Investing

Re-enter the dragon

Banished from the CBC, Brett Wilson proves you can’t keep a good investor down. Or at least off of television.

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Photo:Christopher Wahl

One day last February, CBC-TV announced through a press release that W. Brett Wilson, Dragons’ Den’s on-air Mr. Nice Guy, would no longer feature on the show. Kicked to the curb over a contract dispute, the 54-year-old investor and entrepreneur took just weeks to announce a new television venture. Debuting on Slice on Sept. 12, each episode of Risky Business will feature a real-life couple choosing one of two short-term opportunities—one high risk, one lower risk—in which to invest between $10,000 and $20,000 of their own money. Their choices range from buying gold or speculating in the art market to staking a pool player in a tournament or fronting the money for an event at a nightclub. Whatever their choice, Wilson is obliged to bet his own money on the investment the couple turns down. On the set of the production, Wilson sat down with Canadian Business staff writer Jordan Timm to talk about risk, rejection and the one that got away.

CB: Why jump back into television? It’s not like you need the job.

WBW: I said yes for the reason I wanted to stay on Dragons’ Den: it’s a show that has the opportunity to celebrate entrepreneurship in this country. We’ve got very few television shows that give people a chance to look at what they could do differently as an entrepreneur. And to be blunt, the TV gig exploded my brand. I was well known in western Canada, I was well known within business circles. Dragon’s Den literally exploded the brand. Do I need the celebrity? Not really. But the whole world of philanthropy that I’ve built, that’s the core side benefit of the profile. I just organized Operation Western Front [a fundraiser for soldiers and military families]. Some say it was one of the best charity events ever run in Vancouver, which means it’s on par with anything that’s ever been done in Canada, and I created that from scratch, built it with a partner, sold it out. Nine hundred people, raised a million and a half bucks—but I did that because I had brand recognition. I can tell you that I’m one phone call away from virtually every business leader and business school and, frankly, political figure, and I wasn’t anxious to just walk away from that.

CB: Ten thousand to $20,000 is a significant investment for a middle-class couple, and this is a show that celebrates risk. But when you look at the way things have gone on economically for the past few years, a lot of people would argue that, both as individuals and institutionally in the business world, what we need is a lot less risk.

WBW: I know where you’re going. The problem is, some of the issues in the corporate world have been on the edge of incompetent fraudulence. And so it gave the whole world of risk-taking a bad taint, because the things that we’re doing in Risky Business, there isn’t one of them that doesn’t happen every day. These are real-world opportunities, and I think it’s a matter of bringing back the fact that people don’t have to be risk takers at heart, that taking calculated risks is a way of moving ahead in this world—because often you’re betting, if you can, on yourself. Now, in this case we’re helping an investor couple look at two different investment opportunities and decide which of those looks like the best risk-to-reward profile for them. Some of these higher-risk opportunities, you’re looking at them look at each other and you know that they’re going to struggle to make a decision. The big dollars look exciting, but the risks look big, too.

CB: How will you feel if some of these couples get wiped out on their investment? Twenty thousand dollars is something you can absorb, but it would be much more difficult for the folks who live on my street.

WBW: Well, there’s a couple things. One is that they choose which of those two investments they take. And I’m not going to say that they always take the lower-risk, lower-return opportunity, but they certainly tend to steer away from what looks like the highest risk, even if it’s a high return. Generally, people who are new to investing steer away from high risk. Yes, there will be a few situations where people lose, but $10,000 to $20,000 hopefully isn’t a hole so deep that they can’t crawl out of it, and hopefully they’ll learn from the experience that maybe their risk tolerance is such that they should stay at a lower risk, work a few more hours. I mean, there’s three ways to make money in this world, one is by the hour, two is on commission, and three is equity, to actually have returns and your own reward. And so some people might be better suited to just stay and work by the hour, stay away from anything that’s a higher-risk, higher-reward kind of portfolio.

CB: That’s potentially an expensive lesson.

WBW: Yeah.

CB: You’re now one of the country’s highest-profile investors. You must get pitched all the time. I see you getting pitched by people on Twitter—and you’re engaging with them, which I think is remarkable.

WBW: It’s amazing what you can get done in the back of a car. [laughs]

CB: Well, you’re a very patient man. But your business depends on rejecting a lot of people. What do you tell people about how to deal with that rejection? Say somebody’s got an idea that they’ve poured a lot of resources and time into—maybe it’s a year, maybe it’s five years, maybe it’s more than that—and they’re so sure that it’s an idea they can sell, and they get told no.

WBW: Yeah, there’s several things. One is reload. Reload either in your expectations for the amount of money you want, or reload in terms of how much more time you should put into it. Maybe it needs another three months of gestation, work, development, product development and understanding. One of the things that I find most people have done wrong in their pitch is market assessment, which is why I always talk about the need for marketing. Yes, you can build it—I got that, I understand, I’m so pleased for you. But can you build it economically? Can you sell it profitably? And that comes down to marketing; it’s that differentiation. So sometimes it’s a matter of reloading, and at some point…you know, I’ve had a woman pestering me, literally for the past two years, about a board game that involves celebrity gossip, and I just keep politely saying, “No, it’s still not ready, it’s still not ready.” You know, she keeps thinking, “Well, what if I do this?” “No, sorry. Please, it’s not something that’s going to make sense.” She’d go, “I need to make a living.” So she’s desperately grabbed on to this idea, because she wants to get out of the hole that she sees herself in. “Well, it doesn’t exist!” “Yeah, but maybe it doesn’t exist because nobody really wants it.” There are very few completely original ideas—almost none.

CB: You often say that you invest in people, not in ideas. Is there a trait that you see in people that’s always a deal-breaker?

WBW: Yeah, that is—I’ve gotta choose the right words, here—I don’t know what I don’t know. I hate sitting interviewing someone who knows absolutely everything, because they don’t know what they don’t know. That’s the reality. And I don’t mind someone saying, “I’m not sure, let me find out.” “That’s a good question. I should know that.” Now, people really need to have done all their homework, but you learn to start asking questions around the periphery.

CB: What’s the best deal you never made? You looked at it, you were close, you walked away or it fell through, and afterwards you said, “Thank God!”

WBW: That’s a great question. That I never made? You know, it’s a challenge to answer because anything that I didn’t invest in I probably just walked away from mentally—like, I don’t recall. There’s a few businesses I didn’t invest in and I was wrong, they worked out far better than expected.

CB: What’s the big one that got away, then?

WBW: Petrobank. Now there’s a huge mistake I made. One of my best friends was running the company, I bought two million shares at $2. Big mess.

CB: When was that?

WBW: It was around 1999. And the stock went back to $1.50, so I struggled with it for a while, then it started to take off and it hit four bucks. There was a management dispute, a couple buddies got into a dispute, and I said, “You know what? I’m going to just get out of the way and just watch,” so I sold it all between $3.50 and $4. Not a bad return. But the stock hit $45, $50, $60 before splitting off pieces—the package is probably worth $100 today. I had invested in the person, and my mistake was letting go of the person too soon. I made a lot of money by anybody’s math, but what I walked away from was several hundred million dollars on that portfolio alone. On the other hand, you know, no complaints. I’m still paying my bills.

CB: What’s the business skill that you’ve had to work hardest to master?

WBW: There are so many. Probably it’s the people skills around supervision: slowing down to give people the feedback that they need and deserve, because I tend to be a locomotive. I know where the train tracks are. We might have five sets of parallel tracks, or they might be diverging, but I know where I want to go. And sometimes taking the time to share where we’re going and find out how well where we’re going fits with the staff I have.…I’ve got 12 people who work for me directly, and while I have a president, everybody who reports to us really reports to the president and to me in parallel. Our weekly reports all come to the two of us, and I guide strategy, he guides tactics. But sometimes, because of the pace I keep, slowing down to listen to what’s going on around me is a bit of a challenge. And I hear that often with other successful entrepreneurs—that sometimes the collateral damage of running hard is that people trip beside you and you don’t see them.