There's nothing new about college students launching businesses that appeal to their classmates. After all, seasoned entrepreneurs will often say success comes from knowing your market. And who knows college students better than college students?
But less discussed are the downsides and challenges attached to turning your classmates into customers. Ever tried sitting next to a disgruntled customer in Business Calculus? Yeah, awkward.
To find out how to both avail yourself of the benefits of campus life and steer clear of the mishaps, take a cue from fellow college startup founders. Here are their college startup pros and cons:
Pro: Marketing Made Easy
Some students say they hold certain advantages when marketing to their peers. They like being able to access the classroom, where they can pitch their wares before a professor walks in, or being allowed to send email blasts to fraternities, sororities, or other hard-to-crack groups on campus. (That latter strategy actually helped a couple of recent grads from Furman University in South Carolina attract an average of 15,000 new users each week to download their Yik Yak social networking app, they say.)
Pro: Inspiration Is Everywhere
Some students claim they hold unique insights about what's most important to their classmates today. When Charles Dall got fed up with providing microloans to his frugal roommate for beer, books, and other college essentials, he knew he wasn't alone. Fueled by frustration, the third-year student at Cooley Law School in Michigan created an expense-tracking app called Where's My Money Bro?, which sends an automatic text alert to those who fail to repay a loan after, say, a week or two, then helps transfer payments between borrowers and lenders.
"Everyone I've come across says they get really frustrated when people don’t pay them back," says Dall, who is rolling out the app now and advertising it by paying university groups like Hubbell Connections an average of $50 each semester to have student members post messages on social media and distribute flyers on campuses.
Con: Empty Pockets
But as every student knows, it's hard to get college kids to pay for anything, which could be an obstacle that Dall runs into. (He plans to charge customers $1.99 to download his app.) Still, the 30-year-old is trying to cut costs elsewhere, by partnering up with free money-transferring services like Chase QuickPay, rather than programs that sometimes charge a fee.
Con: Sour on Semesters
For others, a greater challenge has been marketing the right way and at the right time. To generate buzz for MarketOSU, an online classifieds site for Ohio State University students, Jay Clouse spent the start of his junior year in 2012 donning a cheesehead and a T-shirt with his company’s logo. He also spent a chunk of his personal cash on giving away free football tickets to entice individuals to sign up.
But he got started when the school switched to a new semester system. That meant ample course and textbook changes. "And we struggled on the book side, due to timing of the launch,” says Clouse, 22. Even today, the biggest selling item on his site--football tickets--is linked to seasonal demand. All told, he’s managed to corral only around 7,000 active users (from a student body of more than 63,000).
Con: Growing Pains
“When you are in school, you have a power. . . to reach out to peers informally,” says Mike Moyer, an entrepreneurship professor at the University of Chicago’s business school, who adds that marketers would drool over that kind of access.
But scaling up is an interminable problem, as the churn of college students is constant and owners just don't have much experience. It's possible to expand a campus-based business, he adds, “but you have to move very fast.”
To overcome this wrinkle, Sean Thorne, a 23-year-old senior at the University of Oregon, relies on the kindness of mentors. “I know nothing about law or finances, so we have a mentor in each area,” says Thorne, who is the co-founder of the 14-month-old Hallspot, a social networking site for students. "We’ve [also] never scaled a tech firm from beta to 4,000 colleges in America. . . . We're still figuring out that as we speak."