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Some say entrepreneurship is like jumping out of a plane and building a parachute on the way down. 2020 made the risk-taking even more perilous.
The pandemic dealt an especially large blow to small businesses in Canada. Overnight, they were forced to develop new capabilities and sales channels, and to compete online against established players with deep pockets and greater resources.
Many rose to the challenge.
The hardest-hit businesses (think hospitality and arts and culture) have been among the top e-commerce adopters since the pandemic began, according to the Canadian Federation of Independent Business. And in a recent PayPal Canada/Edelman Survey, nearly 70% of online small businesses said selling online has made them more successful.
In our final Disruptors episode of 2020, we spoke to entrepreneurs from across Canada who are taking on the big tech players, with a fraction of their resources. They’re embracing data, and succeeding online despite limited prior experience. Here’s what they can teach us.
A little advance preparation goes a long way
For Alisha Esmail, founder of Road Coffee in Saskatoon, the feeling that something bad was going to happen struck in January, when her Asian suppliers were suddenly behind on deliveries. Esmail paid attention to her gut feeling and pivoted early, launching a new website that more easily enabled online sales the day before Saskatchewan went into lockdown.
Andrew Feenstra, owner of Halifax bike shop Cyclesmith, had already invested in online commerce capabilities—making him somewhat of an outlier among small Canadian businesses, the majority of which lacked a website when the pandemic struck. Cyclesmith’s online business jumped from 5% of overall sales to 50% in just a few weeks. By being ready, Feenstra had the capacity to focus on optimizing those sales and finding efficiencies.
Made in Canada is possible, with a little automation
Soslan Tsoutsiev, president of Transformer Table in Montreal, previously relied on 600 factory workers overseas to make 60% of his company’s products. When COVID disrupted Transformer Table’s supply chain, Tsoutsiev accelerated existing plans to repatriate production to Quebec. To make manufacturing in Canada financially viable, he incorporated automation—learning as he went along. Prior to the change, it took 55 human hours to make each product. Now, it takes four hours: two human hours and two robot hours. Tsoutsiev’s costs have gone down.
“We see now that the more you depend on labour, the more you are at risk. However, at the same time, outsourcing—you’re also at risk. So it’s a balancing act,” Tsoutsiev said.
Any business can become a data business
Even though Cyclesmith’s Feenstra was prepared for the jump in e-commerce, he didn’t know what it would mean for his business. “I’m a bike shop guy, not an Amazon guy. And understanding how people buy online, understanding how the purchasing is done is so different than in an in-store situation,” he says.
By mining and analyzing its own data, Cyclesmith learned it was overcomplicating the bike-selling process. In taking steps to correct that, the shop discovered it could sell to a broader range of customers, including casual cyclists and families.
Cyclesmith also realized it had many customers in Ottawa and Calgary, thousands of kilometers from its Halifax home base. Feenstra’s team is now using data to better understand how it can out-compete bike shops in those cities, as it looks to expand in those markets.
Road Coffee’s Esmail embraced low-cost agile digital marketing strategies and used the data insights she gathered to acquire more customers. Leaning heavily on search engine optimization and data analysis, and consistently tracking metrics, Road Coffee doubled its online following, and saw its sales grow significantly. This is “growth hacking”—a technique Esmail picked up from Big Tech—and here’s an example: follow 10 people on Instagram, comment on their posts every day, direct-message them after five days with a question, make sure you bring them value in some way, and boom—you gain an engaged follower.
If you can’t beat them, be them
Brandon Grossutti, co-owner of PiDGiN restaurant in Vancouver, balked at being forced to pay steep delivery fees to third-party delivery apps.
He made use of his computer technology background to build his own delivery platform, FromTo, to service and support local Vancouver restaurants on a zero-commission model. The idea: create a level playing field for local eateries. Restaurants in Grossutti’s area now have a low-cost alternative to the big delivery players, complete with a user-friendly interface on restauranteur-friendly terms. FromTo, which started with six restaurants, now has 24 live partnerships with 60 more on the way.