Confessions of a Serial Entrepreneur – iRing Inc.

Now I have talked about a few of my companies through my posts but I have yet to mention Nexco or iRing. Two years after starting Stroma Service Consulting Inc. (IT consulting and resourcing company), we knew we would need to diversify, as we had one major employer the Justice Cluster (Solicitor General, Attorney General and Corrections). Between Canadore College and the start of Stroma I worked one year as the accountant (yes you read that correctly) at a local Engineering company. Now this company was heavily tied to the project to convert Adam’s Mine into a landfill. It had other lines of work but the focus was Adam’s Mine. The company was part of the bid to treat the leachate from the facility. The project was already mired down in conflict, and it did not look like it would come to fruition. When the government changed from Conservative to Liberal, the project was killed. I left the Engineering company in the fall of 2000 as I could see the writing on the wall. They really did not need me and I had the chance to start Stroma.

 

Two years later, in the In the fall of 2022 the engineering company went into receivership and Stroma purchased the SCADA and PLC (automation of instrumentation processes) division as we thought it fit under the umbrella of our core IT business that we were trying to diversify. In addition to the PLC/SCADA staff, two other individuals also came to work for us because of this. Chris was an engineer that spent his entire career in the world of explosives and commercial blasting (mines), and Troy was a recent mining engineer graduate who had taught himself how to program. Steve Jobs said, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do”. Both brilliant people so we followed their lead. Chris had discovered a new way of manufacturing a new type of ammonium nitrate-based explosive. He also worked with Troy on a new drill and blast software package called iRing for INCO.

 

We will come back in a future post about Nexco but for this post we will just deal with iRing. Now when you get a purchase order from a large mining company like INCO you get excited. We were thrilled as we knew that every underground mine in the world could use our package to best drill and blast a mine face. Drilling and blasting are critical to the entire mining process. If you get large chunks of ore, additional processing is required as big chunks don’t fit into the ore pass. Big chunks need to be re-blasted or broken up in some secondary way – i.e. underground crushers. If you blow everything to smithereens (I love that word) you end up with dust which is also difficult to process. The chunks do not need to be uniform. In fact, you do not want them to be uniform because non-uniformity allows for greater packing density – more ore in the truck. However, there is a limit as to how large or small the chunks can be. They must follow a rather tight distribution – think of a bell curve.

 

This is how many small companies that sell businesses to larger companies start. You land a large contract from one client that sustains you and allows you to build something and then you take that technology and go look for other customers. This is why B2B businesses are less risky than B2C (consumer) as you only need a handful of customers to survive. We sold our licenses at the time for $30,000 US, and we could justify that since we made the average mine planner speed increase fivefold. In a B2C world, especially in the app space, you need a lot of customers to make it viable. Venture capital in Canada is almost solely focused on B2B.

 

I have no mining experience. But there is one thing I should have paid attention to and that is that our software was built on top of an existing CAD (computer-aided drafting) system. Now in the mining space there are a few such systems that are particular to mining. Up until this point the only CAD system I knew of was AutoCAD and that was the system we started to develop on top of until INCO changed their CAD system. The system that INCO was using was called MineCAD. Now MineCAD at the time was not widely used in mining globally. So, we were building something that sat on top of MineCAD, which means our growth was tied to MineCAD’s growth. This only works out if the platform you are building on top of grows fast or is already established. In our case it did not grow fast or have a large install base and our growth was constrained. We should have paid much more attention to this at the onset, but when a major customer gives you money to build something it is hard to resist. This is why Apple and Google have a stranglehold on the “app market” – because they have the user base which is an incredible moat to overcome for a new entrant.

 

We spent about 8 years or so hobbling along in this space surplus at the beginning, losing money, then breaking even, until we decided to rewrite the app and embed a CAD system within it. Eight years is a long period of time, but iRing was not our core business at the time. We had many discussions about shutting it down but we felt there was something there. We decided to rewrite the software after receiving approval for a multi-year IRAP grant that helped us reduce the costs associated with the rebuild. We should have done this from the beginning with INCO, or at least shortly thereafter. But sometimes life is so occupied with the current fire that you do not have time to address the smoldering ones. It took us another three years to rewrite the program and we drastically changed everything which resulted in an incredible product.

 

We shifted responsibilities internally and I started managing iRing around the time of the new round of development. I had spent the last 10 years up to this point developing relationships in the Service Management space and now I needed to do the same for the mining space. I have built networks a few times in very different industries and it is not an easy thing to do. To any young people who are reading this, start developing your network now and really work at it. Your network will help you find contracts, jobs, and opportunities more than anything else will. Every time I sell a company and move on I feel like I am getting divorced. I know there are people I have met along the way that I may never see again, because I have lost my connection to that industry. And I am terrible at remembering names from my past. I tell Gina that when someone new comes into the picture somebody old has to leave my brain as I have maxed out my storage capacity.

 

I love finding that song from a familiar artist that you never heard before or haven’t heard in years. I had this happen recently and the song is by Simon & Garfunkel called “Keep the Customer Satisfied”, which every business tries to do. This song has been off my radar for a long time but is now back…just like an old colleague.

 

Maybe one of my future posts should be crazy customers I’ve encountered! 😊