Legendary billionaire businessman Sir Terence Matthews was at the Banff Venture Forum Friday night, and spoke about enterprise creation in the flat earth economy. First, he broke down the costs: really good engineers in India: $7k/year. In China: $6k/year. In Canada: $70k/year. Telecommunications links: 155 megabit cross-ocean link: used to be $2 million/month. Now: $10k/month. Office space in London: 200 GBP/square foot. Puna, India: $5/square foot. Get the picture?
Sir Terry's message was simple. You can't ignore the fact that we exist in a world economy these days. "It's not the richest or fittest that survive, it's those that adapt. You have to adapt to the competition from China and India". He continues to start new companies at a scorching pace every year, and he starts them right here in Canada. His formula:
- Use a Mothership. For Terry, it's Mitel. Work with the motherships and develop solutions / painkillers they can sell. Working with a mothership gets you credibility and revenues.
- Hire Smart University Grads. Terry interviews the top 20 grads from Waterloo every year, and hires 4 - 5 of them. Canadian university graduates are amongst the best in the world, but you have to structure the deal a little differently to make it work. The offer: $25k/year, along with another $50k in equity. Government can't tax it, and there's no spending cash for social activities.
- Communicate & Motivate. Terry insists on quarterly reports from his managers, and these reports are sent to every employee. In addition, all his companies hold quarterly all-employee meetings, so that employees understand the past achievements and future direction of the company. Employees deserve to be treated like owners. Give your employees confidence that management knows what it is doing, and they will work harder than ever.
- Passion: Motivated people can do anything.
- Have fun: work isn't just about making money, it's also about excitement, winning, and working with people you like. (amen!)
The result? Every one of his companies ship products and have revenues within the first year. Simply amazing, by any standard.
Overall, it was a very lively speech which stressed the importance of a smart, motivated team.
Later in the night, I bumped into Sir Terence in the hallways of the Banff Springs, and thanked him for his presentation. True to form, he responded energetically, requested that we exchange business cards, and encouraged me to move quickly on my next venture. Now I know why people work for him for $25k/year! I know I would if he sent an offer ever came my way . . .