The college student’s guide to avoiding startup blunders
ANN ARBOR—Zach Hwang knows first-hand how hot it can get riding motorcycles under a summer sun—try it wearing a helmet and a leather jacket.
The 24-year-old from New Jersey wanted to do something about it. After earning his bachelor’s in mechanical engineering at the University of Michigan, he enrolled in the Master of Entrepreneurship program to develop FrostGear. The company is developing active cooling systems in helmets to prevent heat exhaustion and stroke.
The program, in its second year and offered jointly between U-M’s Ross School of Business and College of Engineering, helped Hwang lay a strong foundation as he launches the startup with two other students.
“This degree takes a lot of risk out of entrepreneurship because it helps us avoid some of the common mistakes entrepreneurs make,” he said.
Crushing mistakes to avoid include launching a product or service without a clearly defined customer base, not understanding how to attract venture capital and not having tough discussions early on about partners’ equity splits, he said.
“A lot of startups fail because the partners start fighting with each other,” Hwang said.
The program helps ensure the success of budding entrepreneurs, said Bill Lovejoy, a professor of business administration, operations and technology at the Ross School and co-director of the MsE program.
“Big money and friendship doesn’t mix too well,” Lovejoy said. “That’s a serious conversation, and we force them to have it.”
It’s all part of helping students commercialize innovative technologies. Unlike an incubator, the MsE program shows students how to scale a high-tech venture that solves big problems in society.
Some people have asked, why a master of entrepreneurship—isn’t it better to just do it? Not necessarily, said Aileen Huang-Saad, MsE co-director and associate director of Engineering’s Center for Entrepreneurship.
“Seasoned entrepreneurs have told us that one year in this program can save new entrepreneurs at least five years off the ‘just do it’ random walk approach,” Huang-Saad said.
The MsE started last year with 17 students and has 22 in the current class. It grew out of sparking student interest in entrepreneurship and requires each to work on a venture of some kind.
“How do you bootstrap your way into existence with no money? The whole program is about business, but business starting with nothing,” Lovejoy said.
Many of the students have undergraduate degrees in science, technology or engineering and want to bring about positive social change.
For example, one startup, MyoAlert led by Kabir Maiga, is designing an undergarment that can predict heart attacks for people at risk. Another, Elegus Technologies, is working on an ion-conducting membrane that could extend battery life and other applications.
Elegus is commercializing technology that could make lithium ion batteries safer, more efficient and longer lasting. Several years ago, engineering professor Nicholas Kotov invented a battery separator membrane that resists the build-up of sharp crystals that can degrade performance and cause fires. Separator membranes in batteries keep the positive and negative electrodes apart, allowing the circuit to work as it should.
Over the course of the program, student John Hennessy said the team interviewed more than 50 potential customers before settling on battery suppliers as their target market.
The hard work is already being noticed as Elegus was named RPM Ventures Graduate Student Entrepreneurs of the Year earlier this month. The Elegus team also includes Dan VanderLey and Long Qian, master of entrepreneurship students, as well as Siu on Tung, a doctoral student in Kotov’s lab.
The hands-on aspects of the class gave Hennessy a crucial startup insight—stop overthinking, and just take action. Early in the year, he felt somewhat timid about getting the answers he needed about the market, finding customers and contacting competitors.
One night, after being frustrated with a lack of answers, he found an old presentation by a competing company, which listed the CEO and his phone number. He thought, “Why not?” and was surprised to get an answer.
“I ended up having the most informative 30-minute conversation of the year for our team,” Hennessy said. “I learned more in those 30 minutes than I did with three weeks of my own research online.”
Throughout the program, students receive guidance from faculty and career advisers to help develop post-graduation plans. Graduates are wrapping up the practical course work this summer.
- Master of Entrepreneurship program: http://entrepreneurship.umich.edu