Few students have teachers who believe in them enough to co-sign a $15,000 loan for them. But each year at the University of Minnesota, instructor John Stavig does just that — give or take a few thousand.
Entrepreneurship in Action, a course offered at the Carlson School of Management, is a year-long class where students create, launch and market their own businesses, products and ideas.
“It’s entirely student led,” said Stavig, the professional director of the Gary S. Holmes Center for Entrepreneurship. “They decide what they want to pursue, who’s on each team, who the officers are and then develop a plan to execute the business.”
In the six years the class has been offered, 14 businesses have been created, marketing things like branded iPod covers, organic shampoos and hockey bags with activated carbon in them to eliminate the smell.
Some have ended up being successful, making back all the money from the loan and then some. Others, not so much.
“Last year we didn’t cover it all,” Stavig said. “It was my hit to take, but I believe the students will make it back this year.”
Two of the businesses started over the past six years are still active, and four were sold to the students at the end of the class.
“Over the first five years there was over a quarter of a million in revenue, and they donated $60,000 to the U and other nonprofits,” Stavig said.
Students begin the course by brainstorming hundreds of different ideas. Then they narrow it down to three ideas and divide into groups and start planning. Groups present their idea to a board of advisers, mostly alumni, and then apply for the loan to start the business.
Out of the three ideas being marketed this year, the Toepener, a small device attached to a door that allows users to open it with their foot, has taken off unusually well. It’s been mentioned in publications across the world, appearing in India, Poland and Japan.
“It’s a good launch,” Stavig said. “It’s probably the most successful initial launch of a product. They’ve done at least 20 different prototypes for it, and we encourage them to continue to improve it.”
Max Arndt, CEO of the Toepener’s company, Forge LLC, described it as “a hands-free solution for opening bathroom doors.”
“A lot of places spend hundreds of dollars making their bathrooms touch-free and then you get to the door and you have to touch the door handle. It’s intended to reduce the amount of germs you come in contact with.”
The Toepener has already been installed in public restrooms at places such as Blarney Pub and Grill in Dinkytown, the Bulldog Northeast and some University facilities on the West Bank.
The company is also working to install the product at Lunds and Byerly’s, Arndt said.
Forge is comprised of an executive board and a marketing and sales team. The students meet for class twice a week, but running the company and marketing the product are full-time jobs.
“We communicate multiple times a day by e-mail, and we’ll have a sales meeting every week and an executive board meeting every week,” said Zach Ratkowski, vice president of sales. “It’s definitely time consuming.”
The students find the course hard work but extremely rewarding and an experience that is rarely found in school.
“It’s not reading textbooks and listening to lectures. It’s going out there and trying it and learning from your mistakes,” Ratkowski said.
To get one of the class’s 25 spots, students complete an application process, which is not limited to Carlson students.
“There are no fixed prerequisites,” Stavig said. “We make students apply just to make sure they’re doing it for the right reasons, but we’d love to get more students from across the University.”
The group has had engineering and design students who have done well, he said.
Because the students are running real companies, at the end of the year they can choose to buy out the University and continue to run their business, or they can pay royalties.
For the Toepener, it’s too soon to tell whether the group will part ways with the University, but prospects look good.
“The best scenario for us is that the students want to continue the business,” Stavig said.
Since its launch Jan. 18,, Forge has sold 40 Toepeners and already needs to put in for another order.
The students attribute much of their success to their advisers.
“They really have such a good network that they’ve hooked us up with,” Ratkowski said. “They got us in contact with a lot of key people that have made this a real opportunity, instead of just a hypothetical class project.”