When Parham Aarabi started his PhD studies in electrical engineeringat Stanford University in 1999, he moved into an office Google co-founders Sergei Brin and Larry Page had just vacated. "I wasn't conscious at the time just how much that experience would shape me," says Aarabi. Only later did he realize how much he'd been inspired by the Silicon Valley model of leveraging brainpower from a top-notch university to build a world-beating business.
Since graduating in 2001 at age 24, Aarabi has been a professor at the University of Toronto. He's now also president and CEO of Modiface Inc., whose 173% two-year revenue growth ranks it No. 40 on this year's HOT 50.
The company is the global leader in face-simulation apps and claims a 90% market share in this niche. Essential to Modiface's success is its ability to recruit top talent studying engineering at U of T, which is just a few blocks from the firm's offices.
L'Oréal uses Modiface apps to show its clients what they would look like while wearing its makeup; plastic surgeons use the apps to offer patients a sneak preview of their "after" face. Yet, although the end use of this software is all about glamour, Modiface's origins are decidedly geekier.
Aarabi founded his firm in 2007 after Botox-maker Allergan saw a newspaper story about a gag app he'd built for his students showing how Angelina Jolie's lips would alter someone's face. Allergan asked whether Aarabi could develop an app showing how Botox injections would change someone's look. By 2011, what had begun as a fun project was a serious business with $1.3 million in sales. Clients each pay about $100,000 per year to license the firm's technology, and consumers pay $1 to $2 for premium versions of its apps. Downloads of Modiface's 100 iPhone and iPad apps exceed 10 million.
"The company is only as good as its engineers," says Aarabi, whose parents were also engineers. One key to landing first-class brains is to get them while they're young. Aarabi's U of T job, although he's on indefinite leave from teaching, gives him a jump-start on identifying top young talent. And Aarabi and his staff bring recent hires from U of T to career days at the school to help recruit current students.
Hanging onto talent is as crucial as recruiting it. Modiface bases its retention strategy on three principles: engineers just wanna have fun, great minds need to wander and talent must get paid.
Modiface emulates the Silicon Valley practice of sweetening long work hours with a whole lot of fun. This includes monthly cook-offs in which employees showcase their culinary skills (Aarabi often wins), food stations with unlimited snacks and excursions such as boat trips.
Because the best ideas often come out of the blue, Modiface has a 60/30/10 rule for its engineers. They devote 60% of their time to projects the firm needs them to work on, 30% to related projects that interest the employee and 10% to the employee's own "way out there" projects.
Modiface also offers stock options and salaries about 10% higher than at comparable tech firms. "These people are among the top of their class," says Aarabi. "They could go anywhere."
His firm is now diversifying into fashion- apparel simulations, such as a Brides. com app that women use to "try on" wedding dresses. By applying Modiface's virtual-makeover smarts in related niches, Aarabi aims to keep his firm growing fast— and finding and keeping more of the sharp minds fundamental to its success.