How Canada Goose won the E&Y Entrepreneur of the Year Award

Keeping manufacturing in Canada is possible. Canada Goose has their factory creating the quality jackets that fill up Harry Rosen at the beginning of Fall but is it in China? No.
Canada Goose is committed to producing in Canada and were told their costs would not be possible to cover competing against Made in Japan and China products.
Dani Reiss decided he would take the challenge that his paretns set with their appreciation of quality they had known in Europe. Canadian quality would be as wonderful.
Canada Goose has worked to attract the high fashion people, but also the outdoor buffs and above all, the working guys out in the cold. Dani Reiss took a risk and then worked to get the jackets on film sets over the winter and on TV Olympics. He also took up the cause of the polar bear and other innovative projects that project the Canada Goose brand.
I see the jackets on Bay Street and they always look smart. Well done, Dani, for winning the Ernst & Young Entrepreneur of the Year award. It was a long road with icy patches! You deserve it for building a genuine Canadian business. Nice guys finish first.

Why business should investigate R D tax credits

To get companies growing, research and development is required and Canada has a strong R&D credit although SREDS has a very low uptake still. Here are some other countries and their incentives from The Atlantic.

Innovation, along with entrepreneurship, involves a lengthy process of research and development, one that inevitably entails risk for firms and industries. There are three main categories of risk: regulatory, innovation and monetary. My research and others' shows that lucrative reward systems and regulatory structures directly influence the level of R&D activities. Tax credits are one way to effectively reduce the risks inherent in conducting R&D.

Some readers will be surprised to learn that France has the most generous tax incentives for R&D among the OECD countries. The government is continually expanding the scope of the tax credit, and the amount of funding available nearly doubled between 2006 and 2008. A company can receive up to 50 percent of its R&D costs the first year; 40 percent is covered the second and 30 percent in the third. There is a mechanism that allows funding to be "fast-tracked" for small- and medium-size enterprises, and in most cases, the waiting period for approval is only three months. Lastly, the tax credit is either deducted from the annual corporate tax or reimbursed after three years, providing greater flexibility. The tax subsidy rate per $1 of R&D in France averages 43 cents, while in the U.S. it is a paltry 7 cents.

Finland serves as another example of using policy solutions to transform its economy from resource-based to knowledge-based through consistently increasing gross expenditure on R&D. Simultaneously it has also pursued international scientific collaboration, university/industry partnerships, and enhanced venture capital availability. On a per capita basis, Finland now claims double the OECD average of patent output.

Why our government does need to help business

Innovation is something the government is trying to jump start. It begins at school and with the Canadian education system, although it is not too shabby, there are human capital investments that could be made. Our teachers' union is very powerful so these are probably a non-starter and since the majority of teachers are now female and so are university graduates, merit is a touchy subject.
Equity of input and outcomes is over riding merit and reward for effort.
Singapore paid attention to human capital and focused on merit. I believe their per capita GDP has now passed Canada.
Is the social cost of rewarding young people based on merit worth it?
 Here is The Atlantic:

 In 1960 Singapore had a per capita GDP of $2,300, roughly equal to Jamaica's. Singapore focused on becoming a financial services and research hub, while Jamaica concentrated on tourism. Fifty years later Singapore's per capita GDP was $43,100, while Jamaica's is slightly above $5,000.

The difference was investment in human capital. Singapore's education system is heavily subsidized by its Ministry of Education to ensure a meritocratic principle that identifies and nurtures bright young students for future leadership positions. In the '60s, Singapore attracted foreign capital by targeting labor-intensive manufacturing to create jobs. As its workforce became better educated through its investment strategies in the '70s, it began attracting higher value-added industries such as petrochemicals, electronics and data storage. Today, Singapore is a leader in a host of knowledge-based industries, including the biomedical sciences. In just the past decade, the number of scientists has leapt from 14,500 to 26,600, a gain of more than 80 percent. In the most recent Global Competitiveness Report put out by the World Economic Forum, Singapore ranked 1st in the quality of its math and science education.

How does a VC pitch get taken seriously?

Pitching your business is critical whether you are on BNN The Pitch or at the holiday cocktail party.
Here is a terrific, snappy TV Show with two business owners asking for $5 million equity investment into their business. How do they get taken seriously?
Watch the show here:
http://watch.bnn.ca/the-pitch/#clip573383

Is equality the best big goal for a society

Equality or equal opportunity for all? Equality in a society is a major goal for many - I get emails and Facebooked about this topic all the time.
So is equality for all the best goal? What are the long term consequences? I know when I see my tax bill, I often want to put my resume on Monster and get a union or government job.
I am not sure if this is a true story, but it resonates with me - a business owner, a job creator and a tax payer.

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

It could not be any simpler than that. (Please pass this on)

Remember, there IS a test coming up. The 2012 elections.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Next 36 Ventures tonight at MaRS and on BNN The Pitch

The energy in the room will be at nuclear fusion level tonight. Why? Imagine 36 of the young, newly selected participants in an entrepreneur incubator in one room with Canada's leading entrepreneur community and now you get the idea. It is a lethal combination of excitement.

I am meeting the Next 36 Ventures Finalists at MaRS and Claudia Hepbourn has done an incredible job of developing emerging entrepreneurs and making young people build their careers and business ideas.

Several of the better concepts made it onto the business owner show where they pitch for VC and private equity money. 

See "Whadyathink?" and  "Playfit Mobile" pitch to Jacoline Loewen, Loewen & Partners, private equity expert on BNN's The Pitch.

Whadyathink - http://vod.bnn.ca/Video/507127

Playfit Mobile - http://vod.bnn.ca/Video/507128

The Decision - http://vod.bnn.ca/Video/507129

or view at

http://vod.bnn.ca/Video/507127

Birch Box creates a new channel for make up and cosmetics

Cosmetic brands are the female equivalent of game apps. As a founder, if the brand catches on, the pay off can be great.
I was talking with a cosmetics business owner and a private equity fund from San Francisco and The Shopping Channel is one high risk and expensive way to get a brand boosted but there is an exciting new company called Birch Box that has created an entirely new channel to reach make up hungry females who can never have enough lipsticks or eye shadows.

Bayley Barna and Katia Beauchamp got their investor partners on board and learned that there is a dangerous side of shipping cosmetics.

Birchbox is the startup that VCs can't stop talking about and that new startups are trying to emulate.

The company, which sends its customers a box of beauty products samples every month, launched just over a year ago and it has been growing exponentially with more than 45,000 users and various upscale cosmetic partners such as Khiels, Carol's Daughter and Kerastase.

Read more: http://www.businessinsider.com/what-is-birchbox-2011-11#ixzz1ej6fTHG7

Private Equity wants you to have more than one client

A revolution, rather than an evolution, is happening in the natural gas and oil markets in North America and the world. The revolution results from the impact of fracking and horizontal drilling, and the resulting discovery and development of huge, unconventional oil and gas reserves around the world in shale formations.

The US has potentially two Trillion barrels of unconventional oil reserves in shale and other formations, which can be developed, making it the world’s largest oil producer.

This is followed by China at 350 Billion barrels and Israel with 250 billion barrels. These are all as compared to  Saudi Arabia’s current 260 billion barrels of conventional oil. For Canada, it is 179 Billion Barrels.

The recent US and Canada diplomatic slap in the face over the pipeline between the two countries, as reported by MacLean’s, is around the politics of environmentalists, but also rumored to be the large US oil and coal lobby groups pressuring the US government not to allow any competitors into the US market. Canada would be a big threat to these companies. As the Canadian government said, “The pipeline is a no brainer.” Not to the US government though.

Patrick Daniel, CEO Enbridge,  says that most of the transportation is not through a pipeline anyway, but he supports that the pipeline is a no brainer and the delay is a serious issue. Instead, Canada will now be pushing up the Gateway project to do a pipeline to Kitimat, not Prince Rupert. This pipeline will then transport energy for Asia and our geographic position puts Canada geographically closer to the Asian markets than the Middle East, a huge competitive advantage. Daniel said that environmentalists like to "mob the mike" and that other voices need to also make themselves heard. He said that technology companies say they are revolutionizing medicine but he believes energy already did that by making sure the patient got to the doctor. When you look at that reasoning, we do take for granted our transportation and lighting.

Having one client which is Enbridge's current client situation, the USA, would not be liked by a private equity investor. Enbridge and Canada are now being forced by the USA's politicking to look for their next big client. Asia is the next no brainer, but the Vancouver Port is too full so Kitimat needs to be developed. Enbridge says there will be environmental rules in place to ensure only top quality ships are allowed to be accepted. 
Providing energy to Asia is a race.

A recent article in the National Post titled “Democratic Jackpot” highlights the new sources of energy and how it will be an incredible game changer . Most of the finds are in democratic countries – interesting. They will also be coming online within 10 years.

 The game-changer is "unconventional fossil fuels," much of it trapped in shale - rock that often contains oil or gas. In the case of gas, the U.S. is developing so much, so fast in so many places that the domestic price for natural gas has more than halved. Whereas five years ago the U.S. planned to build major terminuses to import gas, it is now becoming a major gas exporter. America's Marcellus Shale formation alone - a natural gas reservoir that lies more than a mile underground beneath Pennsylvania, New York, West Virginia and Ohio - has enough gas to supply the Eastern U.S. for decades.

Europe, though a novice in the unconventional energy game, has already discovered vast amounts. The U.K., in the first shale gas field it drilled earlier this year, discovered a gas deposit close to half the size of Marcellus, enough to fuel the entire British economy for decades. France and Poland have comparable finds; Germany and the Netherlands smaller ones. Europe has also discovered immense amounts of natural gas in the Mediterranean, which Cyprus, Greece and Israel have begun to develop for delivery to the European mainland. Among the Western democracies, Australia, too, has massive amounts of exportable natural gas, as does Canada, Brazil and others in the Americas. As does China and other Asian countries. All told, the International Energy Agency estimates a world store of natural gas sufficient to last 250 years.

A similar tale of unconventional riches is unfolding in oil, where the U.S. has in excess of two trillion barrels, the world's largest store. China comes next, with some 350 billion barrels, followed by Israel's 250 billion barrels, an amount close to Saudi Arabia's 260 billion barrels of conventional oil. Thirty-five other countries, including 15 in Europe, are believed to have lesser amounts of unconventional oil, but they may not remain lesser for long - with each new assessment in recent years, the estimates have climbed with new discoveries.

The cost of developing these unconventional resources, meanwhile, continues to drop. In the case of Israel, which has developed an unusually clean and efficient drilling technology, oil is expected to flow at a cost of US$35 to US$40 per barrel, or less than half today's world oil price of US$90 a barrel.

The diversified democracies of the world - the U.S. and European countries among others - will profit big time from the world's endowment of unconventional oil and gas, partly because many of them will become energy exporters instead of importers and mainly because low energy prices will spur their advanced economies. Not so for today's undiversified, energy-export dependent countries.

Maxime Bernier delights the business owners at the Globe and Mail Small Business Summit

Maxime Bernier blew me away with the government's positive approach to business. He spoke at the Globe and Mail Small Business Summit about how everyone should be grateful to business owners and how hard it is to get past the politics of envy of success.
Never thought I would hear that in Canada.
There is more and I recommend that every business owner sign up on this new website. It is wonderfully easy to use and very practical.

The Honourable Maxime Bernier, Minister of State (Small Business and Tourism), today announced that BizPaL is becoming a permanent service available to small and medium-sized enterprise (SME) owners.

“The Government of Canada supports SMEs by putting in place initiatives that enable them and entrepreneurs to continue to grow and create jobs,” said Minister of State Bernier. “BizPaL is a concrete example of an initiative designed to cut through the red tape that small business owners encounter.”

BizPaL is an innovative and cost-effective one-stop online service that provides simplified access to information on permits and licences that entrepreneurs and small business owners need to establish and run their businesses.

This unique partnership among federal, provincial, territorial and municipal governments is designed to cut through paperwork burden and red tape. The $3 million in annual funding provided in Budget 2011, the Next Phase of Canada’s Economic Action Plan, will allow the program to provide even greater value to small businesses through continued expansion and service improvements.

In the coming months, BizPaL will become available to more Canadians as additional municipalities join the program. To date, 11 provinces and territories are participating in BizPaL, with more than 600 municipalities offering the service, making it available to over 57 percent of the Canadian population.

Visit the BizPaL website (www.bizpal.ca) for additional information or to access the websites of participating partners.

We are the 99% - Occupy spreads

Surprisingly, this anti-capitalist protester is not getting a lot of press...