We had the opportunity to speak with Toronto serial entrepreneur and Founding Chairman of NEXT Canada, Reza Satchu. With NEXT Canada, Reza Satchu wanted to create something substantive where he could make a real impact on entrepreneurs. His hope was that, in turn, those people would go on to inspire others and keep the cycle going.
An alumnus of Harvard Business School and someone who values quality education and mentorship, Reza Satchu is now serving as a Senior Lecturer at his alma mater, where he is teaching Launching Technology Ventures and The Entrepreneurial Manager. Over the course of his career, Reza has co-founded, built and managed several operating businesses from inception, including the private investment firm, Alignvest Management Corporation.
As Founding Chairman of NEXT Canada, whose mission is to increase Canadian prosperity and accelerate the trajectory of Canada's most promising entrepreneurs, what do you think it will take to carry jobs and job training in Canada into the future?
That is a critically important question and I think we need to talk about the context before we talk about the solution. The context here is that in order for Canada to create jobs, it must compete in the areas of innovation and entrepreneurship. Our economy has to be based on innovation, creativity and thinking about products that can really move the needle for consumers within our country and globally.
If you look at the prosperity gap between Canada and the United States, which has been widening, it's not because we work less, it's not because we're less educated -- it's because at the far right tail, we are less productive, meaning we are not creating the right entrepreneurial businesses, like the Facebooks, the Googles, that create real value.
At NEXT Canada, we are trying to find very promising young entrepreneurs, give them the capital, the mentorship, and the education they need. We are also trying to expand their expectations and give them exposure to people who have built successful businesses in the past. The goal is to have a much more technologically-focused entrepreneurial economy in Canada, where we are building things of significance that are not focused on scale and cost, but rather focused on true innovation and creativity and that can solve real problems for customers.
Toronto has been attracting companies and creating jobs in the technology field for years. What would you say to high school students in Canada who have entrepreneurial aspirations in the tech field?
There are three things I would say to today's high school students.
The first thing I would say is that the education system in Canada is not set up in a proper way to help young, aspiring entrepreneurs grow as entrepreneurs. The current education system in place is extremely traditional. It does not reflect what needs to happen in this economy. There's nothing in the Canadian or provincial curriculums that's targeted to high school students who want to be entrepreneurs. So, you have to look outside your curriculum and actually look for opportunities where you can do entrepreneurial things -- whether that's joining a startup contest, building a business plan, whatever it may be.
To the extent that students are interested in technology, the second thing I would recommend is to learn how to code. Gaining exposure to coding is critically important as a high school student and that, together with entrepreneurial ambition, can set up a student very well.
The last thing I would stress is to have an understanding of what entrepreneurship truly is. Entrepreneurship is the relentless pursuit of opportunity without regard to resources currently controlled. It's not just about building a business --- it's about how you actually live your life. Young people who are thinking about becoming entrepreneurs should think about how to make things better. They should consider how to actually make the day-to-day things in life better; how to avoid accepting the status quo; how to challenge it; and how to think out of the box.
Are there opportunities right now for students in Canada to learn how to be entrepreneurs, and if not, how can these opportunities be created?
Certainly for university students there are tremendous opportunities available. NEXT Canada was one of the first incubators to do this kind of thing. But, now there are many around Canada and so the barriers for students to actually start a business are far lower today than they have ever been in the country.
There's certainly opportunities available. The real question is how do you actually come up with an idea. How are these opportunities actually created and how are you supposed to actually get your first step through one of these accelerators?
Most people are paralyzed when it comes to ideas for new businesses. They think that it's this heavenly experience where they're walking down the street and they get this brilliant idea for a business.
That's certainly not what I've seen in my career and certainly not what I've seen from most entrepreneurs. Most entrepreneurs get ideas because they're willing to look at a situation and think about it in a way that's different than others. Perhaps most importantly, they have the confidence and the guts to try to improve it despite the fact that they have far less experience, capital and relationships in that particular space.
Jeff Bezos is an example when he created Amazon. If you think about it, Barnes & Noble had been selling books for decades. They had thousands of people whose only job was to think about how to sell more books and a market cap measured in the tens of billions. Then, you have an individual who's never sold a book before, but looks at the system and sees there's perhaps a different distribution channel for books and the internet can be used to create it.
For schools that are adding entrepreneurship courses to their curriculum, what ideally would this instruction look like?
When it comes to entrepreneurship, it's imperative that the instruction have a practical element to it. The course curriculum can include cases of entrepreneurs, instruction on how to make decisions with imperfect information, what is the customer value proposition, what is the goal market strategy, what is the profit formula, all these sorts of things. But, the instruction really needs to be taught by someone who has had exposure to being an entrepreneur themselves.
Building a dynamic startup can take years. What qualities are needed in order to flourish as an entrepreneur and what kind of structures and organizations need to be in place to help inspire founders and support them along their journey?
When you ask a room full of people the question, do they want to be an entrepreneur? Just about everyone will say yes. And they'll say yes because they like the trappings of success around being an entrepreneur. However, the money, the power, the prestige, the profile -- all those things are fleeting.
At the core, I think people want to be entrepreneurs because it enables them to have the freedom to have a positive impact on the things that they really care about. So, the question then is why can't everyone do it? There is a human desire to be in a position where you have the freedom to inspire others or help people that you care about, whether that's your family, the community, or country, the world, whatever it may be.
Yet, with that said, there are very few successful entrepreneurs.
Not surprisingly, the road to being a successful entrepreneur is incredibly difficult. It's one where you are often alone, you are often convincing people of a vision that only you can see, whether that's customers, employees, investors. You are surrounded by rejection; investors are saying no, customers are saying no, employees are saying no. It takes a tremendous amount of resilience and tenacity to stay in the course. So, certainly one of the most important qualities of an entrepreneur is to have that tenacity and resilience.
At the same time, you need to balance that tenacity and resilience with being a visionary. A successful entrepreneur needs to be able to see past the trees and see what the world will look like in the future. And entrepreneurs need to sell that vision to their various stakeholders.
What that means is that entrepreneurs need to make decisions with massively imperfect information. As an entrepreneur, you are constantly making decisions in a constrained environment where you have limited information, limited capital, limited resources and yet you still have to make decisions to push your business forward.
The third thing that is critical for entrepreneurs are the people who join the venture. It is critical that you set a culture that resonates with who you are as an entrepreneur, that you hire people that fit into that culture and that they have the same or similar foundational goals around what you're trying to accomplish.
In terms of the second half of the question as far as what kind of structures or organizations need to be in place to help inspire founders, the real challenge is to get students to realize that their expectations need to be much broader. They actually have the potential to build the next Facebook. The first step is actually expanding expectations and creating structures for people to see what's possible. The next thing is having access to capital. Unfortunately, Toronto has not been successful in creating a robust venture capital system, so that means that a portion of ventures either go to the U.S. to find capital or just die. So, the most important thing we can do, especially in Canada, in terms of creating structures to help entrepreneurs is to create a more robust venture capital community.