Features | From Pivot Magazine

Can this company make Excel less excruciating?

Plenty of companies have tried—and failed—to dethrone Microsoft Excel. One Toronto firm thinks it’s found the formula for success: if you can’t beat ’em, join ’em. 

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portrait of Vena's CEO Don MalVena CEO Don Mal (Photograph by Nathan Cyprys)

In early 1979, a tiny text ad ran in the back pages of Byte magazine, a journal dedicated to the emerging world of personal computers: “VisiCalc, how did you ever do without it?” If readers were unsure what had apparently been missing from their lives, they soon found out. Forty years ago this October, VisiCalc, the first digital spreadsheet, debuted on the market and immediately became a global phenomenon. Apple co-founder Steve Jobs once hailed it as the “explosion” that moved the computer industry forward, while others have described it as “the original killer app of the information age.” In time, VisiCalc lost the spreadsheet crown to Lotus 1-2-3, which was eventually usurped by today’s king of the spreadsheets: Microsoft Excel. Or, as countless frustrated business users have grumbled over the decades, ExHell.

For Excel’s most hardcore users—the legions of finance, accounting and administrative workers who have been toiling on it for decades—Microsoft’s workhorse spreadsheet software can be a godsend; it’s powerful, versatile and simple to use. Yet with those strengths come many headaches: broken links, input errors and the mayhem of managing conflicting versions of files. They’re frustrating and costly problems that Vena Solutions, one of Canada’s fastest-growing tech companies, has set out to fix. “As a canvas, you can use Excel to model pretty much any kind of data you want to plan, forecast and budget,” says Vena CEO Don Mal. “It just falls down when it’s used in a multi-user corporate environment.”

In recent years, there’s been no shortage of attempts to develop the ultimate Excel killer (hello, Google Sheets), but Vena is taking a different direction: embracing Excel, rather than replacing it. 

The Toronto-based firm uses Excel’s familiar grid of rows and columns as the face of its offering, which means companies can keep using the templates, custom formulas and models they created in Excel over the years, and build new ones, too. The difference is that the spreadsheets are all mapped to Vena’s cloud-based database, workflow, process design, reporting and analytics tools. That means there are audit trails—so it’s always possible to find out where a particular data point came from or who made changes along the way—and, when needed, a company can travel back in time to earlier versions. Vena also gives administrators the ability to put guardrails in place so users can’t make changes that might break things. 

“The key for Vena has been leveraging financial professionals’ familiarity with Excel,” says Andrew MacMillen, an analyst with Nucleus Research in Boston. “Financial professionals can be set in their ways. So, by building out tools from that familiar user interface, it’s a lot easier to get your foot in the door with each company’s financial team and build a business case from there. Solving that big user-adoption hurdle was a smart thing for Vena to do.” 

Vena’s blend of familiar and new has caught on. Since its launch in 2011, the company has grown to 300 employees. It has more than 600 customers—including White Castle, Ocean Spray, McMaster University and some regional divisions of Deloitte and BDO—80 per cent of which are based in the U.S. Customers pay an annual subscription for Vena’s services that, depending on the number of users and the size of their database, ranges from $25,000 to well into six figures, with the typical customer paying $40,000 to $50,000 per year. This year, the company is on track to earn $50 million in revenue, and within three to four years, it expects to double that haul.

Vena's rock band 'Grid Unlocked' performingVena’s employee band, the Grid Unlocked (Photograph courtesy Vena)

Investors have taken notice. In January, Vena raised $115 million in a financing round led by the American growth equity firm JMI Equity. It included Centana Growth Partners, which led a $30-million round for Vena in 2016.

Vena is chasing an annual sales target of $100 million. If it reaches that goal, and if its valuation is roughly 10 times its annual revenues—in line with recent transactions involving cloud-based companies—Vena would qualify for Canada’s exclusive billion-dollar unicorn club, following a path taken by other Canadian tech stars such as Shopify. “If you think about the market potential, there’s no reason why we can’t have thousands and thousands of customers globally,” says Mal. “I believe we could really be the next great tech story in Canada.”

Vena’s spacious headquarters occupy an old industrial building in Toronto’s startup-heavy Liberty Village neighbourhood. The office features all the touches expected of a young, fast-growing startup: a youthful and diverse workforce, exposed brick and beams, and rustic floors. There’s even a large butter stain, a holdover from when the building served as a bread factory.

The place is also infused with music. A visitor might spot a drum kit or a painted acoustic guitar case near the entrance, which depicts a scene from the company’s recent user conference in Nashville, Tenn., where Vena’s in-house employee band, the Grid Unlocked, took the stage.

The company gets its musical inspiration from its CEO-slash-frontman, who had dreams of rock ’n’ roll stardom before all the spreadsheet grids and financial analytics platforms. Mal’s family moved to Canada from India when he was seven, settling in rural P.E.I. “It was mangos to potatoes overnight,” he says, jokingly referring to himself as Don of Green Gables. Like the red-haired orphan, he also attended a one-room schoolhouse. Despite being the new kid, he doesn’t recall experiencing racism. “My story is: if you include people no matter their race, religion, sex, whatever, then generally they will be successful because they don’t feel in any way inhibited to achieve whatever they can.”

Mal’s mother was a nurse and his father was a serial entrepreneur, running restaurants, shops, a wholesale trading business and an insurance brokerage. Mal would help his father with his businesses and got his first introduction to the world of salesmanship by pitching fishermen on insurance products as they returned from their daily catch. 

The tech company gets its musical inspiration from its Rockstar-wannabe CEO

Mal went to Saint Mary’s University in Halifax but dropped out from its commerce program after two years to pursue his true love: music. “I wanted to be a rock star,” he says. He moved to Toronto and found some success in the music scene—his band at the time, Between the Lines, released an album and toured around Ontario—but to make ends meet, he sold stereos at a home electronics store, where he realized he had a knack for sales.

Over the next decade and a half, he switched to selling software and moved around the industry (including a stint at Kevin O’Leary’s SoftKey Software) until just before the tech bubble burst in 2000. 

He then built Wildfire, a golf club on Stoney Lake (about 40 minutes northeast of Peterborough, Ont.), using savings and funds he’d raised going “dock to dock” selling equity-based club memberships. He eventually moved back to Toronto, picked up an MBA from the University of Toronto’s Rotman School of Management and went to work at the software firm Clarity Systems. That’s where he met Rishi Grover, one of Vena’s three co-founders and its chief solutions architect.

By that time, Grover had spent years working on Clarity’s corporate performance management software. As one of the firm’s consultants, he had met with companies and organizations in all industries and saw the problems they were having with Excel. In the back of his mind, Grover started to formulate what he describes as the “common denominator of pain points” users had with the software.

Many chief financial officers and corporate accountants know those pain points all too well. As part of the typical forecasting process, the finance team emails Excel templates to dozens of departments to fill out. But who knows what they’ll get up to: potentially changing formulas, creating additional worksheets, copying and pasting data incorrectly, altering existing data in cells or renaming sheets altogether. Then the files start coming back, and someone must spend hours or even days reconciling it all and transferring the data into a master file before the important work of analysis and forecasting can even begin. Oh, and then a week later, someone in sales emails you to say he’s really sorry, but he sent the wrong version earlier, and could you please use this one instead?

As infuriating as all that is, says Grover, it was also clear to him that people felt at home in the familiar Excel environment. When Clarity started using a different spreadsheet software, which fed into its reporting and planning system and solved some of the problems he kept hearing about, some users had a hard time letting Excel go.

In 2010, IBM acquired Clarity, and Grover found himself working alongside George Papayiannis, a childhood friend and software engineer at Big Blue who would become Vena’s third co-founder and chief technology officer. Together with Mal, they sketched out the idea for Vena on a napkin at Starbucks. Then they scraped together financing from friends and family and launched the company, with Papayiannis overseeing product development and technology, Grover managing professional services and consulting and Mal as the business development and sales guy. Mal recalls meeting the company that would become Vena’s first client; they asked how many other customers Vena had. “We had to think really quickly,” he says. “My answer was, ‘You’re going to be one of our first 20 customers, so you’re getting a great deal.’ They signed and that was that.”

Vena's CEO Don Mal among offices in their Toronto HQVena’s Toronto headquarters (Photograph by Nathan Cyprys)

One of Vena’s pitches to potential customers is how quickly the company can get its tools up and running. As Vena’s chief financial officer Darrell Cox, a CPA, has described it, “A normal finance person is already an expert in Excel, so you don’t have to get an army of consultants and give up your biggest boardroom to make a change. With other products, you’re forced to use a foreign grid. It’s like trying to drive your car backwards. Why would you want to do that? You’re going to have an accident.”

With Vena’s growth on track, Mal stepped away from the business in May 2018, partly due to a cardiac-related health concern—but also, he admits, to work on his golf game and spend more time on music and with family. He planned to remain involved as an adviser as Shawn Cadeau, who’d joined Vena as chief revenue officer in 2017, was named CEO. But just a few months later, Cadeau left and Mal returned. Mal says the change was “not business performance-related” and that, after his health issues were resolved, the board wanted him to return to lead the company. As for his music career, Mal’s not giving up. “I still believe I’ve got a hit single in there somewhere.”

Vena’s embrace-versus-replace approach to Excel stands in stark contrast to most of its rivals. Like Vena, Infor, a software company with offices in New York and Vancouver, has a financial reporting and analysis tool called F9, which operates within the Excel environment. But others have tried to topple Microsoft altogether.

In 2006, headlines like “Google launches Excel killer” trumpeted the search-engine giant’s foray into the spreadsheet war with its free, online Google Sheets app. To stay ahead, Microsoft has always made Excel available as an open platform, so that third-party developers like Vena can create their own enhancements. “We keep bums in Excel seats, so I think Microsoft is very appreciative of that,” says Mal.

Today, Excel is estimated to control more than 80 per cent of the market for business users, though each year rivals chip away at it bit by bit. Aside from Google Sheets, the rest of the spreadsheet market is carved up by open-source tools like LibreOffice Calc, Zoho Sheet and Apache OpenOffice Calc. In the cloud-based business planning and analysis space, San Francisco-based Anaplan, often described as an Excel killer, went public in October 2018 and has seen its shares climb 247 per cent. Meanwhile, Vena’s most direct competitors in the industry are Palo Alto-based Adaptive Insights, Host Analytics of Redwood City, Calif., and Mississauga, Ont.-based Prophix Software, all of which provide some measure of connectivity to Excel spreadsheets, though none have integrated it into their tools in the same way Vena has.

“With other products, you’re using a foreign grid. It’s like trying to drive your car backwards.”

Mal realized Microsoft may not hold the spreadsheet crown forever, so Vena works with Google Sheets and other office productivity tools “in the event that they make some significant inroads.” But he doesn’t see that happening yet—Excel still offers more functionality for financial pros, and its dominance means there’s still a large market for Vena to go after. Mal estimates there are 100,000 companies in North America in its “sweet spot” (that is, $50 million to $1 billion in annual revenue), yet only 10,000 or so have automated their financial planning and reporting operations. “So 90 per cent are still using Excel spreadsheets the old way,” says Mal. “That’s a huge market.”

Has Microsoft ever approached Vena about a takeover? “Microsoft would seem to be a potential suitor, but we’ve never had discussions with them about that,” says Mal. Of course, Vena’s investors can’t help but wonder whether the company will ultimately be acquired or go public. But Eric Byunn, a partner at Centana Growth Partners, says the first priority “is always to build a growing, stable company.”

Centana was initially drawn to Vena for its ability to help financial institutions herd the massive quantities of financial reporting data they produce, and report that data to regulators. (Byunn says several of the top 10 North American banks are using Vena to do some aspect of their regulatory reporting.) After initially investing in Vena in 2016, Centana doubled down earlier this year during the company’s most recent financing round. “Vena did what they said they would do,” says Byunn. “They’ve grown very steadily in a rational business-building way in an environment where that isn’t always the case.

Just two years after moving into its Liberty Village factory space, Vena’s head office is already bursting at the seams. The company is planning to expand into another office nearby, which will ultimately house another 200 to 300 people. 

The company is also beginning to broaden its customer horizon beyond the finance teams that have been its bread and butter, working with existing clients’ sales, engineering and marketing departments. “If we start to expand into these other areas,” says Mal, “all bets are off in terms of how much bigger we could be.”

Five of the costliest, most embarrassing Excel errors ever

1) In 2003, when Calgary-based TransAlta was bidding on electricity transmission contracts in New York, someone misaligned the rows of data in a spreadsheet so that high bids were offered for low-demand transmission routes. The flub cost TransAlta $24 million (U.S.), obliterating 10 per cent of the company’s annual profits that year.

2) In 2004, someone at the University of Toledo made a typo in a formula that led the school to overestimate graduate school enrollment for the year ahead. As a result, the school faced a $2.4 million (U.S.) shortfall.

3) After the collapse of Lehman Brothers in 2008, Barclays Capital was preparing to buy a portion of the failed bank’s assets. Barclays sent a junior law associate an Excel file containing 1,000 rows of data, some of which had been hidden because they were contracts Barclays didn’t want to acquire. But the clerk converted the Excel file to a PDF for the transaction, and the unwanted 179 contracts became part of the deal.

4) In 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper that seemed to show that countries with debt greater than 90 per cent of their GDP experience -0.1 per cent average growth. Turns out someone had selected only part of an Excel row and left out growth figures from Australia, Austria, Belgium, Canada and Denmark. After they were included, that decline became a 2.2 per cent average increase.

5) JPMorgan Chase’s 2012 “London Whale” trading debacle, in which the firm lost $6.2 billion (U.S.), can be traced in part back to a simple Excel mistake: a model built to gauge the risk of a certain type of credit portfolio relied on a series of Excel spreadsheets that required information to be copied and pasted from one sheet to the next. An error in the process made the portfolio seem less volatile than it really was.