Last week I was asked to moderate a panel as a part of a conference on entrepreneurship at the Kauffman Foundation in Kansas City. With so much that I learned top of mind, and as this topic is of great interest to David and I, and something we think that Durham very much needs more of I’m going to dedicate the next 5 blogs to the topic of entrepreneurship.

Installment #1: How Lemonade can transform Durham. A study of lemonadeday and why we need to bring it to Durham

Installment #2: Video Games, and why they may be the answer to youth entrepreneurship in Durham

Installment #3: Virgin Money - how friends and families can invest more safely with those they know

Installment #4: HotShotBusiness.com

Installment #5: The new entrepreneurship initiative in Durham Public Schools

How Lemonade Can Transform Durham
A study of LemonadeDay and why we need to bring it to Durham

Michael Holthouse is a remarkably inspiring man. When you click on the video link that follows this post you’ll see exactly what I mean. His enthusiasm is infectious and you know that he’s a man that won’t be denied. He was a very successful entrepreneur selling his company for a good sum of money to Sprint in 1997 and committed his life to working with disadvantaged youth. We were talking about our faith and how God can speak to us through our vocations. When he went to illustrate the point I heard the story of lemonadeday.

3 years ago his 10 year old daughter woke him up at 6:30 on a Saturday morning after he had come in late from a Friday night gala event. He had promised her that he’d help her with a lemonade stand as she was set on buying a new iPod, one that he had told her she’d need to earn, even though he could obviously afford to buy it for her. So blurry eyed he set out to do just that. Together they got the materials from the pantry and began to make batches of lemonade while he talked and asked questions of her relating to price, sales pitch, and inventory and later in the morning they went out to sell her wares. She did very well. At first she thought that all of the money was hers, but her Dad then told her that she needed to repay for the materials that she had used, and that some of the money left over needed to go to people less fortunate than they.

The experience was so rewarding for both of them that Michael set out to encourage other families in Houston to do the same. One year later, he set up the first lemonade day in Houston by working with schools and community partners. In one day 2,500 lemonade stands were set up all over the city! A year later, they did it again. This time 11,000! Just 2 weeks ago on May 3 there were 17,450 stands selling 2.4 million glasses of lemonade! At a rate of a few glasses per customer, he estimates that more than 1million people in Houston were touched by this initiative and many more in first year events in Austin, Detroit and his small hometown in Indiana.

The success and the scale of lemonadeday isn’t what’s most impressive about this project. What is most impressive is how such a simple concept that we are all familiar with can teach so many valuable lessons and provide so much benefit to the children of Durham and ultimately to the city at large.

0. FAMILIES. This is an activity that brings families together. Michael talks warmly about how much he enjoyed working on this project with his daughter and to see her excitement. She undoubtedly thought the same. The same can be said, I’m sure, of brothers/sisters/mothers/cousins and even grandparents that participated in other lemonade stands.
0. ECON 101. The entrepreneurial lessons are many. Basic lessons regarding pricing/competition/raw materials/gross margin/profit/cash flow and inventory are all taught in easily applied lessons. One more that might not be so obvious: owner’s equity. Usually friends will stop by to help. At the end of the day many will think they’re entitled to an equal share of the till. Watch the look on your child’s face as they explain that it was they that set it all up, found the spot to sell, and ultimately took the risk. They’ve just learned a great lesson on ownership, risk and profit sharing.
0. CHARITY. Parents have a great opportunity to encourage kids to take some of the money earned and invest in local charities. In Houston, kids gave away more than $250,000 to local charities. Lemonade stands are effectively teaching entrepreneurship AND philanthropy.
0. TITHING. Think that your explanations to your children on why you put money in the offering plate each Sunday (and how much) ring a bit hollow? This will help them understand how to return the tithe back to God.
0. ACCOMPLISHMENT. It’s a beautiful thing to see your child rewarded from their hard work and then enjoy the fruits of their labors. Their new iPod, trip to the movies, or new pair of Crocs will give them a sense of fulfillment and appreciation not attributed to anything else they own.

Now, please watch the attached video and let us know if you’d like to be involved with us at DurhamCares in bringing this to Durham!