WORK HARD. PLAY HARDER.

I'm Billy Hennessey. I own two distinct, Toronto-area businesses: Qwatro RoyalPak and Oxford Marketing. Qwatro RoyalPak manufacturers and packages for distributors of specialty, janitorial, industrial and automotive industries. Oxford Marketing partners with national brands to create and produce a variety of strategic activations. Its sister company, Oxford Beach, creates, markets and produces event properties. I was named one of 20 winners of the 2012 FuEL Awards, celebrating Canada's best young entrepreneurs. And I have been nominated for BizBash 2012 Toronto Event Producer of the Year.

Forget Tech: Here's Why You Should Buy a Factory

In this piece for Forbes, I wrote about why all the entrepreneurs I know want to go into tech. They can’t imagine owning a factory. It’s not sexy enough. To me, this screamed opportunity: I wanted to enter an industry in which I didn’t fit the usual profile. It’s a counter-intuitive approach. 

THE INTERVIEWS: MARK GRAHAM OF COMMONSKU

For the latest instalment of my Q&As with established entrepreneurs, I chatted with Mark Graham, co-founder and chief platform officer of Commonsku. He’s also founder of RightSleeve, a leading promotional products distributor. Mark was national winner of the Dell Small Business Excellence Award, presented to entrepreneurs who use technology in innovative ways, and he has been featured by several major media. He’s a founding ‘chef’ at Promo Kitchen, a non-profit web community focused on education and mentorship for the promotional products industry.

This interview has been edited and condensed.

Q: You’ve said Commonsku attracts a younger workforce. Do you see the nature of work changing in the next five years, and how do you think technology will play a role?

A: If we back up, the principle behind Commonsku is to create a cloud-based business management system that had a really strong focus on bringing social into the enterprise.

So what was important to us when we created the platform was:

1. How can we create robust, cloud-based software that is easy and intelligible to use? Because our belief is that a lot of enterprise software sucks. It’s very old-school, there’s a lot of legacy systems out there, so we’re fighting against big IT departments and clunky interfaces.

2. Leveraging good design, good user interface, good user exchange, to make the experience easy. And to also leverage social. Social has been something that has taken the world by storm in the consumer Internet: Facebook, Twitter, and so on. It’s such a great way to communicate in the consumer world, why can’t we bring that style of communication into the enterprise? So, with that, we leveraged those things - cloud, design sensibility and social - to create a modern business platform that can speak to younger people, or speak to people who want to run a better business- people who wanted to be tuned in to what their colleagues were working on and what their supply chain partners were offering.

Then there’s your question in terms of work changing in the next five years. The screen is obviously a very important part of working in a modern office. But since you can access information everywhere, we really see the screen and, you know, life, as blurred. There’s a real blurring. We want to make sure people are able to work wherever they want, and consume information wherever they want to make them really good at their jobs, as opposed to them being chained to their desks and looking at a screen all day.  

It’s kind of like, sure, people who use Commonsku look at a screen a lot, but they’re also interacting with the information, they’re learning from the information, and they’re also acting on the information. So they can go away from the office, they can go out and meet with customers, and they can bring the screen with them.  So the screen is, sort of, always there, but it’s a lot more complementary rather than something that’s draconian.

Q: Do you think more enterprise-class companies are going to go the social route? Or is the ivory tower here to stay?

A: There’s no question there’s a huge amount of noise being made in the enterprise today to leverage what I just talked about: the cloud, design-oriented software and certainly social aspects. And probably the leader in that movement is Salesforce.com. It’s been very loud with regards to how the enterprise is changing, and it’s staked its brand on that disruption. It’s still very early days, and even though it might seem, if you attend a Salesforce conference or listen to its advertising, that it’s as mainstream as apple pie, but the reality is that a lot of business are still very conservative, and they’re reluctant to get rid of their IT departments, they’re reluctant to move to the cloud, and they’re reluctant to introduce social because they think it’s a waste of time. And it’s really, right now, the most progressive companies that are adopting this.  

But there will be additional inroads. And that’s why we’re in this business. Because we see there’s a huge amount of growth in the sector over the next five years, and I think this will become a lot more mainstream, so it’s a real land grab right now.

Q: Commonsku is an enterprise social network for the promotional products industry. Social sharing is obviously a big component. How do you draw the line between what’s okay to share and what should remain internal? What kinds of privacy issues have been raised?

A: Commonsku is a private platform available only to people in the promotional products industry. Competing suppliers and distributors are on the same platform - think of it like a trade show, but instead of being a trade show in a physical location, everybody’s got a profile, everyone can publish content.

The kind of sharing that takes place there is more focused on the industry. It could be a discussion on new colour trends, or where to find a particular polo shirt. A lot of the information may be on Facebook at this point, so it’s not like they’re sharing trade secrets, they’re sharing and discussing products that are already in the public domain. And they’re looking for more engagement and to try to get more visibility for their products.

So for suppliers, or sellers of promo gear that are on the platform, it’s a great opportunity to raise visibility, it’s a great opportunity for them to meet, to share info with their customers, a great opportunity to share information with prospects.

Certainly there are comparisons to LinkedIn because it’s professional in nature, as opposed to saying “I worked at XYZ Marketing and then XYZ Financial,” it excludes all the past stuff and focuses on your time in the industry.

Q: Commonsku is ‘an entirely new way to run your business.’ Can you tell me a bit about how RightSleeve was run before you came up with the concept for Commonsku in 2010?

A: Paper! It was run on paper and MS Office templates. We managed our purchase orders, and it allowed us to run our business when it was small. There wasn’t anything out there to effectively manage our workflow. So we created our own system at RightSleeve to automate it. And that system ultimately became Commonsku. We redesigned it to make it more robust, and to allow us the ability to accommodate the different people in the industry. But at its very core, it came from our system at RightSleeve.  

Three years ago we chose to spin off the software side of RightSleeve and turn it into Commonsku, so we hired, we incorporated, hired a different staff, and we have different office space. We always like to say Commonsku came from a client. RightSleeve is now a client, a paying client of Commonsku.  

Q: How easy would be to leverage the Commonsku technology to go after different industries? Is this something you’ve considered?  

A: Absolutely. A big part of our view with Commonsku is that we feel it’s just a better way to do business. I’m not just necessarily talking about buying a T-shirt and then selling it to the Royal Bank. I could be a guy selling office supplies. I could be someone in the real estate world. At the real core of what Commonsku is all about is this ‘new approach’ to running your business, a new approach to interacting with your suppliers, and a new approach to interacting with your customers so that everything is in this one ecosystem, and that data has a lot of social meaning attached to it so that everyone can work better with each other. 

Right now we’ve started with one vertical, and we’ll probably be in it for quite some time. So our story is very much tied into the promo story, no question. And, you know, there are certain workflows that Commonsku has optimized for this specific industry. If we were to make it available to other industries, we’d have a bit of tweaking to do - we’d probably have to think about how the brand is perceived and go from there.

But the promotional products industry is a very large global industry, and we certainly have lots and lots of work to do before we come close to capitalizing on the entire industry.  But we’re certainly thinking bigger than the industry. The challenges that our industry faces are not unique. 

Q: What are the biggest challenges you faced when trying to spin off a system you created for an already existing business? Was RightSleeve the guinea pig for what Commonsku became?

A: Yes! The challenge is running two businesses at once. It was very, very hard. You can’t underestimate that. Just because you’re dividing focus, one business is more established, one is not, so you’re just pulled in different directions, it’s very, very hard. But at the same time, it gave us a tremendous advantage at designing a product because we had the customer right alongside us.

Building a development team is extremely difficult.

When you’re building a new company, there are a ton of land mines you have to dodge - all sorts of problems and issues you’re going to have to face. The biggest one is market fit. You may have  a good product and a bunch of people who think it’s really cool, but the rubber hits the road when someone has to open up a wallet and pay you.  

That said, all of these things have a silver lining. You spend your first six months bashing your head against the wall trying to find out what customers really want, then you find out what they want and you have to build the product accordingly, and that’s a real blessing. But I would stress that those are challenges at the beginning, they’re not necessarily challenges we face now.

Q: Tell me about how you got started doing what you do. When did you begin to identify as an entrepreneur?

A: Probably when I was a kid, selling lemonade. I know it’s kind of a cliche, but I would sell lemonade in front of my house, I would shovel sidewalks, I would rake leaves, so from an early age I was already predisposed to this kind of stuff. In university I worked for the student newspaper selling advertisements. I put myself through school, at least my final year, doing that. I ran a window cleaning franchise in university for a couple of years and then, when I graduated from university, I actually went down to work on Bay Street. That’s what I thought you did when you graduated from school.

You know, “this entrepreneur stuff is silly, why don’t you get a real job?” I lasted six months and I hated it and then I quit. I was in investment banking, and I quit that world and got into the promotion business when I was 23.  

I’ve always been hard-wired to call my own shots. Like if I want to go and do something, I’m good at executing those ideas - for the most part!

The perils of business integration

Two weeks after I acquired a second cleaning-products manufacturing business, I consolidated the two companies. It didn’t make sense to continue to operate separate facilities. My first acquisition in the space, RoyalPak, was very strong on the production side, while the second, Qwatro, boasted green products and excellent sales and marketing.

Sounds like a match made in heaven, right? Not quite. We had cultural challenges to overcome. Qwatro had lots of support staff, but RoyalPak was as lean as they come. Employees of the two companies had very different attitudes.

Here’s a Top Nine list of what I learned about the integration process (hey, I like to be different):

  • It will take longer than you expect.
  • Leaders will come and go. Be prepared to deal with upheaval.
  • Make sure your leaders always have their heads out of the weeds and that they are thinking about where you need to be in one month, two months and three months.
  • If you can get ahead of the game by engaging with current customers, do it pre-acquisition.
  • Always have a totem pole of priority customers.
  • Be ready for customers and competitors to kick you when you’re down. While you’re getting the kinks out, they’ll smell opportunity.
  • Adults get emotional, too.
  • The agendas of your employees may not match yours. People who have been doing the same thing repeatedly for 10 years may resist change. You’ll find out quickly who has your back for the long haul and who’s in it for other reasons.
  • Don’t underestimate the challenges of merging accounting systems.

When it all falls down: How to reinvent yourself

Photo: Zoomer toy from Spin Master, which has seen its sales figures start to rise again after they had declined to $400-million from just under $1-billion.

I had a heart-to-heart in Paris with an old pal from business school. Topics ranged from life goals to marriage to the definition of happiness. I said I wanted to play in the big leagues and that I felt the need to get there sooner than later. I have great respect for this person’s opinion, and this was his response: “I don’t think you can get a good feel for a business owner’s true potential until you see how they react when they lose it all, and by that I mean going bankrupt.”

His comment stunned me. I fell silent. The wheels in my head were turning. Whenever I make a business move, I bear in mind the equity I’ve built, which I might lose. Does it mean I don’t have the risk tolerance for the big leagues? Am I playing not to lose instead of playing to win? Am I making too many small deals when I should be scoring bigger ones?

Diversifying is one thing, spinning your wheels is another. If I haven’t lost it all, does that mean I’m not pushing the envelope?

Let’s use two companies to illustrate the point. In my eyes, the founders of Spin Master were the perfect Canadian entrepreneurs, but in the past five years the revenue at their company has declined to $400-million from just under $1-billion. At a recent event I attended, they spoke about how they’re on the rise again. Shred-it International, which Birch Hill Equity Partners has invested in, did 20 acquisitions in 36 months and then fired its mergers-and-acquisitions team to allow it to dedicate all of its resources to integration.

If you’re an aggressive company, is it inevitable that the shit will eventually hit the fan? Is it about winning more battles than you lose, or about trying to win them all? If we don’t slam into walls, do we then convince ourselves we’re using best practices when we should be considering alternative approaches?

Early this year, my Oxford Marketing team was decreased by more than half. It forced us to re-invent ourselves and to focus on the most profitable projects. We’ve reduced our overhead. We’ve became leaner, enabling us to respond to clients faster. And revenue stabilized.

Has the shit ever hit the fan at your business? Why, or why not? Are you doing things the way you’ve always done them? Do you think it’s time to raise the bar?