David Long, CEO SageTea Software – Statement to House of Commons Standing Committee

7 Dec

David Long, CEO SageTea Software – Statement to House of Commons Standing Committee

SageTea Inc. was asked to provide a statement to the House of Commons

Standing Committee on Government Operations and Estimates / Opérations gouvernementales et des prévisions budgétaires

Merci d’avoir nous invitez.

Good afternoon.

My name is David Long. I am the CEO of SageTea Software, an Ottawa-based software company. Our mission is to be a global standard for software development. We have won two Build In Canada Innovation Program awards. Our sales to government are approximately $1.25M to date. When you consider that we are only a little over five years old and started from my wife’s basement – I think most people would consider that quite an accomplishment.

On that note, my wife has said that I never mention her in any of my public statements. Thanks Tandy Yull – we would not have made it without you.
The purpose of the Build In Canada Innovation Program is to help Canadian companies move their state of the art goods and services from the lab to the marketplace by giving the company that first major reference sale.

The Innovation, Science and Economic Development website states that:
Between 2011 and 2013, small businesses accounted for 27 percent of total research and development expenditures, spending $13.0 billion over the period; and,
Lacking both a credit history and the collateral needed to secure a loan, over 80 percent of start-ups used personal financing to finance their new businesses.

I know that there is a need for checks and balances to ensure that government money is spent wisely. As a small business man who wants to do business with government I would also appreciate anything that can speed up the process.

Across Canada, the risk that is taken by entrepreneurs is shouldered, in my view, largely by individual Canadians and their families. Risk is what stifles innovation – a key theme about which I will make several points and recommendations.

Government should reward risk takers within its ranks. The Build In Canada Innovation Program may cover the financial risk by paying for the innovation. The test department also takes risks by providing the human and physical resources during the test. These people also have full time jobs and agreeing to take part in these tests means taking on extra workloads. For a program like the Build In Canada Innovation Program to be really be successful there needs to be a way to recognize and reward the efforts of the test departments and their people.

Our first Build In Canada Innovation Program award was for Text to Software, our software development platform. To achieve this award, we first had to try and fail our first Build In Canada Innovation Program attempt. This was an expensive lesson learned and what we took out of it was that we needed to hire outside expertise to write our Build In Canada Innovation Program proposal. In terms of costs, I would estimate that our investment to make the attempt and win was approximately $50,000. For a small business, this is no small sum and we took a considerable risk at the outset with only a limited expectation of winning after considerable time.

While recent process changes have brought improvements, it can still take more than a year from the start of the application process to the awarding of the contract. Small businesses can easily launch and go out of business if they fail to secure sales targets after investing in those opportunities.

This is an example of risk and how it plays into whether a firm can even make it through a Build In Canada Innovation Program procurement.

Happily, we did win on our second Build In Canada Innovation Program attempt.

I recommend that it should be a government wide policy that when an entrepreneur is arriving with a new product, service or solution, its required that everyone in government, Director to manager to employee, welcomes the innovator in every way they can. Further, after a successful Build In Canada Innovation Program test, an automatic transition to an internal government incubator specifically for these successful products would be an effective way to accelerate innovation. Currently Build In Canada Innovation Program winners still need to hunt for their next client. This problem could be solved entirely if Build In Canada Innovation Program companies were automatically connected with demand under an automatic procurement program.
There are many bright stars in government who have helped us along the way.

One of these was Mr. Bruce Covington, a key advocate and first client for our innovation at Public Services and Procurement Canada. He and his group were very supportive and proactive throughout our first Build In Canada Innovation Program experience.

I therefore recommend that Build In Canada Innovation Program winners should be able rate and recommend their test departments on an official list. If the government were then to have a policy of recognizing and rewarding the top innovative test departments then its likely we would see the pace of innovation inside the government accelerate.

Text to Software automatically creates customized software from text. In our first Build In Canada Innovation Program test – with Mr. Covington and his team at Public Services and Procurement Canada – we were able to create a customized data classification system for 22.5% of the internal Public Services and Procurement Canada budget. We showed that going “codeless” works, completing the project on schedule, despite a three-month delay. Its fair to say that all of us felt that the result of this Build In Canada Innovation Program test could have gone even further. We learned from that experience and have been working with our partner Meyers Norris Penny to leverage all the Build In Canada Innovation Program results we have achieved into new cloud based services designed for government. These are now available to government departments on the Software Licensing Supply Arrangement. The Build In Canada Innovation Program can be thanked for enabling efficiency minded C-Level managers with our powerful new “codeless” solution.

Also, it was Mr. Bruce Covington at Public Services and Procurement Canada who first recommended that we work with a larger partner. This is what began the relationship we have with Meyers Norris Penny today – our largest private sector partner and Canada’s largest Canadian owned accounting, tax and business consulting firm. With Meyers Norris Penny as the lead applicant representing SageTea, last month we were even able to achieve a Software Licensing Supply Arrangement win for all our Build In Canada Innovation Program tested products. Often a smaller company needs a bigger one to help it along when doing business with the government. I therefore recommend that government do more of this – getting private firms, big and small – to work together in complimentary ways.
We utilized the Build In Canada Innovation Program follow on sales program to test Text to Software at the Department of Fisheries and Oceans. There, we built 2 customized software applications in only 5 weeks using Text to Software. These are now available to the Department of Fisheries and Oceans as well as across government through the Software Licensing Supply Arrangement.

Today, we are just beginning the test of our second Build In Canada Innovation Program innovation – SageTea Link – now with Employment and Social Development Canada as the test department. SageTea Link is an automated Extract, Transform and Load tool. What that means for most of us in the room is that using SageTea Link you can automatically migrate and link valuable data from unsupported expensive to maintain systems to new supported ones. This is a huge problem across government.

A key component of our current Build In Canada Innovation Program project at Employment and Social Development Canada is Artificial Intelligence. SageTea has partnered with Lemay Solutions, an Ottawa based AI company who is a subcontractor with Meyers Norris Penny on the current Build In Canada Innovation Program test. As a result, we are also now including a new artificial intelligence module with SageTea Link. This new product – SageTea Link Deep Learning, enables our customers with easy to use Artificial Intelligence. Meyers Norris Penny is doing a security audit of our software to ensure we meet the government’s IT security requirements.

Our experience with the Build In Canada Innovation Program, and in the Office of Small and Medium Sized Enterprises, has been exceptional. The Build In Canada Innovation Program is a terrific program that has made an incalculable difference to SageTea Software’s mission to be a global standard for software development.