Capitalist Brain and Socialist Heart

A few months ago, I had the opportunity to talk about my entrepreneurial experience in front of a group of french students and office workers. I was asked to talk about the different startups I founded and the challenges I encountered. I started talking about my startups being all in the the edtech space (educational games for kids on mobiles, mobile games for adults, an online quiz maker) because my main goal was to make education more fun and engaging. Then, I mentioned that one of the challenges of developing mobile games is revenue. The price for games is usually less than $5 and the conversion rate to paying users is quite low, making it hard to support the app, let alone make a living.

At this moment, a woman interrupted me and asked: “But if you are really interested in education, why are you so worried about revenue?”.

For a split second, I was speechless. Then I replied that a startup with no revenue won’t last long. She didn’t seem happy with my answer. One possible reason might be because she came from a socialist country where education is free for all, so she probably thought that all educational material should free. It made me realise that depending on your political view, you can interpret the same sentence very differently. If you consider the mission statement “Educate the world in a fun and engaging way”, here are the two conflicting points of view:

Socialist View: “This should be free, so anyone can access it”

Capitalist View: “I should charge for it, so I can develop it further and reach more people”

Both views have the same goals in mind (to reach more people), are valid and can be defended, but the way to getting there is very different. One is giving free access, and the other, through making money to insure its viability.

For a few days following my presentation, I felt a bit guilty charging people. This lady seemed so sure, that she convinced me. After all, I was born in France and enjoyed free education. I left France at 20 years old, before working full-time and so never paid taxes (which is how education is financed). So I never had the chance to “pay it back”.

However, after looking at my cashflow, it was obvious that my startup needed money to function. Increasing costs to maintain servers and databases made me realise that the socialist view, on its own, is not really a viable option. But, I had to find a way to satisfy my capitalist brain and newly rediscovered socialist heart. To find a happy medium, I decided that a list of business practices had to be redefined. While my capitalist brain ensures that my strategy is still focused on profits, my socialist heart balances theses decisions with selfless practices:

• We increased the features available on the free version to allow a better range of educational functions
• We offer the same customer support for all users (see below)

Since quite a few of our users are children in primary/secondary schools, our product is commonly used for assignments. We can then assume that these children won’t become paying customers, at least not for another 10 years or so. But we still provide the same customer support to them. And as for the pricing, we have changed it and adopted the following mantra “It will be free to use, unless it helps you grow revenue”.

So next time I pitch my startup to a majority of people with socialist tendencies, I will hopefully be able to give an answer that both represents my capitalist brain, and satisfies my socialist heart.