B Schools Lend A Helping Hand
Wisconsin entrepreneur Kerry Tolzmann dreamed of transforming his 33-acre cranberry bog into a cranberry empire--"the biggest single farm on the planet." But he had absolutely no idea how to raise the more than $20 million he needed to cash in on the red-hot worldwide demand for cranberries. What he needed was, well, cheap advice. So the former professional water skier--and owner of a ski school--turned to the Weinert Applied Ventures Program at the University of Wisconsin-Madison, a two-year-old business course that matches its students with local companies. The cost to Tolzmann? Zip.
At the start of last spring's semester, the school paired Tolzmann, 38, with second-year students Jeff Richardson, a former paralegal, and Keith Napolitano, a former lawyer. These students, chosen because their legal backgrounds would be useful in structuring a business deal, spent four months--about 1,000 hours total--analyzing Tolzmann's expansion plans.
By May, the duo had drafted a 40-page strategic plan, complete with color photos, financial projections, and funding scenarios. For their final class assignment, the two students presented the plan to a band of local analysts and venture capitalists--with surprising results. One of the financiers was so captivated by the proposal that he kicked in his own funds and helped line up other investors. "There was no way I would have [had] the resources to do this without the university," says an ecstatic Tolzmann.
If you still think of universities as ivory-tower dream worlds--think again. As studies of entrepreneurship grow in popularity at the nation's B-schools (see Enterprise: "Class Acts in the Ivy-Covered Halls," Dec. 16, 1996), free hands-on advice and analysis from graduate students is becoming an increasingly important component of many school curricula.
In return for putting time and effort into working with students, the entrepreneur gets their energy, enthusiasm, and perspective, not to mention the oversight of a business professor who also might provide valuable networking connections.
PRESTIGE PROGRAMS. Of course, not everyone is an A-student, and these junior consultants might not be available when you need help most. But with careful scouting around and some thought to your needs, it should be possible to find a good match.
According to an informal BUSINESS WEEK survey, at least 42 leading business schools provide free MBA advice, including 18 of the country's top 25 business schools. High-prestige programs at the University of Pennsylvania's Wharton School, Northwestern University's J.L. Kellogg School of Management, and the University of Michigan School of Business Administration grant MBA students course credit for the hands-on experience of advising local businesses. For example, at Massachusetts Institute of Technology's Sloan School of Management, where enrollment in entrepreneurship courses has climbed 600% in the past two years, grad students have lent a hand to some 65 local high-tech companies.
In New York, publisher Frank E. Cuzzi worked together with four Cornell University MBA candidates to produce a 75-page competitive analysis for his start-up soccer magazine--a document that he figures would have cost him approximately $75,000 in consulting fees. The students' marketing recommendations were so impressive that Cuzzi immediately incorporated some of them into his master plan. "I would call their work our own answer to corporate R&D," Cuzzi says.
Of course, that valuable research and development is not simply there for the asking. For example, about 40 businesses vied for 20 spots in a free consulting program at Carnegie Mellon University's Graduate School of Industrial Administration. And most schools won't consider working with a pure startup because students don't get to handle as wide a range of business issues.
LOCAL FAVOR. At Carnegie Mellon, and elsewhere, the key question professors consider in the selection process is whether students can really learn something by working with a particular company. A proposal to reorganize your file cabinets won't fly, but one to analyze your marketing plan just might. "It has to be a project of real concern to a client," says Robert G. Hansen, who runs the MBA-advising program at Dartmouth College's Amos Tuck School of Business Administration. "We want them focused on cost analysis, pricing, or a marketing dilemma."
When making your case to the business school, it's a good idea to keep in mind that, while some schools will range outside of their geographic area, most favor local businesses. You should consider your needs and the school's specialties, too. At Purdue University's Krannert Graduate School of Management, the bias is toward technology companies, while at Northwestern it's often marketing, and at the University of Chicago, finance.
Good research skills can be applied to virtually any topic. Green Gear Cycling in Eugene, Ore., used University of Oregon B-school students to investigate how to boost sales of its folding bicycles in Europe. "This was a wonderful way to do a specific project," says controller Gary Horsfall. The students' research helped them pinpoint a key difference in consumer preferences. While Americans care most about price, Europeans are willing to pay more for a bike that folds up easily.
Whatever your business plans, schools will require you to submit a short proposal outlining students' slated responsibilities. Some, such as University of California at Berkeley's Walter A. Haas School of Business, even require a guarantee that students will have regularly scheduled meetings with top brass. "We want to integrate students into a company's strategy," explains Berkeley's visiting entrepreneurship professor Amy Shuen.
MOTIVATION. Once you're teamed up with the students, you'll both want to lay down a few ground rules. From the start, clearly state your expectations and work guidelines. And find out what's expected of you, too, whether it's providing feedback to a professor or attending weekly briefings. Students will spend just a few months at your company--and even then, only part-time--so they'll rely on a company insider for updates, interviews, and relevant data. "For this to work, you really have to make time available to students," says Dennis Tootelian, who has directed the Center for Small Business at California State University-Sacramento since 1975.
The partnership's success also will depend on how candid you are with sometimes-sensitive company information. Says soccer publisher Cuzzi: "Students won't know what's going on without it." He made the students sign nondisclosure agreements--a prudent policy.
You'll also want to keep an open line to the B-school professor in charge of your students. The instructor will help guide them and give extra instruction when needed. Sometimes, the B-schools even provide access to capital. For example, the venture capital fund run by the University of Wisconsin was impressed enough with Tolzmann's cranberry venture to invest $50,000.
Consider your timetable when proposing a relationship with a B-school. Remember that almost all consulting will take place on a school-year calendar. It's best to check with your local institution to see if they offer a summer course. Whenever possible, try to work with students who are getting graded on their work. It's hard to beat that motivating influence. And since for them, after all, this is a learning exercise, you'll probably find yourself explaining a lot of basic things about your business.
It's a good idea to check in with the professor to find out how your students' work was rated before you implement their advice. Also, expect to reimburse students for such minimal expenses as travel and photocopying.
That said, many entrepreneurs report that the experience is well worth the effort. "Small businesses grapple 90% of the time with day-to-day tactical issues," says Carmine Napolitano, chief financial officer at California software-maker Coryphaeus, a company using Berkeley MBAs for the first time. "It's rare to step above the day-to-day chaos and take a strategic look at where you want to go."
What's more, you may find that these students graduate to become well-informed employees--and even trusted confidantes. Cranberry grower Tolzmann was so pleased with the help he got from Richardson that he brought him on as a partner. "I even taught him how to drive my bulldozer," says Tolzmann.
While not all collaborations may be that fruitful, a return to campus could help your business make the grade.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- YouTube Bans Firearms Demo Videos, Entering the Gun Control Debate
- Stocks Drop Most in Six Weeks on Trade War Tension: Markets Wrap
- Under Fire and Losing Trust, Facebook Plays the Victim
- Fed Lifts Rates, Steepens Path Through 2020 for More Hikes
- Uber Autonomous Accident Video Shows Car Just Before Collision