Photo: Darin White for CommunitechSurviving BlackBerry and other stories: how Ted Livingston built a unicorn in Waterloo Region Phil Froklage October 8, 2015 Communitech, Ecosystem, Enterprise, Event recaps, Featured, Small to Mid Size “How did it feel to be sued by the largest and most successful company in Waterloo history, just at the point that you felt like Kik was truly taking off?” Mike Kirkup, Director of the University of Waterloo’s Velocity Program, dropped the bomb just four minutes into his chat with Ted Livingston, co-founder and CEO of Kik Interactive, on stage Wednesday night at UW’s Hagey Hall. Livingston laughed good-naturedly while the audience of over 300 Waterloo students cringed at the question, which referred to a patent infringement suit filed in November 2010 by Kirkup’s former employer, BlackBerry (then Research In Motion). “Yeah…” said Livingston, reflecting. “That was shitty.” In a startup ecosystem as relatively young as Waterloo Region’s, Ted Livingston is now something of an elder statesman. He’s a product of the University of Waterloo (despite leaving a term shy of his degree) and, as an early alumnus of Velocity, donated $1 million back to what was then a little-known program. He fought off Silicon Valley VCs who demanded he relocate to California, and built a unicorn – a privately-owned company worth over a billion dollars – with his bare hands. He’ll celebrate his 30th birthday this year, making him a near-grandfather to an ecosystem dominated by youthful energy. Of the students who turned up for “Building a Unicorn: Kik’s Journey to $1 Billion,” few had heard this story before. Kirkup explained that in the fall of 2010, RIM sued Kik, claiming the company infringed patents after Livingston worked a series of co-op terms at the smartphone giant, where he worked on its BBM messaging platform. The two companies settled the suit in 2013, but the battle left scars. The legal action came at a time of explosive growth for Kik. It offered one of the few chat platforms that worked across devices in 2010: Kik was letting BlackBerry users chat with their iPhone-owning friends, and the app was gaining 40,000 users a day. Kik got its first million users in just 15 days, and the second million just seven days later. “It was literally the fastest-growing thing in known human history up to that point in time,” Livingston told Kirkup and the assembled crowd. “Disease had not spread faster. Information had not spread faster. Kik was the world-record holder in the history of humanity and that was amazing.” But when RIM levelled the suit, it also shut off the faucet; Kik messages stopped working on BlackBerry devices, which dominated the market at that time, and the number of new users fell from 40,000 a day to 4,000 a week. “All of a sudden, we start getting these weird things from BlackBerry. They’re like, ‘Oh my gosh, you’re growing so fast.’ We were the number one app on BlackBerry, number one app on iPhone, number one across all these platforms. Suddenly, they turned off our push notifications. They said ‘you guys are growing too fast, we can’t handle it, we need to turn you off for a night.’ That really sucked, I would send a message on BlackBerry and my friends just… wouldn’t get it.” “So they would turn us off, then turn us back on. Then turn us off, and turn us back on. And we started wondering, ‘What’s going on here?’ Then they just took us out of their app store, and a day later a package shows up by courier — a big stack of papers with a gold seal on top. It says ‘Plaintiff: Research In Motion, Defendant: Kik Interactive’. I said, ‘That’s what’s going on.’” RIM had claimed Livingston had used his time as a co-op student to gain the technology to make Kik. “We went from the top of the world, like, everyone flying in to Waterloo to meet with us, to no one caring. That was a super devastating blow. But luckily we were able to raise financing to survive and get past it, and today we’re back to adding hundreds and thousands of people every day. But for a while it was like, a complete reset. And it was a really shitty year after that. It was tough.” Livingston put together a committed group of investors, including Fred Wilson of Union Square Ventures in New York, who believed in the company and understood its vision, and injections of cash kept Kik afloat while it weathered the legal storm. The company has raised $120.5 million in venture funding to date, most recently in August, when it announced a $50-million Series D round from China’s Tencent Holdings. Tencent is the company behind WeChat, the messaging platform whose model Livingston is working to emulate in the West, where Kik’s main competitors are Snapchat and WhatsApp. Kik now claims close to a quarter-billion users. But Livingston insists that having deep-pocketed friends isn’t the secret to his success. “I think what has made Kik successful is that we’re really anal about things being perfect. I think, especially in Canadian companies, the thing that drives me nuts is, ‘Oh, it’s good enough.’ I hear that all the time. At Kik, we really strive for things to be perfect. And it’s really painful to do that. You have a solution, but ‘what if you tweaked it like this, like that?’ Twenty four hours of debating later you’re back at your original solution with one little change, but it’s that one little change that makes all the difference.” With such Canadian attitudes frustrating him, and the one-time largest tech company in the country having tried to shut him down, what is it that keeps Livingston in Waterloo while he grows his company? “For us, we’ve chosen to stay here simply because of the University of Waterloo,” he said. “I’m a huge believer in the University of Waterloo, mainly because of their co-op program. I stay here because I think that over time this will be one of the top ecosystems for tech, and if I can be here on the ground floor for that I think it would mean a lot for our company.” Photo: Ted Livingston, co-founder and CEO of Kik Interactive, at the University of Waterloo’s Hagey Hall.