Canadian Entrepreneurship Requires Varied Investment, Top Talent and an International Mindset
- An entrepreneur needs to have an innate desire to create something new and scale it. If you have that desire, the best time to start working on your idea is now.
- The government’s role is to create an environment that is conducive for entrepreneurs and businesses to grow and succeed. Sometimes the best thing a government can do is get out of the way, and sometimes it needs to build infrastructure, support and capabilities that create better opportunities for all businesses. However, it is not the government’s role to pick winners and losers among industries.
- Pace, pattern and partners are the three P’s that matter when it comes to a business’ global expansion.
Canada needs to create a small investor private equity fund in which any investment-minded citizens can invest to support small business growth. This fund should be funded by small investors to increase growth-business investment and create opportunities for all Canadians to share in PE-style investments that have typically only been available to large institutions.
How did you transition from global management consulting to entrepreneurship, and what would be your advice for aspiring entrepreneurs?
Management consultants are generally focused on one really challenging business problem at a time, whether it is international growth strategy, supply chain operations or new concept creation. Not only are you focused on it full time, but you have a team of consultants who are focused on it with you. You can study it in depth, examine every possible number, try different angles, do deep consumer research and spend weeks to come up with the answer.
You cannot do that as an entrepreneur because you do not have the time or personal capacity to focus on a single problem for weeks. An entrepreneur has to run the business day-to-day and manage the different pieces of the business. Entrepreneurs run their business with their left hand and come up with new ideas with their right hand simultaneously. They do not have the time, capacity, funding, and resources to be able to study things to perfection, so they have to make more 80/20 judgements.Entrepreneurs have to go with their gut and have the confidence to take some risks. They will not have every piece of data required to answer every single question, but they have enough data to go with the solution with the highest probability of success. So, the transition from consulting to entrepreneurship was huge for me. Consultants want perfection before implementation, while entrepreneurs experiment and fix things as they go.
“Entrepreneurs run their business with their left hand and come up with new ideas with their right hand simultaneously. They do not have the time, capacity, funding, and resources to be able to study things to perfection, so they have to make more 80/20 judgements.”
As CEO of Mobile Klinik, I am ultimately responsible for the whole company, whether it is operations, supply chain, marketing, merchandising, partnerships or finances. While I was at McKinsey, I worked with numerous different retail companies around the world on each of those issues. So, I got the opportunity to develop deep expertise in multiple areas of retail management and operations. Now, I can apply that world-class experience to help Mobile Klinik outperform everyone else in the industry.
In terms of what I would say to aspiring entrepreneurs, I’d first say that if you do not have that fire in you to go out, create something, make it big and win, then you are not an entrepreneur and you should not try. If you are not waking up every morning delighted about what was achieved yesterday and a little intimidated about how much more there is to do today, you are not born to be an entrepreneur.Instead, you are likely better suited for managing an existing business rather than for creating something from scratch and scaling it.
Secondly, if you want to pursue entrepreneurship, the right time is now. It is not a year from now or five years from now.I was lucky that I got to the end of one career and then magically got an opportunity to take on an entrepreneurial role in a high-growth organization. That rarely happens because it is really easy to let life get in the way. If you have been working in big businesses for 20 or 30 years, you get stuck and it is really tough to shake off the golden handcuffs, move away from the security of a big organization and suddenly take that plunge.
“If you are not waking up every morning delighted about what was achieved yesterday and a little intimidated about how much more there is to do today, you are not born to be an entrepreneur.”
Finally, make sure that you have a great idea. Start with a really good idea and an understanding of how you can be better at it than anybody else, so that you can win. There has to be a real competitive advantage where you know that you are going to be able to win if you execute correctly. I was lucky – the four founders of Mobile Klinik came up with a really great idea, and I came along at just the right time to get to hit the gas pedal on its growth.
How would you compare Canada’s entrepreneurship ecosystem with those in the US or Europe?
First of all, Canadians in general are more conservative than folks in many other markets. In general, Americans are more open to taking risks and gambling big. Canadians by nature are a little more conservative and take more calculated risks, which is often a good thing. There are a lot of exceptions to that rule, which we should highlight, celebrate and encourage. But, more Canadian entrepreneurs would be willing to gamble big and aim to dominate the world if the Canadian ecosystem helped them to manage risks more effectively.
American entrepreneurs can expand to serve 330 million people without leaving the country or changing elements of their business, such as banking and supplier relationships. In contrast, the Canadian market is just 35 million people. The US and many European countries have much larger markets to serve as a starting point. Secondly, the first place American companies will expand in is Canada because it is right next door, largely speaks English and feels a lot like the US. So, homegrown Canadian companies face far more competition from international players than vice versa, and that is a challenge.
“We have to build a great support system for our entrepreneurs to go global, whether it is through government, investors or financial institutions. That is probably the single biggest thing we could do to encourage Canadian economic growth.”
To overcome these challenges, Canadian entrepreneurs should start with a global mindset. Our intention at Mobile Klinik is not just to be the biggest and best in Canada, it is to be the biggest and best in the world. So, we are building our capabilities, our systems, our people, our organization and most importantly, our mindsets for global expansion. Canada will be the foundation on which we build, not the endgame. An entrepreneur needs to have the confidence that she can succeed in other markets as well. You cannot go international with a bad Canadian idea, but if you can make that Canadian idea work, then do not stop at 35 million people because there are another 7 billion people out there. We have to build a great support system for our entrepreneurs to go global, whether it is through government, investors or financial institutions. That is probably the single biggest thing we could do to encourage Canadian economic growth.
What do you think should be the role of Canada’s governments in enabling entrepreneurship?
I do not think it is the government’s role to manage industry and explicitly decide which sector we should spend money on. The government’s role is to create an environment where entrepreneurs can be successful. Now, we will all disagree about the right way to create that environment. Some may say that the answer is to simply lower taxes and get out of the way. Others may say the government’s role is to build infrastructure, support and capabilities. I think the right answer is somewhere between those two. I do believe that there are opportunities for the government to create conditions conducive to entrepreneurship and the tech supercluster is a prime example of that.
“The government pushed for creation of the Canadian Business Growth Fund to encourage Canada’s major financial institutions to make more funding available for scaling up small businesses.”
The government’s support for Canada’s tech cluster has contributed significantly to its status as the fastest growing tech community in the world. There is a reason why there are more high-tech jobs being created in Toronto than in Seattle, San Francisco and Washington, DC combined. We have created the right conditions for success, including our highly educated workforce, our healthcare systems, our university research efforts, our skilled immigrant visa programs, and our inclusive society. So, the government at all levels needs to identify how it can uniquely create conditions for entrepreneurial success. In some cases that is by getting things like high taxes and regulations out of the way. At other times, it is by putting conditions such as the high-tech worker accelerated visa program in place. Talent will generate entrepreneurship in the high-tech world, so we need to attract the smartest people from all over the world. We need to open the doors and invite them all in because everyone who comes will create jobs for five Canadians. Sometimes, all the government has to do is encourage others to move in the right direction. For example, the government pushed for creation of the Canadian Business Growth Fund (CBGF) to encourage Canada’s major financial institutions to make more funding available for scaling up small businesses.Mobile Klinik is benefiting from the CBGF’s investment in our business and that is not costing the government or taxpayers anything – in fact, the CBGF will earn a great return on its investment in Mobile Klinik.
What is a unique solution or idea that you think could transform Canada’s entrepreneurship ecosystem?
I would love to see an equivalent of the CBGF that is funded by small investors and not by banks and insurance companies. We should create a small-investor private equity fund to support growing entrepreneurial businesses in Canada. Why not give people the opportunity at scale to invest $10,000 or $20,000 in their own investment portfolio rather than allocating it all to large stock market funds? We do not need more investors piling into big banks, the railways and airlines. The money needs to flow to smaller businesses that have the opportunity to create something new, big and beautiful.
“I would love to see an equivalent of the CBGF that is funded by small investors and not by banks and insurance companies. We should create a small-investor private equity fund to support growing entrepreneurial businesses in Canada.”
CBGF has created a structure and framework to attract applications from Canadian businesses that are ready to scale. What if we could have something similar that invests in scalable small businesses with billions of dollars raised from hundreds of thousands or millions of small Canadian investors? These investors would like a chance to participate in the higher return potential of the private equity-style world, while also supporting Canadian economic and entrepreneurial growth.
I think a pension fund or a major private equity fund is not set up to evaluate lots of small businesses and make small investments. Angel investors need to have millions in their bank account and even then, finding the right opportunities is difficult. So there is a gap to fill.
“We do not need more investors piling into big banks, the railways and airlines. The money needs to flow to smaller businesses that have the opportunity to create something new, big and beautiful.”
CBGF has been great for Mobile Klinik; it is an important part of our latest round of financing and our plan to expand not just across Canada, but internationally. We will create more economic activity and more Canadian jobs as a result of that investment. But, they are bringing more to the table than simply a cheque. CBGF brought us a good dose of credibility because of the quality and capability associated with its investment team. They have also been good advisors and connectors. It never hurts to have a meaningful investor who is connected to all the major businesses and financial institutions, and a network of other small businesses across Canada.
What advice would you give to Canadian entrepreneurs who want to expand internationally?
For any company that is considering international expansion, there are three “Ps” that matter: pace, pattern and partners.For Mobile Klinik, pace was and continues to be a competitive weapon. Many organizations such as wireless carriers, insurance companies, or phone and tablet manufacturers needed a national repair partner and no such thing existed. A major wireless carrier would not want to refer customers in each market to a different repair partner; there had to be a single national partner. Mobile Klinik really wanted to fill that gap and realized that scaling up to be a national player would give us a huge competitive advantage. We had to be everywhere as fast as possible, so pace became a critical element of our strategy.
The second one is pattern, which is closely tied with pace. Whether expansion is domestic or international, you can choose to fill out one market fully before moving onto the next or scatter some of your operations into multiple markets and build around them. In the Canadian context, we knew that we needed to be present all over the country as quickly as possible. So, I would rather have three stores in every province quickly than 25 stores in one province before I moved to the next one. Hence, the pattern of expansion was critical in our case. This may change for international expansion. Instead of opening three stores in each of the ten identified countries, we will likely find the first market and succeed there before moving onto the next one.
“For any company that is considering international expansion, there are three Ps that matter: pace, pattern and partners.”
Finally, partners are crucial for global expansion. Mobile Klinik is not going anywhere outside Canada unless some of our partners, such as the device insurance companies and the device manufacturers, want to go there with us. The risks get shared when you partner up with two or three companies and jump into a new market together.
The key is judgment; you have to know where and when the adaptations are required to succeed. For our international expansion, some aspects will be identical to our Canadian operations, yet others will have to be completely different. Figuring out what to keep and what to modify is the decisive factor behind success or failure.
Part of the Entrepreneurship Series presented by: