Forget a dozen roses, starting up a start-up is the new modern take on romance. You order in take out, stay up all night and get so tired, you’re giggly. Plus you get rich, and drop out of school. But there’s a new twist on starting up and it requires sticking around campus till you get your degree.
Venture Accelerators. Before you read any further, know that that term refers to places that help entrepreneurs get their businesses off the ground. They provide office space and services like mentoring. Recently, I stopped by just such an accelerator in SoHo, where everyone was sitting at white desks, typing away on their laptops because that night was the year-end presentation and investors were going to be there.
I carried on a whispered conversation with Mike York, one of the entrepreneurs.
“What project are you working on?” I asked.
“My company is called SoldThru and we do dynamic pricing and analytics for ecommerce retailers,” said York.
“I should say that we’re whispering because you’re surrounded by other companies.”
“Absolutely. There are a lot of us in here so we try to keep it to a dull roar.”
York tells me this is actually his second start up.
“So how old when you started your other company?”
“I was 25”
“When you know all.”
“Exactly [laughing] you realize that – it’s funny, you really think you know everything.”
But you don’t. York’s company failed and this time he’s working on his business with a lot of support. The accelerator he’s in is part of a new program at Columbia Business School. It’s free for recent MBA grads, and admission is competitive. The school covers the cost for the space, this year for 22 companies selling everything from hot sauce to vintage eyeglasses. And the whole thing is run by students. So what’s changed? Didn’t it use to be sexy-cool to drop out when you start a start-up?
“I wouldn’t use the word, ‘dropout,’ I would use the word ‘extended leave of absence’,” said Marc Meyer, director of the Center for Entrepreneurship at Northeastern University in Boston.
Northeastern gives out $250,000 a year in grants through its own new, student run venture accelerator. Meyer could have used that kind of help when he was a student at MIT in the eighties.
“So very much because we made so many mistakes that had nothing whatsoever to do with the product or technology itself. You can be a brilliant technologist and be absolutely dumb about business,” said Meyer.
Meyer’s startup was a success, but Andrew Corbett, faculty director for Babson College’s venture accelerator, says many students and new entrepreneurs make the mistake of thinking they need just one thing to launch.
“Students in the beginning think it’s money, because they need money more than anything else and they may need money,” according to Corbett. But they also need what Corbett says is one of the most important resources — access to a network.
And that’s what these school run accelerators can provide. Accounting majors can give pointers on balancing the books and those tech geniuses can ask for help with market research.
Of course what everyone wants is investors and new customers. And sometimes they can even find them at school. Like at that night’s event.
Derek Lee, a Columbia graduate, runs a luxury real estate firm, but he’s also an advisor for Columbia’s student entrepreneurs and he’s becoming an angel investor.
“I know what it’s like from the other side to try to start companies and to try to raise money,” said Lee. “I can be a good mentor and let people not make the same mistakes I made when I was trying to do it, then hopefully the world is a better place.”
The prospect of leaving school not just with a degree, or even a job, but with $250,000 in seed money could seem pretty great.
Every school has a different approach to who profits, but the money almost always goes to the students.
Babson’s Andrew Corbett says that’s why we’re seeing these entrepreneurship programs popping up all over. It’s good business for schools to offer them to their customers — parents and students.
“That’s what the market wants,” said Corbett. “They recognize that the world has changed, they recognize there’s no, or little security, in working for a big corporation, they see entrepreneurial activity all around them and they want it too.”
And if you’re wondering about the Marc Zuckerbergs and Sergey Brins of the world Corbett notes they’re in a class of their own.
“These people are just off the charts super-smart and super-focused and that’s great,” he added. “And what I would say is hey, good for them.”
Then there’s the rest of us. So kids, if you want to earn kajillions of dollars, stay cool and start up your business in school.