How Tobyn Sowden grew Redbrick into one of BC’s fastest-growing companies
Inside the Victoria company's acquisition strategy and journey to $80 million in annual revenue.
Tobyn Sowden started his first company with $500. While pursuing a computer science degree at the University of Victoria, he managed to build a $1 million per year digital marketing business, all within the four walls of a dorm room.
It’s the quintessential startup origin story: a scrappy young founder with big ideas and no outside capital. Running a company without external support is a challenging but often worthwhile endeavour for any entrepreneur. In 12 years, Sowden has managed to hone the art of the bootstrap, most notably with his current technology company, Victoria-based Redbrick Technologies.
Over the last decade, Redbrick has grown into one of British Columbia’s frontrunners, and now regularly appears on the lists of the province’s fastest-growing tech companies. The firm, which builds, acquires, and scales digital products, currently boasts four profitable companies with a combined run rate of roughly $80 million.
It’s a far cry from the $500 that went into Sowden’s first venture, RedWillow Media. That company sold to performance marketing firm Neverblue in 2008, following which Sowden joined Neverblue to lead marketing and support corporate development for over a year. He says getting injected into an executive team at only 23 years old provided a seminal moment, equipping him with the expertise to build businesses sustainably.
“Getting that early opportunity to draw from people with deep experience at the executive level, being handheld through how to recruit a team, how to manage a team, how to set your strategy, all the way to build a budget, which was such a foreign concept, was an amazing experience,” Sowden adds.
After just over a year at Neverblue, Sowden decided to try his hand again at entrepreneurship, which led to the founding of Redbrick in 2011. At the time, Redbrick offered a proprietary marketing platform for software publishing companies and was later named a top 10 advertising partner for Google Canada.
Once Redbrick had reached profitability and roughly $20 million in revenue, the team decided to move beyond digital marketing to invest in software development. Over five years, Redbrick launched Rebase, which designs custom browsing solutions, and Assembly, a digital publishing company named BC’s fastest-growing company in 2020. Redbrick also launched the productivity app Shift, which now reaches audiences in over 150 countries.
“What we learned is that [starting a business] is really hard,” Sowden says, noting that Redbrick fine-tuned its approach to growing companies over a years-long process of testing, sometimes failing, and learning.
A shared services approach
Redbrick’s growth philosophy hinges on what Sowden calls the “Redbrick advantage,” which means the firm provides its companies with strategic, executive-level oversight, as well as shared services covering leadership expertise, capital, creative support, and operational assets such as human resources and finance professionals.
"The Redbrick advantage is critical to Redbrick’s overall business success because it enables each business within the Redbrick portfolio to operate as a startup while achieving outsized results — both in scale and performance — relative to their team size,” Sowden says.
Some of Redbrick’s other resources include access to a 21,000 square-foot space in the heart of Victoria and support in areas ranging from branding and user experience design. Redbrick also provides investment capital and leadership expertise to steer its companies to future growth.
Bootstrapping to product-market fit
Redbrick’s shared services approach to scaling companies differs from the average startup investment model. Sowden explained where more investors chase companies achieving rapid growth, Redbrick focuses on bootstrapping and building sustainable growth over time. The firm does this by helping its companies achieve product-market fit and become cash-flow positive early on.
“Focusing on sustainable growth while still being cash flow positive leaves us in a flexible position, granting us the optionality to pursue opportunities while still having options should any unforeseen issues arise,” Sowden says.
The approach also means rather than selling investors early on the promise of an unfinished product, Redbrick companies secure early customers to finance future development and provide feedback that can lead to an improved product.
For example, in the early days of Shift, Redbrick launched a beta version of the product and garnered critical feedback from early customers. This feedback revealed that not only was there a strong market need for Shift’s product, but it also helped Redbrick price that product.
“It was enough to show us that there's a way to bootstrap into future product-market fit with only having these really basic functionalities,” Sowden says. “Keeping your eye on profitability early is a way to make sure that you can afford to get to product-market fit later.”
Sowden explains that bootstrapping this way also allows leadership to retain control of the company, unlike most venture-backed startups, who are generally confined to a clear path to exit that often chiefly benefits the investor.
Growth through acquisition
In 2020, Redbrick made its first-ever acquisition. The firm purchased Leadpages, a Minnesota-based software startup that offers a marketing-focused website builder for generating leads and turning them into customers. Sowden says Redbrick saw an opportunity to take the company’s product, team, and business model to the next level as Leadpages’ owners wanted to focus on other projects.
The acquisition signaled a shift for Redbrick, which had until then had operated as more of a venture builder. Sowden believes the company’s current phase of life is focused on “growth through acquisition.”
“We found that the time, energy, and risk it took to start a new business and reach product-market fit in order to allow us to tap our true expertise of paid growth marketing was too immense,” Sowden adds.
For example, Redbrick needed four years to start tangibly scaling Shift’s business, whereas, with Leadpages, the firm’s impact was visible in a matter of months. Leadpages’ website traffic increased 35 percent in the first quarter following the acquisition and has executed five key business hires.
Redbrick’s new growth strategy is to acquire firms with a strong brand, profitability, and product-market fit. Redbrick is specifically looking for companies that focus on helping the “digital entrepreneur” thrive, whether it’s building an email campaign or generating a landing page. Redbrick’s role is to propel a business and bring maturity to its operations while retaining the original team.
With four companies in tow, Redbrick is showing no signs of slowing down. The company has submitted several letters of intent to make its next acquisition. With a team 125-strong, Redbrick’s long-term goal is to have at least five operating businesses under its umbrella and get its portfolio to reach $100 million in cumulative revenue.
Whether Redbrick reaches its $100 million goal in 2022 or the years after is no certainty, but what’s more important for Sowden is that he loves the work Redbrick is doing.
“Money can't replace the desire I have around coming to work, continuing to build a portfolio and helping the CEOs and leadership teams unjam roadblocks and figure things out,” Sowden says. “I love it.”