FROM INVESTMENT BANKER TO ROBOT ENTREPRENEUR
Austin Webb, a current MBA candidate at Carnegie Mellon’s Tepper School, fits Ulrich’s description to a tee. A former investment banker at a mid-market Washington, D.C.-area bank, Webb’s clients were mainly entrepreneurs and small business owners either selling their businesses or building equity. When his brother quit his job and moved to San Francisco to co-found a startup, Webb decided he’d use his MBA to do the same. On campus, Webb met the eventual co-founder to his venture, RoBotany — an automated robotic solution that increases efficiency in vertical farming — at a workshop sponsored by the school’s Swartz Center for Entrepreneurship.
“We went on what I like to call co-founder dates,” Webb, 28, explains. “We went and had coffee, talked about our ideas and the challenges in the space and how we thought we could solve it from a technology standpoint.”
With a master’s degree in robotics from Northwestern University, Austin Lawrence wasn’t even a Carnegie Mellon student when he met Webb. Still, the duo quickly bonded through a mutual interest in farming solutions for food deserts and the world’s increasing population. Next the two snagged Daniel Seim, another Tepper MBA student, and came up with the idea to create a robotic solution and software management system to improve vertical farming.
All the while, Webb continued to recruit and interview for summer internships.
“At the end of the each interview I left thinking, this isn’t what I really want to do,” he admits. “It became obvious to me that we could make a ton of progress if we were able to just focus on it for the summer.” Webb turned down a highly coveted internship at a venture capital firm in New York City and decided to spend the summer building farming robots with his teammates. “You’re seeing all of your classmates coming in and saying this is the job I want and they went and got it,” Webb says of the tough decision to pass up the offer. “It makes it hard when you’re thinking, ‘Did I make the right decision?’ Because I don’t want to fall flat on my face.”
SUMMER VENTURE AWARD PROGRAMS HAVE PRODUCED SUPER SUCCESSFUL STARTUPS
For MBAs “100% committed” to starting their own ventures, Ulrich says the summer is a great time to do it. Each summer at least 10 University of Pennsylvania teams or individuals are awarded $10,000 via the Wharton Venture Award to “pay the rent and buy Ramen for the summer,” he says. For Penn entrepreneurs, the path is a progression. Students are expected to take entrepreneurship courses through Wharton and apply for the Wharton Innovation Fund. “We will give that to almost anybody,” Ulrich says of the allotments, which often amount to about $1,000. But then, if the entrepreneurs execute well and have a polished plan, they many apply for a larger grant — perhaps $10,000. Ulrich warns, however, “We’re not giving $10,000 for someone to go find themselves touring the world.”
Of course, the schools like to list the darlings that have gone through their summer venture programs. Most notable for Wharton is Warby Parker, which earned the Wharton Venture Award under a different name in 2009. Salt Lake City-based outdoor gear company Cotopaxi was also a venture to go through the program. Last summer, Denver-based interior design startup Havenly’s co-founders went through the program and have now raised more than $13 million in venture capital backing. At Harvard, Grab, the Singapore-based taxi hailing app that has raised more than $680 million in venture capital backing, has its roots in the Rock Summer Fellowship program. Also coming out of Harvard’s summer program are Hello Alfred, a “personal butler” service, and Rallypoint, a network of active and former military members. Both startups have raised around $12 million.
‘NOT MANY OF THOSE SUMMER TEAMS ARE GOING TO GO ON’
Such examples are, however, the exception and not the norm. Ponzo believes business schools must prepare students for the hard truth that entrepreneurship is tough, and failure is always a looming possibility. “We’re doing our students a disservice if we don’t expose them to those truths and realities while they’re still in school,” he says. “If we shuffle them off and say, ‘Yeah, entrepreneurship is great, go do it,’ and then a year or two later they realize it’s hard and it’s not for them.”
Eisenmann says it’s a “steep funnel” from the fraction of MBAs who work on a startup while in B-school to the fraction who end up doing the ventures full-time and raising venture capital. “The reality is, not many of those summer teams are going to go on and do this beyond the summer,” he points out. “Not many of them will make it but the ones who do will get a huge edge from going full-time for three months.”
Xu and Rai know what he’s talking about. So far only five breweries have signed onto their platform AluluClub, site traffic has been slow, and the Beer Wagon hasn’t made too many runs. Not from lack of effort. When they arrived in Oakland, they were weeks away from launch with only one brewery signed on. The duo hustled to sign two more before launch. Yet there are about a dozen craft breweries within a five-mile radius of their home office.
Undeterred, they’ve rolled up their sleeves. To garner more on-the-ground support, they’ve spent Saturdays at local craft beer festivals and parks like San Francisco’s Dolores Park handing out guerilla marketing materials. They’ve even briefly employed direct-mail marketing efforts.
“Right now our biggest problem is not the operational aspects. It’s how to attract customers and breweries,” Rai says. Though that’s certainly not the only hurdle facing an alcohol delivery service. In July the team was still unable to hold or control inventory. They were eating a lot of profit by using the gas-guzzling Beer Wagon to personally pick up and deliver the suds.
Still, the two believe there is an opportunity for whomever can master the expensive and complicated interstate shipping process. “The distribution channels for alcoholic beverages have remained unchanged for a very long time,” says Rai, who is likely leaving the company once Harvard’s semester starts later this week. “This market should be disrupted by someone. We have not come across one brewery yet that is happy with their distribution relationship.”
Despite likely being down a co-founder and business partner, Xu remains optimistic. There is more to do, and he is still deciding if he’ll press on during his final year.