RjR Innovations—Transitioning from Consulting to Services to Products Company Before Combining All Three

Posted
on March 12, 2013

(This article originally
appeared in Ottawa
Business Journal:https://www.obj.ca/Opinion/Bruce-Firestone-5444.)

An
intense Robert Beauchamp started Ottawa’s
RjR Innovations in 2004 with his VISA card and a $10,000 laptop he bought so he
could run virtual environments for clients. It started out as a consulting
company but quickly transitioned to an IT Service Management business with
nearly 25 employees, 5,000 square feet of office space (ironically in the same
St Laurent Boulevard office building as the larger database infrastructure
company Pythian Group) and more than $5 million in sales today. They expect to
double in size in the next three years.

Mr.
Beauchamp says that recruiting additional staff is what limits their growth
prospects. “If I could hire 50 salespeople tomorrow and train them, we could
grow much faster. Our ideal clients are enterprise, mid-market clients like
Norton Healthcare, Erie Insurance, NorQuest
College and Big Y Foods.
We implement ITIL best practices for them and this generates a lot of buzz for
us—by far the largest driver of sales is our reputation. But we still have to
close the deal and that requires a sales call.”

ITIL
(Information Technology Infrastructure Library) is a set of IT service
management best practices that is to technology infrastructure what GAAP is to
accounting.

Mr.
Beauchamp did not conjure RjR from a vacuum—he worked in the IT space from age
21 beginning in 1997. He feels that this experience provided him with skills he
needed to launch his own enterprise. He says entrepreneurs need to think about
five things before starting out—

1.
Go work in your target industry—get some experience;

2.
Everyone these days seems to have a good idea; this is useful but not
sufficient—you need to be good at business too;

3.
At some point, you know it will happen for you so be ready;

4.
Realize that your competition is just as passionate as you are—so there is no
such thing as a 9 to 5 entrepreneur;

5.
This is not a hobby; business is tough and there are both highs and lows.

A
year after starting RjR, Robert wanted to hire some people so he could move out
of the consulting space into services but first he needed to raise some
capital. He spent six months doing that and raised $160,000—enough to recruit
his first three employees. After that, all further growth was internally
funded.

Their
big break came in 2006 when they finally got a reseller deal with BMC Software
(provider of a technology platform to run business services) but the
arrangement only applied to Canada.
Robert went to Montreal
to meet with a BMC VP who, after an hour and a half, liked Mr. Beauchamp’s
presentation well enough to extend their deal to US-based clients. By the end
of 2006, revenues surpassed $1.5 million and RjR was on its way.

Future
growth will come from more services and now proprietary products as well. This
is a familiar story—it’s a common experience for tech companies to transition
from consulting to services and finally to products before inevitably becoming
a blend of all three.

They
bought QSignOn from PWC in 2011. QSignOn not only encrypts data on hard drives
in police cruisers, it implements single sign-on and two factor authentication.
RjR expects most police vehicles in Canada will soon be using it.
“Market potential for this product is huge. The largest police force in Canada has just
bought it,” notes Mr. Beauchamp excitedly.

RjR
also has opportunities in the mobile space. “Every business application can be
mobilized,” says Mr. Beauchamp. “A city, for example, might have a website that
allows you to find an arena but maybe you can’t actually book any ice time. Or
perhaps you are accessing the site via a smartphone and you lose your wi-fi
connection. Our platform for mobile applications allows offline usage and then,
when you get back to wi-fi, it synchs up.”

Mr.
Beauchamp is still majority owner of RjR, a feat unto itself given its need for
capital to fund growth. A mostly bootstrapped company leaves the founder in
charge; it both limits and shapes RjR’s destiny.

Dr
Bruce M Firestone, Founder, Ottawa Senators; Author, Quantum Entity Trilogy,
Entrepreneurs Handbook II; Executive Director, Exploriem.org; Broker, Century
21 Explorer Realty; Entrepreneurship Ambassador, Telfer School of Management,
University of Ottawa. Follow him on Twitter, @ProfBruce @Quantum_Entity