NFTE Entrepreneurial Case Study Marbles: The Brain Store

Transcription

1 Notes: NFTE Entrepreneurial Case Study Marbles: The Brain Store Student Name: In 2008, former high-school teacher Lindsay Gaskins was looking to start her own company, but she wasn t sure what type of business she should start that would be successful. She had some good ideas, but she wasn t sure which of her ideas would actually be a good business opportunity; an idea that fills a customer need or want in the market. In order to help her come up with a good idea, she worked with a business incubator named Sandbox Industries to help develop an idea. At Sandbox, Lindsay was able to spend time with other entrepreneurs brainstorming and evaluating business ideas. (Incubation Process, Sandbox Industries) To help entrepreneurs be at their most creative during the brainstorming process, the following rules were put in place: Be open minded Study the innovators Read the papers Create a creative environment Ask a lot of questions Do research Visit creative spaces (business & artistic) Turn off cell phones Institute no bad ideas What techniques are helpful for you when you are trying to brainstorm or think creatively? STOP 5

2 One of the other techniques Lindsay and her group used to identify business opportunities was to identify a target market segment first, use primary research about that market to come up with business ideas, and then use secondary research to evaluate the business opportunity. The questions they considered included: What are the growing demographics in the US? What are their pain points (or things that are problems for them)? The group then sent out surveys to friends and families that fit into the demographics they were targeting to get their responses about their pain points. After receiving numerous surveys answers back, one response about pain points gave Lindsay the inspiration she needed for her business idea: I go to the regular gym all the time, but what I really need is a brain gym. My brain is not working like it used to. Karen s Mom, 58 If you were Lindsay, what type of business or businesses would you consider starting based off of this response? Why? STOP 6

3 Lindsay had used the pain points survey response to come up with an idea a brain gym! A place where aging and elderly people could work out their brains using mental exercises, as one would work out their muscles at a gym. Now that she had an idea, she needed secondary research to back up her business opportunity. As luck would have it, Lindsay was able to find a great deal of research on new discoveries around brain fatigue. Her secondary research found: After confirming through research that fighting off mental decline, brain fatigue, Alzheimer s, dementia, and ADHD was a growing concern for aging Baby Boomers and elderly people, Lindsay decided to move forward with her brain gym idea. She would set up a store where people could buy brain games that worked out different parts of the brain. In May 2008, she set up a store in Woodfield Mall, one of the biggest tourist draws in the State of Illinois, to test if her idea was a good opportunity. To save on high-rental costs and longterm leases, she rented a kiosk at the mall instead of a store front. Continue 7

4 Lindsay opened her kiosk and had a ton of customers check out her products. Many of these customers expressed interest in products, and thought it was a great idea when she talked about it. However, there was one problem: NO ONE BOUGHT ANYTHING! Lindsay had spent a lot of time researching her idea, and it seemed that it was a good business opportunity. However, she needed to figure out why nobody was buying anything from her store If Lindsay had found research that people were interested in her product, why do you think Lindsay s first store was not successful? If you were Lindsay, what would you do in this scenario? How could you find out from customers why they weren t interested in buying anything from her store? STOP 8

5 Lindsay then returned to her business plan to figure out what could be wrong. Eventually, she decided to take a closer look at the target market segment she had originally identified: aging Baby-Boomers and Elderly people. Maybe there was something wrong with her identified target market? To find out why it didn t work, Lindsay went back to doing a great deal of primary research interviewing and surveying people directly to find out what her target market thought about her product. Her research methods included: Spending time talking with customers Asking customers and potential customers questions about their experience Surveying customers who DID buy something Doing more secondary market research Reviewing the data carefully and be willing to change the idea based on the research (Continue) Copyrighted for The Network for Teaching Entrepreneurship,

6 After doing further research, Lindsay found that the demand for her product was there, but she was targeting the wrong segment. Her new research found a new target market segment for her store: Some other key findings from Lindsay s research were: Many customers wanted to be assured that products were brain-expert approved When customers were able to try-out a product, they were more likely to buy Customers said that they wanted more of a book store/library feel to a brain gym If you were Lindsay, what would you do with this new information? How would you change the brain gym idea to be more appealing to this target market? STOP 10

7 In October of 2008, Lindsay re-imagined her initial idea and opened the first Marbles: The Brain Store in Downtown Chicago. The new format of the store was more appealing to her adjusted target market, and they had used customer feedback to change approaches in the store: Customer Feedback: Many customers wanted to be assured that products were brain-expert approved Change: All products were brain-expert approved and arranged in store by the area of the brain it helped; along with news highlights/research studies printed out about the product Customer Feedback: When customers were able to try-out a product, they were more likely to buy Change: A larger store with many product out for playing with and testing; employees are trained in the different brain games, and can show people how to use each product Customer Feedback: Customers said that they wanted more of a book store/library feel to a brain gym Change: They selected a store front instead of a kiosk that resembled a book store in feel, and specifically chose furniture/layout that appealed to younger adults versus children/elderly The changes that Lindsay had implemented were so successful, that she was able to open up three more stores in the Chicagoland area in 2009, four stores in the Midwest in 2010, and ten more stores across the east coast in While Marbles: The Brain Store has found a way to be successful, Lindsay is still constantly interacting with customers to make sure that they are running the most appealing business possible and making changes when necessary. (CONTINUE)

8 Lindsay s growing company has also received a great deal of media attention for their approaches and growth. Watch a brief video of Lindsay on MSNBC talking about the growth that Marbles has experienced. From reading this case study, why do you think it important to do extensive primary market research to correctly identify your target market? From reading this case study, why do you think it important to do continue to do market research after your business is already up and running? STOP 12

9 The Story of Marbles: The Brain Store Lindsay Gaskins Founder, CEO & President; Marbles: The Brain Store We re a one-of-a-kind retail store with a smart collection of hand-picked, expert-tested, certifiably fun ways to a healthier brain for all ages. The best part? Our stores are designed to let you roll up your sleeves and get a little brainy while you play games, solve puzzles, try out software and flip through books to find the right products for you and your noggin. Our team is chockfull of smart, outgoing people who are passionate about learning new things and creating a fun, interactive environment where customers can reach their brain s fullest potential. Our President and CEO Lindsay Gaskins started Marbles: The Brain Store with the simple idea of finding the best brain games out there and putting them all in one place. Not just products for aging baby boomers concerned about memory loss and victims of brain disorders like stroke, Alzheimer s, dementia and ADHD. But also products for anyone who wanted to improve focus and attention, enhance creativity, become better multi-taskers and get the most out of the smartest supercomputer out there: the brain. Our idea was supported by some pretty compelling research and mindboggling advances in the field of neuroplasticity. So we went for it opening a kiosk in May of 2008, one of the deepest parts of the recession and probably not the brightest time to start a new retail store. People thought we had lost our minds. To the contrary, we had just found them. We failed miserably. Which we re not ashamed to admit. Hey, failure breeds success, right? The idea was great. The products were great. The experience not so great. But customers loved the concept so we opened our first store in downtown Chicago in October This time, we got the experience right. With a bigger space, customers could actually play with every product. Our staff had to play with every product, too, in order to field questions from our brainy customers. The response was phenomenal so we opened three more Chicagoland stores in 2009, four more stores in the Midwest in 2010, and now 10 more stores across the east coast in The rest, they say, is history. Albeit a short one. Which means we re just getting started. A SPECIAL THANK YOU TO MS. LINDSAY GASKINS FOR HER CONTRIBUTIONS TO THIS STUDY! Copyrighted for The Network for Teaching Entrepreneurship,

10 Glossary of Terms (Excerpted from the Entrepreneurship: Owning Your Future textbook) Brainstorming working in a group to help each other generate ideas (p.152) Business Incubator programs designed to accelerate the successful development of entrepreneurial companies by providing support resources and services through its network of contacts Business Opportunity consumer need or want that potentially can be met by a new business (p.147) Buying Patterns the purchasing patterns and buying behavior of your customers, including the rate of use, repetition of purchases, benefits sought, brand preferences, and brand loyalty. Also the purchasing behavior (impulsive or cautious, using cash or credit card) (p.170) Demographics objective social and economic facts about people. i.e. the age, gender, occupation, and education of your customers. Economic factors, such as household income, family composition, and size. (p.170) Geographics market segments based on where consumers live or where businesses are located. i.e. the size of the area, density, and location of your customers. Where do they live, work, go to school, or shop? Kiosk a small independent structure used to sell merchandise, as a newsstand, refreshment stand, etc Market a group of potential customers people or businesses who are willing and able to purchase a particular product or service Market Research an organized way to gather and analyze information needed to make business decisions (p.167) Pain Points Survey a method for generating business opportunities by identifying a target market segment first, and then asking them through surveys to identify problems and annoyances they face or their pain points Primary Market Research market research methods that collect new information collected directly through potential customers; can include surveys, interviews, etc (p.171) Psychographics psychological characteristics of consumers such as attitudes, opinions, beliefs, interests, personality, lifestyle, political affiliation, and personal preferences (p.170) Secondary Market Research market research methods that collect existing information that was previously gathered for a purpose other than the study at hand (p.171) Target Market Segment limited amount of customers who are most likely to buy a specific product or service (p.169)