Calgary (a beautiful place not far from Canada’s wild Rocky Mountains – you should visit, it is impressive), is in the midst of transformation. An oil city for the last hundred years or so, Calgary is aggressively trying to diversify, while remaining proud of its oil patch DNA – which encourages risk-taking, innovation, investment, engineering, bootstrapping, and other aspects that make a society entrepreneurial.
Building a Business to Last
During Calgary’s disruptive/transformation period, ongoing for about 3-4 years now (and I suspect it will take a decade or longer still), many businesses have closed their doors or downsized to skeleton staffs. It has had a devastating impact on hundreds of families and numerous communities. These are the stories you read about in the newspapers – the negative ones. Most of the companies which have gone under are restaurants, high op cost and exploration energy firms, and entertainment/leisure-related businesses. Less reported on, however, are the brilliant businesses that have launched, or increased output and expanded their staff, during this disruptive period of transformation in Calgary.
So why have some businesses succeeded in this period while many others have failed?
The successful ones make products or provide services at the indispensable heart of their clients, not the frivolous fringe often associated with consumerism.
These *successful companies (if they can make it in Calgary in 2019 they can make it anywhere) were designed to solve problems for their clients, or the world as a whole.
*The R&D and newly commercialized innovations coming out of Calgary relating to cleaner energy, artificial intelligence, and even retail technology define entrepreneurial ingenuity.
The Frivolous Fringe Business
The firms which provide products or services inspired during economic booms are on the verge of shuttering (if they haven’t already). In Calgary’s current economic climate, they are now viewed by most of their clients/customers as frivolous or, at a minimum, an unnecessary expense. I call these companies “*the frivolous fringe.” And while they can make a mint during boom times, they weren’t built to last, as they lack optionality when commerce slows…
*The frivolous fringe enterprise is not a legacy brand because it wasn’t designed to solve a problem or take on tasks its clients didn’t have the expertise or time to do themselves.
Reading Nasim Taleb’s book Antifragile has drawn me back to this subject of building businesses that can stand the test of time. Simplistically, these types of companies are built on a solid foundation of having more upside than downside. I hope this will encourage you to think about your business (or business idea), and how you can make it sturdier and ready for the next economic slowdown. Start by asking yourself if your venture serves a need of your customers, or a want. If it is a want, explore the possibility of making it a need; or a more attainable want if your client base were to lose, say, 25% of their disposable income…
From Frivolous to Nearly Necessary – Transforming a Business to Stand the Test of Time
Before signing off, I’ll give you an example of one such restaurant near my office that has transformed itself from a frivolous fringe enterprise to a nearly necessary one…
For years, this restaurant has been a staple of the Calgary foodie scene for the health-conscious diner who wants a high-end night out. Great food. However, it comes at a hefty price. So, when the oil patch downturn kicked into gear, the founders of the restaurant made a brilliant move… They renovated a small corner of their restaurant at the front, and refurbished this 300 sq. ft area into a breakfast cafe – still serving high quality, healthy food, but for those on the go in the morning. They serve the most incredible oat parfait for $4.50 (the price of a coffee) – which I, and hundreds of others, buy a few times a week. The price is a far cry from their $40 kale and flank steak plate on the dinner menu.
Before the downturn, this restaurant only served lunch and dinner. These days, breakfast appears to be the busiest meal of the day for them. Talk about turning a frivolous fringe business into one that can stand the test of time.
PS – Entrepreneurship is a journey with many twists and turns along the way. Let me shed some light on how it may play out for you. Subscribe to my newsletter below. Only my best content will land in your inbox.