U.S. Department of Energy
PROVO — Fewer than 1 in 10 businesses last longer than five years, according to BYU's Rollins Center for Entrepreneurship and Technology, but the school's latest crop of student entrepreneurs hopes to beat the odds.
BYU students have raised funds for their fledgling businesses in record amounts this year — together, they have raked in more than half a million dollars, and that only accounts for contest winnings. In years past, anything more than $150,000 marked an exceptional year, Rollins Center associate director John Richards said.
Richards attributed this year's success to a new lean startup curriculum, which the Rollins Center adopted three years ago — business schools across the nation have adopted similar changes as well. The lean startup model facilitates early success for entrepreneurs, as demonstrated by BYU students' competitive success, Richards said, but it won't exempt these companies from many of the obstacles faced by older generations of BYU businesses, such as Property Solutions and KT Tape.
Go lean, fail fast
Conventional thinking once suggested that entrepreneurs should take an idea and run with it, conducting surface-level market research and getting the envisioned product to market quickly so that it could begin making money. Under the right circumstances, this led businesses to rapid growth and early profits. But it also led to vast numbers of disastrous failures.
The new curriculum takes a more cautious approach by encouraging students to survey potential customers about the likelihood that they would buy a proposed product. These interviews, as well as feedback from mentors, allow young entrepreneurs to vet their ideas before the business takes shape. The gradual process helps students find the real market for their ideas, and it results in far greater chances of success, Richards said.
Take FiberFix, for example. This student-led company, which developed a specialized tape that cures and hardens to become nearly as strong as steel, started interviewing potential customers in January. By March, the company had placed product in 140 retail stores and had sold 7,000 units, for more than $70,000 in revenue, Richards said. Few companies expect to ship product so soon.
Inviroment, a student initiative looking to break into the waste industry, likewise benefited from the validation approach. Originally, three BYU roommates envisioned a company that sold packets of plastic-eating bacteria that consumers could place in the trash to biodegrade plastic, co-founder Nathan Parkin said.
After the trio met with industry experts, they realized a product that could be applied at the landfill would be far more effective. When the company officially launched in January, it branded itself as a business-to-business operation peddling a chemical spray capable of degrading plastics to landfills.
Like FiberFix, Inviroment is off to a running start — winnings from competitions sponsored by the U.S. Department of Energy and others have provided the company with more than $100,000 to fund the startup. But starting is only half the battle. For these new companies, the war has just begun.
Barriers to entry
"Every company has challenges," Richards said. Even the best companies should expect opposition of some kind, especially during the early years.
Inviroment, despite its success with fundraising, is no exception. The entire company hinges on a new, unproven technology that itself is a risk — there is always a chance it won't work as planned. Customers' reluctance to take that risk alongside Inviroment has already posed a problem for the company, Inviroment co-founder Devan Bennion said. He's hoping positive results from product tests this summer will encourage additional customers to sign contracts.
"That's going to remove as much doubt as we possibly can," Bennion said.
- BYU student health plan exemption expires
- Woman accused of stabbing girlfriend 46 times...
- Utah bachelor lets sister set him up on 31...
- 'One drink, one time': New research shows...
- $1M in heroin found in 'complex' hidden...
- FBI investigating fatal crash on Ute reservation
- SAGE scores, 2015: Top Utah schools in...
- Police say unlicensed massage therapist...
- BYU student health plan exemption expires 49
- Popular Provo teacher imprisoned for... 44
- Family of man killed by Spanish Fork... 33
- Does coal have a future in Utah? Should... 27
- Students see 'great growth' in second... 17
- About Utah: He walked around the lake... 15
- Bishop, Chaffetz say EPA knew spill... 15
- New law helps Utah avoid marriage... 15