AHEAD OF THE PACK & RUNNING LEAN P 6
INTERNATIONAL BMC TURNS FIVE P 14
COACHING THE COACH MENTOR PROGRAM P 10
BYU ENTREPRENEURSHIP ROLLINS
CENTER
ANNUAL
REPORT
2013–2014
BYU ENTREPRENEURSHIP
2013–2014
ANNUAL REPORT managing director
Scott R Petersen
academic director
Stephen W Liddle
assistant director
Jeff Brown
writers
Jordan Grimmer Jonathan Jarman Josh Naumu Jenna Randle Sterling Randle
designer
Jason Longhurst
printing
byu Print & Mail
contact the center
Rollins Center 470 Tanner Building Brigham Young University Provo, UT 84602 phone:
801-422-7437 email: cet@byu.edu
the rollins center annual report is published by the rollins center for entrepreneurship and technology at brigham young university, provo, utah. copyright 2014 by brigham young university all rights reserved
LearnEarnReturn.com
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he world’s current focus on entrepreneurship as the means to spur innovation and create jobs makes being at the forefront of this movement both exciting and fulfilling. Global leaders have long known the value of educating the rising generation, but never before has there been so much evidence that combining academic scholarship concurrently with solid experiential programs yields significantly greater learning outcomes. The Rollins Center continues its onward march towards its mission of being a global leader in preparing students to succeed in launching successful startups, preparing them for important leadership roles in the world, and fostering an environment of ethical and moral behavior. For us, long-term success is achieved through exemplifying the best of the human spirit, innovating to create a better world that is more self-sufficient, and employing correct methods and principles to help lift the world out of poverty and into both economic and spiritual prosperity. We are truly grateful for visionary administrators, wonderful donors and stakeholders, and the amazing students of Brigham Young University—without each of them, our efforts would be fruitless.
SCOTT R. PETERSEN & STEPHEN W. LIDDLE MANAGING DIRECTOR & ACADEMIC DIRECTOR
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a message from the directors
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now in its fifth year , the international business model competition is bigger and better than ever .
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for byu entrepreneurs , lean startup is the first thing you learn . see how byu wrote the book on running lean .
ahead of the pack
› coaching the coach
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even the best coaches need help. learn why cet mentors give back, and how they helped this coach find success.
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a top school in an ideal setting ideal is the only way to describe the unique mix of resources and opportunities that surround byu.
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›p5 alumni roundup › p 22 campus collaboration › p 26 who’s report who › p ›29 annual 3 numbers game
NUM8ERS G4ME IT’S A
GRAPHIC BY JASON LONGHURST
We at the Rollins Center believe that a 90 percent failure rate is unacceptable. Success is a numbers game: you get out what you put in. Successful businesses come out of successful classes, competitions, and mentoring.
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COURSES OFFERED
MENTORS PROVIDE FREE MENTORING
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TH UNDERGRADUATE ENTREPRENEURSHIP PROGRAM
10 FACULTY HAVE STARTED/OWNED A BUSINESS
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300k+ 200k+
IN PRIZE MONEY
IN SCHOLARSHIPS
TH GRADUATE ENTREPRENEURSHIP PROGRAM
THE INPUT
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ast year we had 25 undergraduate and 32 graduate courses in entrepreneurship. 90% of our faculty have started, owned, or bought a successful business. Our pool of over 200 mentors helped our student teams win a piece of over $300,000 awarded in competitions. Over 75% of our undergraduate students in entrepreneurship programs have started a business while in school, and 100% of our graduate students plan to before they leave school. The result? byu’s entrepreneurship programs were ranked 4th for undergrad and 7th for grad by The Princeton Review: a top 10 finish for the fifth year in a row.
THE OUTPUT
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eams that graduate from the program grow quickly. In the last two years, teams have attended startup accelerators like r/ga Techstars, BoomStartup, and the Microsoft home automation accelerator. Companies launched in the last 12 months have brought in over $1.3m in investment and $1.5m in revenue. Companies started two years ago have now raised over $3m and brought in over $13m in revenue. Our B2B businesses work with clients and brands like Dish Network, Arby’s, DirecTV, Subway, the pac 12, and 7-eleven. Products developed by some teams are sold in Lowe’s and Home Depot stores, and online on Amazon, Kickstarter, and qvc. One company was named to the Utah Top 5 Under 5.
75%
DISH ARBY’S 7-ELEVEN DIRECTV SUBWAY PAC 12
OF UNDERGRADS LAUNCHED A BIZ WHILE IN SCHOOL
TECHSTARS MICROSOFT BOOMSTARTUP ACCELERATORS ATTENDED
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TOP UNDER
STUDENT COMPANY NAMED TO UTAH TOP 5 UNDER 5
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AVAILABLE AT: LOWE’S, HOME DEPOT, AMAZON, KICKSTARTER & QVC
BIG NAME CLIENTS
1.3M+ 1.5M+
3M+ 13M+
INVESTMENT
INVESTMENT
REVENUE (2014 TEAMS)
REVENUE (2013 TEAMS)
annual report › 5
AHEAD
OF THE
PACK
Five years ago the Rollins Center said “burn your business plan.” Since then we have been at the forefront of the lean startup movement and a top ten school for entrepreneurship. Coincidence? We don’t think so.
by josh naumu
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Wade Anderson always knew that he wanted to be an entrepreneur. Much of his desire came from watching his father run his own company, and that desire manifested itself early when Anderson started a window cleaning business to pay for his lds mission. But Anderson didn’t become a fullfledged entrepreneur until a friend from church told him about a new entrepreneurship program at Brigham Young University called the Crocker Fellowship. Excited about the program, Anderson quickly applied and began to learn how to build a business using a new innovative approach called lean startup. Two years later, Anderson is now running Novi Security, a company he cofounded with classmates while participating in the fellowship. Throughout the last year, his company has raised nearly a million dollars in funding from investors, and Anderson credits his education in lean startup for much of his success. “I’m a big believer in lean startup, especially for entrepreneurs without a track record, but also for those that have one as well,” Anderson says. “Entrepreneurship is an extremely uncertain business and what lean startup methodology does is help you to be very nimble in your approach to business. It allows you to easily test ideas and when you find you’re not onto something, you can quickly change without too much cost.”
“Lean startup...provides a set of tools designed for managing the uncertainty that every entrepreneur will face.” Anderson is one of many student entrepreneurs that has benefited since the adoption of lean startup principles to byu’s entrepreneurship program four years ago. This unique approach has not only revolutionized the university’s entrepreneurship program, but also influenced programs and businesses across the country and around the world.
THE FOUNDING OF LEAN STARTUP
So what is lean startup and why is it such a big deal? The best place to start is with the individual who introduced the idea to byu in 2010. Nathan Furr is an associate professor of entrepreneurship at byu, an author of several books, and an entrepreneur who is on the cutting-edge of innovation ideology. The birth of lean startup began as a compilation of ideas and research from Steve Blank and other thought leaders, who Furr first met while working on a PhD at Stanford University in 2009. Since that time, Blank, Furr, and leading entrepreneurs have been heavily invested in spreading the importance of lean startup
principles throughout the world. “For years entrepreneurship programs at business schools borrowed the perspectives of traditional management and applied them in entrepreneurial settings,” Furr says. “But the problem is that this perspective is designed for execution, and for capturing the value of known opportunities in an environment of relative certainty that is usually associated with a large, established company. It’s not meant for finding and exploring new opportunities that come with the uncertainty of innovation. The importance of lean startup is that it provides a set of tools designed for managing the uncertainty that every entrepreneur will face while building a new business.” So what effect has this new perspective had on byu’s entrepreneurs? “Student entrepreneurs have improved their abilities to test their ideas quickly and easily,” Furr says. “This has led to an increase in the number of successful startups, as well as a decrease in the time and resources wasted on unproductive ideas.” byu has embraced lean startup methodology, and Furr credits this as the reason that the university’s entrepreneurship program has seen many positive outcomes since its implementation, including new programs, new competitions, and stronger entrepreneurs.
BUSINESS MODEL COMPETITION
Another result of lean startup’s influence at byu is the International Business Model Competition (ibmc). Founded in 2010 by Furr and the cet under director Scott Petersen, the ibmc was the first competition of its kind in the world. Using fundamental lean startup principles instead of the failed business plan approach, the ibmc focuses on identifying and precisely defining assumptions made when starting a new venture, testing those assumptions with real customers, and then pivoting or changing assumptions based on the lessons learned.
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“We’re rewarding them for the process.... We love to hear that students were wrong and had to pivot on their idea.”
“No business plan survives first contact with a customer,” says Blank, one of the competition's final judges. “That’s because a business plan is a road map for execution for an existing company to launch follow-on products. Startups need tools to help them organize their hypotheses and then rapidly test those hypotheses.” The ibmc emulates real-world situations, fraught with unknowns, that every entrepreneur will be forced to deal with. The competition also focuses on validation with real customers, a key component that many students presenting business plans were missing. “We’re rewarding them for the process, for getting out, for talking to customers, and for discovering where they are wrong,” says Furr. “We love to hear that students were wrong and had to pivot on their idea. Ultimately we want to reward students who are validating assumptions, finding the facts in the field from customers, and building real businesses.” “Students from visiting universities, including the finest universities in the world, have stated, ‘They teach us lean priniciples in our program, but they really don’t show us how to apply them. Attending the ibmc has demonstrated how to use these principles effectively, not just their theoretical use,’” says Petersen. Since its debut, the number of participants in the ibmc has increased substantially, growing from six universities and forty-five teams in two countries in 2011 to 2,500 teams from over 200 schools and twenty different countries in 2014.
CROCKER INNOVATION FELLOWS
One of the best examples of lean startup’s positive influence at byu is the creation of the
Crocker Innovation Fellowship program. The fellowship takes a select number of students through a transformative, yearlong innovation experience. Employing ideas from lean startup, design thinking, and agile software, students learn cutting-edge innovation practices during winter semester. During the spring and summer, students work for an innovative company, before coming back in the fall to work on their own innovations. The program is purposefully interdisciplinary in nature. Students from any major can apply and are guided by the fellowship’s professors who each represent a different discipline, including business, life sciences, engineering, computer science, and law. Furr created the fellowship in 2012 thanks to a generous donation by named Gary Crocker, a successful entrepreneur who wanted to support byu by creating an organization that emphasizes the value of interdisciplinary education. Furr thought that the best way to accomplish the goal would be to pattern it after Stanford University’s Mayfield Fellows program. “The Mayfield program is on the cutting edge of what education needs to become,” says Furr. “Companies clamor to hire Mayfield fellows, and we hope to build more of that kind of momentum here at byu.” Kurt Workman is one of several entrepreneurs whose current business originated out of time spent in the Crocker Fellowship. Workman founded Owlet Baby Monitors as a Crocker fellow, and since that time his company has won multiple venture competitions and obtained millions of dollars in funding. He and other new business founders have high praise for the program and the education in innovation it provides. “The fellowship helped us to form a diverse team of creative minds and also gave us mentoring from some of the most innovative
professors at byu,” Workman says. “It really pushed us and helped us get to the next level. The fellowship was the perfect environment to realize the vision for our business.”
BYU’S ENTREPRENEURSHIP PROGRAM
Lean startup has made waves throughout the country and around the globe, but perhaps nowhere is its impact more evident than in byu’s entrepreneurship program. For the past five years byu has been ranked as a top-ten entrepreneurship program. The university has also seen a greater number and a higher caliber of successful startups, the likes of which include FiberFix, Owlet Baby Monitors, Novi Security, and Dark Energy— to name a few. These successes are due in large part to expert educators and mentors who embraced the lean startup approach and students who weren't afraid to "get outside the building" and validate their ideas. “Today, byu student entrepreneurs expect to immediately go out and solve real-world problems, which is different from a few years ago,” says Nile Hatch, byu’s entrepreneurship group leader. “The ideas are better, the customer validation is better, the solutions are better. As a result, we have more entrepreneurs that are smarter and are ready to make a difference.” byu’s student entrepreneurs believe the program’s stellar performance will continue. Spencer Behrend, student director of byu's Miller New Venture Challenge, is among them. “I love having the chance to be a part of a program that is a leader in innovation,” says Behrend. “The program has been progressing in leaps and bounds every year, and it will be interesting to see what role BYU will play in taking innovation to the next level.”
“Today, BYU student entrepreneurs expect to immediately go out and solve real-world problems.” annual report › 9
COACHING COACH THE
by sterling randle photography by jason longhurst
Giuseppe Vinci returned home to Milan, Italy, in the summer of 2008 with the taste of defeat left in his mouth. The Italian men’s volleyball team had lost to Russia in the bronze medal match of the Beijing Olympics. Upon arrival his friends presented him with a wooden medal to represent the fourth place finish. Vinci’s desire to help the team he coached burned inside him.
“Not getting a medal at the Olympics was very frustrating. I started thinking how we could improve the methods we use to study opponents and prepare our team for games, and came up with some new approaches,” Vinci says. Redemption came in 2012 when Vinci returned to the Olympic arena and coached the us women’s team to a second place finish. Vinci had a breakthrough. The techniques he developed for that victory became the foundation of a business that would help volleyball coaches around the world make better choices. “It is Moneyball for volleyball,” Vinci says. Between Olympic appearances, Vinci enrolled at byu and coached byu’s volleyball teams and worked on his company, VolleyMetrics. Just as he helped players and coaches make smarter decisions as they played, Vinci knew he would need expert help if he expected his business to succeed. That help came from the Rollins Center for Entrepreneurship and Technology (cet).
LEARN, EARN, RETURN
The Rollins Center facilitates relationships between students and mentors. Many of these mentors are byu alumni, and all have achieved success in their own entrepreneurial endeavors. Mentors help students through advisement and team mentoring. During advisement mentors give general advice to the students on what to do, what not to do,
12 ‹ rollins center
“My ventures were a stepping stone towards giving back.” and how things work in the business world. Team mentoring comes a little bit further down the road when a student has taken steps to bring an idea to life. A team of two to three mentors is then assigned to create an environment that gives students the best chance to learn and to successfully launch their venture. James Clarke, founder of ClearLink and current ceo of Clarke Capital Partners, is one of more than 200 mentors that are available to students. The availability and willingness to help is inherent for many alumni. It stems from the cet’s motto of Learn, Earn, Return. Clarke finds time to mentor because he feels a responsibility to give back and provide direction for students. “Learn, Earn, Return is just what we do. It’s about growing and helping other businesses. I’ve made my mark with my companies, but that was not intended to be the end-all. My ventures were a stepping stone toward giving back,” Clarke said. Vinci wasn’t the only student to utilize the mentoring program. In fact, students from eight different colleges and dozens of majors visited the center and met with a mentor this year. However, just having
a good idea won’t get you a meeting. Students must complete reading, research, and writing prerequisites before the mentoring process can begin. The VolleyMetrics team, which includes Vinci and fellow byu student Austin Hayden, read Nail It then Scale It by Nathan Furr and Paul Ahlstrom and became familiar with the customer-centric approach found in Business Model Generation by Alexander Osterwalder and Yves Pigneur. The Rollins Center requires all teams to complete research on their idea, the market, and their competitors. If the idea or product can be patented the Center suggests searching freepatentsonline.com to see if a patent already exists. Teams must submit a business summary to fulfill the last prerequisite. In the summary the following questions must be answered: What is your business concept, the basic pain it solves, and how does it differ from other alternatives in the market? Who are your potential customers? What are your potential revenue streams and how will you be paid? What is the marketplace you will be in, and who are your key competitors according to your research?
TEAM EFFORT
Vinci and Hayden, like the team of mentors assigned to them, came together in large part because of their complementary skill sets. In fact, the team mentoring they received would not have been possible without the two of them coming together. Scott Petersen, managing director of the Rollins Center, said that the cet will not match a team of mentors with a single student. “A company is built by a strong core team not on the back of a single entrepreneur,” Petersen says. Teams are made up of individuals, typically three or four, that possess skills such as sales, web development, and marketing/branding. These skill sets help companies succeed in their early stage, Petersen says. “We provide mentoring services because in the arena of entrepreneurship it is one of the most important educational and experiential opportunities that students can get in a university environment,” Petersen adds. After a team has organized, tested their idea, and iterated their model, team mentoring can begin. The Rollins Center requires that students and mentors commit a specific amount of time each month, varying from a few hours a month to multiple hours per week. Dave Roskelley, partner at r&r Environmental, who recently joined the program as a mentor, believes giving back should be a part of the journey for all successful entrepreneurs. “I personally think that it’s incumbent on anyone that is successful to give back, especially to an alma mater. You give back to the university by giving back to current students and mentoring others. If you don’t, that’s a failure on your part,” Roskelley says. “These mentors helped us so much,” Vinci says. “The progress we made was because of their active help.”
“A company is built by a strong core team not on the back of a single entrepreneur.”
TOPof theWORLD
On
Reaching new heights requires a trusted guide. In May of 2013, Dave Roskelley climbed to the summit of Mount Everest with the help of his sherpa, Thile. A BYU mentor for the past two years, Roskelley knows that any successful journey needs good coaches who have been to the top. Mentors like him are what make the CET mentoring program a success. Follow his story at roskelleyeverest2013.blogspot.com. annual report › 13
Since its inaugural event in 2011, the International Business Model Competition, or IBMC, has grown from six universities and forty-five teams in two countries to 2,500 teams coming from over 200 schools and twenty countries across the globe. Cofounded by the Rollins Center, the IBMC encourages validated learning over outdated “hot-air” business plans; representing a paradigm shift in creating new ventures. by jenna randle
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The International Business Model Competition leads a global revolution, rewarding entrepreneurial students prepared for innovation and hungry to change the world. The annual competition is the first and largest of its kind, representing a radical departure from past business plan competitions. Instead, it focuses on identifying and precisely defining the assumptions of a new venture, testing those assumptions in the field, and pivoting based on the lessons learned. “For startups, business plans fail to match the chaotic reality they encounter in the real world,” says Steve Blank, one of the ibmc final even judges and father of lean startup ideology. “The reality is that startups needed a new class of management tools, tools to help them manage the search for a repeatable and scalable business model.”
LEAN THINKING
Drawing on ideas from customer development, lean startup, design thinking, and other paradigms, Nathan Furr cofounded the competition four years ago. Furr and the byu Rollins Center hoped to emphasize the centrality of testing assumptions with customers rather than selling “hot-air business plans,” says Furr. “Instead of being about planning and a product, the business model competition is about experimenting and a process,” Furr says, “We are encouraging students to tell us about the journey, instead of just why their product is so great.” Competitors are rewarded for getting outside, testing ideas, and learning from those experiences. Each round of the International business model competition is uniquely judged using questions like these: Did the team use the Business Model Canvas or similar tools to identify and track assumptions? Did the team identify the most crucial assumptions to test first (the ones that will kill their business)? And did the team clearly state what they’ve learned, how it validated an assumption or not, and whether their test informed them of any needed changes? The overarching purpose of the competition and the success of any team,
“We are encouraging students to tell us about the journey, instead of just why their product is so great.” however, is measured by how “de-risked” the business venture has become through validating every assumption, from the business model itself to revenue streams, pricing, product costs, and go-to-market strategies. Unlike other venture competitions, it is crucial for teams to show not only their successes in testing their product, but also their failures. “We would encourage you to tell us when you were wrong, where you made a wrong guess, how you discovered you were wrong, and how you adapted as a result,” Furr says. The competition does not focus on financials and slick presentations as much as it does the learning process itself. The judges of the ibmc final event are some of the foremost thought leaders in lean startup ideology, including Nathan Furr (The Innovator’s Method), Steve Blank (The Startup Owner’s Manual), and Alex Osterwalder (Business Model Generation).
GET MENTORING
In addition to the judges, experienced entrepreneur mentors meet with each competing team. Mentors discuss the team’s business model, examine the tests and customer validation experiments, and then coach each team on how they could more effectively communicate the success of their tests and the potential of their model to succeed. “The mentoring goes much further than helping these companies prepare for competition,” says Jeff Brown, managing director of the competition. “It helps them solve problems in all aspects of their business.” The program has doubled in just the last two years, with 2,500 teams from more than 200 schools and twenty countries participating in ibmc-affiliated competitions. Participants came from Canada, Finland, France, Jamaica, Japan, and Mexico, and many other countries throughout the world.
Unlike other venture competitions, it is crucial for teams to show not only their successes in testing their product but also their failures. 16 ‹ rollins center
“We had to grow a lot between this competition and the ones before; we couldn’t just have a product or an idea, but we had to have a business that had been validated.” Prize money goes as follows: first place, $25,000; second place, $10,000; third place, $7,500; fourth place, $5,000; fifth place, $2,000; and sixth place, $1,000. An ibmc trophy travels each year to the champion’s university, adding to the pride of the competition. Gamegnat from American University won the inaugural competition in 2011, with two Brigham Young University teams taking first place in 2012 and 2013. The University of Utah took home the ibmc trophy this past year, taking home the $25,000 first-place prize and the coveted trophy. “The ibmc propelled us into what we are now, providing us the opportunity to succeed and enabling us to get recognition from investors,” says Nate Rhodes, ceo of the winning company, Veritas Medical lcc. “And now, I’m a lifelong entrepreneur.”
INSPIRING WINNERS
Vertias Medical, a team comprised of engineering and medical students, is a start-up focused in the catheter medical device market.
Catheters are specialized plastic tubing used by physicians to gain access to internal areas of a patient’s body. While these catheters are very important to medicine, unfortunately they have a high incidence for infection. Veritas Medical jumped on this pain point and developed a method to stop infection using a high intensity laser that kills bacteria residing on the catheter. The product line includes a catheter insertion and sterilization kit that will be sold either directly to hospitals or as a prescription for at-home use. Teams, like Rhodes’, must prepare differently for the business model competition than they would for other venture competitions. In preparation for ibmc, teams show the work they've put in to test their assumptions and gain valuable customer feedback. “We had to grow a lot between this competition and the ones before; we couldn’t just have a product or an idea, but we had to have a business that had been validated,” Rhodes says. “It was getting out and getting real validation for our business model that helped us be successful.” This is a drastically different experience than preparing presentations of financial and statistical analyses for their future venture. By focusing on lean startup principles and ideology, teams are better prepared to successfully launch their businesses. Veritas Medical attributed most of their success with getting off the ground and finding investors to the competition. After winning the competition, both ibmc and their home university sent out press releas-
es describing the product and it’s success. Because of this press, the team had investors flooding in to support them. The company is currently finishing up lab testing and projects fda clearance in eighteen months, shaving a year off their original projection because of ibmc and the process it put them through.
LAUNCHING ENTREPRENEURS
Veritas Medical is not the only success story of the ibmc. Ryan Davis, student director of the competition, remembers countless other companies coming out of the competition ready for takeoff. “Preparation, mentoring, and networking are incredibly beneficial outcomes of the competition that really allow these teams to take off,” Davis says. When beginning his role in the competition, Davis says he had no intention of going into entrepreneurship, but he now feels like a full-fledged, risk-taking entrepreneur. “Some entrepreneurs are born, and others are made,” Davis says. “But anyone can use the business model approach to help successfully launch their ideas.” The competition is open to all students enrolled at an accredited institution of higher education anywhere in the world. “Our vision is to be the global leader of successful campus-inspired entrepreneurial ventures,” says Scott Petersen, managing director of the Rollins Center. “Entrepreneurship is one of the most important subject areas that can be taught at a university.” annual report › 17
IBMCin review Looking back at winners from the 2014 International Business Model Competition
TheraB Medical michigan state
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A SOLUTION FOR JAUNDICE
Swaddle-mi-bili, recently renamed TheraB Medical, competed with their wearable treatment for infant jaundice in last year’s ibmc. The team won fourth place, creating a blanketlike device that breaks down the excess bilirubin in a baby’s bloodstream without requiring the baby to be away from the mother. The company, started at Michigan State, uses fiber optics inside a blanket as a friendlier means for light transfer. “Jaundice is a disease of newborns,” says Alexa Jones, a biosystems engineering senior. “It presents itself as a yellowing of the skin or eyes. Therapy using blue visible light breaks down the molecule so it can be harmlessly excreted from the
baby’s body.” The team of msu College of Engineering students including Jones, Vu Hoang, and Oliver Bloom additionally won a student business model competition in Lansing, Michigan, and finished eight of eighty-four teams at the Michigan Collegiate Innovation Prize Competition.
Caydian
NO MORE NIGHT TERRORS
Caydian, from Stanford University, created a safe, natural, and non-medical solution to cure sleep terrors. The team made up of bioengineering, medicine, electrical engineering, and mechanical engineering students—won seventh place in the ibmc competition. ceo Varun Boriah paired with cmo Andy Rink to develop a device that uses precisely timed vibrations to get children suffering from sleep terrors into a healthy sleep pattern. Based on publications in leading journals, including the British Medical Journal, it uses ballistocardiography-based sleep monitoring and a proprietary sleep modification system to completely eliminate the sleep terrors. Rink said that he understands the importance of a child’s sleep because he is a new parent himself. The company hosts a free early access program for young children with night terrors.
stanford
AN HERBAL CURE FOR DANDRUFF
Herboo Enterprise from Northern Caribbean University in Jamaica is an herbal cosmetics company that uses only plants to make all their cosmetics. The company won eighth place and the International Award. They created a two-in-one shampoo and conditioner that prevents dandruff and is made from Jamaican sorrel, coupled with other native herbs and spices. “Our mission is to create a healthier lifestyle for the world, one product at a time,” says Javin Williams, ceo and founder of Herboo Enterprise. The company also won Jamaica’s National Business Model competition earlier that year. Herboo Enterprise still creates their shampoo in the kitchen of Williams’ mother in Cedar Grove, Mandeville. The herbs are sourced from their backyard garden. Their goal is to grow the company, and they have plans to introduce many new items to their product line.
Interested in sponsoring, competing, or attending the International Business Model Competition in 2015? Visit our site, businessmodelcompetition.com, for information on sponsoring, videos of past winners, and submission guidelines. See you in 2015!
Herboo
northern caribbean
annual report › 19
a TOP
SCHOOLin
an ideal setting
U
tah’s booming economy and entrepreneurial ecosystem continues to create an ideal and unique environment for entrepreneurs and startups to thrive. What started back in the 1980’s with software giants Novell and WordPerfect blossomed into Omniture, Ancestry, Altiris and Overstock.com in the 90's. Today, that foundation has grown into the next generation of billion dollar companies like Vivint, Qualtrics, Pluralsight, InsideSales.com, and Domo.
AN IDEAL STATE # Best state for business
With nearly 5,000 technology and life science companies now innovating along the Silicon Slopes, is it any wonder why the state, its metro areas and schools are receiving so much attention these days? The fact of the matter is that byu's location in Provo, Utah, is a major reason why its entrepreneurship program has been ranked in the top ten nationwide for five years running. See you on the slopes!
by jordan grimmer
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1 # 2 # 2 # 3 # 3 3rd # 4 # 6
(Forbes 2014)
Future boom state (US Chamber of Commerce 2012)
Business birth-rate state (US Chamber of Commerce 2012)
Best state for entrep. & innovation (US Chamber of Commerce 2012)
Infrastructure state (US Chamber of Commerce 2012)
Lowest unemployment rate (US Department of Labor 2014)
Talent pipeline state (US Chamber of Commerce 2012)
Cost of living state (US Chamber of Commerce 2012)
AN IDEAL CITY # City for overall well-being in the US
1 # 2 # 2 3rd # 3 # 8 15 25
(Gallup 2014)
Best-performing large cities for business (Milken Institute 2014)
Best town in the US (Outside magazine 2014)
City in the world with Google Fiber Best place for business in the country (Forbes 2014)
Top US city for VC tech startup funding (Associated Press 2014)
Home to BoomStartup—a top 15 accelerator (Seed Accelerator Ranking Project 2013)
Top 25 metro for high-tech startup density (Kauffman Foundation 2010)
A TOP UNIVERSITY # Stone-cold sober school 17 years running
1 3 # 4 # 7 15 # 16 25 # 30
(The Princeton Review 2014)
byu startups have appeared on abc’s hit show Shark Tank Undergrad entrepreneurship program in US (The Princeton Review 2014)
Graduate entrepreneurship program in US (The Princeton Review 2014)
Top 15 powerhouse entrepreneurship program (Mashable 2014)
Best undergrad entrepreneurship program (U.S. News 2014)
Top 25 university for VC-backed entrepreneurs (PitchBook 2014)
Best school for entrepreneurship (Forbes 2014)
Alumni Roundup
Cotopaxi
launches with $3m
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Cotopaxi: The Story Behind the “Gear for Good” Company In 2001 byu alum Davis Smith and his wife, who were newly weds at the time, set out on an internship adventure in Peru. During their time in the Latin American country they met a young boy named Edgar who at the time shined shoes in the main plaza in Cusco a city located at the base of the Andes Mountains near Machu Picchu. Little did they know that Edgar would change the course of their lives forever. While returning to their hotel late in the evening during their last night in the city, the couple came upon two little children cuddled on the side of the street. One of them turned out to be Edgar. Earlier that day Edgar’s shoe shining kit had been stolen and he was afraid to go home. The Smiths who had developed a friendship with the boy during their frequent trips to the main plaza gave Edgar what little money they had. The next morning when their bus was about to leave the city, Edgar appeared outside the window where the Smiths were sitting. He was smiling and holding a bag of candy he had purchased to sell to make money. As the bus drove away Edgar ran along the side of the bus and waved. The Smiths were extremely grateful for the chance to say goodbye to their little friend and the moment left an indelible impression on them. “I’ve been telling people about this story since 2001,” says Smith. “After this experience we knew that at some point in our lives we wanted to help disadvantaged children in third-world countries.” That opportunity came in the form of Davis’ latest venture Cotopaxi. Smith, who co-founded PoolTables.com, the largest online pool table retailer in the u.s., and Baby.com.br, Brazil’s most popular e-commerce retailer for baby supplies, wanted this business to be different. In a nutshell, Cotopaxi is a new brand that sells amazing outdoor gear and gives back to humanity.
In fact, 10% of the company’s profits are funneled to their nonprofit arm which invests the money in philanthropic endeavors. Consumers who purchase the company’s products are informed about the tangible benefit that their purchase will make allowing them to grasp its true significance. In July 2014, Cotopaxi announced that it had raised $3 million to accelerate their growth into a household brand similar to Tom Shoes and Warby Parker that share similar missions and models. The company which is set up as a public benefit corporation may be one of the first ever of its kind to raise venture capital. The dream Davis and his wife had thirteen years earlier is finally coming to fruition and is exemplified in the company’s slogan. “The Gear for Good slogan is a two-part promise,” says Smith. “The first part of that promise is that we will make products that will last for good by using the highest possible materials and craftsmanship. The second part of the promise is that we will do good in the world.” And the company is living up to their promises. Each of their products is backed by a Human Lifespan Guarantee. This means that their products are guaranteed to last 61 years, which according to the World Health Organization’s most recent statistics, is the average lifespan of a person living in the underdeveloped world.
Campus Founders Fund Targets Utah Student-Run Ventures byu alum Gavin Christensen announced on August 21, 2014, that Kickstart Seed Fund, which he founded in 2008, would be launching a $500,000 venture fund to invest in the best student-run companies from across Utah’s universities. The unique fund now in operation is run by an investment team made up of 10 students with diverse disciplinary backgrounds. Five of the students on the inaugural team are byu students. The student investment team, with ongoing training by Utah’s most experienced seed investors, identify and select the best entrepreneurs on Utah’s campuses and provide $10,000-$20,000 to help these Campus Founders test an idea and develop an initial product. The investments are structured as founder-friendly convertible notes without caps or discounts. In addition to capital, Campus Founders receives targeted mentoring by leading tech ceos as they prepare to unleash the next wave of explosive startups in Utah’s booming ecosystem. The model for the fund improves upon prior similar models like the Dorm Room Fund and is optimized for students in Utah. Morgan Davis, associate at Kickstart seed fund, serves as the fund’s director and liaison for Kickstart to the student investment team.
Kickstart Fund
targets student ventures
“We know there are deep wells of talent across campuses in Utah and are searching for the most visionary, innovative and determined students wherever they are,” says Morgan Davis. “Regardless of school affiliation, standout students from any campus in Utah are welcome to apply.”
powered by:
Student Investment Team BYU Members:
Kyle Harrison accounting
Ryan Smith global supply chain
Jonathan Johnson economics
Sam Andersen finance
Alex Spencer electrical engineering
annual report › 23
Alumni Roundup
Owlet
k50, techstars, $1.85m
Owlet Named to Elite Kairos 50 List and Raises $1.85M to Launch Product Owlet Baby Care has been busy. Since graduating from the Rollins Center’s Founders Launchpad accelerator at the end of summer 2013, the company that created the world’s first baby “smart sock” that transmits a child’s heart rate, oxygen levels, skin temperature, sleep quality, and sleep position to a parent’s smartphone has been through the r/ga Connected Devices Accelerator powered by Techstars, raised a $1.85 million round of funding, and was named a Kairos 50. r/ga, the world’s most award-winning digital agency, announced the ten companies selected to participate in its inaugural r/ga Connected Devices Accelerator program, powered by Techstars in December 2013. Each accepted team was eligible to receive up to $120,000 in funding. The program serves the growing list of startups in the “Internet of Things” space that are developing connected mobile apps, hardware, products, and services. An on-site, r/ga-dedicated services team as well as program mentors provide design, innovation, development, business, brand, and marketing consulting for the companies. “The 10 startups selected for the Connected Devices Accelerator merge technology and product development in ways that are truly innovative, expanding our perceptions of what’s possible within the ever-growing ‘Internet of Things,’” said Stephen Plumlee, Global Chief Operating Officer, r/ ga. “r/ga is excited to officially launch the program in partnership with Techstars and start working with the 10 companies to help develop and refine their product and marketing strategies.”
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Then in April 2014 Owlet announced that it had raised $1.85 million from multiple firms including ff Venture Capital and Eniac Ventures. Also participating in the round were Azimuth Ventures, Life Sciences Angel Network, Peak Ventures, and Brand Project. “We are excited to have the right partners onboard to change the world with this product,” said Owlet ceo Kurt Workman. “We see the wearable future will include every single baby coming home from the hospital with a health monitor. Owlet is perfectly poised to be that monitor.” Finally in October of 2014 the company was chosen to be a Kairos 50. Kairos 50, a program by the Kairos Society, represent the 50 most promising ventures in the world with founders under age 25. Over 1,000 early stage ventures, from over 43 countries and 100 top universities applied for the opportunity to collaborate with today’s leading corporations. “The [Kairos 50] ... showcases the brilliant ideas that young entrepreneurs are conceptualizing and developing to solve some of our world’s greatest challenges,” said Alex Fiance, President and ceo of Kairos Society. “The [Kairos 50] is … a platform for innovators to collaborate with global mentors with the goal of bringing their game changing solutions to market.”
BYU Student Wins International Entrepreneurship Award Beating out more than 1,600 applicants from thirty-seven countries, Brigham Young University student Spencer Quinn took home the 2013 Global Student Entrepreneur Award with his repair tape company, FiberFix. He also walked away with $150,000 in cash and in-kind business services from Entrepreneurs’ Organization, a global network of more than 7,300 business owners. Quinn, a genetics and biotechnology senior from Chandler, Arizona, won the regional competition in San Francisco before moving on to the undergraduate finals at the International Finance Corporation in Washington, dc, where he also accepted this year’s Innovation Award. “Each year we see an increase in applications and the quality of the businesses presenting,” says Adam Robinson, global gsea sub-committee chair. “We were absolutely blown away by the talent of the 2013 gsea participants.” FiberFix, a resin-coated repair wrap that claims to be one-hundredw times stronger than duct tape, got its start with help from the Marriott School of Management. Quinn and his team participated in business competitions sponsored by the school’s Rollins Center for Entrepreneurship and Technology and received mentoring from its many successful entrepreneurs. “Spencer’s achievement, as well as the success of our students over the past few years in this elite global competition, is evidence that our program is making a huge impact,” says Scott Petersen, managing director of the Rollins Center. “Students are learning the correct process for starting and scaling a business. We will continue to see large numbers of student ventures competing at the international level.”
FiberFix
2014 gsea winner
The Rollins Center has also proven to build strong competition for the Global Student Entrepreneur Awards in years past. byu student Garrett Gee, founder of Scan qr code scanners, was named runner-up in the 2011 undergraduate competition and Brad Moss, Marriott School mba student and founder of React Games, was the graduate student winner in 2012. “I am so incredibly grateful for the support from eo and gsea,” Quinn says. “I look forward to nurturing the relationships I’ve made through this process and to growing FiberFix over many years to come.” In October 2013, FiberFix appeared on the abc hit show Shark Tank and made a deal with Lori Greiner, the “Queen of qvc.” The day after the episode aired, FiberFix debuted on qvc and sold out within minutes. “Doing a deal with Lori has collapsed 3-5 years of growth into just a few months,” says Eric Child, cofounder and ceo of FiberFix.“ It’s been an amazing ride so far, and we’re excited to see what the future holds.” FiberFix has grown from being sold in a few hundred stores to over 10,000, including Lowe’s, The Home Depot and others both in the us and abroad.
annual report › 25
Campus Collaboration
News on the Innovation and Entrepreneurship Front from Across Campus
DO GOOD. BETTER.
The Ballard Center for Economic Self-Reliance is focused on bettering the world, one project at a time. A sister center to the Rollins Center for Entrepreneurship, within the Marriott School of Management, the Ballard Center also has a focus on entrepreneurship and innovation. However, the emphasis is social innovation and economic self reliance. The center mentors and helps students with programs to start businesses that are socially minded and profit driven. This year the center launched a new competition called Y-prize. The Ballard Center hosts annual competitions to encourage students to get involved. For the last 10 years they have been holding the Social Venture Academy competition as a way to recognize and award the top student ventures with a social mission. The Y-prize competition works a little differently. In this competition a social issue is presented and teams work together to create a solution for that issue. The kickoff for the event was in January of 2014 and the social issue was presented. In Uganda, a large amount of the population is affected by a disease called Schistosomiasis, caused by parasitic worms. The pill to treat this disease only costs $.08 to make. The problem is distribution. The teams were then given the assignment to come up with a plan to effectively distribute the med-
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student innovation center
ication to the population affected by the disease in Uganda. Fourteen teams participated in the competition and the winning team was awarded $12,000 to travel to Uganda to implement their distribution strategy. This is just one of many ways that the Ballard Center is getting students involved in social innovation. The goal of the center is to encourage and provide opportunities for students to innovate and create new solution to the world’s problems.
ENGINEERING GETS INNOVATIVE
byu recently announced that they plan to build a new engineering building in order to keep up with the great increases in technology and innovation. “The best ways to teach and practice engineering have changed since our current facilities were built,” the website states. “Although traditional classroom lectures remain, best practice in engineering education emphasizes active learning, team-based projects and collaboration with others around the world. Consequently, we not only need more space but also new types of space.” The new building will have flexible classrooms, team rooms, and specialized labs and equipment. The new engineering building is designed with a distinct emphasis on innovation and will give students the space and resources needed to turn their ideas into reality. The entire first floor of the building will be known as the Student Innovation Center. This area will house all of the spaces, tools and resources for student projects to take shape. It will include computer design facilities, an extensive prototyping shop, multiple bays for project assembly and testing, team meeting rooms, storage space, and flexible space that can be used for classroom instruction or for individual project work. The new building will be 5 stories tall, and over
200,000 square feet. The construction period will be an estimated 24 months. Construction will begin once the project is fully funded. Dontations received before 31 December, 2014, will be doubled by the college’s namesake, Ira A. Fulton. For more information or to make a donation online, visit engineeringbuilding.byu.edu.
CID GROUP OPENS INNOVATION LAB
In 2012, the BYU Creativity, Innovation, and Design Group was organized with the purpose to increase interdisciplinary collaboration on campus. The group is a collection of faculty and staff that have come together to promote the teaching and research of innovation and design. “We believe that if we are to be accomplished innovators, we need to bring together students and faculty from all disciplines,” said Taylor Halverson, a professor at byu and a founder of the group. The group, consisting of over 60 faculty members from across campus, meets once a month to share ideas, discuss research partnerships, and explore opportunities for promoting creativity, innovation, and design on campus. From this faculty group has come collaborative research, opening of courses to students from other majors, and better communication of creativity, innovation, and design related activities and resources at byu. So far, the group has compiled a list of 32 classes, 6 labs, and a whole calendar of events and competitions, all of which have a focus on creativity, innovation, and design. The website innovation. byu.edu serves as a hub for communicating these opportunites to students and community partners. In Winter of 2014, the group made a big step and partnered with the Harold B. Lee Library to create an innovation space for students. The southwest area of the 4th floor of the library was repurposed as a location for students to come together to create a collaborative atmosphere. Beginning that semester, 2 interdisciplinary and design-oriented courses moved into the space. In Fall 2014, the number of courses increased to 6. When courses aren’t being held there, the area serves as a place for students and clubs to meet and collaborate. “We are excited with the steps that the group has made so far,” said Halverson, “and we are expecting big things in the future.”
ENTREPRENEURSHIP LAW CLINIC
BYU has a new resource for student entrepreneurs. In January 2014, the J. Rueben Clark Law School launched its latest program, the Law and Entrepreneurship Clinic (lec). The clinic teams up third-year law students with local entrepreneurs to tackle all the legal issue of starting a business. Since it is an educational program, the legal services provided are free for the client. Lance Lehnhof, faculty advisor and director for the clinic, said that the purpose of the center is twofold. The first purpose is to train law students to understand the needs of entrepreneurs by providing them with a real-world experience of representing startup businesses. The second purpose is to be a resource to local entrepreneurs who need legal representation and don’t have the ability to hire professional attorneys. Law students run the non-profit clinic, with professional attorneys overseeing the whole thing. lec students interact directly with clients to provide counsel on such issues as project financing; corporate structure; strategic partnerships and joint ventures; private equity, venture capital, and angel investment transactions; drafting contracts and agreements; compliance with ongoing corporate legal requirements; and numerous other business matters. Most recently, they have started a service to help their clients file for patents. The lec seeks to take on clients that will benefit most from their services. In order to be considered, the applicant should not have received a significant round of outside funding from investors. Also, they should have a connection with the byu community. Many clients are byu students and faculty. Finally, the work requested by the applicant should be appropriate for students and present an interesting educational opportunity. When the clinic first started in January, there were 8 students. This has since expanded to 11. The students work in teams of two and each team takes on 3-5 clients at a time. The clients range from student startups to small local businesses. The lec has been successful since it’s launch and has already helped dozens of startups with legal counsel. annual report › 27
Campus Collaboration INVESTING IN STUDENTS
byu Cougar Capital, the brainchild of Gary Williams a teaching professor in the Marriott School of Management, is a student-run venture capital and private equity fund run by 2nd-year mba students. Started in 2005, Cougar Capital partners with top-tier venture capital and private equity firms on potential investments and, when appropriate, co-invests in deals. byu Cougar Capital Model Cougar Capital students work directly with industry partners in sourcing deals, conducting due diligence, structuring investments, governing a portfolio, and exiting deals. These experiences help students develop skills in critical thinking, financial modeling and analysis, market research, networking, and pattern recognition. “It seemed like Cougar Capital more than any other class was real and it was practical,” says Joe Atkin (class of 2006), co-chairman of Goal Zero Holdings. “In a case study you have the four corners of the page and you have to work within that frame,” says Justin Jory (class of 2007), Operating Partner of Horizon View Capital. “In a real-life problem there are no corners, it’s open ended.” Partner firms provide clinical learning opportunities, mentoring and training in skill sets that enhance the mba education. This interaction with industry partners provides students with real-world experience and serves as springboard to place the students in these highly competitive industries. To-date Cougar Capital has produced alumni currently working in private equity, venture capital, investment banking, and award-winning entrepreneurial startups. Industry partners benefit from the synergistic impact of having intelligent and capable individuals who can assist in the “heavy lifting” that is often required in complex transactions or in fast track deals. Fund Profile Students have invested in more than 25 companies. The current portfolio of 17 companies includes seed, growth equity and buy out transactions. The original donated funds of approximately $600,000 have produced a portfolio value
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of $2.5 million and a return of more than 5x on the invested money. Recognition and Validation In 2010, Forbes magazine designated Cougar Capital as one of the 11 most innovative business classes in America. In its review, the magazine noted that “students learn about private equity and venture capital the hard way: by having real skin in the game.” byu Cougar Capital teams have placed among the top four schools in the world three times in the International Venture Capital Investment Competition. The event includes the top 12 mba programs from Europe, the top 12 Schools in Asia and the top 50 business schools in North America. The 2014 cc Team placed first in the Midwest Region, placing above teams from the Big 10 and Big 12. The team then received the “Entrepreneur’s Choice Award in the International Finals. “Our preparation in class and in Cougar Capital paid off dividends,” said Daren Mann an mba student who competed on the team. “We couldn’t be happier with how we did.” Industry Partners & Students “[We were] involved from the very beginning of Cougar Capital,” says Blake Modersitzki, managing director of Pelion Venture Partners. “A decade later it’s easy for us to say that absolutely this is one of the greatest things our firm has been involved in.” The Cougar Capital fund is made possible by generous donors. Their donations established an evergreen fund where all donated funds and proceeds from investments remain in perpetuity to benefit future MBA students. “My contribution to Cougar Capital is one of the best investments I’ve ever made,” says Fraser Bullock, managing director of Sorenson Capital. Investments by donors like Bullock are paying big dividends for the 125 students that have participated in the program. “Cougar Capital was probably the single greatest experience I had in my educational career,” says Matt Peterson (class of 2009), cio of Jive Communications.
WHO’S WHO? FULL & PART-TIME STAFF scott petersen Managing Director steve liddle
Academic Director
jeff brown
Assistant Director
nicole collins katy allen jennifer hutchins
jody hirschi
Program Secretary
jeff dyer
Strategy
Financial Specialist
Multimedia Specialist Financial Specialist Assistant
jason longhurst
Graphic Designer
jordan townsend
Multimedia Specialist Mentoring Coordinator Lecture Series TA Assistant
seth townsend
Lecture Series TA
chase wardrop
Lecture Series TA
PROFESSIONAL FACULTY corbin church Miche Bag LLC gavin christensen craig earnshaw nick greer scott johnson ron lindorf tom peterson kim scoville gary williams
Sociology Strategy
Marketing and PR Manager
josh steineckert
eric dahlin
Entrepreneurship
gibb dyer
jonathan jarman
kyle longhurst
chad carlos
Program Coordinator
STUDENT STAFF kyle harrison
ACADEMIC FACULTY david busath Physiology & Developmental Biology
Kickstart Seed Fund LifeLink Corporation One on One Marketing AtTask Western Watts Trammell Crow Company Silvermark Services Sterling Wentworth Corporation/ SunGard
nathan furr
Entrepreneurship
marc hansen
Life Sciences
taylor halverson
Creativity, Innovation, & Design Group Leader
nile hatch jeff humpherys steve liddle chris mattson gary rhoads tom sederberg gordon smith rick west
Entrepreneurship Mathematics Information Systems Mechanical Engineering Entrepreneurial Marketing Computer Science Law Instructional Psychology and Technology
matt wickman justin zsiros
Humanities Manufactoring Engineering
DONOR GROUPS scott johnson david watson travis cook
Chairman, Founders Organization Vice Chairman, Founders Org. Chairman, Associate Founders Org.