1) inRound Innovations

Year founded: 2002

Employees: 10 employees, 25 subcontractors

Product: IT professional services

Revenue growth: 258.7%

Second place wasn't good enough in 2007, so this year inRound Innovations became Ottawa's fastest-growing company with 259 per cent revenue growth, improving on last year's growth by 77 percentage points.

How did it do it? According to co-owner Jeff Lynt, by running a "balanced operation" –improving value for clients, good fiscal planning, partnering with the community and by retaining good employees.

"Our turnover is virtually nil," said Mr. Lynt. "Teamwork is necessary, but fun is critical."

It's caused some growth-related headaches, among them staff doubling up in cubicles and corporate boardrooms becoming employee offices. But despite the company's ability to keep increasing revenues, the executive team sees challenges on the horizon. Relying on the federal government for more than half of its revenues, Mr. Lynt said inRound had to overcome challenges related to that in the past 12 months to maintain its momentum.

"Probably the most difficult thing is in the way the government procures contractors," he said. "The government is trying to funnel a lot more through the big system integrators. They say 'Talk to them.' Well, they're notorious for ignoring us."

Recently, the government tried to whittle down its list of approved IT contractors to seven from the hundreds it had. Industry and media pressure halted the move, allowing smaller firms like inRound to stay on, said co-owner Don Stewart.

But it's not out of the dark yet.

"The next big hurdle for companies of our size is Public Works' 'IT Shared Services' initiative, a multi-year, multi-billion dollar project, that (it) is now looking to outsource to one vendor . . . basically eliminating any play for public services companies of our size to participate," said Mr. Stewart. "We strongly believe that inRound can provide these services, and at more competitive rates," he added, saving the government – and taxpayers – money.

A year ago, Mr. Stewart predicted a top-three finish for inRound in 2008. But he isn't making any Mark Messier-type guarantees for next year.

"I am sure that we will be successful," he said. "But to see that type of growth, year after year, it becomes exponentially more difficult to do. I would like to see us certainly in the top 10, but to make top three, I will not go on record to say that again."

2) Epiphan Systems Inc.

Year founded: 2003

Employees: 11

Product: maker and seller of VGA/DVI signal grabbing technology

Revenue growth: 241.6%

Who needs a marketing department when Google can do it all for you?

Google's ability to advertise to a targeted market, as well as an always-open pipeline to clients for feedback, has allowed Epiphan Systems, an Ottawa manufacturer and seller of screen image-grabbing technology, to score 2,500 clients in 69 countries, said CEO Steve Ryan.

Most clients, said Mr. Ryan, come back for more.

"A customer will buy one, then five, then 20, then 100. That's fuelling the growth. Plus, there's a lot of word of mouth about (the) little gadget that lets you do X,Y, and Z."

The "little gadget" is a device able to capture high-resolution screen images from any monitor. It is particularly useful in "closed systems," where it is prohibited or impossible to install external software of any kind, such as medical equipment like ultrasound machines and radar devices.

"We're basically a company in a niche market," said Mr. Ryan. "We work on an external basis. All you need to use our devices is the original source, and through the USB you can connect and grab images with any laptop."

How did the five-year-old firm get the word out around the world?

"Google," said Mr. Ryan. "We've attended selected trade shows (but) haven't gotten bang for the buck . . . Most of our success has been through Google advertising."

Epiphan sells to "technical people" like engineers, programmers and scientists. Many in that target market are already on the web, searching for a solution to frame-grabbing equipment, he said.

Financing has not been as much of a problem as have logistics: the firm's growth in recent years has necessitated a move to another floor of its building, with staff doubling in number this year.

The key to ongoing success, said Mr. Ryan, is listening to customers and putting their ideas for improvements into practice. When Epiphan began, it was looking at developing web conferencing technology. Feedback, however, let it know its screen grabbers were on to something better.

"You have to build something that someone wants to buy," said Mr. Ryan. "There's a trade off between coming up with a wonderful product, and one someone wants to buy.

"The challenge is coming up with the next product, the next thing. A lot of that is asking what our customers are looking for."

3) Cactus Commerce Inc.

Year founded: 1995

Employees: 227

Product: E-commerce; multi-channel retail; RFID

Revenue growth: 164.9%

Cactus Commerce's progression from a Microsoft subcontractor to a partner in designing and developing e-commerce products has expanded the market for the company's products and the distance traveled by the company's founder.

Reached on his cell phone as he boarded a flight en route to represent Microsoft E-Commerce in France and Switzerland, Cactus founder and chief technology officer Jean-Yves Martineau said the 2007 partnership agreement has pushed the company beyond North America.

"We weren't used to that before. We did stuff here locally and in the United States, but really not that much in Europe and Asia. So having that level of responsibility widens the sort of business you have to do," he said.

Cactus has changed significantly from its origins as an Internet service provider, a venture Mr. Martineau said he only entered because his bank didn't know what assets it could seize from a company building e-commerce websites if it defaulted.

To allay the bank's concerns, Mr. Martineau said the company purchased modems to start as an ISP. Eventually, the residential portion of the ISP side of the business was sold to Videotron, with the proceeds used to continue building up application expertise and grow the e-commerce part of Cactus.

In recent years, the Gatineau-based company has invested in radio frequency identification data management technology used in retail supply chains and has more than tripled its number of employees.

However, unless more talented employees enter the labour market, Mr. Martineau predicts technology companies across the continent will have trouble sustaining themselves.

To address the problem, Mr. Martineau is working with a local university to put together a marketing campaign for high schools and colleges to promote computer science.

"I think a lot of students think it is math all day long and it is really not like that. We want kids to see that computer science is a part of all kinds of different interests. Going into computer science is not a career just in computers, it is a career in helping all the other industries that use computers – even the cool ones."

4) bitHeads Inc.

Year founded: 1995

Employees: 53

Product: Custom software development

Revenue growth: 157.7%

Despite having been around for nearly 13 years, growth at bitHeads is as strong as ever, a fact that CEO Scott Simpson attributed in part to the company's "happy, productive" staff.

"We're not focused on going into this market or that geographic location ... it's more important to do the right things in-house to keep people happy and know that this is a company where people like to come in to work, because we're a services company, and if people aren't delivering properly (because they're unhappy), it doesn't matter," Mr. Simpson said. "We have a low attrition rate."

He noted that bitHeads, which builds software for both large clients such as Canada Post, Research in Motion and Nortel as well as for smaller startups, has the good fortune of providing a service that can be used across several industries, insulating the company against cutbacks in any one sector.

"At the core, we believe 95 per cent of software development is still software development, so when we build medical information systems they're exactly the same thing we put in gaming engines or retail systems. We can go into different domains with the help of clients, whom we rely on to be the real domain experts," he said.

"When times are good, we're one of the trickle-down companies in the chain because people are building a lot. And when times are tough, we're a contract resource, so it's easier to get things done through us (instead of hiring)."

This is evident from the shift in the company's major revenue sources – where the telecom industry used to be a major client, bitHeads is now seeing a lot of gaming development work as offshoring becomes increasingly popular in the communications sector.

Mr. Simpson explained that while it's easy to find offshore expertise in the mature telecom space, the gaming industry is far less understood, which means companies may want to have their development done closer to home.

"There are subsets of gaming work you can offshore easily, but the core R&D is tough to do because it's a dynamic field with a lot of changes going on ... so you need someone close to home to make the changes rapidly," he said.

BitHeads also finds steady work with startups which might not be able to afford bargain-hunting trips to India and China, and with companies in the northeast U.S. looking to do "nearshoring," which gives some of the cost benefits of offshoring without many of the logistical difficulties.

As well, bitHeads's Ottawa location is a key aspect of its success, said Mr. Simpson.

"It's such a dynamic place with lots of things going on in the city and lots of startups. It enables us to deliver bigger, better and more services because of the interesting things people do here. We would not be nearly as successful if we were based anywhere else."

5) Thinknostic Inc.

Year founded: 2004

Employees: 24

Product: Custom e-business software solutions

Revenue growth: 157.5%

With the value of online retail sales expected to double over the next five years, it's no wonder custom e-business software development company Thinknostic Inc. is thriving.

The company, which works with clients to help them get products to market through the use of innovative e-marketing campaigns, has its roots in another e-business success story, MONTAGE eIntegration. MONTAGE had revenues of $50 million, 450 employees and offices in six cities across North America when it was sold to AT&T Canada in 2001. Now, co-founder and president Stephen Byrne is looking to double those sales with Thinknostic.

"Our future plans are to grow to $100 million in 10 years through three primary streams of growth: good old-fashioned organic growth, mergers and acquisitions, and by launching our own products to deliver a third channel of revenue," said Mr. Byrne, who helped start up both MONTAGE and Thinknostic with chief technology officer Peter Lui-Hing and two others.

Mr. Byrne said Thinknostic's rise has a lot to do with its connection with the MONTAGE brand name, as much as with the resurgence of interest in e-business and its challenges since the days of the tech boom and bust.

"When the tech bubble burst, all the work (on e-business) done during that crazy time came to an abrupt halt. It was fast and furious with that technology in the early stages, but the world has since settled down," he said. "But now companies are revisiting e-business opportunities and we're seeing a groundswell of demand, because the technology is mature and the know-how is there."

It seems like Mr. Byrne has barely skipped a beat with Thinknostic, as the company boasts a client list that includes the Department of Foreign Affairs and International Trade (DFAIT), the Bank of Canada, Zarlink and Alcatel-Lucent.

The company has built solutions such as e-security systems for the transportation industry, which check electronic passports and boarding documents and perform facial recognition, as well as a web-based "virtual trade commissioner" for DFAIT that linked international companies to Canadian firms for investment, collaboration and trade.

And with plans to launch an in-house e-business solution with its "flavour around the social networking space" later this year, in addition to its services business of building custom software for clients, Thinknostic looks set to follow in the footsteps of its larger predecessor.

"We have outreach programs selling into Toronto, the United States and other parts of Canada through our sales team and channel relationships, but we're planning on moving into Toronto and Montreal (through acquisitions) and are talking to companies there," added Mr. Byrne.

6) QMR Staffing Solutions Inc.

Year founded: 2003

Number of employees: 12

Product: Professional level employment/resourcing services

Revenue growth: 130.3%

An aging workforce may be driving customers to QMR Staffing Solutions, but it is a growing number of recently retired workers reconsidering their workplace departure that is helping to fill the other side of the equation.

"A lot of people are anxious to retire, but what we hear from a lot of them is after six months or a year, they realize they miss the workforce," said QMR president Marc Quesnel.

"We saw an opportunity where there was a huge demand, but there was a willing pool of senior-level professionals wanting to work. We created an infrastructure where we're matching up the two and building a fairly large business in the process."

After topping the OBJ's Fastest Growing Companies list last year, the employment and resourcing services firm experienced another year of rapid business expansion fuelled by increasing demand.

"This market continues to grow. The demand for professional level (and) mid-senior level professional resources continues to grow and, moreover, the demographic shift into the baby boom continues to be more apparent," said CEO Dan Moorcroft.

He explains QMR quantifies and qualifies contextual knowledge that leaves an organization when a senior employee departs. QMR then brings that knowledge "back to the table in some capacity," said Mr. Moorcroft.

Demand for this service is expected to increase because there is a large "hole" in the labour force among employees between the ages of 35 and 55, created in part by the trend in both the public and private sector to hire professionals as needed, rather than growing the full-time workforce.

Mr. Quesnel said QMR plans to meet this demand by focusing on providing "substantive" resources to its clients, which distinguishes the company from other broad-based providers.

"By substantive, we mean we try to understand what their needs are, and then we match those needs up with the people that we have. We're not just doing keyword searches in a database. We actually understand their needs," he said.

Both Mr. Quesnel and Mr. Moorcroft held senior management positions before founding QMR in 2003 and say their previous experience helps them relate to their clients' issues and needs.

With a company philosophy that includes community involvement, both men also volunteer their time, separately sitting on the board of the United Way and the Ottawa Chamber of Commerce.

"These sorts of things provide us (with) a stronger understanding of the community that we service as a business. That done in a professional manner combines to provide people with integrity," said Mr. Moorcroft.

7) Stoneworks Technologies Inc.

Year founded: 2001

Employees: 15

Product: Computer value-added reseller

Revenue growth: 108.8%

Sign a big name and wave the home flag.

It could be the business mantra for a local hockey team. But it also applies to Stoneworks Technologies' recent success.

Stoneworks, which resells computer hardware and software and also provides pre- and post-professional services, has seen 30- to 35-per-cent annual growth since it was founded seven years ago.

But business really picked up after it signed on as a licensed seller of IBM products some 30 months ago. Growth reached 60 per cent last year, and 109 per cent this year, putting Stoneworks on the Fastest Growing list for the first time.

"We've only been an IBM partner for probably about two and a half years now. It's one of the newer partners, but it's one that's grown for us tremendously," said CEO Jody Burton, an Ottawa native with 17 years in the industry.

Today, Stoneworks relies on the federal government for about 65 per cent of its business, he said. That's relatively low, he pointed out, and it used to be even lower.

"Most value-added resellers do 90 to 95 per cent to the federal government.

"We've always had a strong backing in the corporate community, and that's continued to grow over the years (and) it helped launch our company. When we started, it was in a recessionary period. The government wasn't spending that much . . . It was our corporate clientele that gave us the opportunity and the push to take Stoneworks to the next level."

Growth has proceeded so quickly, in fact, that it's forced Mr. Burton's hand in re-evaluating their location.

"We had outgrown our last building," he said, adding "it just made financial sense to buy a building rather than lease. A lot of it was indeed due to growth and the size of our team."

With the company humming, will growth take Stoneworks outside its hometown's borders? Likely not – you can export a brand or a reputation outside the city, but you can't export good customer service, he said.

"(Our) intellectual property is our people. We have good people that have good reputations in this market. To replicate that in another area is tough. It takes a long time."

8) DICA Electronics Ltd.

Year founded: 1983

Employees: 65

Product: Contract electronics manufacturing

Revenue growth: 108.2%

When Spencer Grabe left his home each morning to catch the bus to school in the early 1980s, he would pass people coming in the door to join his father, Guenter, in the basement, the original home of DICA Electronics Ltd.

The exposure piqued the then 12-year-old's interest in the electronics business and, from high school onwards, it was always in the back of his mind that he would eventually take the helm of the company.

The younger Mr. Grabe joined DICA in 2000 and took over as president in 2006. Over the past three years, the Carleton Place-based electronics manufacturer has doubled its revenues as it expanded into supply chain management.

"We previously used to operate under a consignment model where customers would provide all the electronic components to us and we just provided electronic assembly services. But now they send us a bill of materials ... and we go out and source the material, buy it and sell the finished goods to the customers," said Mr. Grabe.

The company has also experienced considerable organic growth, shipping approximately 290,000 circuit boards in the last fiscal year compared to less than 90,000 five years ago, and is planning a 6,000-square foot expansion that will effectively double its manufacturing capacity.

DICA benefits from having most of its significant customers in the Ottawa area, some of whom have pulled their work in from Montreal because they wanted to be closer to their manufacturer in case there are any emergency requirements, said Mr. Grabe.

In addition to its geographic proximity, DICA's focus on medium-volume manufacturing gives the company an advantage over offshore competitors.

"If you are Nortel and you need 20,000 units a month, by all means, going offshore is the way to go. But if you are a smaller company, you are really not going to get anybody in China picking up the phone if you've only got 500 units a month and they are not that complex," said Mr. Grabe.

Even as the company looks to expand, Mr. Grabe said the company remains focused on keeping its existing customers happy, rather than seeking out new business, and credits the strength of his clients' businesses for helping DICA weather economic challenges such as the appreciating Canadian dollar.

"If you look at some of the other fastest growing companies from previous years, they were some of our customers. So it is only natural that we would also be one of fastest growing companies," he said.

9) Macadamian Technologies

Year founded: 1997

Number of employees: 130

Product: Software outsourcing

Revenue growth: 59.2%

Having a presence in Silicon Valley has meant more than just increased sales opportunities for Macadamian Technologies. For the software outsourcing company's president and founder Fred Boulanger, it has also been a chance to learn a new corporate culture.

"The whole energy in the valley is radically different from what we are used to. Those guys are always looking at the next billion-dollar idea. It's go big or go home. They are really aggressive and it is teaching us a thing or two about competition and how to think of this business that we are in," said Mr. Boulanger.

Macadamian opened its U.S. sales and marketing headquarters in Silicon Valley just over a year ago and gave the company a first-hand perspective on the market and what potential customers are looking for, he said.

The company's presence on the ground creates opportunities for informal meetings over coffee that give Macadamian an understanding of the strategies and directions of key industry players, he added.

Last year, the company also opened a mobile technology development lab in Armenia, the next step in Macadamian's strategy of being a global company, said Mr. Boulanger.

Combined with research and development labs in India and Romania, as well as its North American operations, Macadamian's goal is to be able to execute work from just about anywhere in the world, he said.

And although Mr. Boulanger said integrating the new offices has been his primary focus over the past year, he added the company's role is also evolving to become a "trusted adviser" to its customers by ensuring the design process includes careful consideration of the end user's needs.

"Our approach is different because when you look at outsourcing, what people are going to be looking for is, 'Is it on time? Is the quality there? And is it on budget?' We're adding a whole new dimension to this. What we're giving to our clients is, 'Is the product right for your users?'" said Mr. Boulanger.

"You are going to sell so much more and people will be passionate about the product they use because you took care of integrating their concerns into this product."

10) The Works Gourmet Burger Bistro

Year founded: 2001

Employees: 180

Product: Food service

Revenue growth: 58.4%

It's fitting that a Fastest Growing Company just happens to be opening a brand new location on April 25.

That's the reality for The Works founder Ion Aimers, who this week is "reopening" the restaurant's original location at a new site.

By now, the seven-year-old restaurant chain is, arguably, an Ottawa institution. But for those shedding tears at the loss of the first cozy hangout, Mr. Aimers said it's OK – it was a business move.

"No, we weren't sentimental about it," he said. The new St. Laurent store is twice as large and will serve twice as many clients as Beechwood Avenue did, he said, so the odds of shivering clientele waiting outside for a table are less likely.

Nevertheless, doesn't leaving behind number one make the founder the least bit upset?

"(Beechwood) was cute and everything, but we're business people. I'm not about having a location just because it's nostalgic; I need one that can make money. (It has) to pay for itself, and hopefully make the boss a little bit of payola."

The opening this past year of the Works' Kanata location helped push the chain's percentage revenue growth to 59 per cent, good enough to make the list for the third year in a row.

Now that Mr. Aimer's goal of "five-in-five" is complete (just about – it actually took six years), he said he can now concentrate on his goal of 50 stores in 10 years. Where? Montreal, the GTA, and places in between like Kingston, Belleville and Peterborough.

While finding partners won't be a problem, expanding beyond Ottawa will have its own list of challenges that are making him fret, said Mr. Aimers.

"We've created a good reputation," he said. The danger comes in losing that rep, a possibility when the restaurants extend beyond his control.

"When you sell (a franchise) to someone, they figure they've given you their x-thousand dollars, but you don't really know what you're getting for it," he said. "You don't know whether they're all about personality, or whether they can care less (and) they just . . . think it's a licence to print money.

"So that will be our next challenge for sure, figuring out how to do the old franchising thing or joint venture thing."

By Krystle Chow, Roman Zakaluzny and Peter Kovessy