Top Gun for Start-Ups
An experimental graduate program is designed to carry students to their first start-up
Once upon a time, company founders were born, not made. It was said that entrepreneurs were a special breed, more driven to succeed than the rest of us. It was also said, by such experts as Jeffry Timmons, author of the seminal work The Entrepreneurial Mind (Brick House, 1989), that there was no point in even trying to start a company until you had been in the real work world for years. Maybe by age 40 you would have picked up the 50,000 bits of life learning it takes to deal successfully with the pressures of a start-up.
Boy, has that view changed. "It's ironic, but the times have changed, too," says Stephen Spinelli. "The difference today is that the cost of gaining those 50,000 chunks is so much lower. Back in the old 20th-century days, in 1990, if you went out and failed, it became much harder to get resources and people and the marketplace to listen to you when you tried again. Now it's far easier to reengage, to take the chance. You're not penalized for the loss or for being too young. That changes the whole risk-reward scenario."
A cofounder and former master franchisee of Jiffy Lube International Inc. (one of his units held the record for most oil changes in a day: 1,649), Spinelli cashed out some years back. Eager to share the life that made him so successful, he became a college professor. In his role as director of the Arthur M. Blank Center for Entrepreneurship, at Babson College, in Wellesley, Mass., Spinelli has spearheaded the creation of a revolutionary curriculum for a select group of second-year graduate students taking their M.B.A.'s in entrepreneurship. The new program completely replaces standard class work for the group and practically guarantees that before graduation, all in it (some individually, some in teams) will launch a new business.
"We pride ourselves on delivering education that is relevant and changes with the market, and the whole business model for start-ups has changed with the Internet," says Kate O'Halloran, associate director of the Blank Center and the person most responsible for ensuring that Spinelli's ambitious brainchild remains grounded in reality. "Granted, this program never would have gained legitimacy two or three years ago, but now it reflects the market and the way the world has changed."
What Spinelli has done, in partnership with several other professors at Babson, including the aforementioned Jeffry Timmons, is to develop an entirely new program called the Entrepreneurship Intensity Track (EIT), designed to provide a year of specialized study to those students with the highest potential to start a viable business. Babson spent the past year (and close to $1 million) developing the EIT, but it's still a "beta test right now," as O'Halloran says -- an important one.
One reason for the high cost is that the EIT will also serve as a pilot program for Babson's future use of long-distance-learning technology. The EIT was designed with minimal formal classroom sessions. Students will work together in teams on their own schedules much of the time, and Spinelli intends to incorporate a distance-learning component, including online content and Web-based simulations. "It will help us make better use of the Babson brain trust and provide more collisions with reality for these 21 students," O'Halloran adds. Compared with traditional programs, "this is a half-baked, barely ready-to-go program that Steve and I have a lot of passion for and conviction about."
What she means is that even though the EIT design process has been thorough, it's still a pilot program this year and enough room has been left for winging it as it goes along. Spinelli intends to fine-tune the curriculum further depending on what happens in this first year. "Even on the intensity track, there will be different paces for different students," says Spinelli. "I mean, even before the formal course work started, one had angel investors ready."
There are other graduate schools attempting new programs -- Fordham University in New York City, to name one, recently announced a new class in which students work directly with CEOs of dot-com start-ups -- but Babson has the most experience. It became one of the first to offer entrepreneurship M.B.A.'s in 1967. In 1993, Babson famously remade its entire academic structure, building the first curriculum organized according to the growth stages of a business. The EIT began this past summer, with all the students interning in early-stage start-ups all over the map.
"It was real work, not bad," says student Kirt Poss, 30, of his internship at Boston Scientific Corp., a medical-devices developer. The beauty is, that's the field he intends to enter with his own start-up, which he has already named VisEn Medical. "I have a line on a new imaging technology, which I found when I started my career at a research lab in a Boston hospital. I kept in touch with the head of the lab and talked to him about starting a company around his technology, and now we're putting together a company."
After the internships (or the immersion module, meaning immersion into the real world), the EIT program is taking Poss and the other students through four more modules designed to thrust them into start-up mode. The first includes a new course, designed by Timmons, that will teach the students how to recognize promising opportunities. "They'll end up with a three-page executive summary and a 'rocket pitch' -- elevators are too slow," Spinelli says.
The next two modules bring students together into teams to write business plans, meet with investors to learn about gathering capital and other resources, and spend time in what is being called the "clash room" -- not a specific physical space but a type of forum designed for the EIT, in which students can bang heads with actual investors. "Once they have the rocket pitch, we bring them together with the brains of Babson -- the friends, family, industry experts we have access to," Spinelli says. "That's how we ratchet these students into having the benefit of 50,000 chunks of wisdom."
The final weeks of the EIT, through the end of April 2001, will be spent in the launch module. The intention is for each student, individually or as a member of a team, to secure first-round financing and incubator space for a high-potential business before graduation. In the last weeks students will attend classes and "clashes" in managing growth through the various life stages of a business, from start-up to change of direction. "We want to see them into the future," says Spinelli.
The trick for a curriculum-in-progress like this is to get just the right students. Of the 147 second-year M.B.A. candidates interested, 47 were asked to apply, and 21 are now in the program. "One of the old fallacies of entrepreneurship education was that one size fits all," says Spinelli. "It isn't right. It isn't right to tell any student, 'If you go through this path, you'll come out an entrepreneur.' You have to create a lot of paths. We understand that the student who is going back to Argentina to create wealth for the family is different from the kid who sets off for Silicon Valley."
So whom is the EIT made for? "The path is for the kids who want to get on the rocket-ship path, who say they can't wait to start a business -- the opportunity is now," Spinelli says. "Historically, we would say, 'Calm down, wait,' to those students. Now we're saying, 'No, get crazy. You're in a supportive environment with lots of intellectual capital and resources. Let's go."
Spinelli's whole concept is based on taking the best and the brightest and giving them a lot of directed attention, making the most of the ones with the most potential. That's a little bit of a problem for some of those left behind. "The only resistance to the program was from some of the students that were not selected," says O'Halloran. "They felt they were at the #1 school for entrepreneurship and couldn't get the crème brû lée."
But for those who were chosen, like Heather McGowan, 29, the program is fantastic. She hasn't yet decided what her start-up will be, but she is confident she'll have one by the spring. "I have an idea, but it's not down to earth yet," she says. "It's to facilitate people who are technologically challenged. Appliances are now being made to be more friendly, but the makers don't know how far they have to go for some people. I want to build products and consult to makers, taking a Martha Stewart approach. I might as well aim to become an icon."
During the summer, McGowan interned at an investment firm called Meadowbrook Lane Capital. Although it's based in Springfield, Mass., she worked from a beach house in Mattapoisett, Mass., helping write a business plan for a socially responsible bank. She loved it. "It's a great opportunity," she says. "Sure, it's an experimental program, but my whole life's been an experimental program."
Michael Warshaw is a senior editor at Inc.
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Market capitalization as of mid-August 2000 for some recent campus start-ups
Akamai Technologies Inc.: $7.9 billion
Inktomi Corp.: $11.7 billion
Broadcom Corp.: $51 billion
Of course, not everyone's a winner.
Theglobe.com Inc.: $32 million (down from $622 million at its IPO)
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