An Important Canadian Initiative – Rotman’s CD Lab

ByF.C. Dawkins

Did you know that more than 350,000 Canadians live and work in Silicon Valley. That’s right more than one percent of our population and a much higher portion of our intellectual capital have left us for the world’s most prestigious and most productive ecosystem. This is both a problem and an opportunity but not one that government can solve or even try to solve. So how do we stem the tide?

It’s not a quick fix. When we are producing world class talent they are inevitably attracted to the epicentre of success, achievement but most of all opportunity. It is the opportunity that we need to focus on. The Creative Destruction Lab does that. It creates opportunity here in Canada. The leader Professor Ajay Agrawal is a dynamo. He is the living evidence that entrepreneurship can be taught, an academic with the drive and mindset that can match anyone in the business community. The stated goal of the Lab is to generate equity – specifically to create $ 1 billion in equity in the first ten years. After the first two years approximately $ 130 million has been achieved. However the real goal is to keep the best and most brilliant we produce here in Canada, helping to build our own world class ecosystem and offering a valuable example to others that “Canada’s Got Talent” and I don’t mean the variety acts we see on the American TV show.

Ventures receive the very best of mentorship. It is amazing to see how they evolve in less than one year. Watch for results – they have already started but many more will follow in the years to come

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  • A New Era of Entrepreneurship

    ByF.C. Dawkins

    Whatever happened to the optimum size of the firm? You know the size at which the company was it’s most efficient? most productive” most manageable? Economies of scale did dictate making the firm larger UNTIL the company hit the law of diminishing returns meaning the optimum size had just been passed. It seems that somewhere along the line it was decided that the best way to compete in an evolving global economy was to keep getting bigger regardless of inefficiency and loss of control. Ironic isn’t it. Free enterprise following the example of bureaucratic Big Government. Build behemoths. If you get big enough there’s no way to get rid of you. But how? Well in order to make this happen create a wage pyramid so that those at the top who have very little idea what’s going on below them make outrageous salaries well beyond any possible contribution they can make to the organization. Sound good so far?

    But what happens if things really do get negative? Don’t worry as long as you get big enough your cousin Big Government will have to bail you out. If small companies or individuals get hurt in the process they’re, well, collateral damage, just not as important as Big Business is to the world-expendable. This approach is pretty much out of touch with reality. Businesses do not last forever. Just look at the original list of the Fortune 500 to see how many have survived. In this era of 24/7 hyper-connectivity manifested in an ever increasing rate of change their life expectancy is going down. Size does matter but it’s becoming “Too Big to Survive”. Flexibility and Adaptability are the essential traits of business today. Social media is critical to deal with this new fast paced reality. The real watch words should be “Too Small to Fail”.  Entrepreneurs focused on opportunity, flexible enough to change quickly,, in touch with their business and all the key players are designed for the current environment.

    Technology has opened up communication around the world making global business possible for small well lead companies who can gravitate to that desirable optimum size. For Big Business more independent divisions under a corporate umbrella, sized properly, will help but the era of domination by huge entities will weaken. Careers with one organization have already disappeared. We are a society of individuals. The most important skill for an individual will be the ability to create your own job. We are entering a New Age of Entrepreneurism.

  • Why Entrepreneurs must have an end game

    ByF.C. Dawkins

    Much as we would like to, we never really love our parents as much as we do our children. Your business is exactly like a child. In the early or startup years it will depend completely upon you, looking to you for all the answers. You will always supply them with confidence, belying the uncertainty that you may feel as a first time owner just as you do as a first time parent. The child will look to you 24/7 in sickness and in health and as the parent you will always be there regardless of the problem, dropping everything else in the process. Your business and its components from customers to your team will do the same and like the parent you will be ready and willing to oblige. You cannot easily walkout on your children. Oh some due but for the majority it’s a non-starter. Same thing with your business. You are your business but try to remember your business is not you.

    The middle years are the best when you have become comfortable within your developing family and confident in the decisions that must be made. Neither your child or your business will question you during this peak period. Things do get into a groove on both fronts but then comes the maturing years, the transition from total dependence  to independence. Tough for the parent to admit it’s time to let go and let the child mature  developing all of it’s capabilities, finding new methods and learning new things that the parent doesn’t know or understand.  So difficult to do but you the parent do it willingly in the best interest of your child. And so you must with your business. At some point you will become the limitation in your business. The day will come when it has outgrown you. It will not mature and reach it’s potential unless you let go. Easier said than done but be ready.

    Like your first born that first business must move on to a new future. But then remember you can do it again. Maybe you already are. The second child is easier. There are tried and true practices that you know and understand. You can take that second child from gestation through birth to adolescence from startup to a thriving healthy entity. You can do this as many times as you can handle. And so you can with business. That’s what makes you a parent and that’s what makes you an entrepreneur. There are many mentors that can steward your child and your business into full maturity who cannot deal with the early years. You are the one who launches them from nothing and starts them along the path to maturity.

    So recognize the need for that end game- when it is time to move on and begin again. It’s what you do best. The child will ask for you opinion. The business may ask you to consult. You will learn to enjoy both, but you will find your happiness doing it all over again.

  • 3 Signs Your Startup May Be Slipping

    ByF.C. Dawkins

    Originally posted by Emily Barnes, The Creative Destruction Lab The Rotman School of Management, University of Toronto

    Businesses large and small can find it tough to spare a few moments to step back and look at the big picture. But immersed in the little details surrounding new product features and releases, you can easily miss a few telltale signs your startup is starting to spiral.

    Luckily, Fred Dawkins has done the legwork for you. Partner of the Creative Destruction Lab, serial entrepreneur and founder of The Old Hide House, Dawkins has turned his past experiences into a series of books about entrepreneurship, the first of which is Everyday Entrepreneur. He recently hosted a number of workshops in partnership with the Lab, touching on everything from the misconceptions of entrepreneurship, to the day-to-day trials and tribulations of an entrepreneur, to the increasingly important role of small business in the global economy and all that’s in between.

    If you can’t spare the few minutes to check in on that big picture, Dawkins asks that you at least watch for these three signs that your startup is on the out.

    YOUR STARTUP BECOMES YOUR LIFE.

    Undoubtedly, there’ll be an imbalance. There’s no denying that you’ll have to work long hours – especially in the startup phase and when you run into times of hardship.  Your social life will at times suffer, as will your relationships. But this anguish shouldn’t be a constant.

    This may seem erroneous if you’re in the early stage of running a business. Timing is everything, and if you launch too late – especially in tech – it can make or break your success. It’s a bit of a catch-22. But unless you’re an anomaly, if you’re working an innumerous amount of hours, you’re doing something wrong. It’s symptomatic, and signals a discord elsewhere in your business. How strong is your team? Are you delegating?

    Despite much popular literature that speaks to the contrary, you truly can maintain work-life balance as an entrepreneur.  Recharging your batteries is critical. Have your hobbies and have your venture. Sometimes the two will overlap. Even then, you must create that separation. When you lose sight of work-life balance, you also risk impairing your business’ vision. It’s important to step away from your company, if only for a few hours.

    CASH FLOW – IT NEVER LIES!

    If you’re going to be successful, you’ll first need to know and understand your numbers. Metrics aside, look to cash flow. It’s right on your doorstep. Omnipresent, it serves as the perfect warning mechanism. If you’re running low on cash, you’re doing something wrong.

    Too often, startups seem to bolt at the first sign of cash flow struggles, looking to investment for relief. Granted, it’s a quick and relatively easy fix (provided you can offer up a good pitch), but too many run into the open arms of deals that offer marginal amounts of cash for large chunks of equity.  It’s easy enough to relinquish control of your business because you have to – to bring in a partner or some easy money. But don’t make rash decisions without properly considering the long-term consequences. Do the math. Beware of commitments that’ll eat up your profits. Brick and mortar businesses tackle high overhead, hardware startups combat production costs, and SAAS businesses at first operate virtually cost-free. Remind yourself of this. In a startup press bubble that’s dominated by one funding announcement after another, it’s all too easy to start asking for money. Don’t forget about sales, the good ol’ fashioned revenue stream.

    There’s a lot to be said for natural growth and learning to manage within your means. Bootstrapping isn’t a requirement so much as an opt-in measure of control.

    YOU, THE FOUNDER, ARE THE BEST PERSON ON YOUR TEAM.

    Things are different when you transition from project to business. Parameters change, and your skillsets need to adapt along with them. But few people have the knowledge or experience necessary to carry an idea through to company, then onto global success. Don’t be afraid to hire people who know more than you do in specific areas.

    You’ll be tempted to keep a short leash on success, and find it difficult to relinquish control of even the most minor of tasks. Don’t impede success for the sake of ego. Sometimes you’ll need to let go of responsibility, and sometimes that also means you’ll need to cut off a slice of the equity pie. Your ego will take a hit, and your percentage of future earnings will too, but you’ll mend and the pie may just get bigger.

    Recognize your deficiencies. You can’t always keep pace with your company, or grow at the same rate it does – not everyone is that malleable. Hire those whose skillsets can compensate for the holes in your own. You are not your company and at some point your interests may diverge, so have an end game.

  • What aspiring entrepreneurs can learn from the Alberta election

    ByF.C. Dawkins

    Yesterday’s Alberta election produced a dramatic change but more than anything else it resulted from change and the inability of the PC party in Alberta to manage change.  One of the reasons so many experts maintain that failure is an integral part of succeeding as an entrepreneur is because we do learn from failure. We have to learn in order to recover so we take the time to analyze what we did wrong in order to avoid repeating the same mistake. Success masks our faults. It is rare for most of us to understand our weaknesses when we are getting results. Unfortunately for the electorate for a political party getting results means maintaining power as opposed to effective performance. When things are going well as they did for Alberta under the boom of the oil industry it was easy for politicians to look good and to develop some bad management practices. When a serious problem developed with falling oil revenues there was a huge need to adjust. We will never know whether the proposed budget was appropriate or not but remember when you have to provide customers, suppliers or employees with a bitter pill for the longer run good don’t turn around and immediately give them control to vote the new policy in or not.

    My mantra for the individual in today’s dynamic world is that the number one skill you can learn is the ability to create and manage your own career, with managing being the key to sustain meaningful success. We face an unprecedented rate of change. Every one of us must have the ability to recreate ourselves in the face of this one certainty: change is a constant, by definition the only thing we can count on besides death and taxes. Despite the perception of many that entrepreneurship requires risk this need not mean reckless risk but instead should refer to managed risk. The PCs had the time and needed it to prove that their budget could work in an economy under duress rather than risking a quick election on the outside chance they would get another majority giving them even more time. So among the small business lessons from yesterday’s election results are the following:

    1. Nothing lasts forever including good times in the oil industry

    2. Sustained success requires a relentless commitment to adapt even after a long track record of doing so.

    3. Managed risk produces results while reckless risk invites failure

    4. Knowing your weaknesses in good times and bad will sustain your success

    5. A change in leadership does not guarantee renewal of an organization

    I’ m sure there are more.

    Fred Dawkins is a serial entrepreneur and the author of a series entitled The Entrepreneurial Edge. The third book in that series Ageless Entrepreneur is available from booksellers across North America on May 9th 2015

     

     

     

     

  • Globalization, Branding and The Entrepreneur

    ByF.C. Dawkins

    The appeal and benefits of pursuing a global economy lie in the theory of comparative advantage whereby global completion will ensure that goods and resources will be allocated in the most efficient way, ensuring the most cost effective production of goods and services to the benefit of all. Yet the more we open ourselves up to globalization the greater becomes the discrepancy in wealth distribution which contradicts the theory. Oh to be sure there is a growing middle class in the highly populated eastern countries like India and China but in effect we are just averaging out the wealth of the poor – improving in the eastern world and declining in the west while those at the top accumulate huge fortunes. Upward mobility  on any kind of scale may be in jeopardy.

    Life should be getting better for all of us. Instead large corporations are controlling the marketing of most products largely through effective branding  which allows them to keep the lion’s share of the benefits of low cost production in the form of huge profits rather than either paying a fair price or passing along the benefits to the end user. At the same time the demand for labour is shrinking in relative terms through technology and mechanization undermining wage structures around the world. These large corporations have abandoned their identity as national firms in favour of becoming global entities. They are routed in a culture of control and increasingly rely on acquisitions and outsourcing to give them the innovation and flexibility needed in a fast paced world economy immersed in rapid change. As long as they can control the market they retain control of the profits.

    So how do we break this system and allow the mass sharing of the efficiencies being gained? The hope lies in entrepreneurs digging in the corners, finding comparative advantages and getting low cost products to market. The problem is that there are barriers to get products to market and if you manage to break through your company soon joins the club bringing in huge profits.  Rather than breaking the system, those that succeed are embracing it. Greed is a powerful motivation in the face of dynamic achievement. So as it stands now entrepreneurial success lies in pursuing startups and selling out or by leapfrogging through this stage and becoming one of the Bigs. Neither of these trends will break the current trend on wealth distribution which is moving back towards the historical norm.

    On a macro level entrepreneurs are the main hope to break the culture of control but there are no guarantees that will happen. On an individual level, pursuing a career as an entrepreneur may be the only ticket to upward mobility. That is why the most important skill anyone can master today is the ability to create and manage their own career. We must all adopt the mindset of the entrepreneur.

  • Give yourself the gift that keeps on giving

    ByF.C. Dawkins

    Times are changing – in fact change is the operative word and it’s the one constant we have in every element of our lives.  Western society has been entrenched in the concept of stability since we entered the Great Depression. As businesses grew larger we embraced a culture of control and systems in order to achieve stability. We valued certainty and pensions for our retirement above self improvement and upward mobility. Oh we still strived for both but within the framework of those organizations that were stable. We came to expect easy entry into the work force and a life long job ending in the golden years of a well funded retirement. A great dream that no generation has achieved. Even the baby boomers received a setback with the recession of 2008 and reduction in their savings at a time when they needed them

    Now we live in an era where the largest organizations can and do fail or falter from GM to RIM we have learned the lesson that the status quo has become a fleeting allusion.

    It’s time to give yourself the gift of entrepreneurial thinking.

    Only you can do it. Abandon prison thinking. Ignore the reasons that prevent you from accomplishing things whether personal or professional. Approach your problems from the mindset of ‘how’ you are going to solve them not ‘if’ you’ll be  able to solve them.

    Entrepreneurial thinking can be applied to every element of your life and it leads to another gift: self-determination

    Frankly this is a must. In your business life the most important skill you can learn in the 21st century is the ability to create and manage your career. Is your personal life any different? If we don’t take control we will limit ourselves to a life of mediocrity with decreasing real wages. limited upward mobility, low satisfaction and increasing frustration

    It’s time to trade in stability for agility!

    The attributes that dictate success today are resilience and adaptability which happen to be the characteristics of entrepreneurs.

    So as you reflect on this holiday season consider giving yourself the gift of an open mind – one that is open to possibilities and determined to find solutions.

    All the best for the holiday season

    Fred Dawkins, Author of Everyday Entrepreneur and the just released Family Entrepreneur

     

     

     

     

     

     

     

     

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