Slide outline for Lesson 7.8. Day 1 is slides 1 to 7. Day 2 is slides 8 to 14. In the 13-day calendar, which runs this lesson as one period, use slides 1 to 7 plus slides 9, 10, and 11 (the worked example) and skip slides 8, 12, 13, and 14; those belong to the Numbers Clinic in Lesson 7.10 Day 1.
DAY 1: The customer
Know Your Customer
- Unit 7, Lesson 7.8, Topic 7.2 FACS Shark Tank
- Today: three people who are not on your team tell you whether your idea is worth money
- Write down what they say, including the parts you do not like
Teacher notes
Image: two people talking across a table, one writing.
Team folders with the signed filter sheets out. The rotation written on the board.
Do now
- Your team thinks somebody will pay for your idea
- Name that person. Not "everybody."
- One person, and how you know them
Teacher notes
Take four. If any team says "everybody," say the line: "Everybody is not a customer. Everybody is what you say when you have not asked anybody."
What we think we know
- Who is our customer?
- What will they pay?
- What do they do about this problem right now?
- Fill this in BEFORE you ask anybody
Teacher notes
This is the before picture. At least one of the three lines will turn out wrong, and that is the whole point of the period.
The customer profile: five specifics
- Who? A role, not a name
- Age or stage of life?
- What do they already do about this problem?
- How much can they spend?
- Where would they hear about you?
- Weak: people who are hungry
- Strong: a parent picking up a child at 3:15 who has 20 minutes and $6.00 and right now buys a bag of chips at the deli
Teacher notes
Number 3 is the one to stop on. What the customer already does about the problem is your real competition. Say it in those words.
The three questions. Same three for every team.
- Do you have this problem? Tell me about the last time
- What do you do about it right now?
- If this existed, what would you pay for it, and what would make you not buy it?
Teacher notes
These stay the same all period. Do not let teams improvise better questions; the whole class comparing the same three answers is what makes the debrief work.
Write what they SAID
- Weak note: he liked it
- Strong note: he said "I would pay two dollars but not three, and only if it fits in my bag"
- Use quotation marks
- If the interview is in Turkish, Portuguese, or Spanish, write it in that language
Teacher notes
Model a bad note and a good note on the board from one sentence you say out loud. Then the rule: you are a recorder, not a summarizer.
Three interviews. Rotate on the signal.
- 3 minutes each
- One member of your team moves two tables clockwise when I say
- The person in front of you is never your teammate
- You are asking, not selling
- * *
DAY 2: The money
Teacher notes
Image: a simple room diagram with arrows showing one person per table moving two seats clockwise.
Circulate and say one word when you hear a team pitching instead of asking: "Ask." Then, at the end, the debrief: one thing you now know that you did not know at the start, and one thing you are changing because of it.
Do now
- Your idea costs you something to make
- Write down every single thing you would have to buy to make ONE of them
- Be annoying about it. Include the tape
Teacher notes
Take two teams' lists and add the thing they forgot out loud. It is always packaging, or the bag, or the sign.
Some of you are about to find out your business loses money
- Yesterday somebody told you what they would pay
- Today you find out whether that number is enough
- Finding that out on paper today is the cheapest way it will ever happen to you
Teacher notes
Say this plainly and without drama. A team whose numbers fail today has a real result, not a failure, and Lesson 7.11 accepts an honest pitch that says so.
The worked example. A custom drawstring tote bag.
| Line | Amount |
|---|---|
| Fabric for one bag | $1.80 |
| Cord | $0.30 |
| Thread and needle share | $0.10 |
| Printed paper tag | $0.05 |
| UNIT COST | $2.25 |
| PRICE | $6.00 |
| MARGIN (price minus unit cost) | $3.75 |
Teacher notes
Whole class, same lines, same time, in pen, labeled EXAMPLE. This uses Unit 5 skills on purpose. Do not move on until every pencil has stopped.
Fixed cost and break-even
- FIXED COST: a $15.00 stencil kit. You pay it once, no matter how many bags you make
- BREAK-EVEN IN UNITS: $15.00 divided by $3.75 = 4 bags
- Say it with me: "We stop losing money after the fourth bag"
- Why rounded UP? You cannot sell part of a bag
Teacher notes
Have the class say the sentence out loud. Then give the uglier version: if margin were $3.40, then $15.00 divided by $3.40 is 4.41, so the answer is 5 bags, because at 4 you are still behind.
Your own numbers. CFO leads.
- Unit cost, line by line
- Price, from what your customers actually said
- Margin
- Fixed cost (write $0.00 if there is none)
- Break-even in units, rounded up
- All three of you write the numbers. A judge will ask the CEO what the margin is
Teacher notes
Circulate with two questions only: "What did you forget to count?" and "Say your break-even as a sentence."
The one-month projection
- Units sold in a month, times margin, minus fixed cost, equals the month's profit
- The unit number needs a reason that is not a guess
- A guess: "we will sell 200"
- A reason: "there are 88 students in our grade, all three people we asked said they would buy, so we projected 30, which is about a third"
Teacher notes
This one rule is the difference between Meets and Approaching on criterion 4. Say it once and then ask two teams for their reason out loud.
Peer number check, then CFO signs
- Read your four numbers out loud to another team
- They check the arithmetic and ask one question: "Where does that number come from?"
- Fix any error in red
- CFO signs. No signed numbers page, no deck
Teacher notes
Then the closure: every team says its break-even sentence to the room, in order, fast. Ten different numbers for ten different businesses in ninety seconds.