Land of opportunity
Posted on January 15, 2020 | Atlantic Business Magazine | 0 Comments
International innovator Charles Benaiah explains why he thinks Halifax is a techpreneur’s dream come true
Charles Benaiah (above) is not one of your hurdles-I-have-overcome, life-was-a-bitch entrepreneurs eager to share how you too can become him with lots of hard work and even more determination. “I’ve been very lucky,” says the 52-year-old creator and CEO of watzan (“the company that makes all media social”).
Let’s start in the beginning of the middle of his story. English-born, Toronto-raised Benaiah had ended up at the University of Waterloo, the Ontario research-focused university famous for its excellence in engineering and math and its practical co-op education programs that allow students to combine their classroom learning with real-world experience.
Benaiah had chosen Waterloo because he’d been obsessed with computers since he was 13. That’s when his electrical-engineer father returned home from a Chicago business trip with a still-not-available-in-Canada Atari 2600 video console. Charles played Warlords until his fingers hurt. Eventually, he graduated to an Apple II computer, on which he learned how to write computer code.
While still in high school, coding led him to an all-his-spare-time job with a local businessman. This businessman would call on other local businesses to ask them about their technological needs—from speeding up their accounting systems to automating their inventory. Order in hand, he’d turn it over to Charles or one of a half-dozen other nerdy computer types to translate the customer’s desire/need into software answer/reality.
Computers? Coding? Math? It seemed inevitable Charles would end up at Waterloo. But he quickly realized what Waterloo called math (calculus, algebra, statistics) seemed like “hieroglyphics” to him. Still, he soldiered on toward his math-heavy computer science degree while completing his more interesting and more relevant real-world co-op experiences.
He met Declan on one of his co-op terms. Declan was an electrical engineer in his late 20s, “dapper and cool and knew everything.” He certainly knew Charles, a math student who hated math, wasn’t happy.
“What do you want to do when you grow up?” Declan asked. Not math, Charles knew that much. And not just coding either. One of his roommates at Waterloo had recently worked on a project to make the Oxford English Dictionary—all 600,000 words, three million quotations and “over 1,000 years of English”—searchable. “It was the world’s first search engine,” Charles marvels now. That’s the kind of thing he wanted to do: figure out what a computer could actually do to make life better.
“The only way you’ll get there,” Declan told him flatly, “is to get an MBA.”
Which is how Charles ended up at Dalhousie University in Halifax in 1991. His rationale was not entirely academic. He’d spent most of the first 24 years of his life in the 100-km bubble corridor between Waterloo and Toronto. He wanted to get away, experience life. Besides, he’d heard that… well… that… Dalhousie was—“maybe you can come up with a better phrase?”—a party school. Dal was enough of a party school and Charles was enough of a partier that, early on, he was required to pay a visit to the dean’s office. “I had to explain that I wasn’t a screw up even if I had screwed up.”
But Charles did more at Dalhousie than party and screw up. He was smart enough to make his own luck once again.
One of his first MBA classes was in finance and the professor had created a simulator to help explain foreign exchange trading to his students. Students were supposed to spend an hour on the simulator and report back on what they’d learned. Charles spent 90 hours “playing” at the simulator. “It was like the best video game ever.” He laughs. “I was oblivious to the fact this was the real thing.”
Dal and the simulator changed his life’s path.
Charles Benaiah tells me all this as we talk on the phone about watzan, his Halifax-headquartered technology business that serves doctors everywhere and pharmaceutical companies in the northeastern United States. He manages the company out of New York, sometimes Toronto, maybe Halifax. Or perhaps the company “manages” itself.
To find our way there, we need to continue to follow Charles Benaiah’s very lucky but also smart-with-luck career trajectory from here to there and back—sort of—to here again. Don’t worry. There are lessons to be learned.
“Look Charles,” the Scotiabank HR Guy explained patiently. Again. “You’re determined, you follow up. I like that. But the fact is there’s just no openings here for you right now.”
It was the spring of 1992 and Charles Benaiah was in Toronto on a job-hunting visit, looking to land a summer position in the finance sector. Ever since he discovered that that simulator simulated a real thing, he’d known he wanted to work in finance. On every visit home that fall and winter, he’d made the rounds of the country’s big banks, making a polite but persistent pest of himself, including with HR Guy at Scotiabank.
Just then the phone rang. HR Guy excused himself to take the call. A few minutes later, he returned and explained with a smile: “One of our people is going on mat leave. Do you want a summer job on the trading floor?”
“I had lucked into my dream job.” And that luck led to more luck: a full-time job after graduation with RBC. There was, of course, more to it than luck. Benaiah also employed his computational and data smarts to better understand the increasingly complicated world of derivatives trading to help increase the bank’s profits and decrease its risks. And, of course, to make himself a success at his job in the bargain.
After three years, he decided he was ready for a bigger challenge, which is why he moved to New York. He took a job with Deutsche Bank, “hated it,” and quickly moved into a position in the technology sector at an investment bank instead.
On the day he began his new job—May 15, 1997—Amazon issued its initial public offering of stock. “I had nothing to do with it,” Benaiah tells me quickly. “My bank had nothing to do with it. It just happened to happen on the day I started.” Luck again.
Before Amazon, valuing companies was relatively easy. Company X sold so many widgets, earning a profit of Y on each one. Its value was its annual profit times Z, depending on the industry and other factors.
Amazon’s CEO, Jeff Bezos, flipped that formula on its head, insisting that potential future growth was far more important than achieving quarterly profitability targets. At the point it went public, in fact, Amazon hadn’t earned a penny of profit. In fact, it was still bleeding buckets of money and would continue to do so until the fourth quarter of 2001 when its first profit ($5 million) was considered so anemic, “it barely counted.”
Today, of course, Amazon is one of the world’s biggest companies and best investments. In 2018, its net income tripled from $3 billion (yes, with a “B”) the year before to $10.1 billion. Although its profits took a slight hit in its latest quarterly report—just $2.1 billion on $70 billion in sales—that’s because, as the New York Times explained, “the company has been investing heavily to keep its giant core businesses growing at the expense of profits.”
“Amazon changed the way markets think about value,” Benaiah explains. And that led to his own next lucky/smart career move later that same year.
Bill Grimes, a man who knew a thing or two about value—and about media—approached him. A one-time president of CBS Radio, he had served as the president and CEO of ESPN as it became the most profitable cable channel in the world, and then moved on to Univision, the largest Spanish-language media company in the United States. In 1997, he co-founded BG Media Investors, LLP, a private equity media firm set up to invest in both traditional and new media.
“He said, ‘I’m raising a fund. Come with me.’” Benaiah did. “We spent five or six weeks on the road, talking to every fund manager who would take a meeting with us.” BG Media eventually raised $150 million and invested in 15 different media companies. Benaiah, who became a partner with the firm, “helped create a portfolio of mid-market companies that outperformed public market comparables.”
Seven years later, Benaiah’s universe seemed to be unfolding as he believed it should—and as he hoped it would continue to—when Grimes decided it was time his protégé learned to run a company himself.
On April 8, 2004, Grimes announced “the appointment of Charles Benaiah to the post of president and chief operating officer of HMP Communications… a medical publishing and communications company serving the healthcare professional” in which BG Media had already invested.
“I kind of hated him for that,” Benaiah admits now. But he took the job. And stayed for more than a year, getting real-world experience in the medical publishing business and learning a thing or two about himself in the process. “I don’t like management. I don’t like managing people.”
So he started a new company of his own, but one with no employees this time. “Everyone was a consultant or a contractor. I didn’t have to manage them. They just had to get things done.”
The company was called Sequence. Building on what he’d learned from his years in the medical publishing business, Sequence focused on content personalization, curating printed magazines tailored to the needs and wants of individual readers. Subscribers would identify the topics that interested them using low-tech business reply cards and the publication’s content management system would transform their box-checked interests into editorial and ads specifically targeted for them.
Sequence did well enough that Benaiah was able to sell it in 2011 for an I’d-rather-not-talk-numbers price to R.R. Donnelly, a large Chicago-based print and communications company. Although Donnelly, for reasons of its own, shelved further development of Sequence, Benaiah took the lessons he’d learned from Sequence to create yet another new business called watzan, which he launched in 2014 in Halifax.
Yes, Halifax. Halifax is where luck met business strategy met the future. And where, so far, everyone is living happily ever after.
The luck began with a 2014 invitation from Peggy Cunningham, then the dean of Dalhousie University’s Faculty of Management, to visit and share his entrepreneurial trench tales with the school’s current crop of students. “He was recommended to me by a colleague,” Cunningham recalls. “After speaking with him a few times, I was very impressed with his experience, ideas about entrepreneurship and his encouragement with regard to getting our students, who were starting new businesses, to seek broader opportunities and funding by going to cities like New York.”
As for Benaiah, he says the visit was initially “a way to pay back Dalhousie,” then adds, by way of reminder: “I could have been kicked out.”
But don’t think of what happened next as a “selfless, Kumbaya moment,” he adds quickly. “I ended up [setting up his business] in Halifax for valid business reasons.”
Speaking to students at Dal’s Norman Newman Centre for Entrepreneurship, Benaiah met Ed Leach, an award-winning prof and mentor of local entrepreneurs. Leach introduced him to others in the province’s exponentially expanding entrepreneurial ecosystem, as well as pointed him towards the growing skilled workforce of local university and tech school grads.
Which gave Benaiah his Halifax idea.
He already had an idea for the next company. What became watzan had begun in his head as a personalized digital curation tool for Netflix users, but when that concept failed to find market traction, Benaiah returned to the more focused medical market he’d been part of for the last dozen years and understood well.
It is a focused—and lucrative—market. There are over one million peer-reviewed medical journal articles published every year, plus all manner of articles previously published and archived somehow somewhere. How does a doctor find the most relevant articles? Or figure out the most valuable seminars to attend at the most appropriate medical conferences?
Benaiah already knew there was money—lots of it—to be made in finding digital answers to those medical customization conundrums.
“The medical space is very big,” he explains. Pharmaceutical and other companies spend $500 million a year—and growing—marketing their wares to doctors. When it comes to a doctor’s patients, the market is even bigger—$2 billion a year—and growing even faster.
Based on his previous experience, Benaiah already understood the sophisticated level of “information-in” he would need to gather to funnel all those millions of bits and bytes of content into the specific editorial package that would reach each doctor.
Say a doctor is interested in Type 2 diabetes, more specifically in African American patients with the disease, even more specifically in journal articles focused on patients in the American south. At the same time, this doctor is also only interested in articles from the top tier of medical journals published in the last two years and, oh yes, he or she happens to respect one particular expert’s views on the subject…
The best way to harvest all that information is to ask the right questions at the right time, which is to say when the doctor first signs up. As Benaiah explained in an interview with PharmaExec.com: “A co-founder of Uber said recently, ‘You can get 500,000 people to download an app, but only one per cent will come back.’”
Benaiah didn’t want to make that mistake. He wanted to get the right information to begin with so the doctor would immediately see its relevance in the results. And then he wanted to build on what he’d learned in the beginning by paying close attention to everything the person actually read as a result, logging the details, constantly refining their profile.
His goal was to know what his customers wanted to know even before they did.
Which meant gathering even more user data. What social media channels do they use? Who are their Facebook friends? Who do they follow on Twitter? Who do they connect with on LinkedIn? More important, who, among all their connections, is most relevant to them? Have doctors they follow read a particular journal article? “If they are scrolling through eight-to-10 hematology articles [and] they can see that three of their friends read article number two, they will probably be more predisposed to take a look at that article,” Benaiah explained to PM360, which bills itself as “the essential resource for pharma marketeers.” “We’re really beginning to aid that delivery process by creating this social network and allowing people to personalize the kind of content they want coming at them.”
Impressively thorough? Yes. But we’re not done yet.
Benaiah wanted to take his personalization show on the medical conventions circuit too. What if he could let his doctors know which of their colleagues were attending which seminars at a medical conference? Now that would also be valuable.
Benaiah’s own bottom line? Figuring out how to put all that tailored content in front of a doctor who wants it also means Benaiah can put that same doctor in front of advertisers that want to reach him or her too.
So, OK… Charles Benaiah had this sophisticated, thought-out content personalization plan. But who best to turn his dream into a practical, profitable reality? And where to do that?
He could have set up shop in his current home base in New York, of course, “but just try to hire the top five developers in New York… You can’t. Google and Facebook are already there. They have enormous amounts of money to hire people, which means you’d have to raise enormous amounts of money just to compete with them…” He pauses. “Halifax is a smaller pond.”
It is. And, unlike New York, Halifax isn’t about to turn up its nose at becoming, say, the next headquarters for Amazon. Or even watzan. “There’s more interest in us in this ecosystem,” Benaiah says.
That’s a good start. But Halifax itself has plenty to offer. Start with the reality it is in an English-speaking environment just one time zone and an hour-and-a-half direct flight from Newark, which is in the heart of the New York-Philadelphia corridor where most of watzan’s pharmaceutical industry clients hang their wallets.
Then, too, there’s also an obvious financial benefit to a company’s bottom line if it can invest its Yankee-go-farther dollars in Canada. And costs, generally, are lower in Canada too. Bonus.
Since most of watzan’s customers would be American, Nova Scotia would also be bringing in economy-priming export dollars because the company would be selling its products and services in the U.S. market. Win-win.
Better, Atlantic Canada’s tech sector has shown it can innovate with the best of them. Even before Benaiah first looked seriously at Halifax as the base for his new company, regional start-ups like Fredericton’s Radian6 Technologies and Halifax-based GoInstant had turned the eyes of big-dog investors south of the border. In 2011, for example, Salesforce.com—the San Francisco-based tech giant Forbes has called the most innovative company in the world—gobbled up Radian6 for USD $326 million. One year later, it added GoInstant to its portfolio for more than USD $70 million.
The Nova Scotia government had been doing its part too. In 2013, Darrell Dexter’s NDP government inked a deal with IBM to not only take over the province’s own SAP (Systems Applications and Products) computer systems but also to team up with a consortium of provincial universities to conduct research and train students here in big data, analytics and computer optimization.
While Dalhousie was churning out job-ready business, engineering and computer science grads, Saint Mary’s University’s Sobey School of Business touted its world-class business school. And then there were all those design savvy grads at NSCAD University. Not to forget the next crop of IT professionals being trained in application development and programing at the Nova Scotia Community College.
At some point, Benaiah chanced to meet Lauren MacDonald at a conference. MacDonald, an account manager in the Atlantic Canada Opportunities Agency’s Technology Investments Unit, was impressed by Benaiah’s “desire to build a successful team for his company” in Halifax. And Benaiah was impressed by ACOA’s interest in helping outside companies get established.
They agreed to keep in touch “to explore possible avenues to establish watzan in the region.”
Benaiah wasn’t the only outside entrepreneur sniffing around Atlantic Canada. According to independent research quoted by ACOA, Atlantic Canada has become “the fastest-growing activation ecosystem in North America this year [and is] well positioned to see an increasing number of companies explore the idea of building a presence here.”
Perhaps surprisingly, Benaiah wasn’t looking for money. “The cost structure here was advantageous enough,” he tells me. Instead, ACOA provided what it calls its “pathfinding role to help early-stage companies from outside the region get a better sense of the technology and business landscape in the region… In many cases, early stage companies, particularly those that have already raised funding, are most concerned about finding and retaining talented workers.”
Dalhousie’s Cunningham remembers Benaiah being “very impressed with the quality of the students, their ideas, and their drive.”
Watzan’s concerns (and its personnel prayers) have been more than answered. “Our lead developer is just 28 and he’s been with us for four years,” Benaiah boasts of his 20-person Halifax team. “He’s responsible for every line of code. Our newest hire is this terrific young guy. Just graduated from NSCC. He’s only 20.”
In fact, virtually all of watzan—sales, design, development, operations—is housed in Halifax. His team has developed the company’s key software and apps, including feedkast, a new type of social news reader described as “Google Alerts meets social media,” and mapt, socially-sourced content that watzan calls “the perfect app for a medical conference or any event. We want our app to serve as a guide at conferences or any other field. We lay out everything to lead people to the content they want to see. We’re your map.”
So where does Charles Benaiah, the guy who doesn’t like management and doesn’t like managing people, fit in all of this?
At a distance. “My job,” he explains, “is to manage the team, not micromanage it.” He spends most of his time in New York and Toronto.
How is watzan doing? Benaiah doesn’t like to talk dollars but says the company is profitable and revenue is doubling year over year. He puts watzan’s revenues in “the same league” as two other well-regarded current regional start-ups: Proposify, which set out to streamline the creation of business proposals, and Dash Hudson, the creator of a successful visual intelligence platform.
Benaiah, the Torontonian transplanted to New York and running a business in Atlantic Canada, is one of the region’s biggest business boosters. He was even a finalist for this year’s Ernest and Young Atlantic Canadian Entrepreneur of the Year. Halifax, he tells me and is happy to tell others, is an “ideal place” for an outsider to start a new business. •
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