How To Make a Loss With a Million Dollar Idea
My entrepreneurial journey in the education sector was accompanied by a solid team, sound execution and a negative balance sheet
With the advent of the startup culture around us, I and my friends had been looking out for an idea to start our side hustle. Since all of us were professional data scientists, training and mentoring appeared the most promising proposition. A few of us had already done it earlier at a small scale, so we were certain of the success.
The Path to Success
We brainstormed the idea. We Discussed the services and products our competitors already provide. And we came up with a unique fee and delivery structure. The key offerings in our coaching and mentoring service were -
- No enrolment or training fee for the first batch. Absolutely free!
- Resume based shortlisting of 10 students to start small
- Support in designing resumes for job applications
- One-on-one mentoring for job interviews by industry professionals
- 1-month course for 6 hours every weekend
Does a custom acquisition strategy, amazing customer experience and unique selling proposition; ensure profitability?
The Process and Outcome
The first hurdle was to book a venue and with some online market research, I was able to find affordable real estate in one of the popular localities in my city. This was the first and only big expense that we had to incur.
The date was finalised and the venue was booked. Then came the first day when we started with 100% attendance. We walked them through the course and structure. They all looked motivated and enthusiastic. As days passed, the attendance dropped from full house to 70%. We had already lost some audience within the first 2 sessions even though we were offering an expensive course for no cost.
For the next few weeks, we all slogged to train and prepare this audience for the real interviews. The feedback was great and these students already brought us referrals who were ready to pay us. Steadily, these students started appearing in interviews and a few of them also secured the job with great compensation packages. This further boosted our referral and before we knew it, the next set of audiences was waiting for us.
Eventually, everyone got placed in the field of their choice and simultaneously negotiated a higher compensation for themselves. We were proud of the outcome and our success. Little did we realise that we are standing at a juncture which may lead us to bigger things or end it all instantly.
We hadn’t made any profit yet, but affirmations from the existing audience and referrals waiting at the door, gave us the delusion of success
The Silent Failure
Before restarting the drill, only to become profitable this time, we all took a break post the month-long exhaustion. Some of us travelled and I focused on celebrating my weekends, now that I have them back.
I believe a lot of us realised the extra effort it takes to turn up on a weekend after a full-time job on weekdays. Since we did not take any money in the first round, it all appeared as an exercise with meagre returns and big investments.
I also equated the money that I may earn continuing this side hustle with my day job, which tilted the balance towards my day job. Whichever iterations and scenarios I run, I was not able to declare this hustle as a winner in the foreseeable near future, over other things that I did.
I kept getting queries from prospects for the next several months, but it was just too much effort
Most of the others would have also thought through the same. We are still trying to figure out what exactly went wrong. Some of the things that I could think of are —
Losing Momentum: Probably, we shouldn't have taken that gap. We got the momentum with a lot of effort for the first time. It felt like a gargantuan task to reach that benchmark again.
Money is a Strong Motivator: I still feel that we could have charged a minimal fee to participants who secure a job after successful completion of the course.
Structuring Product/Delivery: In a service-based business, the product is the consistency and quality of the service. During the first round of delivery, we could have created structured instruction material and branded content for the future. This would have taken off a huge burden from the future instructors
Conclusion
If I have to sum up the above experience, the inert attitude we took toward the side hustle and overestimating our detachment from financial benefit took a toll on the future roadmap of the initiative.
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