Tag: Entrepreneurs

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McNair Center Rice Entrepreneurs

Rice Entrepreneurs: East-West Tea

This month the McNair Center is spotlighting Rice entrepreneurs to celebrate National Entrepreneurship Month. To kick off our series, we sat down with Andrew Maust, operations manager for East-West Tea.

East-West Tea

East-West Tea began in the spring of 2016 as a project in Scott Davis’s undergraduate marketing class. Dr. Davis, a post-doctoral fellow at the Jones Graduate School of Business, had students develop business strategies catering to underserved markets on campus. East-West Tea founder Drew Sutherland observed that students frequently went off campus to get boba tea and developed a plan to sell the beverage on campus. At the end of the semester, Sutherland and team members Tommy Bennett, David Cooper, Glenn Baginski and Leo Meiste implemented their plan. East-West launched retail operations on October 12.

Impact on the Rice Community

Andrew Maust joined the team last spring after going to several tea tastings. Since then, he’s climbed the ladder from kitchen worker to operations manager.

Maust describes the relationship East-West formed with Rice as symbiotic. “One of [East-West’s] core foundations is serving the Rice community. While what we do isn’t necessarily the easiest logistically, or makes us the most money on profit margins, we think it’s really important to serve the students and help them out in our endeavors.”

Maintaining a healthy relationship with Rice is a balancing act. Rice Housing and Dining provides East-West with shared kitchen space in Sammy’s. Without their own kitchen, East-West must “maintain operations but also not encroach on other people’s space.”

Maust says another challenge is running a small business and keeping up with schoolwork. He works 15-20 hours per week in the kitchen, which is “more hours than [he] takes in coursework”.

Advice to Rice Small Businesses

Maust also gave some advise to students who want to start their own business: “It has to be a labor of love. Your first goal shouldn’t be ‘Ooh, what can I do to make money?’ Because in order to build something that lasts and is high quality, it has to be something that you put in a lot of time and effort for. Money is great, but first and foremost you have to have that drive, that passion and put forth a great product.”

This resonates with advice Bob McNair gave students at an event at the Baker Institute on August 29th: Strive to create value and success will follow.

 

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McNair Center Weekly Roundup

Entrepreneurship Weekly Roundup: 11/04/2016

Weekly Roundup is a McNair Center series compiling and summarizing the week’s most important Innovation and Entrepreneurship news.

Here is what you need to know about entrepreneurship this week:

Clocking In: Small Business and Overtime Regulation

Catherine Kirby, Research Assistant, McNair Center for Entrepreneurship and Innovation

In December, new US Department of Labor regulations on overtime pay eligibility will come into effect. These regulations will drastically increase the minimum salary for exemptions to overtime from $23,660 to $47,476. McNair Center’s Kirby discusses the pros and cons of the new overtime labor law. Her analysis offers insight on how to mitigate the increased costs to employers while promoting the benefits to low-income salaried workers.

  • The pros: Estimates forecast that the new regulations will create jobs in addition to providing compensation for employees working over 40 hours a week.
  • The cons: New regulations come with new costs for employers. Requiring employers to keep track of attendance and hours of more employees could be costly, especially for small businesses.
  • Policy recommendations: The Department of Labor could implement the regulations in phased increments rather than in one single shock. The government could lower small business taxes to reduce the regulatory burden.

Immigrants and Entrepreneurship

Dylan Dickens, Research Assistant, McNair Center for Entrepreneurship and Innovation

Many U.S. immigrants start businesses. Immigrant entrepreneurs are a diverse and growing group; immigrant entrepreneurs also have greatly varying levels of education. While immigrant entrepreneurs tend to live in larger states such as Texas and California, they compete for business in every U.S. state. The type of work immigrant entrepreneurs engage in is extremely varied. Partly as consequence of this, on average immigrant entrepreneurs outperform their native counterparts and are more skilled at finding market gaps by fulfilling unmet demand. Overall, McNair Center’s Dickens proposes that recent research supports the claim that immigration bolsters entrepreneurship in the US.

10 Marketplace KPIs That Matter

Andrei Brasoveanu, Author, Mattermark

Brasoveanu’s article summarizes the top ten Key Performance Indicators (KPIs) that every entrepreneur should closely monitor when building a market for their product.  Markets ultimately determine how every good and service in the economy is “discovered, priced and delivered.” KPIs, such as return on investment, growth and and burn rate, offer powerful and important insights for entrepreneurs. According to Brasoveanu, KPIs are effective and efficient marketplace metrics for getting startups on track to visualizing and contextualizing their success.

kpis

Scientists Working Outside Their Fields Are More Likely to Become Entrepreneurs

Brianna Stenard, Assistant Professor of Management and Entrepreneurship at the Stetson School of Business and Economics at Mercer University, Harvard Business Review

Highly skilled scientists and engineers are increasingly taking jobs that are outside of, or only slightly related, to their STEM degrees. Weak labor conditions in some STEM fields are partly to blame, but largely, the educational mismatch among scientists is voluntary. Stenard’s research indicates that many employees trained in the STEM fields take jobs outside of their field to acquire technical and managerial skills. Voluntarily mismatched scientists are nearly 50 percent more likely to become entrepreneurs.

Rather than bemoan an apparent oversupply of highly skilled scientists and engineers, Stenard recommends that policy makers implement initiatives that encourage technology entrepreneurship among these mismatched experts. Following a similar vein, Stenard proposes that universities should also consider adopting measures that equip STEM students with the “nontechnical skills…particularly valuable in entrepreneurship.”

And in startup news…

Airbnb’s Terms of Service just blocked a racial discrimination case

Russell Brandom, Reporter, The Verge

On Tuesday, Airbnb successfully blocked a class-action lawsuit that challenges the company’s platform on the basis of systematic racial discrimination. However, thanks to an arbitration clause in the company’s terms of service, the case will go through individual arbitration, and Airbnb will avoid a pricey and public lawsuit. The company recently added a nondiscrimination policy to its terms of service and has apparently taken measures to elimination discrimination from its network of hosts. When approached by the Verge on this issue, an Airbnb representative insisted that “Discrimination has no place in the Airbnb community.”

Palantir Prevails in Lawsuit Over U.S. Army Contracting Practices

Rolfe Winkler, Reporter, The Wall Street Journal

Another California-based startup recently won big in the courtroom, as data-mining software firm, Palantir, prevailed in its lawsuit against the US Army in the Court of Federal Claims. Palantir Technologies, Inc. ranks among Silicon’s Valley’s “most highly valued private companies” and was valued at $20 billion in a late funding round in 2015. The company specializes in big data analysis and offers its services to large commercial customers and government agencies within the intelligence community,. The court’s decision means that Palantir is now eligible for a federal contract that would award up to $200 million for work relating to the Army’s Distributed Common Ground System.
At the 2016 Wall Street Journal  Global Technology Conference, Palantir Chief Executive Alex Karp revealed that his company was positioned to go public.

GIF Site Giphy Is Valued at $600 Million

Rolfe Winkler, Reporter, The Wall Street Journal

Founded in 2013, Giphy, Inc. serves as a search engine and database for Graphical Interchange Format files(GIFs). GIFs are the “short, looping video files” that have most likely taken over your, or your teenager’s, Facebook News Feed. Thanks to Giphy, GIFs have surged in popularity and are now ubiquitous on social media sites and group-messaging platforms, such as Facebook messenger, Twitter, and Groupme. Giphy’s Chief Operating Officer Adam Leibsohn summarizes the company’s platform as a ”search engine…for the messenger generation.“
Giphy recently released an update stating that the company currently serves more than one billion GIFs per day, that are in turn watched by over 100 million users daily. This New York startup’s obvious popularity has not gone unnoticed by investors; Giphy raised $72 million in equity funding from venture capitalists during its most recent funding round, which brings the company’s  cash total to $150 million.

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McNair Center Weekly Roundup

Entrepreneurship Weekly Roundup: 10/28/2016

 Weekly Roundup is a McNair Center series compiling and summarizing the week’s most important Innovation and Entrepreneurship news.

Here is what you need to know about entrepreneurship this week:

Big Problems for Small Practices

Catherine Kirby, Research Assistant, McNair Center for Entrepreneurship and Innovation

Kirby examines the effects of the Affordable Care Act on entrepreneurship within health care. U.S. health care regulations currently hinder entrepreneurship among healthcare professionals, particularly for doctors seeking to establish private practices.
Kirby recommends that the U.S. implement policy changes that would better foster entrepreneurship among physicians. Measures like restructuring reimbursement rates and improving quality of care requirements would reduce the burdens that many private practices face and enable physicians to start small medical practices.

U.S. early stage investment holds up, late stage plunges

Joanna Glasner and Gené Teare, Contributors, CrunchBase

Venture capital investment slowed in the third quarter. Glasner and Teare write that estimates relying on end-of-quarter data may overstate declines in early stage investment.
Crunchbase compares its own projected funding totals with reported round count totals for the third quarter. Quarterly projected funds show bullish early stage investment. When factoring in projections, Crunchbase’s report for the third quarter finds that U.S. startups continue to enjoy high levels of strategic, seed and venture capital investment during seed and early stage rounds. However, there is a steep decline in late stage investment, with fewer companies raising late stage rounds and investors pouring less money into Series C and later rounds.

Startups get bought not sold

Ken Elefant, managing director at Intel Capital, PE Hub

Many entrepreneurs focus, sometimes shortsightedly, on the dream of reaching an IPO. As a result, start-ups often fail to develop important relationships with corporate investors. According to data from Dealogic, only five U.S.-based tech companies went public in the first eight months of 2016. To avoid going out of business or selling at a fire-sale price, Elefant recommends that entrepreneurs develop strong relationships with corporate investors early on so that a later search for an acquisition offer does not turn into a last-ditch attempt to save a sinking ship.
Corporate investors invest in companies for three reasons: to gain access to a technology, to break into other markets and to acquire. For start-ups, relationships with corporate investors offer viability and credibility. Additionally, these relationships provide development, support,  feedback and access to corporate engagement and funds. For companies that might not be on track for an IPO, strong relationships with corporate investors can lay the groundwork for an acquisition.

‘Shark Tank for Students’ Re-Defines Entrepreneurship

Christopher Putvinski, SAPVoice, Forbes

Putvinski focuses on a new television series, The Social Innovation Series. This “Shark Tank or a Y Combinator for students” asks aspiring entrepreneurs to address problems in health or wellness in their own communities.
The show grants $1,000 to students with promising and innovative ideas and a grand prize of $10,000 and the title of “SAP Teen Innovator” to the student with the winning idea.

How Blind Hiring Can Make Your Company More Inclusive

Frida Polli, Mattermark


In an editorial for Mattermark, Polli writes on how diverse companies outperform their non-diverse counterparts. Increasing diversity among employees not only promotes a more fair and equitable workplace environment but also offers a high return on investment for companies. See the McKinsey & Company Report on how diversity improves company performance. Polli suggests that “blind auditioning” is a possible solution for the lack of diversity in companies’ workforces. Using advanced analytics and assessment technologies, companies can ensure predictability and eliminate bias in their pre-hiring assessments of applicants. According to Polli, “improving diversity isn’t just the right thing to do, it’s the smart thing to do.”

And in startup news…

Google buys eye-tracking VR firm Eyelock

Grant Gross, Senior Editor for IDG News Service

Eyefluence is a California-based startup focused on eye-interaction technologies in Virtual Reality (VR) and Augmented Reality (AR) headsets. Serial entrepreneurs Jim Marggraff and David Stiehr founded Eyefluence in 2013.
Google acquired the startup on Tuesday. The acquisition reflects Google’s growing interest in VR and AR technology. The deal further shows the growing potential of VR and AR for entrepreneurs interested in building successful tech startups.

Wavefront gathers $52 mil Series B

Iris Dorbian, Author, PE Hub

Another California-based tech-based startup, Wavefront, recently reported raising $52 billion in Series B funding. Investors include big names such as Sequoia Capital, Sutter Hill Ventures and Tenaya Capital.
Wavefront develops metrics monitoring services for cloud and modern application environments. Wavefront offers invaluable services to leaders in the software industry that rely on Cloud technology, such as Workday, Box, Lyft, Microsoft, Intuit and Groupon.

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McNair Center Small Business

Immigrants and Entrepreneurship

Embracing Immigrant Entrepreneurs

Every day Sharan Gahunia, owner of Raja Sweets in the Hillcroft area of Houston, Texas, sells mithai and other Indian pastries in the shop her father founded over 30 years ago. When Raja Sweets first opened up, there was little South Asian cuisine and culture within Houston, but through hard work and entrepreneurship, South Asian immigrants like Gahunia have helped turn the Hillcroft area into a booming cultural center officially recognized as the Mahatma Gandhi district.

Immigrant entrepreneurs like the Gahunia family are a key factor in American small business and entrepreneurship. 

Where are Immigrant Entrepreneurs from?

Immigrant entrepreneurs are a diverse and growing group. According to statistics from the 2013 American Community Survey, the vast majority of immigrant business owners, 23.4%, originate from Mexico, reflecting the large and long-standing Mexican immigrant population in the United States. The next three countries of origin in terms of raw number of business owners are Korea with 5.1% and India and Vietnam with Houston's Chinatown is home to many immigrant-run small businesses. https://commons.wikimedia.org/wiki/File:MetropoleCenterHoustonTX.jpg4.1% each.

Examining the percentage of business owners by country of origin provides further insight. Iran appears to be the largest exporter of entrepreneurs, with nearly 1/4, or 24.4%, of Iranian immigrants in the U.S. owning a business. The next three countries of origin with the highest rates of business ownership are South Korea with 23.1%, Brazil with 21.0% and Italy with 20.1%.

Educational Extremes and Type of Work

The survey also shows that the distribution of educational degrees among immigrant entrepreneurs is statistically bimodal. 29.8% of immigrant business owners possess a college degree, yet 25.7% of them, the second largest portion, do not have a high school degree. This wide range of educational backgrounds may reflect differences in the immigrant entrepreneur’s countries of origin.

Immigrant entrepreneurs tend to live in the larger states, with 27.8% in California, 11.8% in Florida, 10.7% in New York and 10.5% in Texas. Most immigrant entrepreneurs own either construction or professional service firms, representing 17.2% and 16.7% of all immigrant owned small businesses, respectively. However, the type of work immigrant entrepreneurs engage in is diverse, ranging from agriculture to wind-power generation. A surprising 16.2% of all immigrant owned business fall into the impossible to categorize category “other.”

Small Business Entrepreneurs

In 2012 the Small Business Administration reported higher rates in business ownership and business formation among the U.S. immigrant population as compared to the non-immigrant population. The SBA further found that immigrant-owned businesses tend to export to the global market at a disproportionately higher rate as well.

In 2014, the Kauffman Foundation found that the percentage of small businesses owned by immigrants more than doubled from 13.3 % in 1996 to 28.5% in 2014. The foundation also showed that immigrants did as well or better than native-born entrepreneurs with “opportunity entrepreneurship.” Immigrants are skilled at finding and filling market gaps — such as the unmet demand for Indian pastries the Gahunia family exploited.

Research even suggests that immigrant entrepreneurs perform better as compared to non-immigrant entrepreneurs. In a 2015 study, economists Robert Fairlie and Magnus Lofstrom found that immigrants were well suited to entrepreneurship. They listed ties with already existing immigrant populations, high amounts of family savings, and a lack of pre-existing career, as factors the may make immigrant entrepreneurs particularly successful.

High-technology Entrepreneurship

In the world of high-technology, high growth entrepreneurship, the National Venture Capital Association (NVCA) reported that, “If immigrant-founded venture-backed public companies were a country, then the value of its stock exchange would rank 16th in the world, higher than the exchanges of Russia, South Africa and Taiwan.”  These trends hold for privately held venture-backed companies as well. The study found that immigrant entrepreneurs started 30% of these businesses.

Even outside of high-growth start-up firms, immigrants have a strong positive impact in high-technology. For example, the University of Michigan showed that total computer science employment would have been 3.8% between 9.0% lower if immigration were held at 1994 levels.

 

Looking toward the Future

The NVCA study reported that 78% of immigrant entrepreneurs started their business while either on an H1B employer-sponsored or a F-1 international student visa. Overall, there is strong evidence that immigrants perform better as entrepreneurs than native-born individuals and that they are a boon to the U.S. economy. Reforming immigration policy to encourage yet more immigrant entrepreneurs would therefore contribute to America’s prosperity in the 21st century.