For the thousands of people that will start new business ventures this year across Canada, the vision of being your own boss is usually a motivating factor. As an entrepreneur, I have experienced both the anticipation and anxiety of 'having the buck stop here.' But what I've also learned is that to be successful as an entrepreneur, you need to be more than your own boss – you need to be a leader; creating an environment that actively seeks out and integrates the views of others to continuously evolve and improve.
As a founder of three tech startups, and an investor, director and advisor to many others, I have experienced this challenge first-hand. A leader not only needs to steer the ship, but know how to rechart the course at the same time. A compelling idea, detailed research, and a diversified financing strategy are core components to success, but if you don't approach these with an open mind, your business will struggle. Here are some important lessons I've learned about being a leader:
Research and model other companies
The best way to learn about owning and operating companies is to invest in them. Even if you don't have any money, start a portfolio. The process of picking companies – whether a consulting company, boutique or tech startup–will help you refine your goals. Not sure what interests you? Sit in on lectures or pitch sessions at your regional innovation centre – the MaRS Discovery District in Toronto and Research, Innovation, Commercialization Centre, based in Mississauga are two well-known examples.
Don't pick public companies listed on the stock exchange: you are not quite ready to start emulating banks or telcos. Then, find out everything you can about your "portfolio companies." Organize the information under 10 comparators – like products, region, or prices – to help you pick and track those that are best aligned with your objectives. Entrepreneurs are first and foremost shareholders and investors: practicing with other companies is the best path to becoming good at owning your own.
I learned to be an entrepreneur by pouring over companies' business plans and pitch documents and making choices about which ones were strong candidates for owning or operating through to success.
Plan for the long term
Leaders look ahead – farther ahead than the rest of the team. A good example is capital.
Most entrepreneurs resist raising capital – they don't want third-party shareholders or simply don't know how to create a "share capital corporation." But a company without financing is like a lake without water. Businesses take about three years to reach profitability and entrepreneurs need a plan for financing their losses during the startup stages and for sharing risks and rewards among others who think the business "has legs." If you can't find anyone, accept it as valuable early market feedback, and either move on or continuously refine your business plan until someone will buy in.
My first venture, a tech startup, attracted at least 20 rejections before I landed an investor; but each pitch provided an opportunity to refine my plan and grow my skills.
As any leader knows, the popular or common solutions aren't always the right ones. Once you think you're on the right track, examine the opposite viewpoint for clues to what you might be overlooking. For example, many entrepreneurs pursue financing strategies that cast venture capital (VC) financing as the only source of funding, overlooking the almost $30-billion per year that the Canadian government distributes through more than 4,000 business support programs.
My first company attracted seed financing through Industry Canada – this money played an enormously important role in covering out-of-pockets costs, complementing the sweat equity contributions of the founders – and ultimately helping us attract investors.
Whether you have an idea for starting a business or already operate one, thinking and acting like a leader will be a key element of your success.