It’s 2006. You’re a tech startup with a good idea, you’ve got a bit of traction, and you’ve just opened up a small office in a nondescript Mississauga strip mall after years spent toiling in your basement.
Then, out of the blue, Microsoft calls up and says, “We want to buy your company.” They’re dangling $10 to $12 million in crisp U.S. dollars.
What do you do?
If you’re like most people, you’d take the money before they change their mind.
If you’re Carl Rodrigues, CEO and founder of SOTI, you say, “Yeah, thanks, but I’m not really interested.”
Fast forward to today. SOTI, which sells mobile and IoT device management solutions to big enterprise firms, has seven offices worldwide, does business in 176 countries, has a reported CDN$110 million in annual revenue and has logged 87 consecutive quarters of profit. Not bad.
So yes, looking back, it’s easy to say Rodrigues made the right decision back in 2006. But when you’re a little company working out of a strip mall, and the big guy on the block offers millions, how do you say no?
“It depends what drives you, right?” said Rodrigues Tuesday, shortly after speaking to a packed house on the second floor of Communitech at an event known as Pizza with the Prez, an ongoing series of lunchtime talks featuring tech leaders from the Toronto-Waterloo corridor.
“Imagine a Wayne Gretzky,” continued Rodrigues. “He’s in the Stanley Cup game. What do you think he’s playing for? Is he playing for his salary? Or is [he playing] because he wants to win the Cup? It’s all about what motivates you.
“For me, the Cup is: Let’s build an amazing global Canadian brand. That’s the prize. If I sell out along the way, all I’m doing is helping someone else build that amazing global, foreign brand.”
SOTI now has 700 employees. Its world headquarters is in Mississauga and the company has a facility in Waterloo called the SOTI Research & Innovation Lab, staffed with 15 software engineers.
How committed is Rodrigues to his vision of making SOTI a world-leading firm? In 2015, less than 10 years after saying no to Microsoft, Rodrigues was approached by a company called VMware, a division of Dell. At the time, Rodrigues estimates his company was worth in the neighbourhood of US$2 billion. Again he was asked to sell.
“Sorry, it’s not for sale,” he said. Not for $2 billion. Not at any price.
“I’m trying to build a global multinational Canadian company,” Rodrigues told Communitech News. “If you ask someone: ‘What are the top brands in the world?’ you’d get past No. 100, probably, and there wouldn’t be a Canadian brand among them.”
Rodrigues believes the reason that’s true is that Canadians are generally too willing to sell. He wishes more would think long term. He wishes more would think big.
“That’s what I’m trying to encourage these young Canadian entrepreneurs to do,” he said. “I think that’s what limits us. We have a bit of a farm-team mentality.
“The greatest companies in the world, if you look at what’s behind them, there are a lot of really smart Canadians. At Tesla. At Google. What if they stayed here? Maybe we’d have another BlackBerry.”
Rodrigues acknowledges that not every company is in a position to turn down a rich offer and that he has been able to do so because his company was, and remains, profitable.
But, he said, from the get-go he had an ambition in mind to build and grow. Not sell. “We had a game plan,” he said.
“What do you think [Tesla and SpaceX CEO] Elon Musk’s exit strategy is? He’s thinking big. He’s thinking I got into space – I’ve got to get that car into Mars, right? If you’re really going to do something big, you’ve got to dream even bigger.”
