Start-up investment in students leads to big social returnsApr 30, 2012
For many people, the notion of investing in a business involves an eventual return of capital and ultimate profitability. However, financial gain was the last thing on the mind of Beedie School of Business lecturer and PhD student Adam Mills when he made his latest investment in BBA student projects – ultimately leading to funds raised for children with chronic illnesses and disabilities.
In his Business 478 strategy class, Mills tasked his students with starting up their own businesses. He gave five groups of undergraduate students $100 each from his own pocket as start-up capital in exchange for 15 percent of each business, and told the students they could keep any additional profit.
Mills decided early in the process that hands-on experience was a more engaging way for the students to learn about business strategy than the traditional approach of writing a business plan as a capstone project.
“One of my favourite phrases is, ‘Never practice on the customer,’” Mills explains. “I wanted them to have the experiences of managing real resources and teams to build the skills and knowledge they will need after graduation – but in a supportive and risk-free environment. I didn’t care if they lost the money, the important thing was the experience they would gain from running their own business. It would be a good investment regardless of the outcome.
The services ultimately provided by each group varied greatly. Although two groups offered catering services, one focused on providing quick, healthy snacks by selling fruit cups, while the other concentrated on feeding hungry students studying for mid-terms by offering ramen noodles in convenient locations. Another group set up a music production business allowing customers to record a demo, while a fourth offered private tutoring on a variety of subjects to international students.
The final group chose to offer several products, selling roses on Valentine’s day, offering life coaching and even providing singing telegrams. Although Mills used many of the services offered by the groups himself throughout the term, one memorable highlight for him was sending a singing telegram, Michael Bolton’s “How am I Supposed to Live Without You”, and flowers to a member of Beedie support staff as a thank you for her support.
“Any initial hesitations I had in assigning such a radical project disappeared after the first week of class,” says Mills. “The teams did an amazing job of analyzing the market, finding and fulfilling unmet needs, creating demand for their services and ultimately creating value for their customers. These students didn’t just rise to the occasion; they blew my expectations out of the water. The passion for innovation and value creation, and the way they embraced the entrepreneurial spirit was amazing.”
Mills offered support and advice through simulated board meetings with the groups throughout the project, and the students were able to put the knowledge gained from their Beedie education into practice. “We were forced to utilize a lot of skills we had learned from other classes at SFU while running our business. My statistics class came in particularly handy when figuring out how much fruit would be needed to fill each cup,” explains Ed Wong, of the Fruit Dealers group.
After the final class presentations, Mills was delighted with the learning outcomes the students demonstrated. As an added bonus, he ultimately saw a return on his investment, with each group posting a profit. Mills, however, chose to return his 15 percent portion of the profits to the groups.
Most students chose to donate the profits they eventually earned to the Zajac Ranch for Children, a local non-profit providing summer camps to youth with chronic illnesses, that had been the subject of a live in-class case study during the class. “It almost brought me to tears, I was so moved,” says Mills. “Adding value to both business and community is the true Beedie spirit.”