How did PROFIT HOT 50 firms do so well agains such steep odds? By Adopting these key strategies early on.
Essential #1: Focus on building your credibility
Somen Mondal knew he had to do something drastic to get his Toronto-based software company, N4 Systems Inc. (No. 31 on the 2010 PROFIT HOT 50), off the ground. In the early days, N4 had just one customer. Big companies were hesitant to hire a startup that didn't have a solid customer base. So, Mondal offered free software and support to a high-profile prospect in exchange for the best reference the client could honestly give—which meant the client had to accept calls from anyone inquiring about N4 and discussing N4 with peers at every opportunity. The ploy worked, and N4 gained five new customers based on that one client's referrals alone. "He was over the top in supporting us," says Mondal.
N4's founder soon went a step further. Knowing that Microsoft produces case studies on companies that leverage Microsoft technology (N4's Field ID paperless inspection software runs on Windows Mobile), Mondal asked the software giant to write about N4. "It was just a matter of asking," recalls Mondal, who wound up with a case study touting N4 as a mobile-inspection software expert. Even better, Microsoft did all the work and covered all the costs.
Gary Mauris knew it would be tough to lure consumers away from big-name competitors and persuade them to acquire a mortgage through his nascent brokerage, Port Coquitlam, B.C.-based Dominion Lending Centres Inc. (No. 46). What better way to look like a player than by advertising on television?
From Day 1, Mauris required each of Dominion's agents to contribute $150 per month to a marketing fund that enabled him to run commercials during the evening news and hockey games—right alongside spots from the big banks. It created the impression that Dominion was larger than it was and capable of holding its own against heavyweight competitors. "That gave us massive credibility," Mauris marvels. Four-and-a-half years later, he has 2,000 brokers across Canada, all contributing to his ad fund.
Essential #2: Take advantage of existing relationships
"The easiest way to get business is through people you know," says Tracey Bochner, president of Toronto-based Paradigm Public Relations Inc. (No. 6). When she and co-founder Mike Abbass launched their practice, they worked their personal networks aggressively, meeting with former colleagues and even clients of their previous employers. "We found out we knew a lot more [useful] people than we thought," says Bochner, including providers of complementary services who would recommend Paradigm.
The firm's founders also sent targeted letters to a group of contacts. Within a month, they'd received one reply from a promotions-company employee requesting a proposal for one of his clients: the razor brand Schick. Paradigm won the gig, thanks in part to the glowing reference from Abbass's contact, whom Schick trusted. "That allowed us to skip a few steps overnight," says Bochner. "We anticipated we'd spend our first year or so working on smaller projects, but because of Mike's connection we landed a big client right away."
Bochner also took a client with her when she left her former employer, APEX Public Relations, itself a PROFIT HOT 50 alumnus. She had been managing the Jamieson Laboratories account for eight years, and the client wanted to continue working with her. To avoid burning bridges, Bochner received APEX's permission first. "That was hugely important," she says. "I wouldn't have done it without their blessing."