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At the end of possibly the most modest office tour — a single room in a 1970s office block overlooking London’s Old Street roundabout — Nitzan Yudan admits that for now the dream of building his online rental marketplace to the scale of Facebook is just that — a dream.
However, in one way at least, the Israeli-born MBA graduate is following in the footsteps of Facebook founder Mark Zuckerberg: both created their companies by finding customers among the students at their alma maters.
In the case of Zuckerberg, it was the Ivy League elite of Harvard that provided a test bed for people sharing their pictures and opinions online. For Mr Yudan, whose company FlatClub helps users find short-term accommodation in Dublin, London and New York, it was the students of London Business School.
After struggling to find affordable accommodation in the UK capital for the months he needed to attend classes, Mr Yudan launched FlatClub, starting with five flats and one email to the school mailing list. Within a fortnight, he had 70 flats on his books due to
College campuses have proved a good testing ground for many fledgling ventures because they offer a critical mass of people looking to acquire new experiences who often also possess a relatively high level of disposable income. But business schools have an added advantage in that their students are already likely to be relatively affluent and well connected, so might also introduce founders to financial backers and significant corporate customers.
LBS proved critical when it came to raising seed funding, says Mr Yudan. He secured backing from introductions made by faculty and alumni, some of whom he has since adopted as advisers.
“The hardest challenge of an entrepreneur is doing the first sales. LBS provided me with these,” he says. Today FlatClub has 75,000 members and 25,000 listings, managed by a team of 17 people, as well as partnerships with 50 universities, who promote the service among their students.
Two other founders who used their schools as a test bed are Vikas Narula and Sinuhe Arroyo.
Mr Narula launched Keyhubs, a consultancy business helping companies to map out the informal networks that form their corporate structure, after completing his Global Executive MBA at Duke University’s Fuqua School of Business. But the inspiration and much of the development work was completed while he was learning about the networks that make a company tick.
“It really struck a chord with me,” Mr Narula recalls. “From that point on, I just wanted to do something to apply it.”
Ron Dees, a classmate at Fuqua, stumped up the $25,000 of seed funding that enabled Mr Narula to build the prototype software system for Keyhubs.
“We weren’t close friends, but we would meet for lunch and I would tell him my ideas,” Mr Narula recalls. “I bought him out this year but he has been a great mentor with a lot of wisdom.”
Another key figure in Keyhubs’ development was Jack Soll, associate professor of management and organisations, in whose classes Mr Narula was introduced to the idea of informal networks and who became a sounding board for the first iterations of the technology.
“Jack was eager to see what we students would come up with,” Mr Narula says. “When my co-founders and I launched the product in June 2008 (six months after graduation), Jack began using it with his incoming MBA class. Our first few customers were from this class.”
In 2009, Mr Narula quit his job at Virtual Radiologic, a telemedicine business, to work on Keyhubs full time and contacted all 65 of his EMBA classmates personally to explain the business model and ask for support. About a fifth agreed to use the technology and 10 per cent provided leads to companies that now pay for Keyhubs’ service.
Some of these connections took years to bear fruit, but Mr Narula stayed in touch through blogs and general follow-up. “It helped keep me front of mind for many folks,” he says.
He also made a point of contacting every Duke MBA alumnus in the twin cities of Minneapolis-St Paul, where Keyhubs is based. “At the time, we had some 120 graduates,” he recalls.
“Many of them took the time to meet with me for coffee or lunch. They were eager to help and make new connections for me.”
Mr Arroyo, a Chicago Booth Executive MBA graduate arrived at business school with the concept for what later became Taiger, a semantic software business that enables searches and data matches based on word patterns.
He already had a computer science degree and had risen to PhD level as a technology specialist, but he claims an EMBA was the best way to improve his financial skills.
“I always felt that with my engineering background people would not think that I could talk the language of business,” he says.
“Entrepreneurs do learn by doing but there are many aspects to it where having the right knowledge helps. [The] tools you learn with an MBA allow you to move faster and hit your goals.”
All of Taiger’s largest clients, including Vodafone, Santander and Sony DADC, have since come from connections made at Chicago Booth, says Mr Arroyo, who made the most of having classes at the school’s campuses in London, Chicago and Singapore.
At a time when many business schools, particularly in Europe, are concerned about losing potential students to the world of start-ups, the tale of how these three were helped by faculty and alumni could provide added justification for ambitious 20- and 30-somethings to sign up for a formal business education.
Words of advice: Ensure to take advantage of your course contacts
Vikas Narula, co-founder of Keyhubs, shares his tips for making the most of a business school network.
Send a personal email
Early on in the Keyhubs journey, I made a point of contacting each of my classmates. I wanted to be sure they were aware of my work, as they could become customers or might know people in their network who would make good customers.
Leverage other alumni
Using the Duke alumni network, I made personal contact with more than 100 people. Many of them took the time to meet me, which helped me expand my network locally and reach broader audiences and a lot of my early deals came from this small, core network.
Show interest in others
At first, much of my networking efforts were focused on generating business. There is a fine line between wanting to connect and wanting business. As I became more experienced in the art of networking, I began to network purely for the joy of meeting and getting to know other human beings. I sought to help others before seeking help for myself or my business. This change in mindset made the whole process much more enriching and enjoyable.
I have found it helpful not just to connect, but to stay connected. Each time I meet someone new I put them on my email list. I then blog regularly on various topics and send the updates to this ever-growing list. This has allowed me to spread my message and grow my network without stretching myself too thin.