"Opportunity is missed by most people because it is dressed in overalls and looks like work."
In 2002, twenty nine engineers and computer scientists completed a Lead-to-Win (LTW) program in Technical Entrepreneurship. The LTW program was a pilot program designed for former Nortel employees to gain the skills needed to become entrepreneurs. Of the participants, fifteen started technology businesses, ten tried to attract venture capital funding, eleven tried to grow their companies with no venture capital funding, and seven established five technology businesses headquartered in Ottawa. These businesses attracted over $91 million from venture capital firms during one of the worst economic times to hit this region and created over 280 jobs globally.
On May 15th at the Partnership Conference Series, John Callahan and Tony Bailetti, directors of the LTW program, and three of the LTW graduates spoke about the lessons learned during and since the program.
While each speaker provided a slightly different perspective, several commonalities emerged. For example, successful entrepreneurs:
- enjoy what they do
- know their strengths, weaknesses and desires as well as the terrain in which they operate
- have a supportive family
- align key stakeholders, customers, management, employees, investors, board members, complementors, and intermediaries around a common purpose
- frequently interact with customers and potential customers
- network with other entrepreneurs, startup CEOs, and risk capital providers
- remain optimistic, thick skinned, and perseverant
- do not distinguish between weekend and weekdays
- know where to invest
- are realistic about how much money they need and are aware they can't get it all at once
- recruit world class team members with diverse business experience
- select a business model rather than assume one
- are patient for growth and impatient for profits
Advice for first time entrepreneurs included:
- decide what success means to you
- regardless of your definition, success is validated by a paycheck
- value differences as there is great value in managing a diverse team
- find an office on the ground floor as at some point you will want to jump out a window
- find your defining question and use it to provide laser like focus and guidance when making decisions
- aim for base hits, not home runs
- find your differentiation that adds value to your customers
- first dominate a domain and then outsource it
A venture capitalist and an angel investor offered insights into funder-entrepreneur interactions. Angel and VC (venture capital) investors decide whether or not to invest in a startup by assessing the following: i) enthusiasm; ii) trustworthiness; iii) sales potential of product; iv) expertise of entrepreneur; v) likability of entrepreneur upon meeting; vi) growth potential of market; vii) quality of product; viii) perceived investor financial rewards; ix) niche market; and x) track record of entrepreneur.
When raising VC funds, a Canadian startup faces: i) scarcity of capital in Canada; ii) overcoming the "not in the US" barrier; and iii) lack of connections into VCs in the US. When seeking VC funding, go into it with your eyes open. You will have to give up control and take on additional challenges that may add little to the business. Do not mix and match angel and VC investment as it is extremely difficult to manage their conflicting priorities.
The regional director for NRC-IRAP described the benefits of this program to both startups and existing businesses. This program provides technical specialists who understand the development and commercialization process; they are not just transfer payment specialists. An IRAP investment provides many benefits as it: i) reduces risk; ii) reduces burn rate; iii) validates the venture due to a rigorous due diligence process; iv) demonstrates resourcefulness of management teams; and v) requires firms to keep good records. Professor Bailetti concluded the talks with a presentation outlining plans to make Ottawa a hub for ecosystem keystones. The ecosystem approach to wealth creation and appropriation requires the technical entrepreneur to:
- use a community's shared vision and then contribute to it
- launch market offers using the ecosystem's foundation platform
- compete for leadership positions in market space, niche and governance
- draw on a global pool of talent
- develop the capability to collaborate
- open development and commercialization processes to customers
In conclusion, the nine day LTW program provided first time technical entrepreneurs with: i) rules of thumb and practical experiences; ii) access to an ecosystem comprised of technical entrepreneurs and local legal, marketing, financial, and risk capital services; and iii) effective professors with abundant practical experience. The LTW program was one of the most economically impactful events to have occurred in Ottawa in a long time.