The question “What makes a startup successful?” is a seemingly simple one that has received a lot of attention, from academic research to popular magazines. As you may expect, this question is also top of mind for many MaRS folks who are involved in supporting the next generation of high-impact Canadian ventures. If anything can be stated definitively about the startup world, it’s that it is a world full of uncertainty and change. The path to success is often as unique as the entrepreneurs who steer their startups in a constantly shifting market. With this in mind, we identified some often-cited success factors and reached out to some of the entrepreneurs in our ecosystem to get their take on them. The first insights come from Toby Heaps, founder and CEO of Corporate Knights, a media company focused on quantifying and animating clean capitalism drivers for decision makers. The Facts
Corporate Knights is a magazine, a progressive business association and an asset manager index provider. It started with the idea that you could tackle the important issues where business intersects with society and the environment in the way that good magazines do and that you could do it in a fun way and by telling good stories. By doing so, you could also create a space where Canada’s corporate culture—and, to an extent, corporate cultures in other places—could be a contributing factor in helping that culture evolve to see the role of business in a more holistic fashion, where people understand that businesses are a part of society and that they exist to advance the interests of society. Corporate Knights is a bit of a crazy experiment to see if getting the right information into the right people’s hands will start to make a difference and if people will start to make better decisions.
I would characterize it as a hybrid that has a 10-year history, but that is definitely more characterized by startup features and all of the things that a growth company goes through. In our first eight to nine years of operation, we had steady revenues under $1 million and then we doubled last year and have since seen a lot of changes.
I have an economics background. I travelled a lot and I worked probably around 100 jobs, from a rickshaw driver to a McDonald’s burger flipper to a landscaper entrepreneur, before beginning Corporate Knights. I was always starting little businesses and I would do whatever jobs would hire me. I think I’ve been working since I was seven or eight years old.
We recently launched our first funds, so we now have $10 million invested into our strategy. It’s a modest increment to a trillion dollars, which is our goal. It was nice to see the results after the initial idea from about four years ago, with the actual implementation starting two years ago. It’s an encouraging milestone, but I maybe wouldn’t call it a “success.” Success is still down the road, I think.
Persistence, sticking with it. There were a lot of people, including the head of quantitative strategy for Goldman Sachs, who told us that what we were doing was impossible. No matter how many people told us that what we were doing didn’t make sense, we stuck with it. I think the critical factor is to build up a good team. We have this one genius kid in particular without who it would have been difficult to do this in the time frame we needed to.
I’d like to be able to say that we changed the way capital markets work and made it mainstream to consider relevant sustainability factors in investment analysis and allocation. I’d like to make capital markets symbiotic with the planet.
A recipe for entrepreneurial success
We asked Toby to rate the importance of the following factors on a scale of one (low) to five (high), based on his own experience with Corporate Knights. Here is his take on a recipe for entrepreneurial success.
|Formal education: It doesn’t have to be related, but I think you learn some useful habits in the process of getting a formal education.
|Industry experience: I think you can get industry experience within three months. You just have to throw yourself into it. You need to get it fast. So it depends how you acquire that experience.
|Professional network: You can start without a professional network, but you need to know how to build one fast. When I started I didn’t really know anybody, but I expanded my network one by one.
|Profit orientation: I guess that wanting a long-term viable self-sustaining company, that’s a 5. But wanting to make money right away is a 1.
|Growth orientation: What is interesting is that a lot of companies are just waddling along and then they suddenly explode; they discover something that’s a bit of random luck.
|Export orientation: I believe that if you make a difference in Canada, but that difference doesn’t leave the borders, then you didn’t make much of a difference at all. But if you don’t have a strong base, it’s pretty hard to explode globally. So I think everyone should target main markets as much as possible, but not forget the market that brought them there.
|Access to capital: Capital is important for a company, but access to capital can also make you lazy, especially in the early stages.
|Learning orientation: I don’t think that there are any major business leaders who haven’t had to make huge course corrections on the way to where they’ve gotten or haven’t had to change something so that they could get around a brick wall or leap a canyon.