Features

Big Data for the little guys

Corporate giants like Amazon and Walmart figure out what their customers want through detailed—and expensive—number crunching. Wojciech Gryc makes data analysis affordable for the not-so-giant businesses as well.

John Lorinc
Image of Wojciech Gryc with his team in the downtown offices of Canopy Labs.

Wojciech Gryc with his team in the downtown offices of Canopy Labs.

Not long after returning to Toronto from a Rhodes Scholarship, Wojciech Gryc landed a gig as a consultantfor McKinsey & Company, an elite global  management consulting firm that offers high-level strategic services to blue-chip clients.

Gryc had graduated with degrees in math and international development from UTSC in 2007, and gone on to study data modelling at an IBM research facility in New York before leaving for Oxford. There, he spent two years developing a thesis about using mathematical models to predict the success of democratic regimes.

At McKinsey, he found himself tasked with much more pragmatic assignments: using his data analysis expertise to help huge companies predict the purchasing habits of their customers. Those firms, he soon realized, “invest a lot of money and hire a lot of data scientists. If you’re not a Fortune 500 company you can’t do it, because of the cost.”

It was an observation that kindled Gryc’s entrepreneurial imagination.

He stayed at McKinsey for for 18 months, leaving in late 2011 to found Canopy Labs. His goal? Making sophisticated big-data analytics available to small and medium sized enterprises (SMEs) that traditionally can’t afford these sorts of services.

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Today Gryc does business from Canopy Labs' sparsely furnished offices in downtown Toronto. The décor is standard-issue techie: a hushed, light-filled warehouse loft with large tables instead of desks, whiteboards and a fridge. Employees hunch over their laptops, typing away. The only missing element is a Ping-Pong table.

Increasingly, Gryc explains, tech-savvy multinationals like Amazon and Walmart have learned how to squeeze millions of dollars of extra profit out of the vast storehouses of digitized customer data they collect. These firms have developed ultra-sensitive modelling software to learn their customers’ preferences and then leverage these findings to promote products they’re likely to buy.

Gryc figured he could develop less-expensive predictive modelling systems geared to a wider business audience. So he and his partners spent six months refining their software at Y Combinator, a prestigious startup incubator in the San Francisco Bay area.

After finishing their R&D work they decided to come back to Toronto instead of planting their flag in Silicon Valley. It wasn’t a tough decision. Canada, Gryc says, has better programs for startups, and recruiting talented programmers is easy because the Toronto region is teeming with young, well-educated techies who’ve come through U of T, Ryerson and Waterloo.

“We sell online, so we don’t meet our customers face-to-face,” he says. “It doesn’t really matter where we are.”

The value proposition behind Canopy is that smaller firms can also benefit from big-data analysis, if only they have an affordable service provider. Gryc isn’t the only entrepreneur to have had that insight. A handful of other tech startups are pursuing the same market, while many smaller tech-savvy companies are growing increasingly aware of how to make use of widely accessible online tools such as Google Analytics.

As Gryc explains, many firms sit on large caches of disaggregated data. They have no idea how to connect an email newsletter list with transaction records, for example, or how to connect information on web hits or social media mentions. The data, he says, often reside on different servers that don’t talk to each other. But once the data are aggregated, “you can start deciding whom you should be targeting and then you can start predicting what your customers will do next.” Gryc says case studies have shown that this kind of intensive data analysis can lead to sharp increases in sales.
Canopy can be described as a software-as-a-service firm, performing this analysis for its customers for a monthly fee. The company provides the service to firms with at least 5,000 customers, with rates starting at $250 per month. Its system is designed to upload various data sets—e.g., from Excel spreadsheets or e-commerce platforms such as Shopify—and then run them through its predictive computer models, generating reports on which categories of customers might be receptive to additional sales pitches.

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Those who know Gryc weren’t shocked to see him jump from a prized corporate consulting post to an ambitious startup venture of his own. “He’s always had that entrepreneurial mindset,” says Leslie Chan, a senior lecturer at UTSC’s Centre for Critical Development Studies..

Chan supervised a couple of Gryc’s independent studies courses during his undergraduate degree. He recalls that Gryc all but blew through UTSC, a young man bursting with ideas for all sorts of projects. The university, he says, “could provide him with the environment, and the connections he needed to the next thing.”

From the beginning of his academic career, Chan notes, Gryc was fascinated by the interplay between international development issues and the calculus that underpins online social networks. “He was thinking about how math could be used to address world problems, like unequal distribution of wealth.”
Gryc wanted to come up with practical solutions to the issues he was learning about. While still an undergraduate,  he scrounged up some funding to establish a youth-based advocacy organization called Five Minutes to Midnight. It sought to bring online news media technologies to remote communities in Africa and Asia.

In late 2005, that project took Gryc and a fellow UTSC student, Emanuele Lapierre-Fortin, to Chad, with a few crates of refurbished laptops and some open-source software. They linked up with local organizations and trained their members how to set up online newsletters and magazines as a means of promoting freedom of expression in otherwise closed regimes. Five Minutes did similar projects in Nepal, Burkina Faso, and a dense slum area of Nairobi, Kenya. Gryc describes the experience as “ridiculously cool,” and reflects that it taught him “the importance of having your own vision and being able to grow it as big as possible.”

That sense of upbeat ambition certainly characterizes Gryc’s approach to his young business. Since Canopy launched, Gryc’s idea has proven compelling enough to pull in $1.5 million in venture capital financing from the Business Development Bank of Canada’s startup fund and Valar Ventures, an early-stage fund established by PayPal co-founder Peter Thiel. (In a real-life version of the Dragons’ Den scenario, Gryc says he and his partners had to pitch the concept to some of Thiel’s partners.)

Canopy has since attracted a number of high profile customers, including the Toronto Argonauts, the Canadian Opera Company and the Canadian e-coupon firm WagJag, as well as a San Francisco-based customer loyalty firm, 500friends. Canopy says it is now regularly analyzing over 100 million customer activities and transactions. For now, the firm will continue to focus on companies that sell directly to consumers through e-commerce sites.

Chan, for his part, doesn’t think Wojciech Gryc has left behind his interest in development issues. He points out that the sort of data mining Canopy now does could become useful to a range of organizations, not just SMEs.

Gryc agrees. His company does pro bono work for a number of charities, including Engineers Without Borders and the Toledo Museum of Art. But  Gryc says he is also focused on rapidly scaling Canopy up in a borderless market that he sees as wide open. “We want to make this as big as possible,” he says with a smile. “If we play our cards correctly, this could be a company that goes public and becomes a billion-dollar success story.”