The Last Week at LaunchX Summer
July 27, 2018
The end of LaunchX Summer is more focused on the business side of entrepreneurship, instead of the initial product-building side.
This is the time when students get a handle on their numbers, consider their options when it comes to revenue models and pricing, and make projections about overall financials. By this point they should be confident in their knowledge of the market they’re entering, where their product fits in among the rest of their competitors, and what their path forward to success might look like. They work on grasping their variable and static startup costs, along with key metrics like Break Even Quantity and Gross vs. Net Margin. They also take their learnings and the data they have gathered, and work on building forecasts for sales, customer acquisition, growth, and more.
Operations is another big focus during this end stage of our program. This involves getting into the logistical side of things. Launchies set up product manufacturing/creation, which includes mapping out the materials they’ll need and costs they have, as well as the scheduling aspect of production. They quickly find that small startups can expect a lot more variable costs than larger or more established outfits, which can command better bulk pricing. They learn to allow for variability in cost, so they can ensure that production remains reliable. Down the road, when they scale and bring more consistent purchasing power to their manufacturers and materials providers, they can work out better deals for those aspects of their businesses.
Young entrepreneurs also spend a good amount of time mastering the art of pitching and storytelling. They learn why stories matter in the context of business (especially fundraising) and how to structure a good pitch story and accompanying slide deck. They create compelling personas and stories for their ideal user and distill how their product uniquely helps that consumer solve a problem. In addition to the story itself, student entrepreneurs also dial in their knowledge and understanding of their own businesses, their markets and market landscapes, and future plans for their ventures.
To that end, they tackle how they’ll grow, studying and considering a few of the main strategies: market penetration, market development, and product development and/or diversification. They look at not just their growth potential, but also the likely marketing and other costs associated with each strategy, to determine which is most viable in the short term, and which may be a good option for the longer term. We remind them that different strategies best serve companies at different stages, and some may be too ambitious for where they currently are. Here’s a quick look at each of the strategies and its associated considerations:
- Market Penetration: For this, students look at the best way to enter the market they’re aiming for, be it by underpricing competitors, establishing their differentiators, ramping up their sales, advertising and marketing machines, or some combination of the above.
- Market Development/Diversification: This entails looking outside the existing market and actually expanding it — bringing in new customers — instead of going after ones that competitors have. Founders may think about expanding to a location currently devoid of their kind of product, or targeting a demographic that has not widely adopted products within their market yet.
- Product Development/Diversification: Businesses whose growth has slowed a crawl can sometimes be revitalized by adding new products to their line, or improving upon the products they already have. They may consider introducing products that expressly target consumers who aren’t currently in their market, or even products that would turn one-time customers into returning customers. For example, a company that makes outdoor home security cameras might also move into making indoor cameras that allow people to check in on their pets. Whether the new pet camera attracts a different set of buyers than the ones who’d be interested in the outdoor camera, or represents a second purchase for those who already love the original offering, it’s an opportunity for growth.
The home stretch ends with Demo Day, where students deliver their prepared pitches in front of a panel of 7-8 advisors (instead of the 3-4 mentors they’ve had on their mock board of directors throughout the rest of the process), as well as a room full of family members, who also provide feedback to teams in written form. It’s a celebration of the teams’ accomplishments, and an opportunity to gain even more knowledge about the world they’re entering.
The best part of Demo Day is that it’s both a culmination and a new beginning. We encourage students to take the tools they’ve mastered during our brief but intense program, and use them to really build their entrepreneurial lives. To learn more, grow further, keep tinkering, keep iterating. LaunchX is not meant to just be a self-contained Summer Program for students to put on their resumes and college applications, it’s meant to help them harness their creative spark into a lifelong entrepreneurial mindset. Whether they go on to be founders of their own successful ventures or simply use what they’ve learned to give other endeavors life, their LaunchX experience will serve them well.