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The Silicon Mitten: Michigan’s changing entrepreneurial culture

Photo illustration by Ruby Wallau/Daily Buy this photo

By K.C. Wassman, Daily Staff Reporter
Published January 6, 2014

It’s gone viral. It’s all across campus. It’s not an app, but in recent years, it’s a movement buzzing with energy all across phone screens, Facebook profiles, posting walls. And it’s rapidly evolving.

Entrepreneurship. These days, it’s a buzzword heard across the University, from MPowered events to student startups. Entrepreneurial efforts abound us on campus, but its role at the University is hard to define. If it can be defined by one trait, it’s the ongoing process of change.

“Change” is a fitting definition for the entrepreneurial climate on campus — with an increased focus on the topic over the last year and a half alone. In 2013, there have been two hackathons, a “Month of Entrepreneurship” and a newly created entrepreneurial adviser position. With another hackathon rapidly approaching and the Central Student Government’s Commission for Entrepreneurship renewed for another semester, it seems last year’s change is only the beginning.

The rising ‘rock stars of the world’

You may be hearing more about entrepreneurship on campus, but it’s hardly a new concept. It’s a spirit politicians say America was built on, and the increase in entrepreneurship on campus mirrors a national trend. According to a 2012 Global Entrepreneurship Monitor report on the United States, total entrepreneurial activity is at its highest level since 1999.

Though it’s hard to determine exactly when this increasing trend toward entrepreneurship started, Stewart Thornhill, executive director of the Zell Lurie Institute for Entrepreneurial Studies, believes it comes from a changing business model in the United States.

“The current generation of students — whether they’re undergraduate or graduate students — grew up in the period of time when there was a real loss of faith in the long-term, big-company employment model that their parents and their parents’ parents had gone through,” Thornhill said. “There were all these huge employers which had previously been seen as very stable forms of employment … now all (of a) sudden (they) are not so stable anymore. Your job could literally disappear overnight.”

Apart from the changing business model, Thornhill also cited increased media coverage, a new social culture and the desire for people to control their own destiny as reasons for the growth in entrepreneurship in the United States, and consequently, on campus. Thornhill said “Shark Tank” — an ABC television show where entrepreneurs pitch their ideas to receive funding from investors — is a prime example of how entrepreneurship is infiltrating popular culture.

“The entrepreneurs are now the rock stars of the world,” Thornhill said. “They’re on TV programs and magazine covers. So you’ve got this whole sexiness thing that 20 years ago wasn’t really associated with starting your own business.”

Indeed, there are many well known entrepreneurial “rock stars” nowadays, Mark Zuckerberg being one of the most famous. Zuckerberg started Facebook in his early 20s while a student at Harvard University, and has since turned his dorm-room project into a multi-billion dollar empire — increasing his personal net worth to $19 billion in the process, according to Forbes. Engineering junior Chris O’Neil serves as the current president of MPowered, an active student entrepreneurial group on campus that seeks to unite and enhance student startup culture. O’Neil said during his time at the University, there has been an increase in student entrepreneurial involvement and believes it can partially be attributed to a “Mark Zuckerberg effect.”

“It’s definitely more known than it used to be,” O’Neil said. “Everybody knows that a couple of kids that went to Stanford started Snapchat, and just got offered $3 billion. … Whether you’re interested in entrepreneurship or not, you’re going to know about that story. It builds this awareness of entrepreneurship and you can get people thinking.”

A student movement

Thomas Zurbuchen, now the senior adviser for entrepreneurial education, has spearheaded entrepreneurship on campus during his time at the University. In 2008, he started the Center for Entrepreneurship, a resource hub for campus startups and students interested in created new businesses. While originally exclusive to engineering students, the Center has since expanded its program availability to most students at the University.
Zurbuchen said the increase in entrepreneurial opportunities from the University initially came as a result of increased student demand, adding that he founded the Center for Entrepreneurship for the students — not for institutional prestige.

“In many ways I think Michigan entrepreneurship, as opposed to other schools, is entrepreneurship that has started bottom-up,” Zurbuchen said. “It turns out that students have taken tremendous ownership of entrepreneurship.”

Zurbuchen cited the number of entrepreneurial-minded clubs on campus as an example of student initiative. MPowered was one of the first entrepreneurial student groups on campus when it was founded in 2006, but is now one of 16 listed on the Center for Entrepreneurship’s website and one of almost 50 on campus, according to Zurbuchen.

While entrepreneurship was primarily pushed by students in the beginning, Zurbuchen said the current entrepreneurial climate is being supported by both the students and the University administration.

“What’s really interesting about this movement on campus is that it comes from both directions,” Zurbuchen said. “I think it is a coincidence of sorts that the students see this as absolutely critically important and something that they can act on, but we at the University-level see it as absolutely essential and a huge opportunity for the University to have an impact … in our state, and in our future of the U.S., and the world.”

Changing an institution

The switch to entrepreneurship overdrive may have been slow at the University through the lens of the fast-paced startup world, but for an institution that’s turning 200 in three years, the shift is fairly quick.

Over the course of the last 15 years, the University has seen large amounts of entrepreneurial growth. Zell Lurie was founded in 1999, the Center for Entrepreneurship in 2008 and Zurbuchen’s role expanded to help foster entrepreneurship on campus in 2013.

Zurbuchen’s new role as senior entrepreneurial adviser may not seem as consequential as the opening of two entrepreneurial powerhouses. However, his appointment marks an important shift in the way entrepreneurship at the University works: from the individual to the collaborative group. One of Zurbuchen’s jobs is to design an academic program in entrepreneurship which will be available to all majors, which is a stark contrast from where the different entrepreneurial programs started.

Originally, Zell Lurie and the Center for Entrepreneurship stayed in their respective corners: Zell Lurie in the Ross School of Business on Central Campus, and the Center for Entrepreneurship in the Duderstadt Center on North Campus — primarily supporting only their home communities.

As the buzz around entrepreneurship grew, so did students’ desire to utilize both Zell Lurie and the Center for Entrepreneurship, regardless of whether or not they were majoring in business or engineering.

Mary Lemmer was one of those students. Lemmer started Iorio’s Gelateria with her brother Nick while she was in high school, and decided to come to the University to further her entrepreneurial ventures through Zell Lurie. However, when she learned about the Center for Entrepreneurship’s speaker series, she decided to try and attend those classes as well as Zell Lurie’s. Though it was difficult, Lemmer worked with both departments and was eventually allowed to take the courses with both Zell Lurie and the Center for Entrepreneurship.

The Center for Entrepreneurship offers about 40 courses available to students from other colleges, a 9-credit Program in Entrepreneurship certificate program, and collaborations with Zell Lurie on many different programs including the Masters in Entrepreneurship program, a joint degree from the College of Engineering and the Ross School of Business which was started in the fall of 2011.

“If I would describe (the Center for Entrepreneurship) in comparison to a company’s life cycle, it was the early-stages of really focused entrepreneurial resources for students on campus, and now they’ve grown a lot, which is great to see,” Lemmer said.

A growing resource hub

Apart from expanding programs to other schools, the University has increased the available resources to student entrepreneurs. The University’s TechArb is a student startup accelerator program run between the Center for Entrepreneurship and Zell Lurie, and gives student startup teams the office space to work on their businesses. Nestled in the lower level of an office building on East Liberty Street, the TechArb also offers other resources besides physical office space, such as mentors and introductions with venture capitalists.

Like many students, University alum Jason Bornhorst didn’t come to the University thinking he’d delve into entrepreneurship. He thought he’d get his degree in computer science, graduate and get into the startup scene later. Instead, Bornhorst got involved with the Center for Entrepreneurship and later founded MadeVentures — a student group which together to talk about University-based startups in Bornhorst’s apartment over beer.

Bornhorst founded the group initially because he felt there wasn’t a central place for student entrepreneurs to gather and share ideas, but eventually with help from faculty and a local real estate company, Bornhorst and the students of MadeVentures became the first class in the TechArb.

Since graduating in 2009, Bornhorst has founded his own software company, Filament Labs. He’s returned to the University since graduating and recently spoke at the Center for Entrepreneurship’s Entrepreneurship Hour Speaker Series. Bornhorst said he was impressed with both the students he met after speaking, as well as the progress the University has made in helping student entrepreneurs.

“I think it’s incredible. I think students have access to a ton of new resources today,” he said. “For example, I would never feel the need to start MadeVentures today based on what I perceive to be available from the University just since graduating.”

While the TechArb has been around campus a long time — for a startup — the Center for Entrepreneurship is currently working on a new resource for student entrepreneurs called MEngage.

MEngage is a new program that focuses on growing entrepreneurial programs outside of the University to make the programs on campus stronger. The two programs will be based out of Grand Rapids and the Bay Area of California, and both will work to connect students with successful entrepreneurs who operate in the same sector.

Tom Frank, executive director of the Center for Entrepreneurship, characterized the program as “match.com” for entrepreneurs.

“For me the goal is to match the best talent to the best advice,” Frank said. “I don’t mean to oversimplify it, but getting good advice from someone who knows (and) understands the business sector you’re operating in can make all the difference in the world in terms of how fast you move forward with your idea.”

Frank added that while both locations have the same mission, they will do different work based on their locations. The Grand Rapids hub will revolve around creating more opportunities for students to explore design manufacturing innovation in the state. Frank said this will include anything from finding more internships to helping students build relationships with Michigan incubators and accelerators. Furthermore, the Grand Rapids hub will attempt to create an easier path for students who want to stay in-state to build their company.

In contrast, the Bay Area hub will focus on long-distance mentoring between experts in the area, and students in Ann Arbor. Frank said participants will be using Skype video screens to help facilitate the relationships and leveraging the University’s expansive alumni network to find mentors.

Both locations of MEngage are set to launch in the first few months of 2014.

Changes by the leaders and the best

From new events to new CSG committees, entrepreneurship has infiltrated the minds of the student body.

Many of the most recent student-lead changes can be attributed to University alum Manish Parikh, former CSG President, who ran on a platform of promoting entrepreneurship on campus and followed through on his campaign promise.

During his tenure, CSG dedicated 10 of its 59 executive projects to the entrepreneurial community, which included the creation of an entrepreneurship commission.

The commission, which has been renewed for the semester, is comprised of leaders from student organizations that focus on entrepreneurship, and aims to shape the University with the top student-driven entrepreneurial culture in the country. Since its inception, the commission has worked hard to promote entrepreneurship on campus, including hosting a “Month of Entrepreneurship” in March 2013.

The month was a six-week period comprised of over 30 events featuring entrepreneurial topics. It included events like the inaugural MHacks, which has become one of the largest student hackathons in the country, and will be hosting its third hackathon this month. The Month of Entrepreneurship was well received not only on campus, but also by the Obama administration. The White House dedicated a blog post to the University’s Month of Entrepreneurship, where they interviewed Parikh about the event as well as growing entrepreneurship on campus.

When talking to Parikh on a long-distance phone call from India, it’s hard not to hear the smile in his voice when he talks about entrepreneurship at the University. While discussing the entrepreneurship commission, he sounds like a proud parent. And when it shifts to the White House his tone switches to one of honor.

Parikh’s time at the helm of CSG brought entrepreneurship to a more campus-wide consciousness, but that was not without the help of other student groups on campus like MPowered.

MPowered’s mission is to expose students to entrepreneurship, which it does through large-scale events like its 1,000 Pitches competition, where students from the University and Pennsylvania State University compete to give the best pitch for their business ideas. O’Neil, the MPowered president, said events like these are meant to excite University students about entrepreneurship.

Over the past few years, O’Neil said he’s seen an increase in participation in events like 1,000 Pitches. The last 1,000 Pitches event occurred this fall, and garnered over 6,000 entrepreneurial pitches total — with 5,000 of those pitches coming from the University alone.

“Students at Michigan are already amazing, you don’t need to hold their hands. All they need is that excitement,” O’Neil said.

Branching out: an interdisciplinary approach

By now we all know the dream: start a company and become the next Mark Zuckerberg. While this idea may conjure up images of coffee-fueled business students typing away furiously into the night, startup and entrepreneurial culture is not only growing in Ross’ Winter Garden. Some of the best startups come from teams with mixed educational backgrounds. Before he dropped out, Zuckerberg was studying psychology.

Though entrepreneurial programs were initially restricted to business and engineering students, the recent push to include all majors has allowed the University to foster a more inclusive environment. This has been done through co-University sponsored events like Mingle ‘n’ Match nights, which aim to help student entrepreneurs from any school find members for their startup teams as well as help them network. Large-scale events like MHacks II, hosted in Michigan Stadium last fall, also strive to enhance networking and communication platforms between student entrepreneurs.

O’Neil said the past 1,000 Pitches event included a proportionate amount of students from each college at the University. This representation shows that entrepreneurship is no longer being seen as “just a business,” or “just an engineering” endeavor, but rather something open to the entire campus.

Parikh said he believes the growth of entrepreneurship amongst all schools at the University has made it a concept that unites the student body, much like Michigan Football.

“Kind of like our football stadium, the Big House, (entrepreneurship) encompasses students from all kinds of disciplines and all kinds of ages,” Parikh said. “Together we come together, like in the Big House, to create a solidified impact.”

Thornhill said the diversity of students involved in entrepreneurship is beneficial for student startup teams.

“Having a team of just business students, or just engineers, or just life science students … creates a gap in your skill set,” Thornhill said. “If I were going to invest in a company I’d far rather look for that diversity of skill profile than a group of students that came from one concentration.”

Though the University has started to increase the collaboration between schools, O’Neil believes some students still face difficulty trying to find team members from other colleges.

“You often find business students or engineers who have these great ideas, but they don’t know how to find or talk to the developers who also have these great ideas,” O’Neil said. “They often can’t find common ground — which is a huge problem.”

The ‘Silicon Mitten’

California’s Bay Area has become synonymous with startup and tech culture, earning it the name Silicon Valley, but could Michigan become the next great startup and entrepreneurial community?

Despite the bankruptcy and bad press, Detroit has seen several large companies move to its downtown area — most notably Quicken Loans, an online mortgage lender. In a 2013 interview with Reuters, Quicken Loans CEO Dan Gilbert said his interest in Detroit was partially to help stop the state’s brain drain and give young people a reason to stay in Michigan.

Frank said he thinks that although entrepreneurship is growing across the country, it’s growing more in Michigan because of its central location and its entrepreneurial spirit increases opportunities for startups.

“I’ve never seen such an open environment as I do here,” Frank said. “I see people being really receptive to each other’s ideas, and more importantly, I see people volunteering to help each other in a way that I don’t see other places.”

Apart from an open environment, there is a large amount of venture capital — money invested in a new or growing business — available in Michigan. Such venture capital has been increasing over the past 13 years. According to Carrie Jones, executive director of the Michigan Venture Capital Association, the number of venture capital firms in Michigan has grown from between five and seven in 2001, to 20 in late 2013.

The amount of venture capital available has increased exponentially because of those firms redirecting investment dollars to Michigan. According to Jones, there is now $1.5 billion in assets under management of firms that are actively looking for early stage companies to invest in. Though there is an increased amount of capital available, Jones said many aren’t aware of the potential in Michigan which can result in it being ignored by new companies looking for a place to locate their headquarters.

“A lot of people don’t think necessarily of Michigan right off the bat as being an entrepreneurial state,” Jones said. “But if you go back to Henry Ford and the auto companies, they were started by entrepreneurs who built those companies … and built Michigan to be the automotive hub of the world. There is still very much that spirit in Michigan and it’s good to see that resurgence.”

Lemmer, who grew up in Michigan and has since moved to San Francisco, said while Michigan and Detroit were built on entrepreneurship going back to the fur trade and automotive industries, she doesn’t think the area will ever be fully comparable to Silicon Valley.

“I don’t think Detroit or Michigan is even going to be on par with the Bay Area,” Lemmer said. “I think it’ll be different; I think they’ll both have a different entrepreneurial culture and that’s great. They shouldn’t be exactly the same. I think it’s going to take a long way for Michigan to get there, but we’re on the right path.”

While student entrepreneurs usually dream of getting their first job in Silicon Valley, there are many student-lead initiatives at the University that focus on improving Detroit — some of which are entrepreneurial.

One example is the Detroit Entrepreneurial Network, an organization which aims to give high school students in Detroit a “toolbox of business knowledge and Detroit energy” in order to help them bring their business ideas to fruition in the Motor City. MPowered is launching a similar initiative called Startup High School, which will allow Detroit students to explore, share and execute their entrepreneurial ideas.

Another student initiative currently investing in Detroit is MHacks, an event put on by MPowered and Michigan Hackers. MHacks III will be held in Detroit over Martin Luther King Jr. Day weekend and is being sponsored in part by Quicken Loans.

O’Neil said that while there were other factors, like the amount of venture capital available in Detroit, influenced the decision to move MHacks, they also needed newer, larger spaces with more office equipment to have a fully functioning hackathon.

“It made a lot of sense to go to Detroit where the buildings are really new and innovative in the way that they’re designed,” O’Neil said. “They’re quirky and they show off what it means to be a hacker, what it means to be an entrepreneur and think differently.”

Engineering junior Jack Wink, president of MHackers, said they decided to move MHacks off-campus, not only because it offered the promise of nicer spaces but also because they want to disprove popular misconceptions about Detroit.

“When these students come to Detroit if they have a good experience they’re going to come back and say, ‘Wow, Detroit is an awesome place all these companies that are booming in the area are willing to help out.’ They’re going to remember that and if they ever do end up pursuing their hackathon app they might consider Detroit and move back, which would be a big win for Detroit,” Wink said.

Hail to the innovators

While student entrepreneurs at the University usually focus on building their own companies, throughout the years they have been busy building something else from the ground-up: an entrepreneurial community. This was achieved through Zurbuchen’s ingredients for entrepreneurial success: hard work and an active mindset for growth.

“Entrepreneurship is a way of thinking, taking innovations and turning them into real-life change,” Zurbuchen said.

“Entrepreneurship is of course starting companies, but there are many activities that are totally entrepreneurial that don’t involve a start-up … It’s about taking a big idea and turning (it) into action.”