Try the new

September 5, 2011 12:45 am

The campus entrepreneur

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Student-run ventures give MBAs the opportunity to practice their business skills in a risk-free environment

For most of her life Jessica England was told she would not make a good entrepreneur. Personality tests deemed her thinking too linear and friends said she was too controlling to work in an unpredictable start-up situation.

But in her second year at Dartmouth’s Tuck School of Business, she decided to try her hand at running a business: Tuckstuff, the campus store that sells school-branded goods. The store is entirely managed by a small team of second-year MBA students.

Ms England, who has a background in strategy consulting, was the company’s chief operating officer and ran the team’s weekly meetings. “We had full rein,” she says. “I went into it thinking I’d be learning about retail but instead I learnt more about teamwork and communication.”

As business schools strive to infuse more real-life business lessons into their curriculums by adding increasingly mandatory specialised internships and work-experience programmes, MBAs are taking a different tack: working for student-run enterprises on campus that offer practical preparation for running a company.

These companies offer students the chance to test their entrepreneurial aptitude and apply what they have learnt in the classroom in a relatively risk-free setting. And unlike typical business school exercises, the students can earn money for their efforts.

In the eyes of potential employers, working for a student-run company is “a résumé enhancer”, according to Peter Giulioni, assistant dean and executive director of MBA career services at the University of Southern California’s Marshall School of Business.

Working for an on-campus company “enables students who either don’t have experience in a particular area to get at, or to refine it”, adds Mr Giulioni. “Some employers look for this kind of experience.”

Students are often given office space and storefronts, they have access to free technology and infrastructure, and because the companies are affiliated with a particular business school, the students trade on a well-known brand name.

But even with advantages, mistakes are made – a part of the learning process, say students. Ms England recalls how Tuckstuff once had in sufficient goods in stock at a school reunion. “There had been merchandise that sold very well at last year’s reunion, but we didn’t realise that we should have ordered more of it because we hadn’t taken the time to analyse the sales data. That error probably cost us a couple of thousand dollars in sales.”

The on-campus businesses also give students an opportunity to employ lessons gleaned from their professors and textbooks and to take cues from business school case studies.

Students at MIT Sloan School of Management who ran Sloangear, a store selling school-branded sweatshirts and shorts, found inspiration from Zara, the Spanish retailer known for its ability to react quickly to new trends. In an effort to bring “fast fashion” to the campus, Sloangear began producing limited-edition T-shirts.

“We had difficulty keeping those T-shirts in stock,” says Lorenzo Farrontato, who was the company’s chief marketing officer. “We realised we always needed to be innovating. So every month we came out with a newly designed T-shirt and instead of ordering in standard batches of 100, we ordered in batches of 20 or 30. It was more expensive for us but we were able to charge a premium.”

. . .

Many of these campus-based businesses earn money for the student employees. In recent years Sloangear has reported annual revenue between $150,000 and $200,000 – a portion of which is kept by the students.

“But the goal is not to get rich at Sloangear; the goal is to get practice at running a small business,” says Catherine Gamon, director of MBA student affairs at MIT Sloan.

At a time when many business schools are emphasising hands-on or action-based learning as a critical part of the MBA experience, Ms Gamon says that working at a student-run company on campus “is not strictly experiential”, and that “it has a theoretical framework” because students are making use of what they’re learning in the lecture hall.

“This is an opportunity for students to hone their business skills and experiment while they’re still in school.”

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