Poynt of No Return: The rise of a home grown mobile marketing superstar
How a Calgary firm expanded beyond Blackberries to reach 10.3 million people
by Steve MacLeod
#5 on the Fast Growth 50
Head office: Calgary
2010 gross annual sales: $924,326
2008 gross annual sales: $9,617
Photo Shaun Robinson
Three keys to growth:
- Continue to enhance products and services based on customer feedback
- Use partnerships to stay at the forefront of industry developments
- Grow different departments in lockstep, rather than one at a time
Everyone in the advertising world knew the moment would come, even if they weren’t sure when. In 2010, for the first time in Canada, advertisers spent more online than in daily newspapers. Television still took the bulk of advertising revenue in the country, but Internet advertising accounted for a solid $2.23 billion. It grew by 23 per cent between 2009 and 2010 and was the only medium to record double-digit growth over that period. Calgary’s Poynt Corp. couldn’t have been happier.
Poynt’s free app offers mobile-phone users a local search platform where they can find businesses, restaurants, events, movie theatres, gas prices and weather information. Poynt also provides movie trailers and reviews, the ability to purchase movie tickets, one click to call businesses, and directions, coupons and special offers. It has already been downloaded more than 10 million times, keeping pace with the exponential rise in the data capacity of mobile phones.
As a result, the company finds itself at fifth spot on the Alberta Venture Fast Growth 50 list for 2012. The numbers speak for themselves: in 2008, the Calgary-based company earned a little less than $10,000 in revenue. Just three years later Poynt pushed that figure up to almost $1 million. Still, there have been growing pains. While revenue grew at an annualized rate of 880 per cent between 2008 and 2011, the company posted net losses over the same period – a $3.69-million loss in 2008 and a $6.89-million loss in 2011.
But as more people access the Internet through their phones, Poynt expects the rise of Internet advertising to spill into the mobile advertising market and help improve the company’s profit margins. “The advertising business on mobile phones has just come into being,” says Andrew Osis, Poynt’s chief executive. “It’s still in its infancy; three years ago it didn’t even exist.”
Poynt’s own infancy took place in the first years of the new millenium, when Osis and two partners founded the company to provide local directory information on cellphones. “Back then, there was no such thing as a smartphone, so saying it out loud sounded a bit nuts,” Osis says. “BlackBerry was taking the world by storm just by virtue of people getting email on their phones. By the mid-2000s, it was further along and people could get more and more data on their phones.”
Poynt started developing the software platform in January 2008. Five months later, it released the first version of its signature app, which launched for BlackBerry phones. “It was just business listings and a mapping function,” Osis says. “We emailed it to 100 people and asked them to download it. We said if you like it, let us know, and if not, tell us why and we’ll improve it.”
The first version of the product wasn’t perfect; it has since been developed to offer users more functions. “We aim for middle ground and try to get it to the stage where everyone is reasonably happy,” Osis says. “If you’re in between sort-of-works and perfect, you get a better response from people. Mobile users don’t have the patience for things that don’t work.” And they’re definitely not afraid to let companies know when products don’t work. “People today aren’t just encouraged to comment, they’re expected to comment,” Osis says. “People are very outspoken now versus 10 years ago.” That feedback helped the company shape the platform users see today.
In the early days, Poynt had no revenue stream and each user averaged five queries per month. Now, each user averages 35 queries per month and Poynt inked its first advertising deals in 2009.
Poynt has also expanded its platform beyond BlackBerry devices, reaching 10.3 million users by releasing its app for iPhones, Windows-platform phones and phones using the Nokia QT and Android platforms. Its GPS-based features offer local information for users in nine countries outside Canada. The company’s workforce has expanded from six people in 2008 to more than 70 at the end of 2011 to accommodate the increased product offerings. Poynt now employs 10 salespeople who work specifically on the mobile-phone advertising projections. “You need good people to create a good product and you need a great product to get good people,” Osis says. “That creates good partnerships.”
The mobile-phone space moves fast, and companies that struggle to keep up with innovation can be left behind in a hurry – just ask anyone associated with Research in Motion. That’s an added challenge for Poynt, which must also contend with the usual labour challenges that other businesses face in the current economic landscape. But Osis says his company is up to the task. “That’s a big part of the day-to-day work,” he says. “We maintain great relationships with the handset and platform operators, and also watch the landscape of advertisers, tech analysts and experts.”
Poynt is still a long way from reaching the rarified air occupied by Rovio, the tiny Finnish company that came up with the mega-sensation Angry Birds. But maybe that’s not the right point of comparison, even if it’s the one everyone makes when it comes to mobile apps. Poynt notes that it’s the top local search app for BlackBerry and in the top 10 for iPhone, and that’s a market that isn’t nearly as prone to fads and trends. “There’s lot of noise in the app business at large, but we don’t really compete with that,” Osis says. “What we do is exponentially more complicated. You can’t just go into your basement and put together a good-quality search engine in a weekend.”