Mountain World still has room for dreams Glenn Fawcett’s quest to make virtual reality an actuality in Whistler By David Branigan There has been plenty of hue and cry over the past 18 months about the pace of development in Whistler. Business owners in the retail and hospitality sectors have been caught in the crossfire between the high cost of operating and a growth in competition that has far exceeded growth in the customer base. When the condos that are a part of all the new commercial development come on stream things will start to balance out. The ratio of customers to businesses will eventually reach a sustainable level, but local wisdom suggests it's going to get worse before it gets appreciably better. In this the widely feared El Niño year, with more beds, seats and shelves than ever before, Pique wants to take a look at what it takes to develop a business from scratch in the high stakes poker game that is Whistler. Over the past two weeks I have been rummaging around Mountain World trying to find one of those virtual reality gloves. For those of you who don't know, Mountain World is the massive location-based indoor entertainment centre slated to open Nov. 17 in the basement of the Whistler Conference Centre. Three years in the making, Mountain World may be one of the answers to diversifying the resort’s offerings. When MWE security brought your wayward reporter into El Presidente Glenn Fawcett's office all I could think of was, "How do I go about getting myself one of these?" Using interviews as a disguise for a virtual infomercial session with Fawcett I was able to patch together the secrets of Mountain World's impending success, which I'll share with you now if you promise not to tell. When we met on a perfectly miserable Mountain World day, Fawcett had jump in his step and a mischievous glint of laughter in his eyes. Approaching 40ish, with a shock of dirty blonde hair, an easy smile and a sense of natural athleticism, Mr. Fawcett struck me as a man caught between a rock and a soft place with sunshine and fortune leaning his way. Some folks in life get addicted to unhappiness, whereas Fawcett strikes you as someone who's already had way too much fun, with a fresh truckload on the way and a new quarry in his inheritance. Glenn Fawcett made his first dime in the happiness business. While at the University of Calgary he started putting together party tours and vacations, which paid for his education. Bust Loose Holidays garnered a reputation among the young and travel-parched for being good fun at a good value. The party element of the marketing and event planning was the key component to this success story, as university is where a penchant for blind, buck-wild partying breeds. Starting out small. Fawcett invested his money back into his business and 10 years later he sold Bust Loose for a fair profit and travelled the world looking for his next project. It was during this period in the late ’80s that he started skiing Whistler. He got involved with the Intrawest Resort Club and learned to love the booming resort. He quickly ascertained that both tourists and locals constantly complained about the lack of things to do when the weather is poor, which according to Mountain World research statistics is 47.1 per cent of the time. It appeared obvious to him that some form of indoor entertainment was required, exactly what that would be was yet to be determined. From his days leading the Bust Loose tour Fawcett had been to Disneyland, Vegas, Greece, Turkey, Hawaii, Mexico and South Florida. All the western centres featured some element of location-based amusement parks. At the same time "virtual reality" became a buzz word. Electronic gaming came into the home through Sega’s and Nintendo's advances in video games and computer technology. At this point the big companies started upping the ante for experiential entertainment. All these trends have continued over the past five years as the Mountain World concept has matured. Disneyworld, Universal Studios and the video gaming industry have seen explosive growth, exceeded only by the computer revolution and Bill Gates’s Microsoft empire. Matching that growth has been Whistler. It became clear the indoor entertainment concept had to be a mix of electronic games with virtual reality technology and low tech, high touch, outdoor simulations. But the real success story wasn't identifying the niche, rather it was assembling a $5 million flagship through the minefield of Whistler bureaucracy in one of Canada's most expensive places to do business. That is where our story begins. Two years back you may have seen what seemed like a wildly optimistic flyer circulating through Whistler newspapers; Mountain World's original attempts to raise revenue. That brochure talked of this fledgling company opening up to nine location-based entertainment complexes in mountain resort locations over the next 10 years. This was when there was no flagship. I remember looking at the glossy page in Pique and thinking these jokers are classic VSE hustlers making wild promises to sucker investors, and then they’ll fly the coop in the middle of the night. Last week I sat down with Fawcett as he had just raised the required $5 million, with their first outlet scheduled to open on time in Whistler, exactly one month from today. Originally the Whistler Conference Centre was slated to be a hockey rink, but council, in their wisdom, opted for a convention space to bring in convention business during the shoulder seasons. The basement has been unfinished since its inception, despite many plans for the space. Three years back there was a proposal call which alerted Fawcett to the space’s potential. From that call came a serious bid, from another party, to turn the space into a massive country bar, called Desperado’s. That bid was killed after local club owners objected, saying the Whistler Resort Association shouldn't be getting involved in the bar business. By the time Mountain World approached the WRA a committee had been formed to deal with finding a functional use for the space. After a feasibility study was done the first step towards Mountain World came when the WRA gave Fawcett a lease option in January of ’95. That gave him something concrete to pitch but there were still lots of hurdles. The WRA was so gun shy after the Desperado’s affair that they required a second study to determine if $15 per square foot was fair market value for the basement space. That study suggested $12 was more applicable, so taxes were piled on top to bring it up to $15 and ensure members couldn’t complain about Mountain World being subsidized. That deal today puts $22,000 monthly in WRA coffers. But let's digress to the genesis of a young entrepreneur's dream. Fawcett's original vision was for a ski museum and ski hall of fame. He left Intrawest in May of ’94 to research that possibility. His first stop was the Canadian Ski Museum in Ottawa. It was a weak, old world museum. It didn't fly in Ottawa so Fawcett toyed with the idea of shutting it down, revamping it with some pizzazz and re-opening in Whistler. As Fawcett himself admits, "My initial vision wasn't spot on." What Whistler offers is status, which can be attractive to large corporations. If corporations perceive that by attaching Whistler status to their product they do better in the status-driven marketplace then their corporate sponsorship in Whistler is a success. The sexy location was here, but the sport of skiing had some serious limitations in the eyes of the corporate players. Skiing isn't mainstream enough. No one was buying Fawcett's original idea of relocating the national ski museum to Whistler, so a change was due. The one sports hall that did excite Fawcett was the new Hockey Hall of Fame in Toronto. That quickly became his new model. The hockey hall is a $25 million facility with touch-tone screens, virtual reality exhibitions and full corporate sponsorship. It has been a huge success from the outset, with patrons dropping $10 for entry and an average of another $10 for merchandise. With half a million patrons per year the take is $10 million annually on a $25 million investment. What the hockey hall had that Mr. F did not was an anchor sponsor in the NHL. With NHL backing there was immediate credibility, which quickly attracted secondary sponsors. That was not the case in the pitch to sell the ski museum. Fawcett had meetings with big B.C. players like Jim Pattison and Peter Thomas but it became apparent that while the idea of a ski museum might have been an effective way to promote the sport, potential investors didn’t see a good return. The majority of museums, sport or otherwise, simply don't make money. At this point, after drawing up a business plan and pitching hard with no takers, Fawcett's lease on the conference centre expired. By mid-1995, with the wheels spinning and the savings dwindling, Glenn Fawcett's dream appeared to be fading fast. That's when he received a call from the people that run Ripley's Believe It Or Not, one of the few museum-type exhibits to turn a profit. "Ripley's basically said you've got a lot of energy but you’re barking up the wrong tree. They suggested I talk to Forrec. Forrec are leaders in the field of entertainment and amusement centre architecture and design. They had worked with Disney as well as designing the West Edmonton Mall and Canada's Wonderland. "Forrec suggested that I take a look at a company called Dave and Buster's which had come out of Dallas, Texas in the ’80s." D&B's are a location based entertainment centre with a mix of electronic video, virtual reality and traditional games, such as bowling and billiards. They also feature a hospitality element, a casino and their growth rate has been phenomenal. "I flew down to the Atlanta D&B’s and spent the next two days soaking up the concept. I thought to myself, ‘Holy lightning, would this ever go off in Whistler!’" Upon returning to Canada Fawcett put up ten grand for Forrec to do a feasibility study on the Whistler location. That report came back Nov. 28, 1995 with floor plans, artist's renderings and two big thumbs up from Siscash and Ecash. The WCC Space Committee renewed their support with a new 10 year lease option, beginning in January, 1996, and the real business of raising the capital began. "The first step on the money trail was a meeting with the Young Entrepreneur's Organization," Fawcett says. "They suggested that for the seed money I should go to the people who know, love and trust me, so I went back to Calgary over Christmas and came back with 20 $10,000 cheques. These were my initial stock offerings at 20 cents a share. "From there I applied for and received eligible status as a small business under the VCC, Venture Capital Corporation. I took an office on Howe Street and started hammering away at raising $2.5 million. I was doing up to six pitches a day, networking and schmoozing hard. Raising money is an art form and although it's mighty cold swimming with corporate sharks this was a necessary evil to achieve my goals." The fact is that the VCC wasn't doing him any favours. Investors saw the program as a tax loophole but very few businesses set up under VCCs ever see the light of day. In Whistler, the big players had concerns about liquidity and the fact that restaurants had a notoriously poor return record. So Fawcett shopped out the hospitality component of Mountain World by entering into an agreement with Delta Hotels, which left him free to focus on the amusement end. He hooked up with the Winfield Group for the electronic games. With Burnaby-based Winfield there was no capital investment. Winfield would provide the games and take a 50 per cent cut. That revenue sharing agreement is the basis of the amusement industry, as electronic games dealers need video junkies and junkies need a place to get their fix. A third cut goes back to the Segas and Nintendos as the product source and licensees. With Forrec, the WRA, the Delta and the Winfield Group all on stream Fawcett had things lined up. The money jugular was quickly exposed with the piranha pool smelling return blood. The big break came last November when two investors who had made more than $80 million on Bre-X stock during the frenzy wanted a big stake in Mountain World’s start up. There was a second feasibility study done and when the numbers came back positive the Bre-X boys put up over a million dollars. The NHL style, big fish anchor had been landed and Glenn Fawcett's vision of a ski museum had mutated into an indoor, high tech entertainment centre. From that point on it was all downhill. With start-up financing in place Mountain World Entertainment could afford to hire some high octane talent, in the form of Michael Shearer from the CN Tower as operations director and Alasdair Douglas from Intrawest as Marketing Director. The company also decided to bail on the VSE and the VCC. Yorkton Securities underwrote the company with $1 million in special offerings on the Alberta Stock Exchange, which raised another $1 million in their initial public offering. The $5 million goal which one year previously had seemed like a nightmare had finally been reached. Last January Fawcett and company took over the conference centre basement and began construction of Mountain World. With so many elements shopped out the majority of the funds raised were directed into the physical plant and marketing, which brings us to the grand opening slated for the beginning of ski season. The company is now finishing construction and hiring staff. My guess is that Mountain World will be a huge success. Featuring a virtual reality glider that takes you through the Grand Canyon, a golf simulator that allows you to play the best courses in the world indoors, a climbing wall, F-1 fighter pilot simulators that are in the same league as the airline industry training simulators, plus a host of lesser arcade style games like the virtual racers and Rush auto-racing that have recently proliferated throughout Whistler, Mountain World is a mountain of entertainment. The initial ski museum concept has been absorbed into the interior design of Mountain World but the whole concept has clearly evolved from the prototype D&B’s. Like D&B's, they will feature an electronic fun card for user friendly access. Like D&B's, they will feature hospitality in their licensed restaurant, which overlooks the lower portion of the facility. Like D&B's, they will feature some old school games such as billiards and basketball hoops. Like D&B's, the target market is family during the day but like Meadow Park Sports Centre it becomes adult-only at 9 p.m. and, adults are the key component. The average age of location based entertainment users in the American studies is 33 years old. That is my age. My seven year old son may be the one dragging me in for the initial visit this season but I'm the one footing the bill, and that bill will average 20 bucks per visit. This isn't kids stuff, it's Whistler's first bid in the world of experiential entertainment, the hottest sector of the amusement industry in North America, which is in turn one of the fastest rising sectors of western industry. This story proves that one man with persistence and business skills may still succeed in this marketplace, despite the recent cost/return inversion. Whistler is still a recreational paradise and we still offer a dream that dreamcatchers from all walks of life flock to buy into.