When Life Gives You Lemons 🍋
I come from a family of entrepreneurs.
My Grandfather started his first business in the early 50s, shortly after immigrating to Canada with his young family. There was the gas station, the import business and many more. Both of his sons — my father and uncle — were entrepreneurs. And so are many of my generation.
Which makes the classic lemonade stand a veritable rite of passage in our family.
A few weeks ago, my son declared at a family BBQ that he wanted to have a lemonade stand this summer, and that was all the prompting needed for the floodgates to come off in terms of anecdotes and business advice.
We talked at length about the various locations where each of us had held lemonade stands when we were kids, comparing and contrasting the relative success of each of our endeavors. My uncle proudly noted that, instead of having a lemonade “stand”, he and his friends made batches of lemonade and took them to construction sites where they sold them to the workers (“Go to where the customers are!”). We discussed pricing (with plenty of “back in my day…”s), product (fresh vs. powdered) and the importance of customer service.
After hearing hours of advice from his aunties, uncles and grandparents, it was time for my son to plan his first business.
Location
The first decision to make was location. We discussed that one of the key variables for success was how many people would visit his lemonade stand (the “top of funnel”). Where did he want to setup his shop?
A busy street with lots of cars might work, but what if they drive too fast to pull over?
Maybe a local street with more pedestrians but fewer cars?
Should he setup somewhere with a lot of thirsty people, like a park?
Or instead of a lemonade stand, what about delivery like his Great Uncle?
Ultimately, he decided to combine three of these options (smart kid!):
His lemonade stand would be on a local street with very few cars but a decent number of pedestrians
He would locate it on a lot at the top of a set of stairs leading to an elementary school where people play sports, walk their dogs, etc.
In addition, he would put a sign on the telephone pole at the end of the street to try to direct potential customers down from the “busy street”
“The sign needs to be easy to read”
Product
The next decision was product. What kind of lemonade would he sell? Easy-to-make powdered lemonade? Premade lemonade that he could just pour and serve? Or homemade lemonade?
Despite my friendly warning that it would take a long time to squeeze enough lemons to make lemonade, he opted for the fresh, homemade variety (“it tastes better”). But he also decided to put a spin on it. We live in British Columbia — one of the world’s largest berry producers — and most berries are in-season right now. My son didn’t just want to sell regular lemonade. He wanted to sell strawberry and blueberry lemonade. So we went to the store and bought the ingredients:
Lemons
Sugar
Strawberries
Blueberries
(Ok yeah…that definitely sounds better than powdered lemonade or something filled with preservatives.)
That was a lot of lemons…
Marketing
Two weeks before the launch of his “lemonade popup”, my son decided that it was important to start marketing right away. I tried to convince him otherwise — that a “lemonade coming soon” sign would have any little, if any, impact on sales — but he insisted.
His pre-marketing continued the day before launch, complete with a “help link”:
“Homemade lemonade tomorrow"
“Any questions, come to <address>”
The Big Day
Finally, the big day arrived.
It was a hot, sunny Sunday afternoon. The lemonade stand would run for 2 hours, with only a little help from Dad.
My son is well-accustomed to my obsession with data, so it was no surprise to him when I suggested we should collect data about his first venture. We decided to track two things that day to help us evaluate his first lemonade stand:
How many people came by the lemonade stand?
How many people bought lemonade?
We need more data!
So how did things turn out?
In a little more than two hours, he sold 14 lemonades at $2 each and made a total of $44.75 (including tips). Not bad at all 👏.
Lessons Learned
After dinner that day, we sat down and discussed his first lemonade stand and some of the things he learned:
What Worked
He was happy with his decision to make homemade lemonade. He noticed that a number of people were surprised (in a good way) when he told them that it was homemade and were even more impressed when he shared that he had squeezed the lemon juice himself. And that felt good.
People like lemonade on a hot day. Based on his conversion rate (nearly 50%!), he definitely had “product-market fit”.
He had considerable influence over which product people bought. About half of his customers asked him which type of lemonade they should buy and all of those people went with his recommendation.
The pre-marketing worked (much to Dad’s surprise!). Several customers told him that they had seen his sign about a lemonade stand coming soon and knew to look for it.
The “lemonade stand” arrow sign on the busy street also worked. Several cars saw it and turned to visit his stand.
Opportunities for Improvement
While his conversion rate was high, traffic overall was low. Not many people were playing at the elementary school that day and there wasn’t a ton of local foot traffic. The conclusion: next time, he would try putting his lemonade stand some place where more people would pass by.
Dad needs to figure out how to get a tap-to-pay fob (he lost a couple of customers because they didn’t have cash — and for those of you wondering, there’s no Venmo in Canada 🤦♂️)
(There’s also the topic of pricing/margin, but we’ll leave that until he’s older 😉.)
Conclusion
There’s no big epiphany here. This was never intended as a “here are 5 lessons venture-backed startups can learn from my kid’s lemonade stand” type of post.
But I will say, it serves as a good reminder of a couple of things:
Many of the decisions we make in business are conceptually very simple. And the considerations and trade-offs are the same whether we’re talking about a multi-billion dollar tech company or a lemonade stand.
No matter how much experience you have, always be open to new ideas (seriously? “lemonade coming soon?” 😂).
Data is always helpful. Even small amounts of data can help you to better understand outcomes and identify opportunities to iterate.
It also gave me an opportunity to introduce my son to the wisdom of Kenny Rogers.