Crisis as a basket of opportunities

Let me share the story of an old entrepreneur-friend–someone who refused to say "die". Many lessons on entrepreneurship can be picked up from the exploits of this man. He was into the jukebox business.

For those too young to remember or who have never been exposed to it, a jukebox is an electro-mechanical device that plays music from a vinyl (45 rpm records) or a breakable (78 rpm records) medium. It was coin-operated and was a very popular restaurant fixture in the 1960s and 1970s.

His business model then was to buy jukeboxes and install them in restaurants. The unit (jukebox and records) was owned and maintained by him, while the owner of the restaurant provided the space and electricity. At the end of the week, the unit coin box was opened and the money was split equally between them.

During the 1960s and early 1970s, the opportunity-seeking activity of this entrepreneur was to spot good locations. This meant that the place should be one where people stayed long enough to sit and listen to their favorite pop music or their old-time favorites. The other logic of the business was to make sure that the unit was in perfect working condition.

The third component was to listen to the radio and other entertainment media to keep track of new songs or releases that made it to the "hit parade" of the time.

In those days, this entrepreneur spent his time scouting for good locations, keeping the units well-maintained and making sure the popular music records were installed. This entrepreneur knew his game very well.

The game changed

Through no fault of his, the game changed. It was beyond his control. In the 1980s and 1990s, the music migrated towards sing-a-longs. The customer now wanted to sing with the music and make music with the machine. The jukebox industry was near death.

But this did not dampen this man’s entrepreneurial spirit. Even if he started to get swamped by unit pull-out requests, and even if his shop was getting crammed with all the jukeboxes that have been returned, he continued to preserve his assets.

He kept the units in good working order. He made sure he had spare parts to support the units. He kept looking for new locations. This time, instead of classy restaurants, his units were being deployed to the karinderias or the turo-turos.

But then, another change in the rules of the game occurred and affected the supply of records. There was a shift to cassette tapes and, later, compact disks. The new hits were no longer available in 45 rpms.

Serendipity

One day in the mid-1980s, a serendipitous event happened. A person walked into his shop to inquire if he would be willing to sell his jukebox located in a karinderia along Araneta Ave. But he could not give a price because he never sold a jukebox before.

Nevertheless, he spent some time talking to the person. He wanted to know where the jukebox would be used. He wanted to know why he needed it. He wanted to understand the customer. He was still seeking opportunity. After finally selling the unit to the walk-in customer, he embarked on a new utilization of the assets.

He found out there was a set of customers out there. These were the people who, in their teens and early 20s, spent a lot of time in jukebox joints. These were the baby boomers who enjoyed music and food. These were people who had to save up to listen to their favorite music from the jukebox. These were people who now wanted to re-live the good old days. And most importantly, these were people who had extra money in the 1980s.

New business model

So he embarked on a program to restore and sell his jukeboxes. This new business model also gave new value to his vast inventory of records. The inventory of old records was the very music the new customers wanted to hear.

However, he was careful. He only restored those units that tended to be collector’s items. These units were those that had the mechanism exposed. This meant that the records could be seen and the mechanical system that made the unit work could also be seen.

However, in some of his jukeboxes, the mechanisms were not seen but were hidden inside the box. These units were not as collectible. Instead, he converted a unit whose mechanism was unexposed to a unit that could play compact disks. He installed a compact disk player that could play 60 different disks via a remote control switch inside the unit. The mechanism could not be seen anyway. He just made sure the original lights of the jukebox were all working.

While other entrepreneurs in this industry had dampened spirits, this entrepreneur continued to seek new opportunities, to understand the customer and to innovate. He continued to think out-of-the box. This is also a case of somebody’s junk is someone else’s gold.

For true entrepreneurs, there are no such things as problems. There are only opportunities. Even in crisis, true entrepreneurs see the opportunity. For the entrepreneur, the bigger the crisis, the bigger the opportunity.

Entrepreneurial spirit

In the mid-1990s, the car of this entrepreneur was vandalized. His side view mirrors were stolen. At first, he was angry. The cost of replacement was no small money. And worse, they were stolen again!

He looked at the experience as an opportunity and not as a problem. He developed (invented) an anti-theft device. He saw the loss of his side view mirror as an opportunity for others not to suffer the same fate and suffer the same anguish and anger. He designed it such that it would meet the aesthetic requirements of the customer. He made sure it looked as much a part of the original design of the vehicle. He has since applied the fundamental concept to other vehicle models.

Today, he has developed models for vehicles whose side view mirrors are ready targets of those who can survive the crisis only by illegal means.

This person used his entrepreneurial skills to seek and identify opportunities. But aside from identifying and seeking opportunities, he went into a process of turning an idea into a reality. He used his acquired skills to continuously convert opportunities into a sustainable business venture.

More importantly, the final output of his entrepreneurship not only met customer needs but also made the lives of his customers better.

(Alejandrino Ferreria is the associate dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further information/comments, you may mail him at: [email protected]. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www. aim.edu.ph).