By Renata Arauz-DeStefano WG’17, Founder of Mwayi
A couple of weekends ago, I, along with 26 other founders or founders-to-be, drove off into the woods of Maryland for a 3-day retreat organized by Penn’s student-run Founders’ Club.
The retreat was an aspiring entrepreneur’s petri dish—from long, meditative walks along the shores of the Chesapeake Bay to board games designed to spark innovation, we were surrounded by the great ideas of others or the opportunity to discover our own.
Coming away from the weekend get-away, I felt both refreshed and energized. I got back to Philly exhausted, with a few new faces to call friends, and with a to-do list that spanned pages.
So, to solidify my key take-aways, and share them with a wider audience, I decided to summarize them below:
- Authenticity is priceless – Coming from a business school environment I, for one, tend to get caught up in having accurate projections and a convincing go-to-market strategy. Stephan Jacob G’11/WG’11, COO and Co-Founder of Cotopaxi, reminded us that while these things are important, they won’t make up for a lack of passion and a deep-seated, emotional conviction of your product or service’s worth.
- Brands can be built on more than just performance – Another key lesson I took away from Stephan’s talk was that firms can—and do—make decisions to build brands on things other than performance. In the case of Cotopaxi, he and his co-founders made a conscious decision not to market their brand based on performance alone. Instead, they sought a more unique way to grab people’s attention. Their winning strategy? Embed stories into their products and empower customers to tell the Cotopaxi story for them.
- Start raising money before you start raising money on a crowdfunding site – Call me naive, but I thought crowdfunding was one of the first steps in launching a business. I never would have imagined that a typical budget for launching a crowdfunding campaign was upwards of five-thousand (including about two-thousand each for a decent video and a PR firm, and one-thousand for a strong graphic design team). Now, my future self will (hopefully) consider that to be a drop in the bucket. My current aspiring-founder-and-broke-graduate-student self, however, was shocked. But, better to be armed with this knowledge before taking the dive into the crowdfunding scene!
- Not all crowdfunding sites were created equal – Well, maybe they were, but they certainly aren’t now. An insightful presentation by Harry Du, fellow Penn graduate student and Head of Operations at Fitly, highlighted the fact that entrepreneurs need to analyze the pros and cons of different crowdfunding sites. For example, he noted that Kickstarter users are primarily (70%) men, and that most funding goes to game-related enterprises (https://www.kickstarter.com/help/stats) . On the other hand, Indiegogo has more traction with women (42% of funders) than men (58%) (Source: workshop presented by Harry Du). Thus, it’s a valuable use of your time to take your customer segmentation one step farther, and see which crowdfunding platform will connect you with your intended demographic!
- Pricing is both an art and a science – For early-stage entrepreneurs like myself, setting prices can be intimidating. With so much on the line, we go in circles trying to identify the “best” way to determine the “right” price. Leaving the Founders’ Retreat, I learned that, first of all, there is no “best” way—each method has pros and cons. Moreover, in addition to the more commonly known cost-plus (more art) and conjoint (more science) analysis approaches, I did leave with a new tool to add to my toolkit: heuristic scoring. Combining both art and science, heuristic scoring takes an integrated view of pricing, incorporating consumer behavior/preferences, your competitive landscape, your economics (target margin, etc.), and category dynamics (such as inventory levels, etc.). By collecting a diverse set of data and weighting each indicator according to its relevance, entrepreneurs are able to hone in on their most advantageous price. For a more detailed overview, check out this McKinsey article.
I think I’ve now reached the limit of a readable blog post, but I think the fact that I could go on demonstrates the value of the Founders’ Club and the success of this retreat. If you’re a Penn Founder, be sure to register here to stay up-to-date on future Founders’ Club events! Or [warning: shameless plug coming up], if you’re just curious about the entrepreneurial activities that I’ve been up to, head over to mymwayi.com and leave your e-mail address to stay tuned!
Bio: Renata is a Wharton MBA second-year and an aspiring social impact entrepreneur. Prior to Wharton, she spent four years in the microfinance sector, both in Latin America and in Africa. She will be launching her start-up, Mwayi, a fashion social enterprise, later this semester and will be joining Bank of America Merrill Lynch as an Investment Banking Associate after graduation. Stay tuned at mymwayi.com.