By Deanne Gage
Steve Jobs’ unwavering vision for Apple made his company an icon. Twice. We’ve found some other tenacious leaders who saw what others couldn’t, succeeding on their own terms.
Today, no one disputes Apple Inc.’s genius products that reinvented the music, phone and tablet industries. But at the time, expert advisers thought then-CEO Steve Jobs was crazy to even consider revitalizing those sectors. Consumers illegally downloaded music off the Internet in droves, online access on mobile phones was spotty, at best, and buyers dismissed tablet computers as expensive replacements for small laptops that already did many of the same things. Jobs shied away from public opinion and he had an unwavering belief that people don’t know what the possibilities are until you show them.
While not everyone can be a Jobs-like visionary, many companies find success by defying conventional opinions. Here are a few examples of business leaders who decided to ignore the advice they were given — and our experts’ explanations as to why that was the smart move. Weighing in are Giles Osborne, senior manager at the Toronto office of Parker Prins Lebano, an accounting firm specializing in SMEs, and Robert Gold, senior partner with Bennett Gold LLP, a Toronto accounting firm focusing on entrepreneurs.
Concept Above-board alternative to ticket scalping
Caveat Too many regulatory hurdles
Ca-Ching! Eventually sold to eBay for US$310 million
When you purchase concert or sporting tickets from a scalper or stranger online, there’s always uncertainty whether what you are buying is legitimate. San Francisco-based entrepreneurs Jeff Fluhr and Eric Baker thought, why not legitimize the process? As Fluhr began raising money to launch StubHub in 2000, he had a golden opportunity to sit down with former Ticketmaster CEO Fred Rosen, whom Fluhr deemed “the godfather of tickets.” Unfortunately for Fluhr, Rosen said his idea would never fly, citing the US’s many regulatory hurdles and suggesting that artists/sports teams had no incentives in a secondary market for their tickets.
Although he was crushed by Rosen’s advice, Fluhr moved forward anyway. As he told attendees of the VatorSplash conference for entrepreneurs in 2012, “If you disagree with someone who gives you advice — even if that person is smarter, older or an industry expert — then you should do what you think is right and trust your instincts.” He and Baker researched the laws, found some federal loopholes and plugged away at innovative marketing. StubHub boasts about 15 million unique visitors a month and sells a ticket every second. The company was sold to eBay in 2007 for US$310 million.
Our experts’ take Fluhr displayed much courage by moving forward. “To have someone like Rosen say your business model is not going to work would be a tough psychological hurdle to get past,” says Osborne. “Fluhr must have had a lot of belief in his product.”
Gold looks at it another way. If entrepreneurs display three characteristics — passion, perseverance and focus — they will more than likely succeed with their endeavours. “I think in that circumstance, [Rosen] didn’t understand the market potential,” he says. “No real entrepreneur at heart who ever got that kind of advice from someone in the industry would have said, ‘OK, I’m going to close down the operation.'”
Concept Full-service television advertising for SMEs
Caveat TV is dead
Ca-Ching! A $14-million company serving hundreds of clients in six markets
Commercial advertising is traditionally reserved for companies with deep pockets (think Coke or Nike), not mom-and-pop small and medium-sized businesses. CEO Jenny Munford, however, begged to differ and sought a way to bring quality advertising to those smaller firms. Her vision? Bring an agency and production studio along with directors, producers and editors all under one roof. In doing so, she would eliminate the middle-man markups and reduce the price of advertising to her clients.
In 2006, Munford launched Creative Bube Tube in her then-hometown of Milton, Ont., saving further on costs by having all staff located there, under one roof. Many potential investors questioned her judgment in not setting up shop right away in Toronto, the advertising capital of Canada. Naysayers also criticized her decision to concentrate solely on television advertising. TV is dead, they argued, and she would be wise to find other methods of advertising for this client segment.
Munford, who has years of agency experience, listened to her gut and pursued TV with a vengeance. “If anything, TV has expanded dramatically,” she says. “It’s not just in your living room; people are watching TV in all different forms like online and on a mobile device.” With 250 channels in Canada, small and medium-sized companies have an array of shows to target and at a cost of only a few thousand a month.
Creative Bube Tube now operates in six locations in Canada and the US and has hundreds of clients, including Slimband and Playmobil Canada. Munford won the RBC Canadian Woman Entrepreneur of the Year Award in 2011.
Our experts’ take Munford had a real understanding of the market potential, says Gold. In 2006, the idea of television on YouTube and online tablets was an unknown quantity. “If you understand the market and go for it, that’s what it takes for an entrepreneur to succeed,” he says.
As for the decision to first build the business in Milton, Osborne says it was sound risk management. “It probably allowed her to build the business up without having to obtain a certain kind of critical mass immediately,” he says. “Her initial upfront investment in the business is mitigated a bit because she didn’t build in pricier Toronto.”
Concept Cloud-based invoicing software for the creative class
Caveat Don’t go it alone; partner with a telco
Ca-Ching! Five. Million. Users.
In its humble beginnings back in 2003, Toronto-based FreshBooks had just 10 customers and earned a paltry $100 per month. CEO Mike McDerment had a lofty goal: to drive one million customers to his website. He sought advice from a family friend, a respected business leader who sat on many corporate boards. The counsel? Get a distribution deal, ideally with a telecommunications company, pronto. Without one, Intuit or one of the other large software companies would crush FreshBooks, the adviser said.
McDerment was against this idea from the start. Why would a telco promote FreshBooks over its own products, he wondered. Besides, McDerment was after a specific type of customer, not a list of names. He wanted to target the creative class — freelance writers, graphic designers and other sole proprietors who would rather concentrate on producing their craft, not chasing down unpaid accounts.
So, he aimed to find another way to reach those clients. McDerment spent nearly four years running the business from his parents’ basement, fine-tuning the product based on feedback from his target market. The company also used social media, word of mouth and podcasts to get the creative class talking about his product. Today, more than five million people use FreshBooks’ software.
Our expert’s take “FreshBooks is a good innovative product and McDerment was smart in marketing it to niches that would actually use the software effectively,” says Osborne. “FreshBooks would get lost in the shuffle if he went with a cable company.”
Osborne also sees value in the way McDerment took time to fine-tune the product. “Startups used to spend a lot of money to build something and presented it to the market in one big shot. If it succeeded, great, but if it didn’t, millions were wasted,” he says. “Now the process is more bootstrap, making sure what you build works for the segment of the market that you are pursuing. Doing it that way gave him more time and flexibility.”
Deanne Gage is a Toronto-based writer and editor