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The Rollins Center for Entrepreneurship and Technology
The Rollins Center for Entrepreneurship and Technology
The Rollins Center for Entrepreneurship and Technology (CET) at Brigham Young University, with Scott Petersen as its executive director, is BYU’s innovative program within the Marriott School of Business, and was the first university entrepreneurship program in the world to fully adopt the principles inspired by the lean startup movement.
Executive Director and longtime entrepreneur Petersen had recently read these books when he became the director of CET in 2010, and they spoke to his experiences in starting his own companies. The core insight was that entrepreneurship (an innovative, disruptive startup) does not equal an existing successful business.
“Business is executing on a known business model,” says Petersen, “while entrepreneurship is discovering the answers to unknown, untested, untried, and unproven business models. So if you teach entrepreneurship like it’s an existing business, you will fail.”
In the old days, companies were started by someone merely running an idea by “friends and family, developed further into a business model,” and then, according to Petersen, they would begin building their product and company, with money the founders had raised from “friends, family, and fools.
” After they had built their product and “set up shop,” they would begin taking the product to market, only to find the market didn’t want what they had built, which is one strong reason more than nine of ten new startups fail.
Instead of this, BYU Marriott’s Rollins Center adopted the principles of the lean startup model, where startups are taught to fully develop new ideas, test those ideas and early assumptions with real potential customers, and then, after many iterations, begin to build early virtual prototypes and minimum viable products, where further testing with customers continues before investing any meaningful dollars or time into the new venture.
Says Petersen, “Once customers have validated your idea and early business model, it is appropriate to seek early capital to finish finding product-market fit and to continue to grow the new venture.”
The first stage for CET’s entrepreneurs is idea generation, innovation, and iterating the potential business model. This involves market research and “getting outside the building” to uncover gaps or problems with current market offerings.
After that comes identifying what can be improved upon through brainstorming, innovating, and iterating with their team, and eventually building a virtual prototype—the same as drawing up blueprints before building a home. Using 3D-printed prototypes or virtual prototypes (wireframes), entrepreneurs can then present their early business model to potential customers.
Being informed by a substantial number of customer interviews and learnings, they can then build what is known as an MVP, minimum viable product, and sell this early version to a handful of early adopters who believe in the disruption they are bringing to the marketplace.
With additional iterations and customer learnings from these early adopters, CET’s entrepreneurs can then build their next iteration, a minimum salable product, which is offered to a few more companies. The learnings from these 20-125 companies then lead to further product development, which leads to a MAP—a minimum awesome product.
At this point the product is delivering sufficient value that customers would buy and recommend it, and the company can prepare to build its initial early infrastructure. This is all made possible because of the early discipline in how a company should be started, so that it can secure the needed capital for growth, or it is in a stage to successfully grow through bootstrapping or internal funding.
Most wannabe startups won’t get through this first stage, but failure here is not really failure—it is quitting before you actually start so that significant capital and labor are not needlessly spent and neither the entrepreneurs nor investors have really lost anything.
Then the entrepreneur can start all over again with a different idea until they find a model worth pursuing. “This is the advantage of the lean startup methodology,” says Petersen. “You save yourself a lot of time, energy, and money—and you don’t scar your reputation with investors in the meantime!”
If an entrepreneur’s idea passes, they start to build the early infrastructure of their company, often with seed money, which is used for product development, reviewing architecture for scale potential, onboarding, marketing and sales, and then team building.
At BYU, the end of this particular stage of company-building is the BMC, or Business Model Competition. Here students compete for large cash earnings as a reward for following the correct method of building a solid company.
The third quadrant, or stage of company-building, is customer development. As student entrepreneurs progressively build their startup in the right order, the CET wants to reward traction in getting new customers, increasing revenue, developing a product informed by real customers, and cementing important strategic partnerships.
The competition it holds in connection with this part of company-building is the New Venture Challenge. The top-ten teams each earn $15,000 and an automatic invite to the summer Founders Launchpad, an accelerator modeled after Y Combinator from Silicon Valley.
CET also invites 10 more teams (that aren’t paid) to participate in the summer launchpad. These teams view it as a great prize to get accepted into the summer program.
“This model is why we have a giant list of companies that are scaling,” says Petersen. “Companies such as Owlet, Podium, Divvy, Foreup, Jolt, Sales Rabbit, and many others over just the past few years.”
But the purpose of the Rollins Center is not success at all costs. Its vision statement is to lead in developing responsible entrepreneurs of faith and character—“young people who can go out and build these exciting companies,” says Petersen, “and at the same time be a force for good wherever they go.”
Petersen also attributes the success of CET to its many donors, called Founders, who support the Center financially and experientially. Some of these Founders also serve as adjunct professors who are successful entrepreneurs, passing along to the rising generation their unique skills and experience.
BYU also has an outstanding engineering college, Life Sciences college, and Math and Physical Sciences college.“We seek to build powerful relationships with the entire university community. And so, notwithstanding our current success, we’re still just at the tip of the iceberg when it comes to our potential,” says Petersen. “So you have to look around at what we’ve achieved and say ‘Wow!’” The future looks bright indeed!