How do you teach entrepreneurship to high school juniors? In only one hour?
I had the privilege this summer of speaking for an hour to students at the Neighborhood Academy, a college prep school in Pittsburgh for low-income students, about being an entrepreneur. “Being an entrepreneur” is certainly a broad topic, and you could choose to focus on a number of different areas. I decided that I would have three goals: make it simple, make it inspiring, and make it practical.
So when I was considering what topics to cover, I stayed away from the “administrative nuts and bolts” of being an entrepreneur – accounting, taxes, legal, HR, etc. Not that those aren’t important activities, but they certainly weren’t going to meet my 3 goals. I also chose not to talk about the “psychological” aspects of being an entrepreneur – making mistakes, keeping the faith, the highs and lows, the importance of working with strong teammates, etc.
In the end I broke my talk into three questions that every entrepreneur needs to be able to answer.
Why will customers care?
What is it about your business that is going to interest customers – what is your differentiator? We reviewed a few different options:
- You offer a product/service that is better than your competitors – your outdoor furniture lasts longer than any others on the market.
- You offer a product/service that is cheaper than your competitors – your store sells milk at the lowest cost.
- You are the most convenient provider – you have the closest gas station to the airport.
- You provide something new that nobody else offers – you’ve created the first touch-screen phone with an integrated app store.
How will the customer find out about it?
Just because you’ve invented something new, or provide the cheapest/best/most convenient option, doesn’t mean that you’re going to be successful. You have to make your customers aware of your new business. I grouped different strategies into these categories:
- Market to customers where you are – the giant balloon outside your business, or handing out coupons to passers-by.
- Market to customers where they are – promoting your car wash when the customer is buying gas, or advertising in the church bulletin, or putting flyers in mailboxes.
- Get your customers to market for you – Like and Twitter buttons on your website, or free bumper stickers from the radio station, or distinctive white earbuds that tell people what your music player is even if it’s hidden in your pocket.
What is your business model?
So you’ve got something that customers know about, and are interested in. How are you going to make money? I talked about something that most high school students are interested in – the different gaming business models. There are a surprising number of different business models when you think about it.
- Pay to use – go to the arcade and play a pinball machine.
- Buy a new game to own.
- Buy a used game to own.
- Rent and return games for a monthly fee.
- Start playing a game for free, but then you need to pay to advance to new levels.
- Virtual goods – play the game for fee, but buy additional powers, lives, hints, etc. in-game.
- Free games that are ad-supported.
Of course, your business model can be your differentiator – mailing DVDs by mail allowed Netflix to disrupt the video rental market for example.
A lot of work goes into being an entrepreneur, and it will both exhilarating and draining. The difference between success and failure starts with answering these three questions.
Image credit: Flickr user andy in nyc
Rocco Tarasi was an accountant, investment banker, and CFO before becoming a technology entrepreneur. He writes about innovation at www.InnovationMinute.com with a focus on “everyday” innovations in business models, sales strategies, products and services.