4 Millennial Misconceptions About Entrepreneurship
'Tis business plan competition season once again.
This time of year, I spend lots of time traveling around the country judging business plan competitions at colleges and universities. The participants are either undergraduate or business school students who form "teams" and compete for cash prizes or (sometimes) face time with me and other influential people in the entrepreneurial community. Given the age demographic, most participants are millennials or members of Generation Z who have had little or no exposure to the business world outside of the classroom (except maybe for binge-watching "Shark Tank" episodes).
When you do as many of these as I do, you see lots of teams making the same mistakes over and over again. Here are the most common:
--Worshipping the consumer but forgetting the vendors.
Being students, team members focus their business plans on what they know -- life as a student. I can't tell you how many times I have seen the following plans: a smartphone app or peer-to-peer platform that will help students get the lowest prices for their textbooks; an on-campus takeout service that will provide fresh, healthful locavore food to students on demand; and an online bulletin board to help students socialize with peers from different cultural, ethnic and religious backgrounds.
I have no doubt that these students know their markets better than I do (yes, I was a college student once, but it was back in the Paleozoic era, when you pinned a note up on a corkboard if you had a textbook to sell), but they give no thought whatsoever to motivating their vendors.
Why would a textbook publisher that releases new editions of popular texts every year, precisely to discourage aftermarket sales, go along with a scheme that would reduce its profit margins?
Why would a university (or its labor unions) tolerate a student-run takeout joint on campus, which would compete with its own food service operations?
What types of companies would buy advertising on the online bulletin board, and why?
Too many young people simply assume that advertisers, suppliers and vendors act out of altruistic motives -- an illusion easily and quickly cured by exposure to the real world.