Startups replacing summer jobs for students
CHICAGO (Reuters) - Eric Heinbockel recalls going on a Wall Street interview the day investment bank Bear Stearns collapsed. With his chances of landing a coveted finance job dwindling, the former Columbia University undergraduate began exploring more entrepreneurial options, eventually launching a business that lets customers build their own chocolate bars.
"We had a difficult time finding jobs," said Heinbockel, 24, who founded Chocomize.com in August 2009 with two buddies and nearly $100,000 in financial assistance from friends and family. "I was offered three jobs - all of them entirely commission based with no support."
Nearly a year later, Chocomize.com is on its way to becoming one of the first successful customized chocolate makers in the United States. The Cherry Hill, New Jersey venture hopes to reach $1 million in sales in its first full year and is gearing up to hire additional production workers.
Across the country, similar stories of entrepreneurial pluck have been unfolding among the ranks of recent college graduates facing one of the most sustained job market declines in decades. In June, unemployment stood at 9.7 percent, hovering at levels it has maintained since the recession took hold in 2008.
While the dismal outlook for corporate jobs is certainly a strong catalyst, academic observers said there are other factors at play, noting that 20-somethings today tend to approach entrepreneurship as if it's their birthright.
"This is the most entrepreneurial batch of students I've ever seen," said James Klingler, assistant professor of management and entrepreneurship at Villanova School of Business outside Philadelphia.
"These young people have tools that are literally like breathing to them that previous generations didn't have," he said, referring to the globalization of information and the advent of social media. "The other factor is we have raised these kids so that, no matter if they couldn't hit the ball, they were heroes. They're very optimistic."
Jay Rodrigues, creator and CEO of DormNoise, a company that develops interactive calendars for students on college campuses, epitomizes the current crop. Rodrigues, still a full-time student who enters his senior year at the University of Pennsylvania's Wharton School this fall, raised nearly $1 million in venture financing for his company and now supports three full-time employees working from their homes.
"Adding those pressures on top of school was really challenging," said Rodrigues, 21, who has also maintained a high GPA and even found time to pledge a fraternity. "I just kind of put my head down and chug forward."
Student entrepreneurs often have an underlying social mission. Consider Yeoman Organics, a t-shirt company run full-time since December by creator Joe Levy, a UC Davis graduate who majored in economics.
Levy, who cultivated a taste for entrepreneurship after interning at beverage maker Hint Inc., raised less than $50,000 from family and has been operating the business from his parents' home, learning production and design along the way.
"The economy made me want to do this even more," said Levy, 22, who makes his organic shirts in San Francisco using subcontractors and wants to bring more manufacturing back to the United States. "I wasn't and am not going to be deterred by naysayers."
Neither was Blake Ferguson who co-founded Mangia Technologies three years ago, a business that allows sporting event patrons to text message food orders to concession providers from the comfort of their seats. The venture has raised roughly $2 million in seed capital to date and serves the likes of Salt Lake Stadium, Scottrade Center and Philips Arena.
"Clearly we are no longer in a culture where somebody goes to work at a company and 30 years later they're still at the company," said the 27-year-old Salt Lake City-based entrepreneur.
The prolonged downturn is forcing people to rethink their plans for a career characterized by steady paychecks and progressive promotions. In addition to MBAs starting new ventures, is an array of graduates possessing practical skills ranging from information technology to graphic design. Many of them, too, are hanging out their own shingles.
That's the case at Westwood College, a Denver-based career school with 17 locations. According to a poll, last year 10 percent of Westwood's graduates started their own businesses, up 2 percent from the prior year. "We really believe it's partly due to the economy," said spokeswoman Kristina Yarrington.
Entrepreneurs like Danielle Baker are making a go of it with little more than an idea and some determination, bootstrapping along the way. Baker, a 24-year-old recent graduate of California State University Northridge with a degree in English, had planned on becoming a teacher. But the economy and the arrival of her second child led to a change in direction. She decided to take a stab at starting her own copywriting business, specializing in the needs of companies creating an online presence.
"When we were starting this out, there was a period when my husband and I had it so rough," said Baker, who recalls her bank balance falling to just $400. Over the course of six months she has built a steady base of three to four active customers and a waiting list of projects in the wings.
"Although you don't have the security of a 9-to-5 job, it's like you're creating more security," she said.
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