Why we need to teach entrepreneurial thinking to design students
The Kickstarter Projects:
dahussen — Mobile kindergarten for city kids
Katharina — Take some time off
Modular Triangle — Modular furniture
Wandelbar — Mobile and transformable bar
Ich bin Thomas — Documentary about a starting a heavy metal band
ZooAround — Catch the animals card game
Square Dish — Wooden dish set
Ifinished teaching the course “Become a Design Entrepreneur” in Germany. It was my first teaching gig of this kind and a big experiment at the same time.
The students had to launch a Kickstarter before the end of the semester that generates 999 Euro and is based on a program my friends Christina Xu and Gary Chou teach at SVA.
Here are a few things I learned, things that did not work and what I would do differently.
Be honest with yourself: Do you have a good idea?
Greats ideas come from understanding people’s needs and problems. Turning great ideas into something people want means to deliver a simple solution that satisfy the need.
The two students who got funded so far had one thing in common: They knew from the beginning what they wanted to create. One of them created a convertible, mobile bar. She is a bartender herself, understood the needs and problems of her customers. The second one created a dish set made of squared wood plates and bowls. It looks beautiful.
For the other students, it meant that they had to spend a lot more time on the customer development. They all identified a need or problem, but their ideas did not turn into solutions that enough customers wanted. Did they fail? Yes, projects fail, and that’s ok. They made new lasting relationships and gained knowledge they did not have before. No one can take away from them.
A good framework by David Ogilvy to evaluate ideas:
- How creative and intelligent is the idea?
- Does the idea have originality? Is it different, unique and new?
- Is the idea entertaining? Enjoyable? Aesthetically, spiritual and emotional?
- Does the idea communicate the desired message?
- Is the idea working by itself and the same time does still fit into the big vision?
- Is the idea strong enough, so people will remember it?
Start with the price
One of the hardest things is to price a product or service, but it puts the thing in perspective. Amazon product development process works backward. They start with the press release and faq. It’s a great idea, but one thing I miss is pricing. It’s one of the most important aspects of your business. Assuming the service cost something. Why is that important?
- Value = Need + Price. The need and price correlate to each other. If you can solve a need that is in high demand and unique, you can price it higher than your competitors. If you solve the need that is in high demand, but you have a lot of competitors, you won’t be able to price it high. You need to understand how much your product solves a need, how unique it is and price accordingly.
- Charging twice as much: The other way to look at it is to think about what if I would charge twice as much as my competitors. What could you offer instead? What would you add?
- Price indicates quality: Price is a sign of perceived quality. The same brands and clothes at Tommy Hilfiger are a season later 50% cheaper at TJ Maxx.
- Quantity vs. Quality: The price also determines how you create or produce it. If you want to sell lamps for $10 instead of $1000 you need to use cheaper material, sell higher quantities and be able to produce cheaper. For $1000 you can make the lamp by hand, use a better material, sell lower quantities and add an internet of things feature.
- Mental model: How much can you charge for Crossfit? As a customer I think paying $200 is a great value. A personal trainer is way too expensive, with the small classes and structure it seems a fair price.
How much is your customer willing to pay? What do I need to offer for a certain price? What do customers compare it with? How do you have to produce to offer it at an attractive price? How many do you have to sell to reduce the production cost? You don’t need a business model, but it’s good to think about it.
Rewards Rewards Rewards
When you look at a Kickstarter project, it seems the Pledges play a minor part, but they are equally if not more important. The average Pledge is $25. You can go two routes and they both work.
- Build your product around $25 + Shipping and make hopefully enough profit.
- Price your product higher, but offer a Pledge that is a minimal version of your product or “meaningful.”
There are other interesting strategies:
- Scarcity — People love limited editions.
- Early Backers — Reward the first ones with special editions that have either different pricing or are somewhat “special”.
- Cheaper — When you offer your product later in a shop it’s going to be more expensive. Tell them what the estimated retail value is.
- Exclusive Kickstarter add-ons — When supporting/pledging for your product offer them something special.
- Packages — Pledges that have multiple items with a reduced price.
- Customization — Their name or other personalization
Start with prototypes early
There are different types of prototypes. Testing technical feasibility, is it usable or do people even want it. A few ideas
- Make and show a trailer to an audience. Would they pay for it? Do they want to watch more? Did they subscribe with their email?
- Write a logline. Send it around and ask for feedback.
- 3D Print it, give it in people’s hand, observe how they use it, do they want to use it, do they want to buy it and how much would they pay for it?
- Print it and play it with friends. Do people have fun? Do they want to borrow it?
One or two on a project
Beginning of the semester, we let the students decide if they want
to work alone or partner with someone else. Teams were limited to two and had to raise twice as much.
The projects that had only one student on it were behind on launch date. Two meant they got more work done. They exceeded expectations during the semester, attended every lesson, but that was not a guarantee for success.
The two successful funded projects had only one person working on it.
Things that were helpful, did not work, or I would do differently
Working in public
The students had to present many times within the group, but also to the public during the semester. Especially the latter was important because it enforced a natural check in for the students. More to that we had experts coming in to give each student feedback on their project. If anything I would create more external check-ins like a public presentation or invite expert groups.
At least two people should set up and teach the course
It’s a ton of work, and I could not have done it without my two other colleagues. I would also recommend having complementary skills.
It’s not a startup
Business Plans or talking to startup people about starting companies is not helpful. This course is not about startups — some of them might become one, but that is not the point.
Blogging and using Medium did not work at all. At least in Germany. Writing or blogging is something that is not in people’s mind. Blogging networks like Medium are not known at all. Next time I would focus on platforms they are already using. WhatsApp and Facebook are probably a better bet.
Little experience with collaborative tools
I was pretty shocked about this, but the students had barely ever used tools like Google docs or Slack. Students should have knowledge of basic project management tools and skills.
Working with peers
Teaching used to be something very top to down, now technology companies try to democratize it, and the latest trend is peer groups. I think we somewhat succeeded and failed as well. There was not much visible exchange between the students.
I would love to hear more about how other people encourage more peer work.
Focus on number of backers
We had a few projects that had primarily high priced rewards. That was not a bad thing, but the idea of the course was to reach a lot of people and not a few. Next time I would try a combination of at least reaching 100 backers and $1000.
Once a week check-ins are not ideal
The course was once a week from 2–6pm. This was not ideal, and I would have preferred a check in twice a week.
- Students can be sick or have other obligations. If you miss one you have a gap of two weeks
- Giving the students less room for getting lost.
It’s one thing to research and look at other Kickstarter projects, but another to support other projects. This will do three things:
- Better understanding of how the project and the pledge relate to each other
- The question what is valuable and what is not? How much do I want to spend?
- Giving first, before you take is a fundamental principle of a great community.
All the students did an amazing job, I learned a lot about myself, enjoyed the challenge and they all showed entrepreneurial thinking. Thanks to Judith, Kerstin and Gary!