A thought experiment in startup strategy with NAIT executive in residence Hubert Lau

Want to know how to turn a business idea into reality – without cash or credibility?

Hubert Lau (Honorary Degree '23, Computer Systems Technology ’91) knows that most students don’t have the money it takes to start a business. Or the experience. Or the credibility.

But the serial startup entrepreneur doesn’t consider that a problem – he has a method.

After graduating into an early ’90s economy too strapped to afford him a conventional job in computers, Lau founded an IT consulting and networking firm that has since served more than 1,000 companies and organizations. Then he branched out. He became the largest exporter of malting barley to China. More recently, he took on the role of president and CEO of TrustBIX, a tech firm that validates agri-food sources and contributes to sustainability.

“As I did one deal after another, I found a pattern, and that pattern seemed to work,” says Lau. “When I deviated from [it], I failed,” he adds with a modest laugh, “and failed miserably.”

What’s the “pattern” that will serve as the basis of his mentorship as the 2023-24 executive in residence with the JR Shaw School of Business? To demonstrate, Lau, with enthusiasm and practicality, conducted a spontaneous thought experiment for someone with an idea but no money, experience or credibility: me.

The potential of pickleball

“So, throw me a business idea,” says Lau, a few days into his volunteer role at NAIT, which will see him deliver lectures, judge competitions, participate in panel discussions and mentor students.

“I want to …” I pause to think, then blurt, “start a chain of pickleball gyms,” and shrug, knowing only that the sport is one of the fastest growing in Canada. I envision courts, equipment and an after-match lounge.

The first step is to calculate costs, says Lau: what it takes to get players on a court, give them a reason to hang out afterward, and keep the lights on for them. Next, I need to figure out how to cover those costs.

“So if [you] have so many people [pay for] this and so many people buy that, and your cost is going to be XYZ, you've got a model,” says Lau. “Now you have to prove it out.”

That means it’s time to kick into pre-sales mode, selling would-be customers on the concept. Start talking to people, says Lau, asking if they’d be interested in your pickleball gym. If so, inquire what they’d be willing to spend on a membership and post-game snacks.

Then ask if you can write down their name, completely non-binding, as part of your plan.

Do this enough times that the number of names, and the dollar-value they represent, puts you in the black. This will probably take hundreds of conversations, says Lau, but it will accomplish two important things. One is that you’ll eventually have exhausted your supply of friends and family and forced yourself to pitch to the general pickleball-playing public – that is, complete strangers.

The other is that you’ll have differentiated yourself to the bank’s loan officer or to a private investor.

“If you're lending money and [the first person] comes to you and says, ‘I have an idea,’ and is starry-eyed with no experience, no money, nothing,” says Lau, “and the second person – also with no experience, no money, nothing – comes to you and says, ‘I have an idea, and I have gone out to the market and cross-validated’ …

“Who are you going to lend money to?”

A societal impact

Lau wants his mentees – whom he hopes will include all NAIT students, such as enterprising apprentices – to be that second person, who impresses the investor.

He wants them to succeed for their own sake first. And, according to Ryan Young, Lau is a great choice to help them do that.

“Hubert embodies the spirit of an entrepreneurial leader, a dedicated community advocate, and a genuine role model for our students,” says the co-dean of the JR Shaw School of Business. What’s more, Young feels that the school itself will benefit from Lau’s connectedness with the local business network.

But Lau also wants those students to succeed for the sake of the province.

“Any country that has a growing middle class grows as a society,” says Lau. “Economically, socially, culturally – everything grows. And how do you create a middle class?”

Often, it’s through the work of entrepreneurs behind small businesses, he says. “They have the ideas, they hire people, and they're pushing the economy forward.”

That’s partly how Lau will measure the return on his own investment of time and insight during his residency. While he may not end up being responsible for an imminent explosion of pickleball courts in Alberta, he’s excited about the long-term impact he may ultimately have.

“I'm really hoping to hear stories of students who went through their journey and maybe I got them started up,” says Lau. “But then they figured out their own ways and off they went.”