L TITLE: RECOGNIZING THE OPPORTUNITIES I. ESTIMATED TIME FOR IMPLEMENTATION: 3-4 Class Periods I. PROGRAM OBJECTIVES AND THEME: Program #3 clearly demonstrates the difference between an entrepreneurial opportunity and an entrepreneurial idea. An entrepreneurial idea is necessary, but not sufficient, for entrepreneurship. Byery idea needs to address 2 specific need, want or problem. If insufficient numbers of people experience the need, want or problem, then the idea will probably lack the user-base necessary for success, Most new and developing entrepreneurs begin with the identification of an opportunity, clearly dofine the opportunity and then try to generate a specific idea in response to the recognized opportunity. Entrepreneurs usually find opportunities in areas of “change” or where there are opportunities to initiate change, IV. STUDENT LEARNING OBJECTIVES By the end of this lesson, students will be able to: define entrepreneurial opportunity distinguish an entrepreneurial opportunity from an entrepreneurial idea recognize conditions that tend to give rise to entrepreneurial opportunities identify entrepreneurial opportunities in their school and community apply a set of criteria to assess entrepreneurial opportunities which they identify + understand that most new and developing entrepreneurs fist seek out an opportunity and then attempt to generate an effective idea ~ although there is, no reason why a venture can’t begin with the idea V. VIDEO PROFILE OF PROGRAM #3 “Recognizing the Opportunities” presents the following segments and entrepreneurs, with opportunities to address the teaching points shown in italis. ‘Segment #1: OPENING DIALOGUE BETWEEN HOSTS ‘The opening segment presents the hosts in an interactive discussion to emphasize that entrepreneurs are “opportunity seekers”. They are on the hunt for opportunities and they ty to look at things in new ways ‘and from new angles to try and identify existing or developing opportunities. The hosts stress that ‘frequently entrepreneurs use the same information as others, but they use it differently to focus on opportunities. The hosts, aided by a variety of “still” shots, emphasize that entrepreneurs thrive in change and are agents of change. Change and new developments give rise to opportunities. With so ‘much change and s0 many developments in the world today, opportunities are all around us. 7Prosrast Segment #2; PROFILE OF TOM DROOG ‘Tom Droog immigrated to Canada from the Netherlands with a desire to farm and he settled in the West. He settled near Bow Island, Alberta, and bought a farm where he applies innovation to agriculture by ‘marketing a non-traditional product — sunflower seeds ~ in new ways. Tom's profile can demonstrate that: * Canada is a good country in which t0 find opportunity and that opportunity, and the freedom to pursue opportunity, abounds ‘A niche-market can present an opportunity Entrepreneurs look for change and ways to do things differently Entrepreneurs look for opportunities that spring from other activities Entrepreneurs define their opportunity by understanding the market clearly (birds eat the seed but people buy it and people like clean birdseed) + Entrepreneurs respond to market needs and wants with innovative products + Entrepreneurs create jobs and business for others + Entrepreneurs increase chances for success if they analyze an opportunity thoroughly to lan for growth + Entrepreneurs frequently define success as the realization of their personal goals ‘Segment #3: PROFILE OF DAN SITNAM Dan Sitnam is the lead entrepreneur and president of Helijet Airways in Vancouver. Helijet is an airline that uses helicopters to transport passengers between Vancouver and Victoria, Dan and his company can illustrate how entrepreneurs: + Define a “window of opportunity + Research and evaluate the viability of an opportunity and analyze the potential “market” Apply innovation o widen the “windaw" of opportunity Apply their accumulated knowledge and experience to their ventures Meet and try to avercome market resistance to their ventures Need to be goad team builders Seek “contral" and want to control events and outcomes Seek out challenge, and often thrive anit Bring resaurces together, sometimes expensive resources, to pursue their ventures ‘Need a varity of skills for success Need to be efficient and manage cash-flow effectively Segment #4: PROFILE OF MADELEINE JOHNSON Madeleine Johnson works in real estate in Montreal, but she is also the inventor of the “bag holder", simple device that can be used ta hold a garbage bag open while one rakes leaves into it, Madeleine was Unsuccessful in marketing her produet which ean show that A perceived need may nat present a viable entrepreneurial opportunity ‘Undercapitalization can sink @ potential opportunity and idea A patent does nat guarantee suecess Successfl inventors are not necessary entrepreneurs % ~ Entrepreneurship For Canadians: The Spirt Of AdventureSegment #5: PROFILE OF JOHN VAN AUKEN Over a period of fifteen years, John Van Auken of Sydney, Nova Scotia, developed an electronic line judge for use in the game of tennis, To date he has been unsuccessful in marketing his invention. His profile illustrates: The importance of market analysis to determine the viability of an opportunity The importance of sufficient capitalization The risks inherent in opportunities involving high technology That what appears as @ good opportunity on the surface may not be in the long run Innovation can costa great deal of money That. tobe successful, every idea needs a real opportunity a generally perceived need, want or problem) +The persistence and commitment of entrepreneurs + Successful inventors are not necessarily successful entrepreneurs Segment #6: PROFILE OF RUSS PARKER By marketing Triple A baseball as a family entertainment package, Russ Parker has made his team, the Calgary Cannons, one of the most successful franchises in the league after only three years of operation. Russ demonstrates: Opportunities can be found in all fields of endeavour Opportunities lie in looking for new ways and approaches to traditional or current ways Entrepreneurs create jobs for others Innovative marketing in the field of professional sport How entrepreneurship benefits the community ‘Segment #7: PROFILE OF CAROL LIVINGSTONE ‘Carol Livingstone is a teacher in West Point, Prince Edward Island, population 132. Carol organized ‘volunteers in her community around a project (0 restore the local lighthouse. ‘The entrepreneurship practiced by Carol and her group restored civic pride along with the lighthouse, Furthermore, the stagnant tourist industry was revived creating 25 annual summer jobs, Carol Livingstone demonstrates that entrepreneurship: Can be practised in a volunteer capacity Can be practiced as a group co-operative Can have a significant impact on a community - economically and otherwise Can be practiced on a non-profit basis Segment #8: CLOSING DIALOGUE BETWEEN HOSTS ‘The closing segments involves the hosts in a discussion highlighting the difference between an opportunity and an idea, that opportunities are all around us (in our homes, sehoels, communities, country ~ indeed, inthe global marketplace) and that once a good opportunity is identified the next thing needed isa good idea ~ the focus of the next program, Progra 6Procrant #3 VL IMPLEMENTATION STRATEGY Class Period #1: Preparation for Program #3 1, Conduct a brainstorming activity with the class. Ask students to brainstorm to identify entrepreneurial opportunities in the school (i.e. what needs, wants or problems exist in the school) Follow the rules of brainstorming — write all ideas on the board, no criticism of ideas is allowed, suggest as many ideas as possible with no concern about their merit. (5 minutes) 2. Review the opportunities listed on the board. Note any suggestions that are ideas rather than ‘opportunities. For any ideas listed, ask students to identify the opportunity the idea is addressing — if an opportunity exists. (5 minutes) 3. Without using any criteria attempt to determine through a voting process what students perceive to bbe the “best” opportunity. Write this opportunity separately on the board. (4 minutes) 4. After writing the selected opportnity on the board, ask students to offer opinions a5 to why they thought it was the best. White the reasons on the board. (5 minutes) 5. Looking at the list of reasons, ask students to identify the “criteria” they were using to assess the ‘opportunity. Use Transparency #3.1 to focus a discussion on the criteria to use in assessing an opportunity . Add any appropriate other criteria, identified by student, to this list. 6. Use Transparency #1.7 from Lesson #1 to review the definition of an opportunity. Emphasize that entrepreneurial opportunities tend to arise from “change”. Change creates new and different needs, ‘wants and problems which exist as opportunities for entrepreneurs. (3 minutes) 7. Distribute a copy of Transparency #3.1 to students as a Handout. Divide the class into groups and ask them to discuss and identify changes that are occurring in their community town/city/province/country. Have each group identify a recorder/eporter to record the changes that will be shared with the class. (1S minutes) 8, Before the class ends, allow time for each recorder to read back to the students in his/her group the areas of change that the group has discussed. Each student within the group should record these areas of change in order to refer to them for the homework assignment, (3 minutes) 9. For homework, ask each student to select one of the areas of change the group discussed and identify one or more potential entrepreneurial opportunities generated by that change. Ask each student to select one specific opportunity and use the criteria identified on the handout to assess the opportunity. Students should be prepared to share their opportunity with the class along with a brief summary of the results oftheir assessment. Students should prepare their work in written form so itcan be handed in at the next class Class Period #2: Showing Program #3 Collect the homework that was completed by students. 2. Ask group reporters to report on the areas of change identified by each group. Write these on the board as they are identified. Make sure reporters repeat items already reported from other groups. 80 Entrepreneurship For Canadians: The Spirit Of AdventurePlace a check mark beside each area of change to represent every occasion on which another group identified the same area, Note which area of change (if any) was identified most frequently. Ask students to offer their opinions as to what they think are the most “insightful” areas identified (Le. the ones that are apparently legitimate opportunity areas but which would probably go unnoticed by ‘most people. Keep a record of the “best areas of change” for use in Class Periods #3/4, Put these (on a transparency. (10 minutes) Prior to showing Program #3, ask students to keep their eyes and ears open for: (@) the opportunities addressed by entrepreneurs (b) the ideas developed by entrepreneurs in response to the perceived opportunity (©) good ideas that didn’t seem to address an opportunity (@) obstacles entrepreneurs can encounter (©) representations of the characteristics, skills and benefits of entrepreneurship 4, Show Program #3: “Recognizing the Opportunities” 5. Distribute copies of Student Handouts #3.1 - #3.6. 6. For homework, ask students to use what they have leemed from the video and the readings to: (@) identify the opportunity that was addressed by each of these entrepreneurs (b) describe the idea that each entrepreneur developed (©) refer to the criteria for assessing opportunities to evaluate and select which of these ‘opportunites is, in their opinion, the best (@ write a brief explanation of why they think the opportunity they selected was the best and add to it any advice they would offer to the entrepreneur 7, Before the next class, read the homework assignments that were collected from students, Review ‘homework to ensure students clearly understand the distinction between an opportunity and an idea and to assess the degre to which the criteria for evaluating opportunities are being used effectively. ‘Be prepared to hand this homework assignment back to students in the next class. Class Period(s) #3/#4: Post-Viewing (Time will depend on the extent to which video segments are replayed) ‘Hand back to students the homework assignment from Class Period #1 2, Select a number of students to share with the class their opinions concerning the “best opportunity” portrayed in the video and the reasons for their selection, Examine the extent to which there is either consensus or divergence in class opinion. 3, Amy of the segments of Program #3 could be reshown and reviewed with students but the following ‘ones are particularly recommended. For these segments, you could focus on the teaching ‘opportunities that are identified. at ProgranProaran Tom Droog ‘+ a great deal of Canada's entrepreneurial spirit and initiative comes from immigrants who come to Canada seeing it asa “land of opportunity” + he was a farmer but wanted to do something different ~ he didn’t want to do what everyone else was doing ‘+ an opportunity arose from his first area of endeavour — he first grew sunflower seeds for oil and then was presented with the opportunity for birdseed + he was sensitive to the market, recognizing that people, not birds, buy birdseed and want it clean whereas the birds wouldn't care + this opportunity spawned another opportunity ~rather than just seeds for birds, seeds for people too + he innovated with respect to the product both in terms of flavour and packaging + he shortened the distance between himself and bis customers for better service + his success has led to his need to buy from others ~ therefore creating business and jobs for others + he faces up to the challenges of growth and tres to plan and prepare for growth + he emphasizes that you can’t stand still “standing still is going backwards" + he defines success 2s “a worthy realization of an idea” + he embodies many of the characteristics and skills of entrepreneurs discussed in earlier lessons and he demonstrates clearly the contributions of entrepreneurship (these areas can be reviewed and reinforced) Dan Sitnam + he wants “control”, as do most entrepreneurs — he doesn’t want to work for someone else + he seeks out and wants a challenge ‘+ he didn’t have much experience but spént time observing others and their problems + he confronted resistance and found ways to overcome obstacles + he shows the need to identify potential problems + he found an opportunity and set out to specify the market and the potential users + he had to bring the “right” resources together including # helicopter acceptable to the community + he employed a marketing strategy to attract customers + he faced many problems (including severe cash-flow difficulties) and managed to overcome them + he repeatedly examined his options and applied decision-making skills to make choices + he demonstrates the importance of effective financial management + he demonstrates the importance of efficiency in managing operations + he is an effective team builder c ‘+ he demonstrates many of the characteristics and skills discussed in the first two lessons + he“saw an opportunity and delivered” John Van Auken + Review this segment to emphasize how important it is that an idea be linked to a legitimate ‘opportunity ‘+ Discuss the factors that might determine whether or not John’s idea succeeds + Discuss how difficult it can be for “inventors” to be “entrepreneurs” and take this opportunity 1 review the distinction ‘+ he shows how much time and money it can take to develop a new idea + he shows the persistence that is needed by entrepreneurs if they hope to achieve success 82. Entrepreneurship For Canadians: The Spirit Of Adventure:Carol Livingstone + Review this segment to emphasize how entrepreneurship can be applied to community and not- for-profit endeavours + Use this segment to emphasize how entrepreneurship can also generate non-economic benefits toa community (e-. pride, sense of community) ‘Show the class the transparency you made summarizing the key areas of change students identified in their group discussions. Use Transparency #3.2 to discuss other trends that might give rise to ‘opportunities. Reassemble students into their groups. Distribute copies of Student Handout #3.7 as, ‘well as copies of Transparency #3.2. Using these references, ask each group to identify a specific ‘opportunity that could have good potential for spawning an entrepreneurial venture. ‘After an opportunity has been selected by the group, ask the group to participate in some early brainstorming looking for a good idea to address the opportunity. For homework, ask each student to use the criteria for evaluating opportunities to assess the ‘opportunity selected by the group to see how it stands up. Tn addition, ask each student to continue to try to generate an idea to address the opportunity. Ask students to write all of their ideas down. Furthermore, ask them to think about how they are going about trying to generate ideas. [N.B. #6 assumes that you will be utilizing Program #4 50, if you choose not to, a different bridging activity will be necessary. In addition, some other possible activities are provided on pages 99 and 100) ProgramASSESSMENT Actual: It is really an opportunity? Seen: Has it been seen by others? Selected: If seen, have others selected it to act upon? Enduring: How long will it last? Satisfied: Are you satisfied that you have accurate and sufficient information? Specific: Have you specifically defined the opportunity? Procras! Many: Do, or will, many people care? * Experience: Do you really know what you're doing in this area? Number 1: _ Is it the best opportunity you can see? Think: Can you come up witha good idea? 84 Transparency #3.1TRENDS THAT GIVE RISE TO OPPORTUNITY * Canada’s population is increasing * We have a multicultural society * We have an aging population + Baby boomers are assuming positions of leadership + People are increasingly health conscious + New types of family units are being formed * There is an increased need for lifelong learning * Leisure activities are taking on more importance + Improvements in satellite technology * Changes in electronic communication Progra * Computers are being developed that can translate any language * Computers are developing that accept voice instruction instead of keyboard * Cars can be started by fingerprints instead of keys * There are now more home computers * More women are assuming positions of power Transparency #3.2 85Progra Entrepreneur: Tom Droog ‘Tom Droog always wanted to be a farmer, but farm land is scarce in the Netherlands where he was born. ‘As soon as he was old énough Tom immigrated to Western Canada, and, after raising some capital by ‘working in the oil fields, he bought a farm near Bow Island, Albert At first, Tom produced the traditional crops of the area such as sugar-beets and wheat. But he wasn't happy with the restrictions that marketing boards placed on his production so he looked for another product with fewer controls and with a more flexible market. He decided to try growing sunflowers. He thought en opportunity might exist with sunflowers because they present the farmer with more marketing options. They had been grown for oil in the past, bt Tom discovered a market for birdseed and began to sell millions of pounds oft. Soon he was encouraging other farmers to produce sunflower seeds 50 he could buy and market their crops as well as his own. Today he buys 95% of his product from his neighbours, creating opportunities for them as wel Since he was already packaging seeds for people to feed to the birds, Tom thought the next logical step ‘would be to sell seeds for human consumption. Roasted and salted sunflower seeds are a popular snack food on the prairies and Tom entered that market ~ but not before doing his research. He asked people how he could improve on the competition's product. The result is a product he calls Spitz, which he Produces in three flavours, in a resealable bag, and in one-pound sizes - because he discovered that ‘most people thought that one pound sounded like more than 600 grams, the size he first tried. ‘To shorten the distance between the farmer and the consumer, Tom delivers directly to the stores. Spitz hhasn’t taken over from his birdseed business, but just five years after getting into agriculture Tom Droog. sells approximately ten million pounds of sunflower seeds a year and his business, Alberta Sunflower Seeds, is growing steadily. To Tom Droog, “Canada is the land of opportunity”. 86 Student Handout #3.1ENTREPRENEUR: DAN.SITNAM Sou From an early age Dan Sitnam wanted a career in aviation. When he received his pilot's licence he quickly advanced to helicopters and took a job flying charters in northern British Columbia. After afew years, Dan had accumulated thousands of flying hours and was looking for a way to move back to the City without leaving the field of aviation, At that time there were limited opportunities for helicopter pilots in Vancouver. Most pilots chose to fly charters but this is imregular work. Dan wanted to start 2 business of his own and he saw that the need for people to travel by air between Vancouver and the provincial capital, Victoria, might present an ‘opportunity if it could be filled by a helicopter service. He researched the opportunity and found that several attempts to provide helicopter service between the ‘wo cities had already failed due to the inadequacy of the sircraft and the public’s resistance to the noise they make. Dan Sitnam decided to go ahead anyway and, indeed, he was stopped by public opposition. ‘But he refused to give up. Dan thought he could increase the viability of the opportunity by using a larger and quieter helicopter than had been tried before, and by flying around populated areas at a higher altitude. He bought two ‘welve-passenger Sikorsky helicopters and offered to give rides for free, just to get the public to try the service. He met with community groups to hear and answer their concems. His efforts paid off when the city of Victoria agreed to provide @ space for his heli-pad. ‘Dan believed that because helicopters can fly in any weather he would have an advantage over his competition who operate seaplanes which are restricted to daytime flying in good weather. But seaplanes have lower operating costs than helicopters which meant that for Helijet to be viable it would Ihave to be run as efficiently as possible. As Helijet increased its share of the market, Dan worked to cut costs and increase margin. Helijet employs eighty people with only twenty-four passenger seats to generate revenue and because it ‘operates as an airline, as opposed to a charter service, it requires the complete airline infrastructure, including ticketing and baggage-handling services. Dan took an innovative approach to cost-cutting. Instead of purchasing expensive airline reservation software for his computers, he tricked a less-expensive hotel-reservation software package into selling Student Handout #3.2 (i of i) 87 PRocaAM #3seats instead of rooms. To cut maintenance costs, he convinced the helicopter manufacturer to allow his crews to do major engine overhauls right at Helijet, instead of shipping the engines out at considerable cost. By providing new, steady jobs for helicopter pilots Dan was able to hire experienced pilots at a reasonable price, As with all Helijet employees, Dan hires energetic achievers who are as keen to make Helijet vigble as be is. an is not getting rich at Helijet - yet. But he derives his main satisfaction from taking on a challenge, putting a team together and making it all work. Today, Heliet is still going strong and has just added a third helicopter to its fleet. Progra 88 Student Handout #3.2 (ioENTREPRENEUR: Russ PARKER Russ Parker always loved baseball. He played a little as a young man but didn’t make the big leagues. ‘After high school he took @ job as a salesman and before long was in the."new" business of selling photocopiers. His goal was to make Canon copiers the number one copier of choice in Alberta, where he staked out his territory. After twenty years, his Canon copier business was the largest copier franchise in Alberta and Russ Parker was a very successful man. In Calgary, where he based his operations, Russ Parker ‘controlled eighty percent of the copier market by 1988, and he had become quite a wealthy man, With his financial future secured, Russ once again tumed his attention to his first love, baseball. By the mid-eighties Calgarians actively supported their new NHL hockey franchise, the Flames, and the Stampeders, their CFL team, but Calgary had no professional baseball team. Russ knew about franchises and he decided to explore the matket with an eye to buying a Triple A baseball franchise. ‘There was sufficient population in the greater Calgary area, he reasoned, and Calgarians did love sports. But he knew he would have to be innovative to make a Triple A franchise viable. Triple A franchisees hhave no say in managing the team — they only have control over the park in which the team plays. Russ realized he would have to attract fans to the stadium whether the team was a winner or loser. With & lot of help from his team of advisors, Russ came up with a plan, bought the Calgary Cannons and installed them at Foothills Stadium. ‘The first part of the plan involved targeting the market. Russ determined to go after the family entertainment marker, instead of just the sports-fan market. To draw the whole family to the park, Russ put together marketing team ofthe best people he could find. Patteming themselves after Disney ‘World, they put together a complete entertainment package. From the moment a family arrives at the stadium they are greeted by cheerful, well-trained staff. ‘Sponsors provide giveaways based on the theme of the evening. For example, their tropical theme involves giving away Hawaiian shirts to all the kids while a steel-drum band plays at the entrance. ‘The hawkers are trained to be entertainers who delight the audience with jokes and juggling tricks, while selling hotdogs, pop and popcom. Instead of passing change along the rows, they throw a tennis ball ‘with a slit cut in it to pass the money and change between buyer and seller — everybody loves to throw a ball ata ballgame! Later on, a pizza delivery-person arrives shouting “Who ordered a pizza?” The fans Student Handout #3.3 (‘of i) EJ ProaRAM Lf‘who yell the loudest are rewarded withthe treat ‘The Cannons win some and they lose some, but the fans always leave the park happy and entertained. After just three years, the Calgary Cannons are one of the most financially successful Triple A franchises in the league. Russ says it’s all in knowing what you're selling, who you're selling it to, and hiring the right people for the job. Proceaat 90 Student Handout #.3 (i of i)ENTREPRENEUR: CAROL LIVINGSTONE Carol Livingstone has lived in sight of the lighthouse at West Point, Prince Edward Island, all her life. ‘When the lighthouse keeper was replaced by an automatic light in the 1960s, the lighthouse and the keeper's residence fell into disrepair. Carol and her neighbours were saddened to see the long-standing ‘community lanémari neglected and decided to do something about it, and at the same time create some ‘employment, especially for the women of the area. Carol had helped establish a community center in the village and she and her unpaid volunteers formed. an association dedicated to raising the money to restore the lighthouse. With the help of the provincial ‘goverment, the lighthouse and the keeper's residence were restored and, before long, tourists retwmed. to the village. Building on this success, Carol and her group Worked at tuming the residence into a dinner theater and. hotel, By the time the project was completed, twenty-five summer jobs had been created in a village of 132 people. Now the citizens of West Point get involved in the dinner theater, acting out historical vignettes and singing local dities. AA self-described history buff, Carol takes great satisfaction in seeing the restored historical lighthouse playing a part in teaching the community about its past and helping it prepare for its economic future. Sudo Handoa vB alPRocaAM #3 ‘r'Lt Never Fy" ‘The blue and white aircraft rises off the heli-pad in Vancouver's inner harbour, as if drawn at the end of @ string. It looks like a small airliner minus the wings and except for the huge overhead rotor. It rises near vertically, slants over First Narrows and heads toward the Gulf Islands, reaching 200 metres in minutes. For anyone raised in the belief that helicopters are precarious machines used in foreign jungles, the comfort of this aircraft is a surprise, as is the professionalism of this airline's whole operation, from ticket office to cockpit. ‘When in late 1986 a Helijet helicopter lifted off as the latest competitor in the crowded skies between ‘Vancouver and Victoria, the ovation from the skeptics and the casual skywatchers was a thunderous silence, broken by the occasional snicker. It would be dramatic to report that, with steadily growing revenues and a current six-month report that shows 2 modest net profit, the naysayers have tumed to believers. But they haven’t, even though the company has eamed a grudging respect both within the industry and among the travelling public. Says Daniel Sitnam, Helijet president, “The financial community ~ bankers and brokers ~ sill don’t believe us.” ‘There may be good reason for that skepticism. In the Lower Mainland, an unbelievable 70 airlines are represented ~ from what amount to listening posts of the world’s greatest airlines, to the Mom-and-Pop shops that feature a float-equipped Beaver and a shared counter floating in the inner harbor. Within that ‘group, the number of hopefuls lugging business executives and carpetbaggers to and from the seat of government varies like the membership at a fast-moving poker game, but can best be described as “several,” led by Air B.C. ‘What possible case could be made for yet another entrant, even one in a helicopter? Sitnam’s answer, when he developed the Helijet concept in 1985, was that you had to consider the specific market sought and the type of equipment used. He did so from a fragile base of a humble office, a shared hanger and a ‘fleet’ of a single Bell 412 helicopter and a handful of prayerful employees. “The airport-to-airport market is obviously saturated,” says Sitnam, “but the harbor-to-harbor market mostly consists of Air B.C., which is our only competitor. Actually, we also fly Vancouver Airport to Victoria, harbor” “Tel never fly” by William Annet B.C. Business, May 1989. 92 ‘Student Handout #3.5 (i of il)In fect, the Vancouver airport to downtown Vietoria harbor run arose from the need of national ané {ntemational travellers to make immediate direct connections between Vancouver and Victoria without going, either of the other two circuitous routes. Subsequent traffic has vindicated that decision, and in the first year of operation total revenue on the new route exceeded expectations by 10 percent. In the ‘past year, Helijet installed its own passenger terminal adjacent to the main terminal at Vancouver International Airport ‘The real need, according to the Helijet concept, was not being met when Helijet threw its hatin the ring. ‘A-community of private and public sector people needed a rapid, reliable facility for travel between the ‘wo cities, one unlimited by the constraints of weather and daylight. But in the beginning, Helijet had to contend with the residue of public doubt about the efficacy of the choppers for anything but a scene in “MMfA*S*H*. In the past, much of the public viewed helicopters as sky-hook machines with a innate compulsion to self-destruct, whereas fixed-wing aircraft basically wanted to fly. That atitude, according to Siam, was light years away from contemporary helicopter technology that in some ways has produced even greater safety than that afforded by conventional airplanes. Obviously, it matters little to @ helicopter where it lands or takes off, provided there's a suitable landing, pad. In fact, one of Helijet’s principal marketing features is that its fleet of three Sikorsky S-76 twin- engined helicopters offers greater passenger comfort and safety with IFR instrumentation and the capability of flying at night and all-weather ~ not possible in some of its junior competitors. Sometimes a great notion doesn’t get off the ground. Sitnam, @ native of London, migrated to Vancouver ‘when his father moved here as an engineer. Prior to developing the Helijt idea, he had spent 14 years in the helicopter charter business before he spotted a niche in the perennially busy inter-city market. Privately funded, Helijet Airways is listed on the Vancouver Stock Exchange but has never required a public stock issue. But there were early problems. The capital requirement of buying the big Sikorsky birds, and their heavy ‘operating costs, coupled with the competitive nature of the business, required a close attention to seat inventory and cost control. Sitnam attributes success in these areas to Eric Greenwood, vice-president, ‘marketing and administration, The turbulence of the company’s first year and a half of operation seems to have given way to the relatively level flight of 2 slowly maturing. organization. ‘The first operating year recorded a net loss, due in part to a complete overhaul of the Helijet fleet. In addition, capital costs were incurred with the initiation of a Vancouver Aisport-Victoria Harbor service, heliport leasehold improvements and the installation of an in-house reservation system, and improved airline revenue accounting, marketing and operational systems, “With major overhaul costs now being budgeted,” says Sitnam, “most ofthe first-year loss on operations ccan be attributed to start-up and other non-recurring costs. In other words the picture is not really representative of the year's actual performance.” Individual numbers demonstrate his point: cargo and courier sales accounted for 2.76 percent of total revenue, and continue to grow; the 59,000 passengers boarded were 180 percent up over the previous year; and operating revenues at $4.3 million increased by 154 percent. Helijet’s chairman of the board, Alistair MacLennan, who with Stewart Vorberg and Sitnam was one of the founding partners, points out that after a review of the company's brief history the directors made three specific recommendations to management, all of which were acted upon. They included a fare increase that would inerease monthly revenue to a stable Tevel in excess of $500,000; a review of ‘operating costs to reduce the excesses that tend to follow rapid growth and to establish the specific goal of providing lowest cost for the product in the marketplace; and finally, to establish a commercial ‘agreement with a major air carrie to increase revenue through Vancouver-Victoria feeder operations. Student Handout #3.5 (i of ii) 3 | Prockaw #3| Procaane As of November 1988, says Sitnam, they increased fares (one-way) to $88 from $76, the lower figure representing an off-peak economy rate. The company expects this increase to result in additional monthly revenue of roughly $50,000. The company also recently achieved two significant cost reductions in insurance costs (a $130,000 saving) end in a major fuel purchase agreement with a US. supplier for an annual cost saving of $180,000. In addition, says Sitnam, Helijet’s payroll has been stabilized at 28.5 percent of operating costs, comparing favorably with the aisine industry's 31 percent “With any kind of airline operation,” says Sitnam, “the reduction of costs must always be measured closely against any possibility of jeopardizing service, reliability and safety ~ the only three factors that ‘can contribute to real success.” Despite all this good news, the critics are still on the sidelines, but their voices are more muted. “It's not so much that the ‘Street’ is critical,” says « Howe Street analyst who declined to be identified, “but the stock hasn’t been closely followed because there has been no financing. I know for example that Felijet hhas done well operationally, but you can’t take an analytical look when there's no financial news. Meanwhile, the stock just sits there at 30 to 40 cents.” Company management doesn’t seem to mind that. Unlike most junior companies intent on financing through warrant offerings, it has no incentive to stimulate interest in the stock. “It's not that we aren’t interested,” says Sitnam, “it's just that we have more important priorities. Our strategy is to make the ‘company work and the stock will take care of itself.” ‘But there is also the question of whether the concept itself is sound. Why, for example, should Helijet be successful when there is not a single precedent for a commuter or feeder helicopter airplane in any ‘North American urban area? Dan Sitnam doesn’t particularly care if there’s a precedent, which may be ‘an acceptable attitude for an entrepreneur. Perhaps the circumstances aren't right anywhere else, for a ‘multitude of reasons. And a world-class ferry system, a unique capital market for junior resource financing, and a maturing aquaculture industry all seem to demonstrate that many entrepreneurs in B.C. don't wait for precedents. “There is Trump Air in New York,” says Sitnam, referring tothe system real estate mogul Donald Trump employs to ferry patrons to his Atlantic City casinos. “It’s obviously successful from an operational point of view, whether or not it’s financially successful.” More important than precedents, perhaps, is the outlook for the future, Japan, with an enormous transportation and commuting problem because of its dense population and small space, is projecting an ambitious “fourth generation” transportation system involving a huge series of floating heliporss along its coast. The plan is expected to involve as many as 1,000 helicopters by the end of the century. For Sitnam, the financial progress of Helijet is all he’s concerned about, and that has been established with the recent six-month report. Sales of $2,659,956 resulted in a black bottom line of $202,140, an impressive result after less than three years from start-up. Now that costing and procedures have been established, Simam expects improved results. For the full year 1989, the company projects 73,000 passengers producing $5.6 million in total revenues with a satisfactory net profit, still difficult to assess. “Our strategy,” says Sitnam, “will be concentrated on three major goals: to improve our market share in the two sectors in which we operate; and to establish additional scheduled routes — such as Seattle and ‘Whistler ~ and to market scheduled weekend services.” ‘The critics can’t be faulted for reserving judgement on Helijet Airways. The company is young, adequately but not lavishly funded, and must be viewed as a speculative junior in a tough market not unlike a roller derby. (On the other hand, Dan Sitnam and his company have paid their dues and, like the chopper technology they have aligned themselves with, they have come a long way in 2 1/2 years % Sacer Handoava5 ote)Accu-CaLt System™ ACCU-CALL SYSTEM COULD REVOLUTIONIZE TENNIS* - Montreal native John Van Auken is setting out to change the way tennis is played. If he succeeds, Accu-Call, an electronic line-calling system, will soon be a common sight at tournaments and clubs across North America. ‘With an accuracy rating of 1/1000th of an inch, the system will put line judges out of work and ‘empermental players such as John McEnroe at a loss for words. Although Canadian Tennis Technology Lid. is only three years old, the idea for the Accu-Call system goes back 15 years. At that time, Van Auken, now 72, was a Miami-based engineer and inventor with ‘Saxon Industries. His love of tennis led him to adopt the role of patron, billeting many of the young players that descend on south Florida for the winter toumaments. One of the guests had the idea of an automatic Hine-calling system, Van Auken thought the problem was simple and promised a solution within a week. Now, 15 years and ‘$4 million later, the product is ready. Accu-Call works by layering the entire court and the top of the net ‘with cross-circuited wires set in a mat of acrylic 1/64th of an inch thick that is placed over the existing ‘court surface. The bal is also wired with stainless steel fibres woven into its fuzzy covering. ‘Mamufactured under a special arrangement by Penn Athletic, a Phoenix, Arizona-based sporting goods ‘maker, the balls look and feel the same as regular ones. But when they hit the court surface, a shor. cireuit is create, triggering an automatic signal. Depending on the setting chosen, Accu-Call registers rulings on a set of lights, similar to traffic signals, hhanging at each end of the court, or on a small panel monitored by an umpire. It can also have ‘computer-synthesized voice calling the serves. Darrell Abbott, manager of the Ontario Racquet Club, calls the system unbeatable for tourmament use ‘but doubts whether Accu-Call will become popular at the club level, “Tennis people are traditional in their sport,” he says, suggesting the average player may resist learning to adapt to Accu-Call. ‘Van Auken’s son, Rick, who markets the units, admits the firm still isn't clear on how players will react to the system, But he is confident that a club that actively promotes the product will develop devoted users. Instead of selling the units, the company is renting them out for USS600 for three months, plus a ‘US$4-an-hour user fee. As the clubs can add their own surcharge, Rick Van Auken believes the Accu-Call systems can become ‘money makers for both the company and the clubs that rent them. A Los Angeles area club has already leased four courts end Van Auken predicts there will be 200 in use in the U.S. by July 1990, and more than 4,000 by 1994, These are modest projections, he says, as there are about 65,000 U.S. private club ‘courts, the market being targeted first by the company. ‘Tournament use is a primary market, says the younger Van Auken, who expects the system will be used fat more than 250 tournaments a year by 1993. The courts will rent for US$10,000 a week for a tournament - US$4,000 less than it would cost to hire a full complement of linesmen. + “Aceu-Call system could revolutionize tennis" by Michael Redmond. The Financial Post, April 7, 1989. Student Handout #8.6 (fi) 5 Prosi raAdditional revenues will come from ball sales. The company holds the worldwide patent. He’s ‘counting on recent placements to retum employment at his Sydney facility to a full complement of 25, ‘And if sales take off, that figure could jump to 70-80 employees. But before the marketing effort reaches full speed the company has two hurdles to overcome — money and official sanctions. John Van Auken is looking for USS4 million to set up a marketing arm to be based in New York. Sanctions from the sports governing bodies are necessary before the system can be adopted for widespread tournament play. Procran 96 Student Handout #3.6 (iof i) _|‘SaFARt Tips Safari Tip #1: Safari Tip #2: Safari Tip #3: Safari Tip #4: Safari Tip #5: Safari Tip #6: Safari Tip #7: Safari Tip #8: Safari Tip #9: Recognize patterns as they are forming. The entrepreneur has an advantage if trends, patterns and changes are detected before others have noticed them — perhaps even before they have happened. Look at the small things. Many of the best opportunities lie in what has been overlooked. Don’t overlook the obvious. There is a saying that “only a foolish mouse would hide in a cat’s ear, but it is the foolish cat that fails to look there”. ‘Watch for good ideas that are poorly executed.’ Some people find the opportunities but just don’t know how to take advantage of them and you may know how to. Combine two or more things/thoughts together. Somebody came up with the idea for a bar and a laundromat together. Someone else came up with a coffee shop and book store. Opportunities can often arise when two things are brought together for examination and thought. Look for new, generally unknown information. The best information is that which is new and/or generally unknown. Talk with people. What better way is there to identify needs, wants and problems than by talking to people and finding out. Read journals, trade magazines, etc., to keep on top of things and to gather new information that may give rise to an opportunity or ides, Look for what has worked elsewhere. Student Handout #3.7 ((of i) 7Safari Tip #10: Safari Tip #11: Safari Tip #12: Safari Tip #13: Safari Tip #14: Safari Tip #15: Safari Tip #16: Safari Tip #17: Safari Tip #18: Safari Tip #19: Look for new ways to meet old needs and wants. Look for ways to overcome barriers that blocked a good idea in the past. People tend to resist change and some other entrepreneur may have been unable to overcome the resistance to a good idea. Look for “left-behind” markets. Leaded gas cars. Older model computers, 8-track tape players, Volkswagon bee- tles, As long as people continue to use certain things, they continue to have needs. Look for good ideas that can be improved. Look at “why” people buy something rather than “what” they buy. The idea is to get at what it is that motivates people — what prompts them to buy something — what are the underlying needs and wants. Therein lie the opportunities. Look for new uses for old products. Old tires. End pieces of lumber. Record players. Records. Look for what's not working. Look for unhappy, dissatisfied people. Here you will find needs and wants that are still to be addressed. Look for happy, contented people. Here you will find insight into what has worked and what might work better. Keep your eyes and ears open. There is no more important tip than this one! 98 Student Handout #3.7 (i of i)SOME OTHER POSSIBLE ACTIVITIES ‘The process by which we identify and evaluate opportunities generating ideas. The identification and evaluation of opportunit as observation, enumeration and analysis. is quite distinct from the process of 2s involves "left-brain” activities such In their search for opportunities, students will wear their "explorer" hats and their “judge” hats. They will fist search for needs, wants or problems and then assess their value. Suggested Activity #1 ‘Start with the immediate environment of the classroom. What are some immediate problems, wants or needs facing the group as they start this class? Possible responses: The room is too hot or stuffy; students feel drowsy because it’s moming or early aftemoon; someone may "need" to be with a girlfriend, or boyfriend; someone else needs more time to finish another assignment. Question: Who are the target groups? Whose needs are we addressing? Clearly delineate the target Discussion: In order for a need to reflect an opportunity it must be a broadly-based need, addressing a large target group, which might eliminate the "need! to be with the girlfriend, or boyfriend, How do emotions play a part in determining needs, wants or problems? Anger can be traced to a problem which may reveal a need. The same may be true of happiness, which may point to the satisfaction of a want or need. Have each student pick an item (chalk, chair, clothing) in the room and try to determine what ‘opportunity the production of that product is exploiting. Is it doing a good job? Could it be better? Is there another opportunity hidden in this product's shortcomings? Who is the target group? Suggested Activity #2 Broaden the scope of the search to include the school, the students’ homes and then the whole community. Have students choose one area of opportunity and then break the class into groups of three or four students each to expand on the range of the opportunity. Have the groups do a ‘word cluster’ by writing the opportunity in the center of a large page of paper and then brainstorming additional areas of opportunity from it, using “hitch-hiking” (attaching one idea to another) techniques, etc. Each group should use a different-coloured pen. Then have the groups trade sheets and add to the other groups’ lists until every group has worked with every sheet. Each group's contributions will be denoted by the different coloured ink. 99) Proanant 8Prognan Suggested Activi ‘Using one or more transparencies of illustrations and illusions of perspective (e.g. the rabbit/duck, face of Cheist, vases, old woman/young woman, etc.) engage the group in a discussion on perspective. Direct the discussion fo show that the same search for opportunities in the classroom, home and community ray have been done from only one perspective. Have the group take the perspective of different people and briefly review the above activities. For example: the student takes the perspective ofthe teacher, the principal, a younger brother or sister, the school bus driver, the mayor of the town or city. If the environment has surfaced as a source of problemvopportunity, the class may benefit from showing how perspective applies to environmental problems. The need to get rid of garbage conflicts with the need to preserve the environment ~ Have the students discuss the Hagersville tire fire, for example, from the perspective of the owner of the tre dump, and then from the perspective of his neighbours, ‘You may wish to engage in another ‘word-cluster’ activity this time encouraging the students to take the different perspectives discussed above. Suggested Activity #4 AAs an exercise in evaluation, try this activity using ‘de Bono's hats’*. You will need groups of six students each. Have each student wear one of de Bono's hats — simple papers hats will do. Colour each fone based on the following code and have the students act the part that the hat denotes as they evaluate the opportunity: White: information, just the facts; Black: critical, negative, why it won't work; Red: intuitive, hunches, feelings; Blue: control - staying on top of the process; Yellow: positive, optimistic, the opposite of the black hat; Green: creative, lots of ideas. Actually wearing the hats helps the students stay in ‘character’, * source: de Bono, Edward. Sis Thinking Hats. Markham, Ont Penguin Books Cansda, 1985, 100