PROFIT BusinessCast

During the peak of the last economic downturn, Brian Gracon found himself spending a lot of time at the mall. Stopping in to grab some food on the way back for meetings, he was surprised to see crowded parking lots and lines outside restaurants and nail salons.

"I wonder if there are any businesses that … are essentially recession-proof,"he recalls thinking. "It turns out there were many—from luxury car dealers to tattoo shops to nail salons to cosmetics companies." Gracon's research into these economically agnostic businesses inspired a theory he calls "Meconomics 101."

Gracon explains how business can insulate themselves from the market.

Regulatory changes at the beginning of 2016 opened equity crowdfunding up to more Canadian companies and retail investors. In the months since, a number of startups and growing ventures have sold small stakes to the public via online portals, though restrictions on interprovincial dealings mean they've largely used existing exemptions rather than the new rules.

Whether they’re looking for it or not, there are plenty of people willing to bend entrepreneurs’ ears with suggestions and ideas about how to run their businesses. But not all advice is created equal. “Everybody has an opinion, and who’s to say they’re right?” asks Bruce Hunter.

Hunter does a fair bit of advising himself—as president of Lighthouse 360, he’s helped scores of companies create better business plans and put in place the structures necessary to achieve their goals. “In the very early stages of an organization’s growth, [you’re] trying to figure out which way to go,” he notes. Plenty of perfectly well-meaning people—family, friends, former colleagues—will add their thoughts to the mix as you’re trying to build a business plan. “[People will] give you 16 different directions, [but] you can’t chase them all—it’ll just confuse you,” he cautions. “You need to pick who you are going to listen to.”

In those early stages, it’s important to focus on achieving the plan you’ve developed for your business. “Certainly you need to pivot and you need to change if the market feedback suggests it, but it has to be steady-as-she-goes initially.”

Still, that’s not to say you should reject all external input. Advisory boards are a proven and popular way to harness the expertise of others, and Hunter says it’s crucial to fill the seats around the table with the right people. “A lot of people will choose their advisors because they have industry experience,” he observes. “The most important thing that I would look for is somebody with a breadth of leadership and management experience.” While the technical skills of a sector specialist can prove useful, entrepreneurs are often experts in their fields already, he says. Better to seek the help of someone who can provide strategic direction and insight for the business as a whole.

Everyone knows ‘a guy.’ You drop your phone, or it just stops working, and in an effort to avoid paying hundreds of dollars for a new one, you go to your ‘guy’ to get it fixed. But “it’s not a great experience,” says Donna Custance. “The word we hear most often to describe those places is ‘sketchy.’”

Custance is the co-founder and Chief Marketing Officer at Fixt Wireless Repair, which aims to supplant those ‘guys.’ The company has six locations in the Greater Toronto Area, with two more currently being built. Custance and her partners—all veterans of the wireless industry—see a big opportunity in standardizing and improving the mobile device-fixing process. “There’s over 40 million devices in this country if you combine cellphones and tablets, and at any given time it’s estimated that about 25% of them are either broken and in need of repair or replacement,” she explains.

Fixt aims to have 20 locations in the Golden Horseshoe by the end of 2017, and more than 80 across the country within the next five years. “We really believe that any market can sustain a number of these locations,” says Custance, noting that most Canadians have a device that might need to be fixed at some point.

Most service businesses looking to grow at such a rapid pace adopt a franchise model. Not Fixt. “There’s pros and cons to both approaches, corporate-only stores and franchises,” says Custance. “We felt strongly that corporate was the right approach.”

Here’s why Fixt isn’t franchising, and why similar businesses might want to consider doing likewise.

1. Keeping control of the experience

Custance marvels at how reliant most people are on their mobile devices. “I don’t know about you, but if I leave home in the morning and I’ve forgotten my wallet, I just keep going,” she says. “But if I leave without my phone, I definitely go back.” There’s even a word for it: Nomophobia, the anxiety that comes with not having your mobile phone.

Gaming is a $3 billion industry in Canada. The sector has seen successful titles from independent studios and the local outposts of multinational corporations alike. But while there are plenty of players in the space already, there’s always room for more, says Carly Beath. “The next big thing could come from a huge, established company, but it also could come from two people building a really wonderful game out of their apartment,” points out the senior operations manager for trade organization Interactive Ontario.

Digital media in the province is having a moment. The medium—which includes gaming, interactive educational products, and more—is well suited to the needs of other sectors. Beath points to healthcare and hardware companies who are looking to support their core offerings with smart, well-produced media assets. “Lots of big brands [are] here, and that means advertisers who want to do digital campaigns,” she adds.

Studios and agencies also benefit from the unique model of the medium. “Digital media companies are able to build fan bases and market research subjects before their products come out,” notes Beath. “Or [if] they have a track record of really great projects in the past, people will check out what they’re doing.” That allows studios to get immediate feedback from their fans and modify their offerings accordingly.

The quality of the talent and the strength of the ecosystem also help. “We have good educational programs here [and] really creative people,” says Beath. And while there are plenty of baby-faced graphic designers and game developers, the industry’s workforce actually varies significantly in terms of age and experience. “We get a lot of people who have expertise [and] have been around for a while,” says Beath. “They’re very willing to share their knowledge with younger people coming up.”

Companies often work together too. “People are really collaborative in this industry,” says Beath. “I don’t think you see [that] in a lot of other industries, the same way you see in digital media.”

The sector also receives plenty of support from the government, something that Interactive Ontario’s lobbying efforts seeks to maintain. Beath points to programs like the province’s Interactive Digital Media Tax Credit, as well as programs run by the Ontario Media Development Corporation and the Canada Media Fund.

Does a sector that needs so much help to survive deserve a place in the economy? Beath says the money is being put to good use. Companies “use the support available from the government to get off the ground, and then they’re able to fly on their own,” she insists. A lot of the names on the list of funding recipients change from year to year, she notes. “It means they’ve taken the money they’ve received and then gone on to build a company and don’t need it anymore.”

Eight years ago, Jeremy Choi started working out at Clance Laylor’s downtown Toronto gym. Over the years, serial entrepreneur Choi helped the trainer with some branding and strategy decisions. When Laylor decided to turn his strength and performance coaching regimen into a business, Choi was the natural partner. Together they launched Athlete Activation System.

It’s just one of many instances when Choi’s knack for forming and maintaining connections has paid off. “I’ve made a lot of great friends over the years, and I kept adding value to them, which led me to find really awesome co-founders,” he explains. Choi is also the CEO and co-founder of WPUP, a company that manages websites built on the WordPress content management system.

Relationship building has delivered other rewards as well. “People love to work with people they like,” Choi says. Having a good product or service is important, but it’s not enough. “If you want to generate sales, you need relationships, and people want to work with people they like.”

Here are three things you can do to make and maintain meaningful connections that will help you grow your business.

1. Stroll outside your space

Choi previously ran a digital marketing firm. A few years ago, he attended a graphic design event and struck up a conversation at the bar with a freelance creative director. The two bonded over impending fatherhood. Three years later, the acquaintance started his own agency, and ended up giving Choi’s firm one of its biggest contracts ever.

Despite that success story, Choi says it’s better to do your networking outside your field. He tends to frequent events related to golf, volleyball, and board games—his hobbies. “Those are the ones that I find are the most successful, because you never know what business they’re in or who they’re working for,” he says.

2. Listen at length

Networking often feels uncomfortably transactional—who are you, and what can you do for me? Choi prefers to follow a principle devised by fellow entrepreneur Dan Martell called the 5/50 Rule. “The premise of it is that instead of trying to know someone for five minutes, try to ask questions and get to know them for the next 50 years,” Choi explains.

Nicole Tapscott was referred to her current job by a friend. Well, sort of. Tapscott’s friend, a resident of New York city, was raving about a purchase he’d recently made, and the product in question—a mattress from U.S. e-commerce retailer Casper Sleep—was such an unlikely candidate for consumer delight that Tapscott felt the need to find out more.

“I don’t think anyone’s ever said they were delighted by their mattress-buying experience,” laughs Tapscott. So enthusiastic was her friend about his dealings with the company that she reached out to the company and spoke with CEO Philip Krim, who told her how many requests he was getting to bring the product across the border. Tapscott signed on to help Casper do that, becoming general manager for Canada in December last year.

Tapscott draws a sharp contrast between the traditional mattress-buying process and the way her company works. Instead of including the costs of showrooms, cyclical promotions and salespeople’s commissions in the price of a mattress, Casper sells offers one kind of sleeping surface in six sizes, and priced between $725 and $1,275.

In the two years since it launched, Casper has sold more than $100 million worth of mattresses to more than 100,000 customers. Tapscott says the company’s growth shows that the industry was “tired, maybe even exhausted—not to use too many sleep puns—and it really needed to be upended.”

Here are three questions businesses looking to follow Casper’s disruptive example need to ask themselves.

1. What’s the problem?

Krim and his four co-founders came up with the Casper concept while working on an unrelated business at a New York co-working space. “They noticed that people were sleeping on couches [or] beanbag chairs, working all night and surviving off Red Bull,” Tapscott recounts. The group wondered why these people weren’t taking their shuteye seriously. The answer they arrived at: Setting up a restful sleep was too difficult a process.

Looking around yourself like the Casper founders did can be a great way to have this kind of ‘lightbulb moment’ says Tapscott. “Identify the areas in your life [where] you experience a product or service that you feel is sub-optimal,” she suggests.

Nicholas Reichenbach may have been the only person in North America who hadn’t heard of Josh Donaldson when his agent called the Canadian entrepreneur last year. “I don’t follow baseball—I go to a Jays game once in a year,” admits Reichenbach, founder and CEO of Flow Water Inc. “I had to Google his name at the same time as I was talking to her, because I didn’t know who he was.”

Donaldson’s representative was calling because the Blue Jays’ third baseman had discovered Flow in the clubhouse, and wanted to get some more. Reichenbach was happy to oblige. After Donaldson helped the Blue Jays through the playoffs and won the National League MVP award, his agent got in touch again: The slugger wanted to work with Flow.

The company bottles water from the Reichenbach family’s artesian springs in southwestern Ontario. Though it only launched last May, Flow already has a retail presence in 3,000 grocery chain and independent stores across Canada. Reichenbach says the rate at which customers are likely to make repeat purchases of his product after buying their first bottle rivals that of far more established brands like Fiji.

This year, Flow launched a spring-summer advertising campaign prominently featuring Donaldson. “We have a series of videos going out across all of our social channels this summer, [and] a huge [point-of-sale] campaign that’s going through all of our retail locations across Canada,” explains Reichenbach. And once the playoffs begin, Flow will run ticket giveaways and other contests.

Thank goodness for Google. Here are TK things Reichenbach says companies need to know about working with influencers to promote their brands.

1. Make a genuine connection

The best influencer-brand partnerships involve real, mutual admiration. “If they like your product and you see them using [it], it’s a lot easier to engage with an influencer or a celebrity,” says Reichenbach.

You want the person shilling for your brand to be a genuine product advocate, not just someone who’s just taking your money to say what you want them to. In Flow’s case, Reichenbach could be sure that Donaldson was genuinely interested because the player approached the brand first, and as a user of the product. “He has lots of opportunities from lots of other companies, but he wants to work with Flow,” Reichenbach says Donaldson’s agent told him.

Of course, moments like these are relatively rare—most companies don’t have celebrities competing to work with them. Reichenbach says if you can’t find an influencer who’s already a user but you identify one you think would be a good fit for your brand, it’s important to pitch them on the product, not the deal. “Tell them about your product, the vision, why you created it,” he advises. “Don’t make it about money, because … [agents] are masters at getting the most amount of money for their client.”

The modern consumer isn’t used to waiting. Technology—whether it’s searching on Google instead of in library books or reading emails instead of waiting for letters to be delivered—has led us to expect the rapid fulfilment of our needs and wants.

So says Julian Gleizer, the CEO and co-founder of Toronto-based grocery delivery service InstaBuggy. He singles millennials out in particular as a generation that expects quick service. “They want the information or the products, and they want it now,” he says.

The result: A new economy of companies delivering products and services on-demand and as near to instantaneously as they can. Airbnb and Uber may be the names most associated with this trend, but there are plenty of startups applying the concept to basic consumer needs—like grocery.

Here’s how InstaBuggy has adapted the on-demand model to its own target audience.

1. Understand the regulatory environment

Not all jurisdictions have embraced the on-demand economy equally. Mindful of the cost to more traditional, big-money industries, regulators in some markets have tried to make Airbnb and Uber play by their rules.

“Canada’s a little bit tighter from a regulation standpoint,” says Gleizer. “It makes it a little bit harder to enter the on-demand economy.” That may change—governments at all levels are in the process of formulating policy to address this new form of business.

2. Tweak the model to suit yourself

Startups offering on-demand groceries in other countries have taken the crowdsourcing approach to fulfillment. “They have individuals [who] can select their own schedule, [at] their convenience to shop for groceries and deliver those groceries,” Gleizer explains.

Crowdsourcing minimizes HR costs and maximizes flexibility, but it’s not without its drawbacks. Gleizer uses the example of a construction worker who spends two spare working hours a day bagging groceries. “An order comes in, and you go and start packing, [but] you get a call from somebody saying, ‘Hey, there’s an emergency. You need to come here right now,’” he says. “[In that situation], the customer experience does get compromised.”

When Andrew Brown and I first started meeting in a Bagel House location to record our conversations about business and entrepreneurship, podcasting was in its infancy. Apple had enabled this new form of media on iTunes not long before, and enthusiastic amateurs were filling up listeners’ playlists with hours of material.

Podcasting has grown by leaps and bounds in the years since. The share of the North American population listening has risen from 9% to 17% over the last seven years says Brown, my former co-host and co-author on Business Truths: 96 Ways to Build Loyalty, Grow Profits, and Succeed at Everything in Between.

While company blogs may be more common, plenty of businesses have recognized the value of recording their own podcasts for customers, suppliers, prospects and the general public. For example, some law firms make them for the consumption of their peers and competitors, to display their expertise in case their listeners ever have a client to refer. That’s a unique niche, but every company can benefit from getting their message out in audio form.

At the top of this page you’ll find the 400th episode of BusinessCast, likely the longest-running entrepreneurship-focused podcast in the English-speaking world. Over the course of all that talking and taping, we—Brown, editor Peter Linseman and I—have learned quite a lot about what makes a successful podcast.

1. You need to give to get (an audience)

Building out and monetizing an audience remains a challenge for podcasters, admits Brown. Most businesses aren’t looking to cash in on the media they produce directly, and that’s actually an advantage—you can focus on making great content instead of money.

BusinessCast follows the thought-leadership approach. As with any kind of knowledge sharing, it can be tempting to hold back the good stuff—after all, that’s what your customers pay you for. But remember: The more information you give your customers via your podcast, the smarter and more successful they’ll be. You’ll have better—and bigger—clients who will be easier to serve.

2. The format may change, but the focus shouldn’t

When Brown and I started, we would choose a topic of the week and discuss it in depth, just the two of us. Then we started interviewing guests, initially in person at a home studio or coffee shop, and eventually over the phone. Those thought leaders, entrepreneurs, academics, business leaders and influencers brought their own insights and ideas, and that helped increase the value of listening.

While the voices may have changed, the focus hasn’t—the BusinessCast mission is still to give listeners the information and advice they need to make their business better. Bringing in outside experts via interviews was just another way to do that.