Over the last few weeks I have been running an interesting experiment in one of my classes. I gave each student $5 and told them to go turn it in to more. The project was evaluated on 8 variables/metrics.
- These eight basic metrics could just as easily be applied to any team, working on any business.
- These metrics may be hard to ascertain for some businesses, and are way too subjective in other situations;
- Yet these metrics may well be a much better guide to starting a business than many of the more highly specialized metrics that seem to abound.
8 metrics used to evaluate entrepreneurial skills
The project was evaluated on these variables; each variable is given a range of 1-5 with the extremes being defined.
Metric 1. Internal team dynamics;
- 1. Don’t want to do business with this team ever again … 5. Will name my kids after my business partners
Metric 2. Engage others in helping out with execution;
- 1. Did it all ourselves … 5. An international movement came together to make it happen
Metric 3. Utilization of public and community resources (space/tools/software);
- 1. Just used what we had … 5. Multiple community resource holders begged us to come again
Metric 4. Effectiveness of execution and repeatability;
- 1. We have no idea by what miracle it happened … 5. We can do it consistently and have trained others to do it
Metric 5. Were the customers open to doing more business?
- 1. Everyone told their friends to run the other way … 5. Lots of referrals and invitations to do more business
Metric 6. Was it profitable enough for the team to want to keep doing it?
1. Not even if this was the only way I could make money … 5. Michael Dell, Bill Gates and the rest of college dropouts got nothing on me
Metric 7. Was everything done to minimize risks?
- 1. I am just glad we are not dead or in jail right now … 5. Stakeholders, community and environment could not possibly be harmed by this project
Metric 8. Does any of this matter in a really long run?
- 1. In the long run, we are all dead. – John M. Keynes … 5. The impact of this project will matter even after this Universe is no more.
Analyzing the results
This has been a great success with students quickly exploring many real business ideas and one of them managing to get an $80 return on the money, while most made between $7 and $30.
More importantly, they learned a lot about starting a business, mainly that it’s not a pretty theory, but rather a matter of doing something others will pay for. For the next round I have tightened up the requirements and suspect they will do even better next time.