Reading, Writing, And Revenues
In the past four years, 22-year-old Jimmy Enriquez has founded two thriving companies, launched a campus organization for student businesspeople like himself, and squeezed in enough study time to earn an accounting degree from the University of Texas at Austin. But he still can't drive and talk at the same time, at least not when the topic of conversation is his favorite -- student entrepreneurship. As the car whizzes past his intended left turn for the second time in nearly as few minutes, Enriquez pounds the steering wheel, but it is less a gesture of frustration than an attempt to emphasize his point -- which is that college is the ideal time and place to launch a business.
"If you wait until you're out of school and working for somebody else," he explains, "you're going to get used to that fancy salary and that big car -- and you're not going to want to gamble with that stuff. It's better to start a company when you're a student, while you're still used to driving a junker and living like a dog." In other words, while you are still too poor to know the meaning of downside risk.
It was that sort of predicament that caused Enriquez to take his first entrepreneunal plunge. He had finished his first year of college, and had returned home to Corpus Christi, Tex., in the hope of finding a job that would earn him another year's tuition. But when he got there, he found that his family's financial needs were at least as dire as his own. "Everybody was unemployed, broke." He rolled up his sleeves and started a construction-site cleaning business that netted his family some $30,000 in three months. A sister still runs the operation, called Nelda's Construction Services. It has 15 employees, grosses $3,00 to $5,000 a week, and has expanded into Dallas and Houston.
Jimmy and his younger brother, Rocky, then used $2,000 of the net profits to seed Enriquez Bros. Vending Co., a "foosball" game leasing partnership the pair had dreamed of starting since high school. The plan was that Jimmy would keep the com pany books while continuing to crack the textbooks in Austin. Rocky would take charge of buying, installing, and maintaining the mechanical games out of Houston.
Doubters told them they were fools that the table-soccer craze of the late 1970s was dead. The very thought still sends Jimmy Enriquez into fits of chortles. "Ooo! That was the best thing about it," he drawls. "They were right -- it was deader'n a doornail!" But, both being foosball champs, the brothers were convinced that their expertise could be combined with some promotional savvy to "build a whole new generation of players." They started foosball leagues -- complete with newsletters and tournaments. They even held clinics that, in an ingenious scheme to increase the number of plays per machine, allow kids to play for free until they have learned to get through a game as quickly as possible.
The company is a three-city (Victoria, Corpus Christi, and Houston, Tex.), 68-machine operation, with revenues of more than $60,000. Jimmy took $16,000 out of the business -- enough to pay his tuition through his graduation day last December and on into the courses that prepared him for his certified public accountant exam this past spring. Rocky used some of his money to buy a car, but, according to Jimmy, they are both still "living like dogs," and expect to be doing so for at least another three years. It will take them that long to ensure the health of this company and build both the credibility and the capital to start others. Staying in business for themselves is the all-important goal, Jimmy says. "Having your own company means having your independence. It's a way of making your own mark."
Enriquez is but one example of thousands of young people who are making their mark while still in college. Individually, these students are starting companies of all sizes and descriptions. Collectively, they are forming entrepreneurship clubs that are quickly becoming among the most popular of campus organizations. More than 100 such groups now exist, and most of them have sprung up in the past year or so.
Student-run businesses have been around, of course, almost as long as there have been college students. But the current crop of student entrepreneurs seems somehow different. For the student business operators of the past, getting a college degree was the primary goal, and any money-making scheme on the side was just that -- a sideline. Today's student entrepreneurs don't see their endeavors as merely ways to fatten their wallets and occupy their time while they are waiting to get out into the real world. For most, college is the real world -- a place with markets to be tapped, risks to be taken. They expect to be seeking out such opportunities for the rest of their lives, they reason, so why wait for a diploma? Why not start here and now?
These student entrepreneurs find themselves confronting many of the problems that all entrepreneurs face. There is the need for capital. The employees aren't productive enough. And, there is the question of succession: Is there anybody sharp enough to take over the operation, if need be, after the founder graduates?
The biggest conundrums arise in the area of time management, however. "We've got problems that other students don't have," explains Jeff Mulligan, a graduate student at Babson College in Wellesley, Mass., who juggles his studies with the day-to-day operation of two entertainment companies -- one a mobile disco, the other a mobile sound-and-video service. "You know -- do you write up your income statement or your term paper? Do you make the sale or make it to class?"
Talk like that brings a delighted chuckle from Wichita State University professor Iran Jabara, founder and director of the school's Center for Entrepreneurship. As a 35-year veteran of the business faculty -- 7 of which he was the dean of the school -- Jabara has studied entrepreneurs on and off campus for years. But the popularity of entrepreneurship he sees on college campuses today is far more than he could have hoped for, much less predicted. All of a sudden, he says, "we're seeing more and more students who simply aren't interested in going to work in the corporate world. Maybe it's because they saw their dads working only for Fridays, vacations, and retirement -- and not being very happy as a result. These people are looking for better opportunities. They want to pursue their own dream."
Late last year, Jabara and an associate, a 25-year-old MBA candidate and entrepreneurship instructor at WSU named Verne Harnish, concluded that a national organization for student entrepreneurs would be valuable as an informational clearing-house for what the two perceived to be an increasing number of entrepreneurially minded students across the nation.
"We'd seen studies indicating that even two years ago there wasn't enough interest to start entrepreneurship groups," Harnish recalls. "But when we actually got out to the schools, we found the organizations springing up all over. Everybody I talked to said, 'Oh, we were just talking about the same thing the other night in the dorm.' " Students at the University of Michigan, in fact, were about to launch their own national effort when they heard that Harnish and Jabara had beaten them to the punch. "It's just amazing how all of this came together at once," Harnish mused, addressing several hundred entrepreneurship-club organizers at the Association of Collegiate Entrepreneurs's (ACE) first convention, held this past spring at the Massachusetts Institute of Technology.
Jimmy Enriquez was in the crowd. Like many others at the ACE meeting, he had organized his school's entrepreneurship club -- the University Entrepreneurial Association (UEA) -- primarily to suit his own needs. "It hit me that out of 10,000 business students on the UT campus, I'd only met maybe four or five people who were entrepreneurially minded." He smacks himself between the eyes with the palm of his hand. "I thought, Gosh, I've just got to meet some more before I graduate!" Why? "Contacts! People to share ideas with."
Enriquez and several like-minded buddies set up a booth in a busy hallway of the business administration building, hoping to coax a couple dozen more of their fellow undergraduate students "out of the wood-work" and into the newly formed organization. Within days, he and his friends had signed up half of what is now a 260-member association -- the largest club in the UT business department, and one of the largest on the entire campus.
"It was a great thing to watch," Enriquez recalls. "People would glance at us as they walked by, and their eyes would pop. Then they'd stop over, real energetic-like and say, 'Hey, that's me -- one of the dreamers, the lonely types, the weirdos!" Dreamers who, like Enriquez, doodle sales projections for as-yet-uninvented products in the margins of their notebooks. Loners who spend their free time casing businesses of all descriptions -- just to see where people are spending their money. Self-dubbed "weirdos" who do better rattling off a list of the nation's top 10 venture capitalists than naming the two teams that played in last year's Super Bowl. Enriquez found all of the anecdotes comfortingly familiar. " Sheesh, what a relief! I was beginning to think I had a problem or something . . . ."
What brings students to the meetings is the chance to discuss ventures, to hear what others are doing, and perhaps to offer some help. When, for example, two graduate students at the University of Michigan who had developed a human-powered vehicle called Pegasus (which has attracted considerable attention both in the United States and abroad) needed technical advice on starting a business, they went to, among other places, the Entrepreneurship Club. But the high point of each agenda is the time that most groups set aside for the impromptu airing of ideas -- no matter how half-baked or off-the-wall. The critiques are speedy and straightforward. Many a would-be entrepreneur's better mousetrap has been greeted with boos, groans, and raspberries -- although approval is often registered almost as boisterously. At Wichita State's ACE meetings, you know your notion is a hit when you have to talk louder to be heard over the dozens of snapping fingers. Attend a few of these free-for-alls, says WSU's Harnish, "and you learn real fast how to separate the dealmakers from the flakes."
Not everybody in these organizations runs a company, or even plans to do so in the near future. Only about 30% of Enriquez's cohorts in the UEA, for example, are in business for themselves. Another 10% are "sort of between companies," as Enriquez wryly puts it. The rest are simply testing the waters -- trying to find out if an entrepreneurial lifestyle feels right for them. Some will write business plans; others will not. But most say that, no matter what their path will be, they hope to carry with them certain values that they identify as part and parcel of being an entrepreneur.
To students like Jeff Mulligan, the Babson disco operator; or Scott Mize, a Harvard University student who took a leave from school to launch his own software company, entrepreneurship is a reflection of both personal and societal goals. "I hope I'm part of a new wave of entrepreneurs," says Mize. "One that is as concerned with human values as the bottom line." Muligan agrees, adding, "To me, money's only important as a way of keeping score. I'm just as proud of the money I've been able to pay other students as I am of the money I've made myself." In the five years he has been in business -- first in custom bumper stickers, then in furniture storage, and now in entertainment -- Mulligan has paid out $10,000 in student wages.
Many of the companies the students get into are traditional campus enterprises -- beer-keg delivery services and the like. But enough of the companies, such as Ennquez's foosball operation, are full-scale, full-time businesses, far different from the efforts of previous generations of campus entrepreneurs.
Consider, for example, Scott Mize, the 22-year-old co-founder and principal of Strawberry Software Inc., in Watertown, Mass. Through his expertise, the company has developed four new software packages in recent months -- one of which is a unique package designed to help media buyers make ad-placement decisions. Mize's work force now totals eight employees. He has gotten some interest from several of the nation's software giants in distributing the products, and if sales keep "putt-putting along" as they have been, Mize predicts the company will gross its first million by mid-1985.
At Babson College, meanwhile, 24-yearold Mulligan runs both the mobile disco and its larger counterpart, Videostar Entertainment Inc., a sound-and-video show that is billed as "Boston's first mobile video nightclub." It grosses more than $20,000 a year, he says, and -- perhaps this is the truest sign of his success -- he now has imitators.
It may seem that students who have launched profitable companies that compete in the larger marketplace would have little to gain from associating with their less-experienced cohorts in the entrepreneurship organizations, but most are quick to say that isn't true. Mulligan says he stays active in ACE, as well as Babson's Student Chamber of Commerce, for the camaraderie he finds. "As ACE's slogan goes, 'You can be independent, but you don't have to be alone.' It's really great to talk to people who have the same problems you do." It's instructive, too. "I find out more in an hour over a beer with students like these than I do in a week of classes," he declares. "Where else do you hear what bank is friendly to students who have companies? Or which printer will do your advertising the cheapest?"
"Classes are good for helping you enhance your skills," Enriquez says. "You can learn how to write a business plan, how to present yourself at a bank, or how to do your capital budgeting." But, he explains, you don't hear about ideas and opportunities in class, and, more importantly, "you don't find out what it's like to fail -- to get your butt kicked across the state of Texas like I have a few times." Through these organizations, Enriquez says, he and other students live through one another's successes and failures. And they try to learn to celebrate both. "Lose a grand here, lose a grand there -- that's the best education, I think."
Aside from the thrills generated by watching your company succeed or fail, what is it that these students expect? Money, of course, is part of the motivation, and most student entrepreneurs will admit to being blinded now and again by the dollar signs in their eyes. But for every kid driving a glossy car with a "GIMME" license plate -- like the one parked outside the ACE convention at MIT -- there are several more students who will make a convincing case that the dream of wealth is not all that propels them.
"It's not the money; it's the mechanics of making money," says Enriquez. "Show me a market, and I'll find something to do with it. Give me an idea, and I'll follow through on it."
For Anne Gullikson, past-president of Stanford University Center for Entrepreneurship, one of the largest such organizations in the nation, entrepreneurship is definitely a creative endeavor. But she rejects the notion that it can be practiced only within the confines of one's own brainchild of a company.
"Entrepreneurship is more than just what you do," she asserts. "It's how you do it. Let's face it, not all of us can start companies as soon as we get out of school. Most of us will do it eventually, but until then, I think there are other ways you can utilize your entrepreneurial bent." Unlike most of her counterparts, who are business majors, Gullikson graduated as an American Studies major. She plans to lie an "intrapreneur" to start with -- which she and others define as someone who brings entrepreneurial energy and problem-solving skills to established corporate environments.
Gullikson is also quick to point out that there is no lack of entrepreneurial expression at work in the management of these new entrepreneurship organizations. She, for example, heads an organization that caters to students of all ages and academic disciplines, and plans a convention that annually attracts up to 1,200 people. "If running this isn't a business experience, I don't know what is," she quips.
As for Enriquez, he plans to get his CPA accreditation and then possibly head back to school for his MBA. But first, he is going to work for a Big Eight accounting firm for a year or two -- for "credibility and experience," he says. Does that mean, then, that he is going corporate and giving up his entrepreneurial druthers until the right venture capitalist comes along? "No way," he says. "I was in business for two years before I even heard the word, but I know now that I ani an entrepreneur. I've always been one. And as long as I've got this garbage-can full of ideas," he says, pointing to his head, "I'll always be one."
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