Student-run ‘SloanGear is a real company; this was not just a mathematical exercise’
There’s this notion that business school students tend to do a lot of talking, yet very little walking. But when I look back on my year as the Chief Marketing Officer of SloanGear – the only student-owned campus store in the country – I can honestly say that I applied what I learned in the classroom every day. SloanGear is a real company; this was not just a mathematical exercise, or Excel model or a case study. When we were buying the business, for instance, we had to come up with an enterprise valuation, which we figured out using a discounted cash flow model and other approaches we learned in finance and investment management classes. And in one of our marketing classes, we learned about how to use conjoint analysis to drive product innovation and as a company we implemented those methods.
Perhaps the most important thing that I take away from this experience is a greater awareness of how my decisions affect the overall business. Before business school, I worked in the product supply division at P&G. I have to be honest: when I worked there, I only thought about product supply. I didn’t give branding or accounts receivables a second thought. Now that I’ve been a part of a small management team, I understand how these pieces fit together, and how an individual’s decisions affect not just his or her division, but the company as a whole. To be really successful, managers need to have an understanding of the entire enterprise, and how his or her personal incentives intertwine with all other stakeholders’ incentives. It makes you accountable for the way your decisions impact the long run and not just the monthly results.
And, much as it pains me to admit it: I’ve also learned that you need to burn your fingers a few times in order to really get to know the business. For example, one of the things I spent a lot of time pursuing this year – striking deals with Nike and Ralph Lauren – never came to fruition. Based on the qualitative and quantitative market research we conducted, I am confident that a Ralph Lauren polo shirt or a pair of Nike shorts branded with the Sloan logo would have been a best-seller for us, but the fact is those companies would have required us to carry very, very large inventories of their products to justify their costs, which is risky for a small company like ours. In the end: we just didn’t have the volume. It was disappointing that we didn’t form a partnership, but I am glad I tried and I learned a lot in the process.
What I am most proud of is the fact that we increased the speed of SloanGear’s product development cycle and introduced a number of limited edition T-shirts that are hipper than most school-branded apparel. We’ve had difficulty keeping those T-shirts in stock – they are flying off the shelves. (My personal favorite features the likeness of Alfred P. Sloan, former GM chief and the business school’s namesake, decked out in gangster bling.)
We realized that people would get bored seeing the same T-shirts and sweatshirts over and over again; we always needed to be innovating. So every month we came out with a newly designed T-shirt. Instead of ordering these shirts in standard batches of 100, we ordered them in batches of 20 or 30. It was more expensive for us, sure, but we were able to charge a premium. More important, the shirts earned us a reputation as always having cool, new products.
In July, I’ll be starting as a management consultant in the consumer and media practice at Booz & Co. in Ohio. I am excited about my new job, but I am going to miss being a part of SloanGear.
Don’t get me wrong: I have a lot of faith in the new management team. They have a lot of energy, and each person on the team brings something different to the table: one has a background in design, another has an understanding of e-commerce, a few of them have financial experience, and one of them formerly ran a retail store. The SloanGear 2012 team has a lot of passion. They know what they’re talking about. They have dreams for the future, and they’re doable dreams.
Lorenzo Farrontato, MBA ’11 is Chief Marketing Officer of SloanGear