PROGRAMMED TO SUCCEED

How “Failure is Not an Option” Became a Hard-Driving Force for a Couple of Software Developers

Fear of failure is a powerful motivator, particularly when your future is on the line. When Lakshmi Raj launched Replicon Inc., a Calgary-based software engineering company developing products like time tracking software, in 1996 with her husband, Raj Narayanaswamy, failure was instant. Their first product was a flop, so they tried another. That bombed, too. When their third attempt fizzled, the two began to panic. They had both quit their jobs — she with another software company, he with a consulting firm — so confident were they that their computer science degrees would translate into a lucrative business. After all, Raj had a ton of ideas and Narayanaswamy was a whiz at developing those ideas. What they didn’t have, however, was a clear understanding of how to market those ideas. Meanwhile, their debt had climbed to $100,000, they were paying off one credit card with another, and their friends thought they had lost their minds.

“We were questioning ourselves, too: Are we the right people to do this? Do we still believe in this? What are we doing wrong?” recalls Raj of those early struggles. But the Internet was exploding — “Even grandmas had e-mail accounts,” says Raj — which convinced them corporations could use their software program to become more efficient and productive. That staunch belief in what they were doing drove them forward. That and the nagging fear of failure. “We didn’t have a choice in the sense that failure was not an option,” says Narayanaswamy. “Our skill sets had changed so much that we couldn’t get another job, so we had to continue. [We were driven] to be successful and not be seen as a failure.” Still, success remained elusive.

Enter Maury Parsons, a consultant in the investment and management of technology and commercialization projects. His list of affiliations is long and impressive: managing partner of PaCT (Partnerships for Commercialization of Technology); executive-in-residence at the Banff School of Management; chairman of the Power Pool of Alberta; chairman of the National Technology Advisor Committee to the Canadian Venture Exchange; as well as positions with the Alberta Executive MBA Program and the University of Calgary’s Faculty of Management. It was Parsons’s role teaching entrepreneurship at the University of Calgary, however, that compelled Raj and Narayanaswamy to seek his counsel.

“Our biggest learning curve was going from looking at the world from a technology perspective to looking at it from a business perspective,” says Raj, reflecting on her initial meeting with Parsons. “We had to look at things from a customer viewpoint, how to market to our customers, how to sell to them, how to keep accounts of our expenses and revenue. In fact, the best piece of advice we ever got was from Maury. We had been so worried about accounting; we didn’t know how to keep track of our revenue and expenses, taxes, GST, all of that. And he said, ‘Don’t worry about these things, accountants will take care of them. You worry about simple cash accounting: how much money you’re making, how much you’re spending. As long as you are not spending all the revenue you are making, you should be fine.’”

This simple yet astute piece of advice freed Raj and Narayanaswamy up to do what they did best: create software programs. Back at the drawing board, they took a very small application that they were most familiar with — time sheets — and developed a program that helps companies track the time it takes for their employees to complete a project, which in turn helps those companies with billing, as well as accurate estimation of future projects. Within a month of launching Web Timesheet, they made their first sale, to a PR firm in Seattle. Today, Replicon (named for Narayanaswamy’s favourite sci-fi movie, Blade Runner, which features Replicants — “human-like but more efficient beings; they get things done,” says Raj) has 6,700 customers in 58 countries with annual revenues over $25 million. Their two-person operation has ballooned to 145 staff in their Calgary headquarters, with additional offices in Montreal, Austin, Texas, and Bangalore. They’re currently considering expansion into Europe, Australia and Dubai. Top-tier clients include Hewlett-Packard, Nike, Amazon, BP Oil, Volvo and Ferrari. Failure, it would appear, has been neutralized. “I just saw their desire and intensity to make something happen,” says Parsons of his decision to help Raj and Narayanaswamy get their business off the ground. “I really knew nothing about their product — I am not a high-techie or management guru, so to speak — but I saw in them the essence of entrepreneurship. They live and breathe that business. They just had to learn how to be managers. They needed the confidence to run their business on their own. I could give them a book or [some other materials] and — I’m not exaggerating — they would have read it and be knowledgeable about it within 24 hours. Their capacity for knowledge and desire to learn is insatiable. They absorb and absorb. Seeing two people who are bright, smart, nice, and with incredible ethics succeed is a joy. They are such a dynamic duo. Plus, there’s a synergy that doesn’t occur normally. They are a marvelous complement to each other; they’re perfectly the yin and yang.”

Balancing that yin and yang didn’t come easy. “When we work from our strengths, things are beautiful. When we work from our weaknesses, I get the couch,” says Narayanaswamy with a laugh. Deciding how they would let each other’s strengths work to their advantage, Raj and Narayanaswamy set boundaries for their areas of expertise. Like their first products, that idea flopped. “At first we had a lot of opinions, discussions and fights,” says Raj. “Our personalities are very different. He’s more of a visionary, a creative person; his solution designs are really well thought out. I’m more of a practical person.”

After plenty of trial and error, their working relationship became more fluid. Raj will tap Narayanaswamy for his thoughts on sales and marketing; he’ll call on her for input into research and development. “Sometimes it’s a pressure cooker, but we’ve worked out those things and we pretty much know when we’re getting into a situation like that and we avoid it,” says Narayanaswamy. “We can figure things out now in two or three minutes; it’s no longer a therapy situation.”

At the end of the day, they tried to leave the office at the office, but that didn’t work either. “We had a note on the garage door that read, ‘Don’t bring work home.’ That lasted maybe three days,” says Narayanaswamy. “We have stopped that; we don’t try to avoid work at home or home at work. We have basically made work our life and life our work. The focus was getting the job done, but also having fun and having a life.” When she needs to reconnect with the quieter side of life, Raj says she practices yoga, meditates and reads a lot of spiritual books. “Reading helps put things in perspective,” she says.

And now that they have another baby besides their business, there’s a renewed appreciation for what they’re doing. Raj is currently on maternity leave with their first child, who’s just turned one. She’s still in touch with the office, however, telephone conferencing, text messaging, e-mailing and, because they live only a couple of kilometers away, having the occasional in-person meeting. “I think I have a different appreciation for life,” says Raj of becoming a mother. “Before it was just my husband and work, and now it’s become much richer. It’s given me an opportunity to step back and look at things. I’m also relying more on the other managers and they have stepped up a lot. I trust them, and most of them have rewarded that trust, and risen to the challenge. The company has become a well-oiled machine, for the most part. It’s still stressful and challenging in terms of growing it. It was easier to have the entrepreneurial spirit and take a lot of risks before. Now it would be not only risking what we have built, but risking our managers’ and employees’ jobs, so we have to be very careful about what risks we take.”

Raj couldn’t have imagined the pay-off the risks would bring her when she came to Calgary in 1991 from her home in Salem, India. Because there were so many doctors in her family — an aunt and several cousins — her parents expected her to follow in their footsteps. “I had no interest,” she says simply. What she did have an interest in were math and science, so she enrolled at Chennai’s prestigious engineering and technology school, Anna University, and graduated with a BE in electrical engineering. She met Narayanaswamy through a mutual friend when he was attending another university adjacent to Anna. With interests so similar, they fell in love and soon married. His goal was to work abroad, so Raj followed her new husband to Calgary. Once in Canada, she attended the University of Calgary, where she earned a BSc in computer science. A desire to control their own destiny soon got them talking about running their own business. “One day we said, ‘Why are we sitting around talking about it all the time? We should do something about it,’” says Raj. “We didn’t know what we were getting into, but we have no regrets at all. Yes, it was very stressful, but it has also been very rewarding.”

It’s been rewarding in other ways, as well. In 2004, Raj landed on Profit Magazine’s annual ranking of Canada’s Top Women Entrepreneurs; the following year she and Narayanaswamy won the Ernst and Young Entrepreneur of the Year Award; and last year Raj earned a place on Canada’s Top 40 Under 40 list. This year the company was recognized by Mediacorp Canada Inc. as one of the country’s best workplaces for new Canadians, and named by Alberta Venture Magazine as one of that province’s fastest-growing companies.

“It feels good,” Raj says of the recognition. “It’s acknowledgement for how far we’ve come, and it’s acknowledgement for our employees. A lot of them have been here since we started; it’s become a home for them. We are always proud of the work we do, which is unlike other kinds of software, like gaming that just entertains people. There’s nothing wrong with that, but our software helps people increase productivity or be more clear about what they’re working on.”

Narayanaswamy says while his wife is a tough taskmaster, she cares a great deal for her staff. “Part of her core value is to treat people well,” he says. “We went through a lot of ups and downs at Replicon but we never laid off people. Lakshmi feels the best thing she can do is give people a paycheque. That’s a core part of her upbringing and her belief system. But she’s also very demanding; she sets pretty high standards. She won’t accept low performance; she’ll hold people accountable. She’s pretty strict, but they respect her for that.” While they are flush with success, Raj says her goal in 10 years is to bring Replicon from a $25-million company to a $200-million operation. “I would also like to see our people grow in the company, see them stay here longer and have a rewarding career,” she says, noting that she and her husband spend time mentoring up-and-comers interested in the field. She’s also proud of how multi-cultural the staff is (she herself speaks Tamil, and Narayanaswamy speaks Tamil and Hindi). “There are so many races in our office — Chinese, Indians, Caucasians, Europeans. People speak about 14 different languages in our Calgary office alone. And since we have customers in about 60 different countries, that really helps.”

Maury Parsons is impressed not only with how Raj and Narayanaswamy care for their staff, but with how they go about recruiting the right people. “They spend a lot of time personally interviewing new employees,” says the chairman. “Many managers don’t worry about the next person coming in two levels down, but they do because they want every gear to mesh…. And they have a lot of female employees who head up departments. Some of them, like Lakshmi, have had babies in the last several years. Many businesses [take the position that], if you’re going to be a mother you can’t have an important job, so to speak. You can be middle managers but not top executives. This has never happened at Replicon. That [respect for new mothers] easily attracts more people into their sphere. Lakshmi is a jewel; she’s a great role model for women. She does it all and retains this lovely composure. There’s no hardness or brassiness. She is very strong, but extremely thoughtful. They both are.”

Or, to borrow the wise words from Armenian-American author William Saroyan: “Good people are good because they’ve come to wisdom through failure.”