What does the true entrepreneur do when he can’t find the product he needs for his business? He builds it himself.
Responding to the blistering growth of social media, in 2008, Ryan Holmes added social-media management to the list of services offered by his Vancouver-based Web development and marketing firm, Invoke Media Inc. He quickly found that his team needed a better tool to perform the task effectively, and put his experienced developers of content-management systems to work. In December of that year, Invoke introduced HootSuite, a social-media management system that helps businesses collaboratively execute campaigns across social networks such as Twitter, Facebook, LinkedIn and Google+ Pages from one secure, web-based dashboard.
Despite a competitive landscape and a tough economic environment, HootSuite has flourished. Spun off as a standalone company with seven staff and no revenue in January 2010, HootSuite today employs 90 and is generating sales at an annualized rate of $10 million. The firm turned its first profit in November 2010, just five months after launching a paid version of Hoot-Suite. (Like many software startups, the company still offers a free product with limited functionality as a way of attracting fans.) Today, HootSuite is recognized as one of the world’s top social-media management systems. [More: Social media branding: Learning to fly]
Holmes is the first to admit that Hoot- Suite’s success is due in large part to the rush to social media. “It’s the most disruptive form of communication we’ve ever seen,” he says. “There are three times more social-media accounts than there are email accounts. So, there’s a lot of demand in the market.”
But where there’s demand, there’s competition. Holmes stays ahead through constant product innovation. “We’re more focused on innovating than anything else,” he says. HootSuite actively solicits feedback from its stakeholders using a variety of means, including a high-powered, thirdparty product called UserVoice Feedback, which gathers, funnels and prioritizes customer input.
More valuable could be Holmes’ direct involvement in product development: “I provide vision and direction, review and tweak and modify, and make sure every change is aligned with what I’m hearing, especially from our users.” It’s unusual for CEOs to be so hands-on in the innovation department, but Holmes believes it’s essential: “Founders who manage product are, in general, more successful. Facebook is one example; Apple is another.” [More: How to say we've moved with social media]
Being a spinoff of an established company has helped HootSuite over some startup hurdles. “We had the benefit of a revenue stream and a history with the bank,” says Holmes. The almost US$5 million in debt and equity financing raised by the firm since December 2009 has been even more helpful, funding operations and enabling some strategic acquisitions.
Still, Holmes brings the same bootstrapping mentality to HootSuite that helped him launch several previous businesses on a low budget. For instance, HootSuite staff use the free, web-based Google Apps suite instead of Microsoft Office; BaseCamp, a web-based project-management and collaboration tool; and, yes, the HootSuite software for social-media marketing. [More: Social networking: Calling for customers]
“I’ve started a series of small businesses, and I wish this channel had been available to me when I launched them,” Holmes explains. “Every email you send has a per message cost. Every print brochure has a per unit cost. Social media has no cost per unit—and high virality.”
Practising what its preaches appears to be paying off for HootSuite. “We have competition, but in some ways, I think we’re now leading the market,” says Holmes. “We’re no longer the underdog. Now, we’re looking in the rearview mirror.”
That’s a good place to be, but Holmes is taking his own advice to avoid resting on his laurels. “Always be hustling,” he says. “Work harder and work smarter. It’s not going to happen itself.” [More: The lean growth machine]