then moving outwards from there.

R$: In a lot of the conversations about supporting scaleup companies in Canada, there's an emphasis on improving Canada as a market. Do you think it’s misguided for Canadian companies to try to grow in Canada?

A lot of companies start by thinking they're going to sell their products here and that the Canadian government is going to adjust their procurement style to help them. I remember talking to other CEOs who told me about trying to sell their products to the Canadian government, but nothing happened. So I wasn't willing to wait for that. Government is just too slow. It doesn't move at the speed of business. In many cases, they slowed me down. They talk and talk and talk. But the pace my business was working on is much, much faster. I didn't want to wait for them and I didn't waste my time with them.

To be honest, many other governments work way faster than the Canadian government. I landed contracts with the U.S. government and many other governments way before I did anything with the Canadian government. Then I met individual people from within the Canadian government who were in the right places, and who realized it was a great technology. It wasn't because there's government procurement processes that were going to help me talk to the Canadian government as a whole. I think that piece is still missing. 

R$: When you became a global firm, how did you handle transitioning your leadership style and your organizational systems?

CR: The things you do when you're one person, you do them because you're one person. I did certain things when I was one person, and then as we grew toward 20 people, I could see that those processes and how I worked had to change. For example, when I was one person producing software, I didn't really have to worry about knowledge sharing and writing documentation, because everything was in my head. But then, when I got to 20, that stopped working. I'd have new employees and new developers and I needed a way to share the architecture and get them on board faster.

It continued at every level, so the stuff we did at 20 stopped working when we got to 30 or 40. And eventually we got to 200, and whatever we did at 200, was completely broken when we got to 350. And on and on. We continue to evolve every single system, and now we're close to 1200 people or so, and what we're doing now we're tuning again.

People think that you get to a point and then you have to think about management. No, you think about these things every day and you keep adjusting to deal with the road ahead of you. The management system that we have now will have to change, when we go from 1200 to maybe 2000. It can't stay the same. Otherwise, you won't grow.

R$: Let's talk about company culture. How has your culture helped you achieve your level of profitability and growth? 

CR: Culture is like a marriage—you have to keep working at it. Culture becomes more difficult as the company gets more spread out and there's less of you to go around. So you have to ingrain that culture that you want in the people around you, and then they have to ingrain that culture into the people that report to them. 

It definitely starts at the top. I really like innovation. I like thinking out of the box. I like people who have a really strong work ethic and no egos and no politics. And so the people I surround myself with have those same values, and things propagate. But you do have to work hard to make sure that three or four rungs down on a particular side of the organization, that culture is still there. And we do sometimes see one side of the organization gets the culture more than another side. And then you have to make some adjustments. You have to always be watching and always checking.

R$: How important are colleges and universities for your growth? How active are you in those relationships?

CR: We've taken a global approach to the education system. I look at the world as my pipeline of talent, I do not look only at Canada. I just came back a few months ago from a trip to South India where I took a team with me. We prepared, we rehearsed, we planned and we did a lot of interesting things. We thought about the jobs the kids in that part of the world would be interested in, and we did a tour, spending the morning at one university and the afternoon at another. We did three days and six universities. 

That approach of spending half a day at each college and working with the faculty and getting in front of the whole college and talking to the engineering students and computer science students was phenomenally successful. No other company had gone through that level of diligence. We didn't just cookie cutter it, we customized it. We made it not stuffy. They’d never seen a more down-to-earth, fun-loving company. We had created an online testing program and though we only met with around 500 students across those campuses, when we put out our test, we got over 2000 students writing it. It became viral. All the students talked to their friends and their relatives. And then other colleges got upset with us because we didn't visit them. It was pretty cool to get that level of interest.

We also have those sorts of programs here in Canada. We have a lot of innovative and different ideas about how to engage with students. Not the typical job fairs and recruiting events and all that. That's not innovative. You don't want to do anything the same as any other company. When we work with a university, we take the book, we throw it in the garbage, and we figure out how we're going to get into those kids' heads. You're not going to do that with a cookie cutter approach.

R$: Are there any specific challenges that you have to overcome to grow your business globally while had headquartered in Canada?

CR: The real question is, Are there any advantages that our government creates to help us to scale? There aren’t many things that I can think of. There's a lot of talk, but I don't think they do anything to particularly help us. But there are foreign governments who now see that we are one of the fastest growing tech companies in the world. They approach us, and they say, Can you build your next headquarters here? What can we do to support you?

The Canadian government has to realize that in global business, they have to support local, home-grown companies. Not this song and dance they did because Amazon wanted to open up a headquarters. For me, as a scaleup entrepreneur, that's humiliating. That is utter humiliation, because they don't do that for Canadian companies. I sent an invite to Justin Trudeau to visit us a while ago. He couldn't care less. I got a cookie cutter letter back. He didn't do anything. I would not re-send that letter today, because we have to do better for Canada.

I'd like to see the Canadian government actually do something for Canadian scaleup businesses. I hear sometimes that they're putting more and more money into startups, but the failure rate for startups is ridiculously high. Why wouldn't you actually put your money on companies that are doing something? 

As much as our government is enamoured with the Amazons of the world, that's not good for Canada, because these companies are taking tech talent that could rightfully go to a Canadian company. The Canadian taxpayer has educated those people, after all, and if you're encouraging those people to work for an American company, the net benefits— the IP, the royalties, the profitability, the taxes—they all go to the U.S. We have to understand that. 

R$: What are foreign governments offering you that the Canadian government isn't? What kind of support would you want?

CR: Since we don’t take VC money, everything we do, we have to do with our profits. That's the limitation. Sometimes you want to grow even faster, and you're limited by profitability. So we get foreign governments offering us tax free zones. They also offer us a lot of services. For example, we opened an office in Ireland and the Irish prime minister visited here in Canada just to invite me personally to come open an office in Ireland. Those sorts of things. 

R$: Tell me about your growth aspirations today.

CR: We have people in 22 countries today. We have 12 major offices around the world. We continue to expand, but without proper support from the Canadian government and with foreign governments now offering us business incentives to open up shop there, some of those jobs are naturally going to go into other countries, where they could be in Canada. 

If you look at our growth in the last year, we've probably created more jobs in other countries that we have in Canada. We have to deal with the global economics of it all. There have to be good business reasons why jobs go a certain way. We can't just create jobs in a certain country for the heck of it. So we want to create more jobs in Canada. We want to grow here in Canada. But if the economics offered by foreign governments are better, obviously we have to take advantage of those, because if we don't, our competitors will. And we want to be a successful Canadian company. To be successful on a global scale, Canadian companies have to make the best business choices. Government should be part of encouraging Canadian companies. Not just talking about it, but actually putting in policies that support growth in Canada.

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