Opinion: RjR Innovations’ special blend

Robert Beauchamp started Ottawa’s RjR Innovations in 2004 with a Visa credit card and a $10,000 laptop he bought to 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, more than $5 million in sales and 5,000 square feet of office space – notably, in the same St. Laurent Boulevard office building as Pythian Group, a larger database infrastructure company. The company expects to double in size in the next three years.

Mr. Beauchamp did not conjure RjR from a vacuum. He worked in the IT space starting in 1997 at age 21. He feels that this experience provided him with the skills he needed to launch his own enterprise.

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A year after starting RjR, Mr. Beauchamp said he wanted to hire additional employees so he could move out of the consulting space and into services. But first, he needed to raise some capital.

Mr. Beauchamp spent six months meeting investors and raised $160,000 – enough to recruit his first three employees. After that, all further growth was internally funded.

The company’s big break came in 2006 when it finally signed a reseller deal with BMC Software, a provider of a technology platform to run business services.

However, the arrangement only extended across Canada. So Mr. Beauchamp went to Montreal to meet with a BMC vice-president who, after an hour and a half, liked Mr. Beauchamp’s presentation enough to expand the deal to U.S.-based clients. By the end of 2006, revenues surpassed $1.5 million and RjR was on its way.

In 2011, RjR bought QSignOn from PwC. In addition to encrypting data on hard drives in police cruisers, QSignOn provides 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,” notes Mr. Beauchamp, adding the company recently completed a sale to a major Canadian police force.

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

RjR also has opportunities in the mobile space.

“Every business application can be mobilized,” says Mr. Beauchamp. “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 syncs up.”

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

Mr. Beauchamp says the process of recruiting additional staff is what limits RjR’s growth prospects.

“If I could hire 50 salespeople tomorrow and train them, we could grow much faster,” he says.

“By far the largest driver of sales is our reputation. But we still have to close the deal and that requires a sales call.”

SIDEBAR: Preparing to launch

Mr. Beauchamp says entrepreneurs need to think about five things before starting out:

– Go work in your target industry to gain experience;

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

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

– Realize that your competition is just as passionate as you are. As such, there is no such thing as a 9-to-5 entrepreneur;

– This is not a hobby. Business is tough, and there are both highs and lows.

Prof. Bruce M. Firestone is entrepreneurship ambassador at the University of Ottawa’s Telfer School of Management; founder of the Ottawa Senators; executive director of Exploriem.org; and a broker at Century 21 Explorer Realty Inc. Follow him on Twitter @ProfBruce.

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