TORONTO — She's a Dragon on Dragon's Den. She started five companies before she was 33, is ranked one of WXN's Most Powerful in Canada is listed as a Forbes “Millennial on a Mission,” and has also been called a “tech titan.”
Michele Romanow is the co-founder of Clearbanc, which gave entrepreneurs more than $100M in funding in 2018. She previously co-founded SnapSaves, which was acquired by American tech giant, Groupon in 2014. Michele was also the co-founder of Buytopia.ca, which acquired ten competitors including Shop.ca and WagJag and was ranked third on the Profit Hot 50 list of fastest growing companies.
Impressive stuff. But Michele Romanow told the HAC conference about her early start in the caviar industry, and how she learned reality can be very different from the business plan.
Her venture into the caviar business taught her that 1) Building a business would be messy 2) One of the main challenges was moving from planning to executing and 3) All her innovation would come from trying hundreds of things.
While she was an engineering student at Queen's University in Kingston in her early 20s, Romanow and two friends, Anatoliy Melnichuk and Ryan Marien, were looking at what the next billion-dollar thing might be.
They read an article that said that world supplies of caviar were down by 95 per cent. So Romanow went to the Queen's Library, googled Thomas Keller of The French Laundry restaurant in California, and called to ask why he didn't have any caviar on his menu. “Do you have any,” asked Keller.
“At that second, I knew that if one of the world's most famous chefs couldn't find caviar, there must be a market for it,” Romanow told the HAC audience.
She and her two friends made a massive business plan, a 20-tab Excel spreadsheet. They realized they had to raise money and raised $20,000 — but they needed $6 million. They did some research and found out there was still a natural supply of sturgeon in the Saint John River in New Brunswick, and decided they would build a fishery from scratch.
So they went to the Courtney Bay hotel in Saint John, N.B. The first thing they found out was that you need a license to go sturgeon fishing, and that there hadn't been any available for 25 years. There were only five people left with a sturgeon fishing license, and no, the government couldn't release their names. Romanow called back every day, using a different phone and a different accent each time, until she found someone who would give her the names of the five people with licenses.
“Then I made cold calls to every Elmer Smith I could find. I found out that each fish is worth $2,000 to $10,000 — they're 200-pound fish — and that it could cost $5,000 per day to rent a license.”
When she finally caught up with the correct person, he said, “For you, sweetheart, it's $500 for the summer.”
Only one problem: he didn't have a boat. But he did have a friend who was selling a boat, and for $1,000 and a case of beer, they could have it.
“It was the most gruelling business,” said Romanow. “We had to drive two hours to get to the fish. Then we had to learn how to make caviar through a series of YouTube videos — that were all in Russian.” They also found out that the whole fish needed to be sold immediately.
Such was the beginning of Evandale Caviar — a little different beginning from the one in the 20-tab Excel business plan. “The chefs loved this fish — everyone was so excited and we did great business with hotels and restaurants. By the end of summer, we had made a lot of money.
“And then everything changed. In the fall of 2008, we had the greatest recession since the 1930s, and caviar is a luxury product.
“Everything in that massive plan — nothing happened that way. We learned that when we were executing, work would iterate as we grew the business. We had to move out of the need to plan and into the need for execution.”
The partners rallied and used the last $15,000 from Evandale to start a more successful business, a deal-of-the-day website called Buytopia. Then they went on to hit a home run with a digital coupon app called SnapSaves that was eventually bought by Groupon less than a year after launch for $50 million.
Disruption is a good thing…
Its no secret that the rate of innovation has increased rapidly. In 1952, the average company spent 52 years on the S&P 500 Index; by 2019 that length of time had dropped dramatically to 21 years.
Romanow told the audience that the rate of disruption is increasing, and the industries that disrupt are the ones that are going to make it.
“I've had such a joyful career, being a part of what will be the next wave of disruption — not the business that's being disrupted,” she said.