All eyes on a niche business
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Thomas Hellmann takes a professorial delight in picking holes in the business plans of his MBA students at the University of British Columbia’s Sauder School of Business in Vancouver.
So he had a sobering message for four students enrolled in his 2006 technology entrepreneurship class when their team came up with a proposal for a new type of swimming goggle. The lenses would incorporate a small display of information useful to the serious swimmer, such as lap times, stroke count and heart rate.
One problem was that there was an existing patent for swimming goggles with a head-mounted display. “I told them: ‘If you’re interested in just passing the course, it should be good enough’,” recalls Prof Hellmann. “But if you’re entrepreneurs, you’ve got to rethink it.”
Rethink it they did and two weeks later the team returned with a revised proposal that replaced swimming goggles with ski goggles. “They came from middle of the pack to top of the class,” Prof Hellmann adds.
More than that, the team turned their presentation into a successful business. They incorporated a company, Recon Instruments, in January 2008 and started selling head-mounted displays. Recon, based in Vancouver, employs 45 people and posted 2010 revenues “well into seven figures”, according to Dan Eisenhardt, 36, who led the MBA project and is now Recon’s chief executive.
“We’re not profitable yet, but we’re looking to be profitable in the next financial year (next month),” says Mr Eisenhardt.
Some of the world’s top goggle makers, including Uvex, Alpina and Briko, now produce “Recon-Ready” ski goggles. The Recon package, bought separately, comprises a small plastic arm containing an optical display that clicks on to the right side of the goggle and a battery that fits on the left side. The basic display, costing $299, incorporates GPS and a stopwatch, plus data on speed, temperature and altitude. A more advanced model adds smartphone functionality, allowing wearers to check Facebook and so on.
The company is already broadening its horizons with plans to adapt the technology to sunglasses and scuba-diving goggles. And the National Aeronautics and Space Administration (Nasa) has agreed to evaluate it for possible use in spacesuit helmets.
All four founders are still involved in the business. With Mr Eisenhardt are his fellow Sauder MBAs from the class of 2007, Darcy Hughes and Fraser Hall. Hamid Abdollahi who was studying for a masters in engineering at UBC is chief technology officer.
About 40 investors, mostly family and friends or ski enthusiasts, have put money into the business, encouraged by British Columbia’s generous tax credits for venture capital investors. The government has also provided grants. Even so, a crucial element in Recon’s formation was UBC’s one-year technology entrepreneurship course, which brings together business and engineering students. “It would not have happened without UBC,” Mr Eisenhardt says, citing the interdisciplinary teams and the motivation of his instructors.
Prof Hellmann says the technology entrepreneurship class spawns at least one business each year. “We strongly believe in this co-operative approach of building teams of individuals and …in linking the engineering with the business talents,” he says.
The university is in the throes of rolling out a programme to support budding technology entrepreneurs. Known as e@UBC, it offers seed capital, provides work space and help with legal formalities such as registering patents and incorporation. The seed funding comes from alumni donations, matched by the government-funded BC Innovation Council.
Mr Eisenhardt returns to Sauder each year to share Recon’s story. One recurring word of advice is the need for flexibility within a business strategy. His team quickly abandoned the original plan to sell its technology to goggle makers. They discovered that “very few players out there would take the risk of buying this inventory and supporting it”, he says. Instead, Recon targets consumers directly.
Prof Hellmann has found himself preaching the same message of flexibility to his colleagues at UBC. Putting business and engineering students together is easier said than done. Besides the red tape involved in getting different departments to work together, he has run into cultural barriers between academia and commercialisation. “A small percentage of professors just get it, but for a large number [the entrepreneurship course] is just time lost in the lab.”
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