Editor’s note: This is a guest post by Rick Spence.
On Feb. 28, 2018, Osama Arafat, former CEO of Q9 Networks, was Guest of Honour at Espresso’s Founders’ Dinner. Our community enjoyed hearing about his pioneering adventures in the Internet space. Here’s what you should know about our unique, and very successful, honouree.
After his incredible success building and selling data-security company Q9 Networks, Toronto entrepreneur Osama Arafat is flying high these days. But not in the way you might think.
The electrical engineer turned serial entrepreneur has a new part-time job: flying executive jets for a charter service. It’s not that he needs the work: he loves it. “It’s my passion,” he says. “It’s a way to fly private jets for free.”
Arafat’s aircraft of choice is Embraer’s Phenom 300, a nine-passenger jet that features a best-in-class combination of speed, range and comfort. He flies several times a week, often to U.S. or Caribbean destinations, earning a basic per-diem. Then he waits to be called again.
A fierce innovator, Arafat fully intends to return to business, and he’s always scanning for opportunities. “I’m keeping my options open,” he says. “Flying is just something I needed to get out of my system.”
Arafat was working in engineering controls at CAE Industries in Montréal — ironically, a company that makes flight simulators — when he realized he was bored in operations. In 1994 he joined Stuart Lombard, to start InfoRamp, Toronto’s first ISP. After InfoRamp merged with a competitor, he and Lombard headed venture-backed Isolation Systems, which developed virtual private networking (VPN) equipment to encrypt data on the web. When that company sold two years later, Arafat joined his former backer, JLA Ventures (now Relay).
That didn’t last long. Arafat soon saw an opportunity to help a fledgling ISP pivot to become a nationwide outsourced-data centre for companies with critical security needs. He wrote the business plan, then joined the company as CEO — promising Relay he’d make more money for them as an entrepreneur than as a partner. That firm became Q9. It grew from $1 million in sales in 2000 to $66 million in 2008, when it was bought by a U.S. private-equity group for $366 million.
Arafat headed Q9 until 2014, two years after the firm changed hands again, in a $1.1-billion deal led by Bell Canada. Since then, Arafat has spent quality time with family and earned his commercial pilot’s license. He also served as a director of Waterloo-based networking company Sandvine Inc., helping oversee its sale last year for $562 million.
“It’s going to be harder than you think.”
This kind of summary makes success sound simple, but Arafat insists nothing comes easy in business. Selling a vision, building systems, and keeping pace with your market are challenges that never end. “It’s going to be harder than you think, it’s going to take longer, and it’s going to cost more,” he says. “And when you’re successful, that will be more than you think, too. And that’s not always a good thing.”
In 2008, as the financial crisis took hold, companies everywhere abandoned their capital-spending plans. Suddenly they wanted to trust their data to Q9 rather than build data centres of their own. But Q9 didn’t have the capacity, and data centres took 18 months to build. “We had struggled for eight years. Then all of a sudden the floodgates opened, and we had to shoo customers away,” Arafat recalls.
“It was our darkest moment. These were big, big deals that could have doubled the revenue of the company, and we had to say no to them.” How do you keep going through dark times? Arafat’s lesson: “You’ve got to have tenacity. You’ve got to get punched and kicked, thrown to the floor, and then dust yourself off and get up.”
It Can Be Lonely at the Top
Arafat offers one more key lesson: After working with Stuart Lombard as a co-CEO at both InfoRamp and Isolation Systems, he believes entrepreneurs perform best when they have peers in their organization. “It really is lonely at the top,” says Arafat. “When you’re the sole person at the top, making decisions is very difficult. There are no checks and balances to ensure you make the right decision. Subordinates are always afraid to disagree with you.”
“With a peer, decision-making is so much easier. You sit there, argue it out, consider different points of view, and then come out with a decision. Peers are not afraid to upset you, or tell you that you’re out to lunch.”
Asked what cool new technologies he’s attracted to now — AI, machine learning, fintech? — Arafat sounds almost bored. “Nothing really earth-shattering,” he says. “My whole career was built around the Internet. There are still opportunities there. There is so much in the world that still needs to be connected, still needs to get smart. I think we’re still at the beginning of exploring the possibilities of the Internet.”
About the Author
Rick Spence is a Canadian journalist, speaker, and consultant on business growth, entrepreneurship, and opportunity. He is currently a director at Startup Canada and President of CanEntrepreneur Communications.