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October 25, 2004
Where entrepreneurship is not simply an option: Mandatory course gives MBAs skills, understanding, insight
National Post
Mon 25 Oct 2004
Page: FE4
Section: Special Report: Financial Post: Entrepreneur
Byline: Terrence Belford
Source: Financial Post
Armed with a newly minted master of business administration from the Queen's School of Business and $2-million in investors' money, Raza Hasanie is launching his own venture, Scavenger Energy Inc., in Calgary. Yakim Almaleh, granted an Executive MBA from the same school last April, is helping dot-com pioneer Scott Samuel create his newest venture, Ethical Technologies LLC, in Chicago.
Both credit Queen's with giving them the tools needed to be successful entrepreneurs. If they had gone to another graduate school, the opportunities and challenges facing them today might never have happened, they say. Queen's is the only business school in Canada where entrepreneurship is a compulsory course.
"Quite simply, Queen's gave me the skills I needed to start this company," says Mr. Hasanie, 29. "I had worked previously as a lead geologist so I had the technical experience, but what I needed were the entrepreneurial skills. The focus at Queen's on venturing gave me those, plus a wonderful network of contacts."
Mr. Almaleh is equally enthusiastic about the program. Now 36, he had worked for Nortel Networks, only to be laid off during the company's rounds of downsizing. He returned to school intent on ensuring his future by taking control of it. Today, he handles management of Ethical Technolgies, which creates buying and selling tools for companies and individuals trading on eBay, and he is on his way to becoming a partner.
"Queen's gave me the skills, understanding and insight needed to be a successful entrepreneur," he says. "Scott Samuel recognized that and asked me to join him to bring order to his newest venture."
For the past seven years, Queen's has been turning out many of Canada's newest generation of entrepreneurs, says Dr. Elspeth Murray, director of the Centre for Business Venturing at the School of Business.
"We have past graduates who started ventures such as a wind-power company in Kingston, a greeting card and stationery company based on native art in Winnipeg and an eco-tours company in British Columbia. Raza is recovering oil and gas from shut-down wells in Alberta and Yakim is a key man behind the launch of a new Internet trading tools company. We think we played a large part in making that happen for them. We focus on giving entrepreneurs the tools they need to be a success."
Those tools are vital for small businesses. Queen's studies show 70% of new business ventures fail within five years, mainly because of poor management. The school wants to tip the odds in favour of the entrepreneur. After all, Dr. Murray points out, 95% of Canada's businesses employ fewer than 50 people.
"We are one of the most entrepreneurial nations in the world," she says. "Small business is our future."
The centre she heads is the business school's umbrella organization for all aspects of entrepreneurship. It oversees the compulsory course for both the 15-month EMBA program and the one-year science and technology MBA offered by Queen's. The course offers a mix of classroom studies and first-hand practical experience.
"We have a number of companies in Kingston and Toronto we send students to work with," she explains. "They could be existing companies, new ventures or even large organizations starting a new venture. There are high-tech companies, even offshore ventures. The idea is to provide a broad spectrum of experiences."
Next year, the centre will start its own venture fund to give students first-hand experience in picking stock market winners. Friends and family of students have contributed a total of $3-million and those funds will be invested by Queen's MBA students, with profits to be reinvested in the fund.
"We also do applied research. Our focus is to find out what is different about SMEs [small and medium-size enterprises] and what problems they have at what levels. Our goal is to see what it takes to become a good venture capitalist," Dr. Murray says.
There are also two business plan competitions. Last year, Mr. Hasanie won both. The first is an annual challenge for all students, with a $10,000 prize; the second is a one-day event with a $5,000 prize. In both cases, Scavenger Energy was the subject of his award-winning plan.
Mr. Hasanie's company will acquire existing, fully equipped oil and gas wells abandoned by major producers because the formation they were working is exhausted. While the main pool of oil or gas may be depleted, however, producers often drill right through smaller formations and seal them off on the way down to the main payload.
Scavenger Energy will seal off the bottom end of the well and then tap into those unused smaller formations, and start pumping with existing equipment abandoned at the site.
"Those formations may only be valued at between $100,000 and $500,000 -- too small for the big producers to be concerned with," he explains. "For Scavenger, however, you are probably looking at a cost of $10,000 to break into the small deposits and then maybe $400 or $500 a month to pay a man to tend to the pumping equipment."
His business plan shows Scavenger will be profitable within two years, and with just two producing properties.
The $2-million needed to start Scavenger came from a group of Toronto investors, organized by Paul Hyde, a venture capitalist who was also a judge at both business plan competitions.
"He recognized the merits of the plan and took me under his wing," Mr. Hasanie says. "That is the other thing about Queen's. You develop a wonderful network of contacts."
Illustration:
Color Photo: Todd Korol, National Post / Raza Hasanie's small upstart oil company, Scavenger Energy of Calgary, will recover pockets of oil from wells abandoned by major oil companies. He credits Queen's University's compulsory course on entrepreneurship for getting him started.
Edition: National
Story Type: Business
Note: fpentrepreneur@nationalpost.com
Length: 914 words