The Secrets of Spectacular Growth

Though they do different things, Alberta’s fastest-growing companies offer a similar recipe for preparing for, managing and sustaining growth: match the right product to a big market, and find the right people to pull it off

Cory Janssen admits it’s a cliché. It’s a shopworn story about how two ambitious university students are sitting in a bar writing out plans on bar napkins about how they plan to become dot-com millionaires. But instead of planning to flip a high-tech company to make their millions, they decided to grow their company the old-fashioned way. They’re in it for the long haul. And it’s working.

It’s a shopworn story about how two ambitious university students are sitting in a bar writing out plans on bar napkins about how they plan to become dot-com millionaires. But instead of planning to flip a high-tech company to make their millions, they decided to grow their company the old-fashioned way. They’re in it for the long haul. And it’s working.

Janssen and his Investopedia Inc. co-founder, Cory Wagner, close friends who grew up playing hockey together in Edmonton, run a highly respected financial website that’s making a big hit, not to mention more and more money, in the United States.

It’s likely you’ve never heard of Investopedia. Ninety-nine per cent of its market is in the U.S. You can find it at www.investopedia.com. On the site you’ll find the founders’ original, tissue-paper brainstorm, a dictionary explaining investing and financial jargon to the lay person. There’s lots of other free content on the site, too. Its ads (the main source of revenue) are from august clients like the Wall Street Journal and Charles Schwab, the biggest discount broker in the U.S. The site has won rave reviews in financial periodicals. Investopedia’s gross sales jumped to $1.7 million in the last year, a 71% increase over the previous year, earning it second-place honors for companies with under $20 million in annual sales in Alberta Venture’s annual Fast 50 survey of the province’s fastest-growing firms. That followed a 119% revenue jump the year before.

The keys to their success at their advanced ages of 25? “The secret is there is no secret. It’s just common sense and hard work. And don’t go out there and assume every-thing has already been done, if you’ve got a hunch. A lot of the time people look for a magic solution when they really know it’s just a matter of go-ing out there and getting your hands dirty.”

That may sound trite, but Janssen’s advice is not so different from what many of the members of the 2006 Fast 50 have to say. In fact, there are two common themes behind this exclusive club’s experience of preparing for, managing and sustaining their meteoric growth. One: find a market, an already big or a fast-growing one, then offer a unique product or service that the market really wants. Two: hire people who will deliver on that promise.

Take Pomeroy Group, a private company based out of Grande Prairie that develops and operates hotels and restaurants with partner Manulife Financial. Bob Pomeroy found his market in cities and towns in northern Alberta and British Columbia, where the hotels are sometimes, well, less than genteel. The company operates 11 hotels and 10 restaurants in communities such as Grande Prairie, High Level and Fort Nelson. These were places for quality hotels with middle-of-the-road rates, the CEO decided, as oil and gas activity in the region took off a few years ago. That created his lucrative market. “We’re usually one of the most expensive properties to stay in, but we include everything in our price,” Pomeroy says. “You don’t pay extra for Internet, for your dinner or your breakfasts or shuttle bus. In every single area we go above and beyond the expectation of the guests.” The idea is already keeping his hotels full, adding cash flow to fuel expansion. (Five new properties are planned for the next six months.) Corporate travellers account for most of the customer base. Pomeroy also appeals to families; unlike at most other hotels, pets are welcome. Satisfying guests is also sought in little touches the company hopes will inspire loyalty. If someone sleeps in, a hotel employee will clean the snow off their vehicle and the ice from the windows, an unexpected deft touch in the north that people might appreciate. Last year’s gross sales climbed to $55.3 million, up by 30% from the year before, good for ninth spot among businesses with annual sales greater than $20 million.

It’s the same story, different industry for Magnetsigns Advertising Inc. You may never have heard of Magnetsigns, but it’s a pretty good bet you’ve seen their products hundreds of times, those portable signs outside businesses with the bright, multi-coloured neon letters on a black background. When you start looking, they’re everywhere. Stuart Erksine, president of the private company based in Camrose, says they simply developed a better mousetrap. The signs use magnetic lettering and graphics that can be configured any which way, rather than letters affixed to tracks.

The company now has 108 franchise operators, including 13 in the United States. Its quick rise can be attributed to the size of its market, which should keep its growth continuing at a fantastic pace for the long term. “It’s a huge market. If you look at our customer base, it’s the who’s who in retail in Canada: Staples, Wal-Mart, all the major gas stations and banks.” Franchise licenses, fees for supplies and other royalties, should continue to grow as the number of franchises increases and their individual success grows, providing enough cash flow to add new products and maintain growth. The company’s successful business formula helped Magnetsigns gross $613,000 in 2004, up by 27% over the year before. Coming on the heels of the previous year’s 72% sales hike, that pace placed the company 17th in the under-$20-million group.

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