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Campus entrepreneurship: What it is, why it’s big and how incubators can help

by Corinne Colbert

October 2007

It’s an idea that’s been around for years, but has exploded in recent decades, heralded by some as the future of small business. Google the term “entrepreneurship education” and you’ll get nearly 2 million hits.

In 1970, only 16 business schools in the U.S. offered entrepreneurship classes. Today, according to the Ewing Marion Kauffman Foundation, more than 2,000 colleges and universities offer at least one entrepreneurship course. The National Association for Community College Entrepreneurship, founded in 2001, has more than 600 members; the National Consortium of Entrepreneurship Centers, a collective of university-based programs, has more than 150.

“Entrepreneurship is the reality of the American economy,” says Marge Smelstor, vice president for Kauffman Campuses and Higher Education Programs with the Kauffman Foundation. “Universities are responding to that reality.”

But what exactly is campus entrepreneurship – and what role can incubators have (or do they have) in this movement? NBIA talked with members involved in campus entrepreneurship programs, as well as other experts, to find out.

A new curriculum for changing times

Thirty years ago, most college students could expect to collect their degrees, join a corporation and work their way up the ladder until retirement. “When I was a kid, I didn’t know much about business, so I never had those kinds of thoughts [about entrepreneurship] as I was growing up,” says Andrew Scibelli, former president of Springfield Technical Community College in Springfield, Mass., and a founder of NACCE.

That trend lasted into the 1980s. “When I was in college in the mid-’80s, I was told to go to school, work for a large corporation, work there for 25 or 30 years and retire,” says Tim Mittan, director of the Entrepreneurship Center at Southeast Community College in Lincoln, Neb. Post-college, though, “I’ve been laid off three times,” he says. “There is no such thing as safe employment anymore.”

Today’s students not only have seen their parents and grandparents downsized or outsourced, but also have experienced exponential changes in technology in their short lifetimes.

“Students are demanding [entrepreneurship courses] because they have an intuitive feeling that it’s a fast-changing world and they need to know entrepreneurship,” says Bruce Gjovig, director of the Center for Innovation at the University of North Dakota. “From cell phones to MySpace, they understand more than older folks that a rapidly changing society is driven by entrepreneurship.”

“Our hunch is that [the growth of entrepreneurship programs] is very largely student driven,” Smelstor says. The numbers bear out that hunch: A 2005 Gallup Poll found that seven out of 10 U.S. high school students hoped to be entrepreneurs.

Entrepreneurship programs aren’t intended to help students start businesses, but rather to teach them how to start a business and how to think entrepreneurially. “We don’t tell students that we want them to be entrepreneurs. We actually discourage it,” says Dean McFarlin, NCR Professor of Global Leadership Development with the University of Dayton in Dayton, Ohio, which offers an entrepreneurship degree. “We tell students, ‘You should go out and work somewhere for a while, get some experience, understand business better at the ground level, and then five or 10 years down the road you might have the maturity to start your own business.’”

In fact, every student – regardless of major – should understand something about how small business works, Smelstor says. “We use an analogy with music education,” she says. “Not all students are going to be musicians. Colleges and universities have an obligation to provide education not only to those who will be musicians, but also to those who want an appreciation of music.” Similarly, she says, “Every student should have one of two opportunities: either how to be an entrepreneur, or an appreciation for the entrepreneurial mindset, both to understand how our economy flourishes and how they might extrapolate those qualities that will help them succeed.”

Even graduates who enter corporations need to understand entrepreneurial thinking, says Tom Bryant, executive director of the Center for Innovation and Entrepreneurship at Rowan University in Glassboro, N.J.

“Dynamic big companies have to add new stuff [to their product lines] every year just to break even on the attrition of their existing products,” he says. “Even big, stable companies need innovators.”

But can entrepreneurship be taught? ‘Some people believe that all you need is an idea and somehow you’ll just find your way into success,” McFarlin says. “We’re saying that if you have an interest in entrepreneurship, you can use the fundamentals of business to get your venture off the ground. That’s what we provide in the curriculum and in outside activities designed to support entrepreneurship students and encourage entrepreneurship across the university.”

For example, Dayton requires its entrepreneurship majors to participate in two business-creation projects before they graduate. In their sophomore year, students are divided into teams and given $3,000 to start a business offering an actual product or service. By the end of the year, they’re expected to return the $3,000 initial investment to the university; any profits are donated to a charity of their choice. And in their senior year, entrepreneurship majors complete a seminar in which they offer consulting services to local small businesses that need help.

In the sophomore ventures, creativity counts, as does knowledge of the student market. Items with the UD logo are popular: One business even made and sold flip-flops embossed with the UD logo on the tread so wearers left the imprint on the ground. Others have sold UD boxer shorts and bobblehead dolls of the UD mascot; another sold calendars featuring campus landmarks.

Supervising that kind of program can be tricky – just like running an incubator. “Frankly, our program is a pain in the butt to execute,” McFarlin says. “Think about trying to shepherd 10 [student] companies a year. And the senior seminar course alone takes seven or eight people to run.”

But the end result is worth it. Since the program started in 1999, the sophomore ventures have generated some $50,000 for local charities, profits donated after liquidating their ventures and repaying the university’s $3,000 start-up investment. UND has granted 140 undergraduate entrepreneurship degrees since 1999.

“We believe strongly in exposing students inside and outside the curriculum to experiential, hands-on situations where they can put these ideas into practice in a safe environment,” McFarlin says.

And entrepreneurship education may yield better entrepreneurs (and incubator clients). Lisa Roberts, director of Business, Industry & Entrepreneurship at Cowley College in Arkansas City, Kan., has worked with several clients who took courses in entrepreneurship at Cowley. She says they’re more likely to meet their fiscal projections and make good human resources decisions, and less likely to miss payments or run into trouble with vendors or customers, than those without formal schooling in entrepreneurship.

“Many have commented that they’ve become more confident in their decision making,” Roberts says. “They often directly attribute this to what and how we teach, coach and train in our [entrepreneurship] programs.”

‘We need more campus entrepreneurship’

While many colleges and universities have jumped on the entrepreneurship bandwagon, lots are still trying to get on board. When NBIA participated in the 2007 NACCE conference last January, lots of conversations seemed to begin like this:

“Our president/dean/director says we need more entrepreneurship on campus. We’re trying to figure out how to do that.”

How colleges and universities introduce entrepreneurship on campus depends, in part, on the president/dean/director, Roberts says. “If you have a [leader] everybody likes and follows, it’s easier,” she says.

A nascent entrepreneurship program may need to grow slowly. “You need to find receptive people in the departments – you can’t take on the whole university at once,” Gjovig says. “It’s a conversion process. As you build a track record of success, it goes easier.” Consider Gjovig’s example: The Center for Entrepreneurship at UND was founded in 1984 as a community outreach program for entrepreneurs. It opened its first incubator, the Rural Technology Incubator (now the Skalicky Technology Incubator), in 1999, the same year that the university launched its entrepreneurship degree program. Today, the center manages two incubators and has formed three angel networks in the state. Programs for students include internships with incubator companies, scholarships for entrepreneurship students and a seed fund for student ventures. Each program has built on the next, and the resulting web of campus entrepreneurship opportunities helped UND rank 14th on the Princeton Review’s list of America’s Most Entrepreneurial Campuses and 8th on its list of Best Schools for Entrepreneurs.

“We started with entrepreneur outreach, and that really led to a strengthening of our academic programs,” Gjovig says. “Our students and faculty see so much practice going on here, and that makes a difference. It gives us credibility.”

Starting an entrepreneurship program also takes the kind of networking skills that are an incubator manager’s bread and butter. “Some colleges still operate as silos – one department doesn’t talk to another,” Roberts says. “I have introduced people who’ve worked together 10 years.”

The very nature of academic institutions, however, can make introducing the idea of entrepreneurship difficult. One issue is that academia can be very resistant to change. “Some faculty want to teach the way they’ve always taught,” Roberts says. Another is language. “For a lot of faculty, ‘entrepreneurship,’ like ‘capitalism,’ is a bad word,” Smelstor says. “When we start talking in terms of innovation and creativity, that tends to elevate the discourse because it’s not just business school jargon vs. the rest of the university.”

Still, most entrepreneurship programs are in business schools. “A few have tried to reach out and institutionalize it through the curriculum outside the business school,” McFarlin says. At Dayton, students in any discipline can obtain a minor in entrepreneurship, and the entrepreneurship program’s annual business competition is open to anyone affiliated with the university. Entrants take a series of one-hour seminars on topics such as recognizing opportunities, analyzing financial feasibility and honing an investor pitch. Last year, more than 100 entrants from outside the entrepreneurship program attended the competition seminars, McFarlin says. While an entrepreneurship major won the competition, the second-place team was two law school students. “About 30 percent of entrants were not business students,” he says.

Incubating student businesses

Business incubation programs, whether campus-sponsored or independent, can be an important part of any campus entrepreneurship initiative, Smelstor says. “Incubators tend not to be layered with bureaucratic impediments, so they have a freedom and neutrality that laboratories and university departments just plain don’t have,” she says.

After technology transfer and commercialization – already well-established roles for incubation programs on and near campuses – the most obvious route to actually spurring business creation on campus is student incubation. A few institutions have dedicated student incubation programs; others simply welcome students along with faculty and community start-ups.

Student entrepreneurs tend to be a unique breed, Gjovig says. “Students who start their own companies are used to being hard workers,” he says. “Many of our student entrepreneurs are not straight-A students, but they all are making good progress toward graduation.” Still, one thing an incubator manager may need to do with student entrepreneurs is help them with time management. “We see a trend of them working on their business first, then on their schoolwork,” Mittan says. “We try to help them balance both by setting time frames for homework and not taking on too many sales or projects for their business.”

Juggling competing responsibilities may sound tiring, but student entrepreneurs have youth on their side. “I would argue that students have at least one thing that seasoned entrepreneurs perhaps no longer have: an abundance of excess energy,” says Jase Wilson, who started a company when he was an undergraduate at the University of Missouri at Kansas City. “It was no problem at all to stay up all night to do the required workloads for school and the company.” Now finishing a graduate degree at the Massachusetts Institute of Technology in Cambridge, Wilson says, “I still pull all-nighters from time to time – but I can already feel the difference between 22 and 25.” (For more on Wilson’s experience, see “Portrait of a Student Entrepreneur.”)

There are other unique challenges to incubating student businesses. Cash flow is one thing, says Barbara Hayde, president of the Entrepreneurs Center in Dayton, Ohio. “[Student incubation] is very difficult to do because their resources are at such a minimum,” she says. Still, “if a student company comes in here and they can pay the rent, they’ll get every bit of service that we have available to them,” she says.

It’s not just the lack of capital that can hinder student entrepreneurs, says Jeff Becker, director of the Arts Incubator of Kansas City in Kansas City, Mo. Young people can become too easily discouraged, so an incubator manager will have to make sure prospective student clients realize that starting a business isn’t fun and games, he says. “It’s [more] a matter of working through the issues than just deciding whether [a venture] is a ‘go’ or ‘no-go,’” he says. “They have to have an attitude that they will find solutions, rather than run up against a brick wall and just stop.”

Student entrepreneurs also may be in even greater need of networking opportunities, if for no other reason than to see how others work. At Becker’s incubator, like many others, clients are encouraged to attend weekly networking functions. “It’s probably even more useful for students because they’re isolated in academia,” he says. “If they can get out of that setting and better understand what people have to do to make their visions come true, it inspires them.”

Beyond student incubation

There are other ways to get students into an incubator besides helping them to start a business. At the University of North Dakota, Gjovig recruits students to serve as interns for incubator companies. “Getting these companies access to talent is key,” he says.

“If you can’t afford that talent, student interns are great hires.” And perhaps some of those students get inspired by what they see: Gjovig’s incubator currently counts 10 student-run ventures among its 32 clients.

Gjovig also helps students learn about entrepreneurship from the finance side. Just last year, the center established the Dakota Venture Group, the only student-run venture capital fund in the United States. The fund received initial capitalization through a grant from the Dakota Foundation, which fosters social entrepreneurship in North Dakota and New Mexico; other sponsors include a bank, an insurance executive and the Center for Innovation. DVG has a revolving evergreen fund that plows capital gains back into the fund; it’s also developing a for-profit fund that will return dividends to investors. The group has made one investment so far: The Wine Standard.com, a company that sells bottle openers, glasses, decanters, storage systems and other accessories to wine enthusiasts. (Incidentally, the company was launched by a UND entrepreneurship graduate.)

Speaking to classes can be a great way to reach out to students who are thinking about becoming entrepreneurs, Roberts says. “Any time I talk to a class, I get no fewer than three students who follow up with me,” she says. “They may be interested in starting a business and developing that way of thinking. Or they may give me examples of companies they’re working for so I can help them develop ways to present their ideas to their supervisor. I’ve even had students who brought in their parents who had ideas.”

Another way incubation programs can get involved with campus entrepreneurship programs is to provide expertise. At the University of Dayton, Hayde is a regular guest speaker in entrepreneurship classes. She talks to sophomore classes – the ones running the $3,000 start-ups – about the reasons businesses fail. She also sits on panels that hear students’ presentations on their businesses at midterm and at the end of the year.

“I feel fortunate that I get to take part in it,” she says. “It’s fostering entrepreneurship at a very early age, and they get the bug.”

Campus entrepreneurship at community colleges

“Campus entrepreneurship” has different meanings and implications depending on whether you’re a four-year university or a two-year community college. And members of those groups – especially those at community colleges – are very aware of the difference.

“You’ve got all the university people saying [campus entrepreneurship] is about research and professor-led stuff,” says Tim Mittan, director of the Entrepreneurship Center at Southeast Community College in Lincoln, Neb. “That’s not happening at the community colleges. We have people coming in saying, ‘I want to start a business; I got my degree in plumbing.’ He can start making money tomorrow, but he needs help.”

“We have probably more realistic opportunities to bring [entrepreneurship] education full circle because we teach vocations,” says Lisa Roberts, director of Business, Industry & Entrepreneurship at Cowley College in Arkansas City, Kan. “At a university, students don’t immediately feel the idea of acting on [a business idea]. Our students take their knowledge with the understanding that they will do something with it.”

Entrepreneurship courses can help community college graduates establish stronger businesses, these managers say. “If you go into the auto mechanics program and take one business course, that doesn’t get them ready to go out and start a business,” Mittan says. “By adding entrepreneurship classes, we enhance the education they can get.”

Half the battle, Mittan and Roberts say, is getting past societal barriers to the idea of entrepreneurship. Someone studying automotive technology or running a hair salon may think of an entrepreneur as someone who develops a technology or product and brings it to market – like a university researcher. “Nine times out of 10, our students are going to start their own businesses, but that word association with ‘entrepreneurship’ isn’t there,” Roberts says.

Another difference at community colleges is mission. While many universities have a service component to their missions, the very name “community college” telegraphs those institutions’ focus. “I serve more members of the community than I do people associated with the college,” Mittan says.

In addition to entrepreneurship degree programs, SCC’s Entrepreneurship Center provides incubation services and continuing education courses for those running established small businesses. Similarly, Cowley College’s CowleyWork program offers not only an associate’s degree in entrepreneurship, but also corporate training and technical assistance for small businesses, and continuing education courses in entrepreneurship, leadership and business administration.

Community colleges increasingly are taking the entrepreneurship message to high schools. Mittan’s program offers a kind of entrepreneurship vocational school with up to 70 students from six public high schools and several private schools. In the Entrepreneurship Focus Program – funded by Lincoln Public Schools – juniors and seniors spend five hours a day at the Entrepreneurship Center taking traditional classes like English, social studies and math, but with an entrepreneurial focus. They return to their home high schools in the afternoon for other classes and to participate in extracurricular activities. Their courses at EC are dual-credit; when they graduate, they already have nine hours of college credit they can transfer anywhere.— CC

Portrait of a student entrepreneur

Jase Wilson “always had a hard time answering to others,” he says.

But it wasn’t until he was a student in urban planning and design at the University of Missouri-Kansas City that he began to actually think of himself as an entrepreneur. One of his professors, Mike Frisch, described a class project as “very entrepreneurial.”

“I had not really thought of that term before,” Wilson says. “I started to see that kind of direction I wanted to go in life based on that interaction.”

He took a FastTrac class at the Arts Incubator of Kansas City and then pitched an idea to director Jeff Becker: a Web development firm focused on developers, architects and urban planners, based on his experiences working with those kinds of companies on student projects.

“They’d say, ‘I wish someone was out on the market doing this’ or ‘what would it cost if you were to do this for us?’” Wilson says.

Today, Wilson’s company, Luminopolis, has a full-time staff of four offering Web development, interactive media and artist’s renderings for realtors, developers, urban designers and others. Wilson himself has scaled back to “silent partner” while he finishes a master’s degree in city design and development at the Massachusetts Institute of Technology in Cambridge. But during the summer, he worked on plans to seek investment capital to grow the company. When he’s done at MIT, he plans to “transform the entire operation into a city design consultancy with the capacity to make Web-based communication tools for cities and propose physical interventions for downtowns,” he says.

Wilson credits the incubator for helping his company succeed. “The incubator not only let us develop a business, but also let us develop many contacts we wouldn’t have had,” he says.

For his part, Becker is proud of Wilson and his company. “Jase is one of our success stories,” Becker says. “We’ve had a number of artists come in and accomplish pretty significant things, and Jase is one of them.” —CC

Ranking entrepreneurial campuses

With entrepreneurship becoming a hot topic for colleges and universities, the media have jumped into the game with rankings of campuses. The Princeton Review assembled a list of America’s Most Entrepreneurial Campuses in 2004 for Forbes.com and prepares an annual list of Top Entrepreneurial Colleges for Entrepreneur. Both lists include a number of schools that sponsor NBIA-member incubation programs. See the full list at of America’s Top Entrepreneurial Colleges at www.entrepreneur.com/topcolleges. Forbes’ list of Most Entrepreneurial Campuses is available online at www.forbes.com.

Keywords: best practices, kitchen incubator, special-focus incubator

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