Student entrepreneurs try their wings on campus to see if a business will fly
Admittedly, it seemed a little silly.
Here were graduate business students at Carnegie-Mellon University asking for donations to fund their annual commencement event - a six-hour boat ride along the three rivers of Pittsburgh.
Then David Zimmer had the bright idea of earning the funds.
So, several weeks ago, the second-year graduate student started Business School Suits. After a month of offering students and faculty high-quality suits by mail order, the company showed a $500 profit. Now, Mr. Zimmer wants to keep the business going as a sideline to his planned career in finance.
Zimmer is one of thousands of students proving that entrepreneurship is alive and well.
''It's not only alive and well, it's the focus of attention nowadays,'' says James Brian Quinn, a management professor at Dartmouth's Tuck School of Business Administration.
The word ''entrepreneur'' comes from the French verb meaning ''to undertake.'' Since another venerable profession had already coined ''undertaker'' as its own, men and women who started a business or made it successful became, well, entrepreneurs, explains John A. Hornaday, director of Babson College's Center for Entrepreneurial Studies.
It's difficult to determine how many student entrepreneurs there are, though examples are rife of their selling everything from computer software to T-shirts , radial tires to real estate. In the past 10 years, the number of colleges offering entrepreneurship courses has increased fifteen-fold, to more than 175.
But just taking entrepreneurship courses doesn't guarantee success. Although some student ventures are destined to make millions, 50 percent of all small businesses will fail within 38 months, according to the Small Business Administration.
No amount of education takes away the risks involved. But student entrepreneurs do possess a certain spirit - probably the same spirit that led Zimmer to give up a $50,000-a-year job to come back to school. ''It's much deeper than doing it just for money,'' he says.
Call it a thirst for achievement or independence, Bliss Dayton froze his toes and caught it; Peter Elitzer cut classes and drove hundreds of miles because of it.
Thanks to the work of Edward McHugh, its special programs dean, Clarkson College of Technology, in Potsdam, N.Y., owns a company.
The firm, called Golden Knight Enterprises, is made up of student businesses that show promise. Clarkson helps fund student business projects for two years and then decides whether they are marketable enough to become a division of this company. Toastie Toes is one of the student ideas that made it.
Five years ago, student Bliss Dayton's frozen toes gave him the idea of making a warming machine for ski boots and gloves. The idea won approval and a prototype was made.
There were a few technical problems, and Mr. Dayton graduated before the final design was completed. But this winter, Toastie Toes machines were blowing five minutes' worth of hot air into ski boots and gloves at eight ski slopes in eastern New York. There are still reliability problems, but the two machines that worked all winter earned a healthy $150 to $200.
Clarkson students don't get academic credit for their business projects, but they can take a profitable business with them when they graduate. It is also hoped they learn something about entrepreneurship.
On the pleasant, wooded campus of Babson College, nestled in Wellesley, Mass. , the senior partner of the Crustations DJ Service is learning the ins and outs of the entertainment industry. As a disc jockey providing music and lights for college parties, senior Jeff Mulligan says, ''I'm trying to please hundreds of people, keeping people happy even though you can't play all their requests.''
He is an example of how many student entrepreneurs get started. Crustations DJ Service is one of 23 student-run businesses that make up Babson's chamber of commerce. The group ranges from Babson Tire Sales to Tip Top Cake Service.
Student businesses on college campuses are partly protected, since they usually don't face much competition and usually aren't tied to huge investments. But once out of college, the entrepreneur is on his own, facing substantial risks.
What urges them to face those risks?
By and large, entrepreneurs are confident, hardworking, and fiercely independent. ''They'd rather own 100 percent of nothing than 10 percent of General Motors,'' says one professor. Even if they fail, they usually get a job to earn enough capital to start another venture.''
The funny thing is that they never regret (failure),'' says Karl Vesper, professor of business administration at the University of Washington. ''And who's to say it is a failure?'' Not succeeding can be quite an education in itself.
Peter Elitzer should have failed. Six months after opening a clothing store in Latham, N.Y., he was losing money. ''I didn't know enough to realize how badly I was doing,'' he recalls. At the time he was also a graduate business student at Dartmouth, and on free afternoons he began to peddle his excess stock from the back of a truck. He spent many weekends commuting 300 miles between Dartmouth, his store in Latham, N.Y., and New York City, where he bought clothes wholesale for his store.
Now, 12 years later, Mr. Elitzer has a chain of eight clothing stores. Although he admits his education suffered a little, he says that ''you learn an awful lot of things during the year. I always say if I don't learn something this year, that's the year I quit.''
Many entrepreneurship professors don't think it is a subject that can be taught. But they can expose students to the infinite possibilities - and the risks. Although more than 175 colleges offer an entrepreneurship course, Babson is one of a handful to offer an undergraduate major in the subject.
''I strive to discourage them from starting a business right away,'' says Mr. Hornaday of Babson. ''They're so young.'' Studies show the average age of entrepreneurs is 32, he says, and he counsels students to wait that long before starting. Nevertheless, a great many students drop out of college to begin a business.
''I think a lot of people who don't finish college seem to carry that around for the rest of their lives,'' says Professor Vesper. But ''I sure won't argue with some guy who says: 'I want to start my own business now.' ''
Steven Wilson couldn't wait. The social anthropology major at Harvard dropped out after his junior year to start Data Acquisition Systems Inc. ''I gave up my degree. I sacrificed graduating with my class. And I sacrificed my last year of school, which in many ways would have been my happiest.
''But the term 'sacrifice' is very inappropriate,'' the 22-year-old says. ''I have such a privilege to do what I'm doing.''
With three partners, Wilson has developed a device that allows personal computers to measure and control scientific, medical, and industrial systems. (It could, for example, control the temperature of a chemical storage plant.) The idea would greatly increase the capability of personal computers.
Because of the relative newness of the industry and its low start-up costs, personal-computer ventures have become gold mines for many young entrepreneurs. Among the stars:
* Cromemco. Two graduate students at Stanford University created the first personal computer for a nonspecialist. The Mountain View, Calif., company has been rated the nation's seventh fastest growing.
* Microsoft Corporation president William H. Gates dropped out of Harvard as a junior to form the Bellevue, Wash., firm with a partner. The company wrote the first high-level language for a personal computer.
But does all this entrepreneurship, though beneficial and innovative, come at a cost to its young practitioners? Has the growing emphasis placed on it by colleges somehow dimmed the idea of a well-rounded liberal arts education?
''I'm very much for variety,'' says Professor Vesper, but he doesn't believe teaching entrepreneurship is more narrow than a liberal arts subject. ''What about philosophy? In entrepreneurship you have the microcosm of the whole business world. You can put the whole world into it. The real thing you want to do is give students the opportunity to use their minds.''And these young entrepreneurs do use their minds.''In this country, because of the opportunity of starting a small business, people who are a little bit different have a place in this society,'' says Dartmouth's Professor Quinn. ''It's one of the most humane concepts in the world. And it offers the country - and the world - the full benefit of the creative mind.