No summer break for these students

Next Canada toughens future entrepreneurs

You’re 22 again, and sitting in school. A really influential person is coming into the class today, and your teacher says, “What question would you like to ask?”

While you think about that, here’s a little context. The classroom is in an old engineering building at the University of Toronto, and you’re one of Canada’s best young entrepreneurs. This is the classroom of the Next 36, a program that selects and funds 36 ( or so) high- performing students every year in order to transform them into high- impact entrepreneurs, ready to think big and champion change all their lives.

Last year, the Next 36 rebranded as Next Canada, and now runs two more programs: Next Founders, for more advanced startups, and Next AI, for entrepreneurs exploring the potential of artificial intelligence. Participants in all three groups have one thing in common: they all take Next’s customized courses from May to July. To help you, too, become a high- impact entrepreneur, I sat in on a recent class led by one of Next’s four co-founders, Reza Satchu.

He’s not your e ver y - day teacher. Reza and his brother Asif cofounded a Boston- area supply- chain automation company in 1999. They sold it 18 months later, in the last days of the dot- com boom, for US$ 925 million. Satchu went on to launch a storage company, co-found a securities-trading company in New York, and talk his way into teaching a street- smart entrepreneurship course at U of T. In 2011, Satchu cofounded Toronto investment firm Alignvest, which seeks out high-return business investments rooted in disruptive “market discontinuities.”

So what can you expect from a prof like that? Tough questions, rigorous analyses and bold insights that could only come from someone who’s done it — again and again. Examples: ❚ Whether you’re starting a new business or launching a new product, don’t underestimate the challenge. “Getting your first customer is hard,” Satchu warned. “You have to get a customer to suspend disbelief and make a risky decision.” When he was starting the business in New York, he says, “240 people — very smart i nvestors — turned us down. You need to prove customer demand. And we couldn’t prove it. ❚ “Whatever you do in business, remember you’re bei ng watched. “The early decisions you make in your career really matter,” Satchu said. When he and his brother started SupplierMarket in 1999, while still in their 20s, “every single person who had worked with my brother and me from age 20 to 25 invested in the company. They had worked with us. They trusted us. They thought it could make some money, and they knew we would do the right thing.” ❚ Find information others don’t have. For this class, the attendees had all read a case study, on the early years of stylish handbag designer Kate Spade. Satchu’s key question: Was this a good business to be in? One student said she loves Spade’s products; but a nother pointed out the market was small, with lots of competition. Satchu squelched the debate by saying your success doesn’t depend on the state of your market — but on what you are doing differently. The founders of Kate Spade had spotted an “accessible luxury” niche in the designer market, and slowly made it their own. Many entrepreneurs, Satchu says, try to out- think the market and go where competitors aren’t. They presume big entrenched players have all the bases covered. Think again. Consider how Michael Dell stole the custom- PC market from under IBM’s nose, and how Jeff Bezos founded an online bookstore because he felt sure Barnes & Noble was undervaluing the Internet. “Entrepreneurs make stuff happen out of thin air,” Satchu said. “The most important thing you need is information. Massive amounts of i nformation. And you have to be as clever about it as possible. ❚ “Know your numbers: When Satchu asked if Kate Spade circa 1998, was doing well, the students offered that the company was enjoying high sales per square f oot, and revenues were growing fast. So Satchu advised them to take another look at Spade’s financial statements. They’d see that inventories were up, cash was stretched thin and profits were falling. “On the surface, the business is doing well. But when you look a little deeper, you see massive problems,” Satchu said. “The numbers don’t lie.” ❚ Find a way to connect! Just before introducing a guest lecturer (serial entrepreneur and Ceridian CEO David Ossip), Satchu asked his students what questions they might like to ask him. They responded with such suggestions as what he’s learned in his career and which opportunities he is most excited about. “No,” Satchu said. When you meet a successful, influential person, don’t ask them something they’ve heard a hundred times before. Think harder and more creatively. “If you ask them something very different, you might get more of their time.” Then Satchu took it a step further. “What very selfish thing might you ask?” The students looked puzzled. But Satchu was just asking them to be strategic. If you need a referral or a favour, ask for it. But build a relationship first. Find an element of commonality that draws you closer. “Make the question about something that connects you,” said Satchu, “and maybe you’ ll get a share of their time.”