While I’m generally happy with how I’ve turned out, I do have one regret: I wish I had embraced entrepreneurship far earlier in my career.
I’m trying to remedy that with my children. If I can plant the seed of entrepreneurship at an early age, I will consider it one of my greatest gifts to them.
That goal has led me to challenge my eldest, who’ll soon turn 11, to build a money-making venture this summer.
His first thought was, of course, to start a lemonade stand. Those can actually do pretty well in our neighborhood, but it’s mostly from charity. Smart kids have figured out that the “pay what you want” system is the best pricing, and some silly adults will pay $5 for a cup of crappy lemonade. But in general it’s a labor-intensive beating with a firm ceiling on earnings.
I wanted him to sell something that was a real good or service – something that would truly help folks and teach him about business, not just a lesson on how to shake down nostalgic adults. While I was fine with any endeavor he wanted, I told him that if he could build leverage into the model it could be far more lucrative (another thing I wish I had learned earlier in life).
Solve A Problem
Many a great business has been born from a problem that the founder encountered, and I thought that was a great source for ideas. I knew what had caused him the greatest stress and pain in the prior year, and I could already see the outlines of a business plan.
While my son meandered a bit in his search (he kept thinking of videogame business ideas that would either have no path to revenue or would be hard for a real videogame company to pull off), he eventually landed where I hoped he would: “It was really hard and stressful starting the 5th grade.”
Yes it was. In our school district, elementary school runs through 4th grade. There was a HUGE jump to the intermediate school and 5th grade – new building, new students, new technologies, classes changing 9x / day, calendar management, lockers, lots of clubs, and lots of homework. While the school made an attempt to cover the changes and transition, their efforts fell far short.
My son was really stressed as school approached. I sat with him and we listed all of the things he was worried about. Number one on the list was pretty funny: he was worried he wouldn’t be able to get in his locker and had no idea how they worked. I got an old combination lock and let him practice, and a huge amount of stress was gone. But here’s the funny thing: many of his friends had the same worry. It doesn’t take too many unknowns before a 5th grader is overwhelmed.
The missus and I were also affected. We kept digging through the school website for information, and we found out many random bits from Facebook (which, you may remember, I hate). We kept asking ourselves, “Why don’t they put all of this information in one place?”
Why not indeed.
My son (with a little nudge) concluded it would be a huge help to pull together a 5th grade user’s guide – everything an incoming 5th grader would need to know, as determined by an actual 5th grader. As we brainstormed topics to include, he added some things I wouldn’t have dreamt of (e.g., when you’re late to class, you can run full speed down the halls, but stop and look at each corner like a ninja).
Since I am one of the cheapest people on the planet, I’m a good floor for testing a business concept. I would easily have paid $10-$20 for everything this guide was proposing to cover. And there are 300 incoming 5th graders.
How should it be delivered? I told him he could make a video and we could figure out how to restrict views to only paying customers. He was a little worried about putting himself on camera, and I was a little worried about the amount of work required to prepare a quality video.
I told him we could just create a pdf and email it to paying customers, but that ran the risk of everyone sharing it without paying.
But then I remembered: we live in the same community where some adults will pay $5 for a cup of lemonade. Why not send it out for free, but ask people to contribute based on the value they received? That would risk many free riders, but there would be some people who would probably pay far more than he would have ever charged.
The business plan is starting to coalesce:
- Prepare a 5th grade user’s guide
A comprehensive pdf with links and screen shots will include everything an incoming 5th grader needs to know – it can be sent by email to whoever requests it
- Give it away for free…
…but include a heartfelt entreaty at the front talking about how he is trying to be an entrepreneur, has put in X hours preparing this, and would truly appreciate any contribution if you’ve found the guide to be valuable
- Spread the word
Via key influencers from the incoming 5th grader parents, Facebook (yay! – there’s already a specific FB group for this class), and general word of mouth
- Manage revenue
Organize Venmo and PayPal accounts for easy contributions
I have recommended one tweak to address free riders: he can offer anyone who’s paid anything the chance to write him questions and get answers, and then he can share all of the Q&A near the end of the summer with just the people who have paid something.
There’s also a chance to build positive PR – we discussed that he could give a portion of proceeds to the school’s PTO. We had fun discussing the difference between sharing a % of revenue and a % of profit, and how you get to define “profit” 🙂
There are still bits being worked out, like how can we involve my 7 y.o. so he too can taste the sweet fruit of entrepreneurship. Some doors will close after launch (like ever restricting access to the content in a different product form), but others will open (like monetizing the email list when these same students change schools again in 7th grade).
The school may seize the entire guide and present it themselves after this summer, but (as many an entrepreneur has learned), after he’s made his money, who cares?
I’m excited for my son’s little venture. It should help a lot of people. It may not make a mint, but he is going to learn a lot. To make sure his entrepreneurial spark becomes a fire, we’re going to (quietly) guarantee him some minimum revenue, which may be one of my greatest investments ever.
I will definitely finish this story at summer’s end. If there are exciting updates (or ideas for other posts run dry…) I’ll provide interim updates as well. Stay tuned and please wish him luck!
We can definitely use your help! Asset-Based Life draws one of the most intelligent and business-savvy readerships on the planet, so if you have any ideas or recommendations for this budding entrepreneur (especially on pricing, content delivery, or additional risks), please let us know in the comments.