Traction on Demand CEO Greg Malpass on his fear of venture capital

Contrary to popular belief, venture capital investment isn’t the Holy Grail in startups. Just ask Greg Malpass, co-founder and CEO of Traction on Demand. In less than a decade, he has built a leading cloud consulting and software development company – without taking one penny of external investment.

Malpass revealed the secrets of his success to Shawn Smith, adjunct professor at the Beedie School of Business and co-founder of RADIUS, in a special interview at the Surrey campus on April 10. The interview – during which the pair topped up their energy levels by drinking chocolate milk, a trademark of SFU’s Entrepreneurship & Innovation strategy team – was conducted in front of a live audience of aspiring student entrepreneurs.

Taught by Smith, the final lecture of the BUS 238 Introduction to Entrepreneurship and Innovation class each semester plays host to a live interview with a local successful entrepreneur. This semester’s interview featured Malpass, an SFU Business (now called the Beedie School of Business) alumnus, who has grown his organization from a one-person operation in 2006 to one employing over 130 people today.

Utilizing the customer relationship management Salesforce platform, Traction On Demand moves the infrastructure of clients into shared environments, building software to leverage those environments and increase efficiency for the companies. Their clients range from billion dollar corporations such as Telus and Ritchie Bros. Auctioneers to smaller clients such as dog walking service Release the Hounds.

The interview revealed that Malpass’ entrepreneurial streak had been nurtured at SFU. Initially determined to follow in his father’s footsteps and become a doctor in order to open a sports medicine clinic, Malpass realized in his first year at SFU that he was more interested in running this business than working in it. This, combined with a 1.54 GPA at the time – which would make it hard for him to pursue a career in medicine – caused him to change focus and pursue a business degree.

His low grades meant that he was not eligible for entry into the SFU Business faculty, however, but it was at this point that he first demonstrated the negotiation skills that would serve him well throughout his career. He struck a deal with the Dean of SFU Business whereby he could pursue a business degree provided he could persuade each instructor to allow him to take his or her class. For the next three and a half years, Malpass would begin the semester by auditing the classes, persuading each instructor on an individual basis to then allow him to transfer into the class after two weeks.

During his studies Malpass was engaged with the SFU community, participating in ACE SFU (now Enactus SFU). When attending the annual ACE conference in Toronto the networking opportunities offered there resulted in him landing a job in a small marketing agency, starting out as Account Manager before being promoted to Director of Client Services. From there he went on to work for software company Crystal Decisions, before leaving to co-found a company of his own with three other employees. It was there that Malpass taught himself how to use the Salesforce platform, becoming the first person in Canada to obtain the product’s qualification.

Although the company enjoyed several years of success, after a disagreement with his partners on the company’s direction Malpass opted to go it alone. Starting with only two clients, within four years he would add the likes of Microsoft and eBay to his growing portfolio.

“I was working with some of the top 25 companies in the world, and had all their information,” he said. “I began to wonder how they were doing in comparison to each other, so I did a benchmark analysis. I then sold that analysis to them for $10,000 a month as part of a recurring service so they could see how they compared to each other.”

Asked how such a small company was landing such big clients, Malpass explained that people skills were the secret. He revealed that he recently asked his liaison at Telus – one of his company’s first clients – why they had given such a small company their business. “He said that we just seemed like really nice guys,” Malpass said.

Famed for its company culture, Malpass explained that Traction on Demand’s values are a product of its employees. The company surveys every employee in order to figure out what their values are, collects them, and puts a word articulation on it that forms the company’s values. “It is a tremendous exercise,” says Malpass.

Such a great company culture requires that employees fit within it. As such, the hiring process at Traction on Demand is designed to ensure that prospective employees are not only hard working, but also treat others well. The company also offers $2,000 to anyone quitting within the first two months of employment, to ensure that they want to work at the company. “I am not shy of stealing great ideas from other businesses, and I’m not afraid to experiment,” says Malpass.

Questioned as to whether there was a problem that he believes society fundamentally does not understand, Malpass revealed his distaste for venture capital investment, opining that he prefers the route he undertook, whereby he saved money when business was going well and reinvested it in his own company.

“I have always been fearful of debt – I don’t want anyone else choosing my fate,” said Malpass. “Lenders and investors are very unpredictable. External factors are out of their control. I never borrowed money, my target was always to get work and then hire people to carry it out.”

In closing, Malpass offered a piece of advice to students unsure of what to do with their future. “Acknowledge the fact that no one knows what they want to do with their future – try things, take little steps, experiment and keep stock of what you like and don’t like,” he said. “In the end, we’re all just making it up as we go along.”