Waterloo Tech Highlights for January 2023

Our goal is to provide you with a monthly primer on significant news events from private Waterloo-based technology companies in 5 minutes or less. 

We didn’t publish a newsletter for December so some stories from late 2022 as well here.


Magnet Forensics has signed a deal with Thoma Bravo to be acquired for $1.8B.  Adam Belsher, Magnet’s CEO will lead the combined company.


Darwin AI raised US$6M in a round led by BDC in a down round that included Inovia, Obvious Ventures and previous investor Honeywell. 


Alchemy Nano raised $2.75M of funding and completed their second contract with the Canadian Armed Forces for infrared camouflage solutions.  They’re working on a contract to industrialize the solution.


ApplyBoard’s CEO, Martin Basiri has left the company and his brother, co-founder Meti Basiri has taken over.  Martin plans to build a new ed-tech startup in the future.


Plum achieved 100% YoY ARR growth for 2022.


Skywatch signed up Sidus Space to use Skywatch’s data platform.


RideCo won deals with Kansas City and Riverside, California to power on-demand transit for both cities.


Vidyard hired Jonathan Lister as their new COO.  He joins from LinkedIn where he grew the Sales Navigator business to $1B of revenue.  The company is also now cash-flow break even.


eleven-x signed a reseller deal with Telus to resell their eXactpark solution in Canada.  At the same time a year after launching in the US, 80% of their new business is coming from south of the border.


Chris’ Thoughts

Many tech leaders fret about how to reward great work while keeping their teams lean and hungry.  It’s hard to get to the top.  It’s really hard to stay there.  We’re about to see a tech giant realize they’re not in fighting shape, with an outcome that determines if it’s a comeback story or a cautionary tale.

I can’t think of a single instance in tech where a company went from feared to mocked as fast as Google.  While Facebook and Tesla have dominated headlines recently for their own issues, Google has largely been overlooked until the recent emergence of ChatGPT.  I think that two interesting vulnerabilities explain Google’s inability to get things done and stay ruthless.

Sheer size

Before their recent layoffs of 12,000 people, Google had 190,000 employees worldwide.  Just as a rocket requires even more fuel to lift the fuel off the ground, that’s a lot of organizational work and an ever-increasing number of meetings, planning, and make-work kingdom building.  So how many people do meaningful work at Google vs. just work at Google?  How much time is spent trying to defeat a competitor versus fighting internal colleagues or departments to get a promotion?  I’m willing to bet that ~5% of Google’s work force generates over 90% of their revenue and all their profits.  Like a virus with a reproductive rate greater than 1, more make-work and kingdom-building spawns even more when left unchecked.   Today’s competition is less Microsoft and more likely Frank’s team in Building 6 or the Google Secure Services Team.  This happens everywhere but it gets amplified when companies become over-employed and managers focus on building internal influence instead of strategic power.

Redefining success

Early Google employees made millions of dollars as a by-product of winning in the market.  Today many join Google at the prospect of making a median salary of US$295k.   This astounding number is much higher than any other tech giant.  The company makes so much profit that they can give an obscene amount of compensation to employees.  Winners deservedly get paid but maintaining a culture of competitiveness becomes near impossible when talk goes from which competitor we’re targeting to where we’re going for a family vacation this winter. The people who really want to change the world now join smaller companies like OpenAI and target Google’s place in the value chain. 

ChatGPT (and InstructGPT) are the first credible technologies to emerge that could challenge Google’s search dominance.  While I’m sure Google will find a way, it’s just the beginning of a new fight.

Bringing it into my daily life, I’m reminded of the companies I work with and how I need to help their leaders and teams to stay on mission by maintaining the right tensions with a clear sense of success and the leanest team possible for the job. 

Waterloo Tech Highlights is a communication initiative run by a group of experienced investors and strategists who would like to receive and share real news about the vibrant Waterloo, Ontario tech community.

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Chris Wormald @cwormald