One of the biggest hurdles to growing Canada’s tech sector is attracting and retaining seasoned executives who know how to spur that growth. Large companies attract talent to the city in which they’re located, creating a better ecosystem for the local tech sector. It’s what happened with Waterloo, Ont., thanks to Research In Motion, in Ottawa thanks to Nortel. It’s one of the reasons Canada’s strong startup scene isn’t translating into a mature tech industry: we need more anchor companies.

A lot therefore rests on hot prospects like HootSuite to get the ball rolling. The firm’s new vice-president of marketing, for example, came from Adobe and previously worked at Yahoo and Microsoft. The good news, according to Holmes, is that it’s getting easier to build tech companies outside of Silicon Valley. “We’re seeing a massive decentralization of startups,” he says, with more and more meetings and deals occurring online instead of in person. His company is not at all dependent on local partnerships, he explains. “Our partners are Twitter, Facebook, LinkedIn, Google and others. I work with them.”

Indeed, it’s those four companies that give HootSuite relevance. The company’s social media dashboard can link Facebook, Twitter, LinkedIn and Google+ profiles together under one account, allowing users to send out single messages across multiple platforms. HootSuite uses a freemium model, meaning your typical John Doe—95% of its user base—pays nothing but can connect only five social profiles. More serious users can upgrade to a premium account with expanded features, including the ability to manage as many profiles as they want, for $10 per month. There are also enterprise accounts targeted at companies, offering comprehensive analytics and team support, ranging in price from $1,000 a month to around $100,000. Holmes says the company, which is profitable, earns about the same from both revenue streams.

Last January, HootSuite reported an annual run rate of $11 million. Holmes says that number has since more than doubled—in his opinion, high enough to justify a valuation over $500 million. A half-a-billion projection was floated back in June when popular Silicon Valley blog TechCrunch reported the company may be closing in on a $50-million round of funding.

The lofty valuation comes in part because companies like HootSuite, surfing the social media wave, have been getting acquired ravenously of late. Most recently, social marketing company Buddy Media was bought for $689 million by Salesforce.com, which also snatched up a similar, New Brunswick–based firm called Radian6 for $326 million in 2011. In fact, Salesforce has acquired a total of four Canadian startups in just over two years.

Such an outcome is not something Holmes has ruled out. His goal, specifically, is to build a billion-dollar company in Canada, but once he reaches that milestone, what happens next is anyone’s guess. Brent Holliday, a partner at Vancouver-based Capital West Partners, says Holmes is cagey about his intentions. After all, everyone has a price. “Honestly, somebody comes and offers you a stupid number, you tend to pay attention,” says Holliday, who thinks the company may already be big enough to go public on the Nasdaq exchange. “I want him to go public and become a very big company, a couple thousand employees, because that’s what we need—we need a big anchor company that’s a global player.”

In truth, Canada needs multiple anchor companies. Only a handful of big tech names—IBM, Microsoft, Intel—have maintained their prominence for as little as 25 years. Apple, currently the world’s most valuable public company, nearly flamed out in the 1990s. But when they’re hot, these firms do their countries a lot of good. The talent they retain and help create, in part by training people how to run a big international company, seeps further into the economy, often in the form of spinoff companies. Additionally, profits get redistributed to local research and development, universities and other initiatives. Consider all the money RIM co-founder Mike Lazaridis has donated to the University of Waterloo ($123 million) or to the Perimeter Institute for Theoretical Physics, which he helped launch ($150 million). Anchor companies tend to share the wealth mostly at home. They also bolster a nation’s brand abroad.

Whether or not Hootsuite can reach this level amounts to wild speculation. Holmes has never built a company bigger than the one he runs now. Then again, he’s got a stronger business background than did, say, Facebook’s Mark Zuckerberg.

/>Issac Raichyk, who at 63 is probably the oldest high-tech startup founder you’ll ever meet, insists he’ll keep Keek, a Twitter-like social network for sharing short videos, headquartered in Toronto. He says investors often ask him whether or not he’ll move his company to Silicon Valley, but he believes Canada’s largest city has its own strengths. “Obviously, the Valley has a huge pool of talent, and you can share a latte with the best-known VCs in the neighbourhood Starbucks,” he says. That said, he considers Toronto’s talent pool, exemplified in his team of 40 employees, to be second to none. To boot, Raichyk was able to raise $12 million locally. “We have the talent right here, our business environment is steadier and our tax system is friendlier,” he explains. “So would we move to the Valley? Definitely not.”

Allen Lau
Wattpad, CEO and co-founder

Vancouver-based BuildDirect is already the biggest online destination for heavy building materials, but Jeff Booth’s ambitions are bigger still. According to Booth, there’s been a trend in Canada to sell at around $30 million. “I believe leaders of business in Canada need to be bolder,” he says. He also thinks big businesses play a key role in flourishing ecosystems. They help retain talent, attract capital and affect the general attitude of the local business community. “If BuildDirect could be a small part of that change, it would be something I would be very proud of,” he explains. And that means not selling. Like Holmes, Booth says he wants to build a billion-dollar Canadian company.