Axiom Zen is building a startup that builds startups

This Vancouver technology startup is changing the way that product ideas become fully fledged companies, and speeding up the process

 

Canada’s Most Innovative Companies 2016

A factory churning out qualified entrepreneurs

(Illustration by Kevin Whipple)

Roham Gharegozlou describes his company as “50 guys and gals from all over the world working on the coolest things we can find to work on.” It’s the kind of bland pronouncement that could apply to any Vancouver tech startup, which Axiom Zen happens to be. But while other startups exist to fill a specific need—usually to solve a pain point or service a particular industry—Axiom Zen’s raison d’être is to create more startups.

Axiom Zen, which labels itself as an “innovation studio,” is one of a new breed of company, more akin to incubators—organizations that support entrepreneurial ventures as they grow from concept to a going concern—than traditional businesses. Twenty-nine-year-old Gharegozlou didn’t have a product to rally around when he walked away from his work with Silicon Valley venture capital firms to start Axiom Zen in Vancouver in 2013. Instead, he assembled a team of tech-savvy individuals and tasked them with thinking up big ideas, which are then developed into products and eventually spun out as separate businesses. This company-building-companies structure also lends itself well to helping large corporations behave like startups while at the same time giving smaller businesses access to resources only available to larger firms. In this capacity, Axiom Zen does everything from developing software to building innovation practices within its organizations.

It’s a hybrid business model that demands a unique corporate culture, a modern organizational structure, an appetite for risk and, most important, a talented and flexible team. That team consists mostly of developers, with some designers and niche tech experts mixed in. The company doesn’t hire for specific projects or roles—employees can pick what they want to work on, and they tend to jump between teams and projects. Nobody tracks hours and the hierarchy skews flat, as evidenced by the “Our Team” page on the company’s website, which is organized alphabetically by first name instead of by position. As a result, you’ll find Gharegozlou near the bottom of the page, but he is calling the shots. “Eventually you’re going to have to talk to Roham about how things are going,” explains Caleb Lai, a UX designer at MetaLab who worked at Axiom Zen for two years. “But there’s no manager role you have to definitely listen to.”

While the corporate structure sounds like anarchy, it’s producing results. ZenHub may be the best example of Axiom Zen’s startup creation model in action. ZenHub is a project management tool that acts as an add-on to GitHub, a database of open-source code used by developers to store and share their work. While GitHub is more of a reference tool, ZenHub acts as a sort of social network that allows teams to collaborate, visualize and organize their workflow, and assign and track tasks. It’s used by groups at the likes of NBC, Microsoft and Starbucks.

Given the organic way Axiom Zen operates, it shouldn’t come as much of a surprise that ZenHub developed by accident. It started as a way for Axiom Zen to solve the problems created by a team dispersed across continents and time zones. (The company also has offices in Silicon Valley and Santiago, Chile, and some developers worked from their home cities.) So a developer built a simple prototype, and the team began using it internally. “We showed it to a few of our close associates, and they liked it so much that we decided to put in the work and productize it,” explains Gharegozlou. Now that it has achieved product-market fit, ZenHub is likely to be spun out as an independent startup that will raise capital of its own, with Gharegozlou making an angel investment.

When ZenHub does go off by itself, it won’t be the first business to emerge from the incubator-as-a-company model. That distinction falls to Routific, a company formed by husband-and-wife duo Marc Kuo and Suzanne Ma. Routific is an algorithm for optimizing trips that won Vancouver Startup Weekend in 2012, but the couple shelved the venture a few weeks after their wedding, when Kuo joined Axiom Zen. A few years later, when a client expressed a need for help with route optimization, Kuo and Ma revived their project. But later clients needed something more than the application program interface that Routific had originally made available. “We needed to put up a new website and do our whole branding,” explains Kuo. “Instead of going out into the market and hiring a designer to do it full time, we could rely on the already-vetted great designers from Axiom Zen to just put in a couple of weeks of work for us.” Kuo and Ma are now off the Axiom Zen payroll and hiring a team of their own, though they still operate out of the company’s office. (Gharegozlou jokes that he should be charging them rent.)

Axiom Zen escapes exact comparison, but startup studios like New York’s Betaworks (Bitly, Giphy, Tweetdeck) and Idealab (Picasa, Shopping.com) in Pasadena, Calif., come closest. In Canada, the model was pioneered by Invoke Media. Founded by David Tedman, Ryan Holmes and Dario Meli as a design and development agency, Invoke evolved into a startup generation engine, spawning one of the country’s most promising tech firms in Hootsuite (of which Holmes is CEO), as well as other buzzy names in the sector, like Foodee, Quietly (of which Meli is CEO) and Memelabs. Invoke has since refocused on the agency side of its business, but the opportunity to join one company and exit with another was a huge draw for ambitious talent, explains Tedman. “One of the biggest attractions of Invoke was that [people] could wind up getting hired in an agency and being employee number four or five at Hootsuite,” says Tedman, who is no longer involved in the company’s day-to-day operations. “It really helped us surround ourselves with good people.”

But Axiom Zen’s laid-back style takes some getting used to. “This is a place where you need to adapt quickly,” says Mack Flavelle, who joined the company after it acquired his virtual-reality newsletter and community platform, Hammer & Tusk, last year. Axiom Zen also practises a kind of radical transparency, subjecting projects and products to a collective scrutiny that Flavelle admits can be unsettling. “I get more criticism of my ideas in public than I was originally comfortable with, and I provide more criticism in public than I would like to,” he says. But it also helps improve concepts and plans. Flavelle provides an example: He was having trouble designing a user acquisition process for a consumer-facing mobile experience, so he asked for feedback from his co-workers. “The project manager from ZenHub—which is enterprise software with massive customers—just took me to school,” Flavelle recalls. Forced to question his assumptions, he rethought his approach to bringing on customers and built a better system.

The model has produced some modest success so far: ZenHub has that impressive list of clients; Timeline, an external startup the company did design and development work for, landed on Apple’s list of the top apps of 2015; Routific has TechStars’ seal of approval. Even if Axiom Zen never produces a billion-user product, ventures like it and Invoke look to be links in the evolution of the corporate organization. It can take up to a decade to make a definitive judgment about a startup accelerator, notes Tedman; the same is likely true of Axiom Zen. But Gharegozlou and his team won’t be sitting around waiting.


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