The highs and lows of the riskily rewarding startup experience Special

Posted Jun 1, 2013 by Daniel Edwards
As the idea of joining a startup becomes more universally attractive, CEO of Layer7 technologies Paul Rochester reveals the highs and lows of the startup experience as well as his experience transitioning from an established firm to a young company.
Sean and Lee Renshaw  creators of hang travel gear  appearing on  Dragons  Den  a hugely popular rea...
Sean and Lee Renshaw, creators of hang travel gear, appearing on 'Dragons' Den' a hugely popular reality television show
CBC Television
Never has there been a time in recent history when entrepreneurship has been so heavily accepted and glamourized in the media and society in general. CBC’s Dragons’ Den and ABC Shark Tank have captivated audiences gathering millions of weekly viewers who potentially become the customers for many of the young companies which seek funding on the national stage. Entrepreneurship is in, especially during a time when traditional employment is still not at the level of security that it once held, many individuals are taking the leap to become self employed and seek to gain market share in an industry.
No industry startups have been more sensationalized than the technology industry which has defined a generation with break through innovations from Google’s search engine to the growing demand to post photographs, status updates and share entertaining videos through Instagram, Facebook and YouTube. Beyond the Hollywood depiction of Mark Zuckerberg’s transition from dorm room programmer to multi billionaire CEO in The Social Network, the startup experience is as Layer7 Technologies CEO Paul Rochester calls it “running on borrowed time”. The future for a recently established company in the tech space is uncertain as many companies derive its capital from investors and not from customers as its revenue model is not developed. If the revenue model is non existent or not effective and the investor capital is depleting, without further investment the firm will become just a part of the 90 percent of startups that fail.
During the mid 2000’s Vancouver based software application management firm Layer7 technologies was going through precarious times with instability in management and revenue growth challenges. The economic recession of 2008, as many companies experienced, was not favourable to Layer7 and the company was faced with the real possibility that it may not survive the economic storm without making the necessary decisions. The necessary decision was to bring on Paul Rochester as CEO to guide the company going forward. Mr. Rochester, who previously was a senior VP with Sun Micro Systems (now a division of Oracle Inc), transition from an established firm to a startup was a new experience with its share of obstacles. “A big company is like a tanker, you can take your hands off the wheel and you will go straight for a long time, small company take your hands off you can be in the ditch immediately” said Rochester as he expressed his personal experience. One of the greatest assets that larger companies have, and many young companies fail to develop in time, is an ecosystem of financiers, partners and people who can be delegated work or provide assistance to ensure success. Although Layer7 did not have all these pieces together Rochester was always optimistic. “I felt the company had all the potential to be successful, but we just needed to manage our money until a better market was in front of us” Rochester stated.
The startup reality is that the tough decisions have to be made at the right time, in Layer7 situation the company chose to cut employment from 62 to 46 in 2009, but due to proper execution going forward the firm has grown to almost 200 employees and has been profitable since fourth quarter 2009. The resurrection of Layer7 has caught the attention of multi billion dollar software giant CA technologies who has recently acquired Layer7 for a favourable amount. The startup experience is definitely a period of optimism and uncertainty, but with the right product and effective execution, the opportunity for success is limitless.