A Start-up is Born: The Story of Help­ful

Rotman Management Magazine - - FRONT PAGE - By Karen Chris­tensen and Sharon Aschaiek

A start-up isn’t a ‘com­pany’ in the tra­di­tional sense; it’s a learn­ing ma­chine, says se­rial en­tre­pre­neur Daniel De­bow (JD/MBA ‘00).

for to­day’s THE NEWS IS BOTH DIS­COUR­AG­ING AND EN­COUR­AG­ING would-be en­trepreneurs. First the bad news: Nine out of 10 start-ups fail. But, on the re­ally bright side, as tech­nol­ogy con­tin­ues to evolve, vir­tu­ally ev­ery­thing is open to bet­ter ways of do­ing things. As a re­sult, Paypal co-founder Peter Thiel ad­vises would-be en­trepreneurs to ask a sim­ple but pow­er­ful ques­tion: What valu­able com­pany is no­body build­ing?

Of course, an­swer­ing that ques­tion re­quires a lot of hard work. Just ask Daniel De­bow (Rot­man JD/MBA ’00).

Back in 2007, De­bow was at the of­fice sort­ing through his mail when he saw an in­vi­ta­tion to yet another high-tech con­fer­ence. In­stead of toss­ing it in his cir­cu­lar file, he took the time to read the de­tails: MESH (‘Canada’s Web Con­fer­ence’) was to be held in Toronto, and it was aimed at peo­ple who wanted to con­nect with oth­ers who ‘are as ex­cited about the po­ten­tial of dig­i­tal tech­nol­ogy as you are’.

As one of the found­ing ex­ec­u­tives of Work­brain — the work­force-man­age­ment soft­ware com­pany that had just been sold for $227 mil­lion to U.s.-based In­for Global So­lu­tions — De­bow cer­tainly fit the pro­file. At the time, he was eager to meet top lo­cal tal­ent to work with him on his next ven­ture — so he signed up.

What he couldn’t have known in ad­vance was that he would meet his fu­ture busi­ness part­ner at that con­fer­ence.

De­bow’s own ap­petite for en­trepreneur­ship had been whet­ted years ear­lier. In 2000, while he was study­ing for his JD/MBA at the Rot­man School of Man­age­ment, his best friend’s older brother, se­rial en­tre­pre­neur David Os­sip, gave him an op­por­tu­nity to work with him on Work­brain, which he founded. De­bow and fel­low class­mate Matthew Chap­man (Rot­man MBA ’00) wrote the ini­tial busi­ness plan for Work­brain while they were still stu­dents.

At the MESH Con­fer­ence, De­bow was in his el­e­ment. He met lots of smart and in­ter­est­ing peo­ple that day and, in a case of serendip­ity, one of them was Farhan Thawar (Rot­man MBA ‘07) — a part-time Rot­man MBA stu­dent who also held a Math de­gree from the Univer­sity of Water­loo and had al­ready held se­nior po­si­tions at Mi­crosoft and Ce­lestica.

A start-up isn’t a ‘com­pany’ in the tra­di­tional sense; it’s a learn­ing ma­chine, says se­rial en­tre­pre­neur Daniel De­bow (Rot­man JD/MBA ‘00).

Thawar told De­bow about his cur­rent role at Mi­crosoft, where he cre­ated and ran the most ad­vanced search-rel­e­vance lab out­side of Red­mond, Washington. He ex­plained how he sup­ported the roll-out of new fea­tures and bug fixes for 18 mil­lion Cana­di­ans on the Fi­nance, Au­to­mo­tive, En­ter­tain­ment, Video, Search and Home­page chan­nels.

De­bow was suit­ably im­pressed: He wanted to hire Thawar on the spot to work with him on his next ven­ture. “Farhan was clearly the best en­gi­neer­ing leader in Toronto,” he says. While Thawar was in­ter­ested, the tim­ing just wasn’t right, so the two promised to stay in touch and work to­gether on a start-up some­day.

Later that same year, De­bow co-founded Ryp­ple — a so­cial per­for­mance man­age­ment plat­form — with his for­mer Work­brain col­league David Stein and Ge­orge Babu (Rot­man JD/ MBA ‘09). When they met, Babu was still a Rot­man stu­dent who was eager to get to work on a start-up. As De­bow tells it, Babu just be­gan ‘show­ing up’ at the as-yet-un­named start-up’s of­fice af­ter class — lead­ing Stein to ask De­bow one day, “Does this guy work for us?” Soon enough, he did; and a few short years later, in 2012, the trio sold Ryp­ple for $65 mil­lion to Sales­force.com.

Babu went on to co-found Kin­dred — whose mis­sion is to build ma­chines with hu­man-like in­tel­li­gence — along with Rot­man Pro­fes­sor Ajay Agrawal; while Stein founded Lead­ers Fund, a firm that in­vests in fast-grow­ing en­ter­prise soft­ware com­pa­nies. De­bow took on a role at Sales­force, work­ing to in­te­grate the com­pany with Ryp­ple. Once it was trans­formed into Work.com and repo­si­tioned as a sales-per­for­mance tool, he took on a new chal­lenge for the com­pany: Us­ing the Sales­force plat­form to build ‘wear­able apps’.

Mean­while, Thawar left Mi­crosoft in 2008 to be­come Chief Soft­ware Ar­chi­tect at Achiev­ers; helped start Canada’s first yCom­bi­na­tor-style in­cu­ba­tor, Ex­treme Ven­ture Part­ners, which funded eight com­pa­nies in three years; and then served as VP of En­gi­neer­ing at mo­bile-devel­op­ment firm Xtreme Labs — which he helped to scale from 10 to 250 peo­ple, build­ing some of the world’s most pop­u­lar mo­bile apps. The firm was ac­quired in 2013 by U.S. soft­ware devel­op­ment con­sult­ing firm Piv­otal Soft­ware, and Thawar ac­cepted the role of Chief Tech­nol­ogy Of­fi­cer, Mo­bile, at Piv­otal.

All of this time, De­bow and Thawar stayed in touch, and by late 2015, the tim­ing was fi­nally right: The two were ready to work to­gether. They rented a small of­fice near St. Clair Av­enue and Bathurst Street — mid­way be­tween both of their homes — and set up shop to de­vise their next ven­ture. Right around that time, serendip­ity struck again: De­bow was back at the Univer­sity of Toronto, speak­ing to the JD/MBA Stu­dents As­so­ci­a­tion, when

he met David Pardy (Rot­man JD/MBA ‘16).

Pardy — who also holds a BSC in Physics and Math from Queen’s and a Cer­tifi­cate in Gen­eral Man­age­ment from Stan­ford — told De­bow of his keen in­ter­est in join­ing a growth startup. De­bow in­vited him to in­for­mally as­sist with his new ven­ture and — im­pressed with his bright ideas and drive — he and Thawar brought Pardy on board as an of­fi­cial co-founder of their yet-tobe-de­fined com­pany.

With a found­ing team in place, the hard work be­gan in earnest for the three Rot­man grad­u­ates.

“Our process was deeply in­flu­enced by [for­mer Rot­man School Dean] Roger Martin’s think­ing — as well as by Four Steps to an Epiphany by Steve Blank and The Lean Start-up by Eric Ries,” says De­bow.

Fol­low­ing Martin’s ad­vice from Play­ing to Win, the trio be­gan by de­cid­ing ‘Where to play’. They cre­ated an ini­tial fil­ter for their ideas by ask­ing, ‘What do we want to achieve?’ and ‘Where do we want to spend our time?’ They knew, for in­stance, that they didn’t want to build a car parts fac­tory. “We wanted to cre­ate some­thing that would make ev­ery­day life eas­ier and more pro­duc­tive for as many peo­ple as pos­si­ble. And, to para­phrase Wayne Gret­zky, we weren’t in­ter­ested in where the hockey puck was, but in where it was go­ing to be.”

Their short­listed ideas in­cluded a free, for-profit univer­sity; a home main­te­nance ser­vice; a Linkedin- style net­work­ing plat­form for blue-col­lar work­ers; and a su­per-in­tel­li­gent Ai-pow­ered em­ployee direc­tory.

“For each idea, we used Roger’s ap­proach by ask­ing, ‘For this to be suc­cess­ful, what four or five things have to be true?’” The team worked through each idea, pos­ing that ques­tion and com­ing up with what amounted to a se­ries of hy­pothe­ses — a list of things that had to be true for the idea to be a win­ner. Next, they ranked each hy­poth­e­sis, from ‘eas­i­est to dis­prove’ to ‘hard­est to dis­prove’. If one of the ‘proof points’ was very un­likely to ever hap­pen, that idea was dis­carded.

“Our fo­cus was very much on, ‘What can we dis- prove the va­lid­ity of?,’” says De­bow. “We were ac­tively try­ing to prove our­selves wrong. And if we couldn’t — if all the things that ‘had to be true’ were in­deed plau­si­ble — we kept that idea alive.” For the ideas that made it through to that crit­i­cal stage, the team built rough pro­to­types and tested them out with peo­ple to gain crit­i­cal feed­back and it­er­ate to im­prove them.

Ul­ti­mately, they set­tled on the idea for an Ai-pow­ered em­ployee direc­tory that would en­able peo­ple across an or­ga­ni­za­tion to know what their col­leagues were work­ing on, and how that work was pro­gress­ing, in real time. “When we tested the

pro­to­type, users and CEOS alike told us, ‘We need this tool: You should go ahead and pro­duce it.’”

As in­di­cated, the team didn’t do much tra­di­tional mar­ket re­search. “We were largely guided by our in­tu­ition about what we felt was a re­ally big prob­lem for lots and lots of or­ga­ni­za­tions: em­ployee knowl­edge shar­ing. We had ex­pe­ri­enced this ‘pain point’ our­selves — and lots of peo­ple told us they felt it, too.”

The group worked for nine solid months on the em­ployee direc­tory idea. But all of a sud­den, some­thing just didn’t feel right. In­stead of ig­nor­ing it and march­ing ahead, the founders de­cided to put the project on hold for a while and clear their heads. They in­structed their em­ploy­ees to spend an en­tire week work­ing on what­ever they wanted to work on.

The risk paid off. Two of their em­ploy­ees came up with a promis­ing con­cept, re­lated to the ini­tial idea: A mo­bile app that would en­able em­ploy­ees to send each other short videos to share in­for­ma­tion about their work — sort of like ‘video voice­mail’.

Over the next few weeks, the en­tire team tested the pro­to­type. “Many of us were away from the of­fice, trav­el­ling for meet­ings, and we found that when we used this tool, we felt closer to our col­leagues and more con­nected to them. We just didn’t feel that usual pain point of be­ing sep­a­rated from our team.”

Not to men­tion, they didn’t have to write as many long emails to each other, which was an added bonus — and led to less mis­in­ter­pret­ing of the tone and con­tent of their email mes­sages.

“The three of us looked at each other one day and said, ‘This is even bet­ter than our orig­i­nal idea.’”

The trio made the tough de­ci­sion to pivot and change their fo­cus. And it wasn’t all based on gut in­stinct: Based on their ear­lier re­search, they knew that em­ployee en­gage­ment is a huge pain point for to­day’s or­ga­ni­za­tions. Ac­cord­ing to Gallup, fully 70 per cent of em­ploy­ees are not en­gaged with their work. Sev­eral other pieces of data en­cour­aged their de­ci­sion: Video con­tent is ex­pected to ac­count for 75 per cent of the world’s mo­bile data traf­fic by 2020; by 2022, mo­bile work­ers will ac­count for 42 per cent of the global work­force; and ev­ery sin­gle day, peo­ple send bil­lions of video mes­sages through Snapchat, In­sta­gram and Facetime.

To date, most of the user and app-devel­op­ment ac­tiv­ity in video mes­sag­ing had oc­curred in the con­sumer space; but the team felt strongly that the en­ter­prise space was next. Lots of work­places were al­ready us­ing Skype and Google hang­outs; but this app would be dif­fer­ent. Those tools are what is known as ‘syn­chro­nous com­mu­ni­ca­tion’ tools: You have to be there, at your com­puter or de­vice, at the same time as the peo­ple you are com­mu­ni­cat­ing with. This prod­uct would be ‘asyn­chro­nous’ — so that users could send a short video mes­sage at any time of day to their col­leagues.

“We saw all these dif­fer­ent proof points — a con­stel­la­tion of them — and we just in­her­ently knew that ‘this is go­ing to hap­pen at work.’ Ev­ery or­ga­ni­za­tion needs tools that fos­ter more hu­mane and ef­fec­tive com­mu­ni­ca­tion.”

The name for their com­pany: Help­ful. De­bow ex­plains: “It sounds sim­ple, but the whole rea­son we wanted to build this com­pany in the first place was to be help­ful to as many peo­ple as pos­si­ble; we also felt that this tool would lead to a much more help­ful work­place cul­ture — where peo­ple would com­mu­ni­cate and share in­for­ma­tion more of­ten.”

Marshall Mcluhan fa­mously said ‘the medium is the mes­sage’, and De­bow feels that holds true with Help­ful. “What Mcluhan meant is that the form of a medium em­beds it­self in any mes­sage that it trans­mits, so that the medium in­flu­ences how the mes­sage is per­ceived. If you want to en­gage peo­ple, you need to use an en­gag­ing, au­then­tic, hu­man medium.” Video mes­sag­ing — with its abil­ity to con­vey deeper mean­ing through fa­cial ex­pres­sion, body lan­guage, tone of voice and in­flec­tion — can sig­nif­i­cantly im­prove the most im­por­tant as­pect of suc­cess­ful busi­nesses: Re­la­tion­ships with and be­tween em­ploy­ees.

Avail­able on the Ap­ple and Google Play stores since the start

of 2017, Help­ful is al­ready be­ing used by ma­jor air­lines, banks, gro­cery chains, tech and creative agen­cies, and, of course, lots of start-ups. The team is con­tin­u­ing to en­hance its fea­tures, func­tion­al­ity and user in­ter­face.

Along the way, Help­ful’s founders have worked with the Rot­man School’s Creative De­struc­tion Lab (CDL) — the seed-stage pro­gram for sci­ence-based com­pa­nies that De­bow helped to es­tab­lish in 2012. Through the CDL, Help­ful’s lead­ers have been able to net­work with top tech­nol­ogy in­no­va­tors and re­searchers af­fil­i­ated with the Lab — and to put to­gether a pow­er­ful team of ad­vi­sors that in­cludes Mi­crosoft Bing co-cre­ator Bar­ney Pell; di­rec­tor of Ap­ple AI, Rus­lan Salakhut­di­nov; Bloomberg Beta part­ner Shivon Zilis; and Richard Zemel, who built the Univer­sity of Toronto’s Ma­chine Learn­ing Lab.

The in­sights that Help­ful’s founders have gained about AI helped them build a speech-recog­ni­tion ca­pac­ity for their app that tran­scribes video mes­sages — a fea­ture they con­sider a key dif­fer­en­tia­tor be­tween their prod­uct and oth­ers on the mar­ket.

“There are times when you want to send an ex­pres­sive mes­sage to some­one, but that per­son is not in a po­si­tion to lis­ten to au­dio. But, if you have to type out the mes­sage, that is ex­tra work. We won­dered, ‘Could we use ad­vances in ma­chine learn­ing to do that typ­ing?’ It turned out that we could. We added this to the app, and it made the ex­pe­ri­ence that much bet­ter,” Thawar says.

A startup isn’t a ‘com­pany’ in the typ­i­cal way peo­ple think about it, says De­bow. “It’s more of a learn­ing ma­chine.” About 80 per cent of the orig­i­nal code for the app was changed along the way, as they it­er­ated the prod­uct. At each of his ven­tures to date, he has ei­ther part­nered with or hired grad­u­ates of the Rot­man School, which he calls ‘an in­cred­i­ble tal­ent mag­net.’ Help­ful’s back­story not only re­flects the tal­ent, in­ge­nu­ity and grit of its founders — it is a tes­ta­ment to the Rot­man School’s ca­pac­ity to nur­ture grad­u­ates who are in­ter­ested in veer­ing off the beaten path of con­sult­ing or bank­ing to start their own com­pa­nies.

Help­ful is cur­rently free to use, and the com­pany will even­tu­ally charge a fee for a premium ver­sion. The founders say their vi­sion is to not only cre­ate a great prod­uct that is used and loved by mil­lions, but to more broadly cre­ate many high-qual­ity jobs, strengthen Canada’s tech­nol­ogy sec­tor and con­trib­ute to the coun­try’s eco­nomic pros­per­ity. Noble goals, to be sure. “We have in our hands some­thing that I want to use all the time,” says De­bow. “It has trans­formed how my col­leagues and I work with each other.”

Some peo­ple still be­lieve suc­cess has a lot to do with luck; but when you dig into the de­tails, it be­comes clear that most suc­cess­ful peo­ple ‘make’ their own luck. They learn how to put them­selves in the right sit­u­a­tions, grasp op­por­tu­ni­ties as they arise, al­low for ran­dom­ness, take risks — and most im­por­tantly, they work re­ally hard. Help­ful’s founders are a case in point. And clearly, their Rot­man de­grees didn’t hurt, ei­ther.

Help­ful’s founders: Rot­man grad­u­ates Daniel De­bow, Farhan Thawar and David Pardy.

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