Monday, January 29, 2007

Maxime Bernier and the "secret sauce" of entrepreneurship

I just ran across this ridiculous speech from Industry Minister Maxime Bernier. Speaking in Saskatoon last September, he proved that he (or his speechwriter) doesn't really understand entrepreneurship.

I had no problem with this part:
"The first thing you should know about me is that I am from the Beauce, the region along the Chaudière River south of Québec. The Beauce is unique in Quebec — it is well known as the most entrepreneurial region of the province…. This is where I learned the values that go with entrepreneurship: individual freedom, integrity, responsibility and self-reliance. When I am defending economic freedom and entrepreneurship, I am defending what to me are “les valeurs beauceronnes” — the values of my native Beauce.”

The Beauce is a beautiful, remote region, just north of Maine’s moose country. Everything he says about the entrepreneurial spirit of the region is true. It’s great to have an industry minister (even a lawyer who used to work in insurance) who understands what innovation is all about:
"I grew up believing that when we are free to create and to innovate, and to reap the benefit of our work, all human beings will tend to exhibit some quality of entrepreneurship. And by embracing these ideals we will make the world better, for ourselves and for everybody else at the same time."
But this is going too far:
"You can be an entrepreneur in your own field, since there is always something to improve whatever we do. A hairdresser who develops an ability to match heads with new hairstyles is an entrepreneur. An industrial worker who finds a faster way to assemble a machine is an entrepreneur. A teacher who uses games to keep his students interested in mathematics is an entrepreneur.
"All these people create something of a greater value. They do it not only because they can earn more money. They do it because it makes their jobs more interesting, because it gives meaning to their lives, because they believe that they can make a difference."
This is hogwash. The minister here is talking about innovation, not entrepreneurship. I feel strongly about this, because if we are to truly appreciate and encourage entrepreneurship in Canada, we need a precise understanding of what it is.

Entrepreneurship is not just innovation. The essence of entrepreneurship is not producing something new – it is taking a risk to work towards a goal that may provide a reward. It is the belief that the goal is more than worth the risk.

Without risk there is no entrepreneurship. When a teacher turns a hard subject into a game, that is good teaching - and it may be innovation. But it is not entrepreneurship, because there is no evident risk. There is no attempt to pursue that innovation to a larger end. There is no conception of the reward for leveraging that game, that lesson, to help other students and teachers in the world.

When that teacher takes a risk and remodels the game into a product, and spends time and money seeking out distributors and retailers, that is when innovation becomes entrepreneurship.

I don't mean to be all haughty about it. But entrepreneurship is a precious thing, a fragile sense of confidence that must be continually reinforced and supported. If our government, our culture and our institutions don't support risk-taking as the fundamental basis of entrepreneurship, they're off course before they've begun.

A new low in customer service

Here’s today's new low in customer service. I called a communications company in the States today and got this message:

“You have reached the 20th floor of (company name). If you must leave a message, please do so at the tone.”

This is a media company that doesn't hesitate to stuff its opinions down its customers’ throats. But it would rather not hear back from any of them.

Can such arrogance last in today's "you-first" digital-media culture?

Best-Ever Entrepreneurship Quotes: Week 17

Continuing our series of powerful motivational quotes personally selected to get your week off to an inspiring start.

This week: how to keep a customer.

“Get to know your clients. Go where they are. Try to meet with them as often as you can without making a pest of yourself. Shake their hands and look them in the eye, and always follow through with what you say.”

- Anonymous Canadian entrepreneur, from the June 1999 issue of PROFIT Magazine

This was from a story called “The Best Startup Advice You’ll Ever Get” – in which we quoted every single entrepreneur on the PROFIT 100 list of Canada’s Fastest-Growing Companies. Sure, some were better than others, and there was some duplication, but every single piece of advice they offered was a gem.

PROFIT’s Kim Shiffman compiled a similar article in June 2006, but I just realized it’s not online. I’ll email them and suggest they post it for all to see.

Saturday, January 27, 2007

Four sales lessons from 2006

Warning: Ally Motz, CEO of management-services provider SiriusDecisions Canada, uses a lot of big words. But he’s done some serious thinking about the latest trends in sales and marketing.

In an article in the latest issue of SalesExchange, published by the Canadian Professional Sales Association, he shares four key lessons his firm learned last year, and looks at how these findings could shake out in 2007. Here's my edited version.

“Productivity” is now the in word. Since the dawn of time, sales productivity has meant one word – revenue. Now that’s changing.

Motz defines sales productivity as the measure of time and effort expended by salespeople to create the high-quality, customer-relevant interactions required to advance and eventually close an opportunity. Organizations that track salespeople’s ability to be efficient and effective with these interactions, and then consistently help them to improve, will have many options to drive better performance.

Shared metrics are becoming all the rage. More b-to-b organizations are creating funnels that depict the end-to-end demand process, and measuring the ability of sales and marketing to convert at five key junctures: response, marketing-qualified lead, sales-accepted lead, sales-qualified lead and closed business.

Next-generation funnels must consider the reputation activities that are seeding demand programs at the top of the funnel, building out the link between what Motz calls reputation and demand creation.

The technology is beginning to catch up to aspirations. Disappointed by traditional technologies such as CRM and SFA, SiriusDecisions’ clients have moved forward in three distinct areas: communications measurement, marketing platforms and customized sales communications.

Still, many organizations continue to hope that the implementation of these technologies will solve their sales and marketing-integration issues – only to find that their functionality is limited due to a lack of shared vision and co--operation from either sales or marketing.

Operations isn’t just for number-crunchers any more. Progressive sales organizations have shifted the focus of sales operations to that of sales effectiveness, including the oversight of tasks such as sales training and development, sales programs (centralized briefings, demos, proposals), and sales technologies (CRM, SFA, etc.).

On the marketing side, operations is being used to standardize processes to facilitate successful marketing decentralization, create joint metrics with sales and drive synergies in programs and communications between product lines. Organizations that continue to view operations as only an administrative function will find that these other tasks will remain unstructured and underused, forcing reps and marketers alike to solve their own problems ad-hoc.

See the full article here.

Friday, January 26, 2007

Pitch for Profit!

If you think your business could benefit from a dose of venture capital, but don't know whom to pitch – PROFIT Magazine has a contest for you!

“Pitch 4 Profit” is a Web-based contest in which you record a 90–second pitch for funds, and upload it to PROFIT's website. The contestants with the most compelling presentations (as determined by the judges and the public) will win a chance to present in front of a real audience of potential investors:

* The top three winning companies that are trying to raise less than $1 million will receive a chance to audition for the second season of Dragons’ Den, the CBC-TV show that puts real entrepreneurs in front of self-made millionaires looking for angel-investment opportunities;

* Three companies looking for $1 million or more will win a chance to pitch in front of the assembled venture capitalists at the Canadian Venture Forum, held March 4-6 in Toronto.

Entries will be judged by a three-man investment panel consisting of VC consultant Sean Wise, Rick Segal of JL Albright Venture Partners, and Salim Teja, vice-president of Brightspark Ventures.

While all three are best known for their tech expertise, I am assured that they will consider all entries, including the “boardgames and salad dressing” types of ventures that were so prevalent this season on Dragons’ Den.

So go for it! For more information, to read up on the guidelines for a perfect pitch (remember: Pain Statement + Value Proposition = Elevator Pitch), or to submit your video, click here.

Click here too to watch (and vote on) other people’s video pitches. (They should start coming in soon.)

But move fast: Contest closes Feb. 15, and public voting closes Feb. 19!

Tuesday, January 23, 2007

This is what marketing is all about

Kodak - Winds of Change

This is a brilliant video from YouTube. It's a 3-minute Kodak commercial produced for internal use that proved so popular they've released it publicly.
Click the screen once or twice to see what could be the best Web 2.0 marketing move of the year.
It takes what was great about Kodak, shakes it up and down, admits the company's faults, and then throws down the gauntlet for the future. Masterful stuff.

(Turn your volume down. The announcer may get a little excited. )
"They've got things in their research labs that will make biometrics look like a Happy Meal toy!"

Monday, January 22, 2007

Surviving the minefield of venture capital

My latest (i.e., my second) Financial Post column is up on the Post’s website. To learn about some of the deadliest landmines facing entrepreneurs who think they want to attract venture-capital investment, click here.

I've always admired the little engraved headshots used to decorate the columns of various writers at the Financial Post – so I am delighted to now have one of my own. I think it’s kinda cute.

Best-Ever Entrepreneurship Quotes: Week 16

Continuing our series of powerful motivational quotes personally selected to get your week off to an inspiring start.

For all the marketers in the house:

"If people around you will not hear you, fall down before them and beg their forgiveness, for in truth you are to blame.”
Fyodor Dostoyevsky

You can't go blaming the market for not cozying up to your product. Communication is YOUR job.

Wednesday, January 17, 2007

Don't Bore Your Team: The Leadership Wisdom of Craig MacTavish

It’s a shame more Canadians don't get to read Alberta Venture magazine*. AV provides blanket coverage of business (big and small) in Canada’s fastest-growing province, with wit and style.

And sometime it’s got great information anyone can benefit from.

The November issue, for instance, offered an incisive great interview with Craig MacTavish, the former journeyman hockey player who emerged as a creative and winning coach last spring when he led his Edmonton Oilers to the Stanley Cup finals.

“Craig’s List” of top ten leadership tips should be required reading for anyone in business:

1. Treat players equally. Put no one on a pedestal above the others.
2. Be tolerant of mistakes; otherwise players won’t take necessary risks.
3. Don’t expect players to perform beyond their capability.
4. Be patient with players’ shortcomings.
5. Let players know that you care about them as human beings.
6. Give support to a player in a slump.
7. Involve players in your thoughts and beliefs.
8. Don’t bore your players with too-long and poorly prepared meetings.
9. Present your game plan in a way that players get confident that your ideas are solid.
10. Instill in your team a belief in success.

You can read the full article here.

No teeth, no glory

A while back I was asked to participate in a “graduation day” ceremony for prospective entrepreneurs who had just finished business startup training through the Toronto Business Development Centre.

The grads presented their business plans to a panel consisting of their instructors and me.

It was sort of like Dragons’ Den, the TV show pitting investors against entrepreneurs. Except the mood here was one of graduation-day celebration, rather than the merciless interrogation that the pitchers on Dragons’ Den went through.

Which of course left me in a quandary. When the “students” presented what I thought was faulty logic, or were missing some key connections, what was my role? To keep the mood light and say, “good job,” or go all serious on them? *

My recent column in PROFIT Magazine tells the whole story. Click here.

Excerpt, for those too busy to click:

“I've argued before that marketing is the glass jaw of Canadian entrepreneurs. But there is no excuse for someone coming out of a business startup program not to put marketing front and centre. I thought Google's targeted AdSense messages (online ads you pay for only when someone clicks through to your website) would be perfect for one of these businesses, but the entrepreneurs had never even heard of them.

"And the basic idea of guerrilla marketing — saving your money by piggybacking on other people's contacts and sales efforts — seemed to be a concept they hadn't heard before.”

(Last chance: click here for the full article.)

* You can probably guess how I resolved the dilemma. I feel that sending entrepreneurs out into the world without testing their knowledge and pushing them to the limit is insane. The harder you push them, the more they will be thankful for it later, when the world is pushing back harder than they ever expected.

Monday, January 15, 2007

"Gasoline you pour on a smouldering flame"

I had a great chat last week with Suzie Dingwall Williams, a lawyer and former venture capitalist now with Venutre Law in Toronto. She works with growth-oriented entrepreneurs to help their businesses make the right decisions, especially about venture capital.

She agreed with me that too many companies think they deserve venture capital money when they don't. VC money, after all, has traditionally been reserved for a very tiny group of growth-oriented companies with huge (usually worldwide) potential and defensible niches.

“A true VC kind of risk investment has such a disruptive business model or technology that there’s no real model for it yet,” says Suzy. “Nobody is going to back it unless they're willing to risk all their [investment] for a 1,000% return.”

“VC money is gasoline you pour on a smouldering flame.”

Canadian entrepreneurs with more modest growth ambitions often wonder why they can't get venture capital. Here’s your answer: unless you're a smoldering flame waiting to be sparked into a forest fire, you just ain’t their type.

The same conundrum, of course, afflicted the CBC’s Dragons' Den last fall. The entrepreneurs promoting their businesses thought they were pitching a small business investment opportunity.

Nobody told them that the investors (the dragons) were looking to invest in big businesses that are just temporarily small.

You can read more about Suzie in my Financial Post column next week. Or check out her blog here.

Best-Ever Entrepreneurship Quotes: Week 15

Continuing our series of powerful motivational quotes personally selected to get your week off to an inspiring start.

"Character consists of what you do on the third and fourth tries."
~John Albert Michener

My take: Experience tells me there is a very thin line between failure and business success. Even the top salespeople will tell you that customers tend to buy on the seventh call.

Our instant-win, short-attention-span society doesn't do much to promote third and fourth tries. But that’s where success breeds best.

Tuesday, January 09, 2007

Advantage: Small Business

I just noticed a great post by Toronto venture capitalist Rick Segal on his Post-Money Valuation blog last month that aptly demonstrates just why small business beats big business in the long run.

I’ll do my best to summarize the post, entitled Expenses - Doing Right vs. "The Policy."

Segal says a CFO recently asked him to review the expense-reimbursement section of his new employee handbook. While it was well written and detailed, Segal says it was also much too formal and corporate.

He suggested scrapping the whole thing and telling people to use common sense.

  • "We need to work as a team to make sure we can hit the home run (grand slam) with the capital we’ve been given. It means watching the nickels cuz they add up to dollars.
    "Coach airfare, duh, smallest car, duh, share cars, duh, cheap meals, duh, best western, duh, skype vs. cell, duh.And that’s just the warm-up.
    "Everybody needs to look at every single expense and reduce it."
If you can break employees' feeling of entitlement, and establish trust instead, writes Segal, “you'll be amazed at how little you will have to worry about this stuff. People are generally good.”
Read the full post here.

Monday, January 08, 2007

Canadian Entrepreneurship Test

In the early days of this blog (nearly two years ago!), I wrote a post about PROFIT Magazine's National Entrepreneurship Test, which we produced while I was at the magazine back in the '90s.

The test still holds up as a fun and insightful way to test your ability to think and act in an entrepreneurial manner. But the link went dead when PROFIT's website was restructured into Canadian Business Online last year, and I can't find it on their site any more.

Fortunately, I made sure when we published the test that we let people know it was freely available for reprinting and reuse by anyone in a non-commercial, educational context. So a quick search found that the test still exists online - or at least the revised shorter version, geared to Internet attention spans with 12 questions instead of 40.

So here's to the Entrepreneurship Centre of Sault Ste. Marie, Ont., which took PROFIT up on its offer and republished the test.

Find out if you have what it takes by clicking here.

"Year of the Canadian Entrepreneur"

A new year has begun.

Today, January 8, RoyNat officially launches "The Year of the Canadian Entrepreneur," a multi-sponsor promotional project designed to celebrate Canadian entrepreneurs. The official website is www.yoce.ca.

The project includes a renewed, 12-page Entrepreneur section weekly in the Financial Post, as well as a series of 20-page inserts, the Essential Guide for Entrepreneurs, to run throughout the year in Canadian Business and PROFIT magazines.

There are also plans for a travelling entrepreneurship exhibition to tour the country this spring.

While not an official part of the consortium that bears its name, Canadian Entrepreneur (i.e., this blog) will be taking part. My new column for the Financial Post will run in the newly expanded Entrepreneur section every other Monday.

Today's column looks at the seven reasons why Canadian entrepreneurship is alive, and well, and growing. Click here to read it.

Plus, if they want to use the URL "CanadianEntrepreneur.net," they can just give me a call. In true entrepreneurial fashion, we'll work something out.

Best-Ever Entrepreneurship Quotes: Week 14

Continuing our series of powerful motivational quotes personally selected to get your week off to an inspiring start. This week we hear from a real Canadian entrepreneur.

“Had the men who undertook any great enterprise since time began realized half the obstacles and discouragements they would meet, they would never have started. But fortunately they didn't – and don't.”

Sir William Van Horne (1843-1915). (American-born taskmaster who completed the Canadian Pacific Railway, Canada’s greatest megaproject; he later served as president of the CPR, where he oversaw much of the industrialization of Canada)

My take on it: I’ve talked to countless successful Canadian entrepreneurs who have said that if they had the chance to do it over again, they wouldn't. It was just too hard, they say, took too long, cost too much (financially and personally).

I’ve never known whether to believe them or not. Their very natures usually dictate they do something impossible every day.

But the real takeaway for Canadian entrepreneurs is this: Do your planning. Plan some more. Revise the budget to account for all the obstacles and delays you can imagine.

Prepare for the worst, and no setback will break you.

Thursday, January 04, 2007

Clear the Track - Here comes Kaboose!


Toronto online photo-sharing company BubbleShare, a Web 2.0 technology in search of a business, has just been snapped up by Toronto-based Kaboose Inc., a collection of advertising-driven portals targeting kids and parents.

You can read about the $2.25-million deal in Mark Evans' Maple Leaf 2.0 blog here.

Kaboose is a pretty fascinating company with a worldwide growth plan. If you want to know more, you can read my Kaboose profile from the latest issue of PROFIT Magazine. Just click here.

Small Business: Stronger than you think!

Over on our sister blog, Selling to Small Business, I've just posted the results from a Statistics Canada study that reports that Canadian small businesses are actually healthier and last longer quite a bit longer than many people believed.

It's a 2005 study, but this is the first time I've seen it.

The main point: "Of all firms that were created during the 1990s, roughly one-quarter ceased to operate within the first two years. "
"Just over one-third of these firms survived five years or more, and only one-fifth were still in operation after 10 years.”

Although StatsCan's tone is pretty sombre, this result is much better than the statistic most people quote: the fallacy that 80% of all small businesses fail within five years. In fact, 20% last ten years!

For more, click here to see the post at Selling to Small Business.
Or click here to go straight to the StatsCan report.

Stayin' Alive in 2007

A new story on OhMyNews International (a Korea-based site devoted to user-created content) offers five useful tips for thriving in 2007.

Then it boils the key messages down to three - in a gem of compression that's worth repeating here.

Exercise.
Save.
Be more social.

Click here to read the whole story by Nicolas van der Leek. But really, those five words are all you need.

Monday, January 01, 2007

Best Ever Entrepreneurship Quotes, Week 13

Let's start the year off right with an inspiring yet intimidating quote that sums up the most challenging business task you face.

"To succeed in business it is necessary to make others see things as you see them."
- John H. Patterson

John Henry Patterson (1844-1922) founded the National Cash Register Company. Wikipedia decribes him as a "business innovator, sales genius, social progressive, patriot, and benevolent tyrant."

Patterson was one of the most influential business leaders of his time. In the period 1910-1930 it was estimated that one-sixth of U. S. business executives were former NCR executives. (Probably the most famous person hired and fired by Patterson was Thomas Watson Sr, who went on to found IBM.)

In writing my book, Secrets of Success from Canada's Fastest-Growing Companies, I decided that the final "secret" of top Canadian entrepreneurs was their ability to communicate - to influence customers, employees, financial backers, suppliers and other interest groups to share their own excitement about the mission and future of their business.

I didn't realize that John H. Patterson had said the same thing - better - a century earlier.

Your M&A advisory for 2007

My buddy Grant McMillen of McMillen & Associates Inc. reports that this is a wonderful time to consider selling your business.

In his recent yearend report he noted that M&A activity on a worldwide basis continues to boom. In the first nine months in 2006, transactions passed the $3-trillion mark!

More importantly, he says, values for mid market and smaller companies continue to improve. “This is partly driven by the financial buyers – private equity groups or high net worth individuals – who are looking for opportunities to invest their money. Many transaction values, expressed as a multiple of EBITDA, have been in the 6 to 8 range. One recent one, the acquisition of a mid-sized Canadian company by a multinational, was reportedly at a 14 times multiple.”

For 2007, “the pipeline continues to be strong for both buy and sell mandates,” says Grant. But never think that deals are easy to pull off.

McMillen characterizes 2006 as the year where “close didn't count.” He says he was involved in one transaction that “imploded” the day before closing, and another deal that was put on hold after the Letter of Intent was negotiated.

To ensure your deals don't implode, have the best legal advice possible. Maintain open communication at all times. Anticipate potential problems and head them off.

And listen to your instincts – if you sense your partners in the deal are concerned about something, approach them openly and try to get it fixed. They’re probably as afraid of surprises as you are.