Like Yahoo!'s backers, a number of leading venture capitalists are mining campus populations -- the so-called push-button generation -- for ideas to appeal to the mass market of individuals who feel comfortable buying products and services on-line. Take Tripod, founded in 1992 by Williams College students Bo Peabody, 25, and Brett Hershey, 24, along with professor Sabot. The company began with a student survey Peabody conducted for Sabot's class. "I got to thinking about what Professor Sabot was telling us about low savings rates among Americans and the problems that creates," Peabody recalls. When Peabody's survey results were tallied, he was astonished. "Eighty-five percent of the students said that college is not preparing them for the future," Peabody reports, noting that student ignorance about personal finance and investing was particularly glaring. As a result, Peabody, whose father teaches high school and whose mother is a computer-company executive, prevailed on Sabot to help him locate investors, including Pete Willmott, the chairman of the board of trustees at Williams College and former chief financial officer of Federal Express, to jump-start Tripod.
The company's main product is an Internet site that offers 18-to-34-year-olds a complete rÉsumÉ and job-hunting service, as well as the tools to create and a free place to house their own individual home pages. There are also travel and purchasing discounts, contests, E-mailed reminders of important dates and deadlines, and information from financial-service providers interested in forming relationships with young people. Working with a network of Tripod representatives recruited on more than a hundred college campuses, the company has already registered more than 50,000 members and has even more users. "What we are doing is building a global community of students," Peabody explains while sitting in Tripod's office, in a sagging mid-19th-century white-clapboard Greek Revival house nestled a stone's throw from the Williams campus in Williamstown, Mass. Young people will constitute the first consumer mass market on the Internet, he says: "Hardwired dorms are spreading like wildfire. Thirty percent of the people accessing the Web are at educational institutions. Seniors spend 20% of their free time on the Web, but freshmen report spending 80% of their free time on the Web. When that group graduates, there will be a huge cohort of people wanting high-speed Internet connections."
That reasoning appears to make sense to New Enterprise Associates (NEA), the venture-capital firm that recently purchased a minority interest in Tripod for several million dollars. NEA has also pumped money into several other thriving Web ventures, including UUNet and TravelNet. Tripod posted its first sizable revenues this past summer: about $200,000 in ad sales generated by the debut of Tools for Life, a 32-page magazine designed to help drive students to the Tripod on-line site. Tools for Life is being poly-bagged with more than 1 million of the textbooks that publisher Prentice Hall sells to college students every year.
Hard data on the extent and impact of campus entrepreneurial ventures are difficult to come by. "Measuring the economic impact of entrepreneurial firms spawned by colleges and universities is elusive at best," says economist Doug Henton, who served in both the Ford and Carter administrations and who now runs Collaborative Economics, a business based in Palo Alto, Calif., that analyzes economic clusters. Despite the importance of job creation to the economy, Henton notes that the dynamics of campus entrepreneurship -- unlike, say, the number of family farms in Iowa -- are entirely overlooked by the nation's formal economic and commercial research and data-collection activities. "What we do know, though, is that entrepreneurship is a contact sport," Henton says. "The more interaction between the campus and the world of business, the more likely there will be tangible economic results."
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Hal Plotkin is a freelance writer based in Palo Alto, Calif. He can be reached at hplotkin@plotkin.com
COLLEGIATE HALL OF FAME
Cisco Systems: With sales of some $3.2 billion in the last four quarters and about 6,100 employees worldwide, Cisco Systems is one of the most conspicuous networking superstars; $10,000 invested in the company's February 1990 initial public offering has appreciated to more than $900,000 today. The company was founded by husband-and-wife team Leonard Bosack and Sandy Lerner, academics at Stanford University who supervised computer networks for the school's computer-science department and business school, respectively. The couple figured out how to get their networks to communicate with each other through a device Bosack developed, called a router. Bosack and Lerner quit their jobs, mortgaged their house for seed capital, borrowed against their credit cards, and converted their living room into Cisco's first research-and-development center. One key to Cisco's success: its "customer-advocacy department," which Lerner created. The couple retained 35% of Cisco's shares at the IPO; Cisco's market capitalization now stands at nearly $31 billion, give or take a few hundred million dollars.
Microsoft: It was a magazine article -- Popular Electronics' report on the MITS Altair 8800 minicomputer kit -- that helped persuade Microsoft founder Bill Gates to drop out of Harvard in 1974. Together with his childhood friend Paul Allen, who was getting bored at Washington State University, he created a programming language for the new "hobbyist" computer, which they persuaded MITS to sell a few months later. When MITS offered Allen a job in Albuquerque, he and Gates set up shop in a small office in a strip mall alongside a vacuum-cleaner dealer and a massage parlor. The partners credit the Mother's Club at their high school for funding the first computer terminal installed at their school, in 1968, which helped generate their early fascination with software development. They developed their first product, Traf-o-Data, while in high school. It was designed to automate traffic analysis and was a flop, but their later products, which include MS-DOS, Microsoft Word, and Windows, have done reasonably well; net revenues for 1995 totaled nearly $6 billion, and Microsoft employs 20,000 people worldwide.
