IN THE MAKING | Episode 7 | Scott McCain

Yeah, a family business. Well, let me... yeah, what are you for? When did we start there? And then I don't want to go into great lengths in detail, but it's kind of interesting as I look, as you get older you start to reflect on some of the successes your father and your uncle, my father, my uncle had. And I think when I'm age 65, I have a much higher appreciation of just how amazing it was to grow up in a small village of Florenceville with 700 people, and to live in a very grounded environment where I went to the same small brick schoolhouse as my father did. He was there from grade 1 to 12 and I was there from grade one to six. And when you grow up in that environment where it's... I mean, you can appreciate 750 people, it's not a very big village.

Yeah, the business started in 58. And so I would have been, I was born in 56, so two years after I was born, the company opened its first plant in a freaking cow pasture in a little village. It was a greenfield cow pasture. It was the first french fry factory of its kind in Canada. So yeah, did my father and uncle know the business would be a big success? No, they had no idea. And so I grew up just in a small rural environment where my grandfather was in the potato business, and he was a successful shipper of potatoes. But we were... it was like no, there was no grandiose visions, there was no sense of wow, this is going to be a multi-million dollar success story. No, I didn't grow up in that environment at all. I grew up and all my closest friends are farmers, and guys that like to hunt and fish. That's what you do in northern New Brunswick, it's potato country. And so that's my values, very grounded in roots in rural New Brunswick.

Well, I mean, the business started in 58. I think probably in the late 60s, so possibly 12 years later, which I would have been 14 years old. I think pretty much everybody knew that McCain Foods was certainly a success story in Canada, and to a certain extent they'd already built a factory in England. So we were seen as a company that had vision, a company that had a purpose, and a company that was on a fairly high trajectory to grow and expand in many parts of the world. So I guess I'd have to say I would have been maybe 13 or 14. I remember when I went to university my first year at Mount Allison, I took a BComm, and I used to get teased a bit because of our background. By then, I'm 16, 17 years old, McCain Foods is a pretty well known name in most circles in Canada. So I got teased, called French Fry and String Bean and all that stuff. It's just part of it. You grew up in it and it's like, hey, this is what it is, laugh about it and carry on. But at the end of the day, when you grow up in it, you don't appreciate the level of intensity and the level of tough decisions and hurdles and challenges and roadblocks that my father and my uncle and all of the management teams overcame to make it a success. I mean, can you imagine? Dan, you guys are what, mid-30s something like that? My father was 28 when he first started the business, and he and his brother were going to England when he was age 31, 32 years old, investing 40, 50 million dollars into a factory in northern England. Hell, I'm not sure they even knew where northern England was. So it's just hard to imagine.

Yeah, I don't think we were... I think my parents and I, and my cousins too, were taught... we all lived in a small community. All my uncles' kids were all there. There were four brothers that started the business. My dad and my uncle were probably the predominant shareholders that drove the business, but we just grew up in a very normal environment. I played... as soon as you see here in Lawrence Park here, an outdoor rink with lights on, bulb lights strung across the top. We built our first indoor arena in Florenceville in 1967, it was a centennial arena, so I would have been 11 years old. So it was very rural. Everything was pretty normal for you. No, we weren't spoon fed. We were very fortunate, I lived in a nice decent home. I never had a car, I never owned a car until I got out of university. I wasn't allowed to have one. I could drive my mom and dad's. No, I went to university and got on the train or bus or hitchhiked to school, whatever happened to get there. We weren't given any special favors. But that helps shape your values and who you are.

Yeah, it's interesting. It's a good question. Some people would assume that because your parents started a business, you would be almost forced to go into that business. That was never the case in our case. We were always given the opportunity. I think my father would have really liked to have had us go into the business, and my brother and I did, but there was never an occasion where he said, look, you need to... He said, look, you can do whatever you want, there was no pressure. I think I had summer jobs always lined up because there were different things I could do. I had one summer I went to work in England, I had one summer I went to work in sales in PEI, and one summer I worked on the factory floor. So I think in some respects, my father was trying to give me different experiences to see what I might like, what path I may choose. My brother Michael was more into the marketing and sales in the IT space, and he did more in those areas. I was more of a guy that liked to work on the factory floor because I felt that it honed my people skills. And so that's where I made my mark. When I left university, I joined the company, I went to England to work over there for a year in manufacturing. They were just building the company, pretty new, pretty young up in northern England. So I said, well, I'm 21 years old, I didn't have any ties, I said, hey, this is the place for me. So off I went over there for a year. And then I was only there a year and they asked me to come back and work in manufacturing in Canada. So I worked as a production foreman, supervisor, production manager. And then I was offered an opportunity to go to Oakville to be the VP of Operations in a cheese company. I did that for three years. Outside of McCain? McCain Foods had just bought a cheese business, right? Plus, I don't know why we did that, but anyway, they did. They wanted some manufacturing people to go up there, so they asked me to go up and see if I could work that. I didn't know a damn thing about making cheese, so it was a new experience and a learning experience, I can tell you. But I was there for three years, and then they had an opening in one of the factories in northern New Brunswick up in Grand Falls, which is about 50 miles north of Florenceville. So I went up there and they asked me to manage that site. We were making pizzas and juice and french fries and broccoli. In the peak season, we would have had 2,000 people working on that site. So I did that for three years, and then they asked me to come back to Florenceville and I became the VP of Operations, and I had five factories under my wing. I did that for three or four years, and then we went into some family challenges with different... when we had our trouble in court.

Yeah, no, look, there was... I think we... that was what was the headline news, Dan and Patrick. But you know, as I look back, clearly succession planning for any entrepreneurs that are passing on the baton from first generation to the second generation, doesn't matter what business you're in, it's a very big challenge. Most companies find it difficult. And if it's not planned well in advance and properly with good governance, it's very difficult. It's hard for the entrepreneurs that started the business to let go, and it's hard for the next generation to step into the boots of successful people, to follow them up and try to manage it in such a way that it's going to be successful. So it's not an uncommon issue, and we were thrust into that situation. It's just a host of things, but you know what, we got through it. So Michael and I and my father went on to the Maple Leaf side of things. We decided, well, we better go do something different, and we got involved in Maple Leaf in the mid 90s. We stayed as shareholders in McCain Foods because it's a great company, and so we stayed on as shareholders. My father stayed on the board, Michael and I stayed on the holding company board, and we did that for quite a few years. So I worked with Michael for 20 years in Maple Leaf and ran the agribusiness group, and we had a lot of fun and made lots of mistakes, but we grew the business. And then eventually he took on the majority of Maple Leaf himself, and then I and my two sisters kept our McCain shares, and ultimately ended up going back into McCain Foods on the board. And then eventually they asked me if I would take on the role of chairman. That's kind of the story.

Yeah, yeah. People get confused because it is confusing. But when Michael and I and my father exited McCain Foods in the mid 90s, I think it became pretty clear that we better go do something. We weren't going to sit idle. My father would have been 65, and I would have been, gosh, I was probably 37 or 38 at the time. And we figured, look, let's go try to do something different. And we were fortunate that the Maple Leaf Foods business was shown to us to be an opportunity that could be acquired. We could buy into that business, and we did. We partnered with Ontario Teachers, and we had a controlling stake, and we ended up going into a business that none of us knew very well. So we had to learn it, and it was tough. It's not an easy business, it was very difficult. And we had lots of ups and downs over 20 years, but it's just like anything, you just get in there and you learn it and you try to figure out what's important and carry on. So Michael and I, Michael eventually became the CEO, and I took a bigger leadership role in the agribusiness in the front end of the business. And we had a good bakery business, a good... and today it's primarily just a meat business. In fact, it's exclusively a plant protein and a meat protein business, pork and poultry. And my brother's the CEO, and they're doing a great job.

Well, it's a very good question, Patrick. What you're referring to, it was in 2008... oh my gosh, you mean mad cow? I couldn't... I didn't want to just say because I wasn't sure. We had an outbreak of listeria in the factory. And listeria can be present in different forms. You could have listeria in your fridge for that matter. But if it's highly concentrated and it's not dealt with properly in your production facilities, and if it's consumed in a large amount, particularly for an elderly person or a pregnant person, it can result in death. And it's one of these things where, having gone through this, the learnings after a number of people died from what happened, you learn a lot very quickly. There's something to be said for... it's... shit happens in plants, and shit happens everywhere. It's not the fact that it happens, it's how you deal with the matter. In the case of the listeria crisis back in the early 2000s, it was my brother and the senior leadership team, led by my brother, that took the decision how to handle it. And it was to be transparent and to be accountable, and to make sure that everybody knew that the buck stops here. We didn't point fingers at anybody else. There were certainly lots of people that were responsible for what happened because it happened on the factory floor, but at the end of the day, Michael and the senior management team are accountable when these things happen. And he did a heck of a job in making sure that the public knew that we were going to get to the bottom of it, and we were learning, and we simply had to work hard to find the root causes and to try and make sure that this would never happen again. Because at the end of the day, we were accountable, and we didn't blame anybody else except for ourselves. It happened on our watch, so we had to fix it. That's the position that Michael took. In fact, there are a lot of cases being studied in universities about how he handled it, because it was a bad situation, but we didn't try to blame the lawyers or the bankers or blame the plant manager or the employees. It was something that we went through, and we learned from it. Today, our food safety record is significantly enhanced as a result of the learnings we got from that crisis.

Patrick, the metric that's most used in most manufacturing facilities in the food business is called TRIR, that stands for Total Reportable Incident Rate. And it's a metric that just in the last 20 years has become the most well-known across processing and food businesses, and I think other businesses for that matter. And as leaders, you as leaders running your small business, and we as leaders running a large business, have an ultimate responsibility for the safety of their employees. If somebody gets hurt on your watch, then you're accountable. You can say, well, the guy fell off the ladder, I mean you weren't on the ladder and you weren't there. But in today's environment, how safety is seen by most well-run companies, it may have been the employee's fault, they weren't paying attention or they weren't wearing their safety glasses, whatever. It doesn't matter. You're accountable. They were supposed to... and by being transparent and by taking accountability for it and saying, look, I'm going to learn from this, and we made some mistakes. A lot of people don't want to make mistakes, they're afraid to because they might get sued, they might confess to that or legal action. But you're better off to take responsibility and say, look, I'm going to learn from this and it's not going to happen on my watch again if I can prevent it.

Let me give you one that's fresh in my mind, gentlemen. It's called... the COVID thing. On the podcast, it's called COVID. Let me just share this with you. So I took over the role as Chairman of the Board. Before that, I was a director for I don't know how many years, but I had pretty good knowledge of the business. But I took over the chairman's role back in November of 2019, I think, at the annual meeting they appointed me chairman. So that was great. And so we go through November, December, January, and February. If you recall last year, in January 2020, the crisis in China was just starting to unfold. Yeah, whispers. You guys, like all of us in North America, we're looking at this and saying, well, what's interesting? What's going on inside of that? But it's so far away, this is no big news, and it's not going to affect us. Okay, so then all of a sudden it ends up going over to Italy, and we're all watching in horror what's going on in Italy. It's a little closer. Well, fast forward to the month of March. Within the first three weeks of March, our business basically was cut in half. Because it's restaurants mostly, right? Our business on the McCain side is mostly a food service business. We are retail in Canada and in Australia and England, but we're primarily a food service business. We do retail, but food service is a much bigger market, and that's where the bulk of our business is. So as the world closed down with social distancing and all that, restaurants and pubs and institutions, whether it be stadiums for sports or hospitals or schools or any food concessions of any kind, all of a sudden they're closed. So our business was like, wow. And so you asked the question, was there ever a time? Here I am, chairman now for three months, and holy hell, this thing's going to fly all to hell, and it's going to be on my watch. So yeah, we were all nervous, and we had to cope with that crisis. And thank goodness, we can look... in fact, I'm just finishing writing my letter. We had our six-month board meetings here last week, and we published our results to our shareholders, and then I have to write a letter from the chairman. And so it's basically, look, we got through the second half of last year, which is July through December. And we were very resilient, and we bounced back. As the economy opened up and stores opened up, we were able to recover. Then it's taking a dip again in November and December, and this first quarter is going to be a little tougher. But to answer your question, I think that was the most significant moment in our company's history as far as I can remember, in terms of this thing could have been a mitigated disaster.

Totally, totally. There's a huge fear. If you didn't treat it that way, Dan, you might not be successful. Because fear is a difficult thing, but it forces you to make hard decisions and do things to survive. So we were no different than other businesses that you read about in the paper every day. We had basically three major priorities. Our first priority was the safety of our people, because we knew that when you're running big plants where people are interacting and it's hard to social distance, you have to take extra precaution to make sure that your protocols are in place to ensure the safety of those people so they're not picking up the virus. And then our second priority was cash generation, because when you're bleeding cash when your business goes in half, you have to figure out what you're going to do to mitigate the cash outflow. So that was a priority. And finally, we were looking at how do we find different sources of revenue, either by moving away from food service into retail or more focus on takeout and delivery, because a lot of these places that closed, they stayed open by takeout and delivery. So you have to gear your production around products that would suit that market. So between revenue generation on your top line, cash preservation to preserve cash as much as possible, and people safety, those became the three most important goals of our organization for six months, and it proved to be really the right thing to do.

No, no, no. Look, you've heard the same, I mean, maybe you haven't, but when they say never waste a pandemic... and that sounds harsh, but what it really is saying is, what can you learn from it, and what can you do to reconfigure your business to make it more resilient and able to cope with any future shocks like this? And it forces you to really think about how you're going to pivot to the new realities and what life is going to be like when the pandemic finishes. The biggest thing is being on this call right now. I mean, do you guys ever remember being on Zoom calls prior to COVID? I didn't even know Zoom existed. But look at the amount of change that this is going to create for businesses. In our business today, we're talking about what we're going to look like in the post-COVID environment. Are we going to work from home half the time, a quarter of the time? How are we going to create a positive culture if nobody talks to each other and they're always on computers? What are people's expectations about who wants to get on a bus for an hour in the morning and an hour at night, or a train, two hours of their day, when they think, well, I can work from home and get just as much, if not more, done? These things are really going to be critical in the post-pandemic world. So every company, including most companies, are trying to grapple with how this is going to work and how can I make it more efficient and more effective for my employees and for the business as a result of it.

Yeah, there will be a lot of HR folks busy working and reading information and up-to-date thinking on how to create culture in the new environment where people are working from home maybe half the time. I've heard all kinds of things, from we're going to have culture days in our office so when people come, there's going to be time spent on team building and bonding because you can't get that when you're on Zoom calls. How do we make sure that our schedules... the technology... do we need to have cameras in every office or every conference room so half the people are present and the other half are on the Zoom call because they're working from home or remotely? It's going to completely change the dynamics for a lot of businesses. In your case, you guys are in a business where you're service related, so people are still going to want their windows cleaned and their eavesdrops done and their patios washed, and you can't do that with a Zoom. But most businesses, frankly, I'm in the Maritimes a lot. A lot of Maritimers are leaving Ontario, moving to the Maritimes. They say, I can buy a house down there and I can work from down there. And for a company that's based in Toronto or Calgary or Montreal or Vancouver, if I have to go to the business, I have to fly up to Toronto once a week, I'll do it. It's a big deal to fly out for a day a week. Real estate is certainly cheaper. They've saved money in terms of buying the house, their quality of life. They might say, look, if you want me, I'm really good at what I do, I ain't living in Toronto. I want to live in a different setting or environment, and I'll work from home. If I need to come to the office, I'll gladly come once a week or twice a week, but the rest of the time I'm much happier working in the... whatever. So it's changing the whole paradigm of how work is going to be done.

Well, that's a good question. I think I'm pretty fortunate. I didn't... I just... I was probably... my DNA is not hardwired to say how do I get to the top first. It's just not who I am. Any promotion I ever got was based on, well, if you think I'm ready to move and you want to promote me, then fine. But I don't ever remember going into anybody's office saying, look, I need a promotion, I need to move. So just, if there was an opportunity and they wanted me to do it and said, look, we need you to go here, go there, I said, fine, let's get going. So I never felt pressured to take on more than I felt comfortable with. And quite frankly, I just liked what I did. Every job I ever had in manufacturing, I loved it. I learned a lot. I was managing people, and it wasn't easy because lots of days were tough, but that's what made it interesting. And so I learned every time, every opportunity I had, I learned from it and tried to grow and move forward. But it was just a natural progression. I was never storming into somebody's office saying, my last name is McCain, you need to give me this plant management job or this VP job. That's not the way I operate. I felt if it was felt by the people that I reported to that I deserved a promotion or a different role, then I was called in and said, look, we want you to consider this. And nine times out of ten, I took it on.

Oh heavens, that's a good question. You know, I guess what worked for me... you learn from your experiences for sure. As you grow, you get older, you learn from your experiences. But I guess I always felt, in my case, that things like humility, good listening skills, a high regard and respect for other people's opinions and thoughts and ideas. It's amazing, most of the leaders over the years that I always respected were the ones that could give me hell for something that I deserved, but when I walked out of their office, I didn't feel like it was personal. It was just like they were saying, look, here's the lesson and you need to improve and you need to pay attention. But it didn't make me feel like I was inferior or incompetent. They just managed me by saying, look, you're going to learn from your mistakes, and here's what you should have done or could have done. You should have thought even then, you need to be prepared. And some people said, it's like getting in the batter's box, you got three strikes. First two, you're still in the batter's box, but the third strike, you're out. So I like to think that I tried to manage in a similar fashion. Say, look, you're in a position of authority, and a lot of the best leaders are the ones that have the best followership. So if you don't have followership on your team and they don't have respect for you, then you're going to struggle. The key learnings I learned very early on, I had a supervisor, his name was Bud Cox. I think he had grade 8 or 9 or 10 education, and he was my supervisor. I was a line foreman. I didn't know anything. I graduated from university, so I was supposed to be smart and all this stuff. And you learn a lot of tools, you guys all went to school, so they teach a lot of stuff, but they don't teach you how to manage people to the degree that you're going to learn on the floor. And I learned more from this guy that...

He had very little education as a supervisor, and then I would have learned from two or three years of university and what he taught me was how to manage people effectively and how to get the most out of them. I can remember being knee-deep in french fries in the packaging room where the equipment was broken down and nothing was going right. I'd call him up, he'd say, 'Well, young man, I'll come see you in half an hour, but you try to figure it out.' He'd give you enough rope to almost hang yourself, and just before you're ready to pull the trigger, bingo, he'd show up and say, 'Now look at the mess you're in. How are we going to learn from this? Don't do it again.' It sounds archaic and maybe it was, but as leaders you have to learn from experience that you're only as good as the people working for you. I know you guys are both good, but as you grow and get bigger, as entrepreneurs, it's all about the team underneath them. If your business isn't succeeding, you two are accountable, and you have an obligation to find out why. If you have people in positions they shouldn't be, you have to deal with it. There's a great book by Jim Collins, 'Good to Great.' One of the things I love about that book is they talk about two things critical as leadership: you guys are leaders, and if you don't have leadership in your business, it doesn't matter if it's sport or university, you need very strong leadership. But equally important is that you need the right people on the bus, in the right seats, and the wrong people off the bus. That's a very difficult thing to deal with because you're dealing with people's lives and livelihoods. Sometimes it doesn't work out, and a lot of entrepreneurs make the mistake of keeping people around that they should say, 'Look, we've tried this, it isn't working, you need to move on.' Most entrepreneurs, I for one, hated letting people go—that was my weak suit. When you have somebody on your team that's not carrying their weight, and you've given them opportunities and chances, and it's just not working out, you need to deal with it. Sometimes there's a time to say, 'It's time to move on.' It sounds harsh, and it is, but for the good of everybody in your business, you need to deal with those situations. It's all about the people.

Yeah, my brother always said, 'Scott, you get married to people, and you get married to them too much. You get blinded by the fact that they're not performing, and everybody else around sees it except you.' So yeah, it's not uncommon, guys.

Every person in any stage of their career, no matter what level, goes through the same thing you just talked about. It's what we are as humans; it's not fun. Over time you learn skills that help you have those difficult conversations, and it comes with experience, training, and understanding some key principles. A couple of things to think about: first, by keeping people that are weak in your organization, you're actually hurting them, whether they know it or not. If they're not performing to the level they should, it's probably in their best interest to move on. Maybe it's the way you guys are managing, and they flourish somewhere else. Think of it as a hockey team: sometimes a player isn't performing, you trade him, he goes to another team and becomes a star. Sometimes it's the leadership you're providing. Regardless, you need to move them to a different environment. One thing I've learned is it's not always what you say, it's how you say it. You can have a difficult conversation without making it a personal attack. If it's a personal attack, then you're shitty leaders. But you'll learn over time to sit down and say, 'Look, maybe it's our fault, maybe it's yours, maybe it's both, but it's not working to the degree we need it to. We think it's best for you, and we're going to treat you fairly.' That's important when you exit somebody—to treat them with dignity and respect, and make sure they understand it's not personal. It's like a hockey team: coaches do it all the time. It's harsh, not much fun, and the player doesn't like it, but at the end of the day, these things happen. You learn to do it with honesty, transparency, and respect, so they feel, 'They were honest with me, they told me the truth. I don't like what they said, but I respect it.' It takes practice.

Don't beat yourself up, Patrick. It takes practice. I've been in business a long time and I'm still not that good at it. It's not much fun. Some people said to me, 'Scott, you give a lot of people a lot of rope, but when you turn the corner and say it's enough, man, you come out hard.' So once I've turned the corner and let go, we've let go GMs in our hockey team because it just had to happen. But once you get there, it moves fast.

We started from scratch. It's an interesting story your viewers might like. My dad—I've always been involved, hockey's been part of my life. I'm a sports fanatic, played all through university, played a lot of hockey. I didn't make the varsity team, I was close, got cut—I think I was the last defenseman cut, which pissed me off. But you learn from your losses. Anyway, all my friends are hockey players, and I tend to gravitate to that crowd. In Saint John, New Brunswick, the Calgary Flames' farm team played there, and when they left town, the arena became empty. A few other investors and I decided to put a bid in to get a franchise. The league was looking at expansion in Quebec—there were only 16 teams—so they were keen on adding two more: one in Saint John and one in St. John's, Newfoundland. Don't be confused, they're different. Don't tell somebody from Saint John they're from St. John's, because they'll hit you. And if you tell a Newfoundlander he's from Saint John, he'll hit you too. So we got the franchise. It was a learning experience: we paid for the franchise but had no team name, no colors, no management, no coach—nothing but a license to play. The first year we won five games out of 64. The next year we won about 15. The third year we got into the first round of the playoffs. In 2011, we won the Memorial Cup, the Canadian championship. Quite a success story. We've won three Presidents Cups, so we've had a good run.

Lots. Probably 12 guys playing in the NHL today. I'll give you some names: Jonathan Huberdeau plays for the Florida Panthers. Thomas Chabot in Ottawa—he was our star defenseman when we won the Memorial Cup in 2017. Nathan Bastian started with Montreal, now playing in Winnipeg. His father was actually your coach for a while, and that didn't work out. Anyway, Nathan's a great man. Charlie Coyle plays in Boston. Matthew Joseph plays in Tampa Bay. We've had guys play in Chicago for a while. So we've probably got eight or ten guys in the NHL and another host in the American League. It's fun to see them reach that level of success—that's their dream.

When I went into the team, Dan, I had one rule: I'm only going to buy this team if I have a controlling interest. I've learned over the years that if you have a controlling interest, you can make the changes and decisions you want. I started as a 70/30 partner—some guys didn't want to come in, so I ended up at 70/30. That was back in 2005. After 15 years, all the other partners figured out that this hockey business doesn't make any money and it's not much fun writing checks, so they all left. Now I own 100%.

Oh yeah, we're losing our ass this year because of the COVID environment. We can't play, we have no fans, no sponsors—it's a financial disaster.

Junior hockey is going through a real challenge in Canada for a host of reasons. Some franchises in each league do pretty well, some really struggle to survive, and most teams in Canada don't make much money. People do it because of the passion of the sport. I do it because I'm passionate about the sport, about New Brunswick, and about what it's taught me. I've gotten far more out of it than I've ever put into it. When you own a team, you get instant credibility with other hockey folks. I know all the top agents that recruit NHL players because you become friends with them after 15 years. It's a very close club. When you're investing a lot of money because you believe in the sport and what it can bring to the youth and the community, people have a high degree of respect for that. You'd like to be profitable, but it's not easy.

It's a labor of love. You got to sell more french fries. I got to sell more of a lot of things. Even in that business, we've got a really good management team—four or five key people. Trevor Georgie is the general manager and president. He started running the business, and I told him he'd be the GM too, so he had to learn that. He's done a hell of a job. It's all about people: if you get good people in the right positions over time, you'll be successful. We're trying to figure out what we can do outside of hockey to generate more revenue because the junior hockey model is under a lot of pressure. We have to find other ways to generate income to survive. That's part of being an entrepreneur when you're running a hockey business today—you're an entrepreneur, period.

No, I got approached with a few other people that had the ability to invest about eight years ago to start up a private equity company based in Halifax. Much like the hockey team, we didn't even have a name. We had a vision: these two guys in Halifax had worked for other private equity companies and wanted to start one on their own. They needed capital, so the McCain family became the large shareholders to invest in this new entity. We had three guys to run it—a president and two senior VPs. That was about seven years ago. Today we've got five different companies in the fold, some doing better than others, but it's been a pretty good success. Again, whether it's private equity or anything else, it's all about getting good people.

Oh dear, you wrapped a lot of stuff in that question. I'm very curious, but I don't know where to start. I know you start at the bottom, then you turn around twice and you're a multi-millionaire—you don't know what happens in between. If you're looking at our situation, it might help you formulate a more concise question. Look, as you know, my daughter's an entrepreneur, and it's not easy what you're doing. First of all, you need to have a successful profitable model. I'm assuming you have that, and I think you do. Your ambition is to grow your business, and only you two can know what you think is satisfactory—is it 10% growth on the top line and 5% on the bottom? You can benchmark yourself against other entities doing similar things and decide if it's worth the effort. I call that 'return on effort.' If you're putting a lot of effort in and not making any money, that's not much fun. So you guys have to decide if you're getting a fair return, if it's worth the effort, and if you're having some fun along the way. Some people discount that you can learn more from your failures than your successes. As long as you're learning, having fun, and making money, that's a pretty sweet place to be. How quickly does that make you a millionaire? There's a lot of water under the bridge between starting and becoming a millionaire—it's not easy. Once your business starts generating larger amounts of cash flow, you have to decide what to do with it. If you're an entrepreneur and you want to grow, most entrepreneurs want to grow their business to a certain level of EBITDA and stability so they can turn around and sell it if they want. That's what most entrepreneurs have in the back of their minds: run it for three, five, ten years, and if it keeps growing and making money and you're having fun, you'll probably keep doing it. If not, you'll have a business attractive to somebody else who'll pay you a multiple of four, five, or six times. But when you've got a business with cash flow making money, if I were in your shoes, I'd ask: am I going to invest this money in Bitcoin or Royal Bank or Canadian Tire? That's safe and pays a dividend, which is conservative. But a true entrepreneur will take that money and say, 'I see another guy doing the same thing I'm doing down here. I'm going to go see him and see if I can acquire his business.' There are two ways to grow: organic growth, which is what you're doing today, or M&A acquisition growth. Most entrepreneurs would like the opportunity to have the cash flow to acquire because you can grow faster by acquiring somebody else if you do it at the right price and do your homework. If it's done properly, you can grow very quickly by M&A.

It's called the Wallace McCain Institute—WMI. My father made the founding donation or investment, started probably in 2009, so about 11 years ago. Today they probably have close to 300 graduates from the program over the last 11 years. Every year they had 15 new entrepreneurs in the program—it's a one-year program. You have to be the president of the organization, and it's only in Atlantic Canada: New Brunswick, Nova Scotia, PEI, Newfoundland. We take great pride in helping entrepreneurs in that part of the country. You have to apply to get in—it's almost like Survivor. If you Google it, it's pretty fascinating. These entrepreneurs spend time with other entrepreneurs, like YPO if you've heard of it. YPO is the same thing on steroids. They get together once a month for three days, have study groups or sessions, bring in guest speakers, and talk about different problems. 80% of the problems are the same: how to raise more capital, get better people, grow the business, deal with family pressures, handle employees that aren't cutting it. 90% of the issues are the same regardless of what business you're in. When you network these people together, it's very powerful. Once they graduate, it becomes a religion to them.

Well, you know what? You guys should get off your ass and set up a shop down in Halifax or something like that. Why can't you do the same thing down there that you're doing up here?

I think you're asking yourself the right questions. Every entrepreneur should. I use the metrics a lot with young entrepreneurs—I call it 'return on effort.' By asking that question, you're asking the right one: why would I go and set up new franchises in Halifax, Quebec City, Montreal, Winnipeg, Windsor, when I can grow more and be more profitable with less effort right in my own backyard? I think you've concluded that. Then the next question is: if there are two other guys doing what you're doing in Toronto, why don't you buy him? Before you came to my house, there was a company called White Shark or something. They came to the door and did it. When you came to the doors, I thought, 'This guy seems pretty sharp, pretty friendly, but why does he do it?' I just wanted a goddamn window wash.

You can look at it that way. Let's take White Shark or whatever—it doesn't matter. You have to know what you're acquiring and where the opportunity is. You wouldn't acquire them unless you knew there was an opportunity to do whatever they're doing better. You have to see what you can do to add more value to that business than the way they're running it. You might look at it from the perspective that these guys do the work but don't have near the quality or personal contact that you do. If you owned it, you'd inject your own secret sauce and formula into their business. You'd probably raise the prices, do better quality work, and make more money. But they've got a customer list, so what you're really buying is customers. Unless you had a view of what you can do differently to make that business better because you have to pay for it. If you've doubled the size of your business—like when we bought Cooper Reynolds, it was a small mom-and-pop equipment rental business in Ontario. Today they have four depots, and we're across Canada with close to 60. It was done half by M&A and half by organic growth. Every time we bought a mom-and-pop equipment rental business, we put our own people in there, our magic Cooper difference, and how we managed the rental business. We're in the service business, and we tried to service our customers, and it works. If you're good at what you do, you're going to go in with the view that you're going to be better at managing this business than they were. Otherwise, why would you do it? Then you say, 'Instead of a $300,000 business, maybe over time it's a $600,000 business.' You create scale. Then it becomes an issue of making sure you have good people to help you keep that quality of service to the level of standards you've set. That's why I go back to my argument that it's all about the people. If you make that acquisition, you're going to make sure it's staffed with the right people. If you don't, that's your problem.

You should talk to my GM, Trevor Georgie, who runs the hockey team. He often gives talks to young people about going to university who want to go into the business of sport because that's exactly what he's doing. If you want to have some fun, you'll never get a better speaker on your podcast. He is articulate and eloquent as anybody I've met. I've seen him on panels with Jeff Marek at Sportsnet—this guy is extraordinarily articulate.

A couple of things your audience should really dial in on. As frustrating as it is when you're a young entrepreneur—and you guys live it and see it every day—there's no substitute for hard work. There's no easy path to becoming a millionaire, trust me. There'll be lots of failures along the way, but hard work pays a lot of bills. Humility, respect, making sure you have that confidence that you can take on things and conquer the world—not to the point of being cocky, but you've got to get up in the morning feeling like today's a new day and whatever I did yesterday wasn't good enough, I got to do better today. Whether it's driving your sales or lowering your costs, if you get up every morning and get at it, that's how folks on the East Coast have been successful—they work hard, and we play hard too. There's a lot of hard work involved. There's no easy route—it's just patience and hard work. Anyway, glad it worked out, glad we had some fun. Good luck, and make sure you do a good job of cleaning my goddamn windows when you come.

Well, I might not be here to even look at them because I hope to leave here by mid-April.

Thank you.