Student Internet businesses face uphill battle

Technology is changing the face of business at breakneck speed, and Yale is not keeping up. Or, more accurately, Yale is not helping its students keep up. Members of the Yale entrepreneurial community are voicing concerns over the University's lack of support for student business endeavors. Although official resources such as the Yale Entrepreneurial Society (YES) are providing some support for student businesses, University administrators are holding steadfast to regulations prohibiting students from running businesses from their dorm rooms or using Yale resources.

COURTESY JOSHUA NEWMAN Joshua Newman, MC '01, has started two businesses while at Yale, but is denied business use of University resources.

Internet technology plays an extremely crucial part in all types of business endeavors, making it easier for student entrepreneurs to hop on the start-up wagon and keep abreast of the latest developments. But those wanting to take advantage of Yale's servers and fast Internet connections are slapped with the University's "no business with Yale resources" rule.

"It's problematic to have Yale's nonprofit resources used for commercial purposes," Daniel Updegrove, director of Information Technology Services (ITS), explained. "It's also problematic if it's widely perceived that Yale is an extraordinarily difficult place to do entrepreneurial activities."

Sean Glass, TD '02, and Miles Lasater, SY '00, began YES during the summer of 1999, with the purpose of ad-vancing the spirit of entrepreneurship at Yale and continuing entrepreneurial education. YES's leadership sees the Internet as a vital part of business and foresees a need for change in the University's policy.

Toward that end, YES is sponsoring Y50K, a competition in which students submit their business plans and a panel picks the best plan and funds it. "I think that the Internet has changed the way people think about starting businesses," Glass said. "It is something that can't be ignored. If you are starting a business today and hope to grow it into a large business, you have to use the Internet. Even if you aren't an `Internet' company, you have to have an Internet strategy. Dot-com entrepreneurship at Yale is growing really fast. We got over 40 entries in the first round of the Y50K. Many of the entries were dot-com plays. The advantages of starting an Internet business while at Yale are that there are plenty of talented people at Yale that a person can bring on to one's team as the business grows. The most important thing when starting a company is involving smart and talented people."

Successful start-ups have sprung up at Yale recently. Joshua Newman, MC '01, started Sharkbyte, a database consulting company, in October 1997, as well as Paradigm Blue, an offshoot venture capital fund, In November 1999. Newman developed Paradigm Blue after seeing "interesting business plans by students not getting a foot in the door of traditional venture capitalists because they were students."

Venture capital funds and incubators are now integrated into the vocabulary of every hopeful entrepreneur. Incubators, according to Newman, focus on "zero-stage companies without full teams and full business plans. They provide hands-on assistance." Venture capital funds give large amounts of money and "well-stocked rolodexes" to Internet startup companies trying to get off the ground.

With such resources at its disposal, Newman sees Yale's dot-com community quickly expanding. "At the moment, I guess there are between five and 10 companies moving forward on the Yale campus. But with Yale-focused incubators like Aquarium Ventures [started by Mike Stern, CC '02] and incubators like Paradigm Blue, that number should increase dramatically in the next few months," he said.

Yale still remains at a crossroads. Its rule against using Yale resources is an antiquated one—in theory, no Yale student may use the University's network connection to form or conduct a business, or engage in business-related correspondence. Thus, students trading stocks or e-mailing an employer are violating the rule. Clearly, the rule is often bent or broken—a fact that Updegrove laments. "We're not situated to be a start-up incubator," he stressed. "We're not eager to turn all of the Yale academic web site into an online billboard." Nevertheless, Updegrove leaves the door open for changes in future policies. "There might be creative ways that we can facilitate [student entrepreneurship]," he said.

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