In a couple of my previous postings I’ve talked about trying to leverage the presence of Kent State for greater economic growth in Kent. I realize that on the one hand I’ve stated the obvious — Kent State is already our largest employer and contributes over one-third of our city income tax so it’s a bit of a no brainer to target Kent State as an economic resource — but for me the real trick is figuring out how to translate that strategic goal into actionable programs that produce results. I recently came across a couple of articles in business magazines that talked about the growing link between entrepreneurism and universities that offer insight into how we might do exactly that.
1. Technology Transfer at Universities
The Association of University Technology Managers reports “steady growth in the technology transfer field with 635 new products — in fields from food safety to disease management — becoming available to the public in 2004. In addition, 2004 saw a decline in the rate that university startup companies formed in previous years went out of business.”
Highlights of the fiscal year 2004 U.S. Licensing Survey Summary include:
- U.S. insitutions executed nearly 4,800 new licenses, up 6.1% from the previous year and more than two-thirds were with newly formed or existing small companies.
- n 2004 alone, 462 new companies based on academic discovery began operations in North America; 74.5 percent were in the originating institution’s home state.
- Institutions responding to the survey reported introducing 3,114 new products to the marketplace since 1998.
Here in Kent we’ve seen new businesses, e.g., Alpha MIcron, RocketCalc, Kent Displays, etc., emerge from University based research and with the recent announcement of Dr. West’s new role with NorTech, new federal grants awards to KSU, and new research dollars, all hold the promise of real growth potential for Kent with new products and companies in the pipeline for possible start up here in Kent.
2. Washington University in St. Louis Student-Entrepreneur
Josh Kowitt didn’t sit waiting for opportunity to come knocking on his dorm room door—he bolted out and met it head-on. Four years later, at graduation, he is the retiring CEO of a company with over $325,000 in revenue.
Josh seized his first entrepreneurial opportunity in his second month as a freshman at Washington University in St. Louis (Wash. U.). He noticed that a friend at another college had rented a refrigerator for her dorm room, but there was no such appliance rental service operating at his university.
Wash. U. runs an exciting entrepreneurship program and encourages students to operate businesses on campus. The college even built in seven “storefronts” on the ground floor of their Gregg Hall dormitory in 1999. But most of those storefronts were empty in fall 2000 when Josh approached the School of Arts and Sciences administrators managing the program with his idea for a refrigerator rental and service company.
“They didn’t think much of the idea at first, because the university had tried it before and it wasn’t profitable,” Josh said. “But I built it as a service business.
We don’t just rent the refrigerators—we deliver, service, and pick them up at the end of the year. Convenience is key because we’re competing against big chains that sell refrigerators at competitive prices.”
Josh and three partners started their business by buying used refrigerators from students, cleaning and servicing them, and offering them for rental over their own Web site. They named their company “ResFridge LLC.” The first year they had $38,000 in revenue with $20,000 profit.
That was just the beginning. In his sophomore year, Josh connected with the student-owners of University Trucking (U-Trucking), a company originally established by students in 1977 and continued ever since by new generations of Wash. U. students. U-Trucking offers Wash. U. students door-to-door storage and nationwide shipping, as well as packing supplies and one-hour guaranteed pickup and delivery slots. In 2001, U-Trucking had revenue of $100,000, including $40,000 in profit.
Josh noticed that wherever his crews were moving refrigerators in and out, U-Trucking crews were moving students’ belongings to and from storage. “It was a natural fit for us to merge, because both companies could cut costs and provide more services,” said Josh. “And the merger brought together a management team with truly explosive synergy! We had all the pieces in place to get a storefront in Gregg Hall.”
With the storefront shop, students no longer had to operate their business strictly online or by phone. They could stop in the shop to make or check their orders. U-Trucking focused on building partnerships with UPS and Budget Rental to expand services and convenience for students. Revenue for the merged company grew in one year to an astonishing $210,000, with a profit of $110,000.
Josh and his management team—including Suman Adhya, Daniel Calabrese, Mike Hughes, and Alex King—continued to add products and services to the operation. In Josh’s junior year, the team opened Campus Connections, selling cellular phones, satellite radio products, and Princeton Review test prep services. The trio of companies increased revenue to $325,000, including $150,000 in profit, and employed thirty associates on a seasonal basis.
Josh didn’t come to Wash. U. with plans to become a business owner. He has a passion for constitutional law and intended to become an attorney. A political science major in the College of Arts and Sciences, Josh also took a second major in business management in the School of Business. He credits Wash. U.’s interdisciplinary approach to entrepreneurship with his own flourishing growth as an entrepreneur.
“No one is born a genius business person, and here they really take the approach that any student in any school can get involved in the entrepreneurship program,” Josh observed. “The university wants to offer the most opportunity to the greatest number of students. Now, with the new Kauffman Campuses grant, the entrepreneurship curriculum and hands-on activities can expand even more.”
Now that he has graduated, Josh has the bittersweet experience of selling his shares in the company to a new Wash. U. student-owner. And, although he still loves constitutional law, he’s put his plans to be an attorney on hold so he and Wash. U. alumnus Scott Jupiter can take the U-Trucking concept to scale on campuses around the country.
“I’ve gained a lot of great knowledge and skills being an entrepreneur,” said Josh. “It really has changed my life.”
If you had any doubts about the economic power of the budding young entrepreneurs check out the statistics on these top young entrepreneurs:
3. The Startup Bug Strikes Earlier
As the entrepreneurial career path becomes more accepted, its appeal to the young is rapidly growing, as are the resources to make them successful
There was a time, not so long ago, when a person choosing the entrepreneurial career path wasn’t exactly greeted with rampant enthusiasm. Among the notable exceptions: Michael Dell famously started his eponymous computer company (DELL ) out of his University of Texas, Austin, dorm room. And what would eventually become software behemoth Microsoft (MSFT ) began life when Bill Gates was still a Harvard undergrad.
Both men eventually dropped out of college to pursue their wildly successful ventures, but their paths to fame and fortune were decidedly not the norm. For the most part, and for the rest of us, conventional wisdom held that to be successful, one got a degree or two and then worked for an established company. Tinkering and dreaming was left to — ahem — entrepreneurs, not serious businesspeople.
That was then. Nowadays, “Entrepreneur is no longer a dirty word,” says Gerald Hills, an entrepreneurship professor at the University of Illinois at Chicago and executive director of the Collegiate Entrepreneur’s Organization, a network of student groups on 500 college campuses. “It’s nearly what everyone thinks of when they think about opportunities. They think of entrepreneurs now.” Shorn of its stigma, the once-risky career route is now viewed as a positive calling, particularly given the wobbly economy and the no-longer-sacrosanct benefits of corporate life — pensions and job security are fast becoming relics of a bygone era.
OUT OF THE CRADLE. The short-lived dot-com epoch that launched countless ideas into startup ventures before imploding also helped make the entrepreneurial route a viable alternative to the traditional job path. While a more sober reality has replaced the heady New Economy days, entrepreneurs are finding an expansive array of sophisticated resources, tools, and options for helping them start and operate a new business. More simply, the trail has already been blazed.
And while more and more young entrepreneurs may be embarking on the same general path, their destinations couldn’t be more varied. Take surfer Matt Rivers, who five years ago used money he had earned dishwashing to buy the Pump House Surf Shop in Orleans, Mass. — at the age of 17.
Then there’s Alasdair McLean-Foreman, who started HDO Sport, a high-tech sporting-goods company in Cambridge, Mass., when he was a Harvard freshman and a member of the track team. And in 1997, Paula Yakubik, then 25, quit her job as a newspaper reporter and founded public-relations firm MassMedia in a rented cubicle in Las Vegas. Today, she has two offices in Nevada and over 30 clients.
DORM LABS. Instead of flying blind, fledgling entrepreneurs of all ages can turn to a number of organizations and resources for help in nurturing a diverse set of ideas. Business-plan competitions with juicy cash purses have sprouted up all over the country. In September, the Small Business Administration announced a partnership with Junior Achievement Worldwide to launch a small-business portal for teen entrepreneurs, mindyourownbiz.org.
A number of networking associations are also targeted to particular communities of likeminded businesspeople and their specific issues. For instance, YoungEntrepreneur.com, based in Blaine, Wa., is an member-based Web site that offers advice, strategies, information sharing, and help in securing funding.
In fact, colleges and universities that once emphasized academics in recent years have established a number of entrepreneurial programs and incubators to help polish, educate, mentor, and develop those dorm-room eurekas into full-fledged businesses. No longer the exclusive purview of MBAs, many entrepreneurial programs are now geared toward undergraduate students (see BW Online, 10/25/05, “Teaching the Startup Mentality”).
“I’ve been in education for 30 years,” says the University of Illinois’ Hills, “and I’ve seen a real shift as more and more students want to start a business. They don’t necessarily want to wait to give it a go.”
VIRGIN VENTURE. Five years ago, the University of Maryland in College Park, launched the Hinman Campus Entrepreneurship Opportunities (CEO) Program. The two-year course was established with a $2.5 million grant from alumnus Brian Hinman, a Silicon Valley entrepreneur. It takes 35 students at a time, who must apply for admission. The program and its students are housed in a special high-tech dorm that’s designed to give participants a residential learning environment where they experience an entire business lifecycle, from concept to execution to operation.
According to Karen Thornton, the program’s director, while 75% of the students take part as a learning opportunity, 25% have actually gone on to create businesses from the ideas they hatched at Hinman. In recent years, Iowa State and Oregon State have launched similar programs based on Hinman’s model.
Being an entrepreneur means making your own opportunities, and there’s no telling where a good idea can lead you. After all, Virgin Group got its start when 15-year-old Richard Branson dreamed up a magazine called Student in his native London. Virgin Group is now an $8 billion global empire comprising some 200 companies in 30 countries, and in 1999, the celebrated founder became Sir Richard Branson when Queen Elizabeth II knighted him — for “services to entrepreneurship.”
4. Teaching the Startup Mentality
More and more universities are realizing that the skills needed to launch a company can be useful even to students who aren’t business majors
Retta Mulugetta, a senior at Cornell University in Ithaca, N.Y., has the entrepreneurial bug. During his third year of school he started a business, Ivy Tutoring, a service targeted to freshmen and sophomores who need help in math, physics, or chemistry. But Mulugetta isn’t a business student. He’s majoring in biological engineering and hopes his business pursuits will help him to catapult into the pharmaceutical or biotech industries.
Educators are thinking of every student — even those pursuing a liberal arts education — as an entrepreneur. In the years since the dot-com bust, top schools may have quit giving lots of early seed money to students, says Ken Zolot, senior lecturer at MIT Sloan School of Management. But they’re teaching all their students to think entrepreneurially, a skill members of the next generation will need to succeed in the corporate world, even if they never expect to be their own boss.
FROM AGRICULTURE TO ART. “Every company, large or small, needs innovation to survive today. An entrepreneur is by definition an owner and a manager,” says Bob Joss, dean of the Stanford Graduate School of Business. “They bring that element of ownership and responsibility to the company, while driving innovation from within.” Now students are picking up the ownership mentality through all sorts of methods — from entrepreneurship minors for nonbusiness students to team-based action learning.
Across the country, more young people than ever are being exposed to entrepreneurial thinking. In the early 1990s fewer than 300 colleges or universities offered courses in entrepreneurship, says Paul Magelli, director of the Academy of Entrepreneurial Leadership at the University of Illinois at Urbana-Champaign.
Today, about two-thirds of the 2,000 colleges or universities that offer some sort of entrepreneurship education provide relevant courses outside of their business school, in disciplines ranging from agriculture to fine arts, according to recent research by Magelli’s academy in collaboration with the E. Marion Kauffman Foundation, a Kansas City group. Recently the team found that 186 four-year institutions are offering courses in entrepreneurship designed for students outside of business schools.
MORE THAN A TRADE. Although schools are still acting as business incubators, they support fewer student-run companies than before the dot-com bust, says Zolot. These incubators are often part of a center for entrepreneurship that encourages more academic research about the topic as a way of increasing legitimacy.
Many in the academic world never thought of entrepreneurship as anything more than a trade. In addition, more tenured faculty members are turning their attention to entrepreneurship, whereas adjuncts mostly covered the subject in the past, says Murray Low, executive director of the Lang Center for Entrepreneurship at Columbia Business School in New York.
Educators are advising students to do hands-on projects while in school and spend time working for someone else in the corporate world before launching their own businesses. And this way of thinking is spreading across the campus.
ALTERNATIVE PATH. In the spring of 2004, the University of North Carolina at Chapel Hill set out to make sweeping changes with the arrival of the Carolina Entrepreneurship Initiative, a series of programs designed to change the way students think. The program includes offering faculty fellowships to encourage richer academic research on entrepreneurship. Undergraduates in liberal arts courses can now sign on for a minor in either social or commercial entrepreneurship, and the school will soon offer artistic and scientific entrepreneurship minors as well.
Budding artists and scientists are encouraged to think innovatively — and to understand how their work can be turned into a venture. Part of the motivation is to give students, regardless of their interest in business, an alternative career path.
Anyone with a dream can take charge and launch his own business, whereas some people might feel shut out of the corporate culture, says John D. Kasarda, director of the Carolina Entrepreneurship Initiative and a professor at the Kenan-Flagler Business School at UNC. Institutions like UNC have many reasons for turning to entrepreneurship in their quest to provide the best education. For starters, when students graduate, they face a different corporate landscape than the generations before them did.
“LESS DAUNTING.” After the September 11 terrorist attacks, ethics scandals, and the growth of outsourcing, people are finding that they have to make opportunities for themselves. School is the perfect haven for students to test their wings and fly.
That’s certainly true for Jason Miller, a 26-year-old, second-year MBA student at the Stephen M. Ross School of Business at the University of Michigan. He’s developing a business idea that would help flight attendants earn more money by selling advertising and promotions to passengers, thanks to a $1,000 Dare to Dream grant from the Zell Lurie Institute of Entrepreneurship at Michigan. “Being in school for this makes all the stages a lot less daunting,” says Miller.
Entrepreneurial thinking gives students the chance to take charge of their own destiny — and build a career that includes making a difference in society. “I’m 57, and my students are in their 20s, and they’ll live in a very different world than the one I know,” says Christopher Pratt, dean of Career Education at Columbia University. “It’s important for us to help our students think outside of themselves.”
AIDING THE SPIRIT. Today’s students don’t just need to consider the rest of the world — they need to see it for themselves. One of the programs that Pratt, an American of Scottish descent, helped organize includes high school, undergraduate, and graduate students joining forces with faculty to learn from the owners of small to midsize businesses in Scotland over the course of eight weeks in the summer. This kind of program is intended for students to begin to understand the global marketplace that they’ll confront in their careers.
Still, one of the most valuable parts of the campus experience for the entrepreneurially minded is the built-in networks that now extend beyond the business school. At the Franklin W. Olin School of Business at Babson College, entrepreneurial students have started working with neighboring Olin College of Engineering. Jim Poss, a 2003 Babson MBA graduate, met two sophomore engineering students from Olin who helped him design a solar-powered trash compactor for Seahorse Power, a business that Poss founded and now runs full time.
But can you really teach entrepreneurship, something that’s often thought of as a gut instinct? Educators say yes. Aspiring business owners can pick up everything from financing to marketing in a classroom — even if the spirit ultimately comes from within, says Ellen A. Rudnick, executive director and clinical professor at the Michael P. Polsky Center for Entrepreneurship at the University of Chicago. And a college campus, full of eager young people open to new ideas, is the ultimate breeding ground for innovators.