- Entrepreneurship Project - Summary
In this project, we spent 2 weeks iterating a business idea using the Business Model Canvas, analyzing micro/macro market, industry and team strength and potential using frameworks found in John Mullins' The New Business Road Test. We then tested the assumptions behind our business model from various creative angles in order to develop a Minimum Viable Product. We then took our MVP and built it into a pitch for a panel of venture capitalists.
Our business model started with a social issue that each person in my group was personally affected by- lack of employment opportunities for Tibetan refugees living in refugee communities in India.
I think our first pitfall was to fall into the trap of "needing to scale"- we automatically assumed that we had to design our model from the outset to be able to scale impact beyond the Tibetan refugee community. While thinking about scalability/replicability isn't necessarily wrong, I think by focusing too much on that idea we missed out on some great localized business models for employment generation/vocational training.
Our second pitfall was assuming we had to be a for-profit, which I think also caused us to miss out on some interesting potential non-profit or hybrid models.
We moved away slightly from the unemployment issue, and decided instead to focus on Tibetan artisans (and, later, artisans from other low-income communities), who are often considered even by locals as a forgotten community. Artisans are being undercut by mass produced fakes being sold in China; and worse they are forced to go through middlemen to get their products on the streets. As a result, they lose out on significant margins.
We wanted to connect artisans to a global online e-commerce platform, and we knew this had been done before by non-profits for other communities/geographies. The models we had seen (with a few major exceptions), however, failed to reach a very large audience- their consumer base appeared to be very niche, referred by word-of-mouth and the limited marketing of their brick-and-mortar locations. 10,000 Villages, for example, e-commerce is the cheapest way to sell their items but yet they only sell a small portion of their items online. Other platforms, such as GlobeIn didn't vet and train artisans as carefully as we wanted to. We had developed a training package for artisans that would, over time, empower them to start and run an e-commerce business on their own- with the specific education about how to cater to market preferences (since they had been cut off from direct access to the market by middlemen).
The specific market we wanted to target was the Etsy market, a market that has a knack for high-quality handmade goods. We wanted to basically create the platform and supply chain that could be potentially sold to Etsy to be included on their platform as the "social impact" side of their business.
In other words, we wanted to be what this is for Overstock.com.
However, when I modeled our financial projections and ran scenarios (as an entity independent of Etsy), I realized the sheer scale required in order to be profitable (and attractive to equity investors). To produce enough to be profitable by year 3, we would have to make a risky assumption that our quality control, training, and supplier vetting/management processes would be replicable rapidly and that we could work with well over 100 artisans at a time. From talking to smaller-scale competing companies and non-profits, we knew that this would pose a major quality control challenge. To move forward, on-the-ground research and a pilot would be necessary in order to inform possible innovations to overcome this hurdle.
Overall, I thought it was a very educational experience and we had certainly selected a relatively challenging but fun idea to play around with. From a strategic point of view, we realized the importance of strategic product and service differentiation and also the unique challenge of competing with other e-commerce businesses for attention.
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