Chop Chop Study Shop — Initial Steps and Research

This post tracks the progress of a team taking part in ILC:Entrepreneurship’s 100 Days Startup Challenge.

To introduce ourselves: We are a team of ~8 students and our task was to come up with an idea that we thought we was feasible to pull off in 100 days, would turn the most profit and be a viable business idea in general. So what was the gameplan?

1. Leverage Uchicago students, if not in the long run then at least for an MVP
2. Choose a product that would be doable in terms of startup capital. We had no funds to begin with, so we would have to raise our own, and if we needed a lot of money just to put our idea into existence, we would definitely struggle to sell anything in 100 days. To this end, we also wanted to start fundraising early.
3. Maybe this should be number 1 -> but find a real problem that we could all be excited about solving.

The birth of Chop Chop

Basic premise: students can be some of the most price insensitive creatures on the planet, especially when it comes to impulsive purchases or if confronted with a lot of stress. We thought about what students spend money on and we noticed that some students tend to buy a lot of study materials/snacks in advance of the quarter and also once again suddenly before midterms/finals when they are desperate. In general no one likes to even think about how much they spend on stationery, but when you really need a pen/pencil, highlighters, or paper for that exam tomorrow, it seemed likely that students would no longer care how much these cost. Indeed we later confirmed this was the case — students would not even hesitate to purchase these necessities at inflated prices from the campus bookstore, library vending machines or attempt to pay for expedited shipping from Amazon. What if someone could step in and ensure they had everything they needed at a reasonable price, conveniently delivered to them at this time? Even better, what if we could leverage caring friends and parents looking to reduce stress for the students in their lives. And what better way to deliver such a gift at the perfect time of need than in a box.

Market Research

Our first step was to look at the competition. Below is a summary of what we discovered.

At first we were going to be solely a box of study materials, but we knew that it was worth keeping an open mind and that snacks for example would be a natural good fit for our proposition. We also tried to bear in mind other competitors that were not necessarily subscription boxes, but still options that were very close in nature.

Figure 1: General Explanation & Direct Competition

Figure 2: Indirect Competition

Figure 3: Competitive Matrix & Summary

Key insights:

• Most subscription boxes do not have much brand recognition
• Value should be balanced with costs
• Both low value/cost and high/value cost seem to be saturated and we do not see any true player that would appeal to a broad audience
• It seems unlikely we would be able to sell a box for >$30

What were the opportunities for us to be better/different?

• No company had made their box reusable/there was no reason for continuing to purchase unless you really liked what was inside
• None of these boxes made us of the print-able space on the box — this could help add an extra revenue stream and allow us to keep the final price down
• Similar to point 1, but no box items really built off what the previous ones had to offer
• The more successful boxes usually had one single brand of novelty items — there was a clear chance here to do what Sephora’s business model is supposed to be and bring together a lot of different new/limited items in one place and create value in that way-if we could partner with other startups that could also help differentiate our offering and secure partnerships that would prevent others who might follow later from copying the same marvellous plan

Initial Customer Research

Across the team we ran a series of interviews reaching out to some of our fellow students to gain some insight from outside of our team. We knew this would not be a perfect sample, but we hoped it would enlighten us about what should be in the box and also give us some clues as to what sorts of questions we might want to ask in a general survey. Since we were still building our target customer profile, one question we made sure to include was to ask what setup people need/go to automatically if they need to get some work done. This meant we avoided asking leading or problematic questions about specific products at this stage and kept the format as open as possible and more like a dialogue so people could give us ideas.

Our main takeaways:

• Snacks are more/just as exciting to people as study materials
• Uchicago/school specific branding seemed desirable
• We confirmed that people in general when conscious of what they are buying try to spend as little as possible
• BUT when it comes to last minute things they do not discriminate, pay whatever is necessary and are not even really aware of how much they spend
• People like the idea of healthy snacks
• There are certain items that have a tendency to run out in the middle of the quarter
• Function over “fun” is desirable

In addition there were some areas of concern:

• Students may be too stressed to order their own boxes near exam times
• Some people are very brand/routine loyal
• Question of pricing and value for money
• People might only want to buy things they cannot easily get themselves on campus

We will explain how we thought about these and addressed them in a later post.

Surveys

Having concluded our informational interviews, we now had some general ideas of what students might want to see in a box, and had belief that our idea would have enough interest to stick with it and take it to the next step. However, our ideas of box contents were still fairly vague, so with the help of the whole team, our manufacturing division came up with several proposed lists of box contents. We then used these to discuss what the most likely items were to design a survey. We still had a lot of items and could definitely not include all of them. We also did not know how we could decide for ourselves, so we concluded that popular opinion from prospective customers could at the very least inform our decision and give a sense of whether we had understood our preliminary market research correctly.

Our overarching hypothesis was that people would like items that are:

• Not easily available in this part of the US
• Items that take a long time to ship
• Items that usually come in sets that one person may not have use for
• Items that are clearly overpriced when easily available on campus

Given that people generally respond poorly to surveys, we wanted for people to have a reason to click on ours. We branded it as a “Buzzfeed style quiz”, guessing that the kinds of students who would want to save themselves effort buying study materials would be the same ones who would be happy to procrastinate on homework by clicking through a fun questionnaire. We asked students to pick their 5 favourite items through answering “Yes”/“No” and left some spaces for people to add their own suggestions as well. After some internal deliberation we also added the option to preorder a box for $5 and guarantee one on our first run with a slight discount. We were worried that it was making the form longer than necessary and no one would want to order a box with unknown contents. However, we were conscious that any other kind of interest signalling would be unreliable — just because someone says they would buy something often does not translate into a real purchase!

Our target was 30–50 responses, with an optimistic 5 preorders. We hoped that if this happened we could make a preliminary run of 50 boxes (based on manufacturing considerations — more on this in the future) and the fact that we would have guaranteed 10% of our stock being sold.

Something about our outreach or survey design must have been good because we got an overwhelming 105 responses and 11 people even decided to commit to a preorder. We also took the opportunity to collect 41 email addresses of those who were interested in buying in the future but not ready to pay for a preorder. Although this is relatively small amount, this was a good start in terms of gauging future demand and would help us be more confident in the number of boxes we wanted to order in our first manufacturing attempt.

As you can see from the summarised results above, we managed to confirm the high interest in items we had high hopes for (and now had quantitative evidence to back up our idea) and also eliminate some that proved to not to be able to capture the imaginations of students in the way we had anticipated.

A few things that were suggested that we thought were interesting:

• Medicines/Emergen C for flu season
• Reusable utensils
• The fact that people may want more than 5 items in the box
• One person commented that these were only suitable for a certain type of well-off student — while we disagreed this was important to take note of and think about when designing our box as we would not want to create this impression and alienate prospective customers

At the moment we are a little behind on documenting our progress, but we have a planned sale of boxes in 10th week, which is the week beginning Monday 5th March and if you would like to support the project please look out for more information about this on Facebook.

Thank you for reading!

Written by Dimitry Karavaikin

Chop Chop Team (at time of writing): David West, Dimitry Karavaikin, Rolanda Fu, Jonathan Yuan, Shyn Ru Looi, Melanie Chow, Lancy Zhan, Ryan Jaffe