Tuesday, December 5, 2017

Startup Fever on College Campuses: 3 Questions

By Ed McLaughlin and Wyn Lydecker

The startup ambitions of MBA students and college undergrads have spawned discussions about whether aspiring young entrepreneurs should launch new business ventures while still in school. Students, graduates, professors and investors have varying opinions on whether startup fever should be a pursuit that is encouraged or discouraged while students strive to fulfill their academic requirements.

Here are three points of view:

1. Is Starting Up a Distraction?

Wall Street Journal writer, Lindsay Gellman, reported that Stanford Business School is encouraging its MBA students to avoid the distractions of a startup and to instead focus on their courses, campus life, and getting their degrees.

Educators argue that students need time to test their ideas and “embed desirability into the products, services, and experiences they create.” Instead of taking on the obligations of planning a new business and the pressures that come with meeting investors’ requirements, educators want students to spend their time on campus in preparation – not execution of their new businesses.
This runs in stark contrast to the lure of the Mark Zuckerberg startup experience with Facebook, which began with the collaboration of students in a Harvard dormitory and catapulted Zuckerberg to billionaire status by the time he was 23. But isn’t Zuckerberg the rare exception, the unicorn, not the rule?

2.  Can Students Afford to Put Funding on Hold?

It’s tough to put startup ambitions on hold when one is convinced of an idea that’s ripe and time-sensitive to attracting investor interest. In Rolfe Winkler’s article, Secretive, Sprawling Network of ‘Scouts’ Spreads Money Through Silicon Valley, he describes how venture firm Sequoia Capital funnels millions of dollars “to scores of well-connected entrepreneurs and academics” through scouts who looked for aspiring young entrepreneurs and their promising ideas.

Students argue that it’s hard and even foolish to swim upstream against the undercurrent of investors’ dollars that are available today and may or may not be there for the taking upon graduation.
First and foremost, startup fever and the desire to take hold of available funds must be weighed against whether or not the timing is right. Capital raised too early could lead to giving away too large a portion of equity and control. On the other hand, entrepreneurs who wait too long could endure a cash crunch as they attempt to scale.

As I wrote in When Is the Right Time to Fund Your Startup? – I recommend that founders complete these three steps before seeking outside funding:
  1. Make sure your business is positioned for consistent user growth
  2. Make sure your business offers the promise of future profits
  3. Make sure to develop a strategic plan that enables you to scale your business

3.  Can Campuses Offer Real-World Preparation?

MBA and undergraduate courses on entrepreneurship are on the rise to meet the swelling interests of a generation inspired by a combination of Silicon Valley’s billion-dollar success stories and the glamorization of entrepreneurship through programs like Shark Tank. Most college students are not looking to graduate with a one-size-fits-all skillset that will slot them into long-term commitment at a single company. Besides, as proven out by prior generations, students are wise to the fact that big companies can no longer offer the benefit of long-term career security anyway. So many ask, “Why not take control and start my own business?”

Colleges and universities want to be prepared for an incoming generation of problem-solvers with the drive to find solutions and the ambition to turn their ideas into new business ventures. Today’s students are wired to make a social impact and are willing to take the business risk to make a difference. They want to know how to pitch to investors, build a successful small business, and even take a shot at becoming the next Unicorn.

The Real Question

Rather than trying to turn back the dial on startup fever and asking if students can receive real world preparation on campuses, the real question is this: “How will college campuses help budding entrepreneurs identify where they are in their startup journey, meet them at that point, and provide them with the resources and mentorship programs to set them up for success?”

Embracing Startup Fever

Since entrepreneurship does offer independence and the fulfillment of dreams, we can hardly be surprised that it is becoming an important component of the curriculum on college and university campuses around the world.

This article was originally published on LinkedIn by Ed McLaughlin. Ed McLaughlin is author of "The Purpose Is Profit: The Truth about Starting and Building Your Own Business", along with co-authors Wyn Lydecker and Paul McLaughlin. "The Purpose Is Profit" (Greenleaf Book Group) is available at your local bookstore or on Amazon.

Monday, November 13, 2017

Have Libraries Become the New Startup Incubators?

By Wyn Lydecker and Ed McLaughlin

My friend texted me, I’m in the Rose Room at the New York Public Library. I’m getting some work done. In the throes of starting her own business and taking meetings in New York City, my friend found the library to be the perfect refuge and work environment.

When I go to our local library in Darien, Connecticut, the main reading room is filled with people using their laptops. A librarian told me that most of them were working on their business. Downstairs, virtually every seat is taken in the technology room. Sometimes it’s hard to tell the difference between an incubator, a co-working space, and the library.

My coauthor, Ed McLaughlin, is very attached to the library. It’s where his company, USI, was born. As long as the local library was open, he and his early partners would lock themselves in a study room, basking in the air conditioning and figuring out their business model. The library provided an escape the cottage Ed and his family had moved into to reduce their expenses and minimize personal risk while he toiled at his startup.

Public libraries have been great places to go in the U.S. since the first one appeared on the scene in Peterborough, New Hampshire in 1833. When large-scale book digitization and Internet 
dissemination came on the scene, however, some people worried it would spell the end of this great institution. But that doesn’t seem to be so. NPR tells us that libraries are still the place people go to get guidance from knowledge experts. Although technology might seem like it would draw patrons away from the brick-and-mortar search facilities, it turns out that heavy library users are also heavy technology users. The New York Times gives a peek at the library’s future, integrated with the digital world and welcoming patrons in with open doors and arms.

Some libraries are transforming themselves into incubators for entrepreneurs with their quiet and access to WiFi and technology. My local library has gone out of its way to offer business, media, and technology services. I often hold client meetings in my library, and I’ve learned that patrons can use a 3-D printer, a Bloomberg terminal, and video editing software. You can even get coffee and a snack on the main level. The library in nearby Stamford, CT, has become the host of 1 Million Cups – a forum to connect local entrepreneurs through monthly presentations.

Your local library may have meeting rooms you can use for free or for a reasonable fee. Can’t find the research you need? Librarians can be an amazingly helpful resource for entrepreneurs who are seeking to do in-depth market and competitive analyses. They are not only up on the latest Google search tricks, they can show you how to access databases, financial filings, and industry association journals.

It is my hope that libraries will continue to be a haven of inspiration to the next generation of entrepreneurs. Maybe you’ll be one of them.

Ed McLaughlin and Wyn Lydecker are coauthors of “The Purpose Is Profit: Secrets of a Successful Entrepreneur from Startup to Exit,” winner of the 2017 Axiom Book Award in Entrepreneurship. Available on Amazon or at your local bookstore.

Copyright © 2017 All rights reserved.

Thursday, October 26, 2017

5 Steps to Starting a Successful Nonprofit

by Wyn Lydecker 

After 20 years of working with entrepreneurs who were starting for-profit businesses, I became immersed in the formation of a new nonprofit. With the growing public interest in creating organizations that have a social impact, I wanted to share the top five lessons I learned from my experience of helping to launch and build a nonprofit.

Step 1: Recognize the Value of the Idea

When I first read about Beacon Hill Village, a nonprofit in Boston that helped local people stay in their homes as they aged, I could see the value of the idea. Rather than moving to assisted living, seniors could join the Village, pay membership dues, and have a suite of concierge services coordinated and delivered to them at home – anything from meals to physical therapists. Soon after an article about Beacon Hill Village appeared in the New York Times, two older women in my church (First Congregational Church of Darien, Connecticut) approached me as the co-president of our Women’s Association to see if we could explore launching something similar. We quickly attracted a small group who saw the merit of the concept and formed a committee to evaluate it further.

Step 2: Conduct Research by Reaching Out

A little online research showed us that a nascent “aging in place” movement was spreading across the country. An AARP study had revealed that 90% of seniors want to remain in their homes rather than move to assisted living or a nursing home. Our little committee fanned out to talk with other churches and local social service agencies to see if anyone else was providing an aging-in-place service. We soon connected with a wider local movement and learned that The Darien Community Fund, a nonprofit similar to The United Way, was forming a planning committee to look into the feasibility of establishing an aging-in-place program in our town. I found myself on this new, larger committee and was soon conducting research via self-run focus groups, a mailed survey, and a conference with providers of senior services. Our research results clearly showed that older adults in our town had a need and a desire for services that could help them remain at home. The top three services people wanted were: transportation, handyman services, and referrals to vetted service providers.

Step 3: Don’t Duplicate

During our focus groups, seniors told us not to duplicate services that were already in place. The seniors’ caution to avoid squandering resources made even greater sense as we talked in more detail with the directors of similar organizations. Established nonprofits told us that they did not like new organizations treading on their turf without communicating with them. They had wanted the new nonprofit to reach out to them and find ways to cooperate and collaborate.

It turns out that nonprofits are just as competitive as for-profit companies. They are all vying for a share of the market – competing for the same consumers and, importantly, the same sources of funding. The philanthropy pie is only so big, and the nonprofits clearly viewed its division as a zero-sum game. We discovered that even municipal agencies felt the pressure of competition, fearing that if a nonprofit could do the same job as their government departments that their budgets could be cut by fiscal watchdogs. 

Step 4: Develop a Business Plan

Our sponsoring agency officially turned our committee into an advisory board, and we hired a coordinator to start a pilot program to begin to connect seniors to local services. In addition, the board set up a strategic planning committee tasked with writing a business plan and figuring out whether we should launch as an independent nonprofit or join with one that already existed.

That meant we needed to decide on a business model. Who would be our customers? What were their needs? How would we uniquely meet their needs? What would be our sources of revenue? The questions were not any different than the ones any entrepreneur needs to ask. Since I’m a business plan writer by trade, I volunteered to write our plan.

After months of meetings that proceeded at a seemingly glacial pace, we reached a consensus to run with a model that made every Darien resident over 60 a member of Aging In Place in Darien. Membership was free, and all our revenue would come from donors and grants. We would continue to connect seniors to available services and directly deliver others via a corps of volunteers. To get the word out, we planned a newsletter, a free luncheon, a website, and an email list.

Step 5: Communicate, Cooperate, Collaborate

While we were developing our plan, our board set up committees to promote communication among area agencies and to advise our paid program coordinator on how we should best offer the services. Heeding our research, the committees consisted of representatives from organizations (nonprofit and governmental) that were already delivering senior services. These other providers were excited to be involved because we actively cooperated and collaborated with them. They gained users as we connected seniors with their services.

Communication, cooperation, and collaboration became our watch words. So much so that our strategic planning committee recommended that we join with an existing 501-c-3 charitable organization called Gallivant, which had been providing transportation services to Darien seniors for over 20 years. We saw no reason to form a second independent nonprofit serving the same population and going after the same donor pool. After some tense negotiations – we were an upstart proposing to join with a well-established organization – we agreed to a trial merger of one year.

I’m happy to say that we’ve been officially merged for six years and have a new name: At Home In Darien. Our organization has been very successful in our fund raising efforts, and we are generating greater awareness, gaining more users, and delivering more services every year.

This article first appeared in the Wharton Magazine Blog. 
Wyn Lydecker WG’76 was a former founding board member of At Home In Darien. She is the co-author of a book on entrepreneurship, “The Purpose Is Profit,”with Ed "Skip" McLaughlin.