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Getting
to YES
By dispensing advice—and cash—to students with ideas and energy,
the Yale Entrepreneurial Society has become one of the University's
hottest student groups—with or without a dot-com boom.
December
2002
by
James McElroy
James
McElroy '95 is a freelance writer living in New Haven. He
wrote about Sterling Professor
and Benjamin Franklin biographer Edmund Morgan in our November issue.
One would
be forgiven for not connecting the slippery, boom-and-bust world
of start-up business with Yale University.
MIT and Stanford maybe, but not Yale. But the economic boom of the
late nineties has awakened an entrepreneurial interest among Yalies
that seems strong enough to survive the more recent bust.
After only three years
of existence, the Yale
Entrepreneurial Society has helped spur this awakening. Created
by undergraduates, nurtured by the administration, financed a good
bit by alumni, and adopted by Yale's students in the professional
schools, YES has given away hundreds of thousands of dollars to
promising for-profit and nonprofit start-ups through its Y50K
business plan competition, has brought hundreds of business experts
to campus through its popular series of speakers, panels, and forums,
and has organized networking events for Yalies around the country.
The New York Times, Wall Street Journal, and Business
Week have all taken notice of YES. With its practical, goal-oriented
philosophy, and its ability to help Yalies draw upon the resources
of the University to get things done outside the University, YES
has both exploited and promoted a cultural development that would
surprise many alumni: Business, it seems, is cool.
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YES's
story reflects the entrepreneurial pluck that is increasingly
admired on campus.
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Not just any kind of
business, though. YES taps into a vein of individualism and adventurousness
that only occasionally intersects with consulting and investment
banking—the usual mainstays of graduating Yale seniors. At a
time when institutions of any kind seem limiting and ineffectual
to many students, a do-it-yourself
attitude prevails.
YES's own story reflects
the entrepreneurial pluck that is increasingly admired on campus.
In the fall of 1999, Sean Glass and Miles Lasater—a Yale College
sophomore and junior, respectively—met at the Freshman Bazaar
to pitch a new student organization they had concocted the previous
summer.
"I had never seen Miles
in person before we met at the Freshman Bazaar," Glass recalls.
"We'd been sending e-mails, talked on the phone that summer, but
hadn't actually met face to face."
Glass had placed a
posting on a computer science department bulletin board asking if
anyone was interested in starting a business with him. A few students
replied, but it was Lasater who got Glass's attention with his weblog
of entrepreneur-related links. Also, Lasater actually had some bona
fide entrepreneurial experience, having started and run a house-painting
franchise during one of his summers away from Yale. Eventually,
in the midst of their telephone and e-mail musings, they imagined
an organization that could help students figure out how to realize
their far-flung ideas—a sort of incubator for up-and-coming entrepreneurs,
with all the resources and wisdom of Yale and its alumni. "And,"
says Glass, "when I wrote down 'Yale Entrepreneurial Society'—
YES—I thought, 'We have to do this, because it's got a great
name.'"
"We
knew we had to be at the Freshman Bazaar to recruit people,"
says Glass. "I got three other friends to sign their names to a
form so we could be in the Bazaar, because we had to have five members.
So we did all that, I met Miles, and we sat there at the Freshman
Bazaar and signed up over 200 people. We didn't even know what we
were going to do."
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Yale
can help the New Haven economy by encouraging graduates
to build their lives there.
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Meanwhile, Glass had
attracted the attention of Bruce Alexander, Yale's vice president for New Haven and state affairs,
after an article about Glass appeared in the Wall Street Journal. The same summer in which Glass and Lasater were dreaming of YES
and their other possible ventures together, Glass had considered
taking some time off from school. Over the course of his freshman
year, he had become so focused on starting a new business that he
wondered whether Yale was the right place for him at that time.
This was the summer of 1999: The dot-com bubble had not yet burst,
and newspapers and magazines were full of the stories of young entrepreneurs
diving into the business world. A reporter from the Journal found out about Glass's dilemma—to be at Yale or not to be at
Yale—and wrote about his struggle to make up his mind.
Alexander read the
article and remembers thinking, "This is a student we don't want
to lose."
Alexander had been
a successful real estate developer before Yale President Richard
Levin lured him to New Haven in 1997. Levin wanted Alexander to
find ways Yale could improve the city's fortunes—through retail
development, technology transfer,
and other kinds of support for business.
When asked how the
University would have responded to the entrepreneurial impulses
of undergrads like Sean Glass and Miles Lasater ten years ago, Levin
says, "Ten years ago, we didn't have a person like Bruce Alexander
in the administration. We brought him up here because we wanted
to push New Haven business development. And he's done a marvelous
job." Levin and Alexander both feel that an important way in which
Yale can continue to help strengthen the New Haven economy is by encouraging graduates to build their lives there, especially those
who want to start businesses.
From an entrepreneur's
perspective, the most important resource in New Haven is—to use
a term that came of age during the nineties—the "intellectual
capital" of the University. After all, within Yale's relatively
narrow boundaries is an incredible array of legal scholars, medical
researchers, chemists, engineers, computer scientists, economists
—every sort of expert a businessperson looking for ideas and advice
(and partners) would want to talk to. So one of the simplest, most
obvious ways for Yale to help strengthen New Haven is to throw open
the University's doors to entrepreneurs.
From
the beginning, Glass and Lasater knew that there was a great deal
that Yale had to offer entrepreneurs of the sort they hoped
to become. And they also believed that plenty of Yale students,
from Yale College, the School of Management,
the Medical School, the Law School, and the School of Forestry and
Environmental Studies had entrepreneurial ambitions.
With YES, Glass and
Lasater hoped to help budding young Yale entrepreneurs access the
riches of the University. And Alexander, by helping them garner
guidance, money, and space from Yale's resources, showed them just
how much the University could help.
Cultural excitement
over the dot-com boom definitely helped fuel YES's success, as did
the considerable help from Bruce Alexander and the rest of the Yale
administration. However, Glass, Lasater, and a handful of other
hard-working undergrads built YES, like any start-up—with a lot
of sweat.
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We
said in October that we were going to give away $50,000
in April, and we had about $200 in the bank.
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"The most difficult
thing about starting any student organization," says Mark Volchek
'00, who was a senior when he attended the first YES meeting in
William L. Harkness Hall, "is finding a critical mass of people
willing to dedicate 60, 70, 80 hours a week to it. We were working
70-some hours a week to try to put YES together, staying up all
night sometimes just to make things like marketing materials and
posters."
"Back then, in the
beginning," says Lasater, "we were simply interested in entrepreneurship,
and we just wanted to create an organization to bring people together
to talk about it." But beyond that, they weren't certain what YES
would do.
Lasater and Glass had
speculated that YES would eventually hold a business-plan competition.
But that was just one of the many things they foresaw their organization
doing "someday." Early on, however, they talked with Barry
Nalebuff, the Milton Steinbach Professor of Economics, who,
as Lasater says, "pushed us to do the competition right away."
Nalebuff's opinion
carried a lot of weight. An expert on game theory who has co-written
two books on how competition inspires the best business innovations,
he has advised American Express, Bell Atlantic, and Citibank, among
others.
"So we announced the
business plan competition long before we had any money for it,"
Volchek laughs.
"Yeah," admits Lasater,
"we said in October that we were going to give away $50,000 in April,
and we had about $200 in the bank."
"We also had no plan for how to do the business plan competition," says Volchek.
"We just announced that we were going to have one."
"It was an interesting
time," Lasater says with a grin.
The YES leaders took
a look at similar competitions around the country—particularly
those at MIT and Stanford. They learned that they would need to
hold workshops to show competitors how to put a viable business
plan together and to explain the different issues that prospective entrepreneurs must address. They would need to find experienced
businesspeople to help lead those workshops, and, ultimately, to
judge the competition. They would also need to raise a lot of money.
Unsure of where to
begin, they had a conversation with David Cromwell, the Lester Crown
Adjunct Professor of Entrepreneurship, who gave them advice and
put them in touch with other businesspeople. Glass, Lasater, and
Volchek regularly made trips with other YES members to Boston, New
York, and Silicon Valley to attend entrepreneurial networking events.
They brought back a great deal of entrepreneurial knowledge, a phone
book full of contacts, and quite a lot of cash.
But
one of their best ideas for their new competition came not from
Boston, New York, or Silicon Valley, but straight out of the culture
of Yale: YES instituted a social entrepreneurship category
within its competition, something that had never been done before.
"We have tried to emphasize,"
says Volchek, "the fact that true entrepreneurship—how to organize
something, how to create something—requires the same skills whether
you're running a for-profit business or a nonprofit. You have to
get the management team together, you have to come up with a business
plan, you have to budget. Businesses and non-profits have different
goals—instead of making money, your goal is, generally, to help
people or to do something—but the process of creating
it and running it is largely the same."
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It's an organization focused
on how to start something, anything.
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The original Y50K business
plan competition was a huge success. From the fall of 1999 through
the spring of 2000, YES offered the 60-some teams that entered the
opportunity to join in a number of workshops at which they learned
to hone, step by step, their raw ideas into realistic business plans.
Entries included plans to provide low-cost, helpful services for
the homeless, a scheme for streamlining via the Internet the exchange
of manufactured goods, a Web-based career marketplace, and the blueprint
for a national juvenile advocacy organization.
And Nalebuff was right.
The competition got the attention of the University and beyond.
YES simply needed to decide what to do next.
YES has since become
known for its series of speakers on campus and its alumni networking
forums around the country as much as for its Y50K competition. And
as the organization has grown and expanded its scope beyond the
competition, its membership has come to include many who are not
actively engaged in start-up ventures, but simply want to explore
the idea of entrepreneurship.
Lasater, Glass, and
Volchek are purists about entrepreneurship. They insist that YES
"has never been about making money." Glass says that he imagined
YES as a place where, for example, a young writer could come with
questions about how to get a novel published, or a young theatrical
director could come with questions about how to mount a professional
production.
"It's not a business
organization," says Lasater. "It's an organization focused on how
to start something, anything."
In early 2000, at the
same time they were developing YES into the most popular student-run
organization at Yale, Glass, Lasater, and Volchek started their
own private business venture. During the following summer, they
polished up a business plan and set out to raise the capital necessary
to give the business a go.
Glass
made a deal with his parents that if he, Lasater, and Volchek raised
at least a half million dollars, he could take a year off from Yale.
They ended up raising more than $620,000. So Glass took the
year off while Lasater stayed in school and finished up his degree.
Volchek had graduated in 2000, so he could also focus on the business
full time. Then Lasater graduated and Glass had to go back to school.
Now Lasater and Volchek, their degrees in hand, devote themselves
full-time to the venture while Glass is a senior, splitting time
between the business and his work toward a degree in electrical engineering.
Their venture, HigherOne,
is still technically a start-up—which is to say that it is not
yet making a profit—but it has landed some very respectable clients,
including the University of Houston, and it employs 15 people in
an office on Court Street in downtown New Haven.
The money that flowed
like water in the late nineties has dried up, but a number of businesses
and nonprofits that came out of YES's workshops and forums and business
plan competitions are still functioning happily in New Haven. And
last spring, despite the malaise brought on by September 11 and
the general downturn in the U.S. economy, 55 teams entered YES's
business plan competition.
YES is now incorporated
as a nonprofit organization. Lasater, Glass, and Volchek sit on
its board of directors and plan to continue to guide YES's development.
Certainly, it is harder than it was just three years ago to make
a business or nonprofit idea into a reality. As always, however,
it is not impossible—so long as the idea is good enough and you
go about making it real in the right way.  |
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