Rising to a Pop-Up Challenge: Smith Online MBA Students ‘Experience Entrepreneurship in a Tangible Way’
On a recent evening Vince Sines spilled a glass of water bedside. Now, he and three partners are modifying NightWater, a special, straw-equipped water bottle that clamps to bedside furniture. Initial targets are hospitals and nursing homes, followed by households. This “zero to market” effort is a product of a three-week entrepreneurship exercise, culminating in a “two-hour challenge,” via the Smith Online MBA Program at the University of Maryland’s Robert H. Smith School of Business. Sines, with classmates Issac Meyer, Allison Urrfer and David Deitsch, created their prototype by applying 3-D printing, prior business connections, a minimum viable product (MVP) strategy and to a solution for a seemingly mundane problem.
The late-November/early-December challenge involved class sections taught by Smith professors David Kirsch, David Kressler, Azi Gera and Brent Goldfarb. About 140 students broke out in teams of four. The challenge also illustrated why AACSB International president and chief executive Tom Robinson recently called out Smith’s online MBA program, in the Wall Street Journal, as a “great example” of a high-touch program in that it offers intense levels of student interaction and engagement.
Varyingly the Smith students experienced two distinct types of pop-ups. One is profit-focused and responds to predictable (food truck at a work site), and-or temporary, seasonal (Halloween costume store) market opportunities. The other type is designed as a market experiment applying a “Minimum Viable Product” approach to help an entrepreneurial team determine the extent of demand for their new product or service.
All said, the students engaged in “very short-term businesses somewhere in the middle,” says Kirsch. “We measured (and reward) profit, but our intended outcome is very much "knowledge."
Goldfarb says the students “got out of their comfort zones and actually experienced entrepreneurship in a tangible way.”
“Some of these plays were online – like NightWater – and prompted students to exercise the Minimum Value Product strategy (which has worked for the likes of Facebook and is being applied in Amazon Go),” he says. Others, like Colin O’Brien’s “Feds Shop for You,” were services (in the vein of the seasonal-temporary pop-ups), and all had $5-per-founder budgets.
“Developing our idea in a limited (three week) time-frame with a large number of deliverables due in short order was extremely difficult,” says O’Brien, a FEMA program manager who says his team’s holiday-shopping service pulled in nearly $1,900 during its two hours. “It forced myself and my partners (Anne Hunte, Seth Baab and Beau Crabb) to be especially organized and develop a broad and flexible framework for the company.”
But Kirsch says it’s significant to emphasize the students are not being trained to run pop-ups: “We are using pop-ups to allow them to experience fundamental entrepreneurial processes that can't be taught any other way, and by so doing, they acquire KSAs (knowledge, skills and abilities) that they will be able to apply in the future.”
O’Brien echoes Kirsch: “I work in small business for one of my jobs and I developed new products for my company, but it was always a ‘make it up as you go’ process. The problem was that there was always a lot of wasted effort and resources.” O’Brien says. “Professor Kressler worked to help me understand the process from the product brainstorming to implementation, and I believe that will make a world of difference in my professional life,” O’Brien says.
Like Thefacebook and Amazon Go
Sines with NightWater, meanwhile, tapped into a strategy (Minimum Viable Product) that’s “emerging in entrepreneurial circles of late,” says Goldfarb. (Business Insider says Amazon Go is a minimum viable product in that it’s slated to open in 2017 as single location, downtown Seattle with just ready-made food staples like bread and milk and snacks… See how it works here). The idea, here, is based on rapidly building a minimum set of features that is enough to deploy a product and test key assumptions about customers’ interactions with the product. “Pop-ups reflect this trend… Also think of [Mark Zuckerberg’s 2004 Thefacebook creation as a universal directory for Harvard students] as an early example,” says Goldfarb.
For additional historical perspective, Kirsch refers to a 2009 study he coauthored with Goldfarb and Gera, through which they found “business plans are virtually useless.” The Minimum Viable Product strategy emerged, Kirsch says, as part of lean startup methodology developed by Eric Reis and Steve Blank, among others, in response to “the failure of traditional, linear business development methods in the startup context,” and “would-be entrepreneurs would write business plans that no one would read and that didn't even help the entrepreneurs figure out what they should do,” says. “This was a particularly acute problem for engineers who had ‘built a better mousetrap’ but were ill-equipped to answer the question, ‘Does anyone want to buy a better mousetrap?’”
Sines applied this insight to his product. Through a quick social media survey, he found that 92 percent of respondents take water to bed. Subsequent “customer discovery exercises revealed a potential market in the medical industry,” he says. “A hospital director, nurses and geriatric physical therapists thought a bedside hydration device for recovering patients with limited movement is needed and a great idea.”
Sines, who works as a senior project manager for an Ohio-based material handling solutions provider, also tapped into his professional network, getting 21st Century Group and Advanced Pneumatics Corporation to help develop and produce the units. “They provided the material and made the 3D prints in exchange for advertising space on our website.
The pop-up challenge result? “We sold 14 units in two hours for a $270 profit,” Sines says. “Our price point was $19.99 and we passed on the cost of shipping. Our only COGS (cost of goods sold) was the PayPal fee for each sale. Additionally, we bought the www.mynightwater.com domain for $1.17,” and team-member Deitch created and placed the website on a server he owns, eliminating hosting fees.
Post-challenge takeaways? A redesign is needed, Sines says. “3D printing is not an efficient means of producing units in quantity at a price that will drive demand.” The plan also includes lowering the cost of each unit by moving to an injection mold. “I'll implement a sleeker design and improve on the retractable reel straw action, he adds. “This will greatly reduce the manufacturing time as well.”
Sines says he also will seek funding, a sales staff, and continue with customer discovery. “I'm also in the process of protecting the idea with patents.” Noting hospitals and nursing homes as primary targets, he says he envisions a unit next to every patient recovering from surgery or intense medical treatments. He also aims for NightWater finding its way into most households. “Long term, we will market them to the whole family in an array of colors and potentially silk-screened with your favorite team's logo.”
Broadly, Smith’s online MBA students who participated in the pop-up challenge “developed a functional understanding of how to effectuate a business idea into an action plan,” says Gera.
Goldfarb says the students also improved their organization and communication skills, “and realized that it is ok to leave one’s pride at the door when fighting for a good grade in school.”
Says O’Brien: “The hardest part wasn't the short timeline, but rather, convincing people to part with their money for a convenience. “The phrase ‘ain't too proud to beg’ certainly came to mind when soliciting sales.”
For more information about the Online MBA program at Smith, visit: http://www.onlinemba.umd.edu.
- Greg Muraski, Office of Marketing Communications