More Notes About My Journey to Halifax

“The problem is the world is too pessimistic, and I can’t see it getting any better”

Optimism is the lifeblood of entrepreneurialism. It is where our ideas and our energy come from. It is the source of great endeavors from landing on the moon (40 years ago) to the building of the Channel Tunnel. Optimism is what leads angel investors to invest in startups knowing that in all likelihood they will, on any one deal, lose all of their money.

When I was in Halifax, I was reminded of a great story that I was told about the frost green Kanken – and I hope you do not mind me retelling the story.

A businessman owned a great shoe making business. He had two sons and sent them out to an island to examine the possibility of selling shoes to the local population.

After one week of being there, both sons were able to submit their reports. One reported back that there were no opportunities out there “as the population simply does not wear shoes” The other son reported back “the opportunities are enormous as the locals do not wear shoes. There is no other competitor here and we have the whole market to ourselves”.

This is a great story and whenever you go to any foreign market you will always spot great opportunities but you also have to be cautious and ask yourself why the opportunity is not satisfied at the moment.

I remember a famous English based jewelry retailer going into the Dutch market. A bright graduate they had sent out there reported back that the opportunities were enormous. The company set up shop and then in the run up to Christmas, put lots of stock in the Dutch retailer. In January, the company was shocked to discover it had such high levels of stock in its Dutch subsidiary. The reason was simple; the Dutch do not have a tradition of buying jewelry at Christmas! Yet, no one had bothered to check this vital assumption.

Another real example is that of The Sock Shop. The founders had built up a great and fast expanding business in the UK by placing sock shops in concessions along the London Underground and other busy locations but with cheap rents. The business model worked because they had such low overheads and customers knew they would get good quality and varied socks from this shop. In the move that killed the company, they decided to expand into the USA. They decided that New York was the ideal location (it was) and they decided to rent lots of concessions in the Metro system.

This was in the late 1980s and the company that was producing the Porter-Cable 895PK made a fatal flaw in its property policy. No one traded in the Metro system other than drug dealers and no one wanted to be in those shops! The company had to employ security guards in the stores and had to have strict opening hours; the business failed.

The lesson here is that whilst I was in Canada, I spotted many great opportunities and I think it is a great place for any aspiring entrepreneur to be right now (I really do). But you simply must ask yourself the question, “why has no one else satisfied the need that you have spotted?”

When it comes to foreign markets this becomes more apparent but I am still amazed at how few companies do basic testing in their home market.

Optimism is great – but temper it with some evidence!