Life in the Cloud – George Watt
What IT can learn from a lemonade stand
Recently I had a very interesting conversation with an aspiring entrepreneur. She told me about the demands a changing environment had been placing on her business, their impact on business revenue, and how she adjusted to take advantage of those new opportunities. I am in a fortunate position to have conversations of this nature now and again, and I always learn something interesting and valuable; something I can use to improve my business life, and that I can share with our customers to help improve theirs. This discussion was quite different from most others though, not because I did not learn something, but rather because this entrepreneur was nine years old.
Should I Stay or Should I Go?
For the past couple of years, Heather and her friends had, now and again, set up a lemonade stand. This normally happened at the end of a day of outdoor activity when they ran out of playtime ideas and came in for a drink. As is likely a surprise to no one, they placed a table at the end of the driveway and waited for people to pass by and purchase their product. Last week when they tried this, there were no customers.
Faced with that most of us might predict that this “business team” would respond in one of two ways:
The Challenge – Changing Customer Behavior and Demands
What was fascinating was that they did not decide to “pack it in.” They chose to analyze how their customers had changed. (Yes, that’s my terminology and not theirs, though it is exactly what they did.) So, what did they discover? The neighborhood had, indeed, changed as did the way in which the consumers behaved. It was a more mature neighborhood and there was less foot traffic mid-afternoon than there had been in the past. It was also hotter than usual and people were staying in their air-conditioned homes during the afternoon and walking later in the day.
The bottom line: Their customer was not interested in walking down the street in order to purchase their product, and even if they were, there was nothing to differentiate their product from that of any of the other driveway entrepreneur. Their customers wanted personalized service at home.
Mobile and Social Technologies Restore Revenue
So what did they do? They implemented mobile technologies and leveraged their social network.
Alright, I realize I might be using those terms in a slightly different context than I would normally, though I think given the context of this business, the ages of the entrepreneurs, and the technology at their disposal the use is fair. They created a mobile lemonade stand and went door to door. … OK, that made me pause as you likely did. Nine year olds going door-to-door! Don’t they know not to talk to strangers?!
Fortunately the answer is “yes, they do.” “We only went to homes where we knew the families well…” And after some confirmation, that’s exactly what they did. They went to friends of family and to relatives, and they went in a group. So, they leveraged their equivalent of social networking (dare I call it “social media”?… I think I shall).
The result: Revenue was restored and they made a nice profit. Especially if you consider that their cost of goods sold was $0.00.
Lessons in Driveway Entrepreneurship
I realize the economics of a lemonade stand have sometimes been questioned, though I believe what cannot be questioned is the effective business approach used by these entrepreneurs. They learned:
Lessons for the Rest of Us
What struck me about this conversation was how familiar it was. This is very similar to conversations I routinely have with enterprise IT teams and cloud providers. They are faced with similar challenges, and they have similar options. Sadly, too often we see “Option 1″ as presented above as the response from our colleagues and that has earned us labels such as “Department of No” or “Office of the CI-No”. “Option 2″ presents itself a little differently than described, though I’ll bet you may have encountered a team that appears to have “just given up.”
The good news is that we can all choose “Option 3″ and work in partnership with our customers and the businesses we serve. Instead of resisting new mobile, social, and other technologies we can start with the belief that anything might deliver benefit or advantage and at least consider what they could do for the business. And we could all get closer to the customers we serve, ensure whether their needs and objectives have changed, and keep our eyes open for new technologies and opportunities that might benefit them.
And I believe that, even if you consider the connection of this story to mobile and social technologies a bit of a stretch, there is a connection. These technologies have taken off and are improving the personal and business lives of a vast number of people, and they cannot be ignored.
Having worked with young people a lot in the past, I’ve come to be much less surprised at what I can learn from them. They have the brilliant ability to think unencumbered – with no artificial constraints. This valuable lesson from a nine year old without an MBA… at least not yet.
So, are there other lessons we in enterprise IT and cloud computing can learn from young entrepreneurs? Please share your experiences with us.