In October of last year I wrote a Blog post about what my next venture had to have in order for it to garner my interest. Believing strongly in attracting what I desire has always been a cornerstone of my personal philosophy. So now that I have embarked on my new venture, www.the-interlock.com : the bike lock that hides in your seat post; let’s see how it matches up with what I was looking to attract.
So my Top 3 desires, in order of importance, for the next business were:
1. Buy-Out Target
I wanted a business that should be a buy-out target within a 10 year time frame. This means that I am starting with an Exit strategy already in place and will be able to shape and grow the business in order to maximize the value of that liquidity event when it occurs.
RESULT: The InterLock product is not only patented but is the 1st to market in establishing a defacto new standard for all commuter and transportation bicycles in the world to be manufactured with a lock already built into the bike and not purchased as an after-market product. This also means that it is a disruptive technology in the lock business – as lock manufacturers who rely on after-market sales will see those sales deteriorate. Therefore, it positions the InterLock business as a prime buyout target from a major lock or bicycle manufacturer – and probably sooner than in 10 years. With this in mind I can now develop and document all aspects of the business to make it most appealing to a potential acquisitor and then be able to present everything wrapped up with a nice bow!!!
2. Lifestyle Business
That the business accommodates itself as a “lifestyle business”. This means it has to be flexible enough to balance with my personal life, home life, hobbies and interests.
As this business will rely heavily on manufacturing in Taiwan and selling in Europe and Asia the work flow will be almost 100% contracted out and occurring on a 24 hour basis due to time zones. This then sets up the perfect opportunity to develop cloud based solutions to allow all stakeholders in the business to be able to contribute, find and develop sales and delivery information at the time that is most appropriate for them, and similarly for myself and my business partner (Adrian Janzen – as seen in the photo below using the InterLock). By establishing this as a virtual business we are then able to balance all other aspects of our lives in concert with growing the business.
3. Utilize Core Strengths
That I can maximize the use of my core strengths in establishing and growing the business. These strengths include leadership, organizational structuring, finance and having the ability to figure out solutions when others can’t.
I have had the privilege of mentoring my current business partner for the eight months prior to the formalization of the InterLock business (and end of our mentoring relationship). This has allowed me to see the strengths and weaknesses in him and with that knowledge feel comfortable that I am strong where he is weak and vice-versa, thus hopefully allowing our corporate blind spots to be minimized. As we just incorporated the business last week this has also allowed me to properly review the best possible structure to utilize for our operations and start the company off in the right direction. One of the benefits of my over 25 years of business experience is the ability to draw upon experiences and knowledge and apply them when appropriate. A great example of this is back in my first business in the late 1980’s and early 1990’s I was involved in a number of investment opportunities that were able to take advantage of offshore banking and corporate structuring. As I needed to do due diligence on the opportunities, I became familiar with the features and benefits of offshore banking and tax structuring, but was never able to utilize similar structures for myself or directly in my businesses until now. Since we will be manufacturing our entire product in Taiwan and selling +90% of it in other countries than Canada our corporate structure should be one that benefits from this type of activity. That then means that although our parent company in based in Canada it will have a subsidiary in the Barbados (which has a tax treaty with Canada – so this is a legal and compliant structure!!!). The Barbados subsidiary will actively manage all activities outside of Canada and be taxed at Barbados rates, which are significantly lower than Canadian rates! This initial structuring will eventually save the business thousands, if not millions, of dollars over the years.
When I compiled my initial list of desires and what my next business had to have it was originally a list of 9 items and then I prioritized to the Top 3 as detailed above. In my review of the other 6 desires I am proud to note that all of them have also been fulfilled in this business initiative. So although I spent the majority of my time focusing on what my Top 3 were, the fact that I wrote down all of them, they were also present in my sub-conscious as I analyzed the opportunities – which is why InterLock was attracted to me and so strongly resonated for me about being a perfect fit! Stay tuned as I will be blogging further about how the business develop, because as rosy as things sound now I am positive that there will be many bumps and turns!