Entrepreneurship
1. Discuss what steps Craig took to develop and grow his business. (7 marks)
2. Illustrate the role Craig played in contributing towards the economy (8 marks)
clearrisk | craig rowe
Business is risky, but that is Craig Rowe’s business - risk management to be precise. Craig,
the President of ClearRisk Inc., becomes animated and energized as he explains his line of
work. “Risk,” he says, “is not negative. It is when there is opportunity for a downside or an
upside.” Risk management is about formalizing the decision making process. People are
constantly assessing risks, whether it is instinctively in crossing the street or deliberately in
weighing the pros and cons of buying a car. “Business people,” he says, “engage in the same
process whether in deciding where to build a head office or whether to buy another company.”
the entrepreneur
Craig spent almost 20 years in the insurance industry, where he started right out of high
school. Over the years, he attained various insurance designations and completed many
business courses and ample on-the-job training. Craig is naturally entrepreneurial and also
operated his own consulting company and became involved in several insurance industry
associations. This allowed him to develop a large network of connections.
Craig found himself thinking and talking more and more about risk management. He realized
that if businesses did some basic things to manage risk they would save money. In 2001 he
wrote a book on the topic and later adapted the ideas in to a workshop which he presented
throughout Canada and the United States. Insurance industry professionals and other business
people noticed Craig and saw the logic in his message. Soon he was being invited to speak to
various associations and was asked to assist in writing material on risk management. When
dealing with clients of his consulting business, he noticed the same set of steps and questions
could be applied to different realities in different types of companies. He was sure that there
was something that could be packaged and sold to assist these companies.
He went in search of risk management software. He found some, but none applicable to small
and mid-sized companies and organizations. So he decided to build it. He teamed with David
d’Entremont who had the background provide technical expertise. Together they founded
ClearRisk. They developed a business plan which became their roadmap, even though it was
constantly being adapted to take into account new realities, circumstances and goals. Craig estimates they are on version 30 by now!
Craig decided to leave his job and pursue ClearRisk full-time. It was not an easy decision to
make as Craig had a young family at the time. He had to engage in his own risk management
process and weigh his options. He had almost 20 years of solid insurance industry experience.
He had an extensive network of contacts. He had entrepreneurial experience through his
consulting business. He knew the market. He knew what his customers needed and he knew
that he could develop a product to meet that need. He found a solid business partner to
complement his skills. So the timing was right and after 10 years of thinking, dreaming and
percolating ideas, Craig made the leap in 2006.
Craig says that the biggest challenge facing ClearRisk and any business, whether it is in
starting, sustaining or growing the business, is cash. ClearRisk needed capital to develop its
product. For any business to have credibility with lenders and investors, that initial money has
to come from the business owner. Craig and David secured an operating line of credit from the
bank based on personal guarantees.
Step 2 was to seek more financing to start implementing the business. Craig says that it is
important to look for money before you need it because you are building relationships and
confidence and convincing people that you are creditworthy. A business plan is a necessity but
“everyone invests in people.” This applies to accessing financing from Business Development
Bank of Canada (BDC), Atlantic Canada Opportunities Agency (ACOA), or any government
organization, as well as private lenders and investors. It is necessary to raise private money to
leverage government money.
Another important factor in developing ClearRisk was being accepted by Memorial University’s
Genesis Centre, a facility which provides business and technical support to new and emerging
technology businesses. This added to their credibility and attracted the attention of angel
investors. Angel investors are business people with financial resources available to invest in
new promising businesses.
Technological businesses are expensive to grow and ClearRisk’s growth has been made
possible by private investors and organizations such as Growth Works (a venture capital
company). Ownership of the company is now shared with these investors and ClearRisk is a
corporation with multiple shareholders. One of the tradeoffs in taking money from investors is
that ownership becomes shared. Craig says, “You can have a big piece of something small or
a small piece of something big.” He chose the latter.
Craig’s idea has grown immensely. He keeps the numbers to himself, but says sales have
grown exponentially. His primary market is North America and the ClearRisk software has been
launched in French and Spanish. Customers do not pay an upfront fee; instead, they pay an
annual fee for the software and support. ClearRisk is constantly improving its products. The
team is always enhancing features and improving functionality. Currently, they offer three
programs to consumers: ClearRisk™ Manager, which enables an organization to build and
implement a risk management plan; ClearRisk™ Tracker, which facilitates tracking insurance
claims; and ClearRisk™ Trainer, an online instructional program which increases awareness of
risk and its management. The latter two products are offered in partnership with other
organizations.
ClearRisk’s web-based business is global; however, Craig is cautious about expanding beyond
North America. The insurance industries in the USA and Canada are relatively interconnected
and homogeneous. It would be very difficult to provide support to countries with different
regulations and different languages. ClearRisk offers a web-based software service so they
use web-based marketing, rarely using traditional media. They access all forms of social media
such as Facebook, Twitter, MySpace, and blogs and find the approach cost effective and high
impact. Social media facilitates the use of in-bound marketing.
In addition to web-based marketing, ClearRisk is now getting calls from referrals. Clients are
spreading the word to other businesses seeking a similar product. The demand for ClearRisk’s
product is expanding but Craig resists growing the team too quickly. Craig prefers a small team
and likes the dynamics of small groups. However, more sales people are needed and they will co-op
and computer science students to his company. He likes to hire young people. It is
rewarding to see them take shape and become leaders.
Craig speaks favorably about starting a new business in Newfoundland and Labrador. He
says that the provincial climate is positive. In addition to the practical and financial support
available, the provincial government has done a lot to assist business in recent years, including
reducing taxes and red tape and increasing funding.
When Craig reflects on the path his career has taken, he gives special acknowledgement to
Paul Johnson of Johnson Insurance as a business icon and an inspiration. Mr. Johnson
inherited his father’s small insurance office and built it into an innovative, billion-dollar
Company. Not only was Mr. Johnson a great businessman, he was a community-minded
Philanthropist. This is evident today throughout the capital city in the parks, trail ways, and the
Johnson Geo on Signal Hill. Mr. Johnson has influenced Craig’s professional and
Community life. In addition to Craig’s entrepreneurial success he is firmly rooted in his
Community; he currently serves as Chair of the YM/YWCA.
Craig has advice for young people who dream of starting their own businesses. He says to be
Informed, to go in with open eyes and to seek honest opinions from knowledgeable people. He
advises that an entrepreneur should realize that “the odds are against you, but you need the
tenacity and perseverance to stick with it. It is important to understand your industry, to
understand the need for your product or service and ultimately to understand the risks before
you make the leap.” In business, managing risk is everyone’s business!
1. Discuss what steps Craig took to develop and grow his business.
2. Illustrate the role Craig played in contributing towards the economy
