Recognizing Opportunity and Value in the Unexpected

 

While we might initially have a vision of a final destination in our career, the actual journey to get there often isn’t as straightforward as initially planned. However, there is great value in the unforeseen routes you might stumble upon along the way.

In this episode:

In this episode, Erik Mikkelsen, HBA '06, co-founder and Managing Partner of Auxo Management LP, and the President and Chief Revenue Officer of Stealth Monitoring Inc., a leading North American video monitoring and security company, shares his journey through entrepreneurship and the detours within his career where he found new avenues for opportunity.

During this episode produced in collaboration with the Morrissette Institute for Entrepreneurship, Mikkelsen is joined by guest host Eric Morse, Professor of Entrepreneurship, Executive Director of the Morrissette Institute, to discuss his journey across industries in New York, L.A., Toronto, and Dallas, Texas, the leadership lessons he learned along the way, and how he honed his ability to recognize opportunity in unexpected places.

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Podcast Transcript

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SEAN ACKLIN GRANT: Welcome to the Ivey Academy presents Leadership in Practice, where we discuss critical issues in business, unpack new research, and talk to industry leaders about the latest trends. The Ivey Academy and Ivey Business School are located on the traditional lands of the Anishinaabek, Haudenosaunee, Lūnaapéewak, and Chonnonton nations.This land continues to be home to diverse Indigenous peoples, whom we recognize as contemporary stewards of the land and vital contributors of our society.

Starting out in your career, you probably had an idea of where you might like to end up. We all discover along the way that the journey generally isn't as straightforward. But you'll find some of your greatest lessons by taking an unexpected turn along those unforeseen pathways.

In this episode created in collaboration with the Morrissette Institute for Entrepreneurship, our guest, Erik Mikkelsen, Ivey HBA '06 co-founder and managing partner of Auxo Management, and the president and chief revenue officer of Stealth Monitoring, shares his experience as an entrepreneur and talks about those useful detours in his career across various industries from New York to LA to Toronto, and now Dallas.

Erik offers critical leadership lessons he learned along the way, and explains how he honed his ability to recognize opportunity in unexpected places. Eric Morse, professor of entrepreneurship at Ivey Business School and Executive Director of the Morrissette Institute, is our guest host. Let's get into it.

ERIC MORSE: Back in the early 2000s when you were graduating, you probably would have held the title as most likely to be an entrepreneur. I'd like to a couple of things. Why did you gravitate towards entrepreneurship? What was it in your past? And what was your venture while you were doing your degree here at Western?

ERIK MIKKELSEN: Yeah. Thanks a lot, Eric. I always liked the idea of entrepreneurship. A couple of my first jobs included being a busboy or being a cherry sorter at a local orchard. And my first experience having a boss I thought, "You know what? I'd like to be my own boss one day." And so that was part of it. My first venture was with a few other Ivey classmates. We started in second year before we went to business school, and it was a social media company.

The best friend from high school was at Harvard at the time where they had access to Facebook. And so we created a private community within the Western network, but we wanted to monetize it right away. So we signed up over 50 advertising clients and we sold advertising gig coupons. And really drove revenue to those local businesses. At the time, we were competing mainly against the school newspaper.

ERIC MORSE: Very cool. So if you think about the early days, what were some of the lessons getting going in university or shortly thereafter that you learned?

ERIK MIKKELSEN: Yeah. Listen. When you have your own name on something, it's a little different than the jobs that I'd had in the past. Was a lot more pressure and a lot more emotional. So you hear about entrepreneurship being a roller coaster. And so the highs are high and the lows are low. And when you're convincing a small business at the time to give you hard-earned money for advertising, you really had felt the pressure to create a return on investment for that business and create value.

So a couple of other things that I learned were the value of partnerships. I had a couple other partners that I'm still very close with today 20 years later. And we kind of divided and conquered. And then we got other people involved in the business as well. And so just the ability to network and get things done for other people and build teams was something that I learned really early on, and certainly made some mistakes while we're doing it.

ERIC MORSE: Yeah. You know what? I think that the value of having a partner is so important, and a lot of people miss it. It's like you're having a down day there an up day and they're coaching you through it. And the next time they're down in your coaching them through, and keeping each other going and accountable. I think it's such a great thing.

What were some of your motivations to continue down your entrepreneurial journey from those early days? What were some of the things that really, I guess, lit a fire under you?

ERIK MIKKELSEN: Yeah. I really like the ability to control my own destiny and take ownership of something, as opposed to being just a part of it or an advisor. Coming out of business school, I kind of look at things three buckets. There's a few more, but it's, being an investor being an advisor, being an operator. And being an entrepreneur is a little bit of all three of those things, but probably more on the operations side. And so that was very appealing to me.

And then the ability to really make an impact on other people and on the world, I think, was very motivating for me.

ERIC MORSE: Yeah, cool. It's funny, a lot of our students today have a social enterprise background. But they want to do the same thing you just talked about, is that make a difference on people and in the world. And one of my recent alums said "You know, I want to be an entrepreneur because I do want to make a difference in the world." And it seems like that's the best way to do it.

I told everybody a little bit about your career path, Eric, which is kind of all over the place, right? We went from marketing to finance to real estate to investment to tech. You definitely had a pretty unique career path. What advice would you give to others about thinking through their career, about finding opportunities? And how have you approached that idea of making some of the big changes you've made?

ERIK MIKKELSEN: Yeah, absolutely. So a few things I would say, I didn't know exactly what I wanted to do other than I wanted to be an entrepreneur. And the media company that I started in undergrad, I really felt was successful because it was for students and run by students. And I want to be graduated running the student- led business. I probably didn't understand social media would blow up, and I probably could have continued with it.

But when I was looking at what things to do, one of my friends told me that I sold my soul. When I went in New Investment Banking in New York, they couldn't believe it. And the process there was really, why don't I try something different that's going to give me a skill set that I don't otherwise have and some credibility, and open doors rather than close them?

And so if you don't know what to do, I think the advice is, try to take something where you're going to learn a lot, you're going to add a skill set, and it's going to open a new worlds for you, right? And that way, you'll be able to uncover different opportunities, which is what I was inevitably able to do, ideally. Maybe make some networks connections, save some money, gain some credibility. And those are all things that really helped me later on when I took the plunge into being an entrepreneur.

ERIC MORSE: Yeah, very cool. Can you maybe talk about one or two of those transition moments, Eric, maybe getting into real estate? What did you see that took you that direction? And then we'll get to Stealth in a minute because that's another current and huge thing that you've done.

ERIK MIKKELSEN: Yeah. The real estate one was kind of obvious a little bit, because I was told, basically, to do it. I was in New York from 2006, 2008, doing leveraged finance investment banking. And if anyone's ever seen the movie Margin Call, there's this moment where people at the investment banks kind of knew within a few days that the entire market was going to collapse.

And so I was literally in the bank working midnight on a Saturday or something like that, and someone came over and said, "I think this is all going to go up in flames." And so I was talking to some much more tenured seasoned people in the office like, "Oh, what does that mean for a young guy like me?" They said, "There's going to be opportunities that come out of this." And doing distressed real estate, doing distressed in general, distressed debt investing would be one of them.

And so I took that advice very seriously. Started talking to people and recruiting for jobs that would give me that opportunity. And so I made the switch to a company in Los Angeles that was focused on just that. So it was a nice way to kind of learn through the upswing in the leveraged finance market in the mid 2000s and then learn through the down cycle on the other side of it.

And so I think listening to people that have a lot more experience than you, and looking at the macro trends in the environment, it's always better to be in an industry where the wind is at your back. And that was top of mind for me, and I think paid off.

ERIC MORSE: Yeah, absolutely. And I think it's one of the things that when I look from afar, I would say has always defined your journey. Is that you're always open to opportunity, and you're kind of always looking. Maybe not actively, but certainly passively. And having those conversations that would lead you to opportunities. So I think you've done that amazingly well.

Tell us about Stealth Monitoring, what attracted your attention to this particular opportunity. And maybe tell us a little bit about the growth. I mean, from 55 employees to 1800s employees is amazing growth. You've really built this business into a world competitor. And so, tell us a little bit about that story.

ERIK MIKKELSEN: Yeah. Thanks, Eric. So I partnered up with a fellow Ivey grad who was two years ahead of me, HBA '04, Rob Charron, who was at Stanford Business School at the time and had this concept of what's called a search fund. Raise capital for from a number of high-net-worth individuals. Maybe a few funds and you go and find a business to acquire and actively manage. And then you take a percentage of the upside.

And so our idea at the time, that then basically none-done in Canada, let's take that concept into Canada where we look for a business to buy, right? And the idea with Canada compared to the US was, that even scaled by GDP or population, was about 10 times more capital chasing deals in the US. And so kind of the under $10 million. Deals, you could get for great prices, and then you could expand them.

And so that was the academic thesis, and that's exactly what we did. We came to Toronto, set up shop, and we're looking for a company to buy, ideally, from someone who is probably in their retirement phase with no transition plan. Instead, we found a fairly young entrepreneur in his mid 30s who had built the business from scratch. Really cool guy with a remote video monitoring company. It was called UC at the time. And what the guy is using a combination of technology cameras, sensors and software to replace your supplemental security guards.

And so the idea is you put up cameras in a construction site, and then we watch them after hours for a lower price than the guard would cost with the added benefits of recording all the site activities. So did that for a few years. Was pretty nerve-racking coming in having no experience doing that. And I was used to the corporate world with just different challenges.

And at the time I was 25, so I was one of the younger people to have done it at the time. And really didn't know what I was doing. And so I had to really rely on different people within the business, different investors that we had asked for advice, and just humble myself and really learn the business from the ground up. And so I started actually doing sales there.

I expanded the business to Western Canada first, and we bought another company in Dallas few years later called Stealth Monitoring and rebranded under that name. And so we went from five to 180, and then through acquisition three about 400. And then we've kind of expanded new verticals and geographies since then. And so as you said, we have about 1800 employees now, and we're in four countries with some back office in Asia. And so yeah, it's been one heck of an adventure.

ERIC MORSE: Yeah, for sure. And I'm going to come back to lessons learned a little bit along the way here in just a second. But your growth has been organic and it's also been through acquisition as you've gone through this. Search funds may be something that are relatively new to a lot of folks in Canada. I know you've been pushing us to be more involved in the search fund space for a number of years and rightly so.

And it's really only been the last couple of years where we've really introduced that to our MBAs and some of our HBAs in terms of an option. And it's becoming more of an option for people in Canada. Can you just tell us a little bit more detail on what a search fund is and how that works?

ERIK MIKKELSEN: Yeah, absolutely. So I look at it as entrepreneurship through acquisition where you're building something. So you're raising money for investors, they're giving you some capital to pay yourself a small salary. And then they have a call option when they invest in you. Really, are first right of refusal to invest in a deal that you bring them.

And so in our case, we brought them a deal within a few months. And the majority of our investors said, "Oh, this looks pretty good. We're going to fund our pro rata portion into that investment." And then a few of them will stay on your board and kind of help, advise you on behalf of the entire investor group. And so what's in it for the searcher, which would have been myself and my business partner? Is we take a percentage of the upside.

So some of the private equity where you can get kind of pay back the principal. In a search fund, you typically take 20% to 30% of the profits, depending on how you do.

ERIC MORSE: Right. So fantastic. So you're probably improving your chances of success. You're grabbing something with sales already in the market. You can assess where you think strengths weaknesses are and what you can bring to the table. And I'm sure that's one of the things that you're looking for. So it may limit the upside a little bit, but certainly, it's less risk. And when you grow like you have, I think the upside is going to take care of itself.

ERIK MIKKELSEN: Absolutely

ERIC MORSE: Yeah. Fantastic. So again, I want to go back to that growth because there really aren't that many entrepreneurs that have been on that kind of a ride, Eric. So what are some of the lessons that you've learned going through some of the rapid growth at Stealth Monitoring?

ERIK MIKKELSEN: Absolutely. So a few of them would be the importance of picking the right people to help you. I was very fortunate to have partnered with an entrepreneur who was very humble and very smart, and I kind of knew his limits. But really was a good partner. He was still at the business when we bought the company originally. He said he was going to be there for a few years and then retire or do something else because he's still pretty young, and he's still there.

And so having good partnerships is really important. I also found people either that I brought into the business or just as mentors and advisors that had done it before. So some of them came through the Ivey network where I kind of reached out and said, "Hey, who's built a sales team before? What mistakes did you make earlier in your career? What things do you wish that you knew now?"

So the network, I think, and importance of learning from others is huge. I think also at different stages of a business, when you're really small, we are, call it 5 million of revenue, and we started now we're over 100 over 100 Canadian. You've got to sell whatever you can, basically, when you're a small business. And anyone listening who's a small business owner, I think will relate to that. When you get larger, you have to think about how do I grow more intelligently.

And so, what are the areas that I want to focus on? And what are the areas that I want to say no to, that are less profitable or more complex? And so having focus is a real key. And as an entrepreneur with ADD like myself, it just didn't come easy.

ERIC MORSE: Fair enough. And you know, it really is two different kind of mindsets, right? Because you're trying to find what's going to stick on the wall in that early experimental stage. And as you say, trying and selling anything. Is a really different mindset then "Oh, this is working. How do I scale it because now I need process and systems and execute a million times?"

So I love your answer though, Eric, because I think humility is such an important part of that, and the willingness to reach out for help or "Somebody's been here before and they can probably help me through this." Such great advice. I appreciate that a lot. I'm going to go back a little bit to the funding things because I know, just in personal conversations, that over the years, you've been frustrated with some of the funding opportunities in Canada.

You've had quite a bit of time in the States. And so you've always kind of compared those too. We have been behind. I hope we're catching up, and I'd like your opinion on that. But what are some of the things that other countries do, perhaps, better than us? And where can we do better as a country in helping entrepreneurs grow?

ERIK MIKKELSEN: Yeah, Eric. I appreciate that question. When we had this thesis of investing in Canadian businesses coming back, we want it to be 50% Canadian investors and advisors and 50% American. And we got a lot of feedback that we were just too young, didn't have the experience or the gray hair, so to speak to want to back.

And Meanwhile, we fundraised out of Palo Alto in a few weeks. And so we ended up being well over 80% US. Found that it was just a much slower mentality, much less aggressive and willing to take risks. Whereas, particularly in California, but also some our investors from the East Coast in the US, they had invested in young entrepreneurs, people that only had two to three years of experience that had the will and kind of the grind, and the willingness to kind of prove themselves.

And so one of my investors said, I pitched to him, was "You're kind of trading experience for horsepower. And that wasn't seen in the Canadian market. It's still a lot better. I will say we have a long way to go, but just at Ivey alone, we've started as our work together on the Ivey Angel Day, which is now already raised millions of dollars into startups coming from Western. And that's just the start, we just started that.

And so we have these types of things that have been put in place, that have been successful in other geographies like the US, that we've kind of started to replicate. And the mentality is really starting to shift. And you've seen some fairly large exits coming from Canadian entrepreneurs as well. I saw one the other day, I think, Nick's, was sold for over $300 million, I think. It was the largest exit by a female entrepreneur in Canada to date, which is also really great to see female entrepreneurship and more diversity coming into the Canadian market, which has also been lacking.

ERIC MORSE: Thanks. And you've been a big part of pushing us here for sure. And I think we've only been doing our demo day for a couple of years, and we're upwards of $7 million to really early stage ventures, which is great. So thanks for your leadership there.

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Eric, I'm going to go back a little bit to, again-- I hope stealth continues on for many, many years. But I'm also pretty sure it won't be your last venture down the road. And so you always keep your eyesight on the horizon and follow trends and look outside of the immediate business. And I think it's been something you've done so well over the years. Where do you see emerging trends? Where are some of the things that maybe you are-- hey, I know you're 100% focused on Stealth. But where are some of those things you're seeing opportunities starting to pop up?

ERIK MIKKELSEN: Yeah, absolutely. I think my earlier comments about looking at where the wind is at your back is important. I find it easier to be successful in industries or markets that have-- that just make a lot of sense of disruptive technologies. I always think of Uber as something where it's like, "Hey, this was a problem. It was hard to hail a cab or get from A to B and they just came up with a better solution."

It sounds easy. If the concept makes sense, obviously, for those that know the story is extremely difficult and continues to be extremely difficult for them to execute on. And so I think large addressable markets that are solving problems, that make it easier for people to live and have more enjoyable lives or for businesses to operate and service those people. We have a tendency over time to innovate, and then kind of refine what we're doing.

So it doesn't kind of go in this curve that just goes up like this. And we tend to kind of come up with something new. If that was the engine or electricity or the internet, and more recently cell phones, then spend a lot of time refining that. We have a lot of new really exciting things that we've been working on for some time that are really starting to show promise. And the ones that come to mind would be artificial intelligence, machine learning. We're doing a lot of that, blockchain.

I'll call it blockchain instead of crypto. And then virtual augmented reality, and some really cool things going on within those sectors. And so there's biotech and a whole bunch of other really cool stuff coming out. And so I think we're going to see that the next kind of wave of innovative industries. And I that's going to be really exciting for people across the world, but particularly those that are interested in pursuing entrepreneurship.

ERIC MORSE: Eric, this is something you've been close to, and we've talked about the financing side of it. What else do you think business schools could be doing to encourage more entrepreneurship? It's a question from one of our viewers.

ERIK MIKKELSEN: Yeah, absolutely. I think a lot of people, at least that I have met, they have a perception that entrepreneurship is having to have a brand new, unique idea and going that 0 to 1. Or, I think a lot of people perceive entrepreneurship to only be technology-focused, whereas, I view entrepreneurship really more as a state of mind. You can be an entrepreneur while still working in a large company.

You could be an entrepreneurial investor who's helping even advise, not even invest in something else that's entrepreneurially based or at a large company. You could start something, a club or something social, that's being an entrepreneur. And so I think that's part of it. I think there's different stages in life that you can be an entrepreneur. I don't think-- there's very few I think that are successful, like Zuckerberg, right out of college.

I think a lot of people that I've met have gone into industry, gotten years of experience and really fallen into it. And so always being open to it at whatever stage in life. And then there's all types of industries. I happen to be focused in tech, but I've invested in all types of things from health care to real estate otherwise, and to tequila.

And so I think understanding what entrepreneurship means to you is something that business schools, I think, can do a better job really teaching and understanding and creating networking groups after graduation. And there's some other business schools that do different things there successfully, if it's groups are not working put in different faculty together, these types of things.

ERIC MORSE: Yeah, for sure. No, good answer. I think there's a lot of different paths to entrepreneurship. And an entrepreneurial mindset in particular is great for everybody coming out of university now, and. So that's certainly something that we're trying to focus more and more on. I love the shout out to Eric Brass, by the way. That was nice.

One of the stats I saw just recently, Eric, and it speaks to your point, there's one right time to start. Harvard put something out, I think it was last week. Over 50% of their alumni, 10 years on, have started a business. So it's not right away, very often that startup comes 10, even 20, 30 years after graduation. And I don't know the Ivy number on that. I would guess it's not quite 50, but I think we're doing all right. And hopefully, we can help move it in that direction.

So thanks for that answer. I've got another great question here. As a successful entrepreneur and leader, you've leaned on your network over the years. How are you giving back, and obviously, through the work with the school. But how are you helping the next generation of entrepreneurs and leaders? And what's the best way somebody else might be able to get engaged?

ERIK MIKKELSEN: I had a lot of help. I wasn't afraid to reach out to people for help along the way. Even with my application for Ivey, I had someone come to my high school and talk about Ivey. It was a cousin of one of my teachers. Said, "Hey, this Ivey Business School is a great place." Did a little spiel on Ivey and I said, "Hey." I reached out to him and said, "Hey, can you help me out with my application?"

He ended up helping me out with my resume when I applied to investment banking as well. And because I got a lot of help, the dean at the time, Mark Vandenbosch, of-- or he was the program director of HBA I remember he called me into his office I thought I was in trouble. I was like Oh you want to get that call. And Meanwhile, he had heard about the business that I had started while I was there, and had some potential clients for me. Like me to meet.

And I'm like "Whoa, not only am I not in trouble. This guy's helping me make money." Awesome, right? That's great. And so to pay it forward has always been really important for me. A couple years out of school, I probably did my first thing where the markets crashed. And I got together about 20 fairly recent alum two to five years out of college, and we did a presentation to the current business school kids, and HBA and MBA to say, "Hey, here's the reality of the market. Here's what you should be thinking about when-- not everyone's going to get a job in investment banking or consulting."

And we'll just do a Q&A and have that support in our work. Since then, I think it's been important to take interns and mentor students and kind of pay it forward. We have groups either informally or formally, are there to help advise. And I think because of all the help that I got from people a lot more experienced and successful than me, and I still continue to do that, I think it's important now to do that with the younger generation however I can.

So that's more on the entrepreneurship side, I think, being involved in community and social responsibility of whatever is important to you. So nonprofit work, I think as a business leader and just a community leader, is something that's important. And that those that have the time and/or money to be able to put into. There's lots of ways to contribute there, and I think that's important.

ERIC MORSE: I love this question. So what would you say to someone who's interested in entrepreneurship, but they might be worried about the high-risk perception? How do you bounce back from mistakes or failures? And how do you think about risk?

ERIK MIKKELSEN: Yeah. Calculating and managing risk is a real key to anything, but especially to entrepreneurship. It's a fantastic question. I try to measure the upside and downside as much as I can. I put as many things in the decision trees as I possibly can from those old management science classes.

ERIC MORSE: Makes me delighted to hear you say that.

ERIK MIKKELSEN: What am I really good friends and classmates, Nico is a management science professor now. So he's drilled that into me. But your ability to think about what the risks were. And I'll talk about when I left. People thought I was crazy I was living in Los Angeles, getting over paid for a young 20s person with a convertible in LA. And I was like "I'm going to move to Canada back to Toronto where it's cold but amazing, but cold, and take an 80% pay cut to go and do something."

The timing for me was really important because I had a few years of experience, but I wasn't making millions of dollars. I wasn't in a corner office. I didn't have a mortgage with two kids and those commitments. And so the way that I thought about my down side was if I work really hard, I raise the money and I can't put it to work or I buy something and I really try hard.

When I talk to investors, they said "You're going to make a lot. You're going to learn a ton, and you're going to make a lot of great contacts." Ideally, we want to make money out of this, but I talked to a few recruiters and they said "Worst case, you go back to private equity. You have a good background and you have a bit of a parachute, or you try it again, right? Maybe partner with one of these investors."

So the downside and the upside was everything that I've been able to see and accomplish. And so I felt that it was really weighted in my favor at that time. So when I talk about taking risks with people, I have friends who say, "I want to be an entrepreneur but I have this great job, much more senior at a firm. I don't have really a good support network. I think my husband or my wife would not be supportive."

I'm like "Hey, that's fine, right? Maybe it's not for you. Or maybe you can do something entrepreneurial on the side in your spare time, evenings and weekends and try to get something going a little bit and build up a little bit of that safety net. And then if it really starts taking off, then you can jump into it then." So it's a very personal question, I find, which is different for everyone. And I think some people are more or less risk-averse than others. And I think knowing where you lie on that and how to minimize your downside in different situations is the way to go.

ERIC MORSE: Erik, I couldn't agree with you more. The one other piece of advice that I've heard and going through the process you did when you have investors, is just make sure you have open communication all the time with them. Because if you're doing your best and hustling as hard as you can and it doesn't work, there are professional investors.

They understand that's going to happen, and they're much more likely to help you on that next deal if you were open all the way through it. So good on you. I've got a really another great question here. Who's the best partner you've had? Maybe you don't have to name them. But more like, what were the characteristics of that person that made them such a great partner for you?

ERIK MIKKELSEN: Yeah, absolutely. I've had some great partners. I'll skip to the best one. I've been with him for 12 years, he's my current business partner, and kind of brought me into this. But even my first partner, I'm really close with. A guy named Chris. Chris Cruz is a head guy at a fund called Searchlight in New York, and he's done exceptionally well as an investor.

But we talked a lot about partnership and what you bring to the table early on, and that was the student company that we had. And we both went to become investment bankers, and he taught me a lot. It really set me up for Rob Charron who's my current business partner, and brought me into the search fund world. So it was his idea. He brought me into it. And we were at the Stanford Business School library, which was the old library.

It was the last year before they renovated it, so it was super old and 80s looking. And we spent a couple of days really whiteboarding what was important to each person, what our values were, where we saw ourselves in five years, what we wanted to focus on. Really tried to get everything out on the table in terms of what a partnership could look like. And to have each other's backs and support each other, but also appreciate the differences, I think is really important.

I'll just tell a quick story. We were looking at a deal. We're in the Mars building in Toronto at the time with a few other Ivey alum and looking at a deal. And we got into some argument. I can't remember about what, we had a disagreement on the deal. And I left in a hissy fit, I was like, "You don't know what you're talking about." Whatever it was. And he sent me a text message. And he said, it was a quote.

I think it's from Warren Buffett. But it said, "If two business partners always agree, one of them isn't needed. And so I came back and gave him a big hug and we went on to the rest of the day. Another thing, a quick one that I'll mention on partnership, and I've said this a few times before is, it's next to potentially a marriage, there's a lot of similarities with a marriage. But people tend to not think about it maybe enough or think about all that nuances.

And I say if your friend called you up and said, "Hey, I met this great guy or this great girl and they're awesome and I'm going to get married to them, and I've known them for three weeks." You'd probably say, "Hey, that sounds great. Super excited for you." Three weeks? As a good friend, you'd probably tell them like, "Whoa, have you really thought this through." Meanwhile, I do see people jump into partnerships in business ventures in very short amounts of time without really thinking through these things.

And a lot of our investors, when we're fundraising from them the very get go, they didn't care about my banking experience or you done this many deals. They didn't ask any questions about that. And most of it was about the dynamics of us partners, how long we've known each other, how we work together, those types of things. And looking back 12 years, I understand why. And I've been very fortunate to have a very complementary business partner. We're very hard on each other. From the outside, some people may say, "Hey, you guys sure you really like each other."

ERIC MORSE: Yeah, great answer, Eric. Somebody'd like to know a little bit more about that search, when you found UCIT. Were there other companies you looked at ahead of time? You guys found something pretty quickly. What was that process like?

ERIK MIKKELSEN: Absolutely. I had this great plan of finding these proprietary deals. So I used to say I like the three D's, death, divorce, and disease. All great reasons want to sell your otherwise great company, right? So I look at "Why are you selling. Why are you selling this great company."

And so I was going to go and network with all these divorce lawyers and try to get this inside deal scoop, and that just never happened because we ended up having some really well-known private equity funds. We had guys at Torquest and Burchill and others on cap and on ex that said, "Hey" We met with them we knew people there from the Ivey Network and classmates, and say. "We don't do deals that big. We see them though, all the time.

And you guys seem like good guys, we can give them to you to look at, tell us the criteria you're looking at." That great-- yeah, we're looking at business services recurring monthly revenue. And so we ended up getting some deal flow, but also a lot of advisor interest from that. It gave us credibility within the Canadian market in particular. And so we had the big accounting firms. All these guys kind of reach out and give us deal flow, and that's how we ultimately found UCIT.

ERIC MORSE: Another interesting tough one. What would you recommend, from your experience, for an entrepreneur that has an idea but maybe it's out of their area of expertise? How would you begin to go down that and work on that business idea?

ERIK MIKKELSEN: Yeah, probably. Just off the top of my head, there's probably two ways that you could go. And it's probably a combination, to be honest. I think you need to be somewhat of an expert, either yourself or through your network. And so if you really like an industry, and let's just say it's something in health sciences or something that's engineering-based, you got to think about, "Well, I could bring in a partner, or I could hire someone and just pay them cash to take care of that portion of it for me."

But then you've got to think about, back to that partnership discussion, what value am I adding? So if, it's let's say, life sciences, they have some type of new product that they've developed, are you able to take that product, brand it, sell it, market it, put it through a distribution channel? What are you kind of adding to the table? So that's part one is kind of doing it through others that you're bringing in.

And then number two is if it's something that's easy enough or you can just work hard at it and become enough of an expert yourself to be dangerous. And it's probably a combination that I've personally done with, let's say, artificial intelligence where I'm by no means a developer that's writing AI code. But I've talked to enough experts, read enough, and taken some courses on it that I know enough to be dangerous and that field as an entrepreneur.

ERIC MORSE: Yeah, Eric, I think that's so important. I mean, I think partnerships where you completely separate off and have your own things, they're dangerous, right? You want to educate yourself to know enough about it that you can make informed decisions. You don't have to be the expert, but you should certainly know the ground rules and some of the basics down there. Thinking about your younger self, what advice would you give to your younger self, or maybe current Ivey students as they think about an entrepreneurial career?

ERIK MIKKELSEN: Yeah. I think there's a couple of things as a lot of young people, I was going to say young men, but maybe young people, as probably overly confident, probably naive, thought I had probably more answers than I did. And I think it's OK to not have all the answers and be more humble. And so I think that that's absolutely a lesson. One of my favorite quotes is Socrates, "All I know is I know nothing." You're always learning, always developing.

And so I kind of wish that I thought about that more when I was starting out. I'll go all the way back to Ivey for the second part. I really was focused on entrepreneurship class, finance, these classes. And I didn't pay much attention to organizational behavior. So management behavior class.

And Lo and behold, what's the most important class by far, it'll would be organizational behavior, right? Understanding people, structuring teams, understanding what motivates people, empathizing with people, all these types of things that some of which you can learn in a class like that. And a lot of which you have to learn just by being out in the world and through experience and through others.

Is just absolutely so important. to get things done for other people and develop those, that works in relationships. Unless you're a stock trader who can just sit at a computer and get everything done yourself or a very talented programmer. Most people have to get things done through others. And so it's that network. And then the last thing would be-- and

I think I've been pretty good at this. But I would say connect people and give without wanting something in return. So I've consistently heard and been genuinely interested in what people are up to and what motivates them. And they'll think, "Oh, I wonder if I know anyone, maybe I can help them. Or maybe I know someone that could." And so I'll go out of my way expecting nothing in return, genuinely, to help them. And people remember that, and it kind of comes back to you.

It's kind of karma, but you're laying a bunch of seeds, and just creating a good network of people and what goes around comes around. And that's ended up paying off many times. And also given me the opportunity to invest and do quite well in some of these cases where that wasn't the intent on the onset. But provided opportunity.

ERIC MORSE: Yeah. I think, great advice all the way around, for sure. It's amazing. I know you've been close to the school since you graduated. And so you've seen this progression, but you go back to when you were here at Ivey and we had a couple of courses in entrepreneurship. But it was still way below kind of the consulting finance thing, and we're almost a third leg now with nine faculty members and lots of courses and activities beyond the classroom.

And thanks to you and alumni that have taken this path for helping us get there. So thanks so much. And I love the idea of, paying it forward, and things do come around. Is there anything else that we haven't talked about that we should cover or that you'd like to leave our audience with today?

ERIK MIKKELSEN: Maybe a couple of things. I think you should be passionate about whatever it is that you're doing. I don't think-- certainly, not all of what you're going to do you're going to love. You have to do some things that are hard work or tedious, if it's being an entrepreneur or just being entrepreneurial. But at the end of the day, when you're really trying to think about what you want to do long term, it should be something that you really believe in.

And I think that I've seen the most successful people, is they'll focus more on that than maybe money, and the money will come. It sounds like a cliche, but I've just found it to be true. Take real value and take real care of the network. I have some of the greatest joy that I have, and also some of the best business that I've done is through the Ivey Alumni Network. I'm very close to my classmates.

My roommate from Western is one of my best friends, and we've done a bunch of deals together, and that just brings a lot of-- I'm very grateful for that. But it takes time. Life gets busy as you go, kids and travel, and whatever it is. But I think that that's really important. And then just really trying to stay true to your values and your morals. Having high integrity is really important. But the last one is have fun.

I think for me, COVID and a whole bunch of other stuff stress over the last few years has really taught me life is short, and what's the point of all of this if you're not going to enjoy it along the way? So take time to enjoy the journey, if that's being an entrepreneur or whatever it is in the business world. Take time to have fun. I think it's really important to do that

ERIC MORSE: Yeah, Eric. I think that's awesome. And as I tie that up, I think the working hard piece is a big part that we often overlook. It is hard work, right? I mean, you're going to put it a lot of hours. And so having it something you're passionate about is clearly beneficial in that sense because you want to have fun at this, and it should be a lot of fun. And you have fun through people. And I think you've really nailed that throughout our morning today, is how important the network and the people are that you work with. And I think that's such a good great lesson to kind of live leave people with. So thanks so much for joining us, and we look forward to seeing you next time.

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ANNOUNCER: Thank you for tuning in to Leadership in Practice. We'd like to thank our guests, Erik Mikkelsen and Eric Morse. Leadership in Practice is produced by Melissa Welsh, Joanna Shepherd, and me, Sean Acklin Grant. Editing and audio mix by Carol Eugene Park. If you like this episode, make sure to subscribe. You can also find more information by visiting iveyacademy.com or follow us on social media @IveyAcademy for more content, upcoming events, and programs. We look forward to having you join us again soon.

 

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