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Serial entrepreneurs: How to find the next great idea

Reza Satchu, co-founder of The Next 36, at Venture Day

Jacquie Labatt / Martha Fisher

When the sale of his technology company, SupplierMarket, required him to move from New York to San Francisco in 2000, Reza Satchu became very familiar with self-storage facilities.

Back in Toronto to visit his parents, he was struck while driving on the 401 by how many self-storage facilities were located along the highway.

"I thought, 'Why is it that these facilities exist along the 401? It's not necessarily where people live, it's not where the customers are, but yet, they're all there,'" he recalls.

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"I thought, 'Why is it that people who live in [the neighbourhood of]Leaside have to drive all the way up to the 401 to store their stuff, especially when 70 per cent of the people making these storage decisions are women, and they don't necessarily want to go into a darkly lit area in the middle of nowhere?'"

As a result of asking himself those questions, Mr. Satchu co-founded StorageNow Holdings, which focused on multistory facilities for high-household income customers in the middle of urban areas. The company became Canada's second-largest storage company and sold several years later for $110-million.

Mr. Satchu is one of Canada's most successful serial entrepreneurs, having founded a string of multimillion dollar companies including SupplierMarket, Stellation Asset Management and Alignvest Capital Management] his current venture.

He's also the co-founder of The Next 36, a program designed to help launch the next generation of entrepreneurial leaders.

If, like Mr. Satchu, you're an entrepreneur on the hunt for your next big business idea, it's not likely to come from a bolt striking out of the blue, he says.

As his experience shows, finding that next big idea is simply about looking at things you experience every day from a customer's perspective, and thinking about how you can improve on that experience, he says.

"Most people think to be an entrepreneur, you have to be walking down the street and a bolt of lightning hits you and you get inspired to look at the world differently and come up with this brilliant new idea…

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"I would argue most great entrepreneurs are simply able to look at everyday things in a slightly different way than others," he says.

"Just walk through life for a day and think about all the things that frustrate you and write them down and think about what you could do to solve that problem, because, if you have that problem, then lots of other people are, too. And if you can solve that problem, then you'll create value and build a business," he advises.

Ron Close, the executive entrepreneur-in-residence at The Richard Ivey School of Business at the University of Western Ontario, calls it "using your entrepreneurial beeper" – noticing things in your immediate environment that need fixing.

He says it involves conscious practice – thinking about inefficiencies, wasted time and wasted money, and always being on the lookout for these things.

As well, if entrepreneurs become "steeped" in an industry through their first venture, their entrepreneurial beeper often takes over and allows them to see the second or third opportunity.

"There may be an inventory problem or a pricing problem, a service-quality problem or a product-quality problem, something they notice in their manoeuvring in their first venture. That proximity to a specific ecosystem often yields opportunity if they are practising consciously that entrepreneurial beeper," he says.

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But Mr. Close also notes that once you have – or think you have – that great idea, you need to do your research.

"Very early in your analysis, you need to talk to real experts," he says. "Have a bit of a BS detector, so you don't convince yourself it's a good idea. You want to be an analyst, not a salesperson when you look at these things. You want to prove, not just reinforce your hypothesis."

Mr. Satchu agrees that research is important in the early stages, though he warns there's also a risk in waiting on an idea while you're gathering information.

"I have this phrase which says, any idiot can make a decision with perfect information," he says. "So it's a balancing act between doing your research and getting the information and realizing that, by definition, being an entrepreneur is about taking risks. If you wait for the 100-per-cent guarantee, the opportunity is gone."

Mr. Close notes that more opportunities are presented to successful entrepreneurs, so it's a good idea to keep yourself open to the ideas that might come from someone else.

"The more success you have, the more people hear about you and they bring new projects your way," he says. "It's about being available and having a reputation that grows as you succeed. Investors and people with ideas want to go to people who have a track record."

That's something that Billy Hennessey is counting on.

Just 27, he's been involved in running several businesses, including selling lobster online, dabbling in garbage disposal during the Toronto garbage strike of 2009 and his current venture, Hennessey Events, an event marketing company catering to young professionals that he's run for six years.

Now he's looking for his next big venture – and letting the business community know it in a big way.

His AboutMe website proclaims, "Toronto entrepreneur looking for my next venture"To find his new venture, Mr. Hennessey's put together a group of advisers (including his accountant, lawyer and experienced entrepreneurs) and is setting up meetings with business brokers and accounting firms, looking for an existing business, rather than a startup, to make his own.

"I'm looking for a business that is sleeping or the owner is tired and, for whatever reason, hasn't grown to its potential and I can come in, apply my energy and grow it to much larger than what it is," he says. "Basically I'm looking for something that is profitable, but with the right owner/operator in place, the business can be taken to the next step."

He's not necessarily looking for an industry he's familiar with.

"I'm young, I'm 27, I'd love for the next business to be in another industry so I can learn another industry," he says. "I plan on owning a number of businesses between now and when I die."

While Mr. Hennessey is eager to find his new venture, he's also faced with a common challenge among serial entrepreneurs – ensuring that his current company will continue to grow and prosper, even if he takes on another business.

"We've built a brand, the business doesn't rely on me any more and the proper team has been assembled for the business to thrive without me being around all the time."

According to Mr. Close, building a new business requires an entrepreneur's full attention, particularly if it's a startup.

"A startup is at least a full-time job, so if you're going to dive into a new venture at the risk of your existing operation, you should only do that once you're comfortable you have a team in place to afford you that distraction," he says.

"It might be possible for you to become a chairman of the board, but on a day-to-day, operations point of view, I think you really have to dive in and be there for all of the minor and major decisions that have to be made every day as you're trying to navigate through the minefield of a startup."

Building a business while working somewhere else would be a bit like having one hand tied behind your back, says Mr. Satchu, so you have to be willing to give up some of the control to others on your team.

"There is no way you can have it both ways," he says.

"If you want to be a serial entrepreneur and be building another business, you cannot be a controlling, passionate entrepreneur that wants to make all the decisions. It just doesn't work."

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