Not content to be somebody else’s employee, a new generation of budding business leaders is emerging and they’re determined to make their mark on the world.
by Patrick McDonagh
The entrepreneurial dream is powerfully alluring. Create your own company. Define your own means of living. Make your own fortune.
It’s a dream catered to by popular shows like Dragons’ Den and Shark Tank, where would-be entrepreneurs pitch ideas to a panel of wary investors. It is also a dream pursued by record numbers of Canadians.
According to Statistics Canada and an independent CIBC report, in recent years the country has seen a boom in entrepreneurship through small and medium-sized businesses which contribute almost 30 per cent of Canada’s gross national product. Other recent reports by Ernst & Young and McKinsey & Co conclude that Canada is one of the most entrepreurship-friendly economies in the G20, boasting affordable startup costs and a stable banking sector.
In a recent op-ed in the Wall Street Journal, Busbud co-founder L.P. Maurice argues that Montreal “is fast becoming a world-class launching pad for startups,” thanks to low rents, generous R&D tax credits and the cachet of cool resulting from the international success of creative firms like multimedia studio Moment Factory, videogame producer Ubisoft Montréal and the Sid Lee ad agency.
“People used to take a traits-based approach to defining entrepreneurs: they are risk-takers, for instance,” says Greg Vit, BCom’80, director of the Dobson Centre for Entrepreneurship in McGill’s Desautels Faculty of Management. “But that characterization has been challenged by a more recent approach that suggests you can create the underlying conditions to help entrepreneurs emerge.”
McGill is following the lead of entrepreneur-hothouse universities like MIT in trying to foster that supportive environment. Last year, McGill and l’École de technologie supérieure announced a new partnership, the Quartier de l'innovation. Like Boston’s Innovation District and Spain’s [email protected], the Quartier de l'innovation hopes to spark new entrepreneurial efforts and innovative collaborations. The QI is based near downtown in southwest Montreal – already the home to the biggest concentration of IT and multimedia companies in the city.
Vit thinks it’s natural for McGill to play that kind of major role. “After all, McGill has almost 1,700 professors, working on topics [ranging] from medical research to green chemistry, genomics to new materials in engineering, neuroscience to music to new ways of organizing legal systems. The University is really well-positioned to be a breeding ground for innovation-driven entrepreneurship.”
One of the focal points for entrepreneurial activity at McGill is the Dobson Centre’s McGill Dobson Cup, a startup competition established in 2009. Each year, members of the McGill community – students, alumni and staff – develop comprehensive business plans and pitch their startup ideas to a dozen judges, all industry leaders from across North America. Winners split $93,000 in seed funding and receive mentoring.
Not in it for the money
The Dobson Cup offers prizes in both for-profit and social-enterprise categories. That second category speaks to a growing interest among McGill students in devoting their entrepreneurial skills to projects that aspire to do more than simply make money.
About 15 per cent of the entries for this year’s Dobson Cup were in the social enterprise category. One, a project intended to help the Lac-Mégantic community cope with the aftermath of last year’s devastating train derailment, resulted in the students receiving an invitation from the town to present their ideas. “I do think it’s a new wave and it’s growing,” says Vit. It certainly didn’t hurt that a team of McGill students triumphed at the Hult Prize last year, an international competition for startups designed to tackle major global issues (see related story below). The Dobson Centre offers a popular course on social entrepreneurship, while the Desautels Faculty of Management will be introducing a new Social Business and Enterprise option this fall as part of its strategic management offerings.
Vit says the Dobson Cup is much more than an academic exercise. It’s having a real-world economic impact. “Of 42 startups competing in the Dobson Cup over the past three years, 32 are still employing people and generating revenue – an impressive success rate.”
The Dobson Cup isn’t restricted to participants from the Desautels Faculty of Management. In fact, most of the people who took part this year came from other faculties. Twenty-five per cent of the competitors hailed from the Faculty of Engineering, for instance, while 20 per cent were affiliated with the Faculty of Science.
It’s who you know
Hypejar, one of the winning entries from 2013, is a web-based enterprise that allows early adopters and others interested in new products to learn about – and assess – products well before they hit the market.
“We had the opportunity to talk to people with significant expertise, which was the most valuable gain for us,” says Grant Yim, BCom’03, who, with his teammates – all McGill graduates – presented Hypejar to the Dobson Cup judges, half of whom hailed from Silicon Valley. “If you know the right people, they know other right people, and your network grows organically.” The Hypejar team has leveraged its Dobson contacts, and is making the rounds of industry leaders in San Francisco as they position their business for online success.
The Next 36 co-founder Reza Satchu makes the case for supporting young entrepreneurs (Photo: Owen Egan)
Reza Satchu, BA’91, would certainly qualify as one of the right people for budding entrepreneurs to know. Satchu made his reputation when he and his brother sold their startup, SupplierMarket.com, for $935 million in 1999. Today, he is managing partner of Alignvest Investments and the co-founder of The Next 36, an ambitious initiative that selects talented young entrepreneurs from across the country each year for an intense and demanding training program that’s been likened to a “boot camp for entrepreneurs.”
“With technology today you can be an entrepreneur in six months,” Satchu says. “The barriers to entry today, versus 20 years ago, are far less. It has become much easier to test ideas and take products to market.”
Each year, more than 1,000 university students and recent graduates apply to take part in The Next 36. The three dozen who make the final cut receive mentoring from business leaders and instruction from some of North America’s top management professors, all while working in groups of three to build a real venture, for which they are eligible for up to $95,000 seed funding.
“We want to provide some of the country’s most promising young entrepreneurs with an extraordinarily transformative experience,” explains Satchu. “Many of their businesses will fail, but the participants will still acquire the confidence, relationships, experience, and expectations to create ventures earlier, faster, better than they would otherwise.”
Omer Dor, BEng’12, is a Next 36 success story. When he and his teammates were building Mobicare, an app that connects families and caregivers of patients with Alzheimer’s disease, he drew on the program’s reputation to gain access to physicians, hospitals and Alzheimer’s societies across North America. “The first challenge in building your own business is to carry out extensive market research analysis, which involves speaking to the right people,” says Dor. Mobicare became the first Next 36 venture to find a buyer, and Dor is now the president at Salmatic Technologies, a technology investment firm.
This year, four McGillians hope to receive the same kind of life-changing experience through their own Next 36 involvement. Stéphanie Brisson, BCom'14, Madeleine Channen, Elyse Lefebvre, BA’13, and Jaclyn Ling, BCom'14, were all picked to be participants.
For Ling, who graduated in finance this spring, entrepreneurship began through her interest in fashion. “I started a YouTube channel to share fashion ideas, which reached the point where I was making money from it,” she explains. With a friend, she launched Prim & Lace, a line of her own home-made purses that she began to sell after someone asked about one she was carrying. These experiences helped her make the cut for The Next 36, and now she and her teammates are developing Blynk, a fashion consultant site. Her mentors made it possible for Ling to attend shows at New York Fashion Week – part of the crucial network-building process.
Similarly, Brisson could already boast an impressive CV before finishing her McGill management degree. “But I never realized how entrepreneurial I was until I filled out the application form for The Next 36,” she laughs. “I had won scholarships for leadership – but putting the ‘entrepreneur’ tag on it was new for me.” Her project, Justfit, is a mobile app that she describes as being like “Urban Spoon” or “Yelp,” but specifically for fitness centres – an app that would ensure that travellers had no reason to miss yoga classes while in strange cities. Her mentors counselled her on strategies for retaining clients once they had used the app to locate a gym. “They take the time from their own work to get their hands dirty with our ideas.”
While start-ups often begin with a “Eureka!” moment, there’s far more to the story than that. “A lot of people have great ideas,” says Sophie Boulanger, BCom’03, whose own great idea resulted in BonLook, an online retailer that specializes in eyewear that’s both affordable and stylish. “But the idea is maybe 10 per cent of the work. The rest is in executing a plan.” And that’s easier said than done, especially as business plans need to be flexible. “The job always changes from year to year and season to season,” says Boulanger. Entrepreneurs need to be nimble enough to adapt to changing circumstances.
The case for being ‘stupid’
BeaverTails Pastry partners Pino and Anthony Di Ioia (Photo: Will Lew)
Pino Di Ioia, BA’91, MBA’93, and Anthony Di Ioia, BA’92, MBA’94, understand that. The twin brothers are CEO and CFO, respectively, of BeaverTails Pastry. “The number one thing you need as an entrepreneur is perseverance,” says Pino, who has been one of the many entrepreneurs who has served as a mentoring Dobson Fellow for students at the Dobson Centre. “You have to be too stupid to know you cannot succeed, or confident enough to believe in what you are doing – it’s two sides of the same coin.”
But underlying that perseverance, he suggests, is another fundamental impulse. “There is a dreamy, romantic perspective that entrepreneurs are swashbuckling risk takers,” he says. “But what I’ve sensed, which people might mistake as desire for risk, is a sense of curiosity and a desire for adventure. Entrepreneurs tend to be curious. They ask, ‘Why can’t we improve this process?’ or ‘Why can’t we make a product that does such-and-such?’”
“You don’t have to be a type-A personality with lots of charisma,” to succeed as an entrepreneur, says Corina Tudose, MBA’13. “You just can’t be shy.”
Tudose worked as a hedge fund executive in New York before striking out on her own and creating the Montreal-based Healthyvore, which helps businesses set up wellness programs for their employees. “You must be confident enough to believe in your product, but modest enough to admit mistakes and to recognize when a speed bump on the road means ‘Take the next exit’,” says Tudose. “I’ve learned to differentiate the two: when it’s time to persevere and when it’s time to understand that I need to take the next turnoff, because straight is not the way to go.”
Building a brand
Even once a business is firmly established, the challenges don’t end. “Our brand has been around for 35 years, but you still need stewardship,” says Pino Di Ioia. The Di Ioia brothers began at BeaverTails as students toiling over the deep-fryer; they purchased the La Ronde outlet as the company’s first franchise, and in 2002, when the company was in dire financial straits, the brothers – armed with McGill MBAs – stepped in as managers. In 2009, Anthony, Pino, and Pino’s wife, Tina Serrao, bought a majority interest in the company from the original owners, and have since launched an extensive, but careful expansion. Twenty-two new franchises are planned in Canada, the U.S. and elsewhere this year.
“Brands take on their own aura, and you need discipline to make sure you chaperone the brand properly,” says Pino. New BeaverTails franchises are only appearing at sites that attract tourists. “We’re part of the fun fabric there. The pastry is important, but the magic of the place – whether it’s La Ronde or the Toronto Zoo or a ski hill in Banff – rubs off on our product,” he says. The company received a huge PR boost five years ago when U.S. president Barack Obama sampled some of their sweet treats at a kiosk not far from Parliament Hill.
Frank & Oak co-founder Hicham Ratnani (Photo: Will Lew)
Location may be integral to BeaverTails’ success, but for e-businesses, the challenges are different. “Online is a big flea market,” says Hicham Ratnani, BEng’08, co-founder of Frank & Oak, which mirrors BonLook’s emphasis on affordability and style, only with men’s clothing.
Launched in 2012, Frank & Oak has more than 100 employees and has showcased its wares at New York Fashion Week. Ratnani and his partner Ethan Song cut their business teeth on Modasuite.com, a made-to-measure online retailer for men that they founded in 2009. “We learned how to cater to guys online, and how to serve one client at a time,” says Ratnani.
Those lessons proved to be instrumental for Frank & Oak’s success. “We focus not on the garment so much as on the relationship, creating something that makes the client feel unique,” says Ratnani. Though based in Montreal, 70 per cent of Frank & Oak’s customers live in the U.S. “Our goal is to be the number one brand for the modern man, the brand of the Internet generation.” The company was named Innovator of the Year at the 2013 PwC Vision to Reality Awards for Canadian start-ups.
Chic shades and stylish dress shirts aren’t the only items that you can shop for online. Green zebra tomatoes and black trumpet mushrooms are available there too, courtesy of Montreal-based Lufa Farms.
An innovative experiment in urban agriculture, Lufa Farms touts itself as the world’s first commercial rooftop greenhouse. “We had a big learning curve,” says greenhouse director Lauren Rathmell, BSc’10, a founding member of Lufa’s executive team. Some of that curve focused on creating horticultural practices fitted to a warehouse roof, as well as designing and building the technology that would make such a feat possible. Once the produce was growing, though, Lufa needed to find buyers.
The first baskets of fresh produce were sold online and delivered to drop points in Montreal in April 2011; by that fall, sales were close to 1,000 baskets a week, and, interestingly, traditional face-to-face interaction helped drive that rapid growth. “Our open house days have been our strongest PR. People visit the farm, meet the team, and then get behind the project and tell their friends and family,” says Rathmell. “Customers like being able to see where their produce is grown and to meet the people growing it.” The company now distributes more than 3,000 baskets of produce each week.
Lauren Rathmell tends to some vegetable plants in the nursery at a Lufa Farms rooftop greenhouse in Montreal (THE CANADIAN PRESS/Graham Hughes)
Lufa opened a second rooftop greenhouse after its first year, and is now planning a third in Montreal. A foray onto the rooftops of Boston is also on the horizon. Last fall, both Lufa Farms and Frank & Oak were named to the Deloitte Technology Fast 50 program, which spotlights some of Canada’s most promising new businesses.
Vit says it’s never difficult to get successful entrepreneurs – particularly McGill graduates – to agree to share their experiences with current students. “They remember when they were the ones who were starting out and hustling and trying to make things happen.” Pino Di Ioia says he enjoys interacting with students. “When we speak to students at McGill, we tell them about our failures, because that’s what we learn from.”
The 156 projects that were pitched at this year’s Dobson Cup set a new record for the competition. Surveying the entrepreneurial talent that populates the University, Vit believes the McGill Dobson Cup will keep growing. “In five or 10 years from now, I fully expect that something transformational is going to come out of this. It wouldn’t surprise me if the next Facebook comes out of McGill.”
Patrick McDonagh is a Montreal-based writer. He is the author of Idiocy: A Cultural History, and has written for the Globe and Mail, The Walrus and Chatelaine.
Hult winners aspire to make a difference
Last year, five McGill students won the 2013 Hult Prize for social entrepreneurship, earning $1 million in seed funding with their proposition for providing food to undernourished communities – transforming insects into edibles. The idea isn’t as unusual as it might sound. As the team noted in its pitch, insects are already eaten by millions of people. In winning the prize, MBA students Mohammed Ashour, MSc’11, Shobhita Soor, BSc’10, Jesse Pearlstein, Zev Thompson, and Gabe Mott beat out 11,000 teams and accepted the award from former U.S. president Bill Clinton.
Since then, the McGill team has been busy getting their business off the ground. They are shovel-ready for a large industrial production facility in Mexico and there are plans for a second facility in Ghana.
With such large aspirations, it’s no surprise that the team’s newly coined business name is Aspire. The team originally believed their business model could be implemented within urban slums, which would have meant raising insects within those inner-city zones. “Turns out, people living in urban slums aren’t interested in farming; they want to escape the rural life,” says Mott.
Aspire came up with a new model based on working with local farmers. The business supplies the raw materials, and the farmers raise the insects and sell the produce back to them for a profit. “We can change the nutritional profile of the product, and inject vitamins to enhance the nutritional value. We can produce large quantities by coordinating this way with the local farmers, which means our efficiency goes up and we require less investment in land,” explains Mott.
To find out more, visit Aspire's site.
Braving the Dragons' Den
Illustration: Jeff Kulak
Just six months after asking a friend to help put together a fundraising site to support his training as a competitive judoka, psychology student David Ancorfound himself onDragons’ Den,pitching the resulting site to some of Canada’s most famous venture capitalists. One of them, Bruce Croxon, made a deal for 50 per cent of the site. Makeachamp.com has helped raise more than $400,000 for amateur athletes, six of whom took part in the Sochi Olympics – including silver medalist Kelsey Serwa. Ancor hopes for even bigger numbers at the 2016 Summer Games in Rio. “We want to make it easier for athletes to communicate with their supporters [through the site], to keep them updated,” he says, “because you really can’t make it to the Olympics alone.”
Ancor isn’t the only McGillian who’s appeared on the hit CBC TV series. Here’s how some of the others fared.
David Agulnik, BSc’90
The Pitch: The Banana Guard and Froot Guards, plastic protectors to prevent squished fruit.
The Verdict: The original pitch, the Banana Guard, didn’t impress the dragons. But Agulnik and his partners returned to the show with strong sales numbers and the new Froot Guard, which earned them investments from dragons Arlene Dickinson and Brett Wilson.
The Outcome: Banana Guard and its related products, already popular in Europe, are finding a growing market in Canada and the U.S.
Marty Algire, BSc(AgrEng)’97, MSc'01
The Pitch: FixMeStick, a USB stick that finds and removes viruses on computers.
The Verdict: Algire and his partner shook hands on a joint offer from dragons Arlene Dickinson and David Chilton, although all five tycoons were interested in FixMeStick and its potential for healthy profits.
The Outcome: FixMeStick has taken the tech world by storm, and is available across the globe. A Mac-friendly version is currently under development.
Edith Bisson, BEng’05
The Pitch: Kangaride.com, a membership-based rideshare site that pairs drivers and passengers.
The Verdict: The concept and Bisson’s strong business model garnered an impressive five offers from the dragons.
The Outcome: Kangaride.com has grown by leaps and bounds, expanding from Quebec to Ontario and British Columbia.
Christine Poirier, MA’05
The Pitch: Momzelle, a line of stylish tops for nursing mothers.
The Verdict: While some of the panel weren’t certain about Momzelle’s potential, dragon Brett Wilson made Christine an offer for equity. She decided against it.
The Outcome: Christine’s products are in stores across Canada, and she was named the 2009 Woman Entrepreneur of the Year by Impact Entrepreneurship.