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Breathing new fire into the Den

Breathing new fire into the Den 

The show’s tenth season will see three new Dragons join returnees Jim Treliving and Michael Wekerle. Among the new arrivals is Michele Romanow, who at 29 years old, is the youngest Dragon in the show’s history. An engineer by trade, Romanow started her very first business, a sustainable coffee shop known as The Tea Room, while studying at Queen’s University in 2006. She later co-founded daily deals website, and mobile savings platform Snapsaves, which was recently acquired by Groupon. The Calgary native was also ranked as one of the 100 Most Powerful women in Canada, and was also the sole Canadian on Forbes magazine’s list of the top 20 Millennials on a Mission.

If Romanow looks familiar, it’s no coincidence. She has prior Den experience, having served as a Dragon for the online spinoff series Next Gen Den, which premiered in February. Next Gen Den features younger entrepreneurs looking for their big break in the world of e-commerce.

Excited to make the jump from the online show to CBC’s primetime lineup, Romanow spoke to IT in Canada about life as a Dragon, what she looks for in an ideal pitch, and what millennials face in today’s workplace.

IT in Canada: How does it feel to be named one of three new Dragons for the upcoming season of Dragons’ Den?
It’s exciting. I think that this show is important because it really does encourage Canadian entrepreneurs. One of the unique things (for me) is that I remember watching Dragons’ Den when I was a student, and the more we share our stories of entrepreneurship and our struggles with it, the more entrepreneurs we get. My excitement is really around encouraging more people to be entrepreneurs, which is the exciting part about being on the panel for me.

ITIC: You got your first taste of Den action on Next Gen Den. How did that prepare you for your role on the TV version?
You get to (learn about) the types of deals you’ll be seeing, what kinds of questions to ask, and how to make quick decisions on the people you’re meeting. It was a good preparatory stage to get to (the TV version).

ITIC: Have any of the past or present Dragons reached out to you to offer any advice?
Yes. I’ve been very lucky to have met quite a few of the previous Dragons, and they’ve offered helpful advice on everything, from how to think about pitches as you see them on the show, to how to follow-up with due diligence, and how to make your deals successful after that.

ITIC: What do you look for in an ideal pitch?
To me, it’s a couple of things. The first thing is that with entrepreneurs, you’re always betting on the jockey and not the horse. The only thing I know for sure is that we never get it right on our first try, and I think it’s the entrepreneurs that have a good idea and a deep enough market and can then iterate a little bit in the space end up being the ones that are the most successful. Most successful businesspeople didn’t quite start out in that form; even my businesses didn’t start out in that form.

The next thing that really matters to me is where you can get high growth by leveraging technology. Whereas some of the other Dragons have expertise in franchising, fashion or beer, my expertise is in getting high growth, building something that gets to 1 million users overnight and growing from there.

ITIC: Having seen several pitches on Next Gen Den, what is the biggest mistake people make in their pitches?
I think the biggest mistake is not being prepared. The reality is that as an entrepreneur, you need to know all the aspects of your business. There’s no such as thing as saying “Oh, a finance person knows those numbers” when you’re asked about your finances.

Ultimately, as the one driving and growing the business, it’s very important that you understand all of the different elements. I think that really distills the difference between strong and weak pitches. If some people had been just a little bit better prepared, they might have had a much better story.

ITIC: You started your first business, The Tea Room, back in 2006. What ignited your entrepreneurial spirit?
It was a result of several different things. I think that entrepreneurship is the fastest way to make a difference in this world, in many respects, because you can play by your own rules. If you don’t like the way something is being done, you should start a company that solves the problem.

My first business was all about trying to create a sustainable business that (produced) zero consumer waste, and what that would look like with a high-margin business like coffee. It was actually the experiment of trying something out and the excitement of how it all came together. We planned it, opened it, and then we started seeing the revenue and figuring out how to grow it. After that, I had caught the bug, and I knew I wanted to do this for a long time.

ITIC: How far have Canadian technology start-ups come over the past few years?
When we started at the end of 2010, the ecosystem was nowhere near where it is today. I think we’re still lagging behind in terms of ways to get capital, so there’s still some work that needs to be done there. But we’re doing a good job building the ecosystem that’s needed for success.

ITIC: What attributes do you look for in a company that you would invest in that would make it successful in the future?
I think the biggest thing is how we get high growth, (along with) positive unit economics. I grew my businesses by making sure that we were breaking even of every transaction, whether it was $10 or $100. I had a pretty deep focus on understanding the unit economics of every business, what the margins on every transaction are, and what the marketing costs on a per-unit basis were to get people there.

The second thing is determining if this is something that has real potential to scale much larger. There are some interesting conversations on the show, and some (great) inventors who have come up with better forms of all sorts of different products. You can either choose to grow boutique by boutique, or by doing a massive crowdfunding campaign to see if the crowd can generate the sales and if they like your product.

ITIC: As a millennial yourself, what do you see are the strengths that millennials bring into the workplace?
The biggest things millennials are bringing right now are the ease of (using) technology that’s never been seen before, and the fearlessness to try anything. The nice part about much of what we do on the Internet is that we do it very quickly. Whether we’re trying a certain marketing technique or (exploring) a certain market, it’s all about the ease in which we do things.

I think that millennials have brought this fearless approach to trying different things, (and) leveraging technology in their business has created a lot of success (for them).

ITIC: What are the potential pitfalls that people should look out for with millennials?
I think that millennials have been very focused on doing things that they love, and in essence, that’s a good thing. However, they are a generation that’s less patient with employers and careers that are not satisfying for a variety of reasons. Where previously you could tell people that they had to climb the ladder, go slowly and put in a certain amount of time, millennials have been willing to say that they don’t want to do that.

I think that reshaping the way we talk about careers is a lot about that, and a lot of it has to do with the crowd. Millennials are more willing to take on all sorts of (tasks), but as the crowd-sharing economy grows, we’re going to see more of that, and employers are going to have to think more about how to engage their workforce.

ITIC: What are you most looking forward to in the Den?
MR: Seeing great new businesses. That is the thing that has excited me the most. As an entrepreneur, I’ve looked at tonnes of faces myself, and I’ve been truly surprised with the amount of Canadian innovation I’ve seen in the Den this year.

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