Every now and then the rubber meets the road and events come together at just the right place and right time to create something awe-inspiring. Some call it timing, others call it luck. I call it destiny waiting to happen. It's the force that causes budding entrepreneurs to enroll in a program like the Founder Institute (FI), an accelerator and startup launch initiative.
The three-and-half-month program has helped transform ideas into viable companies. What is now Earnster Inc. is wonderfully positioned to become a leader in the tween and teen empowerment movement, along with gaining street creds as a Gen Z e-commerce/marketing powerhouse. Without FI, what was once a great idea could have never seen the light of day. Instead, Earnster Inc. has a product in development - on its way to market.
The program offers founders a structured curriculum with weekly mentors who share their vast knowledge of startups.
Some of the most useful sessions and assignments include Revenue Models, Product Development and Sales & Traction.
Here are my favorite five:
1. Consumer Archetype: A key measure of success for any company is whether or not it can attract and retain customers. The Founder Institute challenged founders to get up close and personal with the very lifeline that will determine their company's well-being. This assignment required founders to interview potential customers about the value their product poses. Determining whether it solves a legitimate problem or is just a ‘nice-to-have’ could mean the difference between a customer paying for the product and using it regularly or downloading it, trying it once then deleting it when more space is needed on their hard drive.
After tweens, teens and their parents validated the need for Earnster, we were able to design our ideal customer. Since it became clear most tweens and teens were frustrated with having no financial means, we knew our ideal customer had to be too young to get a job, yet willing to work for items they really wanted. We also learned that parents wanted their children to value work, time and money. Yet, many adults, especially single parents, were strapped with busy schedules. Parents found themselves running from pillar to post to allow their children to participate in extracurricular activities like sports. Everyone’s busy-ness made it nearly impossible to institute a structured chore management system. And, since African American teens face high unemployment rates when they are old enough to work, we knew our product could help develop marketable skills in our community.
After identifying key traits of our ideal customer, we landed on the following character:
Russ is a ten-year-old African American male who loves video games and is the star on his basketball team. His parents are divorced and he’s figured out that if he begs his mom long enough, she will eventually buy him the latest game. However, Russ is getting sick-and-tired of begging and being told he has to wait for his birthday or Christmas. He would love to find a way to generate his own money to buy the items he wants.
By designing Earnster’s ideal customer, we were able to develop strategies to connect the company with potential users, as well as, the messaging the company will use to build its brand.
2. Naming the Product: I began FI believing we had the perfect name for the product. It was initially called E:rn (pronounced Earn). The “E” represented Energy, as in E=mc2. The colon symbol represented ratio, as in the mathematical equation 1:1. It means for every 1, there is a value of ‘x’. And, the ‘rn’ represented the abbreviation for Registered Nurse, someone who gives aid. Therefore, E:rn represented the energy expended directly relating to the help a user would receive. My kids thought the name was cool…after I explained my rationale. But, like fine art, if you have to explain it, the artist missed their mark. In addition, I learned that any name with a colon would not be searchable. The colon would not appear, causing the search engine to auto-correct its spelling. E:rn would simply become Ern. And since some people could mistake it for a container used for human remains, we knew a name change was inevitable. We began brainstorming for a new name and Earnster was immediately adopted. Without the help of FI, our company could have been unsearchable, greatly diminishing any chances of success.
3. CAC/LTV: Another assignment by FI critical to Earnster’s ability to raise capital is the calculation of CAC (Customer Acquisition Cost) and LTV (Lifetime Value) of that customer. Fortunately for Earnster, our CAC is extremely low. Due to scrappy strategies, we’re able to reach large amounts of potential customers by attending events such as, basketball tournaments and track meets. These gatherings will put Earnster in touch with thousands of young people. Also, the company is deploying revenue sharing tactics to attract users, like referral programs and fundraising partnerships, making marketing dollars next to zero.
The LTV for an Earnster customer will be determined by the platform’s ability to attract repeat users. Getting tweens and teens to return to Earnster will require the company to offer the latest and coolest ‘must have’ products. If there’s a hot item out there, Earnster must feature it. The company will need to have its finger on the ever-changing pulse of teens and tweens. Our goal is for young consumers to use Earnster as the go-to platform for products they can’t wait to get their hands on and the means by which to get them.
The CAC and LTV are key determinants investors look for when reviewing a company’s funding appeal. Fortunately for Earnster, we’re perfectly positioned.
4. One-on-One Mentor Meetings: Probably a true testament to the value of the Founder Institute is its ability to attract seasoned mentors who are willing to meet with students outside of class. Earnster has benefited from private one-on-one meetings with at least two-thirds of the participating mentors. During these meetings, either by phone or in person, we were able to address company specific questions and get straight, no-chaser answers. Each one brought their experience, attention and knowledge to the table to help us. On one occasion, the mentor’s value extended to an advisor position with Earnster. Now, our team and product is even stronger and more viable.
5. A Hands-on Director: Each FI site is managed by a Director or Partner of Founder Institute. They handle administration duties, schedule speakers and offer office hours. In the case of the Los Angeles branch ran by Jeanine Jacobson, the role has meant so much more to Earnster. Her hands-on approach and personal attention paid to Earnster has been invaluable. Jeanine’s attention to detail on every assignment, review of the company’s official documents and willingness to be accessible throughout the week has made a difference. She’s engaged with founders and feels personally responsible for their success.
As my partner and I approach the end of the program, we can attest to the value of the Founder Institute for anyone considering entrepreneurship. The program will test your will, your concept and your resolve to make the leap into a self-sustaining career that offers no net. Many start the journey, but only a few make it through. If you’re one of the fortunate companies to actually launch, whether it was timing or luck - hard work or unbreakable will - thanks to the Founder Institute, your destiny will also have the potential of being awe-inspiring.