#ScaleStrategy is produced by DX Journal and OneEleven. This editorial series delivers insights, advice, and practical recommendations to innovative and disruptive entrepreneurs and intrapreneurs. Read the second part of the interview with Dean Hopkins here.
“We’re being ambitious. We want to show scaling companies that we can scale, too,” said OneEleven’s Chief Growth Officer, Dean Hopkins, when the Toronto-based scaleup hub announced its plans to expand to Ottawa, Vancouver, London and Berlin in late 2018 and into 2019.
It’s an opportune time to expand globally as a scaleup hub.
According to CB Insights, total annual venture capital global funding “increased nearly 50% in 2017, as over $164B was invested across 11,042 deals. Deal activity was up by 11%, with both deal and dollar figures representing annual highs.”
As for 2018 so far, KPMG’s Venture Pulse Report says “for the fourth consecutive quarter, VC invested has exceeded $45 billion, and in the most recent quarter, just barely fallen shy of $50 billion once more.”
Hopkins is excited to walk the scaleup talk once again.
A tech scene veteran, Hopkins was the CEO & Co-founder of Cyberplex for more than a decade where he grew the organization from a startup to a public company with nearly $1 billion in market capitalization. During his career at Cyberplex, he also successfully managed the company through a major downsizing as the tech bubble collapsed and transitioned it to new leadership where the company enjoyed another round of growth.
Prior to joining OneEleven as Chief Growth Officer, Hopkins ran a boutique management consulting firm he founded in 2006 to drive transformation initiatives on a global basis for clients such as Thomson Reuters and the Ontario Teachers’ Pension Plan Board.
We caught up with Hopkins to talk about scaling lessons, OneEleven’s growth plans and developing the world’s leading source of scaleup knowledge.
DX Journal: You have extensive experience scaling from both an entrepreneurial and intrapreneurial perspective. What are some of the lessons you’ve learned?
Dean Hopkins: First off, it’s all about people. Attracting amazing people that became my partners in growth was the reason we were able to scale. I couldn’t have done it alone. ‘Hire great people and get out of their way’ became my mantra — even to this day.
The second ingredient to scale was culture. We had built a culture that was accustomed to scaling and had an appetite for growth. Our culture was about resilience, and scaling, and picking yourself up and dusting yourself off. We made it okay to make mistakes, then march on.
DX Journal: What have you learned about scaling at OneEleven?
Hopkins: Early on after I joined OneEleven, I sat in on a community lunch with about 300 people from all the member companies. At this lunch, new members are brought up in front of the crowd to say a little about their company. Then 300 people welcome them with cheers — a lot of love goes their way. After that, others come up to talk about their big wins, like raising money, landing a big customer or completing a big launch. And again, 300 people applaud and celebrate them. Well, I remember sitting there thinking, ‘where was this when I was building Cyberplex?’ I was in a hovel by myself toiling away with no community other than people that I would lean on as advisors. I never had the kind of kudos, support, warmth, love, resources that these companies have at OneEleven, and that’s when things clicked for me. This is what community is. A lot of people talk about community, but to actually see it viscerally done, made me realize I needed to recreate it in other geographies.
What we’re trying to do is get a group of companies — all individually pursuing their dreams, but collectively working together — to make sure that each other are successful.
DX Journal: You’re focused taking this OneEleven scaleup initiative global. How do you assess where you need to be?
Hopkins: A big aha moment for me around OneEleven was getting the Startup Genome report. I looked at our success in Toronto and yet our city was number 14 or 15 on their list. I said, ‘wait a minute, OneEleven is working incredibly well in the 15th best market?! What if we took OneEleven and built it out to some of the top 10 markets? That’s what led to the business plan we’re currently executing.
From there, I overlaid our partner Oxford Properties into the mix. As a large global real estate firm, this gave me the first 4 markets to go after — London, Berlin, Boston, Vancouver. We’re studying each market, mapping the ecosystem, understanding who the players are, comparing it to Toronto, figuring out what the differences and similarities are and then plotting our entry. Over the next year, we’ll be in each of those markets.
The approach to entering each of these markets will be subtly different depending on character of the market. We’ve invested a lot in meeting the community, understanding who does what to whom and how we can add value. By the time we launch in those markets, we’ll already have a reputation built up because we’ll have spent some money to support the local ecosystem. We’ll have brought some value to some of the companies there by helping them maybe come to Canada or come to one of our other markets. I view it as kind of putting some karma in the bank before we even launch in each.
DX Journal: When OneEleven enters a geography, what’s the benefit to companies and communities located there?
Hopkins: From our perspective, there are 3 key benefits to having OneEleven in your city.
The first is that we’re building the global knowledge base of scale. Each community we add is bringing a new rich set of perspectives on how to scaleup businesses. We then make that available to everybody in the peer community.
The second benefit is for the companies in each geography is an easier path into other markets through our growing global ecosystem. If a company in Toronto wants to go to London, they can access continental Europe because we have assets and relationships in Berlin.
Lastly, we are building what we call Scale-as-a-Service. This is a set of capabilities — much like you’d find on Amazon but only dedicated to scaling — that help people with the common challenges of scaling. This only gets richer and more pressure-tested the more markets we serve. We’ll have the best set of Scale-as-a-Service capabilities of anybody out there because we’re activating across companies in multiple markets.
DX Journal: Speaking of a scaleup knowledge base, as a company grows are there one or two things that really become important?
Hopkins: Entrepreneurs 100% need to think about getting away from the technical, engineering-focused orientation of their early stages. They should focus their time disproportionately on building their channel to market, building their go-to market, building their customer base, building their way in which revenue is going to come to them. Build protected paths to market that are defendable, because that’s really where the source of competitive advantage is. An entrepreneur could have the best product in the world, but if he or she can’t get it to market the company is dead. The companies that figure out how to build proprietary go-to market or protected go-to market are the ones that end up winning.
The second thing is not to underestimate the complexity of the people equation. Most founders who have reached the scaleup phase realize they need to think about organizational design, career paths for employees and what the organization will look like in 3 years. If they don’t, they will have a churn problem, which is very expensive and disruptive for the business.
The third thing is preparing for the next big round of funding. Generally speaking, people underestimate the amount of relationship building and preparation work needed. It probably takes a year or so to get ready properly. We’re trying to help companies diagnose where they are, how much runway they need and prepare them adequately for the big round, which is another league up from what they’re normally used to.
DX Journal: What books have you read that helped you get through your scaleup journey?
I’m also a big believer in a book called The Alchemist by Paulo Coelho. It’s all about finding personal motivation and that gets you through some very challenging times when you’re leading a company. There’s a book called The Speed of Trust by Steven Covey, which is all about how to engineer trust in your organization, which is essential at this level. Lastly, Crossing the Chasm by Geoffrey A. Moore. A seminal work on how you market and build a go-to market strategy.
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Which innovations will shape Canadian industry in 2019?
Canada is in the midst of an economic shift. New and traditional industries are increasingly being driven by innovation and these advances in technology are shifting the economic landscape at an unprecedented pace.
This is the assessment by Borden Ladner Gervais, which is Canada’s largest law firm. The company has issued a new thought leadership report, titled “Top Innovative Industries Shaping the Canadian Economy”.
The report weighs in on the opportunities and risks Canada faces in order to maintain its status as an international leader in innovation across eight key industries: cybersecurity, the Internet of Things, smart cities, cryptocurrency and blockchain, autonomous vehicles, fintech, renewable energy and cannabis.
To find out more about the report and its implications for Canadian businesses, Digital Journal spoke with Andrew Harrison, a partner at BLG.
Digital Journal: Where does Canada stand as a global tech innovator?
Andrew Harrison: Canada has always been at the forefront of innovation. Products developed by Canadians or Canadian companies encompass a variety of industries and include medicinal insulin, the snowmobile, the telephone, the pager, BlackBerry Messaging, IMAX, the Canadarm and the goalie mask, to name a few. Canadians are also fast adopters of new technologies; email money transfer between individuals, which was inconceivable only a few years ago, has been used by 63 per cent of Canadians.
This is why Canada is recognized worldwide for its research and technological know-how, but we have to be mindful of the challenges in a global competitive market.
DJ: What potential does Canada have to grow faster? Is this sector specific?
Harrison: Canada is well positioned to succeed and take the lead in all innovative industries, but there are definitely sector-specific challenges that could limit this growth. For example, the lack of regulation as to whether cryptocurrencies are considered securities or not is creating uncertainty, which may restrain investment in this sector.
DJ: What are the risks that could hamper innovation and development?
Harrison: For any new product, financing is always an issue; with innovation, money becomes an even more crucial element. Companies must have access to capital – including from individual and institutional investors – if they want to bring their innovative product/process to life. Evolving politics and policies can also have a significant impact.
DJ: What framework will Canada need in the future to secure its innovation potential?
Harrison: The key element is finding a proper balance between regulating the issues that might be created by the innovation itself or its use and providing a space where innovations can thrive without too many restrictions.
DJ: What does the Canadian government need to do?
Harrison: In many cases, laws and regulations were enacted long before we saw these innovative technologies and products brought to life, so they need to be updated. In certain sectors, such as cryptocurrencies and autonomous vehicles, the Canadian government has yet to provide a framework that would define the playing rules for all participants.
The government will also need to take a look at its current regulations on privacy: the coming into force in May 2018 of the European General Data Protection Regulation (“GDPR”) and recent high-profile data breaches have created the need for stronger privacy guidelines. Failure to do so could prevent Canadian businesses from accessing the European market.
DJ: What can academia contribute?
Harrison: Universities play a big role in fostering innovation – they could be the home of research and innovation and incubators of ventures, entrepreneurs, and tech talent. Universities can partner with industry players and have their researchers work closely to solve key industry issues. This is already happening in Canada. The Smith School of Business and Scotiabank, for instance, have partnered to set up the Scotiabank Centre of Customer Analytics at Smith School of Business to bring together professors, graduate students and analytics practitioners to collaborate on applied research projects in customer analytics. The academia plays a big role in creating an innovation ecosystem.
DJ: What is Canada’s most pressing technological need?
Harrison: There is still much work to be done to connect with Canada’s rural and remote communities. In 2016, the Canadian Radio-television and Telecommunications Commission (CRTC) declared that broadband Internet amounted to an essential service and adopted minimal performance standards across Canada: 50 megabit per second download and 10 megabit per second upload. However, the evidence presented to the Committee by a variety of stakeholders shows that the digital divide remains prominent in Canada – it is estimated that it will take roughly 10 to 15 years for the remaining 18% of Canadians to reach those minimums. Canada needs to develop a comprehensive rural broadband strategy in partnership with key stakeholders and make funding more accessible for small providers.
DJ: What type of investment is needed with skills and training?
Harrison: Canada has a serious shortage of tech talent, which makes it imperative for both the government, the education, and the business sector to invest in raising and fostering STEM talents. To help businesses attract the talent they require, the federal government is offering hiring grants and wage subsidies to offset payroll costs for recent post-secondary STEM students and graduates.
Poor IT integration racks up massive costs to companies
Another important finding from the report is that poor integrations and lack of resources contribute to hundreds of lost orders each year, leading to annual revenue losses in the range of $250,000-500,000 for 57 percent of those firms surveyed.
As well as spelling out the cost implications, the survey also aimed to identify core business problems behind integration challenges:
- Experience: The survey found that while 95 percent of the surveyed companies strive to enable their business ecosystems, 38 percent reportedly lacked confidence in their capacity to scale to support the integration initiatives foundational to doing so.
- Complexity: In relation to this, 63 percent of Information Technology decision-makers stated that new business onboarding is too complex and takes too long.
- Resources: 29 percent of companies reported they lacked the skilled resources to build and manage integrations between systems, applications and partner ecosystems.
- Legacy systems: 22 percent of respondents indicated that legacy technologies cause significant delays in generating new revenue. Following this, 81 percent of companies in this position said they believe replacing legacy systems will support emerging business initiatives.
These factors led Cleo CMO Tushar Patel to say: “The overwhelming consensus from these IT decision-makers is that new business demands – many of them brought by forces outside the company – are putting additional pressure on organizations and technologies to deliver better ecosystem integration solutions.”
He adds: “And when they can’t, it’s costing the business money. But for many of these organizations, it’s not an immediately solvable problem because they don’t have the strategy, the tools, the budget, or the resources to execute on these revenue-impacted initiatives.”
In terms of remediation activities to address these obstacles, the vast majority of respondents stated that modernization is key to consolidating disparate technologies, automating data transaction processes and gaining visibility into their critical data flows. These reasons account for why over half of the enterprises indicated they plan to modernize their integration and IT infrastructure in 2019.
#BoardForward crowdfunding campaign aims to boost female board leadership
Diverse board leadership is becoming a priority for public and private companies, and discussion around the topic continues to grow. From the business community to the public at large, the lack of diverse leadership is increasingly seen as a detriment to company performance.
Only 9 percent of unicorn companies — companies with a valuation of $1 billion and up — have board seats filled by women despite evidence showing diverse boards lead to better business outcomes.
While governments are starting to take note — California recently passed legislation to ensure that at least one member of a public company’s board is a woman — private and public companies are still being urged to build more inclusion into their company boards.
Curated talent marketplace theBoardList is one such organization looking to drive change and empower female business leaders across industries and build a new kind of diverse boardroom. The organization already has more than 5,000 members, and is looking to increase its community through a new #BoardForward crowdfunding campaign.
The campaign seeks to raise $200,000 to help the organization find more female board candidates, prepare them for board service and help them find a board placement.
Shannon Gordon,CEO of theBoardList, spoke to DX Journal about the priorities of the crowdfunding project.
DX Journal: The launch video for the crowdfunding project states that “Boards lack diversity because networks lack diversity” — can you unpack that?
Shannon Gordon: The vast majority of board searches, in fact 96 percent of them, are filled via referral. So inherently, they’re dependent on networks. The only way you’re going to get diversity in the boardroom is if the networks are diverse, and today the vast majority of CEOs and boards are made up of men.
Of course it’s not true that men don’t know great women. But we do know that it’s a human tendency to find people who look like you, act like you, and think like you when looking for new colleagues. It’s that homogeneity in those networks, in part, that drives the lack of diversity in the boardroom in particular because it’s such a network-based form of search.
DX Journal: Now you’re launching the #BoardForward crowdfunding campaign. Why go the crowdfunding route?
Gordon: We have a really engaged community of people who are very excited and anxious to support an increase in diversity in the workplace generally, and are looking for the right tools and systems to help make that happen.
Because theBoardList offers a solution, there are so many different ways which we can advocate for diversity. Advocacy is a very important part of driving change, but we’re really passionate about providing a solution and a tool for people to use for when they come to realize that diversity is something that will help their company reach its peak performance. We’re there with a solution.
For us, the crowdfunding campaign is about harnessing that engagement and enthusiasm and desire to make change from both the community and the public. So much of the context in the last year plus has shifted, and I think people are looking to make their own personal impact.
DX Journal: You want to scale your platform — what does that mean?
Gordon: It’s a couple of things. The first is reach. We started initially focused on the tech community, but very rapidly moved beyond that, and now we cover virtually all industries.
We want to make sure we continue to drive depth into each of those industries. Every time someone comes to theBoardList, we want them to find the perfect board candidate. That’s our aspiration. So we want to make sure we are talking to, and reaching, all of those qualified women who have the potential to be that candidate.
The second thing is that we want to continue to make investments in our platform technology. As we scale the community, we need to be able to effectively match candidates with the right opportunity. So we’ll continue to make investments in our ability to do that matchmaking effectively in our search algorithm.
Lastly, we want to make sure that we’re driving demand. There are many companies that already see the value in diversity and are actively looking for female candidates. But there are also many that haven’t realized this yet. We want to be talking to those companies, so we’ll need to scale the team and scale the reach to be as effective as we want to be.
DX Journal: What kind of success has theBoardList seen so far?
Shannon Gordon: We’ve grown our community to more than 5,000 people so far, 80 percent of whom are CEO or C-suite or board of directors already, so it’s a very premium talent marketplace.
We’ve also had more than 550 searches on the platform since it launched in 2016. It typically takes about nine months for somebody to find a board director, and we’re exposing additional candidates who might not have been found before.
Finally, almost half of our placements have been women who are serving on their first board. Which means that through theBoardList, they found their first board seat. That’s really exciting for us because what we want to make sure we promote mobility for women who are perhaps just below board service, but haven’t gotten a chance to serve yet.
DX Journal: How have you been growing your network up to this point?
Gordon: It has been almost entirely word of mouth which is why we’re so excited about the impact we’ve had. But we’re also excited to use the crowdfunding campaign to help us get some of the capital we need to extend that impact.
In order to identify talent that is truly ready for board service, we leverage a network of board directors — people already sitting on corporate boards. They are some really impressive individuals that we know have impressive networks of people around them. We’re aggregating those networks. So inherent in our business is a word-of-mouth phenomenon, as we ask people to nominate women from their network for board service.
We want to extend that impact, which is why we’re launching the #BoardForward campaign.
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