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 mike@volker.org.