Startups replacing summer jobs for students

CHICAGO Wed Jun 23, 2010 10:48am EDT

Graduates celebrate receiving a Masters in Business Administration from Columbia University during the year's commencement ceremony in New York in this May 18, 2005 file photo. REUTERS/Chip East/Files

Graduates celebrate receiving a Masters in Business Administration from Columbia University during the year's commencement ceremony in New York in this May 18, 2005 file photo.

Credit: Reuters/Chip East/Files

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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.

ENTREPRENEURIAL GENERATION

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.

STARTUP SCHOOL

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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Comments (3)
BB1978 wrote:
You cannot run a country where everyone is running their own small business. This is the dumbest advice I have seen. Most small businesses fail under a year and leave people with a mountain of debt and in financial ruin. I find it it interesting that this article doesn’t talk about the people who failed. Not to mention that the cost of having one’s own business also includes buying one’s own health insurance, saving for retirement without a match (if you have the money to do this), paying huge social security and medicare taxes, and not having a steady stream of income. For most people with families and bills, this is not a realistic option.

Jun 23, 2010 12:11pm EDT  --  Report as abuse
STORYBURNfun wrote:
15 million are unemployed, with 8 million out of work for more than a year. That’s what college grads are up against

Jun 23, 2010 12:36pm EDT  --  Report as abuse
PortlandMP wrote:
The majority of job growth over the course of this country’s history has been from small business. Small business is the lifeblood of any domestic economy. To the extent just a fraction of these young (not commited) risk takers succeed, and are able to produce product domestically that can be marketed abroad – then its worth our support and respect, and we just might stand a chance at pulling this country back from the brink for our kids. Dont get me wrong, economic growth doesnt neccessarily come from chocolatiers or biodegradable t shirts (no offense to thos guys), but it does come from the bright and naive kid that build and sells his own motorcycle, or car, or gadget – it comes from real production. All US business begins as small business, and when it gets big enough, it simply moves labor to cheaper labor markets, leaving the US work force to either whither, or start over. I’m all for starting over. I hope these kids kick some A@# and build some great business – and I hope they are hiring when my big business decides to outsource its labor to China.

Jun 24, 2010 6:44pm EDT  --  Report as abuse
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