Hot early stage startups and unicorns aren’t just for the coasts. There’s an entrepreneurial rumbling in the middle of the country close to the shores of Lake Michigan. And Linda Darragh can tell you all about it. Darragh, the Larry Levy executive director at Northwestern’s Kellogg Innovation and Entrepreneurship Initiative, has been deeply involved in the Chicago entrepreneurial scene for nearly three decades. And for the past four years, she’s been reinventing Kellogg’s approach to entrepreneurship into a hard-nosed, innovative, Midwestern style.
The style is you don’t have to start a cutesy, venture capital-backed app to be considered an adept entrepreneur. “The skills and experience required to launch a business come from the skills that are required to grow and scale businesses,” Darragh tells Poets&Quants on a phone call. And according to Darragh, those skills hold value at any stage of lifecycle for any business, even the “un-sexy” and “bread and butter” businesses that dot the Midwest.
And so three years ago, soon after Darragh left her role as director of Entrepreneurship Programs at the University of Chicago’s Booth School of Business, Kellogg revamped its entrepreneurial offerings. “It’s learning about the process of identifying problems, verifying problems and then ideation to find solutions with a good product market fit,” Darragh explains. “That skill set and understanding that process is applicable in any stage of a business.”
‘DID YOU KNOW THERE WERE SO MANY UNICORNS IN CHICAGO?’
Highlighting the entrepreneurship pathway at Kellogg is the three-course Launch-Pad, which includes three 10-week courses including New Venture Discovery, New Venture Development and New Venture Launch. Entrepreneurial-minded students may then pick from 20 elective courses that can be industry-specific and cross-disciplinary. But all along the way, the courses are geared to train the venturing mind no matter if the goal is to launch a new venture or create innovation within a corporation.
In a co-curricular sense, Kellogg’s entrepreneurial approach is highlighted by the Zell Fellows Program. Each year, the school accepts 10 students armed with ventures, invests $10,000 and gives them the space to run with the business idea. In this year’s cohort, Kellogg has added a twist. In addition to the startup-focused track, the Zell Fellows Program added a second cohort for students interested in entrepreneurship through acquisition. These students enter the program with the goal to eventually acquire, run and own small- and middle-market companies. Current Fellows come from family-owned business that they want to return to and are interested in search funds and middle-market acquisitions.
Darragh says the school is also focusing on B2B businesses, rather than the B2C companies that garner so much limelight. “How many people know Cleversafe or Fieldglass or AvantCredit or others that have made billion dollar exits,” asks Darragh while speaking of the Chicago entrepreneurial environment. “Did you know there were so many unicorns in Chicago?”
In addition to the companies Darragh is quick to tick off, Chicago-based vendor management systems provider, Fieldglass, was acquired in 2014 for $1 billion. The company was co-founded and led by Jai Shekhawat soon after earning his MBA from Kellogg in the mid-90’s. LiveWatch Security, which was established in 2002 and headquartered nearby Kellogg’s campus in Evanston, Illinois and sold wireless home security systems, was sold to Monitronics last year for $67 million. Brad Morehead, a Kellogg MBA and current adjunct professor of entrepreneurship, was CEO at the time of the acquisition.
In an exclusive and robust interview with Poets&Quants, Darragh goes into detail on just how Kellogg does entrepreneurship, how Kellogg students take advantage of Northwestern’s campus-wide depth of intellectual property, and why Chicago should be on everyone’s startup map.