Campus Entrepreneurship

Found this article about eccentric British Media entrepreneur Felix Dennis in which he states that “the best time to get started is in a recession.”

From the article,

Despite what he anticipates to be his fourth recession—“we are talking ourselves into it”—starting in America, Mr Dennis remains bullish on the land of the free. “For the rest of my lifetime I’m betting on America,” he says, noting the country’s “pervasive aura of optimism”.

One of the reasons now is a great time according to the article is that large and medium sized firms pull back in these environments, trying to conserve and survive. This leaves lots of opportunities for entrepreneurs.

Greg Ip of the WSJ writes, ‘A four-year college degree, seen for generations as a ticket to a better life, is no longer enough to guarantee a steadily rising paycheck.” The article (free via AZCentral) then goes on to highlight the declining value of a college degree in the US.

There are many factors behind this (the massification of college degrees, technological change, economic change, etc.), but what the article neglects to mention is that a degree only has value if you know how to leverage it. In other words, you must have an entrepreneurial mindset.

The people covered in the article bitch and moan that their degree is not getting them jobs that they once could easily get. Duh! In order for your education to work for you, you must work to differentiate it, sell it, etc. Again, you must have an entrepreneurial mindset.

So even if you are not starting a new firm and plan to take a more traditional career path, you must be able to spot opportunities, organize people and resources, and basically make your own destiny, if you are going to hold a position that the author and others once considered ‘guaranteed.’

At WSJ they have some other interesting links related to this idea of the declining value of a college degree.

Fascinating article by Jonathan Cheng about a Hong Kong based entrepreneur, Lam Sai-wing, in the gold business who created a gold toilet and scored a marketing coup for this business. Something outrageous like a gold toilet (and an entire golden palace) helped grow Lams business by differentiating it from others in the retail jewelry market.

Those odd prices (ie $3.6 at Wal-Mart (which they may be dumping) were created by Sam Walton to grab attention — as did the elephants and other things that Walton used to build the base of small town Wal-Marts that would eventually become the world’s largest retailer. Walton had to do something drastic as he entered the retail market full of new competitors. Wal-Mart, Target, and KMart were all founded in 1959 — and these are just the large, successes that prospered.

I believe that any business, regardless of industry or customer base, can use a golden toilet.

From the article,

He has spent the past decade constructing a palace of gold, decked out in six tons of the precious metal. In recent years, the palace has become an attraction mainland Chinese tour groups couldn’t miss, and a boon for Mr. Lam’s retail jewelry business…

As far as Mr. Lam is concerned, the golden toilet is more than a Guinness World Record-certified, 24-karat, fully functional flushable throne.

Mr. Lam, a former goldsmith, came up with the toilet gimmick in 2001 as he was pushing his jewelry-manufacturing business into a fierce retail market…

As a boy growing up in Cultural Revolution-era China, Mr. Lam, now 53 years old, was obsessed with gold. He says he found himself transfixed with one sentence in Vladimir Lenin’s writing: “When we are victorious on a world scale, I think we shall use gold for the purpose of building public lavatories in the streets of some of the largest cities of the world.”

Lenin’s words alluded to a socialist utopia with no need for money, but Mr. Lam read them as an indictment of the poverty-stricken existence he found himself in. He rarely had meat to eat, and after he turned 7, Mr. Lam struggled to help his single mother and six siblings sell bananas and peanuts.

The textbook market on campuses has always appeared distorted. Hundreds of dollars on books that students often barely touch. Frequent new editions, ‘forcing’ waves of students to purchase new, rather than used, books.

John Hechinger of the WSJ has an interesting article on the rise of custom textbooks and the toll it is taking on students/parents. Basically, specific departments at specific schools are having custom versions of ’standard’ books printed and assigning them to their students (keeping them out of the increasingly global market in textbooks). Moreover, in many cases, the books cannot be sold back and resold on the used market.

The point of sharing the article is to highlight a truth about campus entrepreneurship: EVERYONE IS DOING IT. The article highlights english and other social science departments following this strategy. So students should always keep an entrepreneurial perspective when on campus.

Read below for some excerpts from the article. (more…)

For the first time since 1978, no venture backed firms completed an IPO during the second quarter. Mark Hefflinger over at Digital Media wire has a nice posting on this ‘non-event.’

I have always believed that the focus on venture funding is overblown as a vast majority of new firms do not access the VC markets. That said, the statistic (from the National Venture Capital Association) is pretty staggering and underscores the stalled mentality that has gripped our markets (credit and equity).

From the post:

For the first time since 1978, there were no venture-backed initial public offerings (IPOs) during the second quarter, according to a new report from the National Venture Capital Association (NVCA).

The absence of IPOs follows an exceptionally slow first quarter, in which just five venture-backed companies went public.

In the first half of 2007, 43 companies went public.

The NVCA characterized the trend as a “capital markets crisis” for the start-up community.

Look at an oil chart. Its clearly a bubble, right? But how do you know when a bubble is ready to burst?

Check out this WSJ article by Margaret Coker about the price of vanity license plates (or tags) in Abu Dhabi, UAE. Last month, business man Saeed Khouri set a record when he spent $14 million for the tag: “1″. His cousin, a stockbroker, spent $9 million for “5″.

My favorite part of the article is where a 15 year (who can’t drive yet) spends $530,000 for “29″. From the article:

Soft-spoken and modestly dressed, 34-year-old Mr. Al-Mannaei says he closely controls supply, releasing low-digit plates “almost scientifically.” The result, he says, is a frenzy for even mediocre numbers. In the last two auctions, three-digit plates fetched between $123,000 and $150,000 each, more than double the prices last fall. In the 10 auctions held so far, buyers spent roughly $120 million for 900 plates; the government plans to use the money to build a new trauma hospital for traffic-accident victims. (more…)

Pretty interesting article by James T. Areddy few days ago in the WSJ (free sub) about the incredible business activity that has sprung up in the wake of the massive Chinese earthquake. From the piece:

The May 12 Sichuan earthquake left 19-year-old Yin Dan homeless. It also awakened the entrepreneur in her.

When workmen started building temporary housing nearby last month, one wandered up the hill looking for a shave and a haircut.

The chance encounter spurred Ms. Yin, who had been employed in a beauty shop, to go into business for herself. Now, she is the sole proprietor of “Earthquake Disaster Relief and Convenience Barber Shop,” located in a green tent.

“I have ideas. I want to open a bigger shop, a beauty shop in the city,” says the young woman, slumping into her swivel chair during a rare break from customers. “This is a chance.”

The response of many in the disaster zone is a reminder of how profoundly capitalist ideas have taken hold in China in recent years. For nearly a decade, the private sector has created most of China’s jobs and more recently accounted for more than half the economy. Now, in the rubble of towns of Sichuan province, businesses are sprouting from under tents, inside car trunks and behind makeshift stands. And despite the government’s massive outpouring of food, shelter and cash, few victims seem to believe they will be living off charity indefinitely.

While much of the activity outlined in the article appears to be ‘entrepreneurship’ by necessity, with China’s growing entrepreneurial institutions and culture, there is no doubt that these entrepreneurs have a chance to be high impact entrepreneurs (creating jobs and high rates of growth).

Many entrepreneurs on campus begin through necessity (needing money for tuition, room/board, or b/c they can’t find a job) and later achieve high impact status (read the history of Kinkos).

One wonders whether anything like this occurred after Katrina or whether this is occurring in Iowa right now?

Yes. This campus venture is my startup! The one I have blogged about periodically. This week, we officially launched our new site:

FamilyFantasySports.com, the first fantasy sports site dedicated to family play.

Our inaugural, free leagues will coincide with the NFL’s 2008 regular season. Our leagues will be powered by STATS LLC, the world leader in sports information.

I have been working on this new venture over the past 6 months and am happy to have reached this milestone. Here is our press release (via Yahoo! news) and below is a blurb about us from Rotonation.com (a leading fantasy sports news blog).

With fantasy sports becoming more and more part of the mainstream, it is only logical for a family-orientated fantasy sports site to creep onto the horizon. Family Fantasy Sports launched today hoping to corner this new niche in the fantasy sports industry.

Further, the site puts a strong emphasis on education, health, and wellness: All prizes are orientated towards these goals. They also have a kids’ corner and grown-ups’ blog geared toward these topics.

Feel free to check out the site, sign up for our newsletter, and send me any and all feedback. I will share some of our successes and struggles on this blog as we ramp up over the next few months and execute on our strategy. Thanks.

Today I hauled myself out to the main campus of George Mason (in Fairfax Virginia). What got me to battle the beltway? My friend and colleague Sameeksha Desai was defending her dissertation.

She is a serious and innovative researcher who I have blogged about in the the past. Her work covers post conflict entrepreneurship (think Rwanda, etc) and begins to define/explore a concept called ‘destructive entrepreneurship.’

This term appears to come from Baumol’s 1990 work, Good Entrepreneurship, Bad Entrepreneurship, and Destructive Entrepreneurship. While Baumol didn’t delve to deeply into the destructive, Samee has!

Destructive entrepreneurship is anything that destroys economic capacity; whether it be land, labor, or capital.

So, for example, in an unstable post-conflict environment entrepreneurs will make decisions that are often short-term in nature (b/c the future is very unclear) but cost the economy greatly in the long run. The policy implications of this were discussed in Samee’s work.

While her work focuses on post-conflict entrepreneurship, the destructive nature of much of it is similar to what we see in many urban cores in the US. This idea was discussed extensively after Samee’s presentation and its clear that her work can shed a lot of light on traditional urban issues.

Her work is fascinating and I am trying to find some things to post.

The Globe and Mail in Toronto (where my friend Richard Florida offers his blog) has a great column by Michael Parkatti and Michael Marrone, current Y Combinator participants. For a bit on Y Combinator click here.

The one of the reason’s that we follow Y Combinator is because it is on the leading edge of new funding/advising models. The column is enjoyable and provides some insights into the paths of two young entrepreneurs (which include much time on campus). They will be writing columns each week during their three months in Cambridge at Y Combinator.

From their column:

For those unfamiliar with Y Combinator, it can be roughly described as a Venture Capital firm that provides seed funding for startups. However, their obvious corollaries with the traditional venture capital industry end there.

From a first-time founder’s perspective, Y Combinator is exactly the sort of program that provides the means to achieve our ambitions. On top of the seed investment, they also provide many of the intangibles (product advice, connections, ready access to hundreds of potential investors) that first-time entrepreneurs usually lack. In exchange they receive a small percentage of equity from each founding team. For the current three-month session (June to August), 22 teams have converged on the Boston area.

For two Canadian guys from St. Albert, Alberta and Belleville, Ontario who are long on ideas and short on connections, it’s exactly the opportunity we were looking for to take our startup to the next level.