Billion-Dollar Babies: Previan’s innovation driven by customers

On June 15, the Communitech accelerator in Kitchener, Ontario unveiled its “Team True North” initiative, to identify, promote and support Canada’s top-performing/highest-potential tech companies.

Communitech identified an initial cohort of 35 Canadian firms that it expects, based on objective data, to have the highest probability of reaching $1 billion in annual revenue by 2030.

Research Money has launched a new series, which we’ve called “Billion-Dollar Babies,” to profile some of these top performers, featuring interviews by our writing team with the companies’ CEOs/founders.

This profile focuses on Previan, a Quebec-based industrial technology company.

Previan (previously known as Eddyfi/NDT)

• When founded: 2009
• Where located: headquartered in Quebec City
• Number of employees: 1,500 employees across 33 offices worldwide
• Core business: Technology hardware (instrumentation)
• Financial backing (venture or private): Venture

Previan is an industrial technology group providing advanced diagnostic technologies to ensure the health of infrastructure and critical assets in multiple industries. Through strategic acquisition and development, the company has carved out market and technology leadership positions across the industry; it now serves customers in more than 110 countries.

According to Previan’s website: “We believe that technical intimacy with our customers is paramount to our success, providing us with the insights we need to develop the next generation of infrastructure sustainability solutions.”

Earlier this year, the company for the second year in a row was recognized for its overall business performance and sustained growth, with the prestigious Canada’s Best Managed Companies designation.

Research Money interviewed Martin Thériault, founder and CEO of Previan.

What do you think of Communitech’s Team True North initiative and of Previan being chosen to be in the first cohort?

We really are in line with trying to highlight Canadian businesses, so we were privileged to be part of that cohort.

Our company was a startup and when we started adding other companies, people came to know us, but people don’t know what we do. So we felt privileged to be amongst the best in Canada to be showcased. It’s important for our future, too, to get the recognition.

We are branded as a Canadian company. Our investors are Canadian. We’re truly excited to be part of the first cohort.

I’d expect there’s a lot of competition in the area your company works in: diagnostic and remote monitoring technologies. What makes Previan stand out – what does your company do that’s innovative and unique? 

Right from the outset as a startup, we focused on being the most innovative company in our space. And to us it meant improving science – whether through hardware or software or physics — so that we could deliver more [diagnostic and monitoring] information to our clients, the asset owners.

Our clients simply get better data with us. In our field, we feel it’s been a vital driver. On that basis, we’ve created a lot of value for ourselves, for our employees, and more important for our clients.

Part of that positioning is well supported with Canadian R&D infrastructure and support. The R&D credits in some provinces, like Quebec, are a substantial help. Although they’re not perfect, they do give us the incentives. We get lower costs and we essentially get support from the government to invest in R&D. So our business has been founded based on R&D initiatives.

In a nutshell, what makes us different is that we have the next generation of technology. We’ve advanced technology to the next level and this provides a unique perspective to our clients. 

What is your approach, as President and Chair of the Board at Previan, to innovation and whether it’s necessary for a company to succeed?

For us, it is essential, it’s part of our strategy. If you’re going to be the tech leader, you’ve got to walk the talk. We typically invest two or three times more than our peers in R&D. The obvious impact translates into better [profit] margins.

One of the challenges is to make sure we always question where we’re investing precious dollars. Is it sustainable? Is it nice to have, or is it disrupting, or is it the next generation of technology?

So we’re committed to innovation. But if you’re not careful, you could be investing in all sorts of things that don’t pay out or provide value for your clients.

We’re connected with our clients and the voice of customers is always critical. We like when our innovation is funded by clients. It keeps us on pace to deliver. 

What do you see as the biggest challenge in reaching $1 billion in annual revenue and what is your company’s plan for getting there? Can you say how close Previan is to achieving this milestone?

It’s a big number, but we’re about halfway there, close to $500 million. It [additional revenue growth] is going to come two-fold: organic growth and creative acquisitions will amplify our success and our positioning on technology.

I think we’re well on track to get there [to $1 billion in annual revenue] by 2030. The question is when, as in two years or three years or five years.

The demand in our industry is increasing. And the minute you innovate, you create new categories of markets that didn’t exist. Our clients are spending more to get reassured about their infrastructure. They need that social license to operate, which wasn’t the case 10 years ago.

So there’s growth, but I think we can further accelerate our growth by innovating and defining new categories of value. When we get to $1 billion in revenue, it will be because we’ve expanded our offering, we’ve talked to more clients, the market has increased, and maybe we’ve added other companies to our mix. 

What kind of support are you expecting, or would you find helpful, from Communitech, as a member of Team True North? 

If Communitech has a mission to help Canadian entrepreneurs succeed, I think we’re onboard. I think we need to constantly protect our infrastructure.

On one hand, it’s dangerous to become a subsidiary of U.S. big corporations that get our talent at a fraction of the U.S. cost. I think that Communitech, by representing us Canadian entrepreneurs and businesses, could send a [message] to the politicians that they keep that perspective in mind.

The next bridge or the next hospital in Quebec or Ontario won’t be paid much by Facebook or Google or Amazon. It will be paid by our entrepreneurs that live in Canada and exploit global markets from Canada.

I’m super-positive. I look forward towards any initiative to protect the ecosystem, to even strengthen it, and to network between the different members [of Team True North]. 

Is it important for Previan to stay in Canada as your company scales up and do you expect that it will, given that many Canadian companies reach a certain stage of growth and then are bought by a foreign entity? 

As an entrepreneur, you always have this question: Am I the best owner for my business or can it thrive in different hands? We decided that we wanted to build a Canadian business and not sell it to [a foreign company]. It would be easy to take a big cheque and go home and retire. But we’ve committed to doing this.

Can this change over time? Who knows: never say never. But we’ve specifically debated that question over and over. And as a founder, I made the choice to keep the business Canadian and in full control of its destiny, and to not become a subsidiary of a foreign company.

It’s okay to sell your business and I have a lot of respect for people that do that. And sometimes it leads to other positive consequences for the economy. But I think we need more of us who say, “I’m not going to sell my business. I’ll take it to the next level.”

Now there’s the ecosystem of [R&D and venture] funding, of partners to help us do that. Maybe that wasn’t the case 15 or 20 years ago.

What could the federal government and its new Innovation and Investment Agency do to help Previan to stay and grow in Canada? 

I think we need to stay grounded. With the politicians, it [supporting innovation] is always about job creation. I don’t think it’s job creation anymore. It’s the quality of the value that’s created.

For example, there are companies that create and deliver a service versus companies that create intellectual property. The IP very often has inherent value in it, pent-up growth, because you get the IP benefit in the future, year after year. The Canadian companies that are creating IP – I think that IP will have a tonne of value down the road to create sustainable revenue. So those companies should be supported.

The second aspect is we need to help companies get access to talent, to help them find, select and keep people. Maybe [this means] not helping foreign companies who come and get a bargain in some of our resources.

We need to start thinking about: We’re in Canada. If we can’t find the people here, we can find them in Mexico [or another country]. At least we bring back cash from Mexico to Canada because [such workers] pay taxes here. I think the federal government needs to help Canadian companies with the labour issue and be a bit more creative than the old political approach of “Let’s create jobs.”

We all get excited when Facebook opens up in Vancouver and they get incentives and whatnot. Or there’s a [foreign-based] video games maker in Quebec who’s been here for 20 years and still gets [government subsidies]. All the money that goes to these foreign firms ends up being value creation in other countries, not here for Canadians in a market where there is a critical lack of talent.

So the government needs to change its view on the economy, because simply right now the lack of labour and the competition from foreign companies is really a challenge for Canadian entrepreneurs.

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