Scaleup Q&A: TouchBistro CEO Alex Barrotti on growing "shoulder to shoulder" with his employees

Entrepreneur Alex Barrotti called his decision to focus strictly on building technology for the hospitality sector “the toughest decision we had to make.” A decade after founding his fourth company, TouchBistro, an iPad point of sale and payments platform for the restaurant industry, he hasn’t wavered —and his instincts have paid off. By late last year, Toronto-based TouchBistro had surpassed 16,000 venues in 100 countries, with month-over-month growth of 500 to 700 venues and of recurring revenue. It had also raised $158 million in Series E funding to expand its suite of software tools and its global footprint.

Last fall, RE$EARCH MONEY spoke to Barrotti, TouchBistro’s CEO, about the challenges of rapidly scaling a global business. The company had recently been honoured as a Top 10 Growth Stage Startup at the Canadian Innovation Exchange (CIX) Summit.

RE$EARCH MONEY: How have you handled the transition from startup to scale up?

Alex Barrotti: It was gradual in the beginning. We were five people for the first year. Even in our second year, we were really small, about 12 people. Then I slowly hired my VP of Sales, VP of Marketing and CFO. Now, we’re about 450 people and we hire a person almost every day. That's a challenge. I love the fact that Toronto has become a real hotbed for technology and there are all these startups. But the flip side is that there are 2,500 startups and they're all raising money and poaching people. Now that we’re so visible, people want our employees.

R$: How are you trying to address that?

AB: We use stock options as an incentive to keep them. The options vest over 4 years, so hopefully, it keeps them around for 4 years.

R$: What about your company culture? What aspects of it do you think have been most important to your growth and ability to attract and retain employees?

AB: Giving stock options to every employee is one of the things we do that contributes to our success. It's important to me that every employee has equity in the company. I don't want to build my success on the shoulders of others. Like I say, we do it shoulder to shoulder.

We also have a two-week onboarding process for every employee, so they get a basic understanding of how we do business. During that time, I do a one-hour company history that every single employee attends, in which I tell the history of the company, the history of myself. There's a saying that goes, you can't understand the message unless you understand the messenger. I also give them a product demo — I show them where we got the idea from and where we're going as a company. I've had a lot of people say to me that it changed their whole impression of the company.

R$: Was there a moment when you knew that what you had with TouchBistro could go global?

AB: That was always the intention. We put it in the Apple app store from day one. For the longest time, the app was in English only. But now, in Mexico, the app is in Spanish, support is in Spanish. We have a French-language version as well.

R$: Are there specific challenges that you've had to overcome to grow your business here in Canada and internationally, such as funding?

AB: Actually, funding hasn’t been one of them. I get this all the time: "It's impossible to raise money in Canada." I don't think so. It's challenging. But there's tons of money in Canada. Tons. You have to have a convincing argument and be able to articulate it.

Did I have any challenges? Now that we're selling internationally the biggest problem is actually not software development, it's support. We recently launched in Mexico City, where we now have more than 500 restaurants. We have an install team on the ground in Mexico City, but the entire bilingual support team, which speaks Spanish and English, is here in Toronto. That's the other thing about this great city. You can find multilingual employees no problem.

R$: Along the way, have you used any Canadian government programs or received government support?

AB: Yes, we did the Canadian Technology Accelerator program in New York City in our second or third year of business. It was an accelerator, so they provided mentoring, office space, introductions to VCs. The thesis was that increasing Canadian companies' business abroad strengthens the Canadian company back home. And they were right. Still, to this day, 70% of our sales are in the U.S., but the product is all made in Canada. Literally.

R$: Anything on the R&D front?

AB: We do SR&ED tax credits. That program is really helpful.

R$: Are there any government policies you would change or messages you want to send about what it's like to be a tech entrepreneur here?

AB: There were rumblings by the Liberal government about raising the capital gains tax on stock options. My response was, do you want to kill the best thing that we've had going for us in years? Finally, Canadian companies can compete. If you take away their stock options, then there's no incentive to make a company Canada. I think John Ruffolo, who was head of OMERS Ventures at the time, among others, sat down with the government and said the change would be a disaster.

R$: Speaking of OMERS, you recently closed a $158-million Series E round of funding led by OMERS Growth Equity. With that in hand, what are your growth aspirations over the next 18 months or so?

AB: We want to offer our customers various other services. We have a hub-and-spoke philosophy. At the core is the immediate point of sale at a restaurant. All around are vital services that complement that. First and foremost is payment processing, but we have others like reservation management and online ordering. Some of those are still white-label services. They're not ours. So, we're going to do two things: One, we're gonna make our own new products; and two, we're going to start looking at growing through acquisition. We recently purchased the reservation management platform Bookenda, and it won't be our last acquisition. We’re also going to focus on new market development. We could continue our entry into Latin America, or look at Europe.

So growth through acquisition, market development, hiring new people and space. We're out of space! We are in three buildings now and eagerly awaiting our new headquarters in downtown Toronto, which will house all of us. It's been a long time coming.

R$: What advice would you give to other CEOs leading their companies through the transition from the startup to the scale-up phase?

AB: Don't be afraid to pivot. We stuck to our guns on doing hospitality only, but one of the things that we eventually did was embrace payments. Our [payment processing system] was long in the making, but it has become a massive part of the business. Today, 25 percent of our revenue comes from payments. I jokingly say now, I thought I was starting a point-of-sale company. I didn't realize I was starting a payments company.

*This interview has been edited and condensed.

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