Entrepreneur Series

[kimberland]

My local bookstore is hosting a successful entrepreneur series. I figured I'd post my notes 'cause there are some great lessons there.

Note: The interviewer is Heather Reisman, the founder of the largest chain of bookstores in Canada and wife of Gerry Schwartz, Founder of Onex, so it is an entrepreneur interviewing an entrepreneur.

 

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[kimberland]

First guest was Ted Rogers.
He started from nothing to build a mega media company with a market cap of 31.3 billion.

About Business Partners
Rogers' first business partner was his mother.
Her advice to him "if you're going to be an entrepreneur, you might go bust."
(That didn't stop him obviously)

He is known for going in as a partner and ending up as the sole owner.
Is this intentional?
He says no, he "wouldn't mind if the other two would take charge."
"Partnerships can work if someone is in charge and the others have protection."
His biggest failures (and there have been some billion dollar ones) can be attributed to partnerships with no one in charge.

Are entrepreneurs born or made?
He strongly believes they are born because the good ideas come from the gut.
"Spreadsheets are great for fencing you in,
not necessarily for building businesses."

Leverage For That First Deal
How'd he get the financing for the first deal?
He wanted to borrow against his Mom's house on the expectation that he'd inherit.
However the bank refused, saying "what if you die first?"
Rogers got around this by taking out a life insurance policy on himself.

Going For Broke
Rogers says in business building, you "have to be willing to lose it all." "That's the price of admission." "We almost went under 3 times." (as in losing it all, including his home) They (the wife and him) "always assumed we're going to skate through."

Can An Entrepreneur Build A Successful Business And Still Be Home For Dinner Every Night?
A one word answer "No."
Rogers still has a bed at the office.
He explained that a business is like a child and you "have trouble separating it from yourself."

What is the secret to great execution?
Entrepreneurs aren't known for execution. They are "known for dreaming, leading, guiding."
"Lack of execution is when you have a committee running a company."

Keeping the drive alive
Rogers is constantly running "contests" with his rival companies.
They'll compete for the greatest increase in subscribers, etc
with the loser having to cough up a boon.
One time, he had to deliver steaks to his rival's home.
He, being a jokester, delivered them on hoof, much to the rival's wife's dismay.

Keeping It In The Family
Rogers differentiates the difference between family owned and family led.
Family owned (primary shareholder, on the board of directors) can be passed from generation to generation.
Family led (CEO or President) has to be earned.

Advice For Young Entrepreneurs
You "gotta work very hard, 7 days a week, week after week after week." "If you work that hard, you have a better shot at being lucky." You "gotta have passion." The most common passion? To "build something that will outlast your life."

 

[kimberland]

Second guest was Sandra Wilson, founder of Robeez.
Sandra Wilson is a classic Mompreneur.
Over 12 years, she built the baby footwear company
into a $30 million in annual sales company
before selling it to Stride Rite.

What Prompted The Business Start?
After coming back from maternity leave,
she got laid off from corporate.
She knew she didn't want her son Robbie in daycare
so she wanted a business to replace her salary.

The Idea
Robbie had "chubby little feet and no shoes fit him"
so she cut up an old leather purse
and with her "grade 8 sewing", made a pair of indoor shoes.
Proud of her creation, she showed them to everyone
and the feedback was overwhelmingly positive.

The Start
She bought more leather retail (she ran out of old purses)
and asked speciality boutiques to sell them on consignment.
Sales were slow but the feedback very, very good
(raving fans, she says word of mouth is how the company grew).
She made up 30 pairs
(begging favors from everyone and renting equipment)
and brought them to a trade show.
She got 15 orders and "thought she hit the jackpot."
Then she realized she "had to make 300 pairs of shoes."
Her "husband spent an entire weekend cutting the leather."
She outsourced to a home sewer (and would use home sewers for the first 5 years).
At the next trade show,
she met a sales rep (a Grandma) who took her on a commission basis.

The Plan Vs Reality
Her plan was to replace her corporate salary within a year.
The reality was that for the first 5 years,
she took absolutely no money out of the business
and kept her business operating out of her home.
In her first year, sales were $20,000.
To pay the bills, they rented rooms to students.

What Kept Her Going
"It takes a lot of perserverance."
"What kept me going was a lot of positive feedback."

Financing
The company "always financed out of sales."
She did take on two partners, her brother and her former business teacher
but that was because she "wanted someone to share it with."

Pricing
At first, Robeez were priced too low.
A consultant advised she raised her pricing and for the 12 years,
it remained constant.

Direction
One of her recurring questions was
"are we a shoe company or a baby accessory company?"
"We knew we weren't shoe manufacturers."
"That isn't a core competency of ours at all."
It is important to "know what you're good at."

Selling The Company
Selling the company,
Wilson says "was the most difficult decision I had to make in my life."
She felt that they "had taken the company as far as we could."
"We were not the people to take it beyond $30 million."
She didn't feel they had the knowledge base
and the company needed financial resources.

Next Steps
She's not thinking of a new start up yet ("my head and my heart are still so much at Robeez") but "I've learned so much that its almost a shame not to put it to work."

Advice To Mompreneurs
Ask yourself "what are you trying to achieve?"
"Just to replace the income takes a lot of work."

 

[nomadjanet]

Thanks Kimberland. Always enjoy reading these type of briefs, hearing stories I would never have the chance to hear.
Janet

 

[LAbull]

Great reading so far. Thank you.

 

[yveskleinsky]

Thanks for posting this story. ...Reminds me of that 80's movie with Diane Keaton where she gets fired from corporate America and starts her own business making organic baby food, and makes a mint. Cute movie.

I also like this post, because I get bummed out when I feel I'm not moving fast enough. It's easy to think that these "overnight successes" are just that- when the reality is that they aren't.

 

[kimberland]

For those trading bunnies out there,
next entrepreneur I saw interviewed
(missed a few 'cause of a project I got sucked into)
was Billionaire Seymour Schulich
who made his money building a brokerage
and after that, in the mining and oil industry.

He has donated over $200 million to universities thus far.

Why He Wrote A Book

Through his scholarships,
he would mentor up and coming young entrepreneurs
but he figured that a book was a form of "mass mentoring."

Decision Making Tool

He's been "using this tool since he was 18 years old."
"Mark the positives on one side,
and the negatives on another."
(for those accountants out there, similar to a T account)
Then he assigns a weighting from 1 to 10.
The weighting is where experience and judgment comes in.
"If you're poor at assigning weighting,
you won't get the right answer."
Add up the positives and add up the negatives,
then compare.
If the score is close, play the "if this one factor changes..." game.
If its far apart, the answer is clear.

Youth And Mistakes

"You can't make any mistakes until you're 30."
Til then, it's called gaining experience.
"At 30 years old, you'd better figure out what you're doing."

His University Days

Schulich got kicked out of his chemistry program
(due to lousy marks)
which tilted his sense of self as he always thought of himself as a scientist
and "why couldn't they see that too?"
Then he floated and ended up with "a Bachelor of Nothing."
In that first work term, "what I learned was I didn't know very much."

The Choice To Be An Entrepreneur

He always knew he would be an entrepreneur
but one of his first full time jobs confirmed it.
He worked for a year at $350 a month
and asked for a raise.
After much back and forth, he got a raise to $380 a month.
"That's when I realized I wouldn't get anywhere working for a big company."

Schulich accepted a position at a start up brokerage.
He "could have gone to New York and made a salary 5 times the start up salary."
They "couldn't afford to pay me anything."

What Business People Need To Know

"You gotta know accounting which is the language of business."
"You gotta know modern business history."

Reading Instead Of TV

Did he watch tv growing up?
Nope.
"Had a lot of trouble watching it because it wasn't there."
They didn't have a tv.

The BIG Idea

"Stuff isn't really that proprietary."
"If you're really lucky, you get 6 months."
"I steal ideas from everywhere."
"See a lot of opportunities."
Failures most likely happen because entrepreneurs "haven't done a sufficient amount of market research."
"Talk to people who've been in it."
"Look to where you have an edge."
"Don't play chess against Bobby Fischer."
And...
"Believe me, Chindia is real."
"You want to be in things that the Chinese can't produce or the Indians."

Partners

He had partners his whole life.
The keys to a good partnership?
Respect and Loyalty.
"Certain partners are good at certain things."
They're there "to stop me from doing something completely insane."
"Partners fill in" (while you're sick, on vacation, etc)

Luck

"What's luck?"
"The guy with 10 lines in the water does better than the guy with one rod."

Reciprocity

This is a key factor with successful entrepreneurs.
"Don't be too tough and don't be too smart."
Once he was asked why he left money on the table
with a specific deal.
"I knew I'd need favors from him.
If I took his last penny from him,
I wouldn't get any..."

Giving Back

He tells young people to get their own houses in order first,
their late 40's, early 50's is time enough to give back.
"Don't dilute your efforts early in life."
Then...
"You can give time, talent or treasure."
"Treasure is easiest."