An introduction to the Oxford Beach advisory board members
Photo: The Oxford Beach advisory board has challenged our approaches and brought opportunities to the table.
As 2012 drew to a close, I wrote a blog post about the Oxford Beach management team’s decision to establish a board of advisers in 2013. I was convinced it would help take my events business to the next level because the company was in need of a more refined structure.
We’re really fortunate to have such an experienced, dedicated advisory board:
Jeremy Zuker: An entrepreneur with private-equity experience who sold his startup, WagJag, to Torstar Digital.
Ganendra Nikhil: Strategist and partner at McKinsey & Co.
Chris Polson: Finance and acquisitions background, and a partner at Veracap Corporate Finance Ltd.
Mark Healy: A thought leader with expensive marketing experience, recently named director of strategic planning at Venture Communications.
Rob Godfrey: Has built an extensive network, having headed up sales for Toronto Blue Jays. He’s also a business owner in multiple industries.
The advisory board has challenged our approaches and brought opportunities to the table. It has given our credibility a significant boost. We’re only a few months in, but I’ve already come up with a list of key learnings, and while some may come across as minor, they have all had impact.
- Choose advisory board members who will make your business a priority, otherwise what’s the point? They should be smart, experienced and connected, but you may not want the most successful person you know because there’s a good chance he or she will be too invested in their own career.
- Your advisory board can provide the most valuable assistance outside the scheduled meetings. We get together quarterly as a group, and we try to meet individually with each board member at least once between those sessions. We also communicate regularly through e-mail, phone calls and text messages. With some members this takes place on a weekly basis.
- Advisory board members have different backgrounds and you need to manage them accordingly. We have some executional-type members and some high-level strategy ones. Those that fall under executional prefer to discuss the nitty gritty. The strategy group likes to discuss ideas in theory and move on.
- Share the good, the bad and the ugly aspects of your business. It’s easy to talk about the great work your company is doing. We’ve received the best advice when we share our challenges and expose our vulnerabilities to the advisory board.
- You get out what you put in. In addition to making a conscious effort to communicate regularly with advisory board members, we prepare for the quarterly meetings seven to 10 days in advance, and we circulate documents five days ahead of time to ensure everyone has time to digest the relevant background information.
- Eat at the start of the meeting, not the end. It provides a buffer if someone is running late, and you don’t want hungry advisory board members.
The Interviews: Alex Ikonn of Luxy Hair
Alex Ikonn of Luxy Hair
For the third installment of my Q&A series with established entrepreneurs, I spoke to Alex Ikonn of Luxy Hair. Alex is taking the YouTube world by storm. He consistently uploads videos of himself discussing his personal journey as an entrepreneur as well as inspirational clips to help other up-and-comers. Check out his channel here.
Alex and I met through the Entrepreneurs Organization (EO). He is known through the EO community as “the guy with the really successful e-commerce business”. Other EO members often reference Alex’s business model as one they’d like to duplicate. Alex also has a reputation for supporting other entrepreneurs. Since he’s in the e-commerce sector, I wanted to focus on this exciting and fast-moving area of the business world.
Question: Tell me about your business (Luxy Hair) in four sentences or less.
Answer: Luxy Hair is a customer-centric hair extensions eCommerce retailer. We’re one of the fastest-growing beauty brands on the internet being on the list of Top 10 Shops (2011, 2012) on the Shopify eCommerce platform. Also, our YouTube channel Luxy Hair is one of the largest beauty channels in the world with over one million subscribers worldwide.
Q: What are the benefits/challenges of running an online business?
A: The biggest benefit is scalability. With an online business, you have the ability to scale your business way beyond what you can do with a bricks and mortar business.
The most impactful challenge is that there is always the issue of uncertainty of the current tax regulations of eCommerce businesses worldwide. If your online business is global and you ship worldwide, there are many jurisdictions your product goes to.
Q: Do you feel you have less interaction with consumers? If so, how do you make up for this?
A: I would say we have more interactions with our customers. Running an online business and being on social media networks you get even more feedback as we get to see what customers are saying to us and about us to others as well.
Q: What is one functionality or feature you think all e-commerce websites should have?
A: Definitely having a responsive website. This means that it can be optimized and can easily change size depending on the screen it is being viewed on. If someone is looking at it through a mobile device, like an iPhone or Android, it is optimized for that size, or if they are on a tabloid, it is optimized. This is important because more and more people are using mobile and tablets as opposed to desktops and laptops. This is especially huge for e-commerce! As more and more transactions take place on these devices.
Q: What advice would you give somebody who wants to do an e-commerce startup?
A: I would say to make sure to register your trademark, and have all of their intellectual properties figured out. A lot of entrepreneurs don’t think about the legality of things, make sure to think of it in the beginning because it is cheaper, as time passes it will get more costly.
You are what you eat
Photo: Kyle Byron monitors my form in the gym.
Entrepreneurs are married to their work, so it’s easy for them to neglect other things in their lives, including their health. If you aren’t happy with the way you look and feel, you’ll never be able to sell anything. If you don’t believe in yourself, why would anyone else?
I do my best to make time to go to the gym and to eat properly. When I have those two things under control, I’m more relaxed, I sleep better, and I’m more effective around the boardroom table. If I work out before I head into the office, my employees will often comment on my good mood and they’ve even gone as far as to ask whether I got laid that morning.
I’ve hired a trainer in the past, but I’d never seen a nutritionist. In March, I signed up with a fitness coach named Kyle Byron, who excels in both personal training and nutrition. He also offers cooking classes.
My goals were to burn fat and to get more toned. A lot of Kyle’s clients are busy working professionals, which was important because he understood that I had little time to dedicate to my ambitious goals, so we had to be extremely efficient. We meet once a week, alternating between nutrition discussions (45 minutes), and the gym (60 minutes). My program calls for six workouts a week – three cardio sessions at 30 minutes each, and three gym sessions for about 50 minutes each. It seems pretty efficient to me, since the bulk of those workouts can be done in my condo gym.
Before I met Kyle, my diet sucked (for lack of a better word). I don’t know how to cook, and I have no interest in learning that skill. So I ate out every day. As a result, I was often hungry when I didn’t have time to pick something up, or I ate too much, knowing I wouldn’t have time for another meal later in the day. I spent 30 minutes a day driving to and from work to various restaurants.
Kyle introduced me to the Essential Meal Delivery service, and it has changed my life. I get three meals delivered every day, I make my own breakfast, and I average one business meal a day, for a total of five meals. I know exactly what’s in the three delivered meals (for example, two have no starch and one has extra starch for post workout). I used to eat a minimum of two huge gourmet meals at popular Toronto restaurants every week, but I don’t crave eating out any more.
Photo: A sample plate from Essential Meal Delivery (that’s mashed cauliflower, by the way, not mashed potato).
Thanks to Kyle, I have a much better understanding of how to balance nutrition and training, and I would never have had time to figure it out on my own.
The Interviews: Nicole Verkindt of OMX
Nicole Verkindt of OMX
For the second installment of my Q&A series with established entrepreneurs, I spoke to Nicole Verkindt of OMX, an online marketplace to connect Canadian companies in the defence, aerospace and security industries.
She is also founder and director at GlassFrog, a non-profit international aid organization with projects in Haiti. I have worked on events with GlassFrog in the past and I have a tremendous amount of respect for Nicole’s dedication and her passion for making a difference.
I met Nicole at the Ivey Business School during my HBA days and we both sat on the executive committee for a social club at Western University. She has a diverse business background and she is an expert in both the manufacturing and technology industries.
Most people choose to focus on one vertical throughout their careers, but Nicole has managed to master two. She started out in the manufacturing sector working at a family business, and after selling it she has since moved into technology. Nicole is extremely versatile in her business endeavors and I asked her about the adjustments she’s had to make along the way.
Q: With a background in a family business in the manufacturing world, what was the inspiration for your technology startup?
A: This tech startup is in fact an inspiration from the manufacturing world. It is a platform to connect manufacturing businesses together, help them manage their marketing, supply chain, and compliance/reporting documents that are very specific to a niche area of manufacturing in defence/aerospace.
Q: What is it like switching from one industry to a completely different one?
A: I see OMX as being in the same industry. We are a software company but servicing an industry I have spent my whole life immersed in.
Q: Do you believe a successful entrepreneur can excel in all industries?
A: Of course. There are many examples of it as well. Entrepreneurship is almost the exact same formula no matter what industry you are in. Have a concept with a strong value proposition, keep the company well capitalized and sell, sell, sell.
Q: What’s it like being a female entrepreneur in the tech space?
A: It is likely crazier being a female in the defense industry than tech. I’m not sure how to answer that question! Not sure what it is like to be non-female, so there.
Q: Do you have any words of wisdom for other aspiring female tech entrepreneurs?
A: Move ahead.
A search fund versus skin in the game
Photo: Rob Cherun manages strategy, finances, and operations at UCIT Online Security. His investment firm, Auxo Management, purchased a stake in UCIT in April, 2011.
Other search funds I’ve encountered have been started by smart business school graduates who have some finance experience - private equity or investment banking - or a management consulting background. They find a group of about 20 high-net-worth investors who help fund an acquisition search. The small investment, say $500,000, while they hunt for a company to purchase is then used to pay for office space, salaries for the founders, and diligence costs.
There is typically a finite amount of time, maybe two years, allocated to find a business to buy. Assuming there’s a purchase, the original backers have first rights of refusal to invest in the deal. The search-firm founders receive about 10-per-cent equity, a market salary (in the neighbourhood of $100,000 to $250,000), and a bonus structure based on increases to the enterprise’s value. They later hope to divest the company.
Here’s a simplified example:
If a search fund buys a business for $10 million and uses $5 million in debt to acquire the company, investors will need to come up with $5 million in equity to close the deal. Each founder hypothetically gets a “free” $500,000 valuation on closing (10% x $5M in equity = $500K). If the debt is paid off four years later and the business is sold – assuming the company didn’t grow – each of the founders would make $1 million in proceeds. If they each get a 5-per-cent bonus, they’ll make $1.5 million. And there’s no financial down side.
Sounds like a great deal to me!
Compare this to the path I took:
I used my student line-of-credit to start Hennessey Events Inc., and I maxed out my credit cards. I started and built it on my own. I later used all of my earnings to buy a manufacturing business called RoyalPak. I have personally guaranteed every bank loan I’ve had to date.
Here are the pros and cons of using a search fund for an acquisition, or your own money.
- Limited financial downside.
- Less control
- You get the experience and gain the credibility of running a much bigger business.
- You can benefit from the experience of your investors.
- You have control.
- You may have an emotional tie to the business.
- If you decide to accept external investment later on, you may be able to maintain a significant equity piece.
- External equity is attractive to investors because you have skin in the game and you have operating experience.
RoyalPak Turns Past Success Into Future Growth
2013 Ivey Venture Forum
Photo: The volunteer team, judges and myself at the 2013 Ivey Venture Forum.
I had the opportunity to moderate the 2013 Ivey Venture Forum on May 30. My god is entrepreneurship hot in Canada right now. Five startups pitched their business models to a panel of prestigious judges and there were two finalists: Dymaxium Healthcare Innovations took first place, and Café Xaragua was the runner up.
Both companies were founded by Ivey Business School grads and boy am I proud to be an alumnus. A shout-out to the other companies who made it into the top five: Crowdlinker, Maji Water, and Geneyouin Inc. You guys did an awesome job on your presentations. You may not have won, but keep at it, you have awesome ideas and I see nothing but success for you in the future.
The Interviews: Drew Donaldson of SAFEBRIDGE Financial Group
Drew Donaldson of SAFEBRIDGE Financial Group
This marks the launch of a new question-and-answer series featuring established entrepreneurs from a variety of sectors. My first interview subject is Drew Donaldson, executive vice president of sales at Safebridge Financial Group.
Drew has been working in the mortgage sector since 2006, and he specializes in serving Generation X professionals. He has a great deal of experience buying and selling real estate, and an extensive understanding of the mortgage industry.
I have referred my friends to Drew, and they’ve all been happy with him, whether they were buying personal residences or doing commercial deals. As an entrepreneur, a typical mortgage company would consider me a higher-risk client than someone working a steady nine-to-five job, but Drew got me a very cheap mortgage at a deal structure that was perfect for me and more aggressive than any lender would have made it.
He also coached me through the process from A to Z. I asked him a few questions about the mortgage industry:
Q: Tell me about your business in four sentences or less.
A: At Safebridge Financial Group we constantly strive to challenge the status quo within the mortgage industry and to bring about transformational change to Canadian consumers. In a humble way, we perceive ourselves as the Mercedes of the mortgage business with our unique Mortgage Centered Financial Planning approach.
Q: What is the No. 1 concern people have when using a mortgage broker?
A: Trust. Can I trust the person I am dealing with as opposed to just walking into the bricks and mortar banks. I can’t begin to tell you how many people, after working with our company, have said: “I can’t believe we didn’t use a mortgage broker sooner.”
Q: What has your company done to alleviate this?
A: Another piece of the puzzle is exceptional service. We are working toward being the Ritz Carlton of the mortgage business and that starts with how we are perceived by our clients and the service that we deliver. It doesn’t matter how well you dress. Unless you deliver exceptional service and use the right consultative approach to someone’s mortgage you will never gain their trust, confidence and referrals from family and friends.
Q: What does your company do to differentiate itself?
A: Last year we hired an executive sales coach to come in for a four-month rigorous training session with our team. He recommended all of our mortgage professionals, even the ones with home offices, get up in the morning and dress for success because it has a direct impact on you and your mindset, as much as it affects any client perceptions of you. We believe once you are looking and feeling better, you live each day with a passion and purpose for what you do and why you do it. It is not all about the dress code but it is a piece of the puzzle for all of us at Safebridge.
Q: Can you tell me a bit more about why you focus on Generation X professionals?
A: We accept all clients but target affluent Generation X professionals because we believe we can grow and build a strong lasting relationship over time, which will be a win/win for both them and us. Most are in high growth mode during this phase of their business or career and we believe we can help them tremendously as they build their wealth by using some debt but also properly planning their asset allocation.
For more information, check out this video conducted by Chris Karram, one of Drew’s business partners. It will give you an idea of how Safebridge is growing as a company, the culture and character within the organization, and the path it’s on. The “Vision in Motion,” as it’s called, is to have 75 mortgage professionals and 10 financial planners by the end of 2015.
Sacrifices, marriage and entrepreneurship
Photo: My mom and dad (far right) on stage at my dad’s retirement party in Charlottetown, PEI on May 17. I was the only Hennessey kid who couldn’t attend because I was consumed with working a deal in Toronto.
I recently celebrated my 29th birthday. When I was in my early 20s, if you had asked me when I planned to get married, I would have said I’d meet the girl of my dreams by 27 and be hitched by 30. And that I’d have kids by the time I was 32. I had it all figured out. In theory.
I’m not exactly on schedule. And I’m totally fine with it.
I have friends my age who are successful entrepreneurs and married. I also have self-employed friends who are boot strapping, in love and trying to figure out how to pay for a ring. How they’ll support someone on maternity leave is another story.
Did you know Richard Branson is married? Probably not. He rarely talks about it. Michael Scissons of Syncapse got married in his early 20s and he says it was great for his career because he was able to focus on his company. Entrepreneur Kevin Johnson wrote a post for Under30CEO about his college girlfriend and why, from a business standpoint, getting dumped was the best thing that ever happened to him. Kevin O’Leary of Dragons’ Den once told Chatelaine that people shouldn’t get married unless they’re going to have kids. “You are forming a business relationship,” he explained, “not just an emotional one.”
Successful entrepreneurs often wait until their late 30s to get married, postponing until after they sell their companies or when they are no longer needed to run the day-to-day operations. Some never get married because they’re too into their careers, or themselves. No matter what the end result, every entrepreneur tells me they’d make more money if they were single (then again, the ones with kids say they wouldn’t trade the experience for any dollar amount).
When I decide to take a solo vacation at The Body Holiday – no companions, no exceptions - or I cancel a date when I get a call at 8 p.m. about a new business opportunity, I ask myself: ‘Who would put up with this shit?’ I certainly wouldn’t. What about the nights I don’t sleep well, spurring me to fire up my laptop at 3 a.m., or go into the office at 4 a.m.?
I know it sounds selfish, but being an entrepreneur is sort of a selfish job. It’s not easy to make time for someone outside of work. I still plan to get married and have kids, I just can’t put a timetable on it. I had a very traditional family upbringing. I lived in the same bungalow my entire adolescent life. My mother was an accountant and my father was a manager with the PEI government. When I was eight, my mother decided that partner at her accounting firm wasn’t for her, and my father took a severance package to start a technology company.
Eighteen years later, my parents are happily retired. They spend half the year in Florida and the rest at our cottage in PEI. My parents taught my sister, brother and I two things about life: be the hardest worker in the room, and don’t forget where you came from.
My twin sister is a doctor in Halifax. She’s in a serious relationship. Our younger brother is 27, he’s single, and a very successful business-development employee at a technology company who travels on a weekly basis. I’m not in a relationship, which means I’m able to dedicate more time to running my companies. I don’t have to spend long weekends at my in-laws or hang out with my girlfriend’s friends with whom I might have nothing in common. I keep telling myself I’m going to build and stabilize my businesses, maybe even exit them, and then settle down.
But you know what? In the past, when I’ve dated, I often wished I was working instead of hanging out with my girlfriend. While I expect that attitude to change over time, it also got me thinking: If I were to sell a business for a premium price, would I then run the risk of attracting someone for the wrong reason?
There’s the old saying: you’ll know when you find her. Well, what if you’re married to your business and not mentally committed to finding her? And what about the worst-case scenario, where your business fails in your mid- to late-30s, and everything you were chasing goes down the drain?
I’m taking a wait-and-see attitude. I’d like to hear your thoughts on this.