Ian Telfer, the 2005 Entrepreneur of the Year, talks about what makes an entrepreneur and why he jumped at the opportunity to create a company out of thin air.
There was a time not so long ago when fate tested Ian Telfer’s resolve. Despite an ongoing love affair with precious metals, in 1999 Telfer, now the CEO of Vancouver-based Goldcorp, the sixth-largest gold producer in the world, found himself in a professional dilemma. The company he helmed, Vengold, was flailing in the post-Bre-X mining market. Against his own wishes – but not his better judgment – he morphed the company into a dot-com venture called Itemus for the sake of investors. “When the price of gold went down, things did not go well for Vengold,” says Telfer, 59. “The company was in a financial bind and the only way out was to sell the mining assets. I ended up with a shell that had $30 million in it and nothing else. My reaction was, ‘What can I do to help these shareholders?’ Dot-com was the flavour of the moment and there were opportunities there. As a result, the stock went from $.06 to $5, and a lot of money managers who stuck by me made a lot of money. To that extent, it worked.” Like many dot.coms, however, the company lacked a sustainable revenue source and, despite Telfer’s decision to let tech-heads run the show, Itemus went bankrupt. “I still think it was not the wrong thing to do,” he says. “Maybe I chose the wrong path for the company, but there was certainly nothing going on in mining in the fall of 1999 with gold at $270 an ounce.” When the precious-metals market rebounded in 2002 following a five-year lull, Telfer rebounded with it. After more than 20 years in the sector, the one-time accountant credits his success – and that of Goldcorp – to a canny combination of kicked-in-the-head experience and steadfast visceral instinct. “Everybody thinks deep down inside they have an entrepreneurial streak,” says the affable and upbeat Telfer. “But either they don’t get the opportunity to test it or they’re afraid to take the chance. When the opportunity came for me to create a company out of thin air, it was both an extremely exciting and very uncertain proposition. For some reason, that really appealed to me.” Born in Oxford, England in 1946, Telfer immigrated with his British father (also an accountant) and Canadian mother to her home province of Saskatchewan in 1948. The family soon moved from Moose Jaw to Toronto, where Telfer earned a degree in political science and economics at the University of Toronto in 1968. Receiving his MBA from the University of Ottawa in 1974, he was hired as a chartered accountant in 1977 by Hudson Bay Mining and Smelting, an introduction to the resource sector he considers a “coincidental opportunity.” “I’ve always found precious metals more exciting than base metals,” he says. “Gold is unique because it has an emotional quality. Also, gold stocks trade at much higher valuations than any other industry in the world, based on cash flow, earnings and the lifetime of the business. I like that.” Initially, however, Telfer had no idea he would wind up making a career out it. “I was interested in leaving public accounting and that was where I landed,” he says. “I had no long-term plan, but as soon as I got into the business, I found it brought out my entrepreneurial instincts.” In 1983, he and some colleagues founded TVX Gold, with Telfer as CEO. The idea was to head to Brazil and cash in on the gold rush taking place at the time. More than a passing whim, he wound up spending the next six years in Rio de Janeiro. “Everyone who starts a business says, ‘If I’d known how difficult it was going to be, I would never have done it,’” he says. “An entrepreneur has to have a lot of faith and confidence in their vision to make it happen. Those are the biggest factors. When you look at extremely successful entrepreneurs – whether Ted Turner or Ted Rogers or Robert Friedland – these are guys who went where people told them they were crazy to go. They were successful because they absolutely believed in their visions and they were not going to be dissuaded. People will tell you, ‘If it was such a good idea, someone would have done it already,’ or ‘others tried it and it didn’t work.’ You have to have conviction in your own beliefs. You can’t be a part-time entrepreneur because it’ll never work.” Settling in Vancouver in the early 1990s with his wife and two children, Telfer eventually left TVX Gold to take the reins of Vengold, the venture that would detour into the dot-com sector. In 2001, he made the decision to get back into mining with the takeover of Wheaton River Minerals. His timing couldn’t have been better. Almost instantly, the price of gold started to climb again. There was no looking back.” By spring 2004, Wheaton found itself whirling in a maelstrom of proposed merger and takeover bids – some friendly, most not. That December, a planned merger between Telfer and Goldcorp founder Rob McEwen was jeopardized by Glamis Gold, eager to swallow Goldcorp. Despite market predictions, Goldcorp’s board of directors rejected Glamis’s bid and in February of this year, Goldcorp and Wheaton solidified their deal with 65-per-cent shareholder support. “It was close,” says Telfer, “but I never had any doubt what the best outcome would be for the shareholders.” With Telfer installed as CEO and McEwen staying on as chairman, Goldcorp presently boasts a workforce of over 2,500 people and market cap of US$5 billion. “They say in life you only learn from experience,” Telfer notes, “but in reality you only learn from bad experience. If you start a business tomorrow and it’s a success, you don’t learn anything; if you start a business tomorrow and it doesn’t work, you learn a lot. “Always look forward. It’s OK to look back and say, ‘What did I learn from that?’ but there’s no point in dwelling on things you can do nothing about. You’re either an optimist or you’re not, and I’ve never met a rich pessimist. Lucky me – it’s all worked out.” Runners-up Rick Van Nieuwenhuyse Born in Belgium in 1955, NovaGold Resources CEO Van Nieuwenhuyse worked at an Alaskan mining operation at 13 before earning science and geology degrees. He has 25 years’ experience in the international resource sector, serving as Placer Dome’s VP of exploration before founding NovaGold in 1998. “Since I truly believe you make your own luck,” he says, “it follows that you will be a successful entrepreneur – provided you do indeed know your business.” Wayne Babcock A three-time Entrepreneur of the Year nominee, Dynamic Oil & Gas president and CEO Babcock, 62, received his geophysics degree from UBC before going to work for Amoco Canada Petroleum Co. in 1966. As the company’s geophysical exploration manager, he was in charge of exploring Canada’s western sedimentary basin in Saskatchewan and southern Alberta. He founded Dynamic in 1979 to further oil and gas exploration in the three western provinces. Related stories: Entrepreneur of the year 2005 Entrepreneur of the year 2005 - Health sciences Entrepreneur of the year 2005 - Manufacturing Entrepreneur of the year 2005 - Business-to-consumer products and services Entrepreneur of the year 2005 - Information technology Entrepreneur of the year 2005 - Business-to-business products and services Entrepreneur of the year 2005 - Emerging entrepreneur