“Here’s $5. You can’t do anything illegal. You have a month. Create as much profit as you can,” the class of Entrepreneurship and Innovation Management 310 was told by its professor, said Melissa Morris.
Morris, senior in business management, was stumped. Given just four weeks and $5 to start a business, she and her group needed to brainstorm.
“I thought, ‘Oh, crap,’” Morris said. “I’m not super creative. It’s really difficult to start up your own business, especially if you don’t have funds.”
Andreea Kiss, assistant professor of management, gave her Entrepreneurship and Innovation Management 310 students an unconventional assignment. The Value Creation Challenge was designed to show students that the entrepreneurship of jump-starting a business often originates with limited resources.
“It’s a good exercise if you want to emphasize some of the elements related to the entrepreneurship process, such as opportunity recognition and exploitation,” Kiss said. “It also offers the students the opportunity to practice on a pitch, to deliver a pitch and to see what works and what doesn’t.”
Groups composed of four or five students had the option to create a business with a profit goal or one of social value to donate to a charity of choice. The requirement was to create as much value as possible in one month with a starting capital of $5, provided by an initial investor: Kiss.
Teams that decided on a profit project were required to pay back the initial investment. Kiss asked that her initial investment was donated along with the rest of the money raised in social cause driven projects.
Morris’ team decided to take the social route with their project by raising money for the Pappajohn Center for Entrepreneurship. Deciding not to use the initial $5 investment, the group survived off of local businesses in an agreement to advertise to their class with their presentation.
“It’s easier to ask for money when you can say you’re giving it to charity,” Morris said.
Nearly $400 was raised for the center to help benefit other student entrepreneurs who win business competitions sponsored by the Pappajohn Center.
Kiss said she was a little surprised that so many students took on the social route and not the financial route for their business.
“I think this is a reflection of the fact that I don’t have only business students in my class," Kiss said. "I have a mix of students. Half of them are business majors, half are coming from design, engineering or agricultural.”
With diversity in age, gender, cultural background and major differences purposely in mind, Kiss hoped to show students how valuable a diverse team can be.
“Most entrepreneurship research shows that a diverse team of entrepreneurs actually performs better than a homogenous one because they can build on their diverse experiences,” Kiss said.
Various entrepreneurship classes across the country tackle this assignment, but in different lengths. Some are challenged to create a business within a week or even a day. Kiss said she’d hoped giving students more time to develop their idea would result in less students "who hated [the project].”
I was greeted with a quiet sea of students when she first introduced the project, Kiss said.
“I think it was a reaction of surprise that they actually had to do something,” Kiss said. “It’s not just a written project or presentation. It’s not collecting simple data from fields.”
The assignment was purposely left ambiguous to demonstrate how any true business venture embarks: with limited resources and ethical, time, space and financial constraints.
“The very essence of entrepreneurship is to be able to work under conditions of ambiguity and uncertainty with limited resources that you have to use creatively,” Kiss said. "That’s what I tried to emphasize with this [assignment]."
This vagueness was one thing Kiss noticed students struggled with. Other big struggles teams encountered were difficulties in making decisions on business ideas and assigning roles within the business and identifying the target market. Teams that were decisive and specific were the most successful, Kiss said.
Morris said the ambiguity of the assignment was challenging for her personally, but that the project was useful and a good representation of what starting a business really looks like.
“I really want to work for a nonprofit organization, so learning how to start a business or come up with ideas or create funds … would be helpful for a nonprofit,” Morris said. “Employers always want to know you can work in a group and work well in a group and if you need to take a leadership role, you’re willing to put yourself up.”