# Bruce Croxon: Episode 9

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• 00:00

SPEAKER 1: On this episode of The Naked Entrepreneur, BruceCroxon, serial entrepreneur, former dragon on Dragon's Den,and founding partner at Round13 Capital.

• 00:10

BRUCE CROXON: There's no such thing.

• 00:12

SEAN WISE: I don't think there's sucha thing as an entrepreneur.I think--

• 00:13

BRUCE CROXON: Well, there is.There is.You work hard for 12 years, sell your company,and then take a year off.That's work-life balance.My board of directors thought it was too racy,which was interesting considering, you know,you could go on our site and explore every fetish knownto man.But Ashley Madison was too racy because it impliedmessing around on your spouse.Condensed down to my biggest single advice

• 00:36

BRUCE CROXON [continued]: to young entrepeneurs--

• 00:37

SEAN WISE: OK, you're biggest single adviceto entrepreneurs is?

• 00:41

SPEAKER 1: The Naked Entrepreneur starts now.[MUSIC PLAYING][MILLION DOLLAR IDEA, UNTAPPED MARKET, REJECTED, GROW TO EXIT.DEMAND INELASTICITY.RESILIENCE, OPPORTUNITY SPOTTING, SCALING UP,

• 01:03

SPEAKER 1 [continued]: THE NAKED ENTREPRENEUR WITH PROFESSOR SEAN WISE]

• 01:07

SEAN WISE: Welcome to The Naked Entrepreneur.I'm Dr. Sean Wise, and I'm joined todayby lifelong entrepreneur, co-founder of Lavalifeand managing partner at Round13, a former dragon but stillnumber one in our hearts, Bruce Croxon.Bruce, thank you for coming.

• 01:21

BRUCE CROXON: Hey, Sean, thanks for having me.

• 01:24

SEAN WISE: You went from being an entrepreneur to an investor.Is that a big change?

• 01:28

BRUCE CROXON: Oh, my goodness, yeah, I'dsay it's a significant change.The thing about entrepreneurism iseverything has a start at some spot, right?As an entrepreneur, I get pretty juiced about new beginnings.

• 01:45

SEAN WISE: The creating of something--

• 01:46

BRUCE CROXON: Yeah, and somethingthat I might not necessarily haveexperience in before, that's part of the juice for me.So, yes, it's new.I'm learning.I think I'm getting better at being an investor,but it was a pretty rocky beginning.We can talk about that, I'm sure.

• 02:02

SEAN WISE: Let's talk about the beginning.Let's go back to the early days.You were in online dating, online matchmakingbefore it was cool, in fact, whenit was taboo in some places.In fact, you were in online dating before there was online.There were telephones.Tell us about those early days.

• 02:15

BRUCE CROXON: Well, you're absolutely right.Our first brand was a brand called Telepersonals.And I'm dating myself a little bit,but it was in the time before voicemail.So people didn't really know what this push one push twotechnology was going to evolve to.And as it turned out, voicemail was the killer app.

• 02:32

SEAN WISE: At the time, yeah, for sure.

• 02:33

BRUCE CROXON: At the time, or it still is, really,for that technology.But a second-place application was online dating,and we were using it for promotions and informationlines.And really the technology showed ussomething we take for granted todaybecause we can measure everything online,but this, the late '80s, was the beginning of that.

• 02:53

BRUCE CROXON [continued]: And the technology actually just told usthat people wanted to use it to meet each other.[EARLY CUSTOMER TRACTION]

• 02:58

SEAN WISE: One of the problems with beingon the forefront of innovation is early customers.I know the Toronto Sun was an early customer aroundeven before the dating came around,around promoting and baseball.But that also leaves you exposed if all of your eggsare in a Toronto Sun basket.What was it like in those early daysto get that first customer, and how did it expose you?

• 03:16

BRUCE CROXON: Well, before we got into the dating,we started using the technology to promote things.And one of our first deals was a fantasy baseball draftpromoted by the Toronto Sun.

• 03:27

SEAN WISE: Sounds like a great product.

• 03:29

SEAN WISE: Fantastic, and we'd done a hockey draft with them,and it was really, really popular.Molson was sponsoring.But you're right.All our eggs were-- I mean, if this didn't work,the company was at the stage where it could either propel usor kill us if it didn't happen.And late '80s baseball strike, I don'tremember if you remember that.They walked out, and we had a signed contract with the Sun

• 03:52

SEAN WISE [continued]: to pay us a lot of money to put this into place.But they, I guess, quite rightly for their shareholders,said, you know what?If this baseball strike doesn't get resolved,we're not going to pay you.Even though we're contracted to, we're not going to do it.So big showdown, and thankfully the strike got shortened,and they went back to play.

• 04:13

SEAN WISE [continued]: And we were back on.But it is precarious.And I think it's characteristic of a lot of startupswhere you catch a break, and you're on your way.

• 04:24

SEAN WISE: Yeah, Amazon calls you up.Google calls you up, and they say, hey.Let's try it together.

• 04:28

BRUCE CROXON: Something, but if, you know,you can go down the wrong path just as easily,or if something doesn't happen, it could mean a failure.So one of the characteristics of entrepreneurs-- and I'veseen your show before.

• 04:43

SEAN WISE: No, come on.

• 04:44

BRUCE CROXON: I watched Brett Wilson say the same thing.It's about grit.You know, a lot of it is about grit,like, hanging in there because anyone that tells you the pathis like this is not telling you the truth.[ADVERSITY QUOTIENT]It's this, right?And you know.It's a roller coaster.So really it's about how you handle the tough times,and whether you've got--

• 05:02

SEAN WISE: How do you handle the tough times?

• 05:04

BRUCE CROXON: By remembering that this is the cycle.

• 05:09

SEAN WISE: By taking the long view?

• 05:11

BRUCE CROXON: By taking the longer view,so if things are going really, really well,I don't get too attached to that because it's going to change.I know it's not going to last.[TAKE THE LONGER VIEW, DON'T ATTACH]Likewise, when you're in the trough,I've seen enough of these cycles nowthat when you're in the trough, if you hang in there longenough-- or as a friend of mine says, basketball analogy,we're big on basketball in Toronto now.If you hang around the hoop long enough, you'll catch a ball.

• 05:33

BRUCE CROXON [continued]: So you've got to hang in there, and it'san inevitable ebb and flow.So don't get too attached to the highs.Don't get too despairing of the lows.

• 05:42

SEAN WISE: Now, speaking about the highs and the lows,Seth Godin has a book called The Dip.[BOOK: THE DIP BY SETH GODIN]And it talks about how all businessesgo to this sort of near death, this dip.And he says, you know, it's always darkest before the dawn,but it's also always darkest right before you die.And when you're at the bottom of that trough,you don't know if it's going to go back.You don't know if it's going to go up.

• 06:02

SEAN WISE [continued]: Is it blind faith that keeps you going?Is it a necessity because you have allyour friends' and family's money tied up?Or is it just the entrepreneurial way?

• 06:10

BRUCE CROXON: Well, I think everyone'sindividual circumstance is different.It is always darkest before the dawn,and I think you have to hang in.If you've got enough confidence fundamentallythat whatever you're doing is fulfilling a basic human need,one thing that has changed a lot in the last 20 years

• 06:32

BRUCE CROXON [continued]: is that the only constant is change.So there's a very good chance that the idea you start withisn't the idea that you're going to end with.So an emerging characteristic for me, for entrepreneurs,is people that can be comfortable with changingdirection.

• 06:49

SEAN WISE: So be agile.Know when to pivot, knowing what data to work onand which data to leave behind.

• 06:55

BRUCE CROXON: It's darkest before the dawn, but what canyou do to change your circumstancesto help you come out of it?If you blindly stick with the path you're on,it could be a rapid, you know, race to the bottom.It's a common used word.What can you do to pivot, if you will?[PIVOTING THE BUSINESS MODEL ]

• 07:13

SEAN WISE: And make a change in the business model.

• 07:16

BRUCE CROXON: The potential to change is all around us.It's not like it's taking a decadeto pound out a piece of code now in technology.You want to change something, you can change,and you can get instant feedback from your market, whateveryour market is.It's right there.

• 07:30

SEAN WISE: Now, it wasn't always so easy to change.I mean, Lavalife was a 15-year overnight success.I mean, you guys worked and worked.What were those early pivots like?Do you remember them?

• 07:40

BRUCE CROXON: Sure I do, but you'reright in that it was a different time.So the technology for Lavalife and Telepersonalstook up twice the size of this set, and it was expensive.So it was a barrier to entry.So we had the luxury of time.We could think about things.If we made a mistake, we could recoverbecause people weren't clamoring to get into our industry.

• 08:03

BRUCE CROXON [continued]: And they didn't know how to get into our industry.That is not the case today.There's no secrets in technology anymore.

• 08:12

SEAN WISE: Meaning, you can reverseengineer anyone's solution.

• 08:14

BRUCE CROXON: You can revert and quickly and inexpensively.

• 08:17

SEAN WISE: And with software, it's even faster.

• 08:18

BRUCE CROXON: You got it.And you can hide behind the odd patent,but that's a whole other business.And you have to have the money to back up the patents.So it's increasingly a marketing barrier to entry.It's not a technology barrier to entry.So back in the day, we had the luxuryof being able to take our time.Now, we had all kinds of other challenges,

• 08:39

BRUCE CROXON [continued]: but people nipping at our heels, knocking us offwith the technology to put out of business tomorrowwas not one of them.

• 08:46

SPEAKER 1: Coming up on The Naked Entrepreneur.

• 08:49

BRUCE CROXON: My board of directorsthought it was too racy, which was interesting consideringyou could go on our site and explore every fetish knownto man, but Ashley Madison was too racybecause it implied messing around on your spouse.

• 09:02

SPEAKER 1: All coming up on The Naked Entrepeneur.[MUSIC PLAYING][THE NAKED ENTREPENEUR WITH PROFESSOR SEAN WISE]

• 09:25

SPEAKER 1: Bruce Croxon is a digital pioneer, entrepreneur,and respected investor.Bruce was the co-founder of Lavalife, one of the world'sfirst online dating platforms.Under Bruce's direction, Lavalifegrew to over 2 million users and was eventually soldfor $180 million. • 09:46 SPEAKER 1 [continued]: Bruce became well known to the publicas an investor on CBC's hit reality show, Dragons' Den.Currently, Bruce hosts The Disruptors on the BNN network.Bruce also helms Round13 Capital, an investment vehiclededicated to investing in the growthstage of digital companies.In addition, Bruce is incredibly dedicated to his family • 10:07 SPEAKER 1 [continued]: and to his charitable initiatives.He is a vocal supporter of Anaphylaxis Canada.[anaphylaxis CANADA] • 10:13 SEAN WISE: Now, let's talk about those early challenges.The market was still in its nascent days.People were still not turning their minds to onlinedating as much as they are now.But soon thereafter, everyone wanted to be in this space,from Plenty of Fish to Ashley Madison.They all wanted to find a different aspect of the need • 10:34 SEAN WISE [continued]: to be connected to someone, the basic human need.How did that play out for you as one of the co-founders of oneof the early pioneers? • 10:42 BRUCE CROXON: Well, you're absolutely right.In the early days, it was underground.[BRUCE CROXON]I mean, we were now all the alternative magazinesin North America's best customer.Back in the classifieds, you know,I spent a lot of time explaining to friends and familythat, no, I was not in the phone sex business.These are actually-- • 10:60 SEAN WISE: Just your add was in the phone-sex business, rightaround, surrounded by it, same page. • 11:02 BRUCE CROXON: It was in the same section, right,I mean, surrounded by naked women.But we were actually putting people together.We didn't pay anyone to go on the line or anything like that.So at the beginning, it was heavily stigmatized,but it worked.It really worked for people that used it.So gradually, people caught on to that.And when the internet hit in the mid '90s, • 11:24 BRUCE CROXON [continued]: it really started to be commercialized.And people started to think about online as a way of liferather than something you experiment with.We took advantage of that and created a brandand made Lavalife this hip, cool way to meet somebody.And if you weren't using technology to get a date • 11:44 BRUCE CROXON [continued]: or meet the lot of your life, then youwere somehow missing out.So we were successful in making that transitionand making the brand hip and cool, but, boy, the early days,you know, underground, few people using it,highly effective.And it was interesting to watch it evolve.And then you're right.Plenty of Fish was an unbelievable disruptor. • 12:06 BRUCE CROXON [continued]: They started offering the service for free. • 12:09 SEAN WISE: Out of their apartment in Vancouver. • 12:11 BRUCE CROXON: Oh, yeah, Marcus Frind,a great Canadian entrepreneur that not a lot of peopleknow of, he disrupted the whole space,I mean, doing$10 million in revenueout of his apartment with no overheadand all off of Google Ads.

• 12:24

SEAN WISE: He had one staff or two staff.It was just ridiculous.

• 12:26

BRUCE CROXON: He's built it into a much bigger concern now,but, yeah, he knocked the wind out of our sails for sure.But it's a characteristic of a maturing marketthat you start to get these niches.And Ashley Madison, we had a chanceto buy Ashley Madison from the original founder way back.And my board of directors thoughtit was too racy, which was interesting considering

• 12:49

BRUCE CROXON [continued]: you could go on our site and explore every fetish knownto man.But Ashley Madison was too racy because it impliedmessing around on your spouse.I find that a little ironic in hindsight.We could have bought Match.com, but we were distractedinto a technology project.Lavalife was a $100 million Canadian company. • 13:10 BRUCE CROXON [continued]: It should have been a billion.I look back, and I can see where wezigged and should have zagged.We had a great exit.It was to a public company,$180 million.So I'm not complaining.But as you look back on an entrepreneur,we were right there, first social network,leading the pack globally.And we made some mistakes where if we

• 13:32

BRUCE CROXON [continued]: had done something different, we could'vebeen the major player in the space yet today.

• 13:36

SEAN WISE: Well, and if I was taller,I could've played in the NBA.

• 13:39

BRUCE CROXON: If the queen had balls, she'd be king.Right, I mean, there's all kinds of them.

• 13:43

SEAN WISE: Let's talk about decisionsand how you come to make them after these short messages.

• 13:48

SPEAKER 1: Coming up on The Naked Entrepreneur.

• 13:50

SEAN WISE: You were also about allowing peopleto express themselves.

• 13:52

BRUCE CROXON: Do what you want.

• 13:53

SEAN WISE: There's an internet rulethat no matter what you're into, there'ssomeone else in the world into it.And isn't that amazing?

• 13:58

BRUCE CROXON: Condensed down to my biggest single adviceto young entrepreneurs--

• 14:01

SEAN WISE: OK, so hold on.You're biggest single advice to entrepreneurs is?

• 14:05

SPEAKER 1: All coming up on The Naked Entrepreneur.[MUSIC PLAYING][MILLION DOLLAR IDEA, UNTAPPED MARKET]

• 14:27

SEAN WISE: Welcome back to The Naked Entrepreneur.With me today, legendary serial investor and co-founderof Lavalife, host of The Disruptors on BNN, Bruce.Bruce, I want to talk a little bit about where we left off,which was decision making and howit can be difficult in any growth industryto know when to zig and when to zag.

• 14:47

SEAN WISE [continued]: You said it yourself.You had a $180 million exit.Maybe it could've been a billion.What do you do know that you know that?How does that impact how you coach some of your investments? • 14:58 BRUCE CROXON: That's a good question.I mean, there's obviously been 30-odd-plus years of learningin business lessons.But I've got to say.If I look back on all the technical errors we madeand the strategic errors we made,it's interesting what comes to the forefrontbecause what they all had in common, what the mistakes all • 15:20 BRUCE CROXON [continued]: had in common, were when we ignored our compass in termsof our core values that we'd established for the company.I'll give you a couple examples.One is we were a team-based environment,so being good team players was very important to our place.Another one was open mindedness.We were in the online dating business, right, • 15:42 BRUCE CROXON [continued]: so you can imagine some of the conversations. • 15:44 SEAN WISE: No judgements. • 15:45 BRUCE CROXON: Yeah, I mean, if you were homophobicor your religion didn't allow for premarital sex,nothing wrong with that.Everyone's different, but you wouldn'thave been a great fit with our organizationbecause I won't say we were all about premarital sex.But we were a lot about premarital sex. • 16:01 SEAN WISE: No, but you were also about allowing peopleto express themselves. • 16:03 BRUCE CROXON: Do what you want. • 16:04 SEAN WISE: There's an internet rulethat no matter what you're into, there'ssomeone else in the world into it.And isn't that amazing? [INAUDIBLE]. • 16:09 BRUCE CROXON: Exactly, and we weren't here to judge.So my point is when we let people in to the companyor it was usually in the area of technologyand how it worked because that wasn't actuallymy strength as a CEO. • 16:22 SEAN WISE: You were the marketing side. • 16:22 BRUCE CROXON: That was my marketing business.And I knew what technology could do.And when we ignored or compromised that, we gotled down the wrong road often.So when we should have been buying Match.com and AshleyMadison and putting our foot to the pedal,we were distracted into an ill-conceived, poorly-executed • 16:44 BRUCE CROXON [continued]: technology project that chewed up all our resources.And as it turned out, it was the right thing to do.But the way it was done-- • 16:54 SEAN WISE: Was this the mobile? • 16:55 BRUCE CROXON: Not so much, Dos was being switched to Unix. • 17:01 SEAN WISE: So this is the softwarethat runs behind the scenes. • 17:04 BRUCE CROXON: Software, I mean, we were running telephone linesinto old Dos computers.We needed to do it, but the way it was donehad a lot of different agendas at playthat weren't necessarily in the best interests of the business.They were personal agendas, and wegot distracted for two or three years doing that.And I've got a number of exampleslike that, that all come back to the same thing, • 17:25 BRUCE CROXON [continued]: and it's probably, as I look back,being condensed down to my biggest single adviceto young entrepreneurs. • 17:34 SEAN WISE: OK, so hold on.Your biggest single advice to entrepreneurs is? • 17:38 BRUCE CROXON: Is to pick people that you-- establish whatthe core values that are important to your industryor your business or your partnershipor whatever it is that you're trying to do,and then surround yourself with the people thatfit those core values.Because, especially today, thingsare moving so fast and so much faster than when I started, • 17:59 BRUCE CROXON [continued]: you don't have time to waste on thingsthat have anything to do other than what the businessoutcome is.[ESTABLISH CORE VALUES FIST, FIND PEOPLE SECOND]If you're distracted into other people's egos,or their personal problems are in the workplace,or you have to question trust or integrity in your partners-- • 18:18 SEAN WISE: You're just wasting your time on the wrong things. • 18:19 BRUCE CROXON: You're wasting time you don't have.You just don't have it. • 18:23 SEAN WISE: So check out the core personal values. • 18:25 BRUCE CROXON: Figure out which ones are important to you.Screen for them actively on the way in as you build your team,and stick to it. • 18:32 SEAN WISE: Maybe I'm different, but I find it ironicthat we've had many people talk about buildingyour team is a lot like finding a marriage partner.[DR. SEAN WISE]And here you were, a facilitator of selectionsand helping people to screen for each other.Do you find that to be true now that you'rean investor, that the co-founding teamand how they interact is a key impact on success? • 18:53 BRUCE CROXON: I think it's a key impactbecause back to what we were talking about earlier,it's not like this.It's like this.And anyone can be great to be with when you're on a roll. • 19:06 SEAN WISE: When you're on top, right? • 19:07 BRUCE CROXON: But how are you when the chips are down?How are you on the downside when your back's to the walland you're trying to meet payrollor you've been disrupted and you'vegot to really pull together?Because that's when people's true character, I think,comes out.So if you've done your homework, you'll know who you can goto war with and who you can't. • 19:27 SEAN WISE: I once interviewed a rabbi for the Globe and Mail.We were talking about their guidanceto setting up marriage.And they said, never marry someoneyou've never fought with because until you know how someone actswhen it's not a positive environment,how can you judge them in a positive environment?It's not often I quote rabbis, but that • 19:48 SEAN WISE [continued]: will be the one for the day. • 19:49 BRUCE CROXON: No, absolutely, sure, I mean,I've got some Serbian friends.And they're fond of telling me, look.You can't really be a friend with a Serbuntil you've had a good scrap.[DON'T CHOOSE YOUR CO FOUNDER UNTIL YOU SEE THEM AT THEIRWORST]I don't know what the background is on that,but there's some truth to it.How do you fight?Do you fight dirty?Do you fight with a common goal? • 20:06 SEAN WISE: Do you have integrity?Are you [INAUDIBLE]? • 20:08 BRUCE CROXON: Do you have integrity?Is it about you, or is it about the goal?This comes into play in small business every single day. • 20:15 SEAN WISE: Because there's so few people that every personhas a huge impact. • 20:20 BRUCE CROXON: True, and the decisions,if you think about it, that you have to make on a daily basisto survive today require discussion.And it requires introspection, and itrequires being able to look in the mirrorand say things like, geez, I didn't know that.Or good point.I made a mistake.If you don't have the confidence or the self awareness • 20:45 BRUCE CROXON [continued]: to utter those words, it's going to be a lot tougher because youspend so much time talking about things that aren't the agenda.[CONFIDENT INTROSPECTION REQUIRED TO STAY FOCUSED]And I'm finding more and more that that's the biggest thing.Sure, I look at Lavalife, and we were four guys.I also tell young entrepreneurs to pick the thing you love. • 21:06 SEAN WISE: To work on something that isn't work. • 21:09 BRUCE CROXON: A bit clicheish, but more importanttoday than ever before because youare going to have to work at it seven days a week today.If you're not, the competitor is.So if you're working on something you love,it doesn't seem like work so much.So when I look at Lava, we were four guys in our 20s.We were trying to meet girls.So you want to come in and meet on a Sundayto make a better system on how to meet more women. • 21:31 BRUCE CROXON [continued]: That wasn't work.That was what we would have been doing anyway. • 21:35 SEAN WISE: By the way, I think that was the human needFacebook really took off on, too,the ability to know about your classmates and who wasavailable and who wasn't. • 21:41 BRUCE CROXON: Right, and he was naturally curious about that,so it wasn't really work.It was something that he may have been doing anyway. • 21:49 SPEAKER 1: Coming up on The Naked Entrepreneur. • 21:51 BRUCE CROXON: My last pitch on the Den,a Rosedale housewife that came on with a four-wheel-drive dogcarriage with latte holders and umbrellas,and this was for taking the dog to the park when the dog wastoo old to walk to the park. • 22:05 SPEAKER 1: All coming up on The Naked Entrepreneur.[MILLION DOLLAR IDEA, UNTAPPED MARKET][THE NAKED ENTREPENEUR WITH SEAN WISE] • 22:23 SEAN WISE: Let's go back a few yearsto when you were sitting in the denand having to, as I know working on the show,see 18 deals a day, 20 days, sometimes,back to back to back.They all blur together.If you had to sort of find the common thread between the onesthat you wrote checks to, the ones you shook hands with-- • 22:43 BRUCE CROXON: Well, as you know, it'stough to assess anyone's character in 40 minutes. • 22:50 SEAN WISE: Absolutely, that's why so few of the dealssurvive due diligence because in the real world,you don't start on a first date and get married right away. • 22:57 BRUCE CROXON: Couldn't agree with you more.So you don't make a final decision on the show.So two things I'll say about that.You're right, we saw 230 business pitches a yearthat were on average about 40 minutes in length. • 23:12 SEAN WISE: You should see what we had to see,the 10,000 that led to the 200,000. • 23:15 BRUCE CROXON: You and I didn't overlap,but I know you came along before and paved the way.So two things, one is I noticed that a lot of timesthe ideas, themselves, entrepreneurscame on and tried to convince us there was a human need theywere addressing.And if they could get us there, then theyhad to sell the idea that addressed that human need. • 23:37 SEAN WISE: Yeah, the problem-solution fit. • 23:39 BRUCE CROXON: So by first advice is figure out what problemyou're trying to solve first.There's problems that have to be solved, and some that don't.My last pitch on the Den was a Rosedale housewifethat came on with a four-wheel-drive dog carriagewith latte holders and umbrellas. • 23:60 BRUCE CROXON [continued]: This was for taking the dog to the park when the dog wastoo old to walk to the park.And so I looked at Jim Treliving. • 24:08 SEAN WISE: Who has dogs. • 24:09 BRUCE CROXON: Well, he grew up in Virden,Manitoba, population just this side of 500 people.I said, Jim, when a dog got too old to walk downthe street, what did you do with the dog?And that didn't air, but I mean it was, yeah, well,you really need it?So some of the stuff, there wasn't a need.It was over the top. • 24:30 BRUCE CROXON [continued]: The other thing is, yes, when you do your diligence,it's back to what we talked about.Are these people that when the chips are downthey are going to find a way to get you your money back?They're going to hang in there.They're going to deal with adversity.[HIGH ADVERSITY QUOTIENT] • 24:45 SEAN WISE: They've got the skin in the game.They've got the adversity quotient, yeah. • 24:48 BRUCE CROXON: Do they have the grit?Do they have the grit to hang in?Or at first sign of trouble, are they going to fold?And that's character.You've got to find a way as an investor to get at that.I won't say nothing else matters,but today the idea is going to change. • 25:08 SEAN WISE: It evolves over time. • 25:09 BRUCE CROXON: Good chance it's notgoing to be the same idea as when you started.So is it really about the idea?Not so much.Now, with that lady with the four-wheel-drive drive dogcarriage, what's she going to change that idea into?Nothing I was going to be interested--don't get me wrong. • 25:23 SEAN WISE: You can't put lipstick on a pig.I mean, it's still a pig. • 25:25 BRUCE CROXON: Exactly, but buy-in and technology,which is where I spend my time, and Canadian technologyin particular, very proud of our entrepreneurs here.I think we can hold our own with anyone in the world.The idea is going to change from the time I investin it, to the time it grows, to the time we all exit and make • 25:45 BRUCE CROXON [continued]: our return.So are these the kind of people that can evolve with it?Can you go through the tough times, come out the other end,do it again, because there's going to be another trough?Can you fight?Can you scrap?Can you hang in there?Prove it to me. • 26:02 SEAN WISE: In the last two decades,a lot has changed in entrepreneurship.But the thing that I find most interestingis something that Robert said a long time ago,and you hear it all the time on Dragon's Den or Shark Tank.You don't need my money.You need a quarter to go call your customers.This idea that an idea needs to be funded and then you'll gohit the market has really changed to it's not important • 26:24 SEAN WISE [continued]: whether I think it'll work.It's show me how it works.So let's go back to your Rosedale housewife.If she had come to you and said, youknow what, Bruce, you're right.I couldn't think there was a need for thisuntil I sold 10,000 units.It changes the discussion. • 26:37 BRUCE CROXON: No question. • 26:38 SEAN WISE: What else do you thinkin the last 20 years has changed about being an entrepreneur? • 26:42 BRUCE CROXON: Well, first of all,I think on the sales front it's stilla huge need in the Canadian marketplace. • 26:49 SEAN WISE: Good salespeople. • 26:50 BRUCE CROXON: Yeah, that skill or courage or chutzpah. • 26:56 SEAN WISE: Why do you think Canadians don't havethe chutzpah to be great salespeople, or often don't? • 27:02 BRUCE CROXON: Well, I think it comes back to hunger.I think about my parents' generation.My dad showed up in this country with a grade eight educationand the equivalent of about$50 in his pocket,which was good for about six weeks of room and board.He had no choice.

• 27:23

BRUCE CROXON [continued]: He's not an unbelievably extroverted guy,but he had to get on the phone, sell himself,because he wasn't going to survive if he didn't.We are very fortunate in this country.

• 27:35

SEAN WISE: And in this generation in particular.

• 27:37

BRUCE CROXON: And this generation,there's not many of us that are going hungry.So where does the fundamental drive now come from?Ego, trying to live up to your parents, what is it, right?You start to look around and scratchand claw for what that is.So what has been instilled in you to have the hunger,

• 27:59

BRUCE CROXON [continued]: I think that's one thing.But the fact remains.We don't have a ton of people that are hungry enoughto call somebody up and say, hey, you don't know who I am.And you didn't know you might need this, but here it is.And then risk the click and what areyou doing wasting my time kind of conversationsthat can ensue.It's pretty old school.

• 28:20

• 28:21

BRUCE CROXON: I did.

• 28:22

SEAN WISE: What else did you learn from him?

• 28:24

BRUCE CROXON: God, I learned that oneof his favorite expressions is, when the chips are down,he says, well, what's the worst that could happen?You seem pretty uptight about this.What's the worst thing that can happen?The worst that can happen as an entrepreneur with some skilland experience is you go and get a job.I'm not going to starve.

• 28:44

BRUCE CROXON [continued]: So as I've taken some of my biggest risks,I've got him chirping in the background.What's the worst that can happen?

• 28:51

SPEAKER 1: Coming up on The Naked Entrepreneur.

• 28:54

BRUCE CROXON: The friends and familyare the people that know you best.

• 28:57

SEAN WISE: Which is why an investor asks,do you have friends and family money?Because if you're own friends and familydon't want to back you, why should I?So how does it feel to watch the man you respect who teachesyou business lose everything?

• 29:07

SPEAKER 1: All coming up on The Naked Entrepreneur.P[MUSIC PLAYING][MILLION DOLLAR IDEA, UNTAPPED MARKET][THE NAKED ENTREPRENEUR WITH PROFESSOR SEAN WISE]

• 29:25

SEAN WISE: So let's go forward now.You have two beautiful children, a boy and a girl.You have a few more dollars than 50 in your pocket,not to talk behind your back.But how do you balance this desireas a parent to give your kid everything you wantand this knowledge that by keeping them hungryyou equip them for the future?

• 29:45

BRUCE CROXON: Well, first of all,you have to put some thought into it,which I've tried to do.[BRUCE CROXON]Rather than just, here you go, for every whim or desire,we always have a conversation about where it comes from.We always have a conversation about need versus want.

• 30:04

SEAN WISE: Which is a big distinctionthat many people can't get.

• 30:06

BRUCE CROXON: I think my kids getthe difference between wanting something and needingsomething.Do you absolutely need it, or do you just want it?Well, if you want it, then go and put some work in itto get it.And I watch them because when they work for something,they take care of it.You know, like my boy takes care of his baseball glove.

• 30:27

BRUCE CROXON [continued]: He takes care of his bike.He takes care of his hockey equipment.So I think there's a fundamental understandingthat it just doesn't grow on trees,but it but it's not easy.So he doesn't know hunger.My dad broke water on his drinking water in the winterbecause they didn't have electricity.He doesn't know hunger.

• 30:47

BRUCE CROXON [continued]: I don't know hunger.I don't know hunger, but I grew up hearing his storyand watching him as an entrepreneur making the climband watched interest rates at 21%.When he was over leveraged, I watchedwhat happened to us then because everything went.

• 31:07

BRUCE CROXON [continued]: We were in it together.It was all in, and then we were, OK.

• 31:11

SEAN WISE: How old were you when that happened?

• 31:13

BRUCE CROXON: I was 19.

• 31:15

SEAN WISE: So how does it feel to watch the man yourespect who teaches you business lose everything?

• 31:20

BRUCE CROXON: He didn't lose everything,but I watched him sweat.And I understood what an ulcer was.I didn't know what an ulcer was and sleepless nightsand then watched him hang in there,watched him grind it out, and watchedhim turn it around and then watched himback me in Telepersonals when he didn't have the equity

• 31:43

BRUCE CROXON [continued]: to necessarily do that.It was still risk, and it was a very small amount of money.Just to give you perspective it was $30,000 and signingfor another$60,000.It wasn't a lot of money, but it was a lot of money to him.

• 31:57

SEAN WISE: But that would have been the '80s.That would be about $100,000,$200,000 now.

• 32:00

BRUCE CROXON: Well, it would have been more money today,but it was at the time where he was stillbattling to get under the 21%.And he rolled the dice with me.

• 32:08

SEAN WISE: So does friends and family moneymake you a better entrepreneur or a worse?[FRIENDS AND FAMILY MONEY]

• 32:12

BRUCE CROXON: I think it does because, first of all,from outside looking in, the friends and family arethe people that know you best.

• 32:19

SEAN WISE: Which is why an investor asks,do you have friends and family money?Because if your own friends and family don't want to back you,why should I?

• 32:25

BRUCE CROXON: Exactly, well, it gives you something elseto ask.Maybe your friends and family can't, which happens.

• 32:30

SEAN WISE: But you want skin in the gameno matter how much that might be.[SKIN IN THE GAME]

• 32:32

BRUCE CROXON: You want skin in the game,and it's like, well, why couldn't they?And they know something that we don't?So I think it's really important.And to be honest with you, it's been very few times.But when I've had my family involved, I sure as heckdidn't want to fail.

• 32:48

SEAN WISE: Because you see them every Christmas, Hanukkah,Kwanzaa, they're always there.

• 32:52

BRUCE CROXON: Exactly.

• 32:53

SEAN WISE: Now, your kids have had a lot of impact on you,but they've also impacted your choice of philanthropy,where do your charity work.Can you tell me about?

• 33:01

BRUCE CROXON: Sure, and I'll preface this by saying,there's a lot worse things to have to battle.But our family battles food allergies.So my son and daughter both have life-threatening foodallergies.A bit of irony at play, my wife is a huge foodie.I'm a third-world traveler.

• 33:21

BRUCE CROXON [continued]: I love nothing better than to plunk myself downin some remote place and then figure it in concentric circlesover time.So it's been an interesting change in our lifeto have to be concerned about everything that we consumeand everything our kids consume.So, yeah, I support a charity long knownas Anaphylactic Canada which goes

• 33:43

BRUCE CROXON [continued]: to what happens if you ingest food that you're allergic to.You can going into anaphylactic shock.

• 33:49

SEAN WISE: It's called something now.They've rebranded.What is it called now?

• 33:51

BRUCE CROXON: Food Allergy Canada, and it's coming outsoon with a new brand.And I think that's better because I couldn't evenspell anaphylaxis.Believe me, I know exactly what it meansand what it does, unfortunately.But from a marketing perspective, you know,it didn't quite resonate.So I'm very involved in that charity.We run an annual golf tournament at Magna

• 34:13

BRUCE CROXON [continued]: that raises a good chunk of their year's operating budget.And I've become their sort of national spokesperson.So that's something that's very near and dear to my heart.And it's really designed to not only research cures, but makepeople aware of how to deal with it because what is this?

• 34:34

BRUCE CROXON [continued]: Food allergy, we didn't have that.I didn't have that as a kid.

• 34:36

SEAN WISE: I don't remember that growing up.

• 34:37

BRUCE CROXON: It wasn't there.

• 34:38

SEAN WISE: And I was eating dirt.

• 34:38

BRUCE CROXON: It's new.And that's why, because we didn't live as cleanly.That's actually the leading theory.

• 34:43

SEAN WISE: Is it?That's what's causing all of this.

• 34:45

BRUCE CROXON: Well, we live too cleanly.Our antibodies don't have the same--

• 34:47

SEAN WISE: So I should blame my sister for feeding me the dirt.

• 34:50

BRUCE CROXON: No, you should think her.

• 34:51

SEAN WISE: Let's change topics for a minute.You're capital investment firm is called Round13.Where's the name from?

• 34:59

BRUCE CROXON: The name goes back to a 1975 boxingmatch between Frazier Ali, my idol, Ali.It's called the Thrilla in Manila.And for boxing fans, the 13th round of that particular fight,many consider to be the toughest round of boxing that--

• 35:15

SEAN WISE: For those who don't know,what happened in round 13?

• 35:18

BRUCE CROXON: Round 13, these two guys beat on each otherso badly and so intensely that by the start of the 15th round,one round later, neither one of themcould get off the stool to finish the fight.And that was in the time when the heavyweight divisionwent 15 rounds.Just, like, imagine what these guys did.Well, you look at them today, yousee the toll that that took.

• 35:39

BRUCE CROXON [continued]: Anyway, Ali staggered to his feet.It was a very famous Ali quote. "Closest to deathI've ever been," he said.But by getting off the stool, he won the fight.So we've turned that into a bit of a storyabout the kind of people we want to backin Canada as entrepreneurs are people that know how to get offthe stool after they've had that inevitable beating that they're

• 36:00

BRUCE CROXON [continued]: going to have by trying to start a company from scratch,just beatings we've all taken that not everybody survivesthem.So a lot of people fold, saying, you know what?This isn't for me.But people that hang in there and that are resilient,those are the kind of people we want to surround ourself with.

• 36:16

SPEAKER 1: Coming up on The Naked Entrepreneur.

• 36:18

BRUCE CROXON: There's no such thing.

• 36:19

SEAN WISE: I don't think there's sucha thing as an entrepreneur.I think you live.

• 36:21

BRUCE CROXON: Well, there is.There is.It's you work hard for 12 years, sell your company,and then take a year off.That's work-life balance.It's not every day that things are going your way.So how are you when they're not?

• 36:34

SPEAKER 1: All coming up on The Naked Entrepreneur.[MUSIC PLAYING][MILLION DOLLAR IDEA, UNTAPPED MARKET][THE NAKED ENTREPRENEUR WITH PROFESSOR SEAN WISE]

• 36:53

SEAN WISE: Welcome back to The Naked Entrepreneur.Today, one of my favorite dragonsfrom Dragon's Den, Bruce, I'm so happy to have you here.It's now time for our rapid-fire questions.So I'm going to give you a bunch of questions,and you tell me the first thing that comes to mind.Are you ready, sir?

• 37:07

BRUCE CROXON: I am, sir.

• 37:08

SEAN WISE: Here we go.So what's the worst part about being an entrepreneur?

• 37:10

BRUCE CROXON: It's a lot of work.So if you don't love it-- it's a lot of work,and there's a lot of the roller coaster.So it's not every day that things are going your way.So how are you when they're not?Because there will be those times.So if you're looking for a steady pathand a balanced lifestyle, which I hear about all the time-- I

• 37:34

BRUCE CROXON [continued]: get asked it all the time.Bruce, how do you achieve work-life balanceas an entrepreneur?

• 37:38

SEAN WISE: See, I think that's a misnomer.

• 37:40

BRUCE CROXON: There's no such thing.

• 37:41

SEAN WISE: I don't think there's sucha thing as an entrepreneur.I think you live.

• 37:43

BRUCE CROXON: Well, there is.There is.It's you work hard for 12 years, sell your company,and then take a year off.That's work-life balance.It's not a seven-day thing.Like, it's not going to happen.

• 37:53

• 37:58

BRUCE CROXON: Go with this personbecause they possess a technical skill that you don't currentlyhave in the organization.He or she isn't the best team player,and their ego can be a little bit crazy.And they're not a great fit with you in many ways,but, boy, are they smart.

• 38:16

• 38:20

BRUCE CROXON: Never ignore your gut on a decision.Stick with your core values.Don't get tempted to sell out to a technical skillif your gut's telling you that this isn't a good fit.If this isn't somebody or a team that you'd go to war with,you know, a little voice in the ear, don't ignore it.

• 38:39

SEAN WISE: What keeps you up at night today?

• 38:46

BRUCE CROXON: Not as much as kept me up 30 years ago,I tend to sleep pretty well today, actually.And I think it's got something to dowith my acceptance of the ups and downs.

• 38:59

SEAN WISE: Not the wine before bed?

• 39:01

BRUCE CROXON: No, no, I'm good with that.I don't eat steak too late at night or red meat,but, no, I sleep pretty well.

• 39:07

SEAN WISE: OK, if we had a time machine,and we went back 20 or 30 or even35 years, what would be the more seasoned Brucetell the younger Bruce?

• 39:18

BRUCE CROXON: Hmm, 30 years back,I think it would be take more timebefore you make a decision.My biggest strength and my biggest weaknesses has beenI tend to be impulsive.So when something feels right, I tend to go quickly.

• 39:40

BRUCE CROXON [continued]: The best business partners I've hadare people that have slowed me down and said, hold on.We haven't finished looking at this from all angles yet.Let's talk about this.And my original business partner,a guy named Nicholas Payne, was very thoughtful,very strategic.My current business partner at Round13, John Eckert,

• 40:04

BRUCE CROXON [continued]: I think he moves too slow.He thinks I move too fast.

• 40:08

SEAN WISE: Maybe that's where you find the balance.

• 40:10

BRUCE CROXON: We find the balance.And as I look back, the best decisions I've madehave been a balance of those two.When I've moved too fast, I've gotten burned.When I've let them make their own decisions,we've missed the opportunity.

• 40:22

SEAN WISE: Great, let's go forward in our time machine.Let's maybe go forward 20 or 30 or 40--[INTERPOSING VOICES]If I had, I would have had it on The Den.That would have been very powerful.But let' go forward maybe even 50 or 60 years.What do you want your legacy to be to your children?What do you want them, when they looked back on your businesscareer, to think?

• 40:42

BRUCE CROXON: Well, that's funny.I want them to think that I was a champion of the underdog.I want them to know that there wasn't a story that I wouldn'tgive the time to listen to.I want them to know that I was fair in my dealings,firm but fair.

• 41:02

BRUCE CROXON [continued]: I don't want them to think that anyonecould take advantage of me.But I never want them to think that my way was the only wayto get things done.There are many different ways to the answer,and I certainly don't have all the answers.So if you've hung on my every word, kids, as we've grown up,

• 41:25

BRUCE CROXON [continued]: that's too bad because I don't have the only way to do things.So I'd like them to be encouragedto take many points of view into account.

• 41:33

SEAN WISE: A lot of students watch this.A lot of students look up to you.I'm sure like many of our dragons, you get stopped a lot.And people want to ask you something,or they want to share with you something.

• 41:44

BRUCE CROXON: Especially when I'm hanging out with Treliving,I find I get stopped a lot.He's very popular.

• 41:49

SEAN WISE: He's everybody's grandfather,and he's such a good story teller, too, right?

• 41:53

BRUCE CROXON: Oh, my God.He can weave a tale.There's no doubt about that.

• 41:55

SEAN WISE: Yeah, but I've seen Kevin go up to the washroomand not even get inside the door.And people descend on him, try to pitch himwhile he's doing his business.

• 42:04

BRUCE CROXON: Yeah, it's a popular show.

• 42:05

SEAN WISE: And I think it's led to a lot.What do you wish its legacy to be?What do you hope that after it's allsaid and done the dragons, then, will have added to our nation?

• 42:14

BRUCE CROXON: And I think it alreadyhas added to our nation, but I thinkDragon's Den will live forever as a testament to howstrong our entrepreneurs are.We had a lot of crazy ideas come on that show,and I saw a lot of them.But I also saw people in a nation thathad the courage to get up in front of a national audience

• 42:37

BRUCE CROXON [continued]: and say, you know what?This is what I'm trying to get done.And the thing that blew me away more than anythingwas the young people that came on that show, 10, 11, 12, 13,14 years of age, that were talking about things that Ididn't have a clue about when I was that age.So when I talk optimistically about the future

• 42:58

BRUCE CROXON [continued]: of the country, I'm doing it from a first-hand experienceof having traveled around, talking to those young peoplethat have such a greater depth of knowledge about businessthan I ever had.

• 43:12

SEAN WISE: Isn't it amazing?

• 43:13

BRUCE CROXON: It's amazing, and I think that's largelyto the credit of that show.

• 43:17

SEAN WISE: I think that show was led to a lot of discussions.I know the most popular demographic of the audienceis under 21.It is watched in high school.It is talked about.

• 43:26

BRUCE CROXON: And they watch it with their families,and they talk about it with their families.And the exchange ideas.I was out playing ball hockey and, you know,watching Bonanza.

• 43:36

SEAN WISE: I remember Bonanza with Lorne Greene.

• 43:38

BRUCE CROXON: Yeah, it was a good show.

• 43:39

SEAN WISE: Good show.

• 43:39

BRUCE CROXON: Yeah.

• 43:40

• 44:00

SEAN WISE [continued]: VISIT www.nakedentrepeneur.tv.I'm Dr. Sean Wise, good day and good venturing.Great, so thank you.[MUSIC PLAYING]

# Bruce Croxon: Episode 9

View Segments Segment :

## Abstract

Bruce Coxon, a serial entrepreneur, discusses starting his own businesses and then moving into the world of investment. His success started with creating the first online dating platform, but after selling he switched to investment, starring on the show Dragon's Den. He explains how he instills values into his employees and his children, and what it is like to make the change from entrepreneur to investor.

Bruce Croxon: Episode 9

Bruce Coxon, a serial entrepreneur, discusses starting his own businesses and then moving into the world of investment. His success started with creating the first online dating platform, but after selling he switched to investment, starring on the show Dragon's Den. He explains how he instills values into his employees and his children, and what it is like to make the change from entrepreneur to investor.