I launched Merchant Advance Capital at the age of 22 from the den of my apartment in Vancouver. Random fact: people who work in finance are not just spreadsheet junkies – at the same time as starting my business, I was also the drummer in a rock band, Head of the Herd.
The pinnacle of my music career was when my band opened for Guns N’ Roses in 2013. We also opened for Alice in Chains, The Trews, Mother Mother, The Sheepdogs and I Mother Earth, among many others.
Naturally, I learned a lot about managing time while juggling a new venture alongside performing. In retrospect, there were a number of other lessons I took away from my experience in the band that I have since applied to my business.
Here are some takeaways:
Identify a niche
I started Merchant Advance Capital by identifying a niche in Canada’s financing market, and have been working to make it thrive ever since. How do you carve out a niche business? The answer is to decide which industry you’ll specialize in; become a subject matter expert in this industry, and know all about the possible products and services; then target a gap in the market by identifying what’s missing or what could be better.
What does this have to do with drumming? My idea for changing the way small businesses are funded in Canada stems back to my younger days drumming in punk bands. Punk music is about turning a culture on its head and not accepting the status quo. In this case, the status quo is taking out a loan from a traditional bank. My business doesn’t accept that this is the only way to get financed. We’re turning traditional banking upside down. I’m kind of like the Tommy Ramone of small business funding (but not).
Know your crowd
While the benefits of failing might be fashionable among tech and business gurus nowadays, but the only thing that’s better than failing is succeeding.
Before going on stage as a drummer, I’d always try to get a glance at the crowd so I could mentally prepare. As performers we’d want to deliver on the crowd’s expectations and put on a killer show.
If you do fail, showing strong leadership and accountability to your team is vital. As with drummers, who often keep the band together and on task, if you miss a beat as a business leader, the whole company can be negatively affected.
Talk it out
In any economic climate, it is challenging to find funds to start a business. When you do it, set realistic expectations with your early investors and be transparent in your communications – don’t sugarcoat anything.
Keep investors updated with both good and bad news. As with drumming, consistency is key here. Of course there are times for drum solos, but playing steady tempos is essential to becoming a sought-after drummer – and it works the same in business. Reliable and honest communications with investors will set you up for a long-standing business relationship.
If given the chance to give my 22-year-old self – or another entrepreneur – advice, I’d recommend having a shareholder agreement with your co-founders from the start. Lawyers may seem like an unnecessary expense so early on in a business, but this cost will offset issues that can arise in the future – and minimize financial pressures. Think of the founder agreement as a form of prenuptial agreement that clearly defines roles and responsibilities.
Surround yourself with strong performers
No one person can excel at everything. A band is formed by bringing together the strongest drummer, guitarist, singer and other artists. Only by coming together can exceptional music be created.
Entrepreneurs often try to do everything themselves in the early days – from marketing to sales to finance – to get their venture off the ground. When your profits allow, surround yourself with people that have skills in areas that aren’t your natural strength. No one succeeds in business alone, and those who try will lose to a great team every time. Even solo acts have people helping them with such tasks as bookings, sales and marketing, sound, and so on.
Retaining top talent should be a constant priority. So how do you give these individuals the space to perform? My leadership style has evolved from my time on the drums: I promote a flexible structure so employees can feel confident taking calculated risks and pushing boundaries, within set parameters.
In the eight years I’ve been in business, I’ve often drawn upon my past experiences with music to guide my decisions. I’d encourage other entrepreneurs to consider lessons from their personal passions, and draw upon these experiences when creating a new venture – it may just take you somewhere new.
David Gens is the CEO and founder of Merchant Advance Capital, which has provided financing to more than 2,300 small businesses in Canada.