How do you work with student entrepreneurs?

Posted on March 1, 2012

Today’s students have boundless energy and hopes. Remind you of anyone? Yes, we thought we would change the world, right? Well, we did have an impact. Today’s young generation is eager to demonstrate their talent and realize their dreams.

So … why not leverage their talents to have an impact on the school they love? Engaging students to help your institution while at the same time adding to their skill sets and building their own businesses is an authentic way to benefit both student and institution.

There are a few tricks we’ve learned about doing this at Stanford University. Since we’ve done this a few times now, we have come up with a process that we generally follow. Everything below is not required; everything doesn’t have to be in place from the beginning. But over the life of the relationship, you’ll find that many of the things below will come up. This will be a learning process for you and the student.

Be forewarned: All students are not equally talented. Every student, like any vendor, has his / her strengths and weaknesses. But the young, of course, are in an intense life phase – both discovering who they are and who they are not. This can have an impact on their reliability and trustworthiness. Allow for a certain margin of error. You will play several roles: partner, mentor, and boss.

Our Process

Step One: Vet

The first step in the process is to determine whether or not this is an engagement that should be done. Here are a few questions to ask and answer:

Is this project worthwhile to the institution? Is the student prepared to take this on? Does the student have the technical expertise or the ability to develop it? Does the student have the time?  Is the student someone you think you can rely on? Did the student bring the project to you or did you bring the project to the student? Are you wholly prepared to support the student in this endeavor? Are you ready to be the mentor you will be required to be? Who pays, how much, how will payment be handled, and when will payment be made? Criteria-based installments? Lump sum?

Step Two: Define and Plan

The next step is to meet with the student to define and plan the project. This of course includes a scoping exercise.

What are the deliverables? What will the end result include? Not include? What is the project timeframe? Are there phases? If so, when are the deliverables due? Who will do what – not only on the student’s end but the institution’s end? How do you commit your organization? If information is involved, who will provide it, in what format, and do you have a commitment to provide it?

If the student is developing a product or service but does not expect to support it long-term:

FounderSoup

Students attending FounderSoup event

Who within your institution will support it long-term? Will that individual be involved in the project? (That will be required.) How will a hand-off from student to staff be accomplished and what constitutes a ‘hand-off’? What tools and standards must the student use?

If the student is developing a product or service and expects to launch a business based on it:

Does the student understand – has it been explicitly stated – that the student will be your vendor? (This obviously needs to be clear.) Is the student legally incorporated? Does the student’s company have a tax id and the necessary liability insurance required by your institution for all vendors? Will the student run the system in the cloud? Hint: Insist on it! If the student balks at this, s/he is probably not serious about setting up a business. On your end, now is the time to implement Software as a Service – you probably want to avoid having to have yet another server, another local system to support, and so on.

In some situations, we added students to the payroll while we were working through contract process. Generally, we signed up the student for a part-time arrangement – 10-20 hours a week, maybe less. The point is, they’re logging some hours, being paid, and getting a productive start rather than just waiting around. This is also important because, as part of this hiring process, the student has to sign agreements about privacy/confidentiality, FERPA, and adherence to general university policies. Policies

CrowdJewel

Student presenting about her startup at a FounderSoup event

around student conduct are murkier, whereas the policies around employees and more cut and dry – remember, the student is entering a professional relationship with the institution now. Hiring has the additional advantage of starting him / her off on a legal footing to begin with. This seems to bring greater seriousness, intention, and conscious to the effort – i.e., this is not just another school project: It’s a formal part of the university’s business.

When a student is launching a business, s/he is becoming your vendor. The student has to take responsibility for becoming a bona fide vendor at your institution. (Note: This is not your responsibility – it is the student’s and s/he has to be willing to take it on!) There are two critical introductions you need to make and some conditional ones as well. First, the critical ones:

  1. Introduce the student to your procurement process. They will have to go through the same process as any other vendor would go through in order to do business with your institution. The only – and critical – difference is that you are dealing with a very young person who is learning about the world. Take the time to go with the student to meet your procurement officer and assist the student in ‘going through the ropes.’
  2. You may have to introduce the student to legal counsel, if your procurement office feels it is necessary. The student’s contract will have to have every ‘i’ dotted and ‘t’ crossed. (This is not your job, of course: It is between the student’s attorney and your legal counsel.) We have found it helpful to provide the university’s standard contract to the student’s attorney and try to go from there. Every contract will be accompanied by what we call a ‘scope of work’ (it may have a different name at your institution). This is a description of what the contract will yield. The scope of work will come from your initial planning and scoping with the student (see above).
FounderSoup team

Students at a FounderSoup meeting — looking for a “startup teammate…an engineer, designer, or entrepreneurial decathlete…”

Aside from these, here are some other key introductions you may have to make for your student:

  • If the student is to retain ownership of a product s/he builds for you, then the issue of intellectual property arises. Most institutions have an office of technology licensing, which should be consulted.
  • If the student’s product entails any aspect of security, FERPA, HIPAA, or other security–related matter, involve your security office.
  • If the student’s product or service entails commercial payment, involve individuals responsible for ensuring PCI (Payment Card Industry) compliance.
  • If the student’s product or service entails university branding, consult with the guardian of your institution’s brand, including logo, name-use, institutional endorsement policies, and so on.
  • If the student’s product or service entails university domain name space, involve your IT people to ensure that domain naming is properly handled.
  • If the student’s product or service can raise questions about your institution’s commitment to accessibility, involve the accessibility officer.

Before your student meets with any of the above, show your student where to find websites describing vendor requirements, information security policies, PCI guidelines, accessibility guidelines, etc., so your student will show up prepared.

StartX

StartX – A great boon to the enterprising startup team

While it may seem daunting, most of this can be accomplished with your good judgment about whether or not an introduction is warranted coupled with an email to the student and the appropriate university officer. However, consider if your student needs your supportive presence in-person. If you’re present, the university officer knows it’s serious.

In the end, much good can result. You’re going to learn along with your student: you get to call upon that side of you that has always wanted to be a mentor. Staff at your institution will most likely want to help the student – they’ll become mentors too. And the students will be eager to learn and gain confidence as business men and women. And after all, if the student can cross your institution’s threshold, s/he will have the experience at hand when trying to implement elsewhere.

Step Three: Manage and Monitor

Now the project becomes like pretty much any other project. Only look for the following aspects:

  • You may have to teach the student the importance of communication, of keeping everyone in the loop.
  • Likewise, you may have to teach about meeting deadlines.

(You might find the student better at both of the above than some seasoned professionals, however!)

  • You are helping a student to nurture a business. You will be the student’s first customer, but not the only customer.  You can give the student a great assist by thinking beyond your own institution’s walls. What features should the student’s product have, beyond those needed purely by you and your institution, in order to be successful? Not that you need to pay for all those features, but you can help the student think across the higher education vertical.
  • You must make the project a priority with other institutional staff if their support is required. That way they know you’re serious.
  • You will sometimes have to counsel yourself and your fellow staff to be patient. Remember, the student is maturing and doesn’t know everything yet – even if s/he thinks differently! Extra patience is required.

Step Four: Engage

The final step of the process is an ongoing license and contract. By now, this should all be understood and set up. However, you may have one contract for development and the first year of operation. If successful, you’ll want to continue to engage with an annual (or otherwise periodic) renewal.

Additional information

Also check out information about these interesting resources for students:

  • FounderSoup, where Stanford students make pitches to venture capitalists and VCs provide feedback to students. Relationships begin to form. Sponsored by Andreeson Horowitz.
  • The BASES program at Stanford (Business Association of Stanford Entrepreneurial Students), where successful entrepreneurs in the world share their secrets with aspiring entrepreneurs at Stanford. Sponsored by Sequoia Capital.
  • Startx (originally part of the Associate Students of Stanford University (ASSU)) is a non-profit company that selects, then assists, enterprising students take their companies from idea to reality.

Conclusion

We hope you’ve enjoyed these thoughts and will benefit from them. Let us know if you have questions and additional ideas.

© Tim Flood, 2012

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