The Way I See It… by Michael C. Volker
Entrepreneurs need an “EDG”
Entrepreneurs are always looking for an edge. Some years ago, when I was building my first business I had an EDG – an Executive Development Group.
We often hear about the importance of mentors, advisors and a solid outside board of directors. These, especially the latter, all work in the best interests of the company. But, what if the entrepreneur has an issue with a shareholder-related matter? For example, suppose he wants to buy out his founding partners or bring new ones into the company? What if he has difficulty in dealing with his board of directors? What about the more personal aspects of being involved in a business – for example, should equity be held personally or in a holding company? What about giving equity to relatives? What tax strategies make sense?
Entrepreneurs are like sponges with regard to absorbing knowledge and learning about business. Who do they turn to for answers to pressing questions such as these – some of which are clearly not boardroom types of issues?
My favorite definition of an entrepreneur is someone who can "make it happen", i.e. a person who will achieve his/her business goal and vision by doing whatever it takes. Whether it's a crash course on management, leadership, teaming up with others, or working day and night, the true entrepreneur is totally committed to, and takes the ultimate responsibility for, achieving success as s/he defines it.
Angel investors will tell you that the three bases that need to be covered by an entrepreneur are: their goals, their knowledge, and their capability. Of these, the “knowledge” component is the most important. Goals are a matter of choice (i.e. how ambitious is the entrepreneur?) and capability can be acquired over time and by recruiting the right talent. Knowledge and knowing what needs to be done is the first step towards success.
One of the best ways for an entrepreneur to acquire knowledge is through contact with other entrepreneurs. Although many do this in various informal ways, there is one “model” which I, from first-hand experience, believe to be especially effective.
It works like this: Ten entrepreneur/CEOs get together once a month – away from cell phones, e-mail, and other interruptions for one full day to learn, exchange ideas, provide encouragement to, and act as a sounding board for, each other. These monthly meetings are organized by a facilitator who is paid an honorarium by each of the ten participants. The facilitator may invite an expert to join each meeting for a few hours to cover a particular subject, e.g. valuations, tax planning, leadership, etc. Participants also get a chance to tell “what’s new” in their businesses – partly as a follow mechanism up to make sure they are doing what they said they’d do at previous meetings.
An ideal composition of participants is a mix of entrepreneurs from various non-competing businesses. (In my case, some of the members were from non-tech industries – I learned the most from them!) You need to be able to be very candid and open and this is possible because everyone is sworn to secrecy. You must also agree to participate regularly. If you miss more than one meeting per year, you may be replaced. The commitment is substantial and that’s what makes it work. Continuity, consistency, and follow-up are very important.
So how does one get into an EDG? Why not start one? My particular EDG was organized by a business professor (hint – how to find a facilitator) who thought it would be fun and rewarding – not to mention the real live “case studies” and knowledge he would glean! This group was formed in the late 70’s and stayed together for over 10 years with no turnover – it was that valuable!
Last month, I had the privilege of a little re-union with my EDG buddies back in Ontario. Every one of them has been successful. Some have sold their companies while a few are still running them. Others are acting as mentors, consultants or just simply enjoying life (entrepreneurs never really “retire”).
The way I see it, entrepreneurs need an “edge”. Participation in an “Executive Development Group” can be one of the most rewarding experiences in an entrepreneur's business experience!
Michael Volker is a high technology entrepreneur and director of Simon Fraser U's University/Industry Liaison Office. He oversees Vancouver’s Angel Technology Network and is a director of the BC Advanced Systems Institute and the Vancouver Enterprise Forum. He may be reached at firstname.lastname@example.org.