Introduction - The Fun of Business
Contact: Mike Volker, Tel:(604)644-1926, Fax:(604)925-5006
"Success in Business is not based so much on intelligence as
it is on judgement"
My business history is very simple. I started
a company in 1973 (manufacturing video display terminals) as a University
of Waterloo Engineering student. I worked relentlessly until 1981 at which
time I sold it for approximately $7 million (which was a lot of dough,
way back then!). I took my share of the proceeds and invested in, and got
involved with, several early stage technology companies in Ontario and
in California (Silicon Valley). In 1989, I took on an interesting new challenge
as Executive Director of the B.C. Advanced Systems Institute (ASI).
I left ASI in 1992 to go back to business. In late 1996, I decided it was
time for a "career change" and I became the Director of Simon Fraser University's
University-Industry Liaison Office. I thoroughly enjoy the adventure of
creating and promoting new technology ventures.
Over the past 25+ years in the technology business I've learned a lot.
There's probably a lot more that I haven't learned! Along the way, I've
had some great successes and I've also had my share of so-called "learning
experiences". Yes, at times I've looked like a hero and at times I've looked
like a real ass. At times I'm sure that I've delighted my colleagues and
at times I'm sure I've really ticked off a few people. I enjoy sharing
these so-called learning experiences with others. After selling my first
company, Volker-Craig Ltd., I decided that, having been successful by my
own definition, I didn't need to "do it all over again. Instead, I elected
to spend more time "at home" and to conduct business vicariously - i.e.
helping and encouraging others to take the trip.
My philosophy is old-fashioned and simple: work hard and honestly, be
creative and committed, look for new opportunities, and with some "luck"
and a little help from your friends, you'll be successful and maybe even
have a little fun along the way.
The Fun of Business
"I love business. There's no greater roller-coaster ride than sitting
in the CEO's chair!"
Here are some of my thoughts on why high-tech enterprise in Canada can
be such a thrill.
"If you're not living on the edge, you're taking up too much space."
What is “High Tech”?
My definition is simple: As long as there is an R&D (Research and
Development) expense line item in the P&L (Profit and Loss) Statement
which is greater than 10% of sales, the company is a high tech company.
Put another way, the company invests in R&D in order to create innovative
products. This is distinct from simply using technology. The company actually
creates technology. Information Technology (e.g. software), electronics,
communications, and biotechnology companies are typical examples of "high
Still a young industry
Yes, high tech is young. There's more that we don't know than what
we do know. The number of new products yet to be invented is far, far greater
than anything that has ever existed. As we move away from exploiting our
natural resources and move towards exploiting our personal resources (brain
power), more opportunities will unfold. Even today, in the late 90's only
a small percentage (around 10%) of our workforce is employed in high tech.
Yes, pioneers do get arrows in their backs, sometimes. But pioneers
discover new frontiers, too. Adventure and exploration are not without
risks. If you have a pioneering spirit, the high tech business may be for
Rags to riches opportunities
Nowhere else have we seen so many ambitious and bright people become
millionaires. We've all heard of the well-publicized success stories like
Microsoft, Intel, Apple, Corel and Newbridge and the names Gates, Grove,
Jobs, Cowpland and Mathews are well known. But for each of these there
are hundreds, maybe thousands of others who have made millions of dollars
in high tech. Every time a relatively small and unknown company goes public,
like Architel Systems, several new millionaires are born. I'm not saying
that you should be in technology to make lots of dough, but it's not a
bad fringe benefit. It'll give you the freedom to do what you really want
Business Success Stories
Silicon Valley is well-known, as is the Pacific Northwest. But what
about the Ottawa region? Or Southwestern Ontario or Vancouver? Thousands
of companies are growing and evolving. I measure success as those that
have identified an opportunity and have seized that opportunity for the
benefit of the investors and stake holders. In Vancouver, we're finally
starting to see many companies approach or exceed that magical $100 million-per-year-in-sales
threshold. Names like MDA, MDSI, CREO, and Spectrum Signal Processing come
to mind as do some exciting, emerging companies like Ballard Power, ALI,
NCompass, and Hothaus to name just a few.
Personal Success Stories
It's a good idea to point to successful individuals. These serve as
inspiration and role models. When you meet many of these people, you will
find out that they are not super-human. And they are often not super-smart.
Perhaps they just have a slightly different approach or drive than others.
It's also a good idea to see how well these folks have done to point out
that it isn't just movie stars and pro athletes that become millionaires.
In fact, there are probably more millionaires in the high tech entrpreneur
category than in any other! I won't mention Bill Gates - he's always the
obvious example - a nerdy guy (who turns out to be a savvy marketer) who's
worth multi-billions - arguably the richest man on earth. Consider David
Filo, co-founder of Yahoo, an internet company which hit a market cap of
$9Bn within four years making his stake worth over $1Bn (US dollars, to
boot!), increasing by $150 million in a single day (when Yahoo jumped $26.37
on a single day in July, 1998). Closer to home, i.e. in B.C., there are
a great many who have made millions - they are just very shy and we don't
really know how much they've made. For example, there's Don Mattrick who
sold Distinctive Software to Electronic Arts, Barclay Isherwood who sold
MDI to Motorola, Norm Francis who sold his Basic Software Group to Computer
Associates, Morgan Sturdy who sold Dees Communications to NICE (Israel),
and many others who made millions by owning shares in their companies,
e.g. the teams at Ballard Power Systems, Spectrum Signal Processing, Sierra
Systems Group, PMC-Sierra and many others!
New Business Startups are “in”
Yes, it is cool and fashionable to start a company. You will get no
end of support from mentors, investors, government agencies, and peers.
A plethora of information, advice, and assistance is available. You can
find almost anything on the web! Over 35,000 new businesses (all types)
were registered in B.C. in 1996 and over one million new businesses were
started in North America.
Great infrastructure in Canada
Well, maybe. Taxes aren't so great. And living expenses in places like
Vancouver are causing some problems, too. But we sure have a lot of keeners
and supporters and in particular we do have the know-how. We have great
R&D organizations. It is a well-known fact that Microsoft relies heavily
on grads from the University of Waterloo. Those that stay are creating
hot new companies like Hothaus Technologies. If we can get governments
to listen a little better and pay less lip service and show more action,
we'll do even better. Quebec is certainly demonstrating some leadership
in this area.
What can kill a business? How many fail in their first year? (more
than half) How many fail in their first 5 years? (more than 80%).
How many fail in their second 5 years? (90% of those who didn't fail in
the first five years). Is it management, lack of capital, or competition?
Think about it this way. If a ship goes down, who takes the blame?
Companies can "bootstrap" their growth, i.e. reinvest profits and cash
to build themselves up. Some good examples of growth through re-investment
are Lands' End Hotels and Gateway 2000, both of which were started with
less than $10,000. Why mention the Hotel? Note the apostrophe in the name.
It's a typo that stuck because the founder didn't have the cash to correct
an advertising brochure. And, of course, there's Microsoft, too! For a
great story, watch PBS's documentary on "Triumph of the Nerds".
Now is Best Time to Start
Today is always the best time to start. There's never a better time
(except maybe in the past!).
So, it’s Fun, because....
it’s rewarding (yes, money!)
it’s a roller-coaster
it gives you CHOICES - you can do because you want to, not because
you have to
What can limit you? What is it that Pogo said? "I have seen the enemy
and it is me." So, you really only have to worry about yourself. The only
other real limitations are, as George Gilder might say, the Span of
Life, Speed of Light, Sand and Air. So there you have it.
As engineers, you know about the Engineering “Method”. This will help
you. It is easier to learn about business than it is for a businessman
to learn about software engineering (maybe a bad example) or quantum physics
(a better example). Probably the toughest thing to learn about is managing
people, learning people skills. After all, that's what a company really
is - a collection of people!
BUT - beware of the E-Myth!
Michael Gerber, a management consultant says it well. Just because
you may be good at practicing a profession (auto mechanic, painter, communications
engineer) does not mean that you will be good at running a business which
does those things (auto repair, painting, phone company). He says that
many people are not entrepreneurs. They are just "technicians" suffering
from an entrepreneurial seizure! How true.
In the end, it'll come down to your attitude. If that's right, you'll
do just fine!
Copyright 1997,1998 Michael C. Volker
Comments and suggestions will be appreciated!
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