On Easter Sunday, Groovebug’s co-founders are eating Vietnamese sandwiches and drinking beer at the small card table in their empty office. Soon they’ll be back at the whiteboard, brainstorming ideas for their app, a personalized iPad music magazine. It compiles music, video, news and similar artists according to the user’s tastes.
Both Jeremiah Seraphine and Neal Ehardt are still students — Seraphine in Medill’s graduate Integrated Marketing Communications program and Ehardt in McCormick’s undergraduate computer science department. Both have cut their workload to one class a quarter to devote more time to growing their startup, which they founded last year as part of NUvention: Web, a Northwestern entrepreneurship class.
Because of Groovebug, Ehardt will put in a fifth year at McCormick. That’s not unusual for an engineer, and he talks about the decision to prolong his college career as if it was the obvious choice. “Having your own startup? That’s enough to make me stay,” he says. His position as Groovebug’s chief technology officer has given him a different skillset than what he learned in the classroom. But as the co-founder of a decently successful venture, it wouldn’t be unprecedented for him to drop out entirely, following in the footsteps of Bill Gates, Mark Zuckerberg or even Garrett Ullom, who dropped out of Northwestern in 2010 to develop another NUvention: Web startup, a successful social media marketing company called Adaptly.
“It is still on the table,” Ehardt admits. “I haven’t graduated yet.”
*****
The Farley Center for Entrepreneurship and Innovation is McCormick’s hub for all things startup. It’s even somewhat of a startup in itself. Founded in 2007 and endowed in 2008, it’s an example of entrepreneurship’s often-overlooked sibling, intrapreneurship: building a company from within an existing corporation, or in this case, a university. Its mission is to help students and faculty understand and pursue entrepreneurship as a career option, both in and out of the classroom. It oversees traditional courses on the subject within McCormick’s Industrial Engineering and Management Sciences program.
But the favorite child in the family is the NUvention program, a set of classes that embodies the center’s emphasis on interdisciplinary and experiential learning. Inc. magazine ranked it among the 10 best entrepreneurship courses of 2011. In just over two quarters, students develop a business from a zygote-sized idea to a launched company with a prototype, a plan and an investment pitch. As a McCormick program, the classes have more of a tech bent, but since its first incarnation in 2007 as NUvention: Medical Innovation, it has expanded its brand to separate NUvention classes for web, energy and social entrepreneurship. Though NUvention Medical Innovation is still only for graduate students, the rest are open to all schools, undergraduate and graduate, and acceptance is competitive. NUvention: Web, which teaches students how to create and launch web businesses, receives between 120 and 160 applications per year for 60 or 70 spots.
“Our main focus is really teaching and empowering students to sort of figure out what it means to be an entrepreneur,” says Mike Marasco, who directs the Farley Center in addition to spearheading the NUvention program.
Marasco credits a lot of the popularity of startups to Mark Zuckerberg. “It was around beforehand, but I think Facebook was the first one to really validate that you can go from a college dorm room to a multibillion-dollar company,” he says.
The fact that traditional jobs for recent grads are few and far between doesn’t make striking out on your own any less appealing.
*****
Behind two flights of stairs, four sets of doors and tunnel-like hallways, the Northwestern University Incubator is essentially free office space for any Northwestern student, faculty member or recent graduate working to grow their fledgling company. This is the first year the Incubator has been its own entity, rather than space rented by the Farley Center within Evanston’s Technology Innovation Center.
Once accepted, businesses can use the office above Cafe Mozart on Davis Street 24/7 for three months rent-free, and for $10 a month for the nine months after that. Right now it’s home to 15 companies in different stages of development, whose founders aren’t necessarily there day in and day out. On any given day, you can expect to see Groovebug’s team and the members of SweetPerk, a mobile app company that specializes in local business deals, working there.
Though there’s a smaller private office, the majority of the Incubator’s space is devoted to a single room with a couple desks, a whiteboard, a fridge and a half empty case of Rockstar energy drinks. No space is assigned to any specific company, which fosters a better learning environment, according to Patty FitzGibbons, the program manager who oversees the Incubator. “Because the students in the Incubator are all kind of in the same boat, they feed off each other, they learn from each other — from their mistakes or from going in the right direction,” she says. They can bounce ideas off the developer or commiserate about the process.
“It really provided a support network for those tough days when you’re like, what the hell am I doing?” says SweetPerk CEO Austin Asamoa-Tutu, who graduated from the Kellogg School of Management last year. In an area where the most important skill you have to learn is how to deal with people telling you “no,” community is important.
*****
You can’t throw a rock at Northwestern’s entrepreneurship community without hitting someone who has participated in NUvention: Web, which started in 2010 and was the first NUvention class that accepted undergraduates.
Sandeep Paruchuri, a NUvention: Web TA, former chief financial officer for Wildcat Express Delivery and general entrepreneurship enthusiast, describes the class as “kind of like boot camp.” In the fall, long before they step into the classroom for the first time, participants have to meet with their groups and brainstorm ideas over break. Though the class provides a safe space to try out risky ideas with the Farley Center’s funding, its advisory board isn’t afraid to cut you to pieces.
“They just completely tell you how crazy you are and your idea completely sucks, you’re full of crap, it’s not going to work, and then you have to go back to the drawing board and sort of reinvent everything,” Asamoa-Tutu recalls. And perhaps because of that boot camp mentality, those who complete the NUvention program feel it ingrains the startup process in them well. “We’ve developed this second product now that we’re selling and I tell you, without even thinking about it, almost everything we did came out of the processes that we learned in class,” Asamoa-Tutu says.
One of the main tenets of the class is the importance of user feedback. “The most important thing that they do in the NUvention course is banging the idea into our heads that we need to have people actually using our product and testing our product in order to learn anything,” says Nicolas Renold, who completed the class last year. After he graduated from McCormick, he and his two co-founders took their NUvention: Web startup to the Highland Capital summer incubator program in San Francisco. He slept on couches for three months while his co-founders lived at their childhood homes in the area as they developed their iPhone app, Waddle. The photo journal app allows you to share pictures and comments within a private group, rather than blasting 500 pictures of your baby or your bar night all over Facebook.
“One of the things that’s surprising and that you can be told about but you’re never really prepared for, is how there are ups and downs, and you have to be persistent,” Renold says, paraphrasing an idea he heard from Drew Houston, founder of Dropbox, on dealing with the day-to-day issues that face a tech startup. “It’s just kind of like slogging through shit every day, and eventually you get somewhere but there’s a lot of slogging through shit. And nothing really can prepare you for that.”
That “shit” might be the process of applying to incubators or accelerator programs — which can be a little like getting into college all over again — or proving to investors that your product is worth the risk. It could be going through iterations, creating newer, better versions of your product, sometimes by only tweaking some sections of code here and there, but often by rebuilding everything from scratch.
*****
Because NUvention has spawned many successful companies, it’s hard to think of it as a recent development. A few years ago, there was no NUvention. There wasn’t an Incubator. There wasn’t even a Farley Center. For undergraduates, entrepreneurship as a career path was facilitated only by two classes: Industrial Engineering 225 and 325, the Principles of Entrepreneurship and Engineering Entrepreneurship, respectively.
“You kind of had to go really far out there on your own to get started,” Paruchuri notes of the atmosphere that existed when he first arrived on campus four years ago. Visible student startups like Wildcat Express Delivery and AirHop were still in their early stages, and Northwestern Student Holdings’ only successful business was NU Tutors, which didn’t serve Northwestern.
Northwestern Student Holdings, now one of the most well-known student business operators on campus, evolved out of another student business group, NUcorp. The holdings company hit campus in early 2005, but by 2006 it was about to go under. Its main business was a students’ guide to Chicago called Chicago Unzipped, which went through three editions but in the end had too complex of a business model to survive.
Jeff Coney, the director of economic development at Northwestern’s Innovation and New Ventures Office, is heavily involved with student entrepreneurship on campus. He is the current acting chairman and a member of Northwestern Student Holdings’ board. That means having weekly meetings with its two student CEOs and “being kind of a sounding board/coach/mentor/suggestor/pain in the ass.”
But back in 2006, with NUcorp on the verge of collapse, Coney saw leadership potential in Sean Caffery, an intrepid transfer student whom he approached about rethinking the group. NUcorp relaunched as Northwestern Student Holdings in Spring 2007, merging with the Institute of Business Education’s Launchpad division the next Fall. The two later separated in 2009, citing differences in ideology. But NU Tutors and Wildcat Express Delivery, two of its first businesses, are still kicking, and it has since added more, like AirHop and Project Cookie, with others in the pipeline. Recently, ISBE launched another student holdings group for entrepreneurial endeavors, Arch Capital.
Part of the reason for progress in Northwestern’s entrepreneurship community is Chicago’s role as a hot spot for entrepreneurship. Startups in the area raised $654 million in venture capital funding last year, according to the Wall Street Journal — up 40 percent since 2010. Groups like Built in Chicago, Technori and Excelerate Labs work hard to cultivate the kind of community that exists in more established startup hubs like Silicon Valley.
“There’s more going on in the Chicago startup community today, in terms of startups, financings [and] support mechanisms than there’s ever been in my career being based in Chicago,” says Marasco, who has grown multiple startups and established the Chicago office for Digitas, a digital marketing agency. “Are we Silicon Valley? No, but we’ve got a lot more things in place.”
Chicago has always had a lot of capital but unlike Silicon Valley, where investors learned years ago how profitable technology startups could become, here it has traditionally been relegated to old world business: steel, manufacturing, housing and hotels. “Most of the investment community in Chicago didn’t give a shit,” Adaptly’s co-founder Nikhil Sethi puts bluntly. Even as part of NUvention: Web’s first iteration, he felt disenchanted by the lack of interest in tech startups in the area.
But in the past few years, with the success of companies like Groupon, the Third Coast is feeling more secure in signing over their money to a couple upstart computer nerds. The more successful Chicago efforts become, the more those investors want to try to fund the Next Big Thing. “It really helps the community and the ecosystem,” says Troy Henikoff, a co-founder of Chicago startup Excelerate Labs, a mentorship program where young startups can get free office space, benefits and capital in exchange for a small stock in their company. “It’s evolved immensely, particularly in the last three years. It’s been a huge change,” he says of the Chicago entrepreneurship community.
That success travels north to Evanston as Northwestern pulls advisers, professors and networking contacts from the city. As Chicago becomes a better place to be for an expanding company, alumni are more likely to stick around, becoming a future pool of advisers and even funders for a new generation of Wildcat startups. “I can’t emphasize that enough,” Paruchuri says. “We wouldn’t be the entrepreneurship school we are [without Chicago].”
But our entrepreneurship school is changing. Unlike schools that are more renowned for entrepreneurship, like Stanford, Northwestern doesn’t have one central program, and the best way to describe our startup community might be “fragmented.” The Northwestern Incubator, for instance, is supported jointly by the various Northwestern entities with a stake in nurturing startups into being: the Farley Center, the Innovation and New Ventures Office and Kellogg’s Levy Center. In addition to Northwestern Student Holdings and the Institute for Student Business Education, we have InNUvation, a group specifically devoted to connecting entrepreneurs and providing them with tools for startup success.
“The school has great resources across the board to help would-be entrepreneurs get out the door and be successful,” InNUvation’s Kellogg Co-President Alfredo Garcia says. “I think there’s one gap … there are a lot of scattered resources and sometimes it’s hard to find them.” It’s part of the group’s mission to close the gap. To facilitate cross-school dialogue, one of their co-presidents is a Kellogg graduate student, and one is a McCormick undergraduate. The group operate chapters for the different Northwestern graduate schools plus an undergraduate chapter. They have about 250 and 750 students on their undergraduate and graduate listservs, respectively.
In February, they hosted their first “Pitch and Meet” at the Incubator — essentially speed dating for entrepreneurs — in which everyone had only a few minutes to pitch ideas before moving on to the next person. About 50 people showed up, including students from the law school and the Feinberg School of Medicine who trekked up from Chicago to Evanston. By the end of the night, they practically had to be forced out the door. “I’m not kidding, [Alfredo] would blow the whistle and they were like kids in a candy store,” Patty FitzGibbons recounts, smiling. The group also hosts the Northwestern University Venture Challenge, a university-wide pitch competition with $15,000 in prize money, which attracted 200 people last year.
Joe Mullenbach, a second-year graduate student pursuing a Ph.D. in mechanical engineering, is part of this quarter’s NUvention: Web class, working on the “big data team” to create Seedr, a web service that suggests personalized content to start conversations over social media. As an undergraduate at the University of Minnesota, he participated in a similar class in which students would start companies using technology developed at the university. He founded the biotech company NewWater that creates filter material for drinking water plants.
But he feels that compared to the entrepreneurship club he joined as an undergraduate, the Northwestern networking scene is lacking. His other club met twice a week for lunch with a speaker, an entrepreneur or venture capitalist who could answer questions and provide insight into the business world. “You felt like you were part of this tight-knit group,” he says. “Now at Northwestern, I started to get involved with InNUvation kind of looking for that, and I’ve kind of yet to find it.”
As a substitute, he’s gotten involved in the Chicago community, attending meetups and pitch competitions. “Last year Gali Baler [the former president of InNUvation] had some pretty good things going,” he admits, referencing the group’s monthly pitch competitions and networking mixers. “I think that whole thing has just kind of fizzled out.”
That being said, networking isn’t the highest priority for everyone. One of Northwestern’s latest campus startups is the dating service JavawithMe. Its founders, Derek Morris and Alex Zylman, are former NUvention: Web participants who talk about the process of growing a startup with an easy confidence. But the McCormick seniors aren’t looking to network much with other students.
“You don’t want to just find new people and try to create a team based off that — it’s really about the interactions between people, and if you don’t mesh with the other person really well, you’re going to fail,” Morris says. “So it’s best to start it with people that you know.”
Still, at a university where the departments that engage in entrepreneurship aren’t even friends, can innovation happen?
Well, they’re trying.
May’s Entrepreneur@NU conference brought different groups on campus together in the name of innovation, more than any other year since Michael Deem has been involved. The McCormick senior helps organize the conference as part of his job in the Farley Center. (In case you’re keeping count, he took part in NUvention: Web, too.) “Bringing all these different constituents together has always been a goal of the Farley Center and all interested stakeholders,” Deem says. “It’s a challenge with such tight turnover and with the confederate nature of Northwestern, but this year is the most major step in that process so far … but it’s only the first step.”
The effort is well-supported by Northwestern’s administration. In March, the Levy Institute for Entrepreneurial Practice hired entrepreneurship expert Linda Darragh as the new executive director and announced the creation of the Kellogg Innovation and Entrepreneurship Initiative. “Clearly the Dean [of Kellogg] has said this has to be a priority of ours, and she’s putting a ton of resources and effort behind it,” Henikoff says. He has been involved with entrepreneurship at Northwestern since 1994 when it was one of the first graduate schools with an entrepreneurship program.
Since then, Kellogg’s program has languished while other schools have moved toward developing entrepreneurship programs, but that seems to be changing. Kellogg managed to steal Darragh away from the University of Chicago’s Booth School of Business, where she helped raise the stature of their entrepreneurship program.
“Kellogg is sort of an understated school. There’s not a lot of bravado externally,” explains Carter Cast, who has been serving as the Levy Institute for Entrepreneurial Practice’s interim director for the past six months. “I actually think that we can tout more what we’re doing as a school and take credit where credit’s due.”
An increased focus on supporting entrepreneurship means the programs have become more streamlined, with more cross-campus and crossschool promotion. “There’s a real collaborative environment now that’s being created,” Cast says.
*****
That collaborative philosophy is more in line with the entrepreneurial mission, which places emphasis on paying it forward. “You can’t be isolated to be successful as an entrepreneur,” Alfredo Garcia says. “You need to be a person that can pull out that Rolodex and connect with other people and mutually help each other.”
And while these tech-savvy entrepreneurs probably whip out their iPhones rather than flipping through a Rolodex, the principle still holds. Successful alumni and advisers, like Marasco — whose Rolodex Deem describes with arms outspread, “like the size of this table” — are almost always willing to help out, to take a phone call or grab coffee to talk about your bright idea.
And with most in the Northwestern entrepreneurship community, there’s a persistent eagerness and hope, something they’d probably call “energy.” After all, the next great idea could be just around the corner. Who’s to say the next college dropout billionaire isn’t already walking among us?