Traction on Demand talks about balancing growth with ‘good business’

How Traction on Demand keeps getting traction

For every top-of-mind tech firm like Slack, Hootsuite, and Shopify on the Canadian scene, there are literally hundreds of innovative companies under the radar that are doing just fine, thanks. Better than fine. They’re the most successful tech stars you’ve never heard of.

Traction on Demand, based out of Burnaby, B.C., is one example. The company recently ranked number 21 out of the top 50 fastest-growing tech companies in North America, Deloitte’s 2016 Technology Fast 50 and 500 lists (They’re 177th out of 500).

If those numbers seem less impressive than number 1, or even number 10, consider that there are 71,000 tech sector firms across the country. (If you’re a startup founder, where does your outfit rank)? And it keeps happening, as the company has posted revenue growth of 573 percent over the last three years.

As Traction on Demand founder and CEO Greg Malpass said last week, “In many cases, firms like ours may appear once on this list and then quickly drop off for the simple reason that adding one million dollars in revenue at an early stage is a lot easier than adding 10 million dollars.”

A symbiotic business model for success

As Hootsuite is to Twitter, Traction is to Salesforce, essentially an implementation partner for the popular CRM solution. The company develops cloud-based technology solutions and applications for all kinds of companies, from small businesses to enterprise. On top of that, Traction has partnerships with about 40 other companies whose products integrate with the CRM. To that end, it’s launched four SaaS products just in the last 16 months.

For business school grads who were raised with a simple idea of built-a-product, sell-a-product, that kind of symbiosis between Traction and Salesforce might seem overly complicated. Yet it is in these highly specialized kinds of niches where fortunes can be made.

“I hate that phrase, ‘it’s just business.’ It’s often just an excuse for unethical behaviour.”
– Greg Malpass, Traction CEO

How can other tech companies succeed with this model and what are the pitfalls they need to avoid? The first key lesson is to always remember who your real customer is, Malpass said. “The customer is the person who pays us money – and Salesforce doesn’t do that.”

That means Traction needs to carefully watch how the large number of partner companies whose products they integrate are doing their own innovation.

He likens these relationships to managing a team of athletes, trying to get the best ones on their team. “The big athletes either innovate themselves forward or grow through acquisitions. But sometimes when you grow through acquisitions, you’re not necessarily buying the best solution, but you’re buying the best one you can afford. Sometimes, it takes time for the dust to settle.”

If those companies no longer offer the same value, then a company like Traction on Demand needs to decide if it wants to keep that partnership in place.

When conflicts occur within the network of companies Traction on Demand is dealing with, Malpass says they’ve learned that being up-front and transparent with both parties is the way to go. He recalls the time Google was interested in integrating its Sheets app into Salesforce – and they got the call to help make it happen. As this was happening, Malpass realized that Smartsheet (another long-time partner) was working on some similar functionality.

Salesforce gave Traction on Demand the green light to have a chat with its old partner, without sharing anything specific. “We talked with Smartsheets and gave them the heads-up, to see where the partnership was at.” Smartsheets appreciated the forthrightness and actually looked at the Google Sheets-Salesforce integration as a potentially good thing for its own business, ultimately bringing more customer awareness around the need for that kind of service offering.

For Malpass, being able to deal with that potential conflict proactively and with a positive result was a relief. “I hate that phrase, ‘it’s just business.’ It’s often just an excuse for unethical behaviour.”

The third lesson, perhaps more of an observation, from Malpass about running a tech company with this type of business model: the pace of innovation is extremely fast, but you do get the inside track on what’s coming up. “I read all these vendors’ annual reports to see what they’re talking about from product direction. We have to keep up with what kind of promises they’re making to the market. If they’re saying this is the year of analytics, that’s a good indication. Now they’re talking about machine learning and AI. There’s a ton going on that we have to learn about.”

Jonathon Narvey

Jonathon Narvey

Jonathon Narvey is a content marketing strategist and BetaKit Senior Editor. Living and working in the heart of downtown Vancouver, he's watched this city's tech hub grow and start to compete on a world-class level. He has learned most of what he knows about tech startups and entrepreneurial spirit by interviewing some of the most innovative thought leaders here and abroad. He's always up for learning something new about the startups, leaders and technologies that are changing our world.