Financial Management and What Students Can Learn From A Startup Simulation Game

Startup Wars would like to see their entrepreneurial students follow their startup vision with knowledge and solid preparation. A student’s ideas can be enhanced through the use of the principles of lean canvas methodology.

So what exactly is the Lean canvas methodology? 

The lean canvas model is a modern business plan that was created by Ash Maurya, the best selling author and founder/chief executive officer of LeanStack. His lean startup template helps an entrepreneur to break down their business startup idea into the key assumptions. 

The lean canvas model is adapted from Alex Osterwalder’s (a swiss business theorist) business model canvas. Ash Maurya optimized this model specifically for lean startups. 

Lean canvas vs business model canvas – which is best for me?

Both of these plans allow a student to capture their startup business model as a sketch. However, the lean canvas model focuses on solving a problem, while a traditional business model focuses only on selling a product or service.

This lean canvas model serves as a simple and clear replacement of older business plans by creating a model for business on a single page. It is a tactical guide for startup entrepreneurs to navigate their business concept from idea to a truly successful startup.

Some successful lean startup examples:

  • Dropbox
  • Zappos
  • GE

Startup Wars breaks down the five main principles of this streamlined plan, allowing their students to learn more about these principles through the Startup Wars game.

  1. Entrepreneurs Are Everywhere

The first principle of the Lean Canvas methodology is: Entrepreneurs are everywhere. The phrase is simple. It doesn’t matter who you are, what your passion is – anyone can be an entrepreneur. 

Why is this principle important?

It’s important for a student to first realize the cruel reality of creating a startup. Many startups fail. Many new products never make it to the market. New ventures do not always live up to their potential.

But…….on the flipside, virtually anyone can be a success! 

Success doesn’t break down to having good family genes, piles of cash, or special superpowers. It’s often a consequence of the right idea being born at the right time, in the right place. 

The truth is, a startup’s success can be engineered. Yes, you read that correctly. It can be engineered. There is a business process to follow that works, and this process can be learned and taught. There are tons of opportunities out there, and following the lean startup methodology may just be the right approach for their students. 

Startup Wars teaches this concept through the Company Module setup. Each student has the opportunity to pick a background for their avatar. Students are able to pick their top skill, like development, design, or marketing. 

Startup Wars students become stronger at tasks and specific skills while playing the game.

  1. Entrepreneurship Is Management

The second principle is:  Entrepreneurship is management. Every startup company needs strong management. However, lean startups have a different type of management. 

Management for lean startups is far more flexible and learning-oriented. Flexibility and education are important to have because a startup leader needs to have proper management experience in order to succeed. With the wrong kind of management, a business will fail. 

Startup Wars students have the opportunity to experience business management in a hands-on way. They learn by doing. They achieve the task of creating sprint planning for themselves, and by learning to make the decisions of hiring employees or contractors. 

Entrepreneurship is the same as management. So, entrepreneurial students need the practice of deciding which tasks are going to be accomplished – and in what order. These are all crucial business decisions in the real world.  

Entrepreneurship model decisions they experience: 

  • Innovation accounting
  • When to start selling their product 
  • How to market their product or service
  • Scalable startup entrepreneurship
  • Setting the founder’s salary
  • Choosing the right location – even the exact office

All of these key decisions for startup business models are experienced safely during a Startup Wars game –  before hitting the real world. 

Students experience the tough aspects of success and failure, and develop the needed skills to be prepared. 

  1. Validated Learning

The third principle is: Validated learning. Validated learning is adapting lean companies to the needs of the market through experimentation. This approach allows a student to find out first hand what will work best. 

Why is this principle important?

This lean innovation concept is important because without validating learning, people with startups will not know when or how they need to make necessary changes to succeed. Sometimes, pivoting direction can cause a startup business to succeed – or to unfortunately fail. 

Validated learning is present in Startup Wars through the Financials Module.  Students get weekly and monthly business reports generated through the game. They can then take these stats and decide on many things, like: to hire or fire employees/contractors, or which tasks they want to accomplish next. 

Students have the opportunity to test campaigns for marketing during a startup wars simulation. This gives them valuable feedback from their experiments. 

The Startup Wars Store Module allows students to learn to set prices for their products and services, and gives them the opportunity to change them at any time if needed. 

Validated learning is critical to the success of a future entrepreneur. 

  1. Innovation Accounting

The fourth principle of business methodology is: Innovation accounting. This basically means that lean startups need a more detailed accounting record in order to figure out what can work best. 

This work is gauged by the amount of innovation learned. Specific just for startups, it is important because it bases decisions from the statistics of what is actually working –  rather than what people think is best. 

Startup Wars follows this principle through class focus areas:

  • Sprint Planning
  • Lean startup organizational structure
  • Financials Module
  • Startup store Modules
  • Lean startup customer development

Each student has the opportunity in a Startup Wars game to observe the tasks being completed, and to observe the safe lean startup cycle. They then can then strategize on what they feel should be implemented next. 

Students learn to ask questions about several things:

  • Are things working?
  • Are they gaining profit?
  • Are customers adapting to their product/service?
  • What changes can I make? 

They can visually see this through the Startup Wars financials module. The goal is to line things up for success by making necessary changes needed in the direction they are going – by using the sprint planning or the store module.

  1. Build-Measure-Learn

The fifth and final lean development process principle is: Build-measure-learn. This principle is experiential learning by following the minimum viable product (MVP). 

Startup mvp development (creating the basic model as quickly as possible) basically follows the path of continuous trial and error. This is important for a future entrepreneur because it can prove that all startups can be successful if they are following the proper feedback loop. Pivot or persevere.

Startup Wars follows this principle of lean startup pivoting by helping a student develop a business strategy. If the student realizes their strategy – if what they are doing is not working, it gives them the opportunity to change their direction by pivoting towards something else that will hopefully be more successful. 

Startup Wars Is a Win-Win

Being able to test drive a concept is critical for an entrepreneur.

Experimentation of lean startup steps is the key benefit of playing Startup Wars games. Students learn by doing, they gain lean startup tools and skills while they play out options as many times as they want. 

It’s stress free experimentation at its finest.

How Startup Wars Uses The Main Principles Of Lean Canvas Methodology

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Charlotte Kane
Charlotte Kane Undergraduate Student, The Ohio State University

Startup Wars allowed me to understand everything that goes into starting a business in 90 days.

Darshita Bajoria
Darshita Bajoria Undergraduate Student, The Ohio State University

Startup Wars is an interactive way to learn and hone entrepreneurial skills while being a no-risk outlet. Great tool for those pursuing entrepreneurship.