An extemporaneous analysis of a local startup!


What follows are the unedited thoughts I had as I watched a new startup a few weeks ago. No, this was not a new technology venture, a new iPhone application or brick, and mortar business. These events unfolded in front of my eyes on a spring day back in early May. At the time, I opened Facebook and recorded what I saw and my thoughts accordingly. I've repeated it here for your enjoyment.

"Sitting on my front porch watching a burgeoning enterprise develop. The neighbor kids have a lemonade and cookie stand. They currently have an employee problem as their youngest employee just ripped their sign apart. The executive leadership team has flown in and repaired it. Collectively, they are doing a lot of word of mouth advertising, yet, it’s disjointed and lacks conviction. Just yelling about your product isn’t going to create a desire in the customers. The executive leadership has just taken the youngest employee in for re-training. He’s not happy. The manager (oldest employee) is off doing something so the rest of the employees are talking amongst themselves. All advertising has ceased. Executive leadership (parents) has returned to encourage the team to continue. They’ve also brought more capital equipment in the form of chairs to keep the employees happy. New marketing techniques are being tried in the form of dancing. It was a short-lived effort. The youngest employee is back, but still a dissenting member of the team. A prospect just rode by on a hoverboard and no attempt was made to attract him. Executive leadership is now putting employees on a break as the business isn’t enough to keep labor on the clock. I’m starting to worry, they are giving the employees on break some of the inventory to keep them happy.

I have found out their lemonade is Kool-Aide. It’s a low-quality product. So they are obviously entering the wheel of retail at the bottom end. At some point, they will learn that better product quality will attract more customers. Their pricing strategy seems on point as they are only charging 25 cents per cup of lemonade. I haven’t learned anything about their cookies yet. More observation is needed.

Youngest employee is now getting a chair. He seems much happier. I guess he just wanted to sit down on the job. Oh No! Executive Leadership is now partaking of the inventory. This doesn’t bode well. So far there has only been one customer who bought two cups of lemonade. She paid $4 for them. That is $3.50 over the retail price... OMG! This is the key to their long term success. I don’t know that I’d call it sympathy, maybe it’s just indulgence. If the team can work on this angle, they have a chance at being super successful.

Discussions about low customer flow are being had. It seems that 4:48 isn’t very busy. The rush hasn’t occurred yet. It’s the calm before the storm. Increased customer flow should begin soon now that they have put half the employees on break.

I have sat hear expecting them to reach out and ask for the sale but they haven’t. I’m thinking that they think I’m not their ideal customer which I assume is kids. I’m not even their secondary customer which is probably mom’s. I’m probably in their “everyone else” category.

I think I’ll go to investigate the products. Maybe I’ll talk to them about developing an advertising slogan or theme song.

More entrepreneurial updates soon.

Lemonade stand update: My recommendations on a theme song were well received. “We’ve got lemonade, yes we do, We’ve got lemonade, how about you?” Is now chorusing across the neighborhood. Their first rush has arrived, four kids partaking of lemonade and cookies.

Cookie evaluation: The cookies were made from scratch yesterday. I encouraged them to promote that when talking to their prospective customers.

I purchased lemonade and a chocolate chip cookie. Both were excellent. Well, as excellent as Kool-Aide lemonade could be.

The team is now doing cartwheels in the front yard. They’ve added entertainment to their marketing efforts. We’ll see if that works.

I am a bit disheartened as I’ve seen several people in cars just drive by without stopping. I am of the opinion that you always stop at lemonade stands. This is to encourage young entrepreneurs to keep working for success.

Final update: After their rush was over, they closed shop for the day. They came over and offered me their remaining 3 cookies. I graciously accepted. It’s a great feeling to be rewarded for the marketing consulting I provided. I consider this payment as barter so I won’t be reporting it to the IRS…"

It was fun evaluating the events from a business perspective. I hope you enjoyed the adventure as well.

Jay Burgmann

Founder

Shockwave Marketing Systems

#startup #analysis #local #marketing


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