Customer interviews make students anxious because they fear approaching strangers.
It’s our job to build their customer interviewing muscle.
Like the Make Entrepreneurship Relevant Slides, you can use these slides to get your students excited about interviewing customers. If you’d like to lower student anxiety around customer interviews, try this series of experiences:
Once your students have a good sense of what to ask during an interview, they’re ready to . . .
WALK: Interview Classmates
Students should get comfortable interviewing in a low-stakes environment, so have them start by interviewing 2 – 3 of their classmates.
It’s common for students to feel awkward conducting their first interviews. Let them know the awkwardness is normal and that’s why you’re giving them the opportunity to practice. Reassure your students that the more interviews they do, the more comfortable they’ll feel.
Bonus: Having students interview each other means each student gets interviewed as well.
When students get interviewed, they experience how validating it is to have someone listen to their problems.
When students realize that it feels good to be interviewed, they discover they won’t be bothering their interviewees. That insight alone can reduce their anxiety.
Note: The goal of classmate interviews is just to practice interviewing – they shouldn’t be used for real business model validation. Have your students start their classmate interviews off with, “What’s the biggest challenge you have as a student?” and then let the interview flow from there.
Click below to learn how your students can RUN and FLY with their customer interviews!
RUN: Interview Family and Friends
After interviewing a couple of classmates, students are ready to try interviewing friends and family members. This step gives students a safe way to practice interviewing people who, like their customers, will have no idea what a customer interview is.
As homework, ask your students to interview 3 friends or family members for at least 30 minutes each. Their goal is to learn as much as they can about the problems their interviewees have encountered in the last week (i.e., “What have been the biggest challenges that have come up for you over the last week?”).
As with the classmate interviews, the friends and family interviews shouldn’t be related to the product/service the students ultimately want to launch. These are just practice interviews in preparation for . . .
FLY: Interview Customers
Your students are now ready for real customer interviews!
You’ll want to make your students know the right customers to ask for interviews, and how to ask for those interviews, but at this point, your students will have much less anxiety about interviewing customers.
Since we started implementing this progression with our students, we’ve seen a dramatic increase in our students’ interviewing confidence and the quality of their interviews:
“At the beginning, I was really nervous about interviewing but after getting feedback from my friends and family it’s, surprisingly, become my favorite part of the class!”
– ExEC Student
If you’d like any more help teaching customer interviews, including:
If your students get bored (or anxious) when you start talking about finance, you know what’s waiting for you:
Disappointing and unrealistic financial projections.
Financial modeling is incredibly difficult to teach in an engaging way. That’s why, in addition to our Financial Projection Simulator, we’ve developed a new game to play with your students that makes finance fun and memorable:
The game works in two phases:
Theory: Introduce a lightly competitive game that teaches students the core elements of a robust financial model
Practice: Using the same concepts they learned in the game, students create a financial spreadsheet for their own business model
Check out this quick demo / summary video of the Financial Modeling Showdown:
At USASBE 2023, considering the high level of competition among the Entrepreneurship Experiential Exercises (3E), we were ecstatic and honored that this exercise received recognition and place on the podium too!
STEP 1: CREATE TEAMS
The first step in the Financial Modeling Showdown is to divide your class into two teams. Before revealing what choices students have for their teams, you’ll want to make big deal out of the fact that these two teams are mortal enemies and “disagree on just about everything” with the implication that the teams may be political in nature or represent major cultural differences.
Then you’ll tell your students to pick which team they morally align with most:
Team Pineapple: People who believe pineapple is a perfectly reasonable pizza topping
Team No Pineapple: People who believe pineapple has no business on pizza
Tell your students you’re going to play a game to determine if pizza topping preference is a predictor of entrepreneurial success.
This lighthearted way to create teams is quick, evenly distributes students, and sets a fun tone which is especially helpful for financial modeling exercises.
STEP 2: OPTIMIZE PROFITS
Tell your students they can put their pizza toppings preferences aside for now because they are all now inventors of a new product:
They’ve created a solar-powered cell phone charging case and their goal is to bring it to market in a way that will result in the most profitable financial model possible.
Students will then answer financial questions about their new product via a Google Forms survey (e.g. “How much will you charge for your product?”, “What do you want your salary to be?”, etc.).
STEP 3: THE WINNER IS…
As your students answer the financial questions, behind the scenes, the survey is automatically averaging the responses by team.
That means, as an instructor you’ll get a report that says (for example) on average:
Team Pineapple members want to charge $29.42
Team No Pineapple members want to charge $42.10
…and this is where the competition begins!
“It looks like Team No-Pineapple wants to charge more for their product. Of course, the more you charge, the more revenue you can make, so I’d say say they’re winning at this point. Next, let’s explore what effect conversion rates have on revenue, and we’ll see if Team No-Pineapple is still ahead.”
And just like that, you’re using financial vocabulary in a way that keeps students engaged because you’re using simple examples and leveraging a competitive game mechanic.
You’ll go through each of the major elements of a financial model this way, covering topics like:
Customer Lifetime Value
Customer Acquisition Costs
Salary, Taxes, and Benefits
Real Estate Costs
And at the end, you’ll get to declare a “Winner.”
Or rather, you’ll get to demonstrate to students how hard entrepreneurship is to win. While one team will technical “do better” than their other team, it’s most likely that neither team will be profitable:
The game ends this way because we want to show students that:
Designing a financially sustainable business model takes iteration and experimentation.
Like everything in a business model, our initial assumptions are often wrong…and that’s why we do financial modeling!
Financial modeling is a tool to help them understand what assumptions they’re making about their business model that might set them up for failure.
If they begin modeling the finances for their own company, they’ll be able to see if they’re on the path to riches, or the path to ruin.
And this is the perfect segue for students to…
STEP 4: BUILD THEIR OWN MODELS
To apply the principles they learned playing the game, each student gets their own spreadsheet to model their business’s finances:
The results are financial models that are more realistic because students actually understand the concepts they’re based upon.
TRY IT THIS SEMESTER
If your students get overwhelmed by financial modeling, this exercise will help. Combining a competitive game with real-world financial modeling tools, students learn the core elements of a financial model in a way that keeps them engaged and results in realistic financial projections.
Get the Financial Modeling Showdown Lesson Plan
We’ve created a detailed lesson plan for the “Financial Modeling Showdown” exercise to walk you and your students through the process step-by-step.
It’s free for any/all entrepreneurship teachers. Please feel free to share it.
In an upcoming post, we will share exercises shared with our TeachingEntrepreneurship.org community by Business Model Canvas creator Dr. Alexander Osterwalder!
Subscribe here to be the first to get these in your inbox.
Missed Our Recent Articles?
Whether you are new to our community of entrepreneurship educators, or you’ve been contributing for years, we wanted to give you a list of the posts our community finds most valuable:
Improving Your (Inherited) Course. Inheriting an entrepreneurship course presents many challenges. Re-design the course and provide engaging experiences with this curriculum.
“When the P&L’s come out, students check out.” – Doan Winkel
We all face this problem when teaching the financial aspect of entrepreneurship. Students aren’t comfortable with the unknown, and often struggle with understanding the application of math or financial topics. This is a huge problem because financial modeling is such a crucial part of identifying and validating the business models students are working on.
So how do we balance creating a robust financial projection for a business model without overwhelming students?
Incorporating feedback as we develop engaging lesson plans, we’ve added a fun way for students to experiment with their financial model to our comprehensive curriculum.
The Financial Projection Simulator leads students through an experimentation process so they can find a financially sustainable business model. Along the way, they discover the most important elements of a rigorous financial projection:
Customer Lifetime Value
Cost of Customer Acquisition
Cost of employee salaries (including benefits & taxes)
Initial capital investments
Here is a quick overview of the simulator in action:
With a combination of default values in drop down menus and instructions for researching more detailed estimates, pilot students have reported this is a more approachable way to experiment with assumptions in their financial models. The simulator, “feels more like a game than a spreadsheet”, where they can quickly see the impact of their assumptions on the success of their business.
At each step along the way, we provide short, easy-to-understand tutorial videos so students understand what to input.
The format invites them to more deeply engage in learning about financial models.
No TAM-Based Estimates
ExEC’s financial simulator is also unique because it takes a strictly bottom-up approach to financial projections. Instead of largely inaccurate top-down/TAM estimates (e.g. “This industry is X billions of dollars and if we get Y% of it we’ll be rich”), which don’t take into account real-world difficulties and costs of customer acquisition, ExEC’s financial modeling is purely bottom-up (e.g. “Which channels will you use to acquire customers, what do you hypothesize your conversion rates will be, and how much will that cost?”) to give students a reality check on how viable their business model is.
Here’s more detail on how we approach this, and other areas of financial projections.
As mentioned above, instead of wildly inaccurate revenue numbers based on a TAM / SAM approach, ExEC students estimate revenue based on the product price and how many times per year a customer will purchase that product. This leads to much more accurate evaluation of a business model, and an approachable way for students to get started. As we heard from a pilot student:
“Even though it’s difficult to make our business profitable, this tool gave us ideas of concrete changes we could make in order to make it possible.” – UC Berkeley Student
We offer an extensive set of expenses for students to consider, all of which have suggested default values, as well as instructions on how to calculate more detailed estimates to tailor those values to their business model. We’ve found this combination of default values, with pointers for more information, to make financial modeling much more approachable – allowing students to ease their way in and experiment with different combinations, without overwhelming them.
We’ve tried to make the simulator as comprehensive as possible without becoming anxiety-producing, so your students can feel confident their projections are sound.
Cost of Customer Acquisition
Students are often unsure the best channels to acquire customers, and how costly those channels are. They will want to default to social media channels, but they often do not understand the investment it requires to effectively leverage these platforms. We provide significant guidance so they understand what CAC is and the costs of various channels.
We have done extensive research to offer accurate estimates for CAC from the most likely channels students will choose. These drop-down menus offer students two benefits:
They don’t get overwhelmed having to calculate complicated customer acquisition costs
They work with realistic estimates so the conclusions about viability are more realistic
Of course students can also calculate and enter their own Cost of Customer acquisition estimates into the tool to get a more accurate sense of their marketing expenses.
Here we offer an expandable menu that includes accurate salary estimates for a wide variety of the most necessary jobs for a startup.
The tool also automatically calculates benefits and tax information, which are two very important aspects students often forget that have tremendous impact on a financial model.
Real Estate Costs
As with every section, the simulator provides considerable guidance students can use to research particular markets and categories. Our goal is for students to understand the variety of financial inputs but also to understand where those estimates come from.
In every section of the simulator, we provide suggestions for ballpark costs, and also expandable menus with more detailed information and links to resources in case students want to dive deeper into a particular area.
The ExEC financial simulator gives students additional information in a variety of expandable menus, so they learn as they input their assumptions. One student mentioned:
“It makes it extremely easy to calculate various things. Helps you remember things that you may have forgotten.” – Northeastern Student
The power of this simulator is in the simplicity with which students interact with it, and the simplicity of the results. The ExEC Financial Simulator assesses the viability of a student’s business model as either red, yellow, or green. Students can very quickly see where they need to focus! In the example below, the simulator tells us the business model is not viable.
After working hard to provide what they think are accurate assumptions, most students will see red the first time they use this. Literally!
Students will feel disappointed that their business model is not viable.
How to WOW! Your Students
Bring a student up to the front of the class. Pull up his/her simulator on the projected screen. Walk through this example, live, in a couple minutes to turn a non-viable business model into a viable business model. Show your students in real-time how they can turn their business model from from red to green!
Students can quickly experiment by changing inputs to figure out how to achieve a viable business model. This leads to a powerful discussion in class about why they changed certain assumptions, and whether the assumptions are accurate.
Within minutes students understand how a variety of factors impact their financial, and therefore business, model! And it is fun!
This simulation lets students experiment with different revenue models very easily. This is important because it allows them to quickly iterate and identify a potentially viable revenue model in a rigorous way that doesn’t overwhelm them.