Teaching the Secrets of Successful Serial Entrepreneurship
December 07, 2010
Students who take entrepreneurship courses are eager to hear faculty talk about their real-world experiences. What is it like to launch a venture that’s been called “the fastest-growing company ever,” or to be faced with a multi-billion-dollar bid from Google?
The only two serial entrepreneurs in Chicago who can answer those questions have agreed to share what they know with students at Chicago Booth. Eric Lefkofsky and Brad Keywell, the Chicago-based cofounders of the social coupon website, Groupon, turned down an offer from Google in early December. On January 3, the adjunct professors will tackle their newest challenge: teaching 95 Booth students who have enrolled in the course, Building Internet Start-Ups: Risk, Reward, and Failure.
Lefkofsky and Keywell launched Groupon (along with Andrew Mason, former student at the Harris School of Public Policy, who left to become Groupon’s CEO) in 2008. The firm offers email subscribers a deal-of-the-day coupon at a local business, then encourages them to share it with their social networks. Shoppers have jumped at such deals as a $110 spa treatment for $40, or a $60 dinner at a popular restaurant for $30, passing it along to friends. If enough people sign up for it, the offer is good.
Groupon was so successful in drawing local customers in such markets as Chicago, a national promotion by the Gap last summer drew $11 million in revenue on one day and temporarily shut down Groupon’s server, the New York Times reported. “Groupon had 124 employees on January 1, and it will end the year with more than 3,200 employees worldwide in 34 countries,” Keywell said.
Groupon is not the only success story for Lefkofsky and Keywell. Lefkofsky launched InnerWorkings, a business-to-business online printing firm, in 2002 and took it public in 2006; it’s now run by CEO Eric Belcher, ’95. In 2005, he and Keywell started Echo Global Logistics, a business-to-business online logistics and trucking firm that they took public in 2008. In 2007, they started Mediabank, a business-to-business media-buying technology firm whose platform powers over 40 percent of North American media spend across all media types.
Their success is unparalleled, said Steven Kaplan, Neubauer Family Professor of Entrepreneurship and Finance. “Eric was the keynote speaker at our entrepreneurship conference last November and I did a fireside chat with him,” Kaplan said. “He started talking about what he’d done and my jaw dropped. I realized Eric is probably the most successful entrepreneur on the planet in the last 10 years. He’s started four IPO-able companies in eight years. There’s no one else in the world who’s done that.
“And Brad is a force in his own right. He helped build three of those four companies, and he was also the driver behind the TedX event in Chicago last fall, which was a huge success,” Kaplan said. “He’s a force for putting Chicago on the map when it comes to high technology. We were lucky to get both of them.”
Kaplan persuaded Lefkofsky and Keywell to co-teach an entrepreneurship course at Booth. Lefkofsky, who had taught at Kellogg, and Keywell, who had taught at the Ross School of Business at the University of Michigan, readily accepted the offer. “As a place to teach entrepreneurship, Booth is really coming into its own,” Keywell said.
Their course promises to focus “on several concepts that are critical to expedite the pathway to identify viable business opportunities, find a niche worthy of new business creation, and building the foundations of an excellent business.” One of the two major deliverables is a mid-term “experience”— an “absolutely nontraditional challenge that will cause students to do things that they otherwise wouldn’t do in a business school setting,” Keywell said. “We’re going to give everyone a similar set of materials, and they’ll have a limited amount of time to create something of value. It should be an accelerated way to experience success or failure—hopefully, both.” Being comfortable with failure is critical. “You’ve got to be comfortable with failing, figuring out what the lesson is, and building on your newfound wisdom,” he said. “If you’re not comfortable with that, you probably shouldn’t be starting a business on the internet.”
Kaplan said the course is a strong fit for Chicago Booth. “Eric and Brad think very systematically about starting businesses and building businesses. The way they think is consistent with the discipline-based thinking we teach here,” he said. “Students will be required to draw up a business plan. The better plans can incubate in their course, and students can build them in the New Venture Challenge course,” which leads up to the school’s annual business plan competition.
Among the students who plan to take the class is Matt Moran, a second-year student in the Full-Time MBA Program. “With more and more business being conducted online, it seemed like a great opportunity, especially when it's being taught by two very successful serial entrepreneurs,” he said. “Learning firsthand from professors that bring real world experience into the classroom is a major reason why I came to Booth. I expect this will be a unique experience.”
— Patty Houlihan