Why she matters: Simplifying government contract compliance
Offset Market Exchange (OMX) is headquartered on the third floor of an old, low-rise office building just south of Toronto’s über-hip Queen St. West. Large, paned-glass windows shed late-summer light on battered hardwood floors. A dozen or so people sit at mismatched tables, chatting or staring intently at their laptops, several nursing beers from the communal fridge.
Positioned smack in the middle of this almost comically clichéd startup scene, founder Nicole Verkindt looks up, removes her earbuds, and apologetically lugs a heavy metal table over to a quiet(er) corner of the open concept space. When a bandana-sporting Daschund named Burger scuttles by moments later—it’s a dog-friendly office—she smiles tersely. “If he barks, he gets a bark ticket,” she says. “And when he gets three tickets, he gets kicked out.”
It’s the first of many signs that the 32-year-old Verkindt is not your typical young tech CEO. Offset Market Exchange, which she founded in 2011, helps government contractors manage their obligations to meet local procurement requirements—an uncelebrated but vital line of work. Currently, a company bidding for a Government of Canada defence contract must prove that it will spur business activities in Canada (or “offsets”) worth the full value of that contract. Byzantine rules and arcane terminology have traditionally made this kind of work the domain of highly-specialized consultants. The OMX online makes it easier for contractors in defence, aerospace and other sectors to comply with the rules, find offset opportunities and connect with suppliers that can help them meet their mandates.
It’s not the world you’d expect a bright young businessperson to gravitate towards, but it’s one Verkindt has been immersed in since childhood—her parents ran GMA Corp., a manufacturer of high-tech aerospace components headquartered in Guelph, Ont. Having watched her father struggle for years to land government contracts, she was “squarely intent” on avoiding the family business. But after a post-university sales job, Verkindt gradually worked her way homeward, first setting up and running a factory in the Dominican Republic to supply her parents’ firm, then heading up sales and marketing, and eventually taking over as CEO. She sold GMA to a private equity firm in 2011.
The acquisition deal required Verkindt to stay on for three years; she lasted five months. In need of a new project, she set some parameters. She didn’t want to work for anyone else. She wanted to do something with low overhead, having seen the strain a massive factory can put on a business during sales lulls. And she wanted to be able to walk to work—years of travel across North America had made her wary of airport lounges. A tech business seemed the obvious answer, as did what the venture should do. “I only really knew one thing well: government procurement,” she says.
So Verkindt travelled to Silicon Valley to see what technology was out there, hired a CTO, and met with “tons and tons” of companies to identify gaps were in the market. She kept a whiteboard in her dining room wall and spent mealtimes tweaking her business plan. With a working platform in hand, she cobbled together nearly $1.5 million in seed money and hunted for clients. “At first, all our sales were friends of mine, suppliers I knew,” she says. “I knew it was working when people I’d never heard of would sign up.”
Offset Market Exchange now has more than 4,000 active users, including several international aerospace and defense giants. Cash-flow positive since shortly after launch, it raised a $4 million investment from a customer this fall. Verkindt is currently working to expand OMX into international markets like Spain, India and the Netherlands, where governments have followed Canada’s lead in implementing offset policies.
In person, Verkindt projects steely acumen and no-nonsense competence, listening closely and giving thoughtful, articulate responses. It’s not hard to see why she has a burgeoning side gig as a TV personality, as a Dragon on CBC’s Next Gen Den web series, and a weekly commentator on the network’s business news show The Exchange.
The work OMX does may not be glamorous, but Verkindt is clearly passionate about its potential to improve Canada’s economy. Offset policies are increasingly focusing on encouraging high-tech investment and the transfer of valuable intellectual property to local businesses. “If you incentivize a company like Lockheed Martin [with] billions of dollars in sales to invest in Canadian companies—for example, to give a virtual-reality company its first big sale—it could have a really positive effect,” Verkindt says. “This is a real opportunity.”