When serial entrepreneur Tom Melcher found out that the Harvard Business School was opening a startup hub in New York, the HBS alum decided to apply for a space to move his fledging business out of a guest bedroom in his apartment on the Upper West Side. His seven-month-old venture, Show-Score, is like a Rotten Tomatoes for NYC theater.
“I thought, they are never going to pick me,” laughs Melcher, who is on his tenth startup and graduated in the class of 1989. “I’m too old, and this (his new company) is too weird. Then, they picked me!”
Melcher’s Show-Score is one of 16 HBS alum-founded ventures using the 42 desks in what the Harvard Business School is calling its first Startup Studio. More than 60 early stage companies founded by HBS alumni sought space in the 3,000-square-foot entrepreneurial hub, based in a WeWork shared office space in Irving Plaza near Washington Square Park. At $400 a month for a desk, it’s priced significantly below the $600 cost–with a stocked kitchen with healthy snacks, fresh fruit, high quality coffee, and beer.
‘YOU CAN FEEL THE ENERGY AND THE BUZZ’
But the larger attraction for HBS alumni is the chance to work with other high-energy entrepreneurs who have Harvard’s MBA experience in common and to take advantage of what will be a regular schedule of programming featuring successful HBS entrepreneurs and professors from campus. The private space has a presentation room that can accommodate 25 people at such mentoring and coaching events. The school unveiled the new space at an opening reception last night (May 4).
For Melcher, the most senior and most experienced of the HBS entrepreneurs in the Startup Studio, the cheaper rent was initially the allure. But, he quickly adds, “It’s invigorating to be here. If I was a doctor, I would be in the emergency room or the trauma center. I love the energy and action in the place.” Melcher, who has worked for both McKinsey & Co. and IBM, has a long track record in startups, having founded companies in Silicon Valley and in Beijing over the past 24 years.
For Jennie Baik, co-founder and CEO of Orchard Mile, a luxury e-commerce marketplace, the appeal of working alongside other HBS alums was a function of energy and inspiration. “You are driven because everyone around you is so driven, just as you were at Harvard Business School,” says Baik, 36, who graduated with her MBA in 2008. “It’s nice to be in an environment where everyone wants to be the best they can. You can feel the energy and the buzz here.”
STARTUPS HAVE BETWEEN $500,000 & $1.5 MILLION IN ANGEL AND VC FUNDING
The 16 teams in the new studio are equally divided between business-to-business companies and business-to-consumer companies, with funding of between $500,000 to $1.5 million. They range from Legal Hero, which aims to make law simple for businesses by providing vetted lawyers at fixed prices, which was founded by HBS ’10 alum Annie Webber, to Tootelage, a startup offering educational programs to enable families to support their child’s academic success, which was founded by HBS ’14 alum Lisa Dare.
Harvard Business School views the hub as something of an experiment. “If it works here, we’ll look at other places,” says Thomas R. Eisenmann, faculty co-chair of the HBS Rock Center for Entrepreneurship. The school decided to put its first studio in New York, he adds, because of the “density of HBS entrepreneurs in the city.” Eisenmann says there are a comparable number of HBS-founded startups in both New York and the Bay Area, between 800 to 900 in each place. “But the startup ecosystem in New York has four times the marketshare of San Francisco because startup activity in the Bay Area is spread out across Silicon Valley, San Francisco, and East Bay.”
There are three other cities where HBS believes it has a large enough concentration of alums doing startups: Chicago, Los Angeles, and Washington, D.C. “Those cities are on the border of us considering it (a startup hub),” says Eisenmann. “But this is an experiment. It may not work. What we’re hoping to create is a sense of real community. We want people who will give back. They should want help and want to give help. We don’t want people in the studio who just put their heads down and point on their laptops.”
HBS STARTUP STUDIO MODELED AFTER COLUMBIA BUSINESS SCHOOL SPACE IN SOHO WEST
No early stage venture can occupy more than five seats, says Eisenmann, so that a single startup doesn’t dominate the space. The school expects the typical residency in the studio to be between six to 12 months before it outgrows the space. Columbia Business School has a similar space in a WeWork location in Soho West, and CBS was extremely helpful to Harvard in getting its new studio off the ground.
The HBS studio is staffed with a full-time director, Avani Patel, a Columbia Business School MBA, who helps supports resident teams in their ventures. Although HBS has long had a network of offices around the globe dedicated to supporting faculty research, the school said this is the first off-campus facility for graduates of the school who are practicing entrepreneurs. It complements the broad variety of programs offered to Harvard MBA students by the HBS Rock Center and Harvard University’s Innovation Lab.
Last year, 84 of 932 graduating MBAs at Harvard Business School did their own startups. If you subtracted the sponsored students who were returning to their employers, that means that slightly over 10% of the class launched new businesses.