February 11, 2010
As I’ve gone through my analysis of three business opportunities, my mentors have all separately given me the same advice. Shoot higher (see lesson #3) and just do it.
The business I’m closest to pursuing is now moving in the direction of being the least likely I will establish. It’ll need a fair bit of capital from me and will likely take three to four years to build up. Then, it’s questionable whether the business will be worth that much (not that I build to sell, I build to the best in the market) or provide a return commensurate with the risk.
Although I haven’t yet made a final decision, I am a bit disappointed because I think my mentors are probably correct. I can do this business, I can do it well and can likely grow it into the market leader. Whether it’s best use of my time is another matter.
When it came to starting my first two businesses I “just did it”. Very little planning, very little thought of risk and very little concern about the business fundamentals. As I get older, I’m finding that I think a lot more about the risks, the prospective returns, the required investment or the opportunity cost. Now I take in far more advice.
Some entrepreneurial friends would likely be critical of this rigorous approach. But, it’s the approach I’ve chosen to take and it’s working for me. Although, I’m reaching a point where I’m anxious to get started on something.
Stay tuned. 2010 will be interesting.
January 24, 2010
I’m going through the process of determining what I’m going to do next. There are three business opportunities that I’m reviewing and all three come with pluses and minus. See this entry for an analysis of the first one: Business Opportunity #1
There are personal and professional considerations that matter for each business. I’m a big believer in mentorship and in seeking advice from people who know me, including my strengths and weaknesses, and understand where I want to go. I also believe that it’s important to seek advice from people are have been or are where I want to be.
Fortunately, there are some great people around me. Last week I went over to a friend and mentor’s house for a glass of wine and some advice specific to one business I’m considering.
After a fairly wide ranging and comprehensive discussion, he left me with this nugget:
“If you choose this business opportunity I think you’re choosing the comfortable route. You know you can do it and do it well, however, the upside is limited. Push yourself beyond your comfort zone and do more.”
I think he nailed it and this is why this is my third entry into my Mentor Lesson series.
January 5, 2010
The University of British Columbia, Simon Fraser University, the University of Victoria and other BC based post-secondary institutions are hotbeds for entrepreneurship.
Dating back more than fifty years, some of BC’s local entrepreneur success stories originated from the university environment.
Jimmy Pattison started curbing cars while at UBC. Brian Scudamore started hauling junk while at UBC. Peter Armstrong started giving sightseeing tours while at UBC. Anthony and Andrew Sukow started Advanced Economic Research Systems while at UVic. There are many more examples.
Useful capital is one thing companies need, but there are two key things entrepreneurs must seek out.
(1) Mentorship – someone with domain expertise and a verifiable track record. I was 23 when I started my first company and grew it to 40 employees and y second company grew to 12 employees. I was surrounded by staff, but I struggled to make big decisions and made myriad mistakes. Had I had effective mentoring I would have made good decisions great and bad decisions better.
(2) Effective relationships – entrepreneurs can’t do it alone and you never know when a relationship is going to pay dividends. Had I not made a great effort to establish connections while building my second company, I wouldn’t have made two very key hires and, undoubtedly, would have had trouble selling it.
The free market thinker in me thinks that if a student entrepreneur is going to be successful they will figure these things out on their own. They’ll find a commercially viable opportunity, build the right relationships, find effective mentors and raise appropriate capital.
But the entrepreneur in me who has been beat up (particularly in my second company) likes the idea of giving a helping hand, particularly in the early days. So, I’ve been helping out a team which is establishing a program in entrepreneurship for my alma mater – UBC. It will include mentorship, opportunities for relationship building and very early stage pre/pre seed capital.
I will write more on this another time.
In the interim check out this Financial Post article (http://www.financialpost.com/small-business/business-solutions/story.html?id=2403106) on Canada’s current venture capital market. It features a take on this climate by Danny Robinson, co-founder of Bootup Labs and a successful entrepreneur in his own right.
Bootup is doing some very interesting things in Vancouver and it’s worth checking them out.
November 30, 2009
I’m going to post a series of “Mentor lessons” which are lessons that I have learned from my various mentors over the years.
One of my most important mentors taught me many years ago that “it’s all in the recovery.” His point was that no business is perfect and no person within a business is perfect. So mistakes are going to happen. It’s not that we make mistakes it’s how we recover from them that differentiates one business from another.
My first business was a 325 seat restaurant. While we grew to be very,very busy (with 1 hour line ups in very cold Edmonton winters), we did a soft opening without any advertising or marketing. We wanted business to grow slowly so that we could work out the kinks in our system.
In the early days we permitted the smoking section to sit right adjacent to the non-smoking section, which was very common. Unfortunately, a smoking customer decided to light up a cigar which offended some of our non-smokers. One in particular became particularly upset.
In fact, this customer was simply irate and out of control mad. I made it my mission to turn him around and make him a raving fan of our company. Using a bit of humor, a lot of self-deprecation and even more humility I was not only able to satisfy him during that interaction, but he became one of our most regular (and lucrative) customers.
We were at very real risk of losing not only him and his business, but all the other prospective customers he would turn against us.
By taking a no questions asked, we messed up you are right attitude I diffused the situation and, in the final analysis, generated a lot profit from this circumstance.
We didn’t recover from every mistake we made, but we certainly recovered from this one.
In short, if your business, your employees or you make a mistake just correct it without question or qualification. You never know how a little humility will be repaid.