- This game is telling me that we cannot afford
a coffee machine and that instead
I can offer him a $2,400 bonus.
I think I'll take the $200 out of my pocket
and buy a really good coffee machine and call it a day.
(upbeat music)
I'm Sherry and I'm an entrepreneurship professor
and media executive.
I'm a producer as well as a production head.
I've run companies, I primarily focus in animation
and kids although I've done quite a bit
of primetime animation, as well.
I was the original producer
on both "The Simpsons" and "Family Guy".
I helped launched the Cartoon Network
with "Dexter's Laboratory", "Powerpuff Girls",
"Johnny Bravo", "Cow and Chicken".
Well, I think I definitely have the experience
and the skill set to be able to build
a business and run a business.
The question is, how realistic is the game?
All right, let's do it.
Start a new game, wants me to name my startup.
Well, we're gonna call it Super Startup.
I have to configure my CEO to get started.
Ms. CEO.
And now I have to choose whether she's
a manager or an accountant.
I'm going to choose the manager,
because it's very important to manage your people.
Now, I have to create a website,
and it's either a social media one,
a shopping platform, or a streaming service.
I'm gonna go ahead and do a social media one.
I think we're going to call it Latergram.
Select whether you want an investor
or take a bank loan.
I'm definitely gonna go with the investor mode,
I'm more comfortable with that route.
An investor is potentially a strategic investor,
they can provide you with some resources,
they like to see you grow.
As opposed to a loan, which is just a strict
here's your money, pay interest on it starting now.
"Hi there, nice to meet you.
"My name is Pam and I'm your new advisor
"from Johnson Invest."
An investor is gonna want to put somebody
in your company to make sure their money is protected.
"Every time you complete a milestone,
"a payment will be made instantly."
I'm gonna go ahead and take the building
that they recommended.
You wanna make your investor happy.
It's an office that allows ten workstations,
that seems like a good size for me
at this starting stage.
So, milestone one is now completed.
I don't think an investor is going to
hold up money until you get rent.
"Next, we need to get you started on a desk."
Wow, this investor doesn't have
a lot of expectations here.
Purchase menu, and we're gonna buy a beginner desk.
Ms. CEO, which is presumably me,
we're gonna select it.
Milestone two is now completed.
So, now the CEO is $55,000 in.
"We're now ready to hire some employees.
"Click you CEO, if not selected already,
"to headhunt and to hire your first employees
"according to the next milestone
"in the top right corner."
So, on a social media site I would presumably
need developers to build the application itself.
I would also need to hire a team
that really understood the market place
and what kind of features we need to build.
I would need to hire marketing people
to go out and sell advertising,
which is how we would make our money.
So, we're gonna go with developer first.
So, as a CEO of a startup, you have
to wear many, many hats.
You have to be a recruiter, you have to be HR,
you have to be manager, you have to be everything.
Okay, I have a candidate here.
Looks pretty good, I can negotiate salary with him.
As a startup, you can't pay huge salaries.
But, what you can offer employees in a startup
is stock options, as the company succeeds
that they will continue to grow with the company.
So, since he's a beginner level guy,
I'm gonna offer him $5,000 a month.
Sean came back to me, counter offered
at $5,700, I think that will actually
work with our budget, so I'm gonna
go ahead and do it, 'cause you want to make sure
he's happy and doesn't feel undervalued.
So, I'm gonna hire my designer next.
Okay, so I have two candidates so far,
I'm gonna wait for a third to kinda decide
who I want to hire here.
I think I'm gonna stop this recruiting process
and I'm gonna go with Vera.
She's a beginner, but her speed is better
than the other beginners.
Since she's also going to be a team leader,
we're gonna offer her $5,400.
So she came back at $6,200.
So, we're gonna move on.
That's gonna be above our budget.
We're gonna go with the next fastest guy,
try to hire him for that price
and see how it goes.
Blake accepted our offer at $5,700,
so we're gonna go with that.
So, we're gonna have Ryan start
with the blueprint and then move
onto the wire frame, and then he'll create
the graphics and then the user interface.
And now, we're gonna go to Sean.
I now have milestone three completed
'cause I've hired my people.
I'm gonna have him build the UI component first,
and then build the back end component
and that'll get Sean plenty busy for the moment.
"Next, we need to do some researching
"in order to get started with our website."
So now I need to add a landing page.
"To upgrade the landing page,
"you will need your employees to produce
"the required components," okay.
So we now have a landing page,
but it looks like I need to upgrade it.
We're a little slow off the start.
Obviously, this is very typical
in a startup, we have to get people
used to what the goals are and to perform
at optimal level.
You have to listen to your customer
that is probably the single most important
lesson that an entrepreneur needs to learn.
We have beginner employees, so they're just
not quite as prolific and fast as they could be.
So we're not gaining users as quickly as we could.
Okay.
All right, we've now completed
milestone number five, so we're getting there.
"Wow, your new landing page will definitely
"make people excited about Latergram.
"All we need to do is a bit of marketing
"to get some traffic."
We are gonna go after any gender users
and we're gonna create our campaign,
because we want both.
Audience reached is 7%, my conversion rate is 5%.
That's actually not bad at all,
so this is with $1,000 budget.
Because it's getting a nice conversion rate,
I'm gonna go ahead and double my budget
so we can get lots of users.
"Now, it's time to get back to our website
"and add more features."
So again, it's sort of cyclical,
you get more people onboard
and then they'll tell you what's missing
and what they don't like about it.
So in order to upgrade my features,
I need more experienced developers
and I need to boost up my development team.
So I'm gonna add another desk,
and I'm going to hire a researcher
so that we can keep getting more points to hire with.
Obviously, you have to understand your market
and you have to understand your customer.
But, that's not always done by a researcher.
Often done by market knowledge
with the people you hire or your understanding.
So, we're going to hire Shane
and because he's a lead developer,
we're going to offer him $9,000 per month.
So, he accepted, excellent.
Oh shoot, I over offered him.
I thought I was dealing with a lead developer.
That would never happen in the real world, obviously.
I think there are some elements to this
that would teach you how to run a business.
Unfortunately, if this was a real business,
the very first step you would need to do
is find your investor.
What's really important is progress.
We took a little bit here, as you can see
on this line, to get our team up to speed,
to get them to produce the necessary elements
for us to even launch, and to be able to upgrade
to the point where users now like coming on board.
I'm gonna go ahead and bet on the fact
that we've now increased our functionality
four times, and so we really need to get
the word out there, we're ready for more users.
So, we're gonna go ahead and spend
way more money on marketing.
We went from 20 to 160 users.
We got a little bit of a problem here,
which is totally expected
and totally part of the game.
You have your employees, they're working
at full capacity, you have demand
from the marketplace, you have to continually
upgrade your features.
In the meantime, you have to hire more people
in order to add more functionality.
I'm gonna add a lead developer now
so that we can start getting a little bit more help.
Our lead developer is going to sit over here.
So, we're gonna task our lead developer
with what we need in order to move forward
most efficiently.
We've hit a little bit of a scary time
in the company here.
Our money is running low.
As soon as we hit a point in the business
where they've produced the functionality
for the next upgrade, we will be able
to get more money from the investors,
we'll have hit the next milestone.
So, this is very exciting, we got to the point
where our landing page can now actually
be more than just a landing page,
we're adding a comment functionality.
'Cause our developers have been working
around the clock and getting things done.
Now, we're going to add functionality,
so we hit milestone number seven.
Woo hoo, we just go more money, so we skated by.
"Great work, your first real feature.
"And we've noticed the smiley on top
"of the corner of the feature tab.
"This is an indication how satisfied your users are.
"Currently, they're not too happy,
"because your new feature is too low level."
So, this is not unusual.
So, you hurry up and you get the feature out
and the users don't like it.
"You will need to hire a new lead developer
"in order to create the required module."
I have a problem my lead developer,
the lead developer seems to go home
whether or not the task is done.
The company's hanging by a wire here
and needs that functionality to be completed.
She's 97% completed and decided to go home
before finishing up her work.
Not only that, but she does seem
to be working very slowly,
so obviously we need to have a talk
with Lydia Gonzales.
Good news, bad news.
The good news is our marketing campaign
and our new functionality is working
and we have a lot of new users.
But with that, comes the burden of having
to host them properly and our system
is going crazy, and we're at risk here.
So we hired a system admin.
He's working on the back end
on the hosting side of things.
'Cause God forbid, if that busts up on us,
then that means the whole site goes down.
Meanwhile, I'm noticing that I've got
a couple unhappy employees who start
coming in later, they're not performing
at very optimal capacities.
You can't ignore your people problems,
because that is something that you
depend on in order to function in order
to reach your goals.
So, Sean Hampton, who's the designer
we hired very early on, seems quite unhappy.
He's only at 56% level.
His demand is that we go to a seven hour workday,
that we get a coffee machine,
that we get him a small retirement plan.
Coffee machine, great way to get employees happy.
Small retirement plan, we're just a little bit
too early of a company to be starting retirement
plans, we're barely making it by
with the money that we have.
And seven hour workday, very unreasonable in a startup.
If you want a seven hour workday,
do not work in a startup.
Startups are notorious for long hours,
we all need to pull together to make this happen.
This game is telling me that we cannot
afford a coffee machine, and that instead
I can offer him a $2,400 bonus.
I think I'll take the $200 out of my pocket
and buy a really good coffee machine
and call it a day.
Aha, upgraded one more time.
We can add functionality on the server
and that got us out of hot water
for at least a moment.
Looking at our cash flow over here,
we're at $8,100, this isn't great.
We're gonna have to get to the next milestone
pretty quickly, that's predicated
on us reaching a 75% satisfaction rate
on our comment page.
Satisfaction is at 70%, we need to be at 75%
so we're not too far.
Here's some good news, looking at our stats,
we are at 73,000 registered users,
89,000 potential users, and our valuation's
gone up to $600,000.
And considering we just started,
this isn't so bad.
As soon as we get more money,
we'll start increasing the marketing budget again.
Very low on cash and I need my people to perform.
I am literally one widget away from being able
to upgrade to where I'll get more cash.
Working against a clock here,
hopefully we'll make it happen.
He is a very fast guy, we did make
a great hire with him.
We have $798 left in the bank,
this is not a good place to be,
never would be realistic in a company to be that low.
And, we made it guys.
Woo hoo! (laughs)
Here it is, we launched our new feature,
we're at 75% satisfaction rate,
and we got more money.
So we're now back up to $121,000.
This was a lot of fun.
It's a great game to kinda show
what really goes on in a startup
and all of the different elements
that you have to deal with, or at least most of them.
But, this really did simulate well
the interaction between having to hire people,
having to manage them, having to get them
to be effective, and how they're efficiency
directly effects your business
and your ability to survive in those
early days of a startup.
(upbeat music)