Here’s a really valuable lesson: if you had $5 and 2 hours to make as much money as possible, how would you do it? That’s the question that Tina Seelig, a professor at Stanford, asked her class.
The nominal lesson that Seelig gains from the experience is that that one of the keys to entrepreneurship is to be flexible and think outside of the natural constraints of the problem. She split the class in to three groups, and each set them about their challenge:
One group employed a loss-leader strategy: they setup a free bike tire pressure testing station on campus, and if your tires were flat then they offered to pump them up for a small fee.
Another group used an arbitrage strategy: they acquired reservations at popular restaurants, then sold them to people waiting in line.
But, the group that made the most money thought outside of the box: they sold a classroom presentation to a consulting firm that wanted to recruit students from their class.
Personally, I see a totally different less in this experience: the understanding that the asset is the audience.
I was making a similar point last week when I talked about how important it is to get your product in front of the right customers:
…once you know your potential customers, how do your reach them? Effectively, this is sales and marketing. Typically, product development types detest the marketing types as slick, do-nothing, blowhards. But, it turns out, they have a pretty tricky job which is, “how do I put my product in front of my potential customers in a cost-effective way”. Turns out this is easier said than done.
The bottom line is that when you have an audience what you have is a set of consumers, and when you have a set of consumers there is inevitably a set of sales and marketing people who will pay to get in front of them.
Of course, this is not revolutionary: it is the fundamental premise by which media companies like Cheezburger work. Media companies offer content so that an audience is attracted to their broadcast, and then sell visibility to that audience to advertisers. However, and this is why I’m writing this post, it’s an asset that is often overlooked.