Kik’s millionaire founder wants to leave his mark on the region
WATERLOO — Ted Livingston was soaking in a warm bath, thinking hard about the future — was it time for someone else to become the chief executive officer of the startup he founded seven years earlier?
The work of growing Kik Interactive, the messaging platform he founded with Chris Best, the startup’s chief technology officer, had become, in a word, brutal.
So he was contemplating what to do while soaking in the tub.
Livingston spends more than an hour every morning in his bathtub, reading, taking notes on his phone and thinking deeply about the company. “I have done that for years,” he says. By all appearances, Livingston was a highprofile success. He was, and is the poster boy for Waterloo Region’s startup economy. Kik is valued at more than $1 billion — a milestone achieved by only a few other startups in Canada.
The growth and success of Kik paralleled the expansion of the region’s startup scene, which Livingston supported with a $1-million donation to the University of Waterloo program that nurtures young entrepreneurs. He donated the money to Velocity in 2011 when he was 23, after Kik secured US$8 million in venture capital
I could be remembered as the guy who helped unlock and unleash this community. Like that would be pretty cool, so that’s why I am going to do it. — TED LIVINGSTON ON GIVING AWAY $1 MILLION
financing.
He is one of judges for the Velocity Fund Finals pitch competitions held every four months at the university.
These are loud events with cheering supporters, and multimedia presentations about cutting edge ideas from starry-eyed techies. With food, T-shirts and music, the events are a lot of fun.
That vibe contrasted sharply with Livingston’s state of mind in the recent past.
“A year ago if you had asked me, I would have said, if I were honest with you, I would have said I was miserable,” Livingston says.
Kik was going through a transition. What began as a group of friends building technology they loved had become something else altogether — building a company to build the technology, which is not nearly as much fun.
A year ago, Kik had more than 100 people on staff, making it impossible to have personal relationships with everyone.
So Livingston decided to take a break. He and his wife headed for their cottage on the shore of Lake Huron for a week’s vacation. A few days later, Livingston learned of the death of a friend’s grandfather and went to the funeral.
Livingston and the elderly man had become close. He helped Livingston with a pet project at the cottage — the design and construction of an elaborate tree house. The tree house has retractable steps, a hideaway kitchen and sits on 14-foot-high stilts nestled among big trees.
“He was one of the best people I have ever worked with in my entire life — smart, nice,” Livingston says. “So smart.” The sudden loss of his friend put the challenges at Kik into perspective. Livingston stayed on as CEO of the company he launched with Best in 2009, and got on with the hard working of growing it.
No matter what was going to happen, Livingston realized that he and everyone else ends up like his friend.
“Any time I am getting stressed out or whatever, I just realize that I am going to die one day, and at the end of the day it is not really going to matter,” he says. “So do the best that you can, learn as fast as you can and keep going.”
Kik now has 165 employees and offices in Waterloo, Toronto, New York and Tel Aviv.
The 300 million registered users of its messaging platform include one-in-three American teenagers. The platform is where groups of friends hang out and communicate with texts or live video.
More than 20,000 bots — software robots — have been built on the Kik platform and more than two billion messages have been exchanged on those bots. The top bots on the platform include CNN, H&M and Sephora.
Livingston stresses how hard it was to go from a startup to a fastgrowing company in the supercompetitive space of consumer technology and social media.
“Getting through that transition is probably one of the hardest challenges on the face of the planet,” he says.
He talks about the challenge as much as he can with younger entrepreneurs.
“It never gets easier, it only gets harder,” Livingston says. “Is your life horrible right now? Does this feel like it is getting harder and harder and harder? Good. You are on the best-case path. In the best case it is brutal.”
Livingston balances the demands of running Kik with healthy routines in his personal life. Those routines reinforce what success means to him — building great things with great people; great relationships with family and friends; and staying healthy.
Six days a week, he does not eat bread, sugar or dairy. He walks as much as possible.
“I don’t go to the gym because that is a big waste of time,” Livingston says. “Why would you go to the gym, and spend an hour there so you can eat bad food? I will not eat the bad food, and not go to the gym and I will save an hour every day.”
Every night, two hours before he goes to bed, Livingston unplugs all has electronic devices and hangs out with his wife. No emails, no calls, no work of any kind. Every Saturday is reserved for family and friends with no work-related interruptions.
“And not a bunch of people — less quantity more quality,” he says.
Building great things with great people applies to both his work and personal life. That’s what brought him so close to his friend’s grandfather, a kindred spirit.
“I wanted to build these crazy contraptions on my tree house,” he says. “People who want to build crazy contraptions are in short supply. He was one of them and I worked with him for probably two years on this tree house.”
Ultimately, Livingston wants Kik to be judged on the impact it has on the emotional lives of teenagers, the main users of the firm’s messaging app. Social media has unleashed an out-of-control game that leaves many teens angry, alienated and hurt, he says.
For insights into the emotional turmoil of teenagers, driven largely by social media, Livingston recommends two books, “It’s Complicated,” by Danah Boyd, and “American Girls,” by Nancy Jo Sales.
“It is insane. The game is totally out of control,” Livingston says.
“My 4 1/2 old niece, if she were 13 today I would be very worried,” Livingston says. “Success to me is when she is 13, I feel pretty good about the environment she has to grow up in.”
For someone who became a millionaire in his early 20s, Livingston has a broad streak of humility that is deeply rooted in his family.
Born and raised in Toronto, Livingston grew up in a family of four boys. His father was a financial adviser on Bay Street. His mother worked in advertising. The youngest boy was born with severe cerebral palsy, and died four years ago at 19 without ever having walked or talked.
“For me and my brothers that was a powerful lesson that sometimes, it is just the hand you are dealt,” Livingston says. “And it was one-in-four odds that we would have been dealt that bad hand, so how can we sit there and say all this success is because of us when we have seen so viscerally and firsthand, so much of life is about the hand your were dealt.”
While studying mechatronics engineering at the University of Waterloo from 2005 to 2009, Livingston saved $15,000 from the jobs he worked during his co-op placements. He also inherited $25,000 from his grandfather. That was the money he used to start Kik.
Within two years he was a millionaire. During an early round of private financing, there was more demand than expected for Kik shares so Livingston ended up with $1 million more than anybody else who was part of the founding team. He could have kept the money, but he was concerned that would lead to bad feelings that would weaken the team.
The funding came just after BlackBerry sued Kik for patent infringement. The suit was later settled out of court. Kik lost about 99 per cent of its users after the suit was filed, but the startup was still attractive to investors.
Livingston likens that extra million dollars he received to the only parachute on a crashing plane. “And I threw it out the window,” he says. “It was also like a great statement to the team: ‘Like I am all in.’”
When he was deciding who should get that money, he thought the biggest impact would come from creating a fund for the winners of pitch competitions at UW. The winners would get $25,000 just as Livingston did from his grandfather.
He knew from personal experience that there is a pool of talent here that is unencumbered by marriage, mortgages and children. That talent also has experience, thanks to the co-op program at the university. All the fledgling entrepreneurs needed was a little money.
He watched from a judge’s seat at the pitch competitions as the $25,000 prizes were awarded to teams that became some of the best known startups in this region, including Thalmic Labs and Maluuba.
At last count, Waterloo Region has more than 1,100 active startups — second only to Silicon Valley in terms of density and ranked 25th overall in the world, according to some studies. Livingston takes enormous satisfaction in having played a role in that, more so than anything else he could have bought with the $1 million.
“Ten years from now or 20 years from now, I am not going to remember the nice cars I bought or the house I bought. Those things will all be gone and meaningless to me” he says. “But I could be remembered as the guy who helped unlock and unleash this community. Like that would be pretty cool, so that’s why I am going to do it.”
Livingston, now 29, says the person he most respects in this region is Mike Lazaridis — the inventor of the smartphone and co-founder of BlackBerry. As BlackBerry, formerly Research In Motion, imploded, Lazaridis came under scorching criticism that Livingston believes is totally unfair.
“You built something massive, you are basically tarred and feathered for doing that, and yet you still continue to drive the future — amazing,” Livingston says. “I don’t know who else has done that in Canada to that degree.”
Lazaridis donated an estimated $400 million into research on theoretical physics, quantum computing and nanotechnology. He also set up a private fund, Quantum Valley Investments, that supports several startups in the field of quantum computing.
As Kik prepares to celebrate its eighth year in business, the hard decisions continue. Livingston is constantly thinking about the options, which are surprisingly few.
“Historically, there are only three options for an exit from a VC (venture capital) backed company — go public, sell or go bankrupt,” Livingston says. “And honestly, none of those really appeal to me.”
Whatever happens, he wants to see the employees at Kik financially rewarded for the incredible amounts of sweat and tears they have put into the business, he says.
“If there was an option that maybe wasn’t best for me, but best for the team, I would take it in a heart beat,” he says. “But in lieu of that I am wondering if there is a fourth option. Maybe there is. Maybe there isn’t. I think there is, but we will see.”