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.
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