The Next 36 — Gamechanger: YCombinator+Techstars Meets Rhodes Scholars.

Canadian Education System Fixing Big Problems With Innovation.


For over a decade, the “street smarts vs. books smarts” debate has provoked business leaders, entrepreneurs in Silicon Valley, N.Y. Alley, Austin SWSX, college students across North America, and TV audiences worldwide, for the reality shows, like, The Apprentice.

Should I drop out and follow in the footsteps of Jobs, Ellison, Gates and now Zuckerberg?

Ninety percent (90%) of start-ups fail, or pivot, and 50% of start-ups shut down, within 5 years. These are horrible statistics. The Next36 is going to try to change these statistics. By reducing the failure by just 1 company in 10, portfolio management can have a significant ROI performance improvement.

As much as it takes to be a team player in a large multi-national corporation, there may be power-struggles and battles for promotion, resources, power and compensation. The central themes of “Street vs. Books Smarts” at the core is 1) hard work, 2) emotional intelligence, and 3) creativity and 4) and team leadership.

Jon French, Director of Marketing for The Next 36 stated the group’s vision, “We are looking at developing high impact entrepreneurs as well as start-ups and the vision is a long term play. We expect our alumni to be behind some of Canada’s most successful companies when we scan the business landscape in 10-15 years.”

Integrative thinking and a prestigious university network is now trying to change the game for Canada. The Next 36 is deliver change to Canadian innovation and may well leapfrog past US VC and acceleration systems and to drive innovation. N36 drives their cohorts very hard—they teach students to think how to think, with top professors and with leading entrepreneurs.

Next 36 Faculty Adjunct Professor & Entrepreneur in Residence, Brendan Calder, runs an award-winning course called “Getting It Done” focused on delivering global best practices in performance management, continuous improvement and with street-smart curriculum on passion, courage and goal-setting performance, with a focus on bottom-line results. This mandatory course for cohorts is also offered to Rotman’s EMBA and MBA-level programs.

Calder, a long-time board member of Canada’s largest construction firm Ellis Don, is generous with his business introductions to program cohorts. He teaches approaches from Bill Reddin, and Michael Kami and Peter Drucker. Drucker, who plays an influential role, stated in 2012, “What the Rotman School is doing may be the most important thing happening in management education today.”

The Next 36: YCombinator Meets Rhodes Scholars

The Vision of N36 is to increase Canadian prosperity, and is a competition-based hybrid educational EMBA program combined with acceleration. Academic partners include McGill, Queens University, Ryerson University, Simon Fraser University, The University of British Columbia, University of Waterloo, Western University and founding academic partner, University of Toronto. Investment partners include Alignvest Ventures LP, Relay Ventures, and Slaight Communications. Sponsors have included Cougar Global Investments, Mentorship Wealth Management, Sussex Strategy Group, Tomkins Insurance, Cisco, Royal de Versaille, and Rolex. Most notably, national partners include MaRSdd, TD, Rogers Communications, Osler and EY.

N36 is a 6 month remote program (5 to 6 course-load) with 3 months of acceleration. Students live in residence and regularly pitch to angel investors and VCs. The original Founding Patrons include Jimmy Pattison, Hon. Paul Desmarais (deceased) and Galen Weston. And, N36 collaborates with 250 top leaders of Canadian corporations, incubators and VCs.

French further described, “Innovation breeds innovation. Putting forth Canadian role models who are engaged and have intensity will drive future leaders, innovators and entrepreneurship.”

N36 invests up to $95,000 in the start-ups. N36 focuses on undergrads, because “this is the best time to fail and fail quickly” he stated.

“To the extent that we can connect start-ups and students for internships to technology firms or recruiters, we will do so,” French confirmed.

The N36, and The Next Founders—a program of the Next 36 that focuses on seasoned start-up entrepreneurs—welcome collaboration from traditional VCs and the Angels. N36 has worked with 2nd ranked Creative-Destruction Lab at Rotman School of Management, the University of Toronto—the program host, and with MarSdd and Ryerson’s Digital Media Zone (DMZ). Ideas must come from the students to ensure they are passionate. All-star faculty in 2013 include professors, deans and partners from Rotman, UBC, Harvard, Wharton, Ivey, Georgetown, M.I.T., Sussex Strategy Group, Osler Hoskin & Harcourt, and Boston Consulting Group.

The Next Founders

The Next Founders, for more experienced entrepreneurs accepts a variety of applicants and last year, promoted two college drop-outs.

“We do not discriminate based on the applicants’ educational background. They demonstrated early success and early traction in some cases with venture capital and have potential to build high impact businesses,” said French.

The Next Founders “does not provide equity, nor financing, but introductions. There is no working space, no dedicated mentor, but a network of advisors.”

Interviews with Cohorts

I spoke with key program students, Omer Dor—who sold his start-up, Mobicare, a healthcare technology innovator, to Masonic Aging Services, based in Montreal, Quebec; Mallorie Brodie, a co-founder of Bridgit, a start-up focused on mobile technology serving the construction firms, based in Waterloo, Ontario; and Tagg Jefferson—a UBC engineering student developing a smart-grid analytics for power generation firms and their customers.

Omer Dor, entered the program from McGill University, in the 2nd Cohort in 2012, and successfully completed his program, started his firm and sold his business. In that program The Next36 provided investment and advice, with subsequent funding based on progress and milestones achieved.

Notably, Dor appreciated the mentorship during the firm’s acquisition, due diligence process and step-by-step instruction provided by N36.

“Could it have happened? Probably, but it would have taken a lot more years and some mistakes.” We were happy with result of the sale. Personally, I proved to myself that, with the right team and perseverance, I can do this.” Dor evaluated, “My own expectations of what I can achieve have been raised.”

“The Next 36 exposes you to some of Canada’s most distinguished business leaders, entrepreneurs, and investors. It’s a surreal experience to be surrounded by all these people for a straight-out-of-university graduate. And, that is great, but I think it is the intimate relationship you get to develop which are most important. For me, the most meaningful of these opportunities was to develop a close relationship with my mentor, David Masotti, Chairman and Executive chairman of Defyrus Inc.

“In many different situations David had the foresight to tell I was about to fail and instead of preventing me from doing so, he’d actually let me fail. Afterwards, through our conversations he helped me develop a sense of self-realization to understand why I failed, and what I need to do if I want to ensure I don’t repeat the mistake again. That made a profound impact on my growth as a business leader.”

After the program, Dor took a job with the acquiring firm. Today, he is starting a new journey in Montreal, Canada, with Advanced Healthcare Products, a distributor of health technology products including mattresses, wheelchairs, and other innovations in the seniors market.

“Part of the growth strategy is to look at strategic investments and acquisitions in the health tech space. And, I lead that effort,” stated Dor. “This is directly correlated to my experience in the Next 36.”

I asked Dor if he would recommend the Next 36. He replied, “Absolutely. Remarkably positive experience. I would certainly recommend it for anyone who wants to be challenged.”

Bridgit

Mallorie Brodie’s company Bridgit, deploys mobile technology to expedite and automate a paper-based deficiency repair process for the construction industry. This mobile application allows inspectors to identify, photograph and highlight defects and improves response time, workflow and lowers costs. The application adds voice recording to describe the defect, rather than having inspectors type or handwrite comments.

This is a particularly astute design since contractors typically work with safety gloves, have reduced finger dexterity in cold weather, and may find it difficult to type in a construction setting. The firm met very little resistance to change in their beta-test client PCL.

Getting projects completed faster means that the general contractor gets paid more quickly. With deficiencies, it costs more to return to the site and repair, especially when hiring contractors from another city or town. Users found the application useful for safety, general tasks, and deficiencies.

The firm has received inquiries from a hotel, a feeder company, and a manufacturer, but does not have any plans to license for other industries at this stage.

When asked on the most important aspects of the N36 program, Brodie revealed “we were forced to meet certain milestones. When you have a bad day, week or a month, it’s really easy to give up on the idea. But, when you’re part of a program and they push, you have to continue to set more aggressive milestones for yourself.”

Brodie reiterated the program strengths, “It’s really important—the overall guidance in the early days of the company; the network of the N36—investors, advice and exposure to top business leaders.”

Brodie saw N36 bridging an experiential gap between entrepreneurialism and management, “Getting things done and hitting milestones.” She found value in learning to answer questions of ‘What’ (needs to be done) and by “When” and not stopping at business analysis.

Pictured: Academic Director, Ajay Agrawal, The Next 36 Peter Munk Professor of Entrepreneurship, University of Toronto Faculty Research Fellow at the National Bureau of Economic Research in Cambridge, MA Visiting Scholar at Harvard University and MIT

I asked her about leadership training received in the program, and she described,

“There’s no way not to grow when the bar is pushed so high—you just lead. You don’t have time to think about leadership.”

“By the end of it, you look back,” she reflected. “And, I know a lot more than I did 9 months ago.”

She continued, “One of the founders—he’d bring in a top business leaders every week—CEOs from Canada.” She received advice, asked questions and commented, “They’re still regular people. That motivated us. It’s important to be exposed to someone we can relate to.”

Brodie and her partners will be launching version 1.0 of their product in March. The company is focused on meeting with general contractors across Canada including PCL, and EllisDon—a $3.4 billion construction general contractor with 1400 owner-employees. Calder is both a faculty member of N36 and a Board Member of EllisDon.

“We’re really focused on next 24 months, drive as much market share as we can, and developing more solutions that will help construction industry become more efficient.”

Also, when asked if she would recommend this program to her friends and associates, Brodie affirmed, “Definitely. When you’re coming out of school, it’s really hard to imagine yourself starting a company. It’s a really a powerful program because it brings all these entrepreneurial people.”

“Creating a healthy ecosystem when there are successful entrepreneurs that invest back and mentor start-up is needed; young innovative companies that have had success and have been through the process need to give back to the younger students.”

Bridgit is charging ahead and already giving back. “Our director of marketing came up with an idea to give back to high school students in Ottawa. In April, during entrepreneurship week, we are participating in a speaker panel, holding a coding workshop, and raising awareness of entrepreneurship in high school.”

Gridcure

Tagg Jefferson, a student from UBC’s top-rated Engineering faculty is working on a big data analytics application to deliver insights to the utilities and power generation industry and integration to smart power meters. He is on one of this year’s N36 teams.

Jefferson reveals, “Two billion people are on smart meters, utility operations with infrastructure with data and hardware built around the 1950s to ‘70s. Data has increased 4000 times and firms cannot handle this beyond billing customers.” He asked, “What else can we do with that data?”

I asked Jefferson what inspired him to investigate this innovation direction. He responded, “I was building 20 dollar smart meters in India—very basic circuit boards that could act as a smart meter. They were pay as you go power-meters.”

“They were put between power generators, a backup system diesel generator and the power draw, and customers would pay with their cellphone.” Then Jefferson worked part time with BC Hydro on their smart meter project.

He continued, “By providing good analytics off the shelf, they can get more insights.”

I asked about the business impact of his project and his vision. Jefferson elaborated, “the utility can be able to understand the network: peak demand on systems, improve efficiency, and advertise efficient light bulbs, stoves and appliances in a targeted way, not just mass marketing.”

“Imagine if the utility could identify which households had non-compliant washers and clothes dryers, and the utility could send an email or bill with an offer targeted just to that household, with a federal or provincial rebate to switch to a new EnergyStar appliance.”

He initially focused on residential customer insights. He later described “Grid health” and predictive maintenance as additional benefits.

“When there is ice all over power lines, all the utility’s internal data combined with external data such as weather, population demographics, population growth distributions, seasonality can prove useful.” He provided an example, “we’re going to give you a 95% chance to roll out repair trucks out that week.”

This type of information and risk projection would have helped Toronto during its ice storms in early January, and helped preparedness for the intense winter conditions in the northeastern United States.

Another example is in mining he continued. The value add to the provider to a mine, is to say, “Here’s how the utility can work with the mining operation to improve overall efficiencies: maintain infrastructure, use less power, predictive analysis on power-down or line-down, and forwards with weather patterns.”

Strategically, his reasoning and intuition is sound, especially with a cost-benefit analysis on just insurance premiums for risk management for both mining companies and weather-related storms that destroy homes, power-lines and infrastructure. Insurance premiums are significant in these industries. And, any tool that can prevent deaths, disasters, and other liability is of enormous benefit. When people die because of lack of electricity or heat in predicted storms, giving utilities companies enough lead time and insights to save lives is critical. [1]

Jefferson describes the most salient aspects of the program, “It’s the mentorship and access to advisors, business people and connections. Absolutely incredible minds that can look at what we are trying to do, and any aspect through Next 36, and provide us incredibly valuable feedback.”

Jefferson who is 24, will graduate from UBC in semiconductor engineering in May 2014, and move to Toronto from Vancouver. He anticipates meeting this year’s cohorts, “The people around the program. We’re looking forward to getting to meet these other 35 people in the program who have been selected by a candidacy of several thousand—who are all convinced they’re going to change the world with their respective ventures. [I’m] looking forward to this.”

I asked Jefferson what he was learning about business and leadership.

“I do look forward to be the N36. I did not know my teammate very well except by electronic communication. Getting to know a cofounder or while it’s happening is interesting,” he stated, in describing his situation. “Fortunately, we’re incredibly compatible.” He describes their relationships as “Friends before Founders.” I got lucky. I could imagine if it were two incompatible parties, it would be difficult.”

He revealed N36 has “pretty effective support set up in case of difficulties with the team,” including “professional team builders on staff.” I asked him to predict what would do after the program to which he responded, “I want to see how far we can take it.”

“Would you recommend the next 36?” I asked.

“Yes. The Next 36 is an aggressive program that is trying to turn you into the best leader and entrepreneur. You’re going to be pushed. I like being around people who like challenge.”

In applying for The Next 36 Emilie Cushman, co-founder of Kira Talent, prepared an essay and answered questions on a 60 second YouTube video.

Cushman loves to talk and show her personality through video, and she was paired into a group and asked to think of a business idea. Her team conducted preliminary research and found 2 competitors in this video interview technology space. She revealed that both firms raised capital. Cushman’s background is in business with front-end computer design, and her partner has computer science background—both are undergrad students.

Cushman said, “It was like a crash degree—completely strange world.” It is a union-town where she comes from, Windsor Ontario and The Next 36 in Toronto “provided knowledge of what it meant to start a company, and helped with mentorship—2 CEO-level mentors.”

She revealed, “One is now an investor. And, help raise capital.”

Elaborating further, Cushman identified key benefits, “Networking events. [N36] taught us to really juggle: built an amazing network—donors, sponsors, industry leaders in Canada.” Today, she feels “tied into the network” after completing the program 2 years ago.

“There’s no way someone has access to this at 19.” Cushman is currently managing a $2 million budget raised after an angel round the previous summer. “By the time you get to that point, you’re solving very different problems.”

At first, she described her focus was ensuring the product worked, and finding the first customers. “Figuring basics out. Now at $2 million, and with a team 15 employees, our challenges are growing culture, get the sales and marketing engine going, and the resources to fuel that.”

Cushman added, “We are able to experiment more, and a lot faster. We have a CFO and director of operations and manage budget completely. We report into a Board of Directors, and control our own budget,” she explained simply.

“At first,” she elaborated on product strategy and market resistance, “there was some resistance [to video interviews.] The video interview space has matured quickly. We’d go to companies and they had never heard of this concept, and to expect people to have webcams and feel comfortable on camera.”

“Now, video is the hot topic of this year. From 11% percent adoption to 70% adoption across enterprise—video is part of an application process in just the past 2 years.”

Cushman adds, “Kira Talent is EEO and FCC compliant, and is most concentrated on entry-level and high volume positions, retail to professional services, business schools, and graduate schools.”

When asked how the system deals with lower-confidence interviewees, such as minorities or immigrants, she added, “The system allows applicants to get familiar with being in front of a camera. Firms may get training on how to work with video, such as collaborative decision making. It trains people to be concise, responsive and time-sensitive” similar to Toastmasters presentation and leadership programs.

Kira Talent studied fall-off ratios for interview trial through video completion, and noticed entry-level employees were “the highest to not make it past the initial invitation, especially for retail positions. It varies on industry.”

It’s a time investment. Cushman elaborated, “We experience 98% completion rates in professional services. The product is priced with both pay-as-you-go and enterprise license models. Smaller hiring firms just put in a visa. Customers to date include KPMG, Sun Life, E&Y, and almost every major university.” In describing her product roadmap, “Kira Talent is cloud-based using Python and Jango.” Cushman envisioned, “We would integrate with a firm like Taleo, and applicants would complete the video as they filled out the online application, right through Taleo.”

Customers give their system 4.3 stars out of 5 so far, which is good for a start-up out the gate.

If there are 500,000 jobseekers in Canada and over 5.5 million in the US, and video interviews become a standard practice, the firm hopes to make substantial profits with market penetration and adoption. She seemed skittish with further product features that take away from their potential partner’s business roles and responsibilities.

“We plug into the system they have already.” They don’t currently sell to recruiters, executive search firms, just enterprise. “We replace the pre-screen phone interview.” She explained that the system requires video and the act of videotaping yourself reduces fraudulent applications and cheaters.

“We are positioned as best-in-class for video, while other firms have started and have since gone on to fill gaps in the recruiting process. They have applicant tracking systems and are designed to replace Skype. We’ve stuck to the interviewing piece—enterprise quality and built to scale versus being a mile wide.”

The firm may go global and will need to deal with international recruitment issues and best-practices—so for now, Cushman is remains focused on North America. “We are getting signups from around the world,” Cushman confirmed.

Are immigrants who may be less comfortable in front of a wide camera less receptive? It depends on the industry.

“Candidates in professional services firms jump over hoops.” Cushman is direct in revealing the current competitive nature of MBAs trying to find a job today: MBAs and undergraduate degrees do not guarantee work any longer. Google, for example, over-hires experience for their jobs because of the power of their brand.

On Leadership and Entrepreneurialism

Geoff Smith, President of EllisDon, won the Ernst & Young Entrepreneur of the Year award for Canada in November 2013. He has advice for improving innovation in Canada, and simultaneously addresses the “D” grade given by Conference Board of Canada, for innovation in 2013, because of these factors: patents, manufacturing technology, export market share, trademarks, ICT investment, venture capital, R&D spending, and connectivity. First, Smith delivers on “connectivity” through engagement with The Next 36, Rotman and the University of Toronto.

His advice addresses 2 additional aspects alluded to by the Conference Board Report: culture and efficiency.[2]

So, two things. We’ve worked very hard ever since to push autonomy and accountability (freedom and trust) down absolutely as far as possible throughout the company and to run it very openly — everyone should be getting every bit of knowledge about their project and the company — and with a minimum of bureaucracy. We are crystal clear on our values and try to be equally clear on expectations and accountabilities, but then we strive to just let people do their jobs. Our systems must support this trust, not undermine it. It’s a wide open, entrepreneurial culture, and it’s not for everyone, but it works for us.

More importantly: To a very significant extent, I understand now that effective leadership means getting out of the way. And then—this is key—ensuring that our other leaders are also getting out of the way. Demonstrate confidence in people—top to bottom—and you will have a company of leaders. And, if everyone’s a leader, everyone has to get out of the way.”

- Geoff Smith, President, EllisDon

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Al Leong is formerly a writer for TechVibes. He earned an MBA from the University of Toronto in Global Management, Strategy Consulting and Innovation. And, a certificate in Product Management from MIT/Sloan. If you found this article useful, go ahead and “recommend” or share it. And, feel free to view some other articles in this collection. Al Leong, is an award-winning marketing executive with 25 years experience with Fortune 500 brands, and his site is found at http://www.alleong.ca


Contacts:

· Omer Dor: http://ca.linkedin.com/in/omerdor

· Tagg Jefferson: tagg@gridcure.com

· Mallorie Brodie: mallorie@Bridgit.com

· Emilie Cushman: emiliecushman@gmail.com

· Jon French, The Next 36: jon@thenext36.ca

The Next 36 130 Bloor Street West, Suite 702 Toronto, ON, M5S 1N5 | phone: 647-259-8943


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