Video: Entrepeneurs share advice
Young entrepeneurs share their success stories.
Jobs for young people are still hard to come by. Youth unemployment remains high (14 per cent across the country).
But the climate for youth entrepreneurs seems better than ever, particular in the knowledge sectors where young people have the advantage of low start-up costs and technology know how.
Ajay Agrawal, a professor at U of T’s Rotman School of Management, puts this down to five factors.
• Culture: From Facebook’s Mark Zuckerberg to Dropbox’s Drew Houston to Tumblr’s David Karp, there’s a growing parade of leadership examples for young people. Becoming a CEO has become more imaginable.
• Technology: The digital natives have the insights and expertise to find profitable niches in the rapidly growing world of mobile, Internet and social media innovation.
• Lean methodology: Cost barriers to starting up your own business have fallen dramatically. With careful planning it can be done with $10,000 or less rather than $100,000.
• Access to capital: Not only are investors more willing to fund 22-year-olds than they were a decade ago, there have been an increase in funds available from venture capitalists to the federal and provincial government.
• Infrastructure: The opportunities for mentorship, training and funding have grown through organizations like the Canadian Youth Business Foundation, Nspire and the Next 36. Universities are also actively promoting youth entrepreneurship through the University of Waterloo’s Conrad Business, Entrepreneurship and Technology Centre and Ryerson’s Digital Media Zone, as examples.
According to an Ernst and Young survey released late last year, there has been a marked improvement in training, funding and support for young entrepreneurs in the last five years. Of the 1000 entrepreneurs surveyed, 88 per cent believed mentoring programs would boost that support further in the next three years.
Rod McNaughton, director of the University of Waterloo’s Conrad Centre, says he has noticed a shift in perception towards entrepreneurs as well.
Traditionally even if parents were small business people, they’d encourage their kids to become professionals, he says. “Going home and saying you want to be an entrepreneur was like going home and saying you want to become a musician.” But now entrepreneurs are becoming almost a professional class.
The question is whether this entrepreneurial wave is different, he says. He thinks there could be changes in technology and society that are fundamentally shifting in favour of smaller, new businesses.
So what are the pros and cons of being a young CEO?
The Star asked some of Canada’s young and successful business founders.
His story: At 19, the Vancouver native was one of the youngest people to get funding from a venture capitalist firm ($4.5 million) to develop kiip.me, a company that combines mobile gaming with advertising.
The element of surprise: “You’re walking into a conversation being totally underestimated, which usual give you the upper hand when you actually know what you’re doing…it becomes a little more deadly when you’re in negotiations.”
High expectations: “Because of one movie, The Social Network, the expectation is that young people now have the potential, that there is a small chance we can actually do something big enough to affect the world in such a big way…[traditional advertisers] do actually want to hear what I have to say because they acknowledge that hey, maybe there is something there to pay attention to.”
Being old enough to drink: A problem on a lighter note.
Doubters and haters: “They’re part of the game. All you can do is to try and avoid them.”
Not taken seriously: “People will say awww, that’s a cute little project. I’ve been fortunate enough that we were able to raise venture capital. That was huge vote of confidence for us.”
Age is irrelevant: “My goal, and I’ve succeeded in this over the last few months, is that my age has not been in mention in many, many of the articles and I’ve very excited about that. I want my company to be the highlight of why people want to talk to me, not my age.”
“I call it generating serendipity…There are environments that you should be in, whether it be with people who align with your goals and understand your dreams and objectives, or if it is a city.”
That’s why he moved to San Francisco: “In the one square mile around our office building are 40 startups and that’s the best part.”
“You have to hop on a plane sometimes. I’m not promoting that people leave their country but sometimes in the most ambitious stages of your life, go somewhere conducive to your strengths.”
“I’m the best at being me, and you’re the best at being you.” But one entrepreneur a lot of younger people admire in Silicon Valley is Elon Musk, founder of PayPal, Tesla Motors and Space Exploration Technologies: “Nothing seems to be in his way.”
His story: In early 2007 while at the University of Victoria he co-founded IndoChino, a company that makes affordable, stylish, custom-made suits that can be ordered from anywhere. He was 22. The company now has 60 staff split between Vancouver and Shanghai and has raised $4 million from investors last year.
Advantages of starting young:
The support: “If you can show energy and drive and have this really out-there idea, I think you find a kind of altruism in older entrepreneurs, that they want to help the next generation.”
The opportunity cost: “You don’t have anything to lose. When I started Indochino I was working out of my childhood bedroom, I was living with my family. If I lost everything that’s where I’d be again.”
An exhilarating but heavy workload: “You work a ton, you’re the only person around you doing it — though that can be exciting as well.”
An unexpected amount of admin: From setting up bank accounts to bookkeeping — “I spent the first year doing everything but sell suits.”
Advice to young entrepreneurs:
Do something you are passionate about and take advantage of the resources your university has to offer. When writing his business plan, Vucko approached different professors, used the library databases and computer labs, and got connected with mentors with expertise in his business field. Those mentors led to him getting his first investor as well.
Apple’s Steve jobs and Mickey Drexler, CEO of J. Crew
He co-founded Loose Button in 2010, a year out of university. The rapidly-growing Toronto-based startup sends out samples of luxury cosmetics and beauty products to subscribers every month.
Low entry costs: You don’t need start much start-up capital — you can rent servers from the cloud, get your friends to help and work from your basement.
Young CEO role models: “The mentality has changed over what entrepreneurship is all about … You see the Mark Zuckerbergs of the world and you say hey, if he can do it, I can do it too.”
Support: There are so many organizations that give you access to like-minded people, mentors, speakers and loans. “The infrastructure to do something is there and I don’t think it was there ten years ago.”
Building credibility and reliability: “We had a strong online presence and a good product … and we built momentum.”
There are three things. Be biased toward action — anyone can come up with good ideas, but it’s the action piece that makes it a reality. Be flexible with your ideas. And surround yourself with great people, both on your team and in your network who can give you advice.
Role models: Apple’s Steve Jobs with his focus on product. Tony Hsieh of Zappos.com (now owned by Amazon) for his focus on customer service. Richard Branson for his ability to enter and change new spaces. Jeff Bezos of Amazon for his Wayne Gretzky-like ability to get where the puck is going rather than where the puck is.
His story: He started the Ottawa-based social strategy consultancy as a side project while he was working and attending college, and it evolved into a full-fledged business in September 2010. Two partners have joined him since.
Being young: “Because of our age and our enthusiasm we got into the boardrooms of high-level executives at some good Canadian companies.”
Being underdogs: People resonate with the underdog story: we’re a seven person shop with passion, skills and enthusiasm.
Being young: Being young in a service-based industry can be hard since we rely on intellectual capital not intellectual property. You have to play to your strengths like energy and passion and have people enjoy working with you. It’s also important to manage your personal brand, especially online.
Know what kind of financial situation you’re comfortable with.
“Paycheques are kind of like crack — one you start getting one it’s really hard to kick it … I think businesses fail because people didn’t give themselves the runway needed to take off. We’re a classic example of that. We made no money for 18 months … Even with a great idea or if you’re very, very smart it still takes time to get off the ground.”
Steve Jobs – despite the cliché he had a vision and didn’t let anyone shake it. Dani Reiss of Canada Goose, who answers Hale’s questions and gives back to entrepreneurial community. Richard Branson, for having and executing huge vision.
Her story: She started TalentEgg four years ago after seeing how challenging it could be for students to find work after graduation. The online portal connects students with jobs, and helps employers recruit off campuses across the country and market themselves towards Gen Y.
Startups are a good Gen-Y option: “It’s become more accepted for young people to start their careers in entrepreneurial companies, whether they started them or are working in them.” The appeal is being able to more than just a narrow job, to have a say in what goes on and access to leadership.
Building credibility: “When I founded Talent Egg I was 24, but I looked 15 then and I look 15 now. Right away I knew that I wasn’t going to go into a meeting and look like the other people selling stuff in my market, so I decided I wasn’t going to pretend. I’m a recent graduate, my team are all Gen Y-ers and we understand the market better than anyone else.”
Lack of experience in business: “I worked to turn that to my advantage too … by saying I can approach problems with an open mind.”
“I don’t think you could find an entrepreneur out there who could honestly tell you they’ve never wanted to quit. I think feeling that kind of intense emotion about your business is part of the game.” Being an entrepreneur takes hard work, perseverance (something that got her through the recession) and the ability to step back and reassess what you’re doing.
Her parents who are both entrepreneurs and case studies about the many successful entrepreneurs out there.
Her story: Hobbling home barefoot after a night in heels, she realized something needed to be done. So in December 2009 she launched a company that makes foldup flat shoes to conveniently swap with stilettos.
Being eager to learn: “Nothing was a roadblock, it was all creative problem solving and figuring how to get around things.”
Being young: “I was worried about my age when I started out … and I found it was benefiting me because people were so amazed I was so young and doing this.”
Inexperience: “I was in school, I had no experience with the fashion industry … but as student you learn how to learn and you’re bright-eyed and bushy-tailed and believe you can do it.”
“Surround yourself with amazing people. Find those people in the industry who can help you out and guide you along the way.”
Richard Branson, who gave her the above advice.