Thursday, January 26, 2012

Fifty 2nd Graders, 10 Pies, and a Rock Star

To help more than 50 second graders learn basic economic and business principles, my daughter's elementary school held a bazaar where each student sells goods and services to their classmates. They have $10 to spend on what they sell, and they exchange points earned from good behavior in class for fake money to shop in all of the second grade classrooms.

I saw an opportunity to teach my daughter, and the rest of the family for that matter, some lessons about how to start and build a business. Here's how it played out...

What Does Your Target Market Get Excited About?
The first thing I did is ask what kids her age like. Her older brothers, both of whom have been through the same experience, explained what they saw work the best--candy bars and soda pop. But with only $10 to spend on items for resale, those students capped their earning ability. Then my daughter started talking about the carnival from the fall and how all of the kids stood in a very long line to throw pies in the face of the principal. With some whipped cream and throw-away pie tins, we determined we might have some real potential. The picture below is the "store" she set up in her classroom:


Find the Optimum Business Model
Since we knew the kids liked smashing pies in other people's faces, we began to talk about the best way to monetize, or commercialize, her idea. This is often also referred to as building a revenue model. She decided she could afford to make 10 pies, and wanted to sell raffle tickets with ten lucky winners getting to "pie" someone in the face. She also guessed that some of the crazy boys in her class might be interested in paying for the privilege of getting a pie smashed in their face. We had no idea this "guess" would be our best money-maker, hands-down. Lesson Learned: If you work on it hard enough, you can likely find a way to monetize things for which people carry great excitement and passion.

Get Others to do the Selling for You
Once the event started, she sold a few raffle tickets for a dollar each and no one wanted to pay to get a pie in the face. I had been selected as the default facial pie catcher, so 10 minutes into the activity we had our first pie-throwing event. I found myself in front a very nice, cute young girl. I had no idea she could hurl that pie with such velocity! A small group of kids had huddled around to watch this happen, and they each burst into laughter at what they saw. And that's all it took. Word spread like wildfire, and everyone was talking about the 'pie' store. Lesson Learned: Some of the most significant influencers never spent any money at her store, but they sure brought in a lot of business!

Give the People what the People Want
Before she knew it more kids were interested in raffle tickets and one kid paid $10 for the privilege of taking a pie in the 'mug'. He loved it so much he paid $15 dollars to do it again, and he rounded up all of his friends to buy raffle tickets to try and win a chance to seek revenge, justice, or whatever motivated all those boys to buy tickets. Nothing like a satisfied customer. Raffle ticket sales were okay, but she was raking in more money selling the right to take one of ten pies in the face. I especially appreciated this, because that meant I only received two instead of ten whipped-cream facials. Lesson Learned: Listen to your customers and don't be upset when they use your product or service in a way you didn't initially intend.

Give the People what the People Want - Part 2
My daughter considered trying to get the principal to agree to be a pie victim, but she couldn't bring herself to ask him. She instead decided to target one the most popular teachers in the school, who is a real rock star. His band plays at school events and all the kids think he's great. He agreed to be the grand-prize pie receptacle, and the kids went crazy for it. Lesson Learned: Don't be afraid to ask for help, especially from people you think are too important to be interested in what you are trying to accomplish.

Give the People what the People Want - Part 3
While the raffle tickets were a good idea, she soon had groups of two coming up requesting for one to throw the pie and the other to be on the receiving end. They were offering her $20 each for this opportunity, or $40 per throw. All this while some of the kids were selling candy bars for $0.75. Lesson Learned: Reselling normal products has an earning potential cap, while selling products and services that generate buzz and emotion in customers and influencers carries a higher earning potential.

Pivot When it makes Sense
One thing we noticed after the third pie-ing is that most of the whipped cream stayed in the pie tin after being carefully, but forcefully introduced to someone's face. So, my daughter started to recycle the pies and was able to do far more than ten throws, increasing the opportunity for revenue and 'buzz' about the store. Lesson Learned: Keep your eyes open and you'll likely find easy ways to grow revenue, cut costs, and be more friendly to the environment.

Conclusion
This was a lot of fun, and all the kids came up with great products and services to sell. I'm sure many more lessons were learned than I mentioned, but my hope is a few entrepreneurial fires were lit. Here's a picture after the event when I had cleaned most of the spoils of the afternoon from my face, although it looks like I missed my earlobes!