Breaking Down Barriers to Entrepreneurship
Copyright © 2010. Reprinted with permission from Knowledge@Wharton
“Today, with the Internet, social networking and other media, people are interconnected,” says Vivek Ramaswamy, “making the original hotbeds of entrepreneurship not as distant as they once were.”
As a student at Harvard University, Vivek Ramaswamy realized that even in Cambridge, Massachusetts, which boasts of two world-class universities—Harvard and the Massachusetts Institute of Technology—students with entrepreneurial aspirations had difficulty connecting with potential partners and investors. He decided to do something about it.
In 2007, his final year at Harvard, Ramaswamy partnered with fellow student Travis May and co-founded StudentBusinesses. com, a Web site to connect students with the entrepreneurial ecosystem. The duo also developed two supporting software products. In 2009, they sold their business to the U.S.-based Kauffman Foundation, which is focused on advancing innovation and training future business leaders. The foundation later rebranded StudentBusinesses.com as iStart.
In a conversation with India Knowledge @Wharton, Ramaswamy, who is currently a student at Yale Law School, shared his views on entrepreneurship and his own business ventures.
Excerpts from the interview:
What are your views on entrepreneurship in America?
This may sound trite, but I believe it to be true: Entrepreneurship is the fabric of what America is all about. The recent resurgence in entrepreneurship is a resurgence of something quintessentially American. It has been responsible for driving this country in years past and will drive it forward in the future as well. The shift of the entrepreneurial age toward a younger age bracket indicates a potential uptick going forward as these younger, aspiring entrepreneurs gain more experience.
How do you see the current entrepreneurial resurgence as being different from earlier?
I would think the correlation between an era of increased globalization and an increased desire to participate in an entrepreneurial endeavor is not a coincidence. When interconnectedness is at a peak due to technological advances, the ability to spawn something new is slightly easier.
In your view, how are American universities adjusting to this new trend?
Today, with the Internet, social networking and other media, people are [becoming increasingly] interconnected, making the original hotbeds of entrepreneurship not as distant as they once were. The emergence of Web-based tools to achieve that interconnectedness is spawning entrepreneurship programs at universities across [America]. Our business..., StudentBusinesses.com, was focused on the issue of university entrepreneurship. The number of universities in the past five years that have added either business plan competitions or entrepreneurship education programs has dwarfed the same five-year trend in any period before it, at least to the extent that I am aware. Most of these [programs] are actually at universities that are outside of the typical so-called “hotbed” regions. I think a big part of the reason for this is what the Internet and other technology and media have accomplished in connecting those places that are more geographically distant from the traditional hotbeds.
Are you suggesting, for example, that while a place like Silicon Valley would have been geographically or academically inaccessible to people one to two decades ago, it is now possible to connect folks in disparate geographies to work collaboratively?
Exactly. It is an ability to access what is happening in those places typically known for entrepreneurship and to use that to plant a seed in a wide range of other places.
The objective of StudentBusinesses. com was to connect young students with the entrepreneurial ecosystem and tap into their energy. Some research, however, shows that the majority of successful entrepreneurs have had years of experience and also industry know-how before they went out on their own. How did you envision bridging that gap?
It is a distinction we were acutely cognizant of at the time we started Student Businesses.com. Some folks we approached at the initial stages to join us as advisors and consultants told us that they didn’t believe in our concept because they [felt that] a person needed to have substantial industry experience in order to become an entrepreneur.
We viewed it a little differently. [We felt that] young people, including those coming out of the university programs, are at a stage in their lives when they are able to take the biggest risks. They [also] have a fresh perspective that’s not colored by industry experience. That inexperience or freshness can be catalyzing. Of course, it could potentially impose limitations on the types of things that young students may envision themselves doing. We wanted to tap into that innovative lens [that] younger people at universities possess. Recognizing the value that experience could add, one of our major initial theses was that the experience of starting something new can be a valuable experience in itself.
Even if the venture doesn't result in anything?
Absolutely. That act of trying can be its own experience and that was part of our thesis from the very beginning in terms of the value created for a student by founding his or her own startup company.
You launched StudentBusinesses.com in 2007, the semester before you graduated from Harvard. Times were good then [economically]. We didn't think about the world as we do today. How did you and your co-founder Travis May manage to get ahead of the curve? Did you see this coming?
[Actually] it was a very difficult time to start a business. Even though the message of entrepreneurship becoming all the more important was not lost on people, the conditions of fear that existed at that time were somewhat of an adversity that we faced in launching the company.
StudentBusinesses.com paired up entrepreneurially-minded students with people who were interested in their concepts. Can you tell us more about it?
The site, StudentBusinesses.com, had two searchable databases—“Businesses in the Game” and “Students on the Roster.” Aspiring and current entrepreneurs could join either of these for free. While entrepreneurs could post a profile that described their business and what they were looking for on “Businesses in the Game,” those interested in joining a start-up could [sign up on to] “Students on the Roster.”
Over time, our site also expanded to include two software-as-a-service products—B Plan Studio and Start-Up Space. B Plan Studio enabled university entrepreneurship programs to conduct a business plan competition in a seamless fashion and in a way that preserved the data and the information that was gained in that competition. Start-Up Space enabled universities, and in particular business schools, to create internal networks of aspiring entrepreneurial students on their campuses.
StudentBusinesses.com built these proprietary software platforms?
Yes, we built that software, which was modeled on some of the same aspects as our website. In the StudentBusinesses.com model the students sign up for free, while the external professionals who are interested in tapping into these students pay [for] a subscription. How were you able to convince people to pay for another site subscription?
The primary users of the site, from the non-student perspective, were actually professional service providers who were seeking to expand their businesses to include start-ups. [For instance,] law firms that were looking at targeting a new clientele, or web development and IT consulting firms that were generating revenue by serving large corporations but were interested in taking a little bit more risk in working with younger companies.
[But] it was never our main objective to market this aspect. We wanted to build a strong database and network of student entrepreneurs. We were acquired within two years of our launch [so] the process of going beyond that first step perhaps lies in the hands of our acquirer, the Kauffman Foundation.
Could you talk a little bit about the acquisition of StudentBusinesses.com by the Kauffman Foundation?
One of our objectives from the very start was to not only succeed in our own right as a business, but also from a more social entrepreneurship perspective to enable other businesses to do the same thing. It is that spirit that led the Kauffman Foundation to be the best acquirer. They are the world's largest foundation devoted to entrepreneurship and one of the largest foundations in the United States. I think one of the [reasons] that Kauffman looked at us was to find a platform around which to organize some of their activities including, but not limited to, their expansion into the university entrepreneurship space. At the end of the day, our consideration was not just a financial one, but the knowledge that our platform would be taken in the direction we had in mind from day one -- fostering entrepreneurship among young people across this country.
Can you tell us about the experiences that have shaped you as an entrepreneur?
From a personal standpoint, I consider myself much more of an accidental entrepreneur. I was involved in the entrepreneurship club at Harvard but I heard of it only because it was new on campus.
But the club obviously didn't fulfill what you wanted it to.
I saw so much potential among the aspirations of the students who were [at Harvard]. I suspected [it would be the same] at universities across the country. These aspirations weren't being served and harnessed.
Is there an example of something frustrating that happened or a specific point when you and [May] said, “We can do this better.” What was the spark that made it into something more?We observed, for example, that there were a lot of people at Harvard who were idea-driven but didn’t have technical skills to accomplish what they wanted to accomplish. They were always looking among their own community for people who had technical skills to help them launch a new idea that they had.
The next Facebook?
Exactly. And the fact that Facebook was launched during my time at Harvard probably impacted other people’s aspirations. Students had these great ideas. They didn’t have the technical ability to do it themselves, but they knew what they wanted to accomplish and all they needed was to find the right persons, except that Harvard was filled with a bunch of similar people. However, right down the street you have Massachusetts Institute of Technology (MIT), which has a higher concentration of people with world-class technical capabilities. Though separated by only two subway stops, this distance was enough of a barrier to limit the type of communication that should have been taking place. If that barrier existed within Cambridge among these two heavyweight institutions, one could only imagine the gulf at a national level.