Two weeks ago, my co-teacher Ed asked me to sit in the panel of his technopreneurship class. I don't know what made me particularly qualified to judge the students' entrepreneurial ideas, excepting perhaps the string of failed businesses and half-started ventures that I have under my belt. Nevertheless, I accepted the invitation as I thought it was another chance to interact with the students. Perhaps I was also looking for inspiration to start anew.
It's hard enough to come up with a good and original idea for a business -- and harder still to pull it off. I should know: failed businesses and half-started ventures, remember? I thought of my stint as a sounding board for the students. With a pair of fresh eyes, not under pressure from deadlines of finishing the paperwork, I could point out where the business plans were weak and where they could work.
Some plans were good, some plans so-so. I actually found one worth putting time and money into, if the students were willing to work on it over the next semester. We'll see.
I did come out from the experience with more insight, and that made the time investment in sitting in the panel worthwhile. Specifically, I found some fundamental pitfalls that students kept falling into. I'm sharing them here for my future reference and for your comments, if any.
Pitfall #1: Too broad a target market. Or to put it another way, not defining the target market specifically enough or well enough. Without this defining quality, the venture loses focus and therefore feels half-baked.
Because there are far too many competing services out there now, it is essential for the beginning technopreneur to identify a niche service. Given the limited resources of startups, defining a niche one can excel at gives the best chances for success.
The one business idea I felt worth getting into did precisely this: they had a very specific group that they wanted to offer their service to. Granted, there were some problems with the approach, but because the target market was well-defined to begin with, they could just adapt the mechanics more quickly. They didn't need to rip out the guts of their plan.
Pitfall #2: Not following the money. The students were coming out with ideas meant to cater to the "lowest common denominators", groups that the students imagined were underserved because of their perceived lack of means. Perhaps this approach might work for a social venture (even then, I don't particularly think so, and I'll explain at another time), but it's a bad way to plan a business. Why? Partly because they don't have the money to spend (or more specifically, the money to spend on the service that the students want to offer), but mainly because the students have not really thought this market through. More on that in Pitfall #3.
It seems to me, though, that this is a very Filipino way of thinking...a knee-jerk reaction to provide services to "the masses" but without understanding what "the masses" want.
Pitfall #3: Underestimating the market. Ironically, this ties to the problem mentioned in Pitfall #2. The students start out with this misconception of what it it means to be poor and underprivileged, and design services accordingly. But this leads to outrageous assumptions, for example: a "poor" person would not have access to the Internet, and would rather only use services that make use of SMS. But think about it, four text messages already equals an hour in an Internet cafe.
And so we have this seeming paradox. Which one is it, really? Does the target market have the means, or doesn't it? On deeper examination, the conflict can be resolved by an understanding of the market, which comes to greater focus when addressing Pitfall #1 properly.
Pitfall #4: Not having fun. This, quite possibly, is the biggest failing that threaded through many of the projects. I surmise that the students put forward proposals that they thought were "serious" or "adult". Perhaps or perhaps not, but many just sounded quite dreary to me. Such a shame, because this is supposed to be a young crowd of aspiring technopreneurs, but they all took the fun and joy out of their projects.
Worse, I think the projects would fail the cooking test: would you yourself be willing to use this service that you are putting up?
So there you have it, four pitfalls I identified from my students' project proposals. If the assessment sounds harsh, it's not meant to be; and if I recognize these weaknesses, it's only because I recognize those weaknesses in my own thinking.