By Etienne Kishibe
Starting a technology company now would seem to be a bad idea to most.
The technology sector is imploding, with companies like Nortel and EDS Corp. laying off thousands of workers.
For Nish Patel, however, starting DNA 13 in September 2001 worked perfectly well.
Small enterprises are popping up all around Ottawa. According to Ottawa’s Entrepreneurship Centre, there were 5,280 startups in the city between August 2001 and August 2002. That’s a 367-per-cent increase since last year.
Technology companies account for 40 per cent of the startups.
The centre’s executive director Stephen Daze said in a published report that extensive layoffs always lead to an increase in new businesses.
But he was unable to say how many of these new enterprises are successful.
To Patel, the risk doesn’t matter much.
“Considering the general economic market, the risk of starting your own business or going to work for a company where the risk of layoffs is always present is a wash.”
Patel’s company sells a computer application for customer relations management, geared toward large corporations.
A small company, with seven full-time staff in a second-floor Byward Market office, DNA 13 has still landed clients like BCE, Manulife and RBC Financial.
Patel says his company actually benefited in some ways from the technology sector meltdown.
He says the company makes use of the extensive high-tech talent in Ottawa, since skilled workers laid off from larger companies are available to be hired.
Even in a generally poor market, Patel says, there were niches his company could fill.
“Despite the downturn there were still tremendous opportunities . . . we saw a market need for our product,” says Patel.
Early on, potential clients were receptive to the idea behind DNA 13, so Patel started the company.
Though the technology sector remains fragile, Patel says his company is doing well and is moving into the American market. But he is cautious.
“Coming out of the high-tech bubble, we have to be more diligent about how our business grows,” he says.
DNA 13 has the rare advantage of producing highly specialized products for a particular clientele.
This makes it a comparatively stable company, which doesn’t get caught in speculative bubbles, according to Patel.
DNA 13’s product was sold to BCE before any production had begun.
The commitment from this major buyer reduced the uncertainty his company faced, which Patel says is the “biggest obstacle” for any new business.
The Entrepreneurship Centre reports that the trend toward small businesses has created $58 million in new investment, and $310 million in sales, in the Ottawa area.