Fireside Chats with Fiery Entrepreneurs – Part Three, with David Kincaid, President & CEO, LEVEL5 Strategic Brand Advisors

In Part Three of our six-part interview series on business planning, Fireside Chats with Fiery Entrepreneurs™, we are lucky to have a legendary Canadian marketer in our midst. David Kincaid is President & CEO of LEVEL5, one of Canada’s premier strategic brand advisory firms, and has been responsible for the launch of several international products and media innovations throughout his storied career. As the Chief Marketing Officer for Corus Entertainment, one of Canada’s most successful integrated media and entertainment companies, he was responsible for revitalizing the entire brand portfolio. He also spearheaded the extremely successful Labatt “Out of the Blue” campaign, which he developed as Senior Vice President of Marketing and Strategic Planning for Labatt Breweries. David is highly acclaimed and has received accolades for over 25 award-winning advertising and promotional campaigns.

This is a fascinating interview in which David sheds light on some fundamental questions aspiring entrepreneurs should ask themselves before they plunge into the world of entrepreneurship and start to write a business plan – especially those aspiring entrepreneurs that wish to start a business after spending several years in the corporate world. Read on.

Faheem Moosa: Dave, thanks for so graciously accepting my request for an interview – great to have you here. In your opinion, what are the best ways an entrepreneur can research and understand his or her market?

David Kincaid: Before you worry about researching and understanding, you’ve really got to understand what it is you are passionate about and what it is you believe you can bring to the market. To understand somebody’s need without understanding what value you can bring first, is a little bit like asking, ‘Do you believe in religion?’ It’s such a broad topic. Once you understand what the focus to your passion, your capabilities and your value proposition is, you will then know what kind of clients (you need to target), keeping those parameters in mind. At LEVEL5, the parameter is brand – we want to research and understand our client’s brand. When I went out to do my research to develop a business plan to launch LEVEL5 I knew the subject matter I was researching and understanding, but it was driven by something that I had a passion for.

Anybody can have an idea, but what you need to have as an entrepreneur is belief. So, you have to test the market around the hypothesis that your belief creates. My belief was that people had lost track of looking at their brands as assets – it had become a Marcom effort. So I went out and did my initial research and understanding around that. I could do it credibly because I was passionate about it and because I had a background in it. I went out and spoke with Presidents, CEOs and Board members of companies who demonstrated their ability to build their business through their brand. I also talked to start-ups – companies that had the goal of creating a brand but that were starting from nothing. I leveraged my network more than I did desktop research. Because this was something I was passionate about and had a background in, most people were receptive to me bouncing the hypothesis off of them.

FM: When there are several growth opportunities ahead of you, what criteria do you use to analyze those opportunities and place your bets?

DK: Three of them. One, is it rooted in a meaningful consumer insight? Two, does it truly deliver on an unmet need as a result of that insight? And three, is it truly a business? So, there are all kinds of directions I could have taken LEVEL5 in, but the model that I created involved organizing a small group of senior people with practical experience as owner-operators or CEOs of brand-driven organizations. That’s the choice I made. I could’ve developed it across a whole bunch of different models. Again, you could have the greatest idea, one that is rooted in a consumer insight, delivers on an unmet need and is wonderful, inspiring and unique. But is it really a business? Is it sustainable? Can you scale it? And, do you have the competency, reputation or credibility to participate in that area?

FM: Do you think it important for young, entrepreneurial companies to have a well-defined competitive position, target market and value proposition? Why?

DK: Yes. If not, where do you target? How do you prioritize? Where do you focus your efforts? Whose needs and understanding are you trying to develop an appreciation for? You have to position against a specific target audience with something that’s unique and it’s got to bring value to them. That’s what I mean, is it a great idea or is it a business? And you should be able to write a business plan around it. If it is a business, then show me the plan. I wrote a very detailed 3-year business plan to get LEVEL5 up and running. I took it to the bank – the bank manager said it was more detailed that the plans he gets from companies that are 25 years old when they’re applying for credit. The plan was approved on the spot. I laid out exactly what I was trying to do, for whom, and gave them some idea about some responsible level of investment and spending and what my revenue expectations were.

So, if you don’t position, don’t have a target and don’t have a value proposition, how can you write a business plan?

FM: What is your philosophy with regard to raising awareness about your company? How do you recommend entrepreneurs approach and plan this task?

DK: For an entrepreneur with a brand new proposition in the market, raise what I call responsible awareness. Often when people leave the corporate world to start up their own thing, they go out and build awareness about how great they are. But they have nothing to prove – no demonstrable results. I don’t care how great you were as the CMO of Royal Bank, you’re now running a new business. You actually have to re-earn your stripes. So, raising awareness is more based on doing it responsibly, through people who believe in you and will endorse you because they’ve worked closely with you. And it’s not about going out and telling the world on your website or PR that ‘we can do this, or we can do that’. That’s great, but what have you got to prove? What have you got to show for that? So, build awareness but do it responsibly. Always leverage your network. Word of mouth is your single largest, most powerful yet riskiest form of media to raise awareness. What are you doing to promote that?

FM: What are the key success factors for running and growing a profitable professional services firm?

DK: Number one is differentiation. The world doesn’t need another advertising agency. So, what’s your unique selling proposition and how does that come to life through the value proposition? Number two, as I said earlier, is that it’s truly a business and not just an idea. People can pursue ideas and go broke. Again, it’s a business if it addresses an unmet need, if you can credibly deliver it and that it is sustainable and scalable. And the third one pertains to your business model. In year one, if you can’t break even, then you don’t have a proper business model. Because, once you start that spiral – ‘Oh, we’ll cover the losses next year’ – you are now working from a position of fear, not confidence.

FM: What do you feel is an entrepreneur’s biggest challenge when it comes to implementing a strategic plan / business plan? How can entrepreneurs be successful at implementation?

DK: I think the biggest challenge most entrepreneurs have is confidence. And again, a lot of it is because they pursue an idea, not a belief. Because the idea sounds good, they get it out there, they try to make a business out of it and it fails. The numbers aren’t coming in, and the immediate conclusion when you’re managing an idea versus a business, is ‘I guess the idea wasn’t very good, let’s pull the plug, because it’s not making any money.’ Secondly, as an entrepreneur, you’re building an asset. You should be worried about the balance sheet, not the P&L. That requires long-term perspective and it requires persistence. Underscoring both of those is confidence. So, the biggest challenge is to keep that confidence and not let the fear-factor come in and rule you.

The best way to be successful at implementation? Surround yourself with people that are better than you – diversity of opinion, diversity of backgrounds. And put on big ears. You may be the founder, but you don’t have all the answers. I operated the company on my own for five years, but I didn’t operate it as well as Ian Madell and Hua Yu do today. I have an ongoing intellectual curiosity and capacity, but I’m not as diligent, rigorous and thorough in poring over periodicals and articles and newspapers as Matt Kelly is. I think I’ve got a pretty good business development capability and a pretty good network, but it’s half that of Bruce Elliot and Tom Wright. So, once you know what the success factors are and what you need to run the company, find people who are better at doing it than you are.

For an analysis of this interview, click here.