Enterprise at Yale

Yale students look at the pros and cons of taking the non-I-banking path

Vent, share, or just express your opinions about this article in Speak Your Mind.

KUSHAL DAVE/YH I'll make you money, I promise.

The Dow Jones recently hit that magic number of 10,000, to the elation of investors everywhere. And part of its rise can be attributed to the influence of such Internet companies as Amazon.com, which attract hordes of investors, even though they have still to see profits. When Yahoo actually reported sizeable profits this week, people reacted with surprise. The recent surge in successful, or even psuedo-successful, high-tech startups is drawing college students out of traditional post-graduation jobs and into the sometimes rewarding, sometimes risky field of computer entrepreneurship. Reflecting the trend, some undergraduates are banding together to form a new organization that hopes to foster enterprise in both the non-profit and for-profit setor.

As the trend for tech start-ups grows, some students who are considering forging into entrepreneurship themsleves feel that Yale should do a little more to offer practical knowledge and assist students like them. Meanwhile, some graduates that already have companies of their own feel that there is no need for Yale to provide anything in particular.

Student.Com is perhaps the most well-known recent example. Begun in 1995, by five Yale juniors, Student.Net grew from a small website that was part of Nando.net to a flourishing e-business that has two sites under its belt, Student.Net and TVGrid.Com.

A word from the wise

David Sklar, BK '97, was one of the five Yale juniors who, along with founder Stewart Ugelow, TC '97, worked on the site night and day before it achieved its miraculous success. Sklar noted that while Yale did not specifically teach any skills for succeeding in a web business, there were many advantages to Yale's network of bright young minds. "There were no discrete parts to my 'Yale education' that provided needed skills in starting Student.Net," Sklar said. "Being in an intellectually challenging environment surrounded by impressive achievers, however, made it easier to think that one could succeed in a venture like this."

Sklar also recalled that the hardest part about starting Student.Net was "figuring out what we didn't know about starting a company and learning those things — or finding people who knew these things." Sklar did not feel that Yale should offer any additional services that specifically cater to future entreprenuers.

Don't like I-banking? Try your own firm.

However, two Yale students. Mickey Kataria, BR '99, and James Gutierrez, CC '99, who are hard at work getting ready to launch their own high-tech startup, complain about the lack of support for Yalies that are looking to start their own firms.

Mickey Kataria finds the hardest part of the process to be better than the other guy. "The hardest thing is trying to figure out who your competition will be, and trying to figure out how to create a better product." The numerous regulations that bog down any fledging company are also a concern. "I really didn't know too much about the legal issues," recalled Kataria.

"There should be a lot of seminars..."

Kataria feels that "there should be some sort of forum on legal issues," so that students like him won't be going in completely blind. Gutierrez also agrees that there should such forums. "I think there should be a lot of seminars … and classes cross-referenced to Yale SOM," Gutierrez said. "Yale is really far behind other schools like Stanford and MIT in encouraging entrepreneurship, in providing the right structure."

However, both Gutierrez and Kataria feel that what Yale does provide is an impressive peer network. In fact, Kataria decided to jump into the entrepreneurial jungle only after Gutierrez convinced Kataria to join in. "Yale helps most in providing contacts — mostly peers that you will be working with," Kataria said.

The impressive peer network and the contacts can only go so far, however. Gutierrez and Kataria had to do a lot of footwork to find and recruit their management team and other people to help them out. "At other schools, they really have a lot of resources...Yale is just not supportive enough," Gutierrez said. However, he did find some help in former grads Sklar and Ugelow, the founders of Student.Net. "I gave the Student.Net guys a call … they were really helpful."

Concept Stimulation

Gutierrez, however, is hopeful that the situation will change with the introduction of a new undergraduate organization. This new organization, currently led by Ajay Royan, BR '00, hopes to provide students like Gutierrez and Kataria with a forum where they can develop ideas for any type of business, have it critiqued, and convince some more students to join the team. The new Yale group will provide a place for "idea development and concept stimulation," according to Royan.

The basic structure of the new organization would include small seminars and a chance for teams to present their ideas to large groups. Royan hopes to get businessmen, "regular guys who are willing to give us their two cents on practial things like 'How do I apply for a [business] loan." While Royan appreciates the "intellectual eduacation" that Yale provides, he hopes that his group "will flatten the practical education curve," that is, increase the amount of practical, legal, and technical know-how that students like Gutierrez and Kataria will have under their belts.

In addition, Royan hopes that his new group will foster more of the team-formation that started Gutierrez and Kataria's project. "I would prefer that people work in groups," Royan said. He envisions that groups of entreprenuers will present business ideas, perhaps create a web page, so that other students can critique the model, or even sign onto the new "company."

One thing the Royan's group will not be able to provide is the financial resources of big-time investors. However, Royan hopes that Yale, like MIT, will be able to hold a conference where venture capitalists and investors can flock to campus and provide the funds for their favorite new idea.

Until next semester, when Royan will officially launch his new group, Gutierrez and Kataria will have to continue to work on their business model and independently seek constructive criticism. However, for both of them, the prospect of running their own business is very exciting. "I always been very interested in starting my own company," Gutierrez said.

The big step.

"It's a big psychological step," Gutierrez added. "We could fail, fail five times before we suceed." Even with the threat of failure, however, Gutierrez and Kataria are still enthusiastic. "I'd feel a lot better about failing with my own company," said Gutierrez, who passed up an offer from Goldman-Sachs to start his own company.

Does Sklar have any final advice for his soon-to-be peers still at Yale? "Be singleminded about success, if you really want to succeed; realize the tradeoffs that commercial success require and be honest with yourself about how much you want that success," he said.

Anything else? "Get a good lawyer," he said, adding "Keep in mind that as a young, motivated, bright person, you will probably have lots of great opportunities throughout your life."

Related Sites:

LINKS WILL OPEN UP IN A NEW WINDOW

• Student.Net.
• E-the-People.: another site founded by a Yalie.

  Back to YH Features...