Some entrepreneurs start businesses out of passion, or a great idea. Not Harley Finkelstein. ”I always had a certain natural gravitation towards entrepreneurship,” he says, but maintains his introduction to entrepreneurship was a little less glamourous. “It was less about passion and more about necessity.” He was born in Montreal but grew up in Florida in the wealthy community of Boca Raton, and moved back to Montreal to attend McGill University after graduating high school. “I lived a bit of a sheltered life, and didn’t really know the value of a dollar, at least the way I do now,” he says. A few months into school his dad lost his business. “Effectively, we were broke,” he says. “I had two options. I either had to move back down to South Florida to live with my parents or stay in Montreal and support myself.” He tried part-time jobs but he didn’t want to interrupt his studies, and after speaking with a friend on student council who told him how much the school spent on promotional t-shirts every year Finkelstein got the idea to start his own t-shirt company.

He scraped together enough money to buy a screen printing machine, and began printing t-shirts out of a small office that he was able to use for free. He managed to get local schools including McGill on board within the first few months, and by the end of 2002 he had five customers. Between 2002 and 2005 he continued to build the business, and the company grew to about 50 clients. He hired some staff that allowed him to spend less time in the office. “By the time I finished my undergrad the company was pretty much self-sustaining,” he says. He went on to law school in Ottawa with the idea that he would still run the company but with no day-to-day responsibilities. “Today my responsibilities are absolutely minimum,” he says, and while the company isn’t growing as much as it was in the early days it’s still operational. His company’s t-shirts are still worn by corporate clients including Beaver Tails, but 90-95% of the business is focused on selling to schools. Finkelstein says there were (and still are) advantages to working with schools. “The people making the decisions to purchase shirts weren’t necessarily the ones paying the bills,” he says. Also he was pitching people his age who understood where he was coming from. And he didn’t like how fickle corporate clients could be – whereas he knew schools would need an order every year, corporate clients would order from him one year and disappear the next. “Our sweet spot is really universities.”

His lessons during that first business really stemmed from the reason he started it. “Necessity is a major motivation,” he says. “That in itself was a huge driving force, and a huge catalyst for my success.” He also says he learned the importance of an entrepreneur being an extension of their brand. He says that clients trusted him because they could reach him at all hours of the day, and he was the ones doing the sales pitches. “It was really ‘well it’s Harley’s company, he’ll go above and beyond for us, we have his cell phone, if it’s Saturday night and we need shirts for Monday we can call him and we know that he’ll be in the office Monday morning printing t-shirts for us,’” he says.

Finkelstein’s latest business venture is also related to retail, but with an online twist. He joined Ottawa-based startup Shopify earlier this year as the director of business development, after striking up a friendship with the company’s founder Tobias Lütke at a local founders meetup. Lutke founded Shopify because it was too difficult to get an online store up and running – now the company is an online-retail platform bringing advanced commerce functionality to businesses of all sizes. The company currently has customers in over 60 countries, and processes more than $100 million in revenue for its over 10,00 clients, including Tesla Motors and General Electric. But while they may have big-name clients, the company is also focused on helping smaller retailers set up an online storefront quickly and easily.

Shopify also recently closed a $7 million round of Series A funding from Bessemer Venture Partners, FirstMark Capital and Felicis Ventures. Finkelstein says the company will use the money to expand internationally and focus on becoming a better-run company. “I know that’s vague, but the reason is that we really didn’t need the money,” he says. “The investment is more strategic.” He says the people who invested in the company are thought-leaders who can lend their expertise to the company going forward.

Finkelstein can point to a couple specific reasons why Shopify is so successful. “The reason we’re fairly successful is because everyone here loves what they do,” he says. “I am obsessed with this company.” He says in his opinion the idea of work/life balance is strange, because if you love what you’re doing it’s all just ‘life.’ “Your business is just part of that. If you can find something you love doing and do it every day you’ll be successful.” He says passion is really important at Shopify, and that while you can teach business acumen and technology, passion is a prerequisite as a startup. “I don’t wish anyone had to go through an incident like I went through when everything got turned upside down in my world,” he says. “But I have to say that experiences like that do make you stronger, it’s motivating. In one respect it was the worst thing that ever happened to me, but in hindsight it was the best thing that ever happened to me, and I wouldn’t be anywhere near where I am today without those experiences.”

This was a guest post by Erin Bury and was published today on the Sprouter Blog. Toronto-based Sprouter facilitates networking and collaboration between entrepreneurs globally.

The following is a guest post written by Erin Bury. It originally appeared as a column in Women’s Post and was published earlier today on her personal blog.

The startup I work for is a small team. But what we might lack in manpower (there are a whopping four of us) we make up for in ideas. We have an ideas wall where we post upcoming features, bug fixes and what we call “crazy ideas” – the things we would do if we had unlimited time and money.

Since I’m the whole marketing/communications/social media/events/PR team (my title barely fits on my business card) it’s been necessary to take advantage of outside sources of help over the past two years. My favourite place to get help is from interns. We’ve had several amazing interns over the past two years, including Jenna Stothers (who is now working at High Road Communications) and Cristina Graci, who is now an entrepreneur herself.

I do a lot of speaking engagements with new entrepreneurs, and the question I get asked most often (aside from ‘what the heck is a Community Manager’) is how do I find a good intern? So I thought I’d share some insight from my experiences, and hopefully lead you to the next great addition to your team. Here are a few things to consider when hiring an intern for your startup:

1. Find someone who is interested in your industry. This might seem like a no-brainer, but I don’t think many people actually follow this advice. When people look for an intern they look for a skill set – a developer, a marketing person, or someone who is adept at social media. But they don’t consider whether that person is actually interested in their business. Whether you own a bakery or have an online startup you need to find someone who’s interested in your industry – you’re passionate about your business, and you need someone who’s going to share at least a little bit of that passion.

2. Don’t get them to bring you coffee. When I think of interns in 2010 I don’t think of someone who grabs coffee for you and sorts out your travel schedule. Interns today don’t just want to do admin tasks, although they certainly have a place in internships, just like in any other startup position. When you create the job posting cater it to the type of experience the person will get. You’re not just offering them a position, you’re allowing them to learn from your expertise.  Make sure you are balancing their admin tasks with projects that will expand their knowledge and increase their area of learning, and sit down with them weekly to answer questions and share your experiences.

3. Know where to look. The biggest problem with finding in intern is knowing where to post your opportunity. While sending out the job description to your contacts and posting it on your online properties is a start, I’ve found that approaching schools is a great way to find talent. I’m partial to Humber College’s public relations program – the students are eager to learn about PR, and take social media courses as part of the curriculum so they’re quite online-savvy. Regardless of the area of expertise you’re looking for, there is a program out there that is filling internships for students. And the great thing about school internships is that students get credit for them – so you know they’re going to work hard and not brush aside the position if another opportunity comes up. Get in touch with academic institutions and find out how to post your opportunity, they’re usually more than happy to help.

4. Make sure to set out parameters. I know that as a startup you have limited resources, and it won’t always be possible to pay an intern a salary. While I’ve definitely had success with unpaid interns, I find it’s most effective to at least offer a weekly stipend. It makes your position more attractive (especially if you’re posting at a school where you’re competing with established companies), and it helps set out a routine. When you have a paid intern they are expected to be in the office the hours you set out, whereas with unpaid interns they often have part-time jobs or other commitments that they take on to pay the bills.

5. Don’t forget your responsibility in the equation. While an intern’s responsibility is to help lighten your workload and contribute to the daily grind at your startup, you also have a responsibility. Your responsibility is to ensure that your intern walks away with new and improved skills, a better understanding of what it’s like to work at a startup, and great additions to their resume. I also think it’s great if you can help them find a job after they leave you, especially if they’re unpaid. The least you can do for them is send out a few e-mails and check for opportunities.

Hopefully that helps your intern search – I’ll be welcoming our new full-time intern Emily Moorhouse in January, and I can’t wait to teach her all about startup life.

Photo: Women’s Post

There are only a handful of investors who are so well-known that they can draw a crowd of 500. Fred Wilson is one of those investors. As a VC and principal of Union Square Ventures, Fred has invested in Web 2.0 success stories including Disqus and Etsy. He’s also a prominent blogger, sharing his thoughts on entrepreneurship and the investment landscape on his A VC blog. Yesterday Fred made the trip from New York City to Toronto to present to a theatre packed full of entrepreneurs at Democamp. The topic of his talk was Ten Golden Principles for Building Successful Web Apps – an appropriate subject for the audience of web startups and tech entrepreneurs.

Here’s a recap of Fred’s must-haves for building successful web apps:

1. Speed - Your app must be fast.

2. Instant utility – You can’t have people do a ton of work before they can use your app.

3. Voice – Fred says software is becoming media because the experience we have with it feels like the experience we have with newspapers, magazines, etc. He says media has always had a voice, and your app needs a voice as well. He says the best voice you can give it is your own voice, to make it feel like you adding that “there’s a reason that Craigslist is Craig.”

4. Less is more - He says that instead of adding features, you should take them out. If you have problems simplify them. Let the users find the features, don’t throw them all in people’s faces.

5. Programmable – Build a platform that other people can enhance, and make sure to open your API. This turns developers into evangelists for your application.

6. Make it personal – You are part of the web app, but everyone can be part of the web app. This means not just providing profiles, but making them engaging and fun and happy. Make sure that everybody’s version of your web service is unique.

7. RESTful – Fred says your URLs are central to the REST (Representational State Transfer) approach. He says every resource on your site needs to have a URL and ones that people can understand.

8. Discoverable - Pay attention to SEO, because Google is still important. Also work on SEM if you can afford it. Search drives a lot of traffic, but he also advises people to get social. Make your app social, make it so that people can share their experiences out into the social web. Build things in your app that makes it more discoverable.

9. Clean – It doesn’t have to be white, it doesn’t have to be sparse, but it has to be clean. He says it’s hard to describe what a clean website looks like – it doesn’t try to do too much, it’s easy on the eye, the colours aren’t garish, you don't have a panic attack when you see it.

10. Playful - Fred illustrated this point by showing a slide of where the idea for Twitter was conceived, on a slide in a park. He says game dynamics and play are so important on the web today, and a good example of that is Foursquare.

After Fred’s presentation he took questions from the audience on everything from the biggest trend he sees online (globalization) to his advice for finding startup employees. He even stuck around to see the startup demos, including Startup Weekend Toronto winner Task Ave. – he said their insight around location-based alerting was fantastic and added that he thinks they’re really on to something. High praise from someone who’s been investing in startups since 1986. Wilson promised he would be back to Toronto, and compared the city’s startup scene to the one he’s immersed in in NYC. For entrepreneurs who didn’t get to chat with Fred, he said he’s available via e-mail – or the next time he makes the trip north.

Photo courtesy goldmoneymnews on Flickr.

This was a guest post from Erin Bury and was published earlier today on the Sprouter Blog.Toronto-based Sprouter facilitates networking and collaboration between entrepreneurs globally.

Michael Garrity learned firsthand that when you’re an entrepreneur everything takes longer than you think it will. The road to launch for his company, CommunityLend, was paved with roadblocks and obstacles – most importantly getting their Peer to Peer Lending Marketplace properly regulated. “That whole regulatory process took us three times longer than we had originally estimated and cost us four times more than we had budgeted,” he says. “It was humbling, to say the least.” While the company was founded in 2007 the regulatory hurdles delayed launch until this year. Garrity says getting to launch took a tremendous amount of collective focus, collective personal sacrifice and external support from their shareholders, Board and families. “I can tell you that it tested our organizational mettle early and it gave us an operational discipline which will likely make us a better company for our customers.”

After overcoming the hurdles CommunityLend launched on January 11, 2010, and is now live in Ontario and Quebec. The company allows people to borrow money directly from private investors and institutions. The goal is to get personal loans into the hands of Canadians looking for better rates than the banks are offering. CommunityLend is the only service of its kind in Canada, but similar companies like Prosper and Zopa exist in the United States and the United Kingdom.

Along with regulatory issues a big challenge that Garrity faced was fundraising, and after raising several rounds of funding he has a lot of insight on the pitching process. “Most investors are looking for a company that is uniquely positioned to grow quickly and profitably into a large inefficient market with a capable and committed management team,” he says, adding that “if you break your pitch deck down into that sentence you are likely covering the key basic qualities.” Though he says getting an investor to a positive decision on writing a cheque and signing your subscription agreement is a hard and often quite random task. He says investors often want to invest in areas of professional interest to them personally, regardless of how well you know your own market. He stresses the importance of catching an investor when they are in an investment “mood.” “This may sound self-evident but if markets are tanking, angels are likely feeling nervous and not keen to make any risky investments,” he says. “Similarly if a VC has just come out of a brutal LP meeting where redemptions were discussed, they’ll likely be gun shy on any early stage investments which are going to take longer to get to a liquidity event.” The only way around those types of complexities is to really do your homework on likely investors and to pitch a lot of them in multiple geographies.

He advises finding investors who understand your space and who have invested in companies at your stage of development before. In terms of  when to raise, how much to raise and from whom Garrity says the bottom line is if you need money now to make your business work then all the advice out there is a luxury you can’t afford. “The time is ‘now’ and the amount is essentially ‘whatever you can get’ and the who is from ‘whomever is ready to write a cheque.’ You can get picky when you are Facebook and right now you aren’t Facebook.” He says to constantly be raising investment interest around your company while you continue to work to deliver on the promise of your pitch.

Garrity’s first vision of CommunityLend is very different from what it is now. “We started out with the sincere belief that we could use online marketing to efficiently and  rapidly originate good quality borrowers looking for a better priced loan through a better online process and, that we could attract significant individual lender interest in the high return possibility associated with consumer lending,” he says. “We were wrong.” While individual borrowers and lenders are still encouraged to visit their site directly it’s no longer the sole focus. They changed their focus quickly to partnering with third party borrower origination channels which can deliver them a steady stream of good quality borrower applicants cost-effectively, and to partnering with institutional capital players interested in the proceeds of consumer lending assets. They’re still in the process of finishing all of the requisite technical and operational changes to fully support the pivot but are already seeing positive results.

The road has been long and winding, and Garrity can see three clear next steps for the business. The company is closing another capital raise for the company to support growth plans. “It was a slog, like all financings are these days in Canada, but we’ve been lucky in attracting some terrific investors.” They’re also introducing new products including a 5 year loan product which will help lower monthly payments for borrowers. They’ll also introduce a new product to support auto lending. Finally, they’re looking to add to their team (specifically developers and loan officers). And while they may not be Facebook right now, watch out – with Garrity’s determination and passion you can’t help but wonder if he’ll be a household name one day soon.

This was a guest post from Erin Bury and was published earlier today on the Sprouter Blog.Toronto-based Sprouter facilitates networking and collaboration between entrepreneurs globally.

The following is a guest post from Erin Bury and was published earlier today on the Sprouter Blog.Toronto-based Sprouter facilitates networking and collaboration between entrepreneurs globally. _______________________________________________________________________________________

Ben Yoskovitz is an entrepreneur who is familiar with the acquisition process. He started his first company, a software development service business, in 1996 between his 2nd and 3rd years in university. “We focused most of our energy on providing U.S.-based clients with software and Web development services,” he says. “That company was acquired and then morphed into a product company in 2000.”

He left that company in 2006 to work on a new venture which was a collaboration between Ben and fellow Montreal-based entrepreneurs Fred Ngo and Austin Hill. They were discussing the challenges of finding good people and startup opportunities in Canada. “I had similar frustrations with how companies were recruiting – especially with the success of social technologies in other areas of business and our personal lives.” So they started Standout Jobs, a social recruiting company. Originally their focus was on video since it’s a great medium for storytelling. “In many ways it beats text,” Ben says. “And we found that videos were a great way for companies to tell their stories – and attract talent.” They scaled their vision and plans to look at other social technologies including blogging and social networks, and found ways for companies to leverage those technologies and the importance of storytelling for recruitment.

Recruitment was one of many challenges the team faced while building the business. “We made a lot of noise in the local market (which was helpful), and leveraged our own networks to try and find talent,” he says. “We even produced our own recruitment video.” Looking back, he says he wishes he had a better understanding specifically of the HR market. “It’s a tough nut to crack,” he says. “We made some assumptions early on about our ability to break into that market that were simply wrong, and it took a lot of time to adjust.”