Last Lecture

Mark Twain said, “Do the thing you fear most and the death of fear is certain.” For a lot of aspiring entrepreneurs, the fear of failure is what stops them from chasing their dreams. They allow this fear to stop them from ever even trying. One characteristic of successful entrepreneurs is the ability to view failures as learning opportunities that will teach them something and will help them progress on the path towards their dreams. Looking at failures from this viewpoint gives them the courage to push-on despite the knowledge that failures will come. Tom Kelley, the General Manger at IDEO, gave a lecture on the importance of viewing life as an experiment. All of us are probably pretty familiar with the scientific method. The scientific method includes five key steps – observation/research, hypothesis, prediction, experimentation, and conclusion. The prediction and experimentation steps within the scientific method may end up being completed multiple times before a sound theory is developed. The first time the experimentation is completed is not considered to be a failure, but rather an experience that is helping to refine the hypothesis. When we look at life through scientific method lenses, we realize that what we consider to be failures actually help us to progress towards our end goal. With regards to failures Randy Pausch once said, “Brick walls are there for a reason: they let us prove how badly we want things.” Never let failures or brick walls get in the way or achieving what you really want in life! 

I once had a conversation with a professor at Tufts University in Massachusetts, and he said that the number one thing he has observed about successful business people is their ability to identify a need in a market and fulfill that need. In other words, they identify a problem, or paint point, and provide a solution. If you base your business around providing a product or service that provides a must-have to your potential customers rather than just a nice-to-have, you will be successful. An example of a business that is currently trying to do this is Uber. Uber is an on-demand transportation service that directly competes with taxis. Anyone who lives in a big city knows that taxis are a major source of pain. They’re dirty, the drivers tend to be unfriendly, and they can be very expensive. Uber created a convenient app that customers use to connect them to a reliable ride that takes them to their destination, and it’s almost always cheaper than a taxi They also have a rating system in which customers can rate their driver, and very poorly rated drivers will lose the ability to transport customers. Uber has so far been pretty successful in spreading their business to major cities, and lot of people are seeing the value they provide and are no longer using taxis. You don’t want to start a business that won’t survive. Make sure that whatever product or service your business provides is solving a real problem that people will value.

Lastly, make sure that what you do is your passion. Being an entrepreneur takes perseverance. Steve Jobs said, “I am convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” This perseverance more easily comes when you are passionate about the mission of what your company is doing. When you find something in life that you love – do it! It will become a source of happiness and pride in your life.

Working In and On Your Business

As part of this week’s lesson, we were asked to read an article that talked about working on your business, not just working in your business. The article talked about the two involvement extremes that most entrepreneurs adopt after the initial stage is over and the business is operating well. The two extremes are broken down into those that only work in the business and those that step away from the business and relinquish control to their employees. Entrepreneurs that work only in the business become entirely consumed by the day-to-day operations of their business, and allow no time for them to focus on the overall strategy and long-term vision of the company. The other extreme of entrepreneurs distance themselves from the business, and lose control over the direction the company is headed and plays no part in the strategic planning of the company.

Both of these extremes are dangerous and should be avoided. The best way to play an active part in the long-term success of your company is to work both in and on your business. When entrepreneurs are able to let go of their high involvement in the day-to-day tasks and allow their trustworthy employees to handle them that frees up time for the owner to focus on the strategic planning of the business. Being able to find a balance between working in and on my future business is something that I am going to have to work hard to find, but I know I can do it.

$100 Business Challenge Update

This week I submitted my presentation on the company I created for the $100 business challenge. In addition, I began writing the report that is due next week. 

Family and Business

I learned a lot this week from the reading for the “You be the Consultant” activity.  The situation presented was interesting: a company’s founder was planning on retiring in a few years, and his three children all worked at the company.  He had to determine in which child’s hands he should leave the leadership of the company.  The complexity of the issue was that his favorite pick, and possibly the best-qualified candidate, was the youngest of the three children.  While we don’t live in an age where primogeniture is the law of the land, but the idea of skipping over the oldest children in favor of the youngest seems unusual even still.  What I learned from this reading is that when you are dealing with a family business, it is absolutely critical that maintaining an open line of communication stays at the top of the priority list.  Businesses fail all the time; people can get a new job and move on.  Families are much more important, and it’s essential that effort be made to maintain the integrity of the family relationships during stressful times such as succession planning and inheritance planning.  In fact, doing this reading made me question whether I’d even want to go into business with family members at all—it seems like there is the potential for an extraordinary level of stress and a high potential for hurt feelings, and I’d be more comfortable focusing on maintaining those eternal bonds than running a company together.

$100 Challenge Update

There's not much to report this week on the $100 Challenge Update other than that I am working on putting together my presentation.

Franchising

This week’s assignments were all about learning about how franchising works.  I found this week’s learning to be really exciting.  I have often thought that entrepreneurs have to find a new idea and solve all the problems around building the operations and sales of a business.  Realizing that an entrepreneur can buy into a business model that already solves many of the problems that a new company faces (training, advertising, supply chain, etc.) was eye-opening.  So many small businesses fail within their first few years of operation that it can seem very intimidating. Who would really want to take those risks?  At the very least, any reasonable way to mitigate the common business failure risks seems worth investigating.  Purchasing a franchise is such a proven model that I am surprised that more people don’t do it!  I observed this week that many people who own at least one franchise go on to own additional franchises.  They are lucrative enough to be desirable, and the work is perfect for someone who wants to be an entrepreneur but who also doesn’t want to go through the process of “reinventing the wheel.”  Raising the initial capital can be tough, but some people get around the challenges of fundraising by partnering with co-investors or borrowing money from friends and family.

$100 Challenge Update

This week was a really big week for my business! I was able to meet my goal of selling 28 bags of Carolyn's Cocoa Cups hot chocolate mix, which means that I made a $100 profit! I was not feeling very optimistic about my chances of reaching this goal last week, but I had some big orders come in at the beginning of the week that helped me reach my goal! 

Interview With An Entrepreneur

In this week’s lesson we were asked to write a paper giving a summary of the interview I had with an entrepreneur. The follow are the five key takeaways that I got from that interview:

Success is defined in different ways for different people.  According to the entrepreneur I interviewed, he defined success based on three different criteria – is the reaction positive, what is the level of adoption, and does the action lead to revenue. Every entrepreneur should take the time to determine how they define success for their business.

Set out to solve a problem. More times than not, if you are able to accurately identify a problem and come up with a solution for it, people will get on board and your company will be successful.  

Relationships and connection are essential, but don’t put too much trust in them. One of the biggest struggles that the entrepreneur I interviewed has had to deal with is that his contacts and connections have generally overstated their ability to be of assistance.

Learn from your mistakes. The entrepreneur I interviewed said that if he had to do it all over again he would follow his instincts more, avoid distractions, and focus on tangible results. Throughout your entrepreneurial journey, take time to sit down and evaluate how well you have done, and make course corrections if needed.

Being an entrepreneur takes hard work. It may take years for a company to really take off, and those long years require a lot of hard work, dedication, and perseverance. 

$100 Challenge Update

Things are continuing to go well for my business, Carolyn’s Cocoa Cups. So far I have made $75 in revenue with about $42 of that being my profit. I am not very confident that I will be able to reach the goal of making a $100 profit, but I am going to continue to try my best to keep pushing and sell as much of my product as I can!

Here are some pictures of my product:

The Flywheel Effect

As part of this week’s lesson, we were asked to read an overview of the concepts discussed in the book Good to Great, by Jim Collins.  Good to Great is a book that talks about the characteristics that can be found in companies that went from being good to great. In the book, it mentions that the companies that go from good to great don’t do so by implementing some sort of radical change program, but instead by using pragmatic programs that were based on three elements: disciplined people, disciplined thought, and disciplined action. 

One idea that was introduced to me through reading the overview this week is the idea of the flywheel. A flywheel is a heavy, metal disk that sits horizontally on an axle. The amount of effort it takes to get the wheel to make one rotation is immense, and so is the amount of effort it takes to get the wheel to make two, three, and four rotations. However, after consistent pushing to turn the wheel, the wheel begins to use it’s own momentum to propel it around. The individual pushing the wheel doesn’t have to push any harder than before, but the wheel is beginning to pick up speed.  This idea of a flywheel teaches that continued and sustained efforts will produce positive results, and will allow a company to gain momentum. I think a lot of the successful businesses out there are successful because they don’t try to take any shortcuts, but instead put in the hard work that it takes to be a great company and they keep pushing and pushing until things start to really take off on their own. This concept is one that I plan on implementing in my own start-up business someday.

$100 Challenge Update

This week I introduced a new line in my product offering. Before, I was just offering bags of chocolate hot cocoa mix. However, after seeing that most people only purchased one bag, I decided to add another bag of cocoa mix that was a variety pack. My reasoning in doing this is that I anticipated that I could bring up the average number of bags sold through each transaction by adding more variety, and thus increasing my revenue. In these new variety mix bags are a serving of chocolate, peppermint, and marshmallow hot chocolate mixes. I am optimistic that this will increase my revenue and help me achieve my goal of making a $100 profit. 

Qualities of Great Leaders

The main theme of this week’s lesson was leaders, and what makes great leaders. We discussed how the Savior is the perfect leader, and how emotional intelligence is what distinguishes great leaders from good leaders. As part of our preparation for the week, we were also asked to read a talk given by Hugh Nibley titled Leaders to Managers: The Fatal Shift. In this talk, Nibley used the example of Moroni as an example of a great leader. Moroni was focused on equality and didn’t try to control those whom he was superior to. He never focused on gaining power, but rather to create an environment of peace where all individuals worked together to achieve a common goal. I think this strategy is one that would be beneficially applied to all aspects of my life, particularly in callings at church and my future career. I hope to be able to apply the characteristics of all the great leaders we learned about in this week’s lesson to my entrepreneurial career and personal life.

$100 Challenge Update

This week was the first week that I started actively trying to sell my product, and it has been much harder than I had anticipated. I was initially hoping that I would get a lot of repeat customers, and that was going to be how I would get a lot of revenue from selling my product. However, I am not very confident at this point that that will be the case. I am starting to think that the best way to increase my revenue is to try to sell a higher quantity with each sale.  In order to do this, I think I am going to have to introduce different flavors of hot cocoa mix and offer a deal to individuals that purchase more than one bag of mix. I had toyed with this idea before starting to sell my product, and now that I am actively trying to sell my product I think it’s something I am going to have to work on in the coming week.

Valuing Customers

In this week’s lesson we learned about the importance of valuing customers. There are two ways in which business owners can show that they value their customers:

1. Give them good customer service
2. Determine the financial value of each customer and strive to increase it

Giving good customer service is essential to running a successful business. Two of the best ways to increase revenues is to either increase your number of customers or try to persuade your current customers to buy more product with each purchase. Both of these can be more easily achieved when you provide your customers with good service. If you don’t, chances are good that those customers will take their business elsewhere.  Individuals can provide good customer service by politely acknowledging customers, providing helpful assistance, and giving each customer as much attention as they desire. In doing these three simple things, customers will feel valued by the company. When customers feel valued they are much more likely to make a purchase and become a repeat customer.

The best way to determine the financial value of each customer is to calculate your revenue for each week and then determine your regular customer base. After doing this, divide the weekly revenue by the customer base. This number will tell you the financial value of each of your customers. In viewing your customers in this way, you are financially valuing your customers. Once you know the financial value of your customers you can determine the best course of action to increase your revenues.

Learning about the importance of valuing customers has made me think about how I am going to apply this knowledge to both my $100 Challenge business as well as my Big Idea Company. I know that in placing an emphasis on providing great customer service I will be more profitable than I would be otherwise. 

$100 Challenge Update

This week I finalized my logo and packaging. In addition, I made my first batch of hot chocolate mixes that are now ready to be sold. I plan on beginning to sell my product starting next week.   

Suggestive Selling

In this week’s lesson we were asked to read a paper about suggestive selling. I found the article to be really informative, and provided me with some ideas that I want to implement in my own business for the $100 challenge. One of the techniques of suggestive selling is bundling items. When you bundle items you combine related products and offer them to your customers as a package deal that is cheaper than if they purchased the items individually. 

In an effort to get customers to make a larger purchase than they may have originally planned on, I am going to bundle my hot chocolate mix bags for the $100 challenge. Each bag of hot chocolate mix sells for $5. However, if a customer would like to purchase 2 bags I will sell it to them for $8. Any additional bag will also only be $3. I think this is a really smart idea because without it I don’t know that I would get many of my customers to purchase more than one bag of mix. The additional revenue is worth discounting the price of my product by a little.

$100 Challenge Update – Carolyn’s Cocoa Cups

This week I purchased the necessary ingredients to make the first batch of hot chocolate mix. I also started working on making the logo for my business as well as creating the packaging. My original plan was to sell the hot chocolate mix in little plastic treat bags with enough mix in each bag to make three cups of cocoa. However, after giving it some more thought, I realized that my competitors (Swiss Miss, Nestle, Land O’ Lakes) package their hot chocolate mix in single servings. So I purchased small plastic containers that fit one serving size worth of mix in each container. I plan on putting three of these plastic containers in each plastic bag. Deciding to change the packaging costs me an additional $0.20 per bag, but I think this additional cost will be worth it in the end.  I also decided to change the name of my business from Carolyn’s Cocoa to Carolyn’s Cocoa Cups to reflect the change in packaging.

Work Hard, Sacrifice, and Make Due

One of the takeaways that I got from the lesson this week is the value of working hard, sacrificing, and making due with what you have. This week we were asked to read an article called Startups on a Shoestring. In this article, one of the entrepreneurs said that he built his company for “$100 and 100,000 hours.” Companies can be successful even if they don’t start out with a large amount of capital, but it is going to take a lot of hard work and sacrifice to be successful. The entrepreneurs mentioned in the article went years without taking a salary, and all of them worked a second job to help fund their business.

In the same article it also stated, however, that about half of all start-ups don’t make it even five years, and this is mostly due to a lack of capital. This just goes to show how much time, energy, and dedication it takes for all entrepreneurs to be successful no matter the size of their financial backing.

$100 Challenge Update

This week I raised the $20.00 of capital to support my business. After speaking with my husband and walking him through my business plan, he and I agreed that we would invest our own money into the start-up of Carolyn’s Cocoa. This week I also determined how I plan to spend the initial $20.00 of capital and figured out that I will be able to purchase all necessary supplies to make a few batched of the hot chocolate mix, but will also need to purchase more supplies shortly after I start making a profit.  

Common Startup Mistakes

This week we were asked to read an article titled Richard Branson on How to Avoid Common Startup Mistakes. Richard Branson is a very successful businessman and investor who is well known for being the founder of Virgin. In the article, Richard Branson listed four of the most common mistakes that new entrepreneurs make. These mistakes include not staying on target, not being realistic about the costs of starting the business, hiring people you like rather than people you need, and not knowing when to say goodbye to the company as CEO. Out of all of the mistakes that entrepreneurs make I found it really interesting that he mentioned those four. I liked the advice that he gave regarding being realistic about the start-up costs. He said that it is important to keep expenses as low as possible, but that doesn’t mean that you should undercapitalize your business. Branson said, “The playing field is littered with undercapitalized start-ups that were doomed from the outset.” This is something that I want to keep in mind when I start my photography business. It is important to make sure that I am realistic in estimating what the true cost will be of getting things up and running, and to not shy away from trying to obtain that money. I also liked his advice about making sure to hire people that are smart and know the industry, rather than just hiring friends or family members because you enjoy spending time with them. It is important to surround yourself with smart people that have business know how and who will be able to help your company see long-term success.

$100 Challenge Update

This week I finalized my idea for the $100.00 business challenge. I have decided to go with creating a homemade hot chocolate company called Carolyn’s Cocoa. I also worked on creating a business plan to help guide me over the next several weeks. In the business plan I included a vision statement, mission statement, objectives, strategies, and plans for the company.

Entrepreneurs and America

“Silicon Valley’s most valuable export…is the idea of Silicon Valley itself.” – Simon Cook, DFJ Esprit

The most meaningful part of this week’s lesson for me was reading through the Special Report on Entrepreneurship in The Economist.  The reading took me a little while to complete, but I did not mind at all; I was wrapped up in the analysis of the world of venture capital and entrepreneurialism.  What fascinated me the most was the focus on why entrepreneurialism succeeds in various parts of the world, and why there is not a robust entrepreneurial spirit elsewhere.   The thought that America is the hotbed of innovation because of the unique culture of American individualism and optimism really stood out to me.  I had never really given much thought to why innovation seems almost second nature in this country, but it makes sense that a nation founded on blazing trails, being a pioneer, and living by the sweat of one’s own labors and ingenuity would be incubator of so many creative and successful ideas.  

The articles in the reading carried this forward to the next step: where else has entrepreneurialism succeeded, and why has it thrived?  Israel, Singapore, and India were all highlighted as examples of places where innovation is beginning to thrive.  These places have only been able to do so when people have been given the freedom and incentive to take risks without fear of punishment for failure.  As economies have become more liberalized, and as governments have taken a step back to allow individuals to take risks, these economies have been able to mirror some of the success of America as a whole—and Silicon Valley in particular.  

My final takeaway from this week’s lesson is that if an entrepreneur is going to succeed, he can’t be afraid of taking risks.  He should be building a network of close friends with whom he is willing to work hard to solve a problem, and he should educate himself in a field for which he has passion.  Modern tools exist to facilitate the growth of a start-up, and the entrepreneur should take full advantage of their availability. Entrepreneurs are pioneers who want to make the world a better place, and where they are encouraged to take risks there tends to be growth and prosperity.

$100 Challenge Update

This week I identified my top 5 ideas for the $100 challenge. I then looked into what the start-up costs would be and posted about my ideas on the group discussion board for suggestions. I received some great feedback and I think that I am going to go with the idea of making homemade hot chocolate mix and selling it in little bags.

Making Meaning

Taken from iqdesk.com

This week I started reading “The Art of the Start” by Guy Kawasaki. It is a business book that offers great advice to entrepreneurs that are starting a business or non-profit organization.  Each of the chapters focus on different topics such as positioning, raising capital, and branding, among others. The book starts off by talking about The Art of Starting. Kawasaki offers 5 pieces of advice that he recommends every entrepreneur should accomplish in order to be successful. The 5 different suggestions are:

1. Make meaning
2. Make mantra
3. Get going
4. Define your business model
5. Weave a MAT (Milestones, Assumptions, and Tasks)

I really like the idea of making meaning. When you make meaning you help the lives of others by creating a product or service that makes the world a better place. Kawasaki said, “Making meaning is the most powerful motivator there is.” When we know that we are making a difference in the world, it can give us the strength to keep going despite the many challenges that can come with start-ups. I think when we make meaning we are more likely to feel a sense of accomplishment in our efforts. Reading about the importance of making meaning has really made me think about what my future career goals are. I hope that one day I can say that I am making meaning in the world. 

$100 Challenge Update

This week I spent some time brainstorming 20 different potential ideas for the $100 challenge. There are a handful of ideas that I am considering using for my start-up, but I need to do some more research into the viability, practicality, and affordability of the different ideas before I can make my final decision.