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What motivated you to become an entrepreneur?
There was a great study that I once read that you can usually tell how successful an entrepreneur will be later in their career by the age in which they first incorporated their first business. My first incorporated business was selling plastic. In fact I received an incorporated company for my 18th birthday from my grandparents. Early on, I watched my father and my grandfather run their businesses - they always talked openly about business and doing deals. I believe we have an entrepreneurial gene. Entrepreneurs can certainly be trained, and they can be improved, but I think they are born. You have it or you don't.
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Do you feel that for you it was inherited?
I do. It's a theme that runs very much through my book. This multi-generational approach to creating wealth and protecting wealth is very much a part of the family experience. No question. I think children live what they learn. I grew up understanding that the rewards from business only came through taking risks.
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How did you get started in this business of writing a book and speaking professionally?
I had something to write, and I said it before in my speeches, that anyone who writes a book is trying to convince themselves of an idea, not necessarily the readers or their audience. And I knew that having sold our business, there was something inside me, something significant about that experience, that needed to be said. I was always frustrated and a little bit perplexed by all the books I read about family businesses. None of them spoke to our experience as a family business. These books always advance ideas on how to perpetuate the business. These books talk about how, a third generation business is better than the second and a second better than a first generation business. That was not our experience, so I had something to write. I felt that families could succeed in business together even if they sold the business. In fact selling a business to a family member or to a third party, in my mind, became the secret to creating successful families and protecting wealth. That book in my mind hadn't been written. That's the book that I wrote. And of course, once you write the book, you find out very quickly that the world doesn't beat a path to your door to buy it, so you really test your conviction and the voice in your book by going out and talking to people. I think people detected that this was something very close to my heart, it's a very passionate viewpoint that I have. There's a lot of suffering in family business that I think is quite unnecessary. I think there are a lot of professionals whose interests are misaligned with business owners. I didn't want that hypocrisy to flourish. I felt compunction to actually address that hypocrisy. In the book one of the characters talks about being an iconoclast and I feel that I am. I've always bristled at the idea that business owners who work so hard are never shown how to exit, and celebrate their exit from the business. So that's the book I wrote, and so one speech lead to two, which lead to four, which lead to sixteen and it has been that kind of book and that kind of speech. No question, it took some courage to give that first talk, and the first talk incidentally was to a group of accountants, and it was a total disaster. I drove out to the parking lot thinking. I will never read another speech again, I will just trust the voice in my head. I wrote the book. I'll just tell my story, and it will unfold as it should. The material will come to me as it should. The next day I had a speaking engagement at the National Club in downtown Toronto, and I did just that, I just had a conversation with the audience, and I've never looked back.
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What is the significance of the name Détente and what is your vision of the future?
The word detente is a french word and it's translation is "easing strained relations," so you'll remember at the height of the Cold War, there were often thaws in the relations between the Americans and the Russians, and that period was called detente. I thought, you know, that's what I want to do. I want to ease strained relations in family businesses. I want to do that by bringing the generations together to build a plan, collaborate on a plan that celebrates first of all the family, and secondly the protection of wealth. That's really why I wrote this story, and picked that name for the company. My vision for the future? Well the vision for the book is really quite simple. I have set the goal of selling a million copies. My goal is to change family businesses, not just in Canada and the United States but all around the world. I believe that the problems facing families and business together are universal. Despite the cultural differences, the issues are always the same, whether it's located in Brazil, Russia or Australia. It's families who come together for all the right reasons, because they trust and love each other, and they know that they can create significant wealth when they work together. Over time those very qualities turn, and the thing that becomes a great wealth creator becomes a great wealth destroyer, and I've always been fascinated at what point that relationship changes, and why and how could we open up a conversation among the family to make sure that the greatest qualitites of the family business endure.
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What do you love about what you do?
I think that the very best part of what I do is receiving an e-mail after a speech. There is nothing more satisfying. When you receive an e-mail, you receive a communication or a phone call, and someone says "I started out listening to your talk and being actually quite angry that your hypothesis was actually wrong, and by the end of it, and as I'd taken a day or so to really think about this thing, I have completely changed my mind, and now I think that you're onto something, and I'd like to talk to you more about this". For me, that is satisfying. It's easy to receive an e-mail from someone who already agrees with you and that's satisfying, but to be able to change someone's thinking and shift it profoundly, particularly on this subject, which is emotionally complex, is deeply satisfying.
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Who has inspired you in getting where you are today? Why?
The most successful book in Canada is the Wealthy Barber, and I think what made that book so great is that David Chilton demonstrated at quite a young age, he was in his mid to late 20's, that you need courage of conviction to differentiate yourself. He broke all the rules. He self-published a book. He wrote it himself. He printed it himself. He did his cover design himself. He believed in his message. Twenty years later after shaking up the establishment by challenging the conventional norms, after selling his book from the trunk of his car he became the all-time best selling author in the history of this country. That spoke very profoundly to me. That took incredible courage. There is no more uncertain and dangerous profession than writing a book. They almost never make money, and unless you're really committed to an idea and unless your idea is different, there really is a financial disaster waiting to happen. The fact that he's written that one book and stuck by it for 20 years and the principles and the ideas and continued to convince people that saving 10% is a good thing tells me volumes about him as an author and entrepreneur. As trite as it sounds, people still aren't saving 10%. He's continued to preach what he believes is a fundamental value to protect people's good financial health. As an author and a self-published author, he's as good as it gets not just in Canada but around the world.
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You mentioned you started in this business about a year ago. What are the most crucial steps you've taken from that point to get to where you are today?
I wrote the book, the book was printed, it was delivered, and for the first month, I sent out e-mails and I mailed out books, and nothing happened. I remember thinking, what have I done? I have just wasted six months, and this whole idea of writing a controversial book with a different message for business owners is just not going to be bought. I'm going to have to sell every copy, and the thought of selling a million copies just seemed completely impossible. So one day I said, I've got to get out. I've got to start small, and there was a small networking group in a small town just north of Toronto called Alliston. It was a small group of 15 people, and I had one minute to give a presentation on who I was. To make a really long story short, there was someone in that audience who suggested that I talk with a lawyer in Barrie. That lawyer introduced me to a guy at an insurance company. I spoke to a small group that turned into three more speeches, turned into nine. It's one of those stories where the message is quite viral. What worked for me was getting out of the office, meeting people, talking, and really being committed to the message. In the early days when I hadn't really perfected the nuances of the message, it was hard, and there was a lot of learning in those early speeches. You can't get to perfection right away. My advice is, you have to get out, you have to meet people, you have to talk, you have to practice, practice, practice, and stay focused and committed to the message.
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What business achievement now or in the past are you most proud of?
Selling our family business, the business that my father started in 1973. The word team is way overworked. We were an unbelievable team. We have very different skill sets. We divided up the selling process into different roles and responsibilities, and we executed it with military precision. It was something to behold. I really used that experience as motivation for the book. I think selling the family business for the vast majority of owners feels like a failure. It wasn't our experience, we sold, I say in the book, we closed a deal and my father ran to the parking lot and it’s the only time I saw him wear running shoes with a suit -- we were thrilled. We were so happy that we had done what we had done, and I just know that he couldn't have done it without me, and there was absolutely no way I could have sold that business without his knowledge and the experience and his negotiating skills. Generationally we are really good at what we do. Starting businesses, running them and selling them, with the collaboration of the family. So selling a business in our family has never felt like failure, and that's the story I had to write. That's the story I had to share; to give permission to business owners to do what's in their heart. They know the right thing to do, and that's to sell their business. If not to their family, then to a third party. The idea of gifting a business to family is where I drive my stake in the ground - it's the biggest mistake a family can make. If you think the idea of saving 10% is trivial, well so is telling millions of business owners that "gifting" their businesses will destroy wealth and relationships - yet no one talks about this stuff.
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Did the buyer ever find out that you guys collaborated to maximize your opportunities?
You don't know what goes on in the minds of your acquirers. At the end of the day, they did get a very good business. What you have to understand is that when you sell and the deal closes, you're no longer the owner, nor can you invest yourself in the course or the fate of that business. Business is about control, you either have it or you don't. A lot of people have asked, what's going on in the business now. I really don't know. It's not that I don't care, it's just beyond my control. Relinquishing control is hard for business owners. I think that's the large reason why they don't sell. Of course, we know that the vast majority of business owners don't sell, and they die at their desk, or voluntarily close their doors and of course the wealth is destroyed, relationships unravel and the family really tears itself apart. So, in talking about the end and the finality of a business, it's like talking about death. No one wants to talk about it, no one wants to go there. Of course life happens, people age, people get sick, people get incapacitated, and it's tragic. Most advisors don't engage at that emotional level. Those who do, really offer profound help to business owners who desperately need it. The book is meant to get families thinking and talking about the finality of their business.
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You mentioned your biggest achievement was selling the business, was that also your biggest challenge?
Running the business as well was a challenge. I took over the business in '99. Like any business it was difficult. Not that what I encountered was any more difficult or complex than what my father faced when he was running it, as president for 25 years. We did have an extraordinary confluence of events; the high Canadian dollar, rising energy costs, China, new competition, consolidation among our suppliers, consolidation among our customers, and all of this started to come all at once. So the way in which I responded to those challenges, again with my father's support was to decide that it was time to sell. I think that is really a great accomplishment. It is very hard for kids to admit that now is the time to sell a business. It's very easy to translate that into, I'm not worthy of running this business. When in fact, it may not have anything to do with the kids at all. The average business lasts 27 years, in this country. That's just about the average length of an individual's career. Most founders who gift their businesses to the kids do it, not because they hate their kids, but they love and trust them, and they want to reward them for their hard work. What the founders don't realize is they're passing businesses that may be at the end of their lifecycle, at the end of their natural life span. Everything, every product, and career, and services, will come to and end. So they’re gifting these businesses to their kids, and they end up failing. Not necessarily because the kids have a lack of commitment skill or knowledge. They're just businesses that are tired, and have run their course. That's what the book's trying to get at, they're trying to get generations to come together and look at and probe the market, for it's value. That's the pinnacle of a successful business. When you crystallize your wealth through a sale. If the kids know they have to buy the business (in other words they are not going to get it as a gift) then they will look at the business in a completely different way. This is my bias.
I am passionate about this. You know I say this, and there are a lot of business owners who hear my message, and they think it's wrong. I understand that perspective, I understand how they -- how in a way, how crass it sounds, saying that every business ought to be for sale needs to be sold. You take out the fun and the passion and spirit, and the enjoyment of the business when you reduce it to a balance sheet. It seems to diminish a founder and a business owner's commitment to their people. And to their philosophy. I understand how blunt my message is, and how it can rub up against that other vision. So I understand that, but on balance, I can tell you that all of those things will never serve the business owner, it will never serve the family. It defies the universal principals and laws of the market place, which have nothing to do with philosophy and people and commitment, and passion and vision. There is, at the end of the day, a supplier of a good and service, and a buyer. All the passion and vision in the world can't help you if customers, consumer demand and preference changes for your product and services. Most business owners are so closely and emotionally connected to the business they can never detach, and of course, we all know the statistic that only 30% of businesses make it to the second generation, 3% make it to the third generation. Who's talking about that. Who's talking about the finality of business. Who's talking about how improbable it is to get past that 27-year average. In my estimation not enough people.
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What were the best and worst career decisions you have had to make?
I finished my Ph.D. I was 26. I had gone over to England to do it. In three years I was able to obtain a doctoral degree. But I was 26 when I graduated and I had an early stint with a lobby group. I loved the work. But then a movie came out, it was called Wall Street. I had this fascination of working downtown in the cut throat business and doing deals. I really thought that I was actually quite special and I thought, I’m a young guy, I have got to go to Bay Street. I do not think the city is big enough for me, but I will give Bay Street a shot. So I applied and got a job very quickly at a large commercial bank and I learned very quickly that I was not so special. In fact, big corporations were not for me. So everything that excited me in a small entrepreneurial setting was slowly killing me in a large, bureaucratic downtown environment, where I lacked flexibility, I lacked the ability to be creative. I couldn't understand why people could not just stop and spin on a dime and make things happen. So it was a great experience, particularly at a young age. It was probably both my best and worst move professionally.
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What's next for you and Détente?
I am not tiring of this. In fact, I feel, on many days, a renewed sense of commitment in the message in the book and the speeches. There is not a speech that I give where I understand that there is family-business dynamics, obviously beyond my personal experience that is both interesting and complex and I love testing those new dynamics against the principles in the book. So that is an interesting exercise, particularly when you're staring at 500 eyeballs. It's testing me intellectually, which is important to me. So, as I mentioned, I want to sell a million copies, I want to change family businesses, not just in North America, but around the world; I want to rewire them so that they probe their finality, which is celebrated as their success. I want to bring families together and celebrate the only true legacy, which is not the perpetuation of a business, it's not even the money from the sale of a business, it is the family and their love of business not their love of "a" business. So I think that is a pretty big objective, a big thing to bite off and I think I am in year-one, entering year-two of at least a five-year commitment to this vision.
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You mentioned you speak sometimes about philanthropy and giving back. Is there a particular way that you or your company gives back to society?
I donate a percentage of my speaking fees to charities that support youth entrepreneurship.
So one of my parts of my message, is that families ought not to gift their business to their kids, that if kids want to run the family business, they need to buy it from their parents. Now, that is a pretty tough message for a kid to hear. But I believe it truly is in their best interest. So helping kids develop or nurture their entrepreneurial spirit, if they've got it in them - they may not have access to capital and maybe not know how to raise the funds. So my personal philanthropy is to gift through entrepreneurial organizations, but also, quite frankly, I am not a particularly expensive speaker, and I have deliberately kept my fees low in order to make myself accessible to industry associations, financial planners, who ever; so that as many business-owners as possible can hear my message. I do not want my speaking fees to get in the way of a business owner who potentially can change the fate of their family and business.
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If you were to start another business, what might it be?
I look into new businesses all the time. I've got an opportunity to invest in a coffee-roasting business, real estate is of interest to me right now. I’m actually quite bullish on Canadian manufacturing, oddly enough. I believe my investment philosophy is quite straight-forward: it's buy low and sell high and I think there is a big swath cut through in the Canadian manufacturing landscape that is really ripe to invest in, not to replicate what they have done for 30 years, but to use their intellectual advantage, to recast them into something even more interesting going forward. I'm looking at all sorts of things. I meet hundreds of business owners on my travels and take great notes.
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You mentioned you were involved with youth entrepreneurship. What advice would you offer any youths or otherwise starting a business?
When you are starting out, you typically do not have as much market knowledge and information and intelligence as you think you do. The temptation is to replicate what the market already has because your thought process is that you deliver to the marketplace what is already being bought, so therefore, it must be of value. The hardest thing for entrepreneurs to manage and to master is the courage to differentiate themselves in their offerings to the marketplace because to offer something completely new is to offer something that no one is currently buying. That is counter-intuitive and it is the biggest and most common problem for entrepreneurs. To muster the courage to develop something and position it so that it is new, but still of value. So this requires insight about what your customers want and need. That's simply it. So whether it is packaging or branding or the way in which you offer your service, whether it's your technology, somehow you have to stand out. It's hard. It's usually more expensive to be different, but it always serves. Back to David Chilton. He was not copying anyone. Something inside of him spoke to the opportunity of writing a different book that was self-published, that he was going to deliver himself to the marketplace, through his speeches. It was unprecedented; it was different. It was the difference, it was the uniqueness of his offering that made him so special and consequently so successful.
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Why have you chosen to align and work closely with the Haunn Group?
I meet lots of people in the insurance business. I meet lots of people in the financial planning business. I think there are very few who have mastered what I talk about, which is this idea that you don’t put the tax plan at the center of your financial plan. You have a conversation with your clients, you understand their dreams and aspirations and their values and you then listen, very carefully. I see very few people in your space that have the capacity to listen and understand and then through a conversation, craft a plan that is appropriate and tax efficient. The cart is way too often put before the horse and it does not work. I think what's really fascinating to me is the success that you've had, and it touches business owners in a unique way. It is an awkward conversation to have with strangers and it requires a certain courage to be different, it requires a significant amount of introspection and self-awareness in order to engage people about their own awareness, it requires a bandwidth to engage clients in an awkward subject, in a subject that is typically avoided and a conversation that is potentially volatile and loaded with sadness and disappointment and frustration. Those conversations open up so many things that are unknown, sometimes to the clients themselves. I think this requires courage and you are unique in Canada. I think this subject of succession planning/exit planning is important given the demographic of aging owners who I know are under-insured, particularly against the size of their business assets. I think if you look at the current investment landscape and what we've gone through in Canada in the last year, you can see that business owners are ready for a different kind of conversation with a different kind of wealth management professional who is taking a life view as opposed to a quarterly view, and I think that's what makes The Haunn Group so truly unique.
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Is there anything else you wanted to add?
I've always enjoyed my chats with you folks. You've been very, very supportive of my book and it's message. Not everyone has been. I'm very appreciative of the opportunity not just the opportunity to speak to your clients, but the way that you're positioning your networks -- I'm very grateful.
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