Paul Terry: Driven to succeed

Phemi Health Systems CEO Paul Terry has a knack for mastering anything he tries, whether it’s spearheading health-care startups or practising martial arts

Serial entrepreneur Paul Terry: “successful people – for me – was anyone with a pound or dollar. The only way out of that was thinking. The only thing I could do was educate myself” | Dominic Schaefer

At first blush, Phemi Health Systems sounds a bit like one of those startups from HBO's Silicon Valley that have developed yet another health-care app that promises to make the world a better place.

But take a peek under the hood and it is instantly apparent that this is no ordinary startup, but one with some serious entrepreneurial horsepower and business bona fides behind it.

For starters, the company's system is built on the supercharged SAP HANA platform, which facilitates real-time analysis of massive volumes of data.

The company has two top cardiologists on its advisory board and its executive team includes Paul Terry (CEO), Adam Lorant (vice-president, marketing and product management) and John Seminerio (chairman of the board). That's the same high-tech trio that built Abatis Systems, which sold for $1.4 billion, and OctigaBay Systems Corp., a supercomputing company that sold for $155 million.

“Paul, Adam and John are serial entrepreneurs with very good track records of beating the odds,” said Eric Morse, an associate dean at Ivey Business School who cited the trio's successes in his book Cases in Entrepreneurship: The Venture Creation Process. “I wish there were a way to invest, as these guys are as good a bet as you can find in a startup.”

Phemi is the fourth company the trio has founded together. PolarBlue Systems – which they founded in 2008 – failed to raise the kind of investment it needed, so the trio shut it down to focus on Phemi.

This is the first time Terry has taken a turn as CEO of one of their companies. Lorant said that with his knowledge of health care and medical research, Terry was the logical choice.

“He had a perspective John and I didn't have of the health-care space,” Lorant said.

He also has something that comes in handy for any CEO: a fierce competitive streak that drives him to excel at everything, whether it is building a company, winning at bridge or taking down an opponent in a sparring match. (He has a black belt in aikido and is also trained in Systema, the hand-to-hand combat system practised by the Russian military special forces.)

“If you want to get Paul excited about something, say, ‘It's impossible, you can't do it,' and then that just gets his back up,” Lorant said.

That competitive streak appears to have come from disadvantage. Born in the U.K.'s “Black Country” – so-called for its coal mines – Terry grew up poor.

“My dad was a miner, his dad was a miner, his dad's dad was a miner,” Terry said in a recent interview at Phemi's new office in the old QLT Inc. building on Great Northern Way. “My mom and dad could neither read nor write.”

His family lived in a 600-square-foot council flat and relied on the British welfare system for food and clothes. He admits he grew up resenting successful people.

“Personally, I had a real chip on my shoulder around successful people,” Terry said. “Successful people – for me – was anyone with a pound or dollar. The only way out of that was thinking. The only thing I could do was educate myself.”

Terry pushed himself in high school and got a grant to go to the University of Liverpool, where he studied physics and electronics.

While in university, he joined the army reserves. After earning a degree with a double major in physics and electronics, he obtained his PhD in just two years and got an associate professorship when he was just 22. His area of research was artificial intelligence, robotics and supercomputing.

It was while teaching that he met his future wife, Louise Turner, who was one of his students. Turner also has a background in technology and is the current president of the Premier's Technology Council.

After a couple of years in academia, Terry decided to go into business and ended up going to work as a hardware engineer for Newbridge Information Systems, which was acquired by Newbridge Networks, a company founded by Welsh-Canadian tech entrepreneur Sir Terry Matthews.

The data networking technology that Newbridge developed would later become an important component of the Internet.

Terry ended up leaving Newbridge briefly to earn an MBA, and when he came back, Matthews sent him to Ottawa, where Newbridge had an office that ran its various business units.

“My first boss was Adam Lorant,” Terry said. “We've been together now 20-odd years.”

Terry spent 10 years with Newbridge. In the mid-1990s, Terry and his wife, who also worked for Newbridge, were sent to Vancouver to acquire a business unit of MPR Teltech, a telecommunications innovator that developed telecom, Internet and computer technology that seeded several other companies.

“My wife did the acquisition,” Terry said.

MPR Teltech was a division of BC Tel that had been privatized. Through a series of acquisitions, MPR Teltech innovations went on to become core technology for PMC-Sierra Inc. (Nasdaq:PMCS) and Newbridge, among others.

Newbridge was later acquired by Alcatel-Lucent for $7.2 billion. As part of the sale, Matthews agreed to fund a startup, Abatis Systems, led by Terry and Lorant. Matthews also chaired the board of directors. Terry and Lorant brought Seminerio on board as CEO in 1998, and the three have been together ever since.

Abatis developed traffic-shaping hardware for computer networks. Two and a half years after they founded it, Terry, Lorant and Seminerio sold it to Redback Networks Inc. (Nasdaq:RBAK) for $1.4 billion.

The Abatis team continued to work for Redback for about a year, which required commuting to Silicon Valley.

They then left Redback to form another new startup: OctigaBay, a company that was formed more around talent than any particular technology.

Terry said they didn't even know what they wanted to do at first, but eventually settled on developing a low-cost supercomputer. Asked why, Terry quipped: “Because a big-ass computer looks like a fun thing to build.”

The company was less than a year old when it was acquired by Cray for US$155 million in 2004. Lorant and Terry stayed with Cray; then in 2006, Terry left Cray and “went skiing.”

He spent several months skiing in Whistler, becoming adept enough to become a ski instructor.

“I have lot of hobbies,” he said.

Those hobbies include yachting (he's a yacht master), bridge (he's a grand master) and martial arts. He's also a pilot.

After OctigaBay, Terry, Lorant and Seminerio founded an angel investment firm called Magellan Angel Partners. Meanwhile, Terry spent 11 years on the board of directors of the Michael Smith Foundation for Health Research. After stepping down from the Michel Smith foundation, he joined the Providence Health Care board.

It was while serving on those two boards that Terry came to understand just how far behind the Canadian health-care system is when it comes to managing patient, medical and research data.

“I was appalled at technology in health care, especially with respect to how they get data, how they use data, how they gather it,” Terry said.

While serving on the Providence Health Care board, Terry met Chris Thompson and Alan Rabinowitz – two St. Paul's Hospital cardiologists who had a startup called Phemi that managed patient health data. Terry, Lorant and Seminerio liked the idea so much, they decided to get behind it.

“We liked the value proposition, but we thought the technology needed rewriting,” Terry said.

What Phemi needed was supercomputing capacity, Terry decided, so he pulled together some of his old OctigaBay teammates to reinvent the system and ended up partnering with SAP AG (NYSE:SAP), which had developed a high-powered in-memory computing system called HANA.

Although the company's initial focus is health care, Terry said there are many other potential applications, including the oil and gas sectors.

Last year, Phemi raised $2.8 million in startup financing and moved into the ground floor of the old QLT office, where the company now employs 26 people.

“If half of the sales we're expecting come off, we don't have to raise money again,” Terry said. “However, there's a foot race on in the U.S. Sometimes you should not grow organically because you could be out-invested by somebody in the U.S.”