Why You Should Become an Everyday Entrepreneur

With Joseph Rotman at the Creative Destruction Lab

Joseph Rotman invested a great deal to improve the future of this country. The Rotman School of Management at the University of Toronto is a lasting legacy showing both his commitment and what we as Canadians are capable of achieving. An important part of  that legacy is the CDL which is really just getting started.

It is both enlightening and alarming to discover that more than 350,000 Canadians live and work in Silicon Valley. 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? There is no quick fix. We are producing world class talent and such talent is 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 and founder Professor Ajay Agrawal is a dynamo.

Ajay is living evidence that entrepreneurship can be taught, an academic with the drive and mindset that can match anyone in the business community. When he approached the Rotman school to start this program he was told ‘you can use the facilities but you must find the funding yourself’. He has worked relentlessly ever since  to do just that in the process bringing in a very accomplished group of proven entrepreneurs to act as mentors. The stated goal of the Lab is to generate equity – specifically to create at least $ 1 billion in equity in the first ten years. After the first two years approximately $ 130 million has been achieved.

Financial targets are how we keep score but the greater purpose 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. 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 significant ones are ahead in the years to come.

As a partner of the Lab and member of the advisory board I am proud to point out that this program is not just another accelerator to help brilliant tech students bring their ideas to market. For me the Lab represents far more and has the opportunity to change and influence this country. We are traditionally small ‘c’ conservatives who let our brash cousins to the south take the outrageous risks and create the startling successes. We don’t lack for success stories but too often those successes happen outside our borders. Now when we are in an era where entrepreneurship is viewed as what I like to call the economic wonder drug of the 21st century, it is absolutely critical that Canadians embrace the mindset of an entrepreneur and become agents of change in a world where ironically change is the one constant. In that sense the Lab can be a leader and help change the narrative for Canada.

For me the Lab has three main purposes. The first as already outlined is to produce successful, scalable ventures flourishing as sustainable businesses right here. The second very unique goal and  achievement  of the Lab stems from the way in which students of the Rotman MBA program are engaged with the ventures and the  mentors. We need these talented business minds creating new businesses and making them succeed in Canada. The Lab immerses them in the startup culture and introduces the potential for success outside the world of investment banking. In this new era of entrepreneurship when every university and college around the world is trying to teach entrepreneurship this may be the most effective way any of these institutions has found to date.

The third and potentially greatest influence of the CDL program is as an example of what can be accomplished in Canada. We are building a pyramid of success. The ventures that go through the full program will be shining examples at the top of that pyramid. But there are many other levels of success below these which can be achieved and make an important contribution to our economy and our society. Not every success story relies on innovation. The potential multiplier of the Lab comes from encouraging all Canadians, at every level to adopt the mindset  that we can make things happen here and to apply innovation to a whole myriad of business solutions and applications. These potential ventures will be the foundation of the pyramid we hope to build and can have rippling effects across our economy for generations to come.

This is exactly what Joseph Rotman hoped to accomplish and thanks to him, it is a real possibility when we sorely need it.

Not long ago countries like Japan and Korea focused on a corporate policy based on loyalty. The concept was that employees stayed with a company for their working life. Companies nurtured this loyalty as a solid foundation to build on. North American companies flirted with this concept looking for ways to understand and replicate the quality assurance programs coming out of their Asian competitors. Enter globalization, the technology revolution and a rate of change that may be unsustainable for humans. In a blink job stability vanished.

Large companies by nature are slower to react than their smaller compatriots but large scale permanent lay-offs have become a fixture of the corporate world. International companies are making record profits pursuing low labour costs around the world while paying those at the top record bonuses. Add the increasing wealth gap and a shrinking middle class in the developed world to the equation and you reveal a growing underpaid work force plagued by uncertainty.

The result is that the most important skill you can develop today is the ability to create and manage your own career. The key to upward mobility is becoming entrepreneurial at any level. Technology is the greatest ally of the would be entrepreneur. It is less expensive to start a business today. Social networking provides an instant support group. Crowdfunding offers a potential source of funds. New careers are being created every year while traditional roles disappear. Entrepreneurs are the problem solvers that create these new opportunities.

The best news: after you’ve done this once; after you made the initial leap of faith and become an entrepreneur, you can and will repeat the process again and again. Change is the one constant we can expect in our lives going forward. Change is the antithesis of stability. Seniors are doing startups out of necessity. Youth are doing startups to get into the work force. Mompreneurs are dealing with the difficulty of re-entering the workforce by creating new careers that encompass their lifestyle needs.Every startup has a multiplier effect through job creation. So the answer for a secure future no longer lies with embracing a career with one strong entity. A secure future can best be secured through the ability to adapt and recreate yourself according to new circumstances. The essence of entrepreneurship is adaptability and resilience – the ability and determination to face new circumstances. We are entering a new era of entrepreneurship.

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.

The more I write and speak about entrepreneurship the more I realize how mainstream the topic has become. Whether you know it or not you and everyone else has to become more entrepreneurial in their thinking. We live in a fast paced global society that requires all of us to be resilient and adaptable. Those are the critical attributes that make us entrepreneurial. Entrepreneurship applies to far more than business and business issues. We are talking about a mindset not a skillset. A mindset focused on solving problems. A mindset grounded in determination to make things happen. It’s about being proactive not reactive. Most important it is about self-determination!

In an extremely competitive global world, in the era of Big Data, we can never know enough and we will never understand much of what we know. We cannot have the answers but the answers will always be there for us to find. There is no time for prison thinking. If you think like an entrepreneur you will find the way and that’s just as true about your personal life as it is about your career. As for that part of your life, in the face of declining job stability and the entrenchment of wealth disparity, the most important skill you can learn today is the ability to create and manage your career. There is a very good reason that every college, every university and now even secondary schools are offering courses in entrepreneurship.

When I wrote my first book Everyday Entrepreneur I had the ambitious goal of doing for entrepreneurship what David Chilton did for financial planning with The Wealthy Barber – to write a book that applied to all of us in a form that everyone could read understand and enjoy. The jury is still out but the endorsements received are encouraging that I have come close. The second book in my entrepreneurial series Family Entrepreneur comes out later this month. Dealing with the dichotomy of family and business brings entrepreneurial thinking into both settings. Remember family was the first “crowd” and still offers funding and nurturing for many entrepreneurs in a startup situation.

I am extremely grateful for the opportunity to mentor and encourage would be entrepreneurs both in their business and private lives. It is really all about taking charge of your life in the midst of a roller coaster world. You have to learn to capitalize and enjoy the highs while defending against the lows. Entrepreneurial thinking is the tool to do it.

Fred Dawkins is a serial entrepreneur who is best known as one of the co-founders of the olde Hide House in Acton Ontario to which “it’s worth the drive”. He is a partner in The Creative Destruction Lab at the Rotman School of Management at the University of Toronto and is currently writing a series of books entitled The Entrepreneurial Edge published by Dundurn Press, which focuses on encouraging and preparing would be entrepreneurs for challenges in their careers and in their private lives.

Most of what the average person reads about entrepreneurship sustains the mystique. We revere the outstanding successes achieved by extreme entrepreneurs from Edison to Jobs. Reading about these giants colors our perception of entrepreneurship. We admire their achievements but consider them beyond reach. Their stories sustain misleading myths about entrepreneurship that combine to keep capable people from embracing an entrepreneurial career. Here are some of the distortions that deceive us:
– Entrepreneurs are born and cannot be made
– Entrepreneurs are gamblers who take reckless risks to achieve high rewards
– Entrepreneurs work 24/7 and have little or no personal life
– Entrepreneurs need to fail in order to succeed
These established stereotypes derive from two specific types of entrepreneurs. First are the misfits or rebels who either cannot or will not conform; the gamblers to whom few of us can relate. Second and even more prominent are the tech entrepreneurs immersed in the world of venture capital where risk is high, failure is frequent and the rewards for success are dramatic. However Silicon Valley is not the center of the universe and these are not the definitive entrepreneurs; they are but two types of many, both removed from the traditional economy and the rock solid problem solvers that collectively form the engine that drives the economy. Those are the achievers that make things happen especially creating jobs while big business is chasing lower costs around the globe.
Let’s set the record straight
Entrepreneurship can be taught. It should be taught and it is being taught
Becoming an entrepreneur is all about the mindset not the skillset. Entrepreneurs find the way to make things happen they don’t always know the way. This is a teachable philosophy, entirely appropriate in a world dominated by change which generates knowledge and new problems at a phenomenal rate. Finally after fifty years of a flawed model focused on turning out executives for large corporations, colleges and universities have turned their attention to promoting and encouraging entrepreneurship
Entrepreneurship is not about the risk you take but the results that you achieve
It’s a startling paradox. Too many good opportunities die prematurely because so many potential entrepreneurs are risk averse. At the same time businesses are failing because of absurd risks fostered by the idea that being an entrepreneur is nothing more than a gamble. Entrepreneurs succeed through determination not by taking unwarranted risk. Managing your risk as you embrace it is critical. Not all ideas are opportunities and every opportunity is not viable.
Entrepreneurs need to find balance and will make mistakes and have regrets if they don’t
Having a work ethic is critical. During your startup phase and later when you encounter bumps in the road you will work long hours with great satisfaction. But as things progress and you don’t find balance you are missing something – failing to build your team, keeping too much control or limiting your own development. Both you and your business will suffer. Never forget: you are your most valuable human resource. Balance is a subjective decision but dividing your time does not preclude you from succeeding as an entrepreneur.
Entrepreneurs do manage their risk and avoid failure – if they fail they learn and move on
Describing failure as an essential part of success is pure rationalization. Admittedly many entrepreneurs are motivated by the fear of failure more than the rewards of success. Avoiding failure is a powerful source of determination. We do learn from failing because we take the time to analyze it. Success is elating and it masks our faults. Entrepreneurial infallibility is another myth that leads to bad decisions and setbacks that result from forgetting the basics.
What is an entrepreneur?
Most of us will never reach achievements like Steve Jobs or Mark Zuckerberg. That does not demean what we do achieve. Society needs to recognize a broad definition of entrepreneurship at every level and value entrepreneurship of every type because in a world dominated by globalization and technology the one thing that we can count on is change across every element of our economy. Resilience and adaptability are important entrepreneurial qualities that allow us to embrace the ongoing pressure for change. In the simplest terms entrepreneurs are problem solvers who consistently make things happen. They are agents of change in an era of change. They are disruptors at a time when the status quo is a moving target. Do you want to be part of the solution or part of the problem? We can all become more entrepreneurial in our beliefs, break out of prison thinking and think outside the box. The alternative is personal stagnation and uncertainty evolving from lack of job stability, declining upward mobility and the shift in income distribution toward the rich. The most important skill you can develop is the ability to create and manage your own career,
Do understand: we can’t all be innovators but for every innovation there will be thousands of entrepreneurs finding applications for it that solve everyday problems producing jobs and independence in the mainstream economy. Being first is over rated. Doing things better and different often brings greater opportunity. Remember that coffee shops existed in London in 1650 but Starbucks found a new appeal and a great market niche for this old product that resonates in today’s economy.
Believe in your own ability. You can establish the mindset of an entrepreneur. You can eliminate the word ‘can’t’ from your vocabulary. You can approach problems by skipping right over the question “if” it can be solved and skip directly to the question “how” it will be solved. You can find opportunity and you can analyze to make sure that opportunity is viable. All of this can be done within the context of the traditional economy and you don’t have to be a tech genius to do it. Technology is not a threat but offers a great tool for you to use. We are entering a new era of entrepreneurship which means it really should be an option for almost anyone.

For the past fifty years our business schools have been working on a flawed model. We have focused on producing executives for large corporations; only recently have we introduced enthusiasm for entrepreneurship to our MBA programs. However we live in a world economy focused on globalization, revved up by the technological revolution and immersed in a 24/7 mindset. We have created an extremely fast paced environment requiring flexible management led by adaptable and resilient leaders – the essence of entrepreneurship.

The misguided emphasis on turning out high paid executives has led to politically motivated policies like ‘Too Big to Fail’ which can be more properly labelled “Too Big to Succeed” or simply “To Big”. Like their second cousin Big Government these monolithic corporations need the impact of entrepreneurs – people who are disruptors that challenge the status quo in the face of a new global reality. They are too slow and unwieldy and are led by overpaid executives far removed from reality, Increasingly they rely on growth by acquisition and flexibility achieved by contracting out. They are part of our reality but not the part that will have the greatest influence and guide the inherent change built into the global economy. Entrepreneurs will pursue opportunity around the world and find the many niches that will move us to more efficient allocation of resources and lower cost of production across the entire world. At the same time in the west where we have structural issues such as high unemployment levels among unskilled workers, entrepreneurs will invest locally finding opportunity and create jobs that will put these resources to work. Government cannot do this effectively and big business has no interest in doing so.

‘Everyday Entrepreneur’ encourages entrepreneurship at all levels, focused on preparing entrepreneurs for the challenges they will face through a wide range of anecdotes helping them experience the realities of life as an entrepreneur in this ‘New Era of Entrepreneurship’.

Praise for Everyday Entrepreneur

“Fred Dawkins employs a likeable cast of characters and the simple setting of Canadian cottage country in July to convey a complex set of ideas ranging from the nature-versus-nurture debate (are entrepreneurs born or made?) to a variety of essential how-to entrepreneurship skills to specialty topics such as gender, leadership, negotiation, and team formation, as well as the important role of entrepreneurship in the global economy. His casual, easy-to-read writing style belies the critical importance of his subject matter. Not just potential entrepreneurs but also governments, big companies, and business schools in the West must adapt to the new reality of an increasingly educated and ambitious middle class in so-called developing countries and take immediate steps to reinvigorate our large population of underutilized problem-solvers in order to remain competitive and continue to enjoy increasing prosperity. As Sam would say: It is not a question of if, but rather how.”
— Ajay Agrawal, Peter Munk Professor of Entrepreneurship at the University of Toronto’s Rotman School of Management, founder of the Creative Destruction Lab for entrepreneurs, and co-founder of The Next 36 entrepreneurship program.