We hear a lot about success stories from the USA in the technology field. Startup Grind Toronto changes that assumption with their great events that shifts the focus onto Canadian startups and offers educational events to grow that knowledge.
On September 1, they hosted Bruce Croxon. Best known for his role in creating Lavalife and serving on CBC’s Dragon’s Den, Croxon shared his wisdom to a packed room at the Telus office in Toronto. Prior to serving on Dragon’s Den and starting an investment fund, Lavalife was sold for $150+ million in 2004.
Here are the key lessons any technology leader, or leader in the making, should live by according to Croxon.
1. Know your cost to acquire & revenue numbers
Two key business metrics came up during the event. Both will be familiar to those who have studied direct response marketing. They are:
- Customer acquisition cost: how much money does it cost the company to acquire an additional customer?
- Customer lifetime value: how much will you earn from the customer? This point is especially important for companies selling subscriptions (e.g. Software As A Service).
Knowing both of these metrics will inform which kind of marketing channels make sense for the company.
2. Hiring strategy: Attitude over skills
Croxon’s hiring philosophy is to hire for attitude and train for skill. In the past, he made mistakes when hiring star technical talent without giving appropriate weight to teamwork and values.
A note to tech professionals: Your top notch coding skills are not enough!
3. Key metrics for tech firms seeking investment
As the founder of investment firm Round 13 Capital, Croxon frequently meets with business owners seeking investment. During the Q&A session, Croxon shared a few points on what he looks for in potential investments:
- Absolute revenue: Monthly revenue in the $100,000-$150,000 range
- Revenue growth: double digit monthly growth is attractive
- Customer growth: The company needs to have an effective channel to acquire additional customers and the potential to continue exploiting that channel
- Clear plan for additional funds: will the company be able to use the money from investors to go out and acquire additional customers?
4. Managing the ups and downs of business life
Croxon pointed out that business is full of big wins and losses. The important point is to keep a level head during the issues. For further insight on this topic, I suggest reading Stoicism 101: A Practical Guide for Entrepreneurs. This ancient philosophy has become popular in entrepreneurial circles lately.
5. A patriot’s view on Canadian talent
“The main difference between Canada and Silicon Valley is not talent; it’s mainly that the Valley is more self-promotional.” – Croxon
As an active tech investor, it was inspiring to hear Croxon’s remarks about the quality of Canadian talent. He called out the Waterloo region as being particularly important to Canada’s tech industry. In addition, Croxon’s investment firm exclusively focuses on Canadian technology companies.
6. Execution over originality
In the technology industry, patents and protecting intellectual property are often emphasized. In Croxon’s view, a brand new idea is less important than a robust work ethic and execution.
To build on Croxon’s view, consider the early days at Amazon in the 1990s. There were other companies that sold books on the Internet. Amazon’s success is due in part to executing the details better (e.g. packaging and shipping books better, better selection and related points).
7. Croxon’s favourite apps
Croxon shared a few of his favorite apps including Waze (the world’s largest community-based traffic and navigation app) and Ritual (your concierge for the best restaurants and coffee shops in your neighbourhood).
Thanks to Sharn Kandola, co-founder of feeDuck, for facilitating a great event.