Chicago Booth Magazine The Next Generation of Enterprise: Entrepreneurship at Booth

Another recent exit: PrettyQuick, a beauty services app founded by Coleene “Coco” Meers, ’14, and Shreena Amin, ’12, that tied for third place in the 2011 NVC, was acquired by Groupon, another Chicago-based young company. Other NVC successes include: Base, a provider of productivity software for company sales teams; BloomNation, a community marketplace for sending fresh floral arrangements; Caremerge, a care coordination network for senior living communities; and Rise Interactive, a digital marketing agency.

The program also has spun out three additional tracks: the John Edwardson, ’72, Social New Venture Challenge (SNVC) that focuses on start-ups with a social mission; the Global New Venture Challenge (GNVC) for executive MBA students in the US, European, and Asia programs; and the College New Venture Challenge (CNVC) for University of Chicago undergraduate.

RESONATING WITH INVESTORS

True to the deep-rooted spirit of enterprise at Booth, the idea for the NVC came from a student. Jeff Meyer, ’97, approached Kaplan in 1996 to propose a business plan competition. “I said, absolutely,” Kaplan recalled. “We pretty quickly put in place the same model we use today.”

The annual NVC program begins with the fall kickoff, when students learn about the process ahead and form teams. In February, some 75 to 100 teams submit applications, each with a summary of their business idea and its viability, which are then sent to a group of judges who narrow the field to approximately 30. These 30 teams participate in the spring quarter course, Developing a New Venture.

One section is taught by Kaplan and the other is taught by Ellen A. Rudnick, ’73, clinical professor of entrepreneurship and executive director of the Polsky Center. The teams develop their business plan, practice their pitch, and get valuable feedback—frank and often critical in every sense—from faculty coaches and classroom judges. “We throw them into the network and introduce them to people,” Kaplan said. “And we have tight deadlines, so they must produce.” Overall, about 160 judges—alumni entrepreneurs, investors, and faculty members—are involved, whether  in reading applications, evaluating classroom presentations, or assessing the 10 finalists, who are selected a week before the final presentation in late May.

“If you get to the finals, the odds are that you have a real company,” Kaplan said. The NVC finals cap Innovation Week, which includes the finals of other NVC tracks as well as events and guest lectures on entrepreneurship and innovation across the University of Chicago campus.

For Waverly Deutsch, faculty coach and clinical professor of entrepreneurship, it’s all about the strength of the business story—a story that will resonate with investors. “Your job is not to tell them everything about your business,” she said. “It’s to get them excited about your business.”

“The 12-minute pitch is a coffee date,” Deutsch said. “Your goal is not to get married. Your goal is to get the dinner date, the sit-down in their office.”

That was great advice for Meers, whose PrettyQuick app enables consumers to make appointments for beauty services at spas and salons. Meers, a native of Birmingham, Alabama, spent five years at French beauty giant L’Oreal in Paris and New York. There she identified a market gap or “pain point” as she calls it and dreamed of starting her own company. She recognized that it was difficult for busy people to line up an appointment on short notice for a manicure, massage, or haircut “at the press of a button”—and that 40 percent of capacity was underutilized at one million spas and salons in the United States. So she connected spa clients eager for appointments with the still-available spa spaces and services.

“I learned how to stand up in a room  of investors who’ve seen business  models like ours and are going to try and poke holes in our plan,” she said of her NVC experience. “And you’re ready for it, because you’ve done so much work. You know your model inside and out. The ability to tell, convince, sell, and defend the story—that’s what I’ll always think of as my main takeaway.”

Within three years, PrettyQuick expanded to Boston, Dallas, Miami, San Francisco, and Washington, DC. Users select from hundreds of locations that have been vetted by a team of editors. Meers said new parent Groupon will provide expertise in sales and account management, while PrettyQuick’s expertise in booking and managing merchant relationships  will be beneficial to Groupon. The company plans to add 5,000 spas and salons in its core cities by 2016 and to expand to dozens of new US markets.

The importance of narrative in building a business also resonated with Mike Pintar, Booth student team member of Chicago-based NETenergy that tied for second place at this year’s NVC, winning $40,000. NETenergy developed a  battery that stores thermal energy, which it says can save building owners 30 percent on their usage and reduce carbon emissions by 50 percent.

“The most important early advice we got was to tell a story,” Pintar said. “Our first presentation talked a lot about technical aspects, but coaches said to make sure we talk about the problem we’re solving.” 

PERFORMING ON A BIG STAGE

Faculty coaches push their students to think big and to present with ambition, knowing that investors seek companies that can ramp up quickly and sustain long-term growth. In spring 2014, former Deloitte consultant and student Katlin Smith was gaining distribution for Simple Mills, her family of gluten-free baking mixes. But Deutsch and Robert Rosenberg, ’97 (XP-66), faculty coach and adjunct associate professor of entrepreneurship, counseled that her business plan was too modest. They suggested she might take the opportunity to position her mixes as healthy, above  all, which would have broader appeal than the targeted gluten-free label. 

“Why should you be on the specialty product shelf?” Deutsch asked Smith. “Why aren’t you on the baking shelf? Your goal is to be the Betty Crocker of the 21st century.”

Smith’s team went on to tie for first place in the NVC that year. Within two months Simple Mills had secured  funding from an angel investment group and topped its $2 million fundraising goal. The company now has six employees, headquarters in the River North neighborhood, and has expanded distribution to 1,000 stores. 

HANDS ON

NVC coaches encourage budding entrepreneurs to think big, but also focus on the nuts and bolts of market research, sales and marketing, product development, and team dynamics. The program is known not only for its rigor but for its focus on experience-based learning. “It’s hands-on and immersive, and it gives in-depth understanding, not just theoretical frameworks,” Rosenberg said. “It equips aspiring entrepreneurs with a visceral sense of whether they can navigate this career path.”

For Maestro’s David Rabie, there were particular challenges in executing the product design. “The hardware turned out to be more difficult than I expected,” he said, crediting Deutsch’s class with helping him navigate some of the potential pitfalls.

Rabie got hooked on healthy eating 10 years ago when he and his father participated in a retreat in the Los Angeles area. They hiked 10 to 15 miles a day and ate vegetarian food. “For the first two days, we hated it,” Rabie recalled, “but by the end of the week, our bodies felt completely different; we felt like we could conquer the world.” He got the idea for Maestro in spring 2014, while cooking in a digital steamer basket that he found unduly labor intensive. He thought: “there’s got to be a better way.”

He began developing the product that fall, taking advantage of the new Polsky Center i-Corps Program, which helps students, faculty, alumni, and community members validate the market need and opportunity of their business idea. “The main thing we did was talk to customers and see what they wanted and didn’t want,” Rabie said. “It just gave us a lot of useful information about our audience.” He hired an engineering firm and lined up other suppliers to help with the prototype.

Full-Time student Santiago Lopez led the team behind TaskPath, a mobile- and cloud-based workforce management platform for service providers, such as retail merchandisers and janitors, that tied for third place in the 2015 competition, winning $25,000. Lopez said the experience taught him how to work collaboratively. At the start of the program, he recalled, each member of his four-person team was doing a bit of everything. “We were inefficient,” he recalled. “Then, we started to specialize. One of us would work on presentation, another would do demos, and another would go to meetings with coaches and mentors. Judges want to see you have different skills sets in your company.”

NVC coaches continually emphasize the importance of assessing demand. “I tell them go get the pulse of their market,” Kaplan said. “That’s the big one. I see entrepreneurs get excited about their idea but then they don’t talk enough to customers or potential customers.” Added Lopez, “Conducting research and creating strategies about how to get to those customers is a huge part of the NVC.”

For Full-Time student Daniel Kuenzi, a major challenge was fine-tuning the user experience for his ride-sharing app Weelio. The app, which is geared to college students looking for low-cost rides to and from campus, was a finalist in the 2015 NVC and won $10,000.“Users are accustomed to polished apps such as Uber and Facebook,” he said.

“Our testers were asking, ‘Can you add this, and make it more like Uber?’” The faculty coaches pushed Weelio to make its app more intuitive for users, Kuenzi said, which meant paying extra attention to features such as the log-in process and in-app payment. He plans to use the $10,000 to improve the product’s functionality.