Amy Gordinier-Regan, left, and John Risley.
The founder, president and CEO of Clearwater Fine Foods—and chair of Futurpreneur Canada—sits down with managing editor Mark Brown to talk about his approach to mentorship. Risley brought along one of his mentees, Amy Gordinier-Regan, president of organic skin-care company Skinfix.
Canadian Business: You founded a very successful seafood company. But at an age when most Canadians are thinking about retirement, you seem to be getting even more active in the business community, as a mentor and private investor to at least six up-and-coming companies. How do you choose which companies to work with? Is it like Dragons’ Den, or do you take another approach?
John Risley: Dragons’ Den is a great media event, but it’s little else than that, simply because the process of understanding a business opportunity is also a process where you have to understand the individual who is the proponent of that business opportunity. Those are two very distinct evaluation processes. You’ll see lots of great opportunities, but there has to be a fit between the opportunity and the person who is the advocate of the opportunity. Do they understand what it takes? Do they understand the time commitment? Do they understand the host of disappointments they’re going to be faced with? You’d be amazed at the number of times you encounter reasonably good opportunities but people who think they have all the answers and aren’t really good listeners or don’t have any real confidence in themselves or are afraid of the financial consequences of failing. OK, fair enough, but obviously starting a business is not for you.
You take an interesting approach to mentoring: You are part private equity investor, part mentor. How important is it to own stakes in the companies you mentor?
JR: It gives me a reason to go to bed worrying about a problem one of them has got. If I didn’t have an equity stake, would I take it as seriously? No. It’s just not resident in the human condition to do that. Intellectually, you want to make it a success, but at the granular level you want to financially make it a success as well. So their success is my financial success.
Amy Gordinier-Regan: We are being funded and we are being mentored simultaneously. It’s a really powerful model to work with someone who has done it before, maybe just not in our industry. It’s different from talking to traditional private equity investors, who have a lot of industry experience and exposure, versus someone who has been an entrepreneur. Those people have been in the weeds, and you can call and ask them questions that aren’t necessarily related to revenue or EBITDA but are related to, “what should I do in this situation?”
JR: But this is not about what percentage share I own in their businesses; it’s about us having a meaningful relationship such that I know that they will take my advice seriously. They may not accept my advice. They are free to reject my advice, and their rejection or acceptance of my advice is not based on how much equity I own in the business. It’s based on my confidence that they will use their own judgment in terms of coming to the right decision. That’s a big leap of faith, from owning a business where the CEO is going to listen to you to one where the boss said this, so this is what we are going to do.
That’s fair to say, but given your track record and your success, I’d imagine it would be tough to ignore your advice. Amy, has there been a situation where you’ve actually rejected John’s advice?
AGR: More times than not, I’ve taken his advice because of the business experience he brings. But there was a time when we were looking to enter into the U.S. market and we were in conversation with Target, and John questioned whether that was the right move. It’s obviously a big risk to go into the U.S. market, and Target was a national launch, which meant a national marketing campaign, which meant a big spend and a lot of risk. He didn’t necessarily disagree, but he did ask if we should go regionally first; maybe look at 400 stores on the eastern seaboard instead of 1,800 stores nationally. I felt strongly that we needed to go national and we needed to spend the money and make the investment. We had a very spirited dialogue, and we listened to what he was saying. It wasn’t bad advice, but ultimately we came to the mutual decision to go national. So far, so good. If the team has the confidence in their decision, he’ll be respectful and support that decision.
In addition to mentoring six companies directly, you also serve as the chair of Futurpreneur Canada, a non-profit organization that provides financing, mentoring and support tools to aspiring business owners ages 18 to 39. Where does Futurpreneur fit in?
JR: We’ve played with this model of how we help youth entrepreneurship across the country. Most of the kids we help at Futurpreneur don’t have any business experience: They are fresh out of school, and this is their first real job experience. Last year we helped start over 1,000 businesses across the country. About 5% of businesses fail even when they have a good mentor, but as many as 25% fail for those that don’t. The role of a mentor makes an enormous difference in helping those businesses deal with the inevitable problems any emerging business faces. The power and value of mentorship, in my mind, is absolutely proven by the fact that we have helped start 7,000 to 8,000 businesses.
Futurpreneur doesn’t just connect youth with volunteer mentors; it provides some financial support as well….
JR: At Futurpreneur, we want to mature young businesses. A $100,000 [investment] isn’t enough to build a company like Skinfix, but $100,000 is a place to start with an idea. We come in at that kind of level and hopefully can migrate these businesses up to the next stage, where they are going to go off and get some funding and get a different level of mentorship other than the volunteer kind we support.
Where does your passion for mentorship come from?
JR: The power of business mentorship to me resonated with me when I started [selling seafood] back in the ’70s. I was lucky to have someone I could call on to give me some industry advice. I was a guy who flunked out of university and never wanted to work for anybody. I’m not sure those are necessarily good credentials for starting a business, but they were my credentials.
How did you meet your mentor?
JR: This guy, Mac Swim, happened to own a building, and a mutual friend introduced me to him. I was looking for something to do in between failed occupations, if you like. He made the building available to me at no initial cost. He said, “Get your business up and running, and then pay me rent.” So it started at that very junior level. And then, simply because he was a very senior guy in age and experience, he was able to provide me access to business knowledge and experience: You know what happens when the bank turns down your first loan application? Where are you going to find some outside equity? And then how do you deal with the inevitable business problems every business faces in terms of finding good people?
Are you encouraging CEOs and other business leaders like yourself to follow your lead?
JR: I’m not sure I’ve been as direct as you just suggested. On the other hand, I don’t mind doing it…. This whole idea is really fairly new to me. The idea that someone would help sponsor or incubate a bunch of businesses is really only about five or six years old. But if you had 1,000 guys like me doing this across the country, and each one of them had five or six businesses, that’s pretty significant.
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