Cheap loans and tight job prospects create a new crop of entrepreneurs
by Kate Lunau on Wednesday, March 2, 2011 link to article
After graduating from the University of Western Ontario in 2004, long-time friends Joe Facciolo and Skai Dalziel, both from Barrie, Ont., set off to travel the world. By the time they came home, in 2008, the job market had toughened considerably. “I was looking for work in alternative energy, but nothing really materialized,” says Dalziel, 30. Chatting about their travels, and how hard it was to find a good restaurant in a new city, the two friends were seized by a business idea. “We said, we’re young and we don’t have a lot of responsibility,” Dalziel says. “We figured it was a good time to give it a go.”
That fall, they moved to Whistler, B.C., where they knew the tourism market was strong. By November, Whistler Tasting Tours—which provides guided tours that visit some of Whistler’s best restaurants, providing a multi-course dinner in one evening—was born. “One of the biggest challenges was securing ?nancing,” Dalziel says. “Banks weren’t interested in getting involved.” The Canadian Youth Business Foundation (CYBF), a charitable organization that works with entrepreneurs aged 18 to 34, gave them a $15,000 loan, and Whistler Tasting Tours was profitable within its first year; now they’re talking about branching out to other locations. Running a business, “you’re letting go of your social life,” he says. “But it’s really rewarding.”
Facciolo and Dalziel are two of countless twentysomethings who’ve avoided a more traditional career path, launching their own business instead of working for somebody else. Driven by a tight job market, the number of tools available online, and a growing sense of do-it-yourselfism, entrepreneurship is booming among students and recent grads. And with role models like Mark Zuckerberg, the 26-year-old billionaire founder of Facebook, they’re in good company.
Necessity is often the mother of invention. Between 2007 and 2008, the youth unemployment rate (among those aged 15 to 24) increased four times more than the overall unemployment rate, notes Canada’s Vital Signs report. Unsurprisingly, in 2009, the self-employed tended to be older, Statistics Canada figures show. While 17 per cent of salaried workers were 15 to 24, among the self-employed, that number was much lower: three per cent. But the CYBF’s Vivian Prokop has found the self-employed are getting younger. “A few years ago, the median age [of those assisted by the CYBF] was 29,” she says. “Now it’s going down to 26.”
Last year, Emily Hamel Hilton, 28, launched her own business, Style 28 Home Design Ltd., which imports fair-trade toys handmade in Sri Lanka. “My company is just me, and I wear all the hats,” says Hamel Hilton, from Victoria. “Sometimes it’s scary, but there comes a point when you have to say, I’m going to put all my energy toward this.”
Photograph by Rick Collins
For a younger generation more comfortable with new technologies, the Internet has made it easier. “All you need is a laptop, a couple of friends, an idea and some passion,” says Chris Nguyen, 28. Last year, the Ryerson University grad co-founded a site called TeamSave, which uses group buying to offer discounts on a range of products and services; by November, it had partnered with Kijiji (Canada’s number-one classifieds site) to launch Kijiji Daily Deals. Winnipeg native Vincent Cheung, 29, is completing a Ph.D. at the University of Toronto while running his own digital media company, Shape Collage Inc. Since it was launched in 2008, the software, which allows users to arrange their photos in differently shaped collages, “has been downloaded over three million times from people in 200 countries,” says Cheung. “People ask how much it costs, and I say $10 for the domain name, $10 for a server, and it’s sweat equity from then on.”
Even so, “one of the biggest challenges for any young entrepreneur,” says Dalziel, “is being taken seriously.” Charitable organizations like the CYBF and Advancing Canadian Entrepreneurship (ACE), which supports student businesses on campuses across Canada, can help. ACE’s student entrepreneur program runs a competition open to full-time students who also have their own full-time businesses. (Young entrepreneurs explain their businesses before a panel of judges.) Last year, Cheung was named Student Entrepreneur National Champion, and went on to win 2010 Global Graduate Student Entrepreneur of the Year.
Entrepreneur Reza Satchu believes Canadian universities can do more to encourage student entrepreneurship. “We’re churning out incredibly bright students, but not providing them with a bridge to entrepreneurship,” says Satchu, managing partner of Guildwood Capital Management, which has offices in Toronto and New York. Part of the problem, he believes, is that Canadian students aren’t exposed to top-level businesspeople: “When I went to McGill,” where Satchu did his undergraduate degree, he says, “I met no one but academics.”
Satchu and three other partners recently launched the Next 36, a highly competitive program that brings 36 of the most promising undergrads from across the country to participate in an eight-month entrepreneurial boot camp. (The first crop were picked from about 1,300 applicants in December.) They’re rubbing shoulders with some of Canada’s most prominent business leaders, while collaborating with each other to develop and market mobile phone apps. “They get an opportunity to interact with people they wouldn’t have a chance to,” he says. “It’s the opportunity of a lifetime.”
Meanwhile, Ryerson envisions itself as a hub for digital technology innovation in downtown Toronto. Last April, it opened the Digital Media Zone (DMZ), an airy loft space with computers, a wall-length whiteboard, and a scattering of comfy beanbag chairs, which overlooks Yonge-Dundas square. Here, students, staff and alumni who’ve applied for a spot gather to build their own businesses. Since the space opened, 14 companies have been successfully launched.
Starting a business straight out of school might sound risky—or downright terrifying—but for Satchu and others, it’s exactly the right time to do it. “People have this view that decisions you make in your twenties are somewhat irrelevant. I think that is crazy,” he says. “In your twenties, you want to be as uncomfortable as possible. If you’re comfortable, you’re not learning anything.”
Greig Perantinos, a 21-year-old student at the University of Western Ontario’s Richard Ivey School of Business, agrees. At the age of 19, he scraped together all of his savings—less than $5,000—and opened Cool Moose Creamery in his hometown of Tottenham, Ont. “That money was everything I had, and I had no idea whether I’d get it back,” he says, reached over the phone in Singapore, where he’s doing a semester abroad. “But the town needed an ice-cream shop, in my opinion,” says Perantinos, who was named ACE’s 2010 Student Entrepreneur Regional Champion for his work. That first summer, he turned a profit; by the next year, he’d opened a second location, in nearby Alliston.
Perantinos would do it again in a heartbeat. “Your twenties is a relatively low-risk time,” he says. “I would encourage students to see if they like it, while they’re young.”