Articles

The E25: Canada’s Hottest Dot-coms

By Simon Tuck

Published in The Globe and Mail, Toronto on June 22, 2000

They’re not just Canada’s hottest e-businesses — they’re also the country’s elite warriors in a global battle over who controls the next great commercial frontier.

There has been plenty of behind-the-scenes chatter about Canada’s rapidly improving e-business sector, but an extensive survey by Bain & Company is the first ever to document — and list — its best prospects.

According to the e25 ranking of Canada’s top 25 on-line firms, the hottest dot-com of all is Point2 Internet Systems Inc. and its business-to-business site, Point2.com. The low-profile Saskatoon company started as an on-line equipment listing for traditional industries such as mining and oil.

The survey, conducted by Bain and published by The Globe and Mail, evaluated 285 companies, about 100 of which scored high enough in the five categories — innovation, impact, execution, funding and fame — to be considered strong bets for the future.

The e25 stresses the importance of innovation and strategic impact — while playing down more conventional measures such as Web site traffic and revenue — in order to ferret out the best prospects in Canada’s New Economy. That approach is bound to generate a lot of controversy — and much needed discussion about the evolution of the nation’s on-line sector.

Jon Huggett, vice-president of Bain’s Canadian branch, says it’s time to stop thinking of e-business as a peripheral novelty and start viewing it as core to today’s business world. “It’s not the Old Economy or the New Economy, it is the economy.”

The stakes are extremely high. International Data Corp. (Canada) Ltd. forecasts that sales over the Web in Canada will reach $149-billion by 2004, 85 per cent of which will be between businesses. “If we don’t participate effectively in the Internet economy, we’ll get left behind,” says Michael O’Neil, IDC’s country manager for Canada.

e-25 is Canada’s only research-based tracking index of home-grown Internet start ups. The following companies make the top ten of the ranking, which focuses on the long term value creation of Canadian e-commerce businesses:

Point2 Internet Systems, a business-to-business company providing marketing and inventory management tools for the heavy equipment industry;

Book4Golf.com, a company providing a tee-time reservation system for golf courses across North America;

TUCOWS, a provider of services and software distribution online;

CarBiz.com, a business-to-business company with a proprietary software suite for car dealerships to improve traffic and to instantly approve or deny customer financing;

GlobalMedic, a business-to-business company connecting individuals, corporations, healthcare providers and payers to deliver healthcare products and services online;

Internet Sports Network, a business-to-business company famous for SportsRocket, specializing in the provision of games to branded sites;

skulogix, a merchandising fulfilment and transaction services provider to branded vendors and their retail customers;

Bingo.com, an entertainment company with a site allowing registered users to play bingo games for free;

EPOST, a provider of online, secure mail delivery, including bills, payment, flyers, etc; and

Onvia.com, a business-to-business marketplace for small business buyers and sellers.

The results of the survey conducted by Bain & Company Canada came after the analysis of 285 businesses using the following metrics:

Strategic Innovation: Bain looked for companies that have created something new, rather than adapting an existing concept;
Strategic Impact: Bain assessed the business model against its competitors — evaluating its potential to create a strong, sustainable business;
Execution: Companies’ management teams were interviewed to gauge the ability to implement strategies;
Funding: Bain assessed companies’ ability to obtain funding;
Fame: The ability to get noticed by the business community and raise one’s presence in the media.

“Gauging strategic impact, innovation, execution, funding and — to some degree — fame, the e-25 is a good indication of which companies stand the best chance to change the way Canada does business,” said Jon Huggett, Vice President in charge of e-commerce in Bain’s Toronto office. “The focus is shifting from valuation to value. Companies are being built to last instead of built to flip. Bain’s comprehensive research found many Canadian digital entrepreneurs with a healthy focus on the fundamentals of innovation, winning strategy and excellent execution. The common theme among the teams we met was a passion for delighting customers and building strong businesses. It contrasts with the popular vision of the Internet entrepreneur as a fresh-faced opportunist looking to make a fast buck and get out quick.”

THE RANKINGS

Point2.com
Heavy equipment exchange
Score: 90
Book4Golf.com
Golf portal
Score: 84
Tucows.com
On-line content provider
Score: 83
CarBiz.com
Portal for auto dealers
Score: 80
GlobalMedic
B2B e-health company
Score: 77
SportsRocket.com
On-line game provider
Score: 76.5
Skulogix
Web agent for fashion
Score: 76
Bingo.com
Entertainment Web site
Score: 75.5
Epost Canada
Electronic post office
Score: 75
Onvia.com
Small business services
Score: 74.5
BayStreetDirect.com
IPO-investor intermediary
Score: 74
WebHelp.com
Assisted Web searching
Score: 73.5
Chapters Online
On-line bookseller
Score: 73
Megawheels.com
E-adviser for autos
Score: 72.5
Bid.com
Web auction technology
Score: 71
E*Trade Canada
On-line securities trading
Score: 70.5
Brandera.com
Marketing industry portal
Score: 69
TDbank.ca/CanadaTrust.com
Web banking, brokerage
Score: 66.5
iMoney Corp./Canoe.ca
Financial news, shopping
Score: 66
JobShark.com
On-line job recruitment
Score: 65.5
Medbroadcast
Medical information
Score: 63.5
Wiredmerchant.com
End-of-life computer sales
Score: 62
Gearunlimited
Sports equipment sales
Score: 61.5
Workopolis.com
On-line job recruitment
Score: 59.5
PatchGear.com
Industrial gear brokerage
Score: 58.5