In Silicon Valley, they call companies that are worth more than $1 billion before they go public unicorns.
Skip the Dishes was on its way to becoming Winnipeg’s first unicorn, but it was acquired by the U.K.-based public company Just Eat, so it might not technically qualify for the label.
Farmers Edge, the precision agriculture company that has raised much more than $100 million from venture capital investors and has customers around the world paying for its data-based precision agricultural services, is probably getting close to that mark.
In a discussion about the changing shape of governance for knowledge-based companies at a get-together of the Institute of Corporate Directors on Wednesday, Josh Simair, founder of Skip the Dishes and Wade Barnes, co-founder of Farmers Edge, had some biting commentary to share about the challenges they faced growing their companies in Winnipeg and the realities the province is facing in the increasingly digital economy.
Both of them would be considered fabulously successful by most accounts and many might think they ought not to have a care in the world.
But the two founders and CEOs (Simair recently resigned from Skip the Dishes) — who are both born-and-bred Prairie boys — want to see the landscape change so that others might have an easier go of it growing digital-era companies in a region that may be more wedded than most to traditional industry.
It may very well be the case that those two companies are the outliers and that enterprises of their size may not emerge out of Winnipeg again for another generation, but both were unimpressed enough with their own accomplishments to imagine how it might be easier for others to do it the next time.
They both believe they face significant challenges ahead for their companies to continue to grow and both rang alarm bells about the kind of structural changes the province ought to be considering.
"We need to stop thinking there is economic value in new factories," Barnes said. "That is not where the world is going. It is going digital. The world is changing. You are going to see a lot of really big companies get hit with a sledgehammer. Big-name companies so mighty and powerful. They are going to get a big shakeup."
Barnes, the CEO and founder of Farmers Edge, pointed out that with 1,400 employees and growing, Skip the Dishes now employs just about as many as the largest private-sector employers in the city — New Flyer Industries and Boeing Canada, which are both at around 1,500.
But their ability to keep growing is tied at least in part to their ability to continue to fill the positions that need filling. Simair said Skip the Dishes officials recently returned from Sao Paulo, Brazil, where they made job offers to 93 system developers.
"Between Farmers Edge and Skip, we are hiring more developers than the entire province is graduating," Simair said.
His big thing is how hard it is to get immigration permits for skilled workers to be able to come and work here. They both urge government to make that process easier using the simple logic that there are jobs available here, no local candidates that qualify and future wealth generation for the province is at stake.
Those two companies eventually became as successful as any Manitoba company in recent history in accessing enough investment capital to grow their companies to the size they are at now.
But both of them also ran into extreme culture clashes with their Silicon Valley investors (who do not believe there could possibly be anyone smart enough in the Prairies to run the companies they started). Simair said he ran up $70,000 in credit-card debt as he boot-strapped his company into existence in the early years. That kind of self-reliance and economic reality was a stark contrast to the way the Silicon Valley venture capitalists throw around money.
Barnes’s experience starting up Farmers Edge was also one where he had a team of dedicated partners who understood when they had to miss a paycheque every now and then. Their subsequent venture capital partners were not nearly as understanding.
Both of them said investors and board members were needed who understood the world of technology and also the particular cultural realities of Prairie companies. The fact that there is virtually no way for companies such as theirs to access capital locally to achieve the kind of success they’ve achieved speaks once more to the need for more flexible and reliable pools of capital based in the region.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Thursday, March 22, 2018 at 5:32 PM CDT: Updates facts in story.