Through the Eyes of an Intern: Economics of Entrepreneurship
Reza Satchu is the Founding Chairman of NEXT Canada. With substantial experience as an entrepreneur and investor, he has received Canada’s Top 40 Under 40 Award and is a member of the Canadian Advisory Board to the Harvard Business School. He has co-founded and operated multiple businesses from inception, including: SupplierMarket, a supply chain software company backed by Sequoia Capital and sold to Ariba for $925 milion; StorageNow, Canada’s second largest self-storage company prior to being sold to InStorage REIT; and KGS-Alpha Capital Markets, a fixed-income broker dealer with over $5 billion of assets. Previously, he has served as an Adjunct Professor at the University of Toronto, where he taught Economics of Entrepreneurship, a course that was rated by students as the best learning experience for many years. Today, he volunteers his time at NEXT Canada teaching his course to young entrepreneurs.
The wave of anticipation that hits you as you step into Professor Satchu’s Economics of Entrepreneurship class is not one you experience in a traditional classroom. Reza teaches not only economics, but also what one needs to be an entrepreneur: the vision for a better world, the grit to overcome the failures, and the relentless pursuit of opportunity.
Reza kicked off the session with a Harvard Business School case on Beta Golf, a technology incubator in Menlo Park, CA that has successfully built a portfolio of startups in the medical, consumer products, and industrial technology sectors. Guiding the Next 36 and Next AI cohorts through the case, his approach to sparking a discussion was aggressive but effective.
After raising the question of whether it is important for an entrepreneur to be an expert in the industry they break into, he emphasized that “it’s impossible to know everything. If the entrepreneur wasn’t an expert in the industry they were going into, there would never be any ventures created in that industry”.
Not one to adhere to typical lecturing styles, Reza never fails to challenge the cohort with thought-provoking questions: “Who has a different idea? A more creative idea? Who completely disagrees with any of the options presented so far?” If the students fail to utilize the information available to them, he doesn’t hesitate to call them out on it. “Every year, I have to berate you guys for not looking at the numbers. Not looking at the numbers is like going to war without having an army on your back. It’s incredibly disappointing that nobody here looks at it because otherwise it would be incredibly easy to tell that there is no economic value from a certain situation.” It wasn’t that he didn’t believe they were smart enough, but rather that he saw more potential in them to be better.
“Nobody will ever tell you that your idea is the greatest idea ever. You will never have enough information or capital to do the things you want to do. To be an entrepreneur, you need the drive and passion to follow through with what you dream to achieve.”
The trick of the entrepreneur, Reza said, is to whip through the haze — figure out people’s incentives, and see if there’s really something there or not. He outlined three steps to confirm that there is a high chance of breaking into an industry successfully:
- Form your team’s business and technical competencies;
- Think about the industry’s structure and what it takes to win in it, then evaluate if this is an industry where you can actually succeed; and
- Define a potential path that makes sense to bring that product to market, whether it be through a start-up, acquisition, or manufacturing of the product.
He closed his case by reminding the cohort of the opportunities NEXT Canada presents for them to meet leaders who make powerful decisions despite having incomplete information, and introduced guest speaker Jonathan Goodman, CEO of Knight Therapeutics.
The classroom immediately fell into a relaxed ambience as Jonathan dove into his unconventional journey in entrepreneurship. After working in consulting and brand management following the completion of his law degree, Jonathan found himself hungry for a new challenge to feed his ambitions. While he could have accepted a job at his father’s drug company, Pharmascience, he couldn’t see himself working a management role in an already established company. Puzzled by Jonathan’s resistance to work with him, his father challenged him to start his own company. In no time, Jonathan proved himself by successfully capturing 3 venture capitalists for his first company, Paladin Labs Inc. “I came up with an idea that was not rocket science,” he said.
“It’s more important to execute than to have a great idea. It’s about who puts themselves out there and makes it happen. Smart venture capitalists back the management, not the idea.”
After founding Paladin Labs Inc., he sold it to Montreal drug firm Labopharm Inc. and got started with his next venture without even taking that afternoon off to celebrate. “Why do you think I worked right away?” He posed this question to which a student responded: “You like what you do?” He nodded. “That’s it! I love it. I love making a profit and making a difference in the same process. All of you need to figure out what your passion is and how you want to leave the world a better place. Nobody ever sat on their deathbed and said they should have worked harder. They would say they wish they had touched people’s lives and make a difference. This is the only life we get.” Today, Jonathan is actively doing this to his career at the intersection of business and philanthropy.
Jonathan then steered the discussion towards something all entrepreneurs despise but brace themselves for: failure. He emphasized that, as an entrepreneur, you have to embrace failure. A student asked, “You say you have to fail in order to succeed, but how do you make sure you fail successfully?” to which Jonathan responds, “You have to be able to know what you’re passionate about and the impact you’re creating in order to have the confidence to know you’ll come out successful in the end. You don’t have to be smart to make money. I’m not smarter than you, I’m just not scared.”
“All of you can be entrepreneurs,” he assured them. “Just do something that has great ROI, both financially and socially, because vision without financing is a hallucination, and life is too short to be anything but transparent”.
Reza wrapped up the class by asking, “Who here wants to spend 30 minutes with Jon?” But this was more than just a question for the cohort. This was a test of their ability to seize every moment, every chance, and every opportunity to learn. “Jon, was there a student you saw a spark in?”
Mariam Walaa is the Marketing Intern at NEXT Canada. She currently manages the #NEXTFounderChats and Through the Eyes of an Intern campaigns.