I write this from one of Asia’s largest cities—Dhaka in Bangladesh—with street sounds making their way up to my 20th floor hotel window. Though still one of the poorest areas of the world, the city has advanced beyond recognition since the times I visited here as a child. Concrete laid over dirt, single-story buildings replaced by towers, bare feet now in shoes, and the beggars that I remember crowding every yard of sidewalk are now working for salaries.
Dhaka, like much of Asia, is now a land of opportunity. The new wealth emerging here is born from those who saw and seized opportunities (new buildings, factories, businesses) when others stood back. Indeed, my wife and I are here because MasterCard now recognizes the immense potential of the country and is launching a new office here.
Great self-made entrepreneurs have one thing in common: the ability to see and seize opportunities when others stand back.
So how can we recognize big opportunities?
To do this, I believe, we need to shed some misconceptions about how and when opportunities emerge.
The first misconception is that a new opportunity appears all at once. The word "opportunity" first appeared in English around the 15th century and derives from the Latin words "ob" (through) and "portus" (port or harbor). We think of an opportunity as a door that suddenly opens that allows us to reach the safety of a harbor. But in practice, opportunities usually unfold as a series of doors that lead to new doors that open to yet more doors and eventually lead to your harbor.
A great example of this is Big Ass Fans, a company that has grown since its founding in 1999 to 400 employees (from 6), to over $100 million in revenue (from $31 million four years ago), to commanding 75% to 80% market share. The company, as its name implies, manufacturers unusually large fans that look like upside-down helicopter blades hanging from the ceilings of large spaces. The Ikea near me has them mounted in its warehouse area and my airport uses them to cool the waiting room. These fans are for big spaces for which air conditioning can cost a fortune. By connecting a slow-moving, giant fan to a two-horse-power motor, Big Ass Fans enables its customers to cool large spaces at a fraction of the cost.
Door 1 opens: discontent with what is and a desire to look at what else could be
I sat down with Carey Smith, the company’s CEO—technically his title is "Chief Big Ass"—to break down how he saw and seized the opportunity he did. It started inauspiciously, when Smith graduated school, joined an insurance company as an underwriter, and realized he would not remain satisfied working from a desk forever. Discontent is the first necessity of progress, as Thomas Edison said. Where are you discontented with what is and so are willing to lift up your gaze to explore what else could be?
Door 2 opens: the first strike that builds intelligence
Smith recruited a team to launch a new business. Their idea was to apply technology for cooling buildings by reducing the temperature of their surfaces. These buildings were not well insulated so the cost of air conditioning would be astronomical. But, says Smith, "the idea was so far out there [that] it never got above $1.5 million in sales … it was not scalable." While the business did not provide the profit Smith and his team wanted, it did provide knowledge they could never have expected. They got to know physical plant managers of warehouses, they learned about building cooling, and they saw warehouses littered with small, standing fans pushing air around to cool off areas where people worked, all of which enabled them to open the next door. What knowledge or insights can you draw from your most recent attempt (or failure)?
Door 3: applying insights to create a contrarian solution
Smith and his team decided to adopt a new approach to the challenge of cooling warehouses. They figured that small fans pushing air around large warehouses was not a great solution. A better one would be fans "that were properly scaled to the building," said Smith. They designed huge … slow … fans.
"If you asked a fan engineer how do you get more air, he will say to run it faster. We went the other way: a larger fan [that ran] more slowly. Not only were we doing something that had not been done, but we went at it in a contrarian way." How can you apply your knowledge or insights to create a new, contrarian solution?
Doors 4+: adjust and refine
Smith’s team first named their company the less-than-inspiring name the HVLS Fan Company (which stood for "high volume, low speed"). But when they would answer phone calls from would-be customers with "Thanks for calling the HVLS Fan Company," they’d hear a pause on the other line, followed by something like, "Are you the guys that make those big ass fans?" So the HVLS Fan Company decided to walk through the door that customers had opened for them and rename themselves "Big Ass Fans." The name stuck and spread. Along the way they made countless other adjustments from new technological improvements (all of their fans now have their edges turned up to improve flow) to distribution (they tried selling through dealers but found a direct sales force allowed them to better keep up the sales intensity they needed). What rhythm will you put in place to make sure you can adjust quickly as new doors open?
After all of that meandering work, some business historian or guru will write about you, saying you saw an opportunity and opened the door. But you know the journey was far more complicated (and fun) and the harbor you reach is never enough; there is always the next one to find, more doors to explore.
This view of opportunity fits what I believe we will find as we dissect the seeming "overnight success" of any great entrepreneur and shows me that, after spending nine years building my speaking/writing/consulting business, though I still feel I have yet to reach my "harbor," I am on the path. This is not about opening one door and walking through, but about having the courage to open the first door and the resilience to keep opening those that will follow.
And if you find yourself unsure if you are ready to reach for the handle, consider Smith’s final advice for any aspiring entrepreneur: "You only get so many opportunities in life and when you are young and the first one passes you by, you think, ‘Well, I'll wait for the next one.’ But it will be four to five years before you get the next one. When you see an opportunity, you've got grab it!"