Editor’s note: Dan Schawbel is the managing partner of Millennial Branding, a Gen Y research and management consulting firm. He is also the #1 international bestselling author of Me 2.0 and was named to the Inc. Magazine 30 Under 30 list in 2010. Subscribe to his updates at Facebook.com/DanSchawbel.
Colleges are starting to become startup incubators by offering a variety of classes and programs in order to help students pursue their entrepreneurial ambitions. This is good news for students because employers feel that they should gain entrepreneurship experience before graduating. Many professors are current or former entrepreneurs who act as mentors to students and teach them critical marketing, sales, and operation skills. The Kaufman Foundation estimates that more than 2,000 colleges and universities in the US, two thirds of the total, offer a course in entrepreneurship. There are now approximately 5,000 courses on entrepreneurship, up from 250 back in 1985. There are a few famous college dropouts, including Facebook’s Mark Zuckerberg, that didn’t need a business curriculum to start their companies, and a few lucky students who were selected as part of Peter Thiel’s “Thiel Fellowship” program, but they are outliers. Zuckerberg was in the right place at the right time and most students don’t get into Thiel’s program. Many students could use the education, network and support of an entrepreneurial institution.
Why are colleges creating these classes, programs and centers? Many students are passionate about entrepreneurship over full-time employment, the barriers to entry are lower to starting a business now because of the internet, and young people believe that entrepreneurs create jobs which are good for the economy. The Global Entrepreneurship Monitor (GEM) presented by Babson College (ranked #1 for entrepreneurship education) shows that there are 165 million early-stage young entrepreneurs age 18 to 25. More and more students are starting their businesses in college and graduating into full-time entrepreneurs.
College business plan competitions
One way colleges stimulate entrepreneurship, innovation, and gain publicity is by holding business plan competitions, where students present to a panel of judges in hopes to win a prize or get funding for their ventures. Bentley University, my alma mater, has been holding the “Bentley Business Bowl” for fifteen years. This year, they had 216 students competing in front of 90 judges. For this competition, the first place prize receives $200 to $350 depending on years in school. While that’s not enough money to fund a gumball machine, other schools like NYU’s Stern School of Business up the ante. At Stern, there are two separate Entrepreneur Challenges open to students and alumni – traditional ventures and ideas that address social programs. The winners of both can get up to $75,000 of funding. Columbia University, on the other hand, rewards students for outrageous business plans in the form of elevator pitches.
Entrepreneurship class offerings
At the University of Michigan, there are three types of classes: 1) engagement classes where students are made aware of the importance of entrepreneurship 2) skill-building classes 3) practicum classes in which companies and projects are launched. In total, they have 2,500 students in entrepreneurship classes each year. Thomas H. Zurbuchen, the Associate Dean for Entrepreneurship Programs, says that they try and hire entrepreneurs as teachers but in some classes they don’t have a current entrepreneur involved. At the University of Chicago’s Booth School of Business, they take students beyond the classroom, allowing them to actually test their ideas in real-world situations. Tracey Keller, an Associate Director of the Polsky Center for Entrepreneurship, says that students not only take courses, but participate in competitions and labs, which give them practical tools to help start, finance and manage their own businesses. At Boston University, Peter R. Russo, the Director of Entrepreneurship Programs, says that all of their professors have been entrepreneurs.
Students can become entrepreneurs through education
Students who take entrepreneurship classes don’t always have their own business. They are mainly taking these programs and classes to learn how to start one successfully. Zurbuchen of the University of Michigan estimates that only 10% of students own a company previously. William Baumol, the Academic Director of the Berkley Center for Entrepreneurship & Innovation at NYU’s Stern School, says that about one third have their own business and Russo of BU, says about 10% undergrads, 20% MBA’s and an additional 20+% of students who have family operated businesses.
Justifying an entrepreneurship program
If you don’t have a business idea in mind but are interesting in eventually starting one, it might make sense to enlist in an entrepreneurship program. If you already have a business and it’s not doing well, then further education can help you improve. If your startup is extremely successful, it might be a waste. Baumol from NYU admits that many successful entrepreneurs don’t have an advanced degree but that it can help a student’s subsequent work and provide some improvements. He says “college courses are not enough to create entrepreneurship.” Zurbuchen feels that students gain more than classroom content – they learn how to work in a team and establish a network. Keller explains that a college education isn’t necessary to be successful but it can improve your chances. She views the degree as being a safety net if your business were to fail. “Should their business ideas fail, they still have their degree and an expanded network on which to build their future careers,” she says.
Recent graduate success stories
Students from entrepreneurship programs are creating their own future through their companies instead of having to apply to jobs. As a graduate of the University of Michigan entrepreneurship program, Jeff Williams started HandyLab, Inc., which develops and manufactures molecular diagnostic assays and automation platforms. He sold the company in 2009 to BD, a leading global medical tech company, for $275 million. Ashish Rangnekar graduated Chicago Booth last year with the idea to start a test prep application. He took entrepreneurship classes while working as a students, eventually starting BenchPrep and winning the 2010 New Venture Challenge. Since then, his company received funding from Lightbank and recently secured an additional $6 million in funding led by New Enterprise Associatiates with participation from Steve Case and Ted Leonisis’ Revolution Growth. Although they have already released 100 courses to an audience of approximately 250K users, BenchPrep has expressed the goal of reaching a million students with 500 courses by the end of 2012.