Michele Romanow: Scaling Successful Ventures and Building a Transparent Culture

Michele is a public board director, an angel investor, and an invigorating public speaker in the fintech, disruption, and innovation sectors. Famously known for her tenacious role on Dragon’s Den, Michele is a world-renowned technology entrepreneur with an extreme passion for leading, growing, and building successful ventures. 

Listen to this episode (or read the transcript below) to learn how Michele’s entrepreneurial journey led her from a caviar farm in New Brunswick to a global lending firm that specializes in providing founders with accessible funding.

1 Have you ever worked for anyone else or have you been a manager since day one? 

You always have a manager. If you’re an entrepreneur, you think you work for yourself but often times you’re working for your employees or your shareholders. Regardless of where you are, you always have a boss but one unique element in my career is that I’ve had some big corporate experiences. 

The first business I started was a caviar company because I figured out that the worldwide supply of caviar was down by 95% because of overfishing. I was crazy enough to move to New Brunswick and built a fishery from scratch and our thesis was that if chefs could find the products we were selling we would have no problem making sales. As time progressed, it became impossible to sell one of the world’s most luxurious products as a 21-year-old because the 2008 recession had hit. We tried a few other ideas, but nothing really worked so I ended up taking a job as the Director of Strategy at Sears where I saw ecommerce really blow up which helped me decide what I wanted to do next. I had one really incredible manager and one that wasn’t so great while I was there and I learnt a lot from both of them. 

I also ended up building Buytopia and SnapSaves which eventually got acquired by Groupon and we had a huge team, so I’ve definitely had my share of amazing bosses and people I’ve really enjoyed. 

2 When was the first time you led a team?

I started a sustainable coffee shop on the campus of Queens University that is actually still there today and that was my first time leading a team. We had a staff of over 80 people and every student only wanted to work for three hours a day once a week and that was the first time that I really experienced the ups and downs of managing people. 

3 How would you change how you approached leadership in the past? 

We’ve made so many mistakes and I think I’ve always leaned more to the side of over-trusting people rather than micromanaging them. I think being too trusting early on in my career led to some problems later on so I now use the trust but first verify method. The easiest way to do it is to trust your gut and do some investigating by asking more questions. 80% of the time it’s nothing and 20% of the time you may discover a larger issue. I think you always have to lean towards being a little bit more trusting in a startup environment because you’re working with very few people and you have to move quickly. 

4 Why should people adopt the philosophy of being transparent?

As you scale, it gets harder and harder to be transparent because there are a ton of nuances in data and there are a lot of things that can go wrong which can be very damaging. One of the lines that I always love to use is that “loose lips sink ships” because there are a lot of things that you’re going to be working on that you can’t share. I think for the most part if you’re treating people like responsible adults and giving them access to information, they will generally make good choices and when you don’t give them access to that information it may be hard to explain your decisions which leads to a constant cycle of not being able to trust management or leadership. 

We try to be really transparent about our decisions and when we make mistakes so everyone can gain an understanding of the risk factors that are associated with the business. We also try to really instill the idea of radical candor within our teams. We want everyone to come to work and care about their colleagues. If you don’t care about your colleagues or your job then you should find another place to work. 90% of things that happen in the workplace are true miscommunications and the other 10% are real conflicts that you have the opportunity to resolve. One of the things that people don’t talk a lot about in culture is that you can write whatever you want on the walls but the norms that you create will end up being extremely powerful.

5 How do you know when someone is truly not performing well? 

How you get people on your team to talk to you is largely your responsibility and it’s based on your reactions. If you’re going to get really upset or overreact when you hear a bad piece of information it’s going to be very hard for you to be able to get the information you’re looking for internally. 

I just want to reiterate that I’m talking about the day-to-day norms, if there are much more serious problems you have to create a structure and a plan to deal with it. We all think we’ve become so efficient by leveraging tools like slack and text messages but we’re losing out on body language and tone. We’re restricting most of our workplace communication to the 20% of words that we say and then we wonder why we’re confused or why we’re miscommunicating with each other. 

6 Do you have any advice for entrepreneurs that have never led a team before?

We built Clearbanc by founders for founders so we can transform the way people from around the world are receiving capital and we thought that the best way to do that would be to hire people that could be empathetic and understand what founders go through. One of our limitations as human beings is only having empathy or a true understanding of things that we’ve personally experienced. 

One of the reasons why hiring entrepreneurs worked so well for us is because they could instantly feel empathy and understand what our customers were going through so that became a huge part of our culture. Having a background in entrepreneurship also teaches you really quickly that the world owes you nothing. It doesn’t owe you a sale or a great person or an amazing partnership, you have to go out and fight for it every single day. You can’t build an entrepreneurial culture without entrepreneurs and entrepreneurs have an innate response to be competitive and thrive off of healthy competition which I find to be really helpful. Anything that you can do to help your teams understand your customers on a deeper level will really help in the long run because it makes it possible for your team to be empathetic. 

7 How do you recognize talent? 

Structurally you have a huge advantage in a startup because you’re very close to the founders and we also do this thing in corporate America or Canada where we create structures that are designed around retention. Companies do this thing where they make employees think that they’re not good enough or they make them think that they have to stay in a position for a certain amount of time when in reality it’s just a retention strategy and everyone learns at a different pace.

I believe that outstanding individuals actually have a lot of things that they are really bad at but they have a couple of superpowers that make them incredible and they can take the world by storm with those talents. I would argue that as an individual it’s far more powerful to double down on your strengths instead of trying to eliminate your weaknesses. It’s important to think about how you can build upon your superpowers rather than mitigating your weaknesses. 

8 What is your opinion on the book “Little Black Stretchy Pants”? 

I think the book was really honest. One of the most important parts of the book is how they accurately portray what it’s like to start a business because in reality most companies are on the verge of bankruptcy and you’re going to want to walk away like 20 times before it becomes a success story. 

Another important part of the story is the movement it created and the openness that the author has when he talks about how he lost out to his competitors on certain occasions and how it happened. One of the elements in the story that really resonated with me was how the company was extremely successful and had eight stores, but he was still putting his house on the line to get funding and that’s something we’re actively trying to improve with Clearbanc.  

9 Do you have any advice for folks that are leading teams? 

I really like this book called The Culture Code, it’s a really excellent book on managing teams and it has great antidotes in it. The book outlines this story where a group of lawyers, MBA’s and kindergarten students are given spaghetti and marshmallows and they are all told that they have to build a tower. The kindergarteners end up building the tallest tower and they dissect what each group does in an attempt to determine what interactions result in successful teamwork.