Perfection, Failure, and Fish Eggs with Michele Romanow
Less than a decade ago, Michele Romanow was catching sturgeon and harvesting caviar off the coast of New Brunswick. Romanow not only learned how to catch, gut and clean fish, she also learned how to be scrappy.
While obtaining her MBA from Queen’s University, Romanow and two classmates surmised that the next million-dollar-idea was caviar. After extensive research and winning five international business plan competitions, the team was armed with $120,000 in seed capital.
Romanow and her classmates-turned-business partners headed to the East Coast after graduating in spring 2008. It started well as she negotiated her way to securing one of five available sturgeon fishing licenses for just $250 for the entire summer–a steal considering she budgeted $5,000 a week.
The summer was lucrative for the team, selling nearly all of their inventory before the seasons end. Caviar, however, is a luxury product, and when the recession hit in fall of 2008, she and her two business partners decided to move on.
That business was the first chapter in Romanow’s entrepreneurial journey. Today, the 32-year-old is the co-founder of Buytopia—a daily deals site—and the youngest Dragon in CBC’s Dragons’ Den. Her latest venture Clearbanc is a Toronto-based fintech company she cofounded in 2016 with her partner Andrew D’Souza. The company offers financial services tailored for entrepreneurs and the gig workforce; namely Airbnb hosts and Uber drivers. In its first year, Clearbanc has earned 25,000 customers.
You have exhibited an entrepreneurial drive since you were a teenager. Where does that motivation come from?
I think a lot of it is just genetic and I was wired that way. My first natural instinct was to be very competitive and to be the best at things. I cared about getting the highest mark on the piano exam. I cared about getting the highest grade in the class.
I actually had to unlearn a lot of that drive for perfection because being an entrepreneur is not about being perfect. It’s about executing at triple the speed of anyone else. So you can’t do speed and perfection.
It was also partially because my dad had grown up in a tiny little town, and my mother had been an immigrant. I was like, “Well, I got really big shoes to fill. If you guys had such incredible achievements in your life, with frankly no competitive advantages, I got to figure something out here.”
And then I met Anatoliy Melnichuk, my business partner in third year university, and he was ultimately the one that taught me how to take risks. It wasn’t about being perfect, it was about moving, and that you would somehow figure out. Every time that something happens you continue to expand your horizon of what you believe is possible.
Clearbanc is a fintech company supporting self-starters—seems like a natural fit for you.
I really wanted to build a bank for entrepreneurs. That’s the biggest mission and probably the most ambitious goal I’ve had in my career so far.
As I joined the cast of Dragons’ Den, I saw on the show that there were all these businesses that were doing two things differently: processing payments online and acquiring customers online. With these businesses, they’re producing revenue, but when they need a loan from a bank, the bank looks at them and says: “That’s very nice, why don’t you write me this business plan, I’m never going to look at it. Then I’m going to look at your personal credit, and then I’m going to provide you with a business loan with a personal guarantee.”
That is not fair. That’s fundamentally not fair. Because if you have a business that’s growing and that we can assess, we shouldn’t be asking you to put up your house every time you want to expand your business. That’s asking you to take an enormous amount of risk when we should be able to use data to do better than that. Even if that means charging more, that’s a way better option than saying, “Well you have to put everything else you’ve worked for on the line to do this.”
We are so biased in this world to only like companies that only raise equity from venture capital. But truly VC-worthy companies represent a tiny, tiny part of the economy. They’re very important because they often provide enormous scale and growth and they take on very, very big challenges, but they are not the only engine that matters to the economy.
The gig economy affords flexibility to consumers, but can be unforgiving to the workforce. How can the industry support these people?
Everything from benefits and insurance policies make sense when you put groups of people together that do largely the same thing, and then discount the price of everything to the benefit of everyone. I think that will be the evolution of what is going to have to happen in the gig economy.
There is no question that today work is going to become more flexible than ever. You can’t ignore the trends around smartphones, around online ratings, around the ability to source and hire and pay over platforms—those are not going anywhere. Now, it’s how do we build all of the tools that this series of people need to support happy and healthy lives, which includes insurance and health benefits. I think it’s going to be probably one of the biggest transitions in our economy here in the next decade.
What lessons did you learn from the caviar business that you bring to entrepreneurship?
Fishing is in many ways the most important part of my story. It was where I learned that I just had to be scrappy if you wanted to get something done. And there was going to be just a constant supply of obstacles that made no sense.
How did we find the one fisherman that didn’t own a fishing boat? We had one person that we needed a license from and there was only five. Every time you were in those moments when you felt like there was something insurmountable, you just kind of keep working away at the problem, you get a little bit more creative around it.
“Being an entrepreneur is not about being perfect. It’s about executing at triple the speed of anyone else. So you can’t do speed and perfection.”
I think that those roots were so important to me. Because it’s that scrappiness that’s still important. When something isn’t working and our partner isn’t cooperating, how many different inroads can I find to get ahold of the exact person I need to?
One of my favorite lines is, “Successful people do what unsuccessful people weren’t willing to do.” That is being an entrepreneur. It’s not about saying, “I don’t do those things.” I remember we had a diligence meeting at the very end of SnapSaves deal with Groupon. Before they came, I was cleaning bathrooms because we just had to. I remember thinking, “We’re just going to do what needs to be done to succeed.”
You left behind a secure corporate career for a scrappy startup. What is your advice for someone else with the same dream?
There’s never the right time. The most common thing I hear from people is: “I didn’t have enough experience, or I needed to finish my two years here.” People create artificial timelines. Every single day you wait to start it becomes more and more difficult. One of the sole reasons I am successful today is because I started early. Although I’m 32, I’ve had five or six big swings; companies I got to start and things I got to see, and you learn from those every single time.
Early success in your career really prevents you from taking risk. But there’s never a good time to take a risk. I can’t stress that enough. There’s never a time where the idea feels baked enough, it feels big enough, you have the right people. It’s always going to be like, “I don’t know if I’m ready.” It’s always going to feel that way.
There is this myth perpetuated in the workplace that if you leave an employer, you can never come back. I can tell you there are probably 50 people off the top of my head I can name that have worked for me previously that any day they wanted to come back, I would hire them back because they were just that good. I think that ultimately when you think about making these decisions in your own life, you have to remember, if it all fails, you can probably always go back.
How has failure played a role in your success?
We don’t talk about failure enough, but it is essential to learning and growing as an entrepreneur. Innovation means you fail 90% of the time and you succeed 10% of the time. Most businesses can never operate with that level of failure, which is why it’s actually so hard to do—it’s why entrepreneurs stand a chance in the first place to do it.
You’re going to try a lot of things, and most things aren’t going to work, and you got to find the glimmer of something that’s working, and be like, “We’re going to double down on that, and we’re going to do that fast enough that we’ve created an innovation out of it.” There are very few entrepreneurs that got very lucky on their first try. Most of them had big moments of things not working along the way, which has ultimately led to their success.
Failure is a byproduct of innovation. It’s about knowing that it’s not going to personally define you forever. You were not being very innovative if you have never failed.
Gender bias is top of mind for much of the tech sector right now, although your career doesn’t seem to have been affected.
I feel really lucky. My grandmother grew up on farm and had the choice to be a schoolteacher or a secretary. Those were the only available options for ambitious women. That was two generations ago. Sometimes it’s really important to step back—and that doesn’t mean we stop trying, we stop caring, we stop pushing for things that are better.
My life would’ve just been different if I was born 50 years earlier. And that alone is really, really difficult to digest.
People have largely taken me seriously throughout my career. I also started early, and so maybe it was just a mixed bias. I couldn’t tell if people weren’t taking me seriously because I was 21 or if I was a woman. I had to learn very quickly how to establish a lot of credibility when I started. I think engineering was a huge booster in my ability to be taken seriously at an early age because it’s the program that drives most of technology today.
I’ve also had many mentors, I’ve had amazing business partners, and if I hadn’t met Anatoliy, I don’t think I would have ever been an entrepreneur. I had a partner that was just naturally okay with risk. He was like, “It all will be fine.” And I somehow believed him. He learned an enormous amount from me too, but it was that risk taking that allowed us to really accelerate.
There’s a lot of bias in the system, there’s lots of moments that you are going to shake your head, and you’re going to need someone to call, and hopefully you have a best friend, and someone else that’s equally as angry as you. But surround yourself with good people and constantly look for opportunity. That is not to say that we do not need to call things out.
Why did you get involved with the Canadian Entrepreneurship Initiative?
Fifty percent of Canadians can’t identify an entrepreneur they look up to. That’s insane.
In the top five, there were people like Alexander Graham Bell and John Molson. With all due respect—if you’ve passed away, you’re not really the modern shining examples of entrepreneurship. The youngest person on the list was Kevin O’Leary.
So I think it’s a really important conversation we need to be having in Canada, because if we don’t look up to entrepreneurs, if we don’t know our entrepreneurs, if we’re not there to support our entrepreneurs, we’re never going to build the economy of the future. Canada was a resource-based economy, those resources will go into decline. We will need to create innovation and innovative companies because our current system does not support innovation. That’s not how innovative thinking happens.
The initiative is also about celebrating women entrepreneurs and sharing all of those stories. Every once in awhile, I’ll get a seven-year-old or an eight-year-old girl on the street who will be like, “Michele, I watch the show, and I’m going to be just like you.” Those are the moments your heart melts, because you can appreciate exactly what it means to provide some level of, like, “Hey, this isn’t that hard. This is totally attainable for you too.”
