Universities support student startups despite risk of failure

Despite a recent youthful burst of innovation in the U.S. technology industry, more than half of startups don’t survive after five years — casting doubt on the value of entrepreneurial ventures.

The business world has become less dynamic in recent years, and a 2014 report from the Brookings Institute showed that older, established businesses are performing better than smaller, younger ones.

But universities might cushion the risk behind launching a startup.

James Oliver Jr., a 2002 UNC graduate, co-founded Seven Under, an online magazine for black golf enthusiasts, along with another Kenan-Flagler graduate. They paid for the magazine’s costs out of pocket, and they worked on it for three years — but it failed.

“We couldn’t raise capital. We couldn’t find a partnership to help us get it off the ground,” he said.

He’s now founded WeMontage, a successful business that turns personal photographs into removable wallpaper. Still, he can recall the pain of bogeying his golf magazine.

“After so many years of sacrificing so much, eventually you’re like, ‘How much more of that can I take?’” he said.

Austin Helms, a UNC business major and founder of Buddy’s, a waterless car washing company, said the resources UNC provided helped successfully bring his passion to life.

“The entrepreneurship track has by far been the game changer, and it’s mainly because of the faculty,” Helms said. “They’ll do pretty much anything to help you.”

UNC supports entrepreneurship through several initiatives, including an entrepreneurship minor, the CUBE at the Campus Y and a class in the business school known as Launching the Venture, which is open to students, faculty, staff and alumni. Participants in Launching the Venture establish their ideas, develop business plans and solicit sources of funding, with the help of faculty.

“From a short-term perspective, you can make money and have some fun,” said Scott Albert, an entrepreneurship professor at Kenan-Flagler and the course’s instructor. “But on a longer term basis, it is really going to help you as you move out into the real world after graduation.”

Albert said the course gives students invaluable experience through trying to get a business off the ground and has produced between 30 and 40 startups that are currently operating companies — including Novocor, a medical technology company in the Research Triangle area, and Windsor Circle, a burgeoning customer-data analyzer.

N.C. State University runs a similar entrepreneurship initiative called the Garage. It’s an incubator that provides meeting space, 3-D printers, a laser cutter and other workshop tools.

Sharon Bui, an N.C. State graduate and former member of the Garage, co-founded Frill, a sorority clothing company that has appeared on ABC’s “Shark Tank.” Bui and her cofounder sold a stake in the company to Barbara Corcoran and Kevin O’Leary.

With high rates of failure among startups, and successful entrepreneurs such as Mark Zuckerberg and PayPal co-founder Peter Thiel leaving college to start their businesses, some question whether universities should be investing in entrepreneurship — or if entrepreneurs should be investing in a university education.

Albert said starting a company consumes enough time to detract from coursework and a student’s social life.

But Jack Paley, UNC student and founder of Aspen Crunch, a granola-product company, said the time commitment is manageable.

“I enjoy the daily grind of it all,” he said. “I’ve never felt bogged down to the point where I can’t handle school work and entrepreneurship.”

Like Helms, Paley attributes his success in running Aspen Crunch while earning a college degree to the University’s accommodating resources.

“They’re there for you with mentorship, guidance in all different forms, education and space to work,” said Paley. “It could be a lot more challenging to have a venture, but this university has been an amazing resource for me.”

Paley said striving to become an entrepreneur has taught him skills he would have struggled to learn elsewhere, such as managerial experience, and he believes it is one of the strong points of the university.

“It’s an education that’s hard to find in a lot of the other programs,” Paley said. “I think that investing in entrepreneurship is one of the best things the university can do.”

Randy Myer, a professor of entrepreneurship at Kenan-Flagler, said investing in entrepreneurship is as important, if not more, than the investments universities make in more traditional disciplines.

“Suppose somebody comes from the art department, and they want to start an art studio. Should they go into the entrepreneurship minor? Yeah,” Myer said. “As long as a student has a passion about an idea, we should be helping them to ignite that passion.”

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