For most students, juggling a class load with extracurricular activities is enough of a responsibility. Some students, however, decide to start a business on the side.
While enrolled in the School of Management’s Masters in Business Administration program in 1999, Michael Langford took an entrepreneurial leadership class. One assignment was to create a feasibility study — a limited version of the business plan a hopeful entrepreneur would present to potential investors.
Langford conceived an idea for corporate management software and got a positive response to his plan. He pitched his idea to SMG’s Michael Bronner Center and Hatchery, a program for undergraduate and graduate students who have entrepreneurial interests.
The Bronner Center paired Langford and his partner with an SMG faculty member to provide guidance and mentoring.
Another student, David Berman, a 2001 SMG graduate, launched a company called the Social Entertainment Network with the help of the Bronner Center and won BU’s Entrepreneurial Management Institute (EMI) Business Plan Competition in 2001. He cited his faculty mentor, Dr. Jeffery Hiesler, as providing him with valuable guidance in areas in which he was weak, such as formatting financial statements.
Prospective entrepreneurs like Langford and Berman can present their business plans to the Bronner Center Steering Committee at any time, according to Peter Russo, the director of the program and an SMG professor. Groups with promising concepts are teamed with faculty volunteers and can obtain a stipend of up to $1,000 to develop their plans. They also get the opportunity to meet with venture capital firms that offer critiques and advice.
The participating venture capital firms “poke holes and ask questions that need to be answered,” Langford said.
The goal of the process is not to create multi-million dollar corporations, Russo explained, but rather to offer assistance to students who would otherwise be unfamiliar with or unprepared for the enterprise. Business plans — documents that articulate the financial, organizational and strategic aspects of the potential business — are a crucial element in convincing potential investors to invest.
“For most students, they’re here to gain more experience,” Russo said. “They get the networking, the contacts – they get to know the industry.”
Langford, his partner and their business got fairly far in what he called the “pre-start-up phase.” They incorporated their business and were working with clients to hone their product. However, after much consideration, they decided not to launch the business.
Langford does not look at the experience as a failure. After graduating in 2001, he began working as an analyst with a financial corporation in downtown Boston. He founded the Boston University Alumni Entrepreneur Organization, which he describes as an organization where people can come together to talk about entrepreneurship, share advice and make contacts.
He is developing a new business idea, using his experience with the Bronner Center to navigate the obstacles he knows he will encounter.
“It was actually a success, in that not all businesses should be started,” he said. “We realized that we were going to be very capital intensive — both my partner and I had a minimum salary requirement and neither of us was really ready to do the bootstrapping method at that time,” Langford said.
Both Langford and Berman said most small businesses, especially those with students in CEO positions, start out by “bootstrapping” — making it with their own funding and not the funding of a venture capital firm.
“Even though everyone thinks about getting VC [venture capital] money to start a business, less than one percent of startups are funded by VC money,” Berman said.
Eric Tapley, winner of last year’s New England Collegiate Entrepreneur Awards, can attest to that. Tapley, who started 3000?K, a web services firm, as a student at Worcester Polytechnic Institute, started his business primarily with cash flow from freelance computer consulting.
After a rocky beginning, Tapley took work developing websites for the American Red Cross and worked for six months without a paycheck to “turn things around” and restore customer confidence in his service. Tapley said decisions like that are an integral part of any determined entrepreneur’s success.
“I took my free time and put it toward the business,” he said. “There have to be sacrifices to make a business work, but I think they’re worth it.”
For Tapley, it was “rewarding but difficult” to create a functioning business while finishing his senior year in college. While time management was especially challenging, classes were more beneficial, because each class became a way to develop necessary skills.
Berman also looked at classes as a way to increase his skills. While he was not concerned about his grades and admits they “weren’t stellar,” Berman believes school was still an important phase in the development of his business.
“Going to class was, for me, an important part of running the business. I was receiving training in my mind specific to what I needed to do,” he said. “For example, SEN is a service company, so I would take courses like Marketing For Services with Roberta Clarke, or Entrepreneurial Ventures with Kermit Stoffer, both amazingly good classes which I will never forget. If I hadn’t taken these classes, the business wouldn’t be what it is now.”
Now, the business is planning to release its software to the public in April. Berman says he is working harder than he ever has with fewer resources and under more pressure. However, he says it is the best job he has ever had.
Tapley said perseverance is the most important part of an entrepreneurial endeavor. He describes his company as having a “pretty good strategy, pretty good customer service, pretty good price — nothing outstanding.” What sets 3000?K apart, Langford said, is determination.
“You have to be almost nuts,” he said. “Real entrepreneurs stay in even in down markets. That’s the time when people are weeded out, and it’s the most important time to get involved.”
According to Russo, the focus of the Bronner Center has changed as a result of the market changes over the past several years.
Bronner developed the program in 2000 in the midst of the dot-com boom. Then, Russo said, the majority of the plans they saw were Internet start-ups. Now, more plans are technology-related, responding to the current trend in digital technology. Currently developing projects in the Bronner Center include wireless devices, software and biotechnology.
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