Why some people are addicted to startups
Serial entrepreneurs are the Energizer Bunnies of the business world, channeling their extensive vitality into one company after another. While some hit home runs their first time at bat, others take time to warm up to success and profit. Here, six business owners talk about their wins and losses, the lessons they learned along the way, and the strategies they used to improve their play.
When Kelly Lawson launched Ella in 2015, the start-up tech company was pushing a peer-to-peer app where women could directly sell their gently used clothing items to each other. Lawson had identified an increasing appetite among female consumers for leaving the planet and the economy in good shape for the next generation. “But what stays the same is a woman’s incessant desire to have a new shirt when you don’t necessarily need a new shirt.”
“It was one of those things that started as an idea of solving my own problem and I turned it into a business,” Lawson says. She earned revenue by taking a commission from each sale.
The app is still active—but it’s no longer the beating heart of the operation. “Now it’s a bricks and mortar retail store where we sell new inventory, but (also) ethically sourced items like independent designers and Canadian-made products,” Lawson says.
Lawson opened her Saint John store in September of 2016 after realizing she wasn’t hitting her targets with the app. “It was making money, but not enough,” she says. “The bricks and mortar was born from a need to make more money more quickly.”
Users identified that meeting up with potential buyers, coordinating schedules and trying things on was just too much of a hassle, especially because most of them chose to rendezvous in coffee shops, gas stations and other public spots. “It was just this kind of strange back alley experience,” Lawson says.
So she opened the store to provide a venue more in keeping with mainstream shopping. “There’s a fitting room and mirror and some privacy and anonymity, too. And they could use our point-of-sale so they weren’t having to run for cash or do money transfers to each other—we could just run it through our system (for a fee).”
While she’s found success as a gently-loved clothing retailer, this wasn’t Lawson’s first career choice—or her first business venture. An occupational therapist by training, she worked in that field for six years before taking a marketing job at Clinic-Server, a tech startup that makes practice management software for allied healthcare professionals. Along the way, she and her husband founded a social media marketing agency called Sociological that’s still in full force today. But her first foray into the business world was a photography business she started to stave off the boredom of her day job.
Lawson’s most recent venture is called Website Weekend. It aims to pull all the required expertise for website development (graphic designers, photographers and computer programmers) into one room, concentrating an often months-long process into 48 hours. “We hosted our first weekend in the spring and it was an amazing success,” she says. “We launched four websites as a result of that weekend.”
Asked why she is constantly driven to start new businesses, Lawson makes an avian analogy. “I suppose I’m a bit like a crow,” she says. “I see (an opportunity that’s) shiny and bright and I feel compelled to chase after it; to feel the outcome. I’m just not wired to sit and wonder ‘What if?'” Her advice for anyone thinking about setting up a new venture? Don’t be scared to flop. “You just keep going. That’s your opportunity to learn, if nothing else.”
Wait for your pitch
Tim Moore was a junior high teacher in the 1970s. While he enjoyed the work, the money wasn’t great. So Moore decided to pursue graduate studies at McGill University because another degree would boost his teaching pay. But halfway through the school year, he ran out of cash—which led him to trade his car for a pick up truck and start a moving business aimed at university students. “I made more money in two days working as a truck driver than I did in a week of teaching.”
The moving business proved so lucrative, Moore never returned to the classroom. He eventually bought a moving company and took it national, creating AMJ Campbell Van Lines, which he sold in 1999.
Around that same time, Moore bought two condominiums in Halifax, furnished them and started renting them out as executive suites. “Within a year I bought 30 condos, furnished them all and they were all booked,” he says. “There was pent-up demand.”
Premiere Executive Suites eventually wound up owning 1,150 condos. Moore sold that outfit seven years ago, but has since returned to the game with Moore Executive Suites which has 50 suites in Halifax, Toronto, Calgary and Norway.
Six years ago, his family bought into Oceanstone Seaside Resort in Indian Harbour, Nova Scotia. “It was insolvent and we turned it around,” Moore says.
One of the most important lessons he’s learned along the way is that, no matter what the venture, it’s vitally important to find solid employees. “We just get great people who are better and smarter than us, and we service the heck out of our clients.”
Moore words of truth? Success doesn’t happen overnight, and some businesses require more patience than others—like Premiere Self Storage in Truro and Dartmouth Crossing, where Moore is a major shareholder. “In the first few years, let me tell you, it was tough. We were having cash calls all the time. But you can’t quit. You’ve got to just keep plugging away.”
The storage business has since turned around, he says. “A public company on the Toronto Stock Exchange has offered to buy us out,” Moore says. “But we have no interest in selling right now.”
Running the bases
Tom Hickey figures he’s founded 23 companies in a career that started when he was 16 and launched a car-cleaning outfit while he was in high school. “It wasn’t a big business or anything, but I did it in the summer and I got to drive nice cars around the town of Glace Bay,” Hickey says.
After studying engineering, he launched Frontline Safety in 1994 at the age of 25. He grew it, sold it to a public company and later came back to buy and sell the public company. “The guys I’d sold it to had made a couple of mistakes in operating it. I was still a shareholder, so I came back in and helped them get it turned around. And then, in 2012, we sold that one for $87 million,” Hickey says.
Hickey enjoys learning new businesses. He recognizes that as one of his major strengths. “My passion is trying to figure out how they work. And after I get one figured out, I tend to move on to the next thing.”
Typically, he joins forces with an operating partner and gives them equity. “I’m the guy with the cash and I think I’m good in the first one to three years where you’re doing the business plans and you’re trying to work out the bugs. Then when it becomes operational … I back away a little bit and move on to the next thing.”
His most successful companies have been the safety business (which ended up with 800 employees in 26 locations across North America) and road construction. “We bought an asphalt plant in 2008 and I didn’t have anything to do with the asphalt business,” Hickey says. “Then we started Atlantic Road Construction and Paving with my partner (cousin, Brad Hickey). He was in the industry for 20 years, so we’ve grown that considerably. We’ve got a couple of hundred employees there now, too.”
Not all of his entrepreneurial endeavors have shone so bright: Frontline Gold, for example, was a venture that soon tarnished. “To be honest with you, that one didn’t work out at all,” Hickey says. As of this writing, Frontline Gold was trading on the TSX Venture at a few pennies a share.
“I was only involved in it for about a year and a half. We took the company public, I gave up control and the guys that had control made some decisions that didn’t work out well for the business. So I got away from it,” he says.
Asked to share the most important lessons of his entrepreneurial journey to date, Hickey cites homework and focus. “You can’t just start a business based on a good idea. The world is a big place, lots of people have good ideas. So (you need to) research margins, competition, barriers to entry, initial capital, profits—do your homework. Secondly, focus. Too many people get sidelined and forget the big picture. Focus is a big key to crossing the finish line.”
For Hickey, the trick to building any successful business is finding solid associates. “Anything that hasn’t worked probably falls back to that rule. And anything that has worked also falls back to that rule.”
Gordon Stevens has started seven different brands since he left an executive gig with Goldman Sachs 15 years ago and came home to Nova Scotia. With five still in play (Uncommon Grounds, Rum Runners Rum Cake Factory, Sugah! Confectionery, Lost Cod Clothing Co., and, his newest, High Seas Taffee and Tea), that’s a heck of an impressive batting average.
“I tried to make it not happen in favour of a real career,” he says of his entrepreneurial vocation. “But there was always something that was kind of dragging me back.”
Uncommon Grounds was launched in homage to his fascination with the coffee business (Stevens and his wife took a road trip in 1993 across the United States and Canada, stopping at every coffee shop they could find along the way).
Rum Rummers was cooked up to satisfy Halifax’s increasing cruise ship clientele—he had identified a need for unique, widely-enjoyed products that passengers could put in their suitcase. “Some of them are filled with rum cake lovers,” Stevens says of the ships that now leave Halifax with thousands of his cakes aboard every year. In that same vein, he’s started several other ventures on the Halifax waterfront aimed at customers who will be gone when their ship sails before dusk.
But not every ball gets hit out of the park. “When we shut down Uncommon Kids and Carbonstock— both of those went down the same year (2012)—it was not a great time in the economy and you had to lick some wounds.”
Stevens could have read that as a signal to never open anything else ever again. “But the itch to do something new and to create something new was always there,” he says.
“You really just have to look at what you did, what you did wrong, and what you can do to change it and move on. And even with the existing brands, there’s a lot of that.”
For example, he says pricing had to change after the Canadian and U.S. dollars hovered around par a few years back. “When you get to par, the attitude of somebody coming off a cruise ship with respect to shopping is completely different than it was when we were at a buck-fifty,” he says. That forced changes in his pricing model and product mix.
While that’s changing again as the U.S. dollar creeps up in value against its Canuck cousin, Stevens says government has gone silent on the advantage of shopping in Canada. “So now it’s on us to communicate that to visitors,” he says.
Your longevity as an entrepreneur, he says, will depend on how you respond to changing circumstances. “It’s either a big challenge or a little challenge, but there’s never a day that doesn’t have something that you weren’t expecting.”
Shelley Simpson’s first business venture, launched over two decades back, was a chemical coating adhesive manufacturing company that she ran for more than a dozen years with a partner before selling it for a profit to a Montreal outfit.
“My husband was employed with a U.S. company,” Simpson says. “After the Free Trade Agreement was signed they didn’t have to have a subsidiary in Canada so they kind of pulled out … The choice was to either relocate with the company or stay in Atlantic Canada and to fill that gap, and we chose to stay in Atlantic Canada.”
They started Adpro Adhesives Inc. as a home-based business. “We kept the overhead costs in line with the revenues that we were making. It wasn’t hugely profitable right from the very beginning.”
“One of the things that I think we did in the right way was we built it up over time,” Simpson says. “We didn’t go out into a commercial facility until it was really needed.”
That led to distribution and then manufacturing, she says. The company’s customers were mainly manufacturers. “Adhesive was used in a lot of different manufacturing facilities,” she says. When manufacturing took a nosedive two decades back, Simpson was already making exit plans.
The effort to start a successful company involves “persistence against all odds,” she says. “But there is a point where you kind of have to know where the opportunity ends.”
From there, Simpson moved to a position with the Centre for Women in Business at Mount Saint Vincent University helping other entrepreneurs. “I did that for a period of time always knowing that I wanted to get back out into entrepreneurship again.”
When her contract wound up at MSVU, Simpson decided to start her own consulting firm focused on innovation and training while she hunted for her next business opportunity. “Through that I got involved with a company (offering) a new technology, which was portable power for the exhibit, event and tradeshow industry,” Simpson says.
LED SGS Solutions Inc. is the creator of Showbattery, the company’s trademarked product. That company is currently in the process of merging with Prism Lighting Group, where Simpson will run the show. Prism develops signature LED lighting for the tradeshow industry. “They would have been the folks who designed the lighting for the Showbattery. It was all (one) kit.”
The merged entity has a research and development facility in Dartmouth, and distribution centres in Brampton, Ontario, and Rochester, New York.
She and her business partner (and cousin) Charlie Simpson are focused on growing the company, particularly in the U.S. over the next few years. “If another opportunity were to come along, we’d certainly look at it,” she says. “We’ve talked about how this business may pivot in the future. But right now I’m just concentrated on this company.”
Bottom of the ninth
Faith Drinnan started and ran a magazine marketing agency for 25 years before she recently sold it to a Montreal company. Oyster Group officially became part of Innova Group on May 1.
Drinnan had worked in the magazine industry for more than a decade before she launched Oyster out of her Halifax home in 1992 as a database marketing agency. Oyster did everything from organizing marketing campaigns to generating new subscriptions to managing subscription databases for magazines. While Oyster made money from the get-go, Drinnan decided to sell after losing interest in the business. “It didn’t excite me any more and it hadn’t for quite a few years. So it was time to hand it on to the next generation.”
Drinnan moved to Tatamagouche after hearing how the small town on Nova Scotia’s North Shore is chocka- block with entrepreneurs. She was in the process of extricating herself from Oyster and yearning for something new.
“Sisterhood Fibres officially was launched in 2015—the Year of the Sheep,” she says. The wool spinning business was her passion project. “I’ve been a maker my whole life. I started knitting when I was five. I tanned hides when I was 10,” Drinnan says.
“My kids say ‘Mom’s a hipster with hippy blood running through her.'”
Drinnan plans to hold retreats for women on the 11-acre property she and her husband bought overlooking Tatamagouche Bay. “The property is called Windy Hill, but I’ve changed the name to Wooly Hill,” she says. The plan is to teach women how to spin, weave, dye, knit and felt.
“But the main purpose of Sisterhood Fibres is for retreats and to have women just relax and have fun,” Drinnan says. “Being an entrepreneur for 25 years, I burned out more than once. I know how women especially can get caught up in life with their business or their job, their children and overkill— all the things they have on their plates.”
She’s hoping women can put those responsibilities aside and enjoy the oasis on her former farm property that boasts lots of nearby amenities including a brewery, a distillery, a winery and a lavender farm. “It’s just a place where women can come for a few hours or a few days and just relax and forget about all that other stuff and all those other responsibilities,” Drinnan says.
In fact, her retreats might be just the kind of experience that could recharge a serial entrepreneur’s batteries for the next move.
When it comes to launching a new business, you need a plan, Drinnan says. “A business plan, for sure, but also a life plan. If you have small children or aging parents, for example, you need to ensure that your growth plans take into consideration your other life. This may mean having a key employee who you know can make decisions and be a leader when necessary.”
She’s also a keen proponent of trusting her gut. “Many of the bad decisions, and there have been many, were made because I did not trust or was not brave enough to follow my instincts.”
That may take you down the wrong path, but serial entrepreneurs are bound to make mistakes, she says. “Admit them, learn from them, hold your head up and go on.”
Drinnan has long recognized that she likes to be in control. That stretches back to her childhood, when she set up businesses shining shoes, selling pieces of cake, digging clams and staging puppet shows. “It was never about the money. It was and is about creating, organizing and problem solving,” she says.
“I see opportunities everywhere.”