A startup is like art. It is a profoundly intimate expression of the founder. A passion molded into a mission, a startup is a means to invent, serve, compete, and endow. It’s a long shot requiring total commitment — a process laden with fateful tradeoffs and dead ends, where falling short isn’t always failing forward.
Why take the risk and make the sacrifices? There is an exhilaration that comes with ownership and freedom, of turning an inspiration into a career-making venture. That’s the goal of the Zell Fellows program at Northwestern University’s Kellogg School of Management. Founded in 2013, Zell Fellows is designed to support student entrepreneurs who plan to launch businesses they can run after graduation. Consisting of 30 hand-picked students, the program is an incubator extraordinaire, one that caters to students at every level of their venture’s development.
PROMISING STARTUPS BOOSTING KELLOGG’S PROFILE
The Zell Fellows program is more than jut financial backing for student ideas. “In addition to the welcomed seed funding, there is the network of advisors and resources that is made available,” writes Milan Raj, who is earning a dual MBA-MS in Design Innovation at Kellogg with the McCormick School of Engineering. “From a design firm on retainer to monthly check-ins with business leaders to treks meeting with diverse businesses across industries, these opportunities have shaped how I think about targeting real customer pain points and how to build with a focus on scalability. To launch a business side-by-side with other dedicated students who are launching their own disruptive businesses which solve unique challenges across industries has been the ultimate confidence booster.”
This year, you’ll find plenty of innovative ideas percolating out of the Zell Fellows program. For example, reBLEND is marketing smoothies made from traditionally discarded produce. BackWave Technologies fights heart failure through a monitor that alerts physicians when patients’ heart output decreases. Online platforms, however, have been particularly popular with this year’s fellows. Stay.EAT+DRINK focuses on boosting occupancy rates in hotels, restaurants, and spas through a “ROI-centric” model targeting Millennials and Gen-Y. Qualtrium connects Latin American companies and investors, while Hilltop Health offers a turnkey solution for veterinarians to manage their practices.
Some enterprises are already gaining traction. Qualtrium has lined up several clients on its platform. reBLEND notched an 86% satisfaction score in early trials. And stay.EAT+DRINK was a Northwestern darling, racking up several awards during the year. However, these startups have big shoes to fill. Look no further than Zell’s inaugural class, which boasts Matt Elenjickal’s FourKites, a global supply chain solution that has raised over $51.5 million. Then there are Zell alums Wise Apple (Rebecca Sholiton, Zell ’16 and Nate Cooper, Zell ’17) and FlyHomes (Stephen Lane, Zell ’15 and Tushar Garg, Zell ’16), which have raised a combined $7.3 million.
‘AN ACCELERATOR OF PEOPLE, NOT VENTURES’
That’s a formidable start for a five-year-old program. The growth stems less from emphasizing building businesses and more on developing people, says David Schonthal, a clinical associate professor of innovation and entrepreneurship and faculty director of the Zell Fellows program.
“We provide students with mentorship to help them operate their business effectively. We have a pretty extensive program where we provide each of them with executive coaches to develop their leadership skills. We’ve created programs for the Zell Fellows that are specifically focused on founder leadership issues; we’re helping each of these entrepreneurs develop their emotional intelligence, self-awareness, identify their own strengths and weaknesses, and help them understand how to build effective teams around them, so they can complement their skills.”
In a nutshell, the Zell Fellows differs from most programs by focusing more on the founder than the enterprise. “The Zell Fellows is an accelerator of people not ventures,” Schonthal notes. “Our bet is on you as a founder, not on the particular concept that you are working on. Our evaluation of the success of this program is whether or not people do something — whether they take an entrepreneurial leap at some point in their career — and can look back on this program and say it gave them the skills and fortitude to do that.”
CUSTOM APPROACH LEADS TO FOUR DISTINCT TRACKS
Zell Fellows forego any course credit for their work, however. Instead, it is a year-long, co-curricular endeavor that students complete more as a calling than a grade. Targeted mainly to full-time second-year and one-year MBAs, the program has been a work-in-progress that has evolved to meet the specific needs of Kellogg’s entrepreneurial population. Notably, the program maintains four unique tracks, each with its own faculty leader and executive coaches.
The first — and oldest — is the New Venture Track, a catch-all led by Gregg Latterman, a Kellogg MBA, entrepreneur, and angel investor. In his professional life, Latterman had signed artists like Train and John Mayer to his record label’s joint venture with Columbia Records (he later formed a management company whose client list included Liz Phair, Michelle Branch, and The Fray). Under the leadership of Schonthal and Latterman, the New Venture Track quickly became a go-to for Kellogg’s aspiring entrepreneurs.
Despite the track’s popularity, Schonthal understood that student ventures couldn’t be confined to a one-size-fits-all model. By the third year of Zell Fellows, Schonthal began adapting the programming to fit the differing needs of the ventures. This was particularly true for students who were looking to pursue entrepreneurship in ways beyond starting a business from scratch. This led to the launch of the Acquisition and Ownership Track. Run by Alex Schneider, who co-founded a private equity firm that invests in small businesses, this track caters to students looking to acquire and grow businesses – an umbrella that Schonthal says covers areas like search funds, fundless sponsorship, franchising, and family businesses.
In 2016 the Zell Fellows added a Healthcare Track, since a third of the students were gravitating towards healthtech, an industry, Schonthal says, requires far different development and resourcing than a consumer-focused tech startup. To oversee this track, Kellogg brought on Pete McNerney, a serial entrepreneur and venture capitalist that Schonthal describes as a “pioneer in the medtech investing space.” This past year, the program also added an Emerging Markets Track for social entrepreneurs, which is headed by Jamie Jones – a scientist-turned-researcher and venture fund manager who has partnered in the past with the Gates Foundation and the U.S. Department of State.
FACULTY LEADERS KEEP VENTURES MOVING FORWARD
Kellogg’s Zell Fellows approach, which trains the individual and tailors the programming and resources to the individual entrepreneurs, was the motivating force behind Chase Michalek coming to Evanston. The founder of Hilltop Health, Michalek describes Zell Fellows as a “fast track accelerator” — one where the quality of faculty and coaching offers practical guidance that resonates with the startup situations he encounters. As a member of the New Venture Track, Michalek receives dedicated weekly office hours with Latterman, who seamlessly ties his music industry experience and theoretical teaching to the day-to-day hurdles of his students’ ventures.
“Gregg is a really relatable guy who helps you with everything from business structuring to negotiation conversations with partners or suppliers,” Michalek explains. “He is really a sounding board, a guy who isn’t quick to talk but quick to listen. Being a first-time entrepreneur, having that trust that I can seek him out on a pretty regular basis is really helpful.”
Latterman’s lessons just don’t revolve around the business. His coaching sessions also force Michalek to confront issues like executive presence and communication skills. More important, he acts as a manager to keep student on task and a mentor to reinforce the bigger picture. “The accountability factor that Gregg has with us has been remarkable,” Michalek adds. “He keeps us honest and active with driving our business forward. He reminds us that we are students, but we are also trying to advance businesses. He understands that sometimes you have to prioritize business and sometimes you have to prioritize school.”
Go to page 3 to access in-depth profiles of the most promising startups at Kellogg this year.