An overnight success

Halifax based firm thinks outside the box

December 08, 2011— Halifax, Nova Scotia

Quark Engineering and Development Inc.

A unique business model and outside-of-the-box thinking are fuelling this Halifax-based company's rapid growth. Quark Engineering and Development Inc., a research and development (R&D) firm in Halifax, is a poster child for how a few words of advice, some modest funding and perfect timing can set a company on the fast track to success.

Founded in 2007, Quark develops new ideas and launches new companies. Its raison d’être is to spin off new technologies, leveraging internal resources and external partners repeatedly for maximum efficiency. It carries out R&D work for external clients, but it also develops internal projects concurrently. “We’ve always got stuff in the prototype phase all over the place,” says Tim Burke, chief executive officer. “That’s how we work—jumping on good ideas and opportunities to see how far we can take them.”

Woman is shown Tethering her smartphone to her laptop.

Woman is shown Tethering her smartphone to her laptop.

Keeping the focus on R&D

National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) Industrial Technology Advisor (ITA) Kevin Skinner first encountered Burke in 2007 while providing advisory services to another of Burke’s companies. Skinner then went on to become involved with Quark, which is perhaps best known for developing Tether, an innovative device that enables users to access the Internet through their smart phone cellular connections.

Quark’s first Tether product, known as TetherBerry, was launched internationally in 2009. Despite the fact that TetherBerry was a single-platform product designed to work only with BlackBerry phones, it was an overnight success. Unexpectedly, the three-person operation found itself struggling to cope with demand.

“They were having clients come at them from all over the world,” says Skinner. “The response was such that they could not physically handle the customer support demands. They had technical people on the phone dealing with customer inquiries.”

Skinner and Burke agreed that the firm needed to get its technical staff refocused on R&D, since the product was a beta version at the time and needed enhancements. With Skinner’s help, Quark obtained its first round of NRC-IRAP funding in 2009. Through NRC-IRAP’s Youth Employment Program, Quark hired a marketing strategist, freeing the technical staff to focus on product development.

Next, through Skinner’s efforts, Quark received additional much-needed funding through the Accelerated Review Process (ARP) to transform TetherBerry into a multi-platform and Bluetooth-enabled device. In 2010, TetherBerry was rebranded simply as Tether, and sales accelerated rapidly. Ultimately, these technical improvements led to better market penetration, multiplied business opportunities and increased revenues by 50 per cent.

Scooping up awards

Since then, Tether has won a striking number of awards, not least among them the provincial I-3 Technology Start-Up Award from Innovacorp in 2010, which netted them $100,000 in seed money. It also won a Crackberry award in 2010 for best general utility, and numerous other third-party vendor awards. Tether is also one of five Atlantic finalists in the 2011 Manning Innovation Awards.

The learning curve was steep, but NRC-IRAP’s support has enabled us to free up resources as well as add new resources to the pool.

Tim Burke
Chief Executive Officer, Quark Engineering and Development Inc.

NRC-IRAP recently provided funds so Tether could hire a new graduate dedicated to account management. Having that specialist on board has allowed Tether to expand from strictly B2C offerings into the B2B world. Funding is also likely for a subsequent Tether project that will be a significant extension to its core intellectual property.

Since NRC-IRAP’s involvement with Quark in 2009, the firm has:

  • Attracted a customer base of more than 100,000 Tether users in 127 countries worldwide
  • Grown from three to five employees (more, if you count staff working at spinoffs)
  • Boosted its B2B market share from 10 corporate accounts to 45

What is perhaps most impressive about the company is that it has managed to be so successful despite no private equity investments to date. The original founders, including Burke and his partner, Stephen Hankinson, bootstrapped Quark and Tether from the outset. The company was successful “out of the gate,” says Burke, which enabled the partners to maintain considerable equity and grow the company organically.

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