The kids are all right

Written by Rick Spence

My mother made me a capitalist. When other kids on the block set up Kool-Aid stands, they cleared five bucks on a good a day. I made only $3, because Mom charged me for Kool-Aid, sugar and paper cups.

These onerous fees put my business at a competitive disadvantage, although I didn’t phrase it that way at the time. But I did ask why I had to pay for something I’d always received for free. That’s when I learned that everything in the kitchen cupboards had to be paid for. Later in life I would expound this principle among overspending friends, student radicals who wanted to abolish tuition fees and CEOs who thought banks should be forced to lend them money. Sadly, not everyone has a mom with an economics degree.

Fortunately, technology may succeed where parents fail. Today’s kids have discovered a new computer game called Lemonade Tycoon, which is slyly teaching them about strategy, input costs and the truth about business plans.

I caught on the other day after finding my daughter playing a free demo version of the game on our home PC. She proudly announced she had just sold $300 worth of lemonade. “The trouble is,” she said, “I had to pay $120 to sell at the fair, so I only made $180.” I was astounded; didn’t she know this was an economic simulation? It’s practically homework.

I’ve long been aware of The Sims and their ilk. These best-selling PC games give you the tools to create whole environments, such as cities or wildlife parks. The challenge is to build settings that are successful and sustainable: put too many animals in your park, and they’ll eat all the vegetation, then starve. Because these games involve decisions and consequences, they’re wonderful learning experiences.

The allure of Lemonade Tycoon is its simplicity: a host of decisions, but just one product, so you can easily explore the impact of your choices. Retreating to my own computer to find out more, I was surprised to learn that Lemonade Tycoon is produced by a Montreal company, Hexacto Games Inc. The second thing I learned is that the company was sold last May to a deep-pocketed firm in California. Sigh.

I obtained my own demo from (another former Canadian firm). Downloading the game took 39 seconds; mastering it took longer.

You start by selecting a location and purchasing supplies, choosing a recipe and setting your price. When business picks up, you can hire an employee or invest in lemon juicers or ice machines.

I set up shop on the front lawn (rent-free) and waited. Lemonade Tycoon’s primitive graphics offered a basic streetscape populated by tiny human figures, but its appeal lies in finding ways to make more profit. That day it rained and everyone hated my sickly-sweet recipe. Still, I sold 17 drinks at $1 apiece. My expenses were $8.42, leaving a profit of $8.58. Day 2 was sunny and hot, and I adjusted my recipe. I sold 25 cups for a profit of $15.41.

Feeling invincible, I moved to the park (paying $10 in rent), raised my price to $1.10 and invested $7 in advertising. But mosquitoes invaded the park and it rained all day. (I learned too late to heed the program’s ever-changing weather forecasts, but ignoring obvious signals is a common entrepreneurial shortcoming.) I sold 15 cups and lost $8.49. The game taunted me: “Is that the best you can do?”

The next morning proved warm and sunny, but I lost sales because people couldn’t wait for me to squeeze the lemons by hand. At least I reduced my loss to 82ÀšÃ‚¢. Wanting more volume, I moved to the beach, paying $40 in rent and another $50 for a high-end juicer. Then it rained all day and I lost $31.63. I hadn’t read the weather report, which reminded me that a lesson forgotten is no lesson at all.

Frustrated, I went back to the park, improved my recipe and lowered my price — and my one-hour demo expired. Just when I was getting it right!

And that’s the point. The toughest challenge in training young entrepreneurs is helping them overcome their innate optimism. Have you ever tried convincing a startup entrepreneur that their idea might not work? It can’t be done. They have to learn for themselves. But if games like these can help them understand risk earlier — as well as the need to abandon your business plan and tinker endlessly with your formula — then bring ’em on.

Success comes not with your original idea, but your reaction to how the real world slices, dices and compromises your plan. It’s just what my mom used to say: when life gives you lemons, make lemonade.

© 2003 Rick Spence

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