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Dispatches from the Valley: George Favvas of Perkhub
Dispatches from the Valley is a weekly series where we chat with Canadian entrepreneurs that have moved from Canada to Silicon Valley to build their startup

On average, a college graduate will earn over $1-million more than a college dropout over the course of their career. George Favvas wasn’t about to settle for average. He dropped out of school and became an early employee at a hyper growth company that Bell bought out less than a year after his arrival. With the money he earned, he decided to quit and start his first business. Since then, he’s built several successful companies and has never worked for anyone else.

We talked to Favvas about how a visit to the Apple store inspired his latest startup, why he doesn’t think he would get into an accelerator program now, and why you wouldn’t find him in the Annex if everything came crashing down.

Can you talk about how you started out as an entrepreneur?

I was born and raised in Montreal. It would be cool to say that I’ve been an entrepreneur since I was two, but the reality is that I fell into the space by accident. When I went to CEGEP, I failed my first semester because I spent my whole time at the student newspaper office. I was fascinated by the idea of mass communication, becoming totally absorbed in it. I didn’t go to any classes, and, even though I actually passed all my final exams, I still flunked the semester.

So I switched from a science program to a communications one, and as a result I graduated CEGEP in December. I couldn’t start university in the fall, so I had six months to kill. This was in 1995. The Internet was just bubbling up at the time, and I ended up getting hired to do tech support for one of the first internet providers in Montreal. At the time, I thought, okay, I’ll do this for six months and start university in the fall, but I started having a lot of fun and I’ve been in the internet space ever since.

That company was Total Net. I was its seventh employee. About six months after I joined, the company grew to employ around 200 people. It was then bought by a unit of Bell Canada. After the buyout, I quit and decided to start my own company. I haven’t looked back since.

Can you give us the elevator pitch for your most recent startup, PerkHub.

We’re a software platform that lets organizations and companies manage perks and group buying discount programs for their employees and customers. The idea is we take a large group of individuals in an access restricted environment and we create closed groups that allow companies to have employees or customers pool their buying power.

For example, TriNet is a company that does outsourced HR for around 2000 small businesses and 200,000 employees. A lot of those companies are small and don’t have a lot of buying power, but when you group 200,000 of them together, they start to get great pricing on their cell phone plans, office supplies or whatever it is that they’re buying. We facilitate that, and we let organizations like American Airlines and Time Warner role these programs out to their members.

Where did the idea come from?

When I was with my previous company, I walked into the Apple store on Saint Catherine’s street in Montreal and because I bought four MacBooks on the same day, I got the white glove treatment. I was getting corporate discounts and the business card of the sales guy, who he told me, “Give me a call if we’re closed and I’ll come open the store for you”. To me, four MacBooks isn’t that much, so that got me thinking about all the stuff that a small business buys where, with a little more buying power, they would get much better pricing. To me, it was just unfair.

Did you start building the company in Canada or in the Valley?

We actually started building it on a plane heading to the Valley. We had the idea and and, almost immediately, Real Ventures committed to putting some money into the company. I then met Dave McClure, who is a very high profile angel investor. He asked us to come down to the Valley and join 500 Startups, an accelerator he was starting up at the time. We would never get into that program today with the stage we were at—it was just an idea at that point—but we were part of its first cohort, so he was just happy to have someone join.

What do you think is the biggest difference between starting a company in the Valley and starting one in Canada?

I’m a mentor at Founder Fuelso I talk to a lot of Canadian companies. I tell them two things about the Valley. The first is that there is a unique way of approaching markets and building products there that I think should be transferred to Canada. The second thing I tell them is how much more dense the community is there. In Toronto, for example, you might go to MaRS to find a concentrated mass of tech entrepreneurs and companies. In Silicon Valley, it’s basically a whole city; the scale at which it operates is just unparalleled. That’s something that’s a lot harder to replicate.

What’s one thing that you learned from your experience running PerkHub that you hadn’t learned in your previous ventures?

One of the things that I learned was the importance of really understanding a customer and how you go about the methodology of defining a customer. I also just began to realize how quickly a company can rise and fall in the Valley. You can go from zero to being huge very, very quickly. It’s faster than anywhere else in the world.

One more thing that I began to realize is how precious time is. Money is not a resource that you’re constrained on out here. It makes it such that entrepreneurs are comfortable killing off things very early and very aggressively. They’re not afraid to take that chance out here.

Is there one big opportunity that you see for Canadian entrepreneurs in the near future?

A lot people say that the ability to run a startup in Canada for less is really beneficial, but I actually don’t think it’s that huge of an advantage. I think we have to take stock of our strengths and leverage them. I think our biggest strength is raw talent. Look at the incredible engineering talent coming out of Waterloo. With RIM’s implosion, there is so much raw talent to choose from in just that one area.

Two, if you look at Toronto specifically, there are wearable computing companies, like Thalmic with the Myo and Bionym that are doing great things. Then there’s Montreal as well. It used to be a great place for language based startups in the 90’s and I think there is the potential build something really special again around language technology.

You’ve already accomplished a lot, what motivates you to keep going?

I could give you the PR answer, but the real answer is that I don’t think that I could actually get a job on my own. I either wouldn’t be able to get a job working for someone else, or I would just get fired. It just doesn’t really work for me, so I have to create my own thing. On a more serious note, though, I love creating something out of nothing, and then having that be worth something to people. That’s what excites me.

Favourite productivity tools?

Google apps, Dropbox, and Evernote

Favourite book you’ve read recently

Dude, I’ve honestly haven’t got the time for that.

What would you be doing if you weren’t doing what you’re doing now?

I’d be unemployed.

This interview has been edited and condensed.
Christian Borys is a contributor to Toronto Standard. Follow him on Twitter.

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