Without shifting his gaze from the glass, he turns his attention to the straw poking over the rim. “You could make this wider or colour it differently or make it bend here,” he observes, doing the math in his head: cost, production, marketing, distribution.
Gustavson is an entrepreneur, doing what entrepreneurs do — thinking how to make money doing something better.
The Winnipeg native 18 years ago turned a simple idea of foreign exchange into a global, multimillion-dollar empire and says his eyes are always open to possibilities.
“When you’re an entrepreneur, you’re just wired to look at things like that. Even when I travel, I see I could put a currency exchange here or a gelato store on that corner.”
There are tales (all true, confirms Gustavson) of Peter as entrepreneur as early as age six when he sold wooden coat hangers door to door. A year later, he was peddling a hand-made trellis, which he’d discovered how to make in Popular Science. A more familiar story is the one of Gustavson financing a double degree in accounting and marketing by distributing the Globe and Mail in Winnipeg. He’d start work at 2 a.m., meeting the plane bringing in wholesale bundles of papers. His grandmother would slip $2 a week in gas money under his pillow.
{advertisement} After moving to Victoria, he advanced that early ambition by founding Custom House Currency Exchange in 1992. It quickly grew from the 600-square-foot kiosk in an old waterfront building into a brand handling $15 billion a year in transactions, operating in 80 countries, and employing 630 people. Then, quite suddenly last year, he sold it for $370 million US to Western Union. Gustavson made headlines this year with a $10 million gift to UVic’s business school, where he’s been involved since 1993, as employer, advisory board member, and chairing the committee for its Distinguished Entrepreneur of the Year Award that he helped establish six years ago.
After selling Custom House, Gustavson puttered for a few months, and putted, but found he couldn’t just sit around. “I tried to knock off a bunch of things on my bucket list, like travel, and I worked hard to get my handicap down, but you can only play so much golf. When you’re an entrepreneur, your entrepreneurial juices just keep flowing.”
The proceeds from the sale went into his private equity investment enterprise, Gustavson Capital Corp., and he usually gets pitched three or four business ventures a week. The only one he swung at was Edmonton-based Marv Holland Apparel Ltd., a manufacturer of uniforms and fire-retardant clothing used in the oil patch. He now owns a majority share.
“I did a SWAT on it. Their weaknesses were things I was familiar with and I thought I could help address. They had little presence on the Internet and their sales force was small…. And when you drill down into the minutiae of their P&L, which is fire-retardant clothing, there’s a big opportunity to exponentially focus on that part of the business.”
After running North America’s largest non-bank foreign currency dealer, how will selling fire-retardant apparel be competitive enough to keep your entrepreneurial itch scratched?
The fun I had at Custom House was growing it from a single shop in Victoria to 80 locations around the world. Marv Holland has a great product that can sell internationally and currently has very little sales beyond the Canadian border.
Was it just too good an opportunity to pass up?
The more I peeled back the onion, the more I thought I’ve been here before. They had a new product, fire-resistant apparel, which was originally manufactured in Alberta. That couldn’t be cost effective. They’ve since shifted the manufacturer off shore, and it’s extremely competitive price-wise and in quality. Now all they need is to build out a sales force. It’s no different than Custom House. We had a product we developed in Canada and could sell it internationally. If it’s foreign exchange or widgets or clothing, when they boil the ocean, it’s all about customer service and meeting their demands.
Do you think a lack of that I-can-do-it passion has Canadians lagging behind economically?
In Canada, we don’t celebrate business success the same way they do in the United States. A very successful company in the States is a local hero. We don’t have that sort of society in Canada. I hope to change that. We live in a government town and I’d love if my investment at UVic started to change us from a government town to a high-tech business town.
If we’re not celebrating our business heroes, are we at least prepared to help them out financially?
We don’t reward start-up businesses and support them, as do other countries. In Canada, if I have an idea to create a widget better than any other widget and I need to raise financing, it’s very difficult. There’s a lot more opportunity in the United States. If I tried to raise $25 million, that’s way above the limits of most private equity firms here. It’s considered too large a transaction. In the United States, that’s considered a small transaction.
Custom House was named one of the 50 best-managed companies in Canada eight years in a row and you’ve won a ton of awards. What’s your secret?
Ensure that your subordinates have the skill sets to execute whatever your goal is and let them go out and do it. Delegate to a fault and monitor their progress against those goals and don’t interfere if they’re achieving that.
You’re a University of Manitoba grad: why did you choose to donate $10 million to UVic?
I’ve been here for 20 years and it’s my home. I got to know UVic sitting on the board of advisors for seven years and I saw some of the great challenges they have around finance. And at UVic, you can actually graduate with a specialty in entrepreneurship.
What mix of skills does one need to make a go of it as an entrepreneur?
An entrepreneur is someone who, as you go through your day, you’re always looking for opportunity. It’s a switch that never turns off.
Looking back — and I’m not suggesting this is the twilight of your career — what is it you’re most proud of?
The growth I saw and helped to foster with the people of Custom House. Kids straight out of university who grew as I grew through Custom House and turned into great managers and leaders.
So, has success spoiled you?
I still live in the same house, I still drive the same car, I still eat the same hamburgers, and I haven’t bought new golf clubs. Money is just a barometer to measure your success. To me, it’s just a game now. I can’t eat any more than before, I can’t wear any more clothes than I have, I can’t jump any higher. You know, I used to love playing Monopoly. Now life is just play money, but it’s nice to have a big pile of it in front of you.
Entrepreneur Peter Gustavson founded Custom House Currency Exchange in 1992, starting up in a 600-square-foot kiosk. It quickly grew into a business handling $15 billion a year in transactions, operating in 80 countries, and employing 630 people. He sold it last year for $370 million US. Now, he’s on to other things.
