Late last summer, my then five-year-old son, my wife and I decided to put up a “lemonade stand” for fun. Actually, we decided to sell these terrific ice cream cookie sandwiches that we make at home. Vanilla ice cream sandwiched with two homemade oatmeal cookies, mmmmmmmmm. MMMMMM…. Sorry, I was distracted there for a moment.
We had a great time. We made some upfront decisions on philosophy, product, pricing, positioning and go-to-market strategy, but as in any “startup,” it did not go as expected.  Here are some highlights and lessons:
Clear Corporate Goals and Philosophy:
I figured the lemonade stand will help my son learn about cost of goods, the potential monetary profit of work, salesmanship, and responsibility. I also wanted to do it because (1) I never did it as a kid and (2) I wanted him to get a taste of the entrepreneurship (see my line of work at my startup, Boxxet).
Maximizing profit was not our philosophy that day. We wanted to learn, have fun and share our great product.
A Unique and High-Quality Product:
I’ve bought lemonade, hot cocoa, cookies and smoothies from kids all over. I am a sucker for the stand and will stop every time to buy. But I don’t often buy truly great product from a lemonade stand. Yes, that is not the point (and why I always stop at stand), but I felt there was room for improvement.
The week before, we had made ice cream cookie sandwiches as a family for a party. We had fun making, eating and sharing these desserts. They were fun to make, easy to handle, delicious to eat and were a hit at the party.
It became clear to us that the ice cream cookie sandwich would be a unique and desirable lemonade stand product.
Product Pricing:
This was a discussion between my wife and I about this. These types of sandwiches would go for $2-$3 at a store or restaurant. I felt that the lemonade stand needed to keep a $1 threshold for someone to the stop the car and help the kid. Also, I felt that we need to leave value on the table by giving more to the customer. We looked back to our Corporate Philosophy and went with $1.
Of course, it was the five-year-old who nailed it when he said, “if they have money, it costs one dollar; if they don’t have money, it’s free.”
Go-to-Market Strategy and knowing when to change it
Our first plan was to market via cute kid and kid-created signage along a high-traffic road in the heat of the afternoon. We abandoned the strategy after about 10 minutes. In the end, I believed we would have sold our inventory, but hanging on the side of a busy road was not that pleasant and it wasn’t fun to watch 30 cars pass by without stopping (people are intent on getting from A to B when they drive).
Then we went to the local park where people were hanging. While we thought we could sell stuff there, we did not want to “sell” to or bother people who are relaxing. Once again, we turned to our corporate philosophy and we moved on.
So we did what my son wanted to do in the first place. Sell in front of our house. It was lower traffic but much more highly targeted: neighbors who were more motivated (guilted?) to buy.  Turned out to be a great move. We hung out, brought out music, chairs and drinks, had neighbors hang with us and caught up with people who were walking and driving by. We had access to corporate HQ for freezer needs and potty breaks. There were a great deal of intangible value.Â
Building The Right Team
We knew we had the back-office and operations all handled (mom and dad). Once the people saw the product and price, they were willing customers. But we knew we had a hole on the sales side. My son is a great closer but not a good opener. He’ll engage in a great conversation once warmed up and the customer will want to buy. But he’s not the “jump up and down and holler at the top of his lungs” type (pretty useful for a lemonade stand). So this leads me to..
When to Hire Your VP of Sales
At one point, our ten-year-old neighbor came over to see what was going on. He volunteered to help. We quickly agreed as we just gotten to our final selling spot after unsuccessful attempts elsewere. He hopped on his bike and started tracking down cars and bringing them to the stand. We had our “opener,” some would call him a “hunter.” He insisted on helping for free but we made him take a commission (need to have a “Win Win”).
Relying on Friends and Family:
In a startup, you often rely in friends and family to help get the company started: financing, the first few sales, moral support. No different here. Our neighbors really put fuel in our tank. One came over and bought seven (for his extended family who was having dinner later but had no dessert planned). In fact, it turned out that two party goers would buy about half of our inventory.
The Sweet Feeling of Momentum
Startups are a struggle, but there is nothing like the feeling of momentum. And we had it as people stopped, bought, and enjoyed. We sold about 22 of these things. After a few discounts, commissions to the ten-year old and paying $5 back to mom/dad for COGs, our son netted about $10.  My wife and I had a great time, we hung out with neighbors and I think our son learned something.
And, of course, we saved a few ice cream cookie sandwiches left over for us to eat for dessert that night. We enjoyed our day and our treat, and that turned out to be a great exit strategy. Â
The town’s farmers’ market has a green fair today and I bumped into my old friend and colleage Mitch.
So what’s the chart? That’s our monthly unique visitors: one of the key currencies for consumer Internet startups. The pressure to grow “uniques” is very strong. Recently at Boxxet, we decided to make some big changes to our site (improved algorithms, new page link styles, moving out certain types of content) to make it stronger and healthier for the long term. But there would be a big short-term hit.
If you are make, sell, or invest in software, you know that the