The Way I See It… by Michael C. Volker
The Next Wave of Entrepreneurs can improve the odds
Technology entrepreneurship is alive and well in British Columbia. It’s trendy, it’s growing and it’s serious. More importantly, though, the new crop of entrepreneurs is better prepared, more realistic, and much less naïve than their predecessors.
According to B.C. Stats there are 7,800 companies in B.C.’s technology sector in 2000 as compared to only 5,100 in 1995. In terms of economic output, the average annual growth rate of B.C.’s tech sector for the past ten years has been an impressive 9.2%.
Budding entrepreneurs have learned that the dot-com phenomenon of a couple of years ago was an anomaly in the world of corporate start-ups. Good ideas, youth and enthusiasm are no longer sufficient conditions for garnering financial support especially at surrealistic valuations. Venture capitalists who funded these deals thought that they’d add value by bringing in a bunch of “impressive American executives” – to quote one burned entrepreneur – to run the company. He went on to say, “$30 million later, the company is being wound down. Boy, did they know how to spend money, though!”
If you don’t believe me, just look around you at all the liquidation auctions that are taking place. Computers, servers and fancy executive suites are fetching a dime on the dollar. There was just too much excess and money came too easily.
The new breed is back to business basics. They understand the concept of “sweat equity” as opposed to silly notions of “market wages”. Frankly, any entrepreneur who even hints that salary is important to him, is not worth investing in.
Recently, I met with a group who are paying themselves only from earnings (a foreign concept to non-entrepreneurs) and who understand pre-cash flow frugality. For example, these fellows needed to meet with some prospective clients at their office but they didn’t even have guest chairs. So, they bought a few nice, but modest, chairs just for the meeting. After the meeting, they thought they didn’t really need them, so they returned them to the store. What that tells me is that they understand the importance of conserving cash. Just contrast that to the trappings you can find at the afore-mentioned auction sales!
I get many calls from first-time entrepreneurs asking for startup advice. The problem with many is that they don’t know what they don’t know! I’ve always preached that, to a certain extent, naivety is good thing but that only applies to not limiting one’s abilities.
In B.C. there is no shortage of support and resources for entrepreneurs. There’s a growing pool of mentors, i.e. successful entrepreneurs coaching the up-and-comers. There are also many courses, workshops, seminars and “boot-camps” to help entrepreneurs in their quests.
New Ventures BC is an organization that took root just last year. This particular group has taken the form of a business competition – in which start-ups compete for prize money - $50,000 from the Bank of Montreal for the winner – over a half-year period by participating in an educational and preparatory program.
High tech “boot camps” are offered by private groups such as Catalyst-Law, a Vancouver law firm specializing in technology venture creation.
The B.C. Universities have teamed up to form Westlink Innovation which provides educational sessions such as it’s popular “from concept to company” series.
The B.C. Advanced Systems Institute has offered it’s “Business Advisory Board” service whereby expert panels convene to hear, and advise, entrepreneurs on their business plans.
The way I see it, it takes real entrepreneurs to build successful companies. The infrastructure support available to them may improve the odds.
Michael Volker is a high technology entrepreneur and director of Simon Fraser U's University/Industry Liaison Office. He runs Vancouver’s Angel Technology Network and is Chairman of the BC Advanced Systems Institute as well as Past-Chair of the Vancouver Enterprise Forum. He may be reached at email@example.com.