gmhTODAY 08 gmhToday May June 2016 - Page 26

Their plans to produce a smartphone case were dashed when the school’s 3-D printer suffered a component failure and they were told it would be weeks before a replacement part would arrive…too late for the team to build their prototype. In Junior Achievement parlance, the kids had to “pivot.” In other words, they went with plan B to produce a coffee mug, and dubbed their new venture “Ritemugs.” Now they would have to work faster to make up for lost time. During the program’s first few weeks, student participation dwindled due to scheduling and commitment conflicts. However, three Live Oak sophomores emerged to see things through to completion: Isaac Muniz, who served as CEO; Ashley Cowell, who took on finance and supply chain management; and Kaden Kim, who led sales and marketing efforts. Isaac Muniz, CEO According to Isaac, “I wanted to learn about running a business, but I didn’t expect to be the guy in charge! I had to learn how to plan meetings and motivate people while holding them accountable. It was challenging. In the beginning, stu- dents dropped out, which added to the stress level, but those who stayed grew into their leadership roles and learned to rely on each other.” “When a local businessperson offered to buy all our shares, Mr. Garcia explained that the investor would gain full control of the company. We were like, ‘WHAT!?’ Then we decided to limit the number of shares we would offer to each investor.” “We sold 78 shares at $5 each to 30 shareholders, keeping in mind that we’d have to pay them before liquidating the company.” Ashley Cowell, Finance & Supply Chain “At first I had no idea how involved I’d be at every step to track costs and make sure our finances were properly handled,” Ashley said. “I had to learn how to use spread- sheets, prepare budget forecasts, and look at profit and loss statements. The hardest part of manufacturing was getting the materials and producing the finished mugs. We did everything, including pricing, sourcing, ordering, pickup, design, production and sales of the mugs.” As it turned out, Isaac, Ashley and Kaden fired the ceramic mugs in their respective family’s kitchen ovens, They also 26 printed special tags and tied them onto the handle of each mug. When finished, the mugs rivaled those sold by commercial retailers. Kaden Kim, Marketing & Sales. Halfway into the program, Ritemugs lost the leader of its marketing and sales efforts. Kaden stepped up to the plate. “I thought it would be fun, like working at Apple or Google. But we had to abandon our idea to make phone cases because a bulb burned out on the school’s 3D printer and by the time it was replaced we’d be out of business. We learned how to pivot when we went with plan B to do the mugs. To generate sales we ran local newspaper ads (Morgan Hill Times donated ad space), promoted the mugs at basket- ball games, and created a public service announcement for our school’s morning announcements. We targeted three markets: Rotary Club members, students and their parents at basketball games, and Morgan Hill residents attending a fundraiser for the Teacher’s Alliance Coalition. It was hard work and took a lot of time but we sold all of our inventory. I learned that companies with good marketing and sales make it look easy.” Ritemugs designed and manufactured two lines of mugs. A “heart mug” was sold in advance of Valentine’s Day. A “speech bubble” mug came with a stick of chalk to allow customers to write a new thought for the day with each morning’s cup of coffee or tea. Each mug also came with a card that included the company’s mission statement and instructions for proper care of the mug. “Our parents were very supportive,” Kaden said. “They were surprised how quickly we got things done even when we hit problems and how well the mugs turned out.” Ritemugs Gets Results “We priced the mugs at $7 a piece, and made over $500 after selling all of our inventory,” Ashley said. “We paid ourselves a salary too, $1 each. Our shareholders got back their original $5 plus a dividend, making a 50 percent return on their invest- ment in about four months!” Then Isaac added, “One investor told us, ‘This is the best investment I’ve made in a long time!’” The three Ritemugs founders recently attended a Rotary luncheon to express appreciation for the organization’s support. Their presentation didn’t go GILROY • MORGAN HILL • SAN MARTIN MAY/JUNE 2016 Local Entrepreneur Armando Garcia exactly according to plan, but it gave them yet another opportunity to learn. “We had a beautiful slideshow,” Ashley said, “but there was a glitch in the equipment so we had to improvise. It caught us by surprise but we pulled it off.” Ritemugs also produced their own public service announcement, which was included in Live Oak’s school-wide morning announcements. In March, Ritemugs student executives were busy drafting an annual report, pre- paring to “liquidate the company,” and making a final production run of mugs for their entry in Junior Achievement’s regional competition (Ashley will make the team’s presentation on April 12 th at the Mountain View headquarters of Intuit Corporation). The winning team will go on to compete in Seattle, and from there, winners will have a chance to compete nationally in Washington, D.C. When TODAY asked Ritemugs founders if they’d like to run a company one day, Isaac, Ashley and Kaden were of one mind. “Definitely. Absolutely. Oh yeah.” These young entrepreneurs sold us their last mug in stock. We figure one day it’ll be a collector’s item. For those of you who missed out, Armando may be leading the program again next year. “I’m hoping this year’s kids will be inspired to guide next year’s student entrepreneurs through the program to share lessons learned from their personal experi- ences,” Armando said. “Rotary has expressed interest in supporting the program next year too. All we need is a few advisors from the local community to encourage and guide the students. If any of you TODAY readers is interested, let me know!” gmh gmh