The University of Michigan has spent the better part of a decade beefing up classes and programs that teach students how to start and run their own companies, and those efforts appear to be paying off.
Earlier this month, Princeton Review and Entrepreneur magazine rated U-M as the best undergraduate program for entrepreneurship in the U.S. U-M finished 8th in the organization’s ranking of graduate entrepreneurship programs.
Stewart Thornhill, executive director of U-M’s Zell Lurie Institute, says the university first decided to participate in the undergraduate rankings a few years back, and “it’s been a steady march” to the top of the list since. Princeton Review credited the undergrad program for launching 807 startups and raising $20 million in investment capital in the past five years. On the graduate side, 194 companies have collectively raised $129 million.
Thornhill attributes the university’s success to a number of different factors. U-M has added entrepreneurial classes and programs across campus, even in schools one might not automatically associate with startup companies, like those in the realm of arts and literature. The university has also established a number of student-run venture capital investment funds and put a bigger emphasis on cross-campus collaboration. U-M has continually added more courses on the subject and now offers an entrepreneurship minor for non-business students, he says.
Thornhill says he views the Princeton Review rankings as “nice, shiny things to hold up.” More importantly, he says, they get the word out to kids who may not have realized U-M was a student startup powerhouse.
“It puts us on the radar of potential future students who might not have thought of us for entrepreneurship,” Thornhill says. “Entrepreneurship is a cross-disciplinary opportunity here. They learn by doing, start a company, and get their first capital investment—it’s all combined.”
Thornhill says part of the uptick in entrepreneurial programming is due to student feedback. “Like any business, we serve customer demand,” he says. “The student demand was, we needed to offer more and better. They can practice here in a low-risk environment.”
When he’s in front of a classroom, Thornhill will often ask the students how many of them would like to one day run their own companies. “Almost all hands go up,” he adds. “Anytime you have a big success [like the Princeton Review rankings], it’s a great thing to point to, but I don’t think we’ll have a real sense of impact until 10 or 20 years from now. The average company exit takes about 10 years, so this is a long game.”
College entrepreneurship is a growing trend, and not just at U-M. According to a new Association of University Technology Managers survey of 193 universities, hospitals, and other research institutions nationwide, academic research fueled significant economic gains in 2017 with the formation of a record 1,080 startup companies. That 2017 figure is up 5.5 percent from the 1,024 formed in 2016, and up 32 percent from the 818 startups founded in 2013, AUTM says.
Thornhill says the widespread increase in student startup interest is due in part to the rise of iconic entrepreneurs like Tesla founder Elon Musk and Facebook’s Mark Zuckerberg. “It’s the phenomenon of tech gazillionaires,” he says. “People in my generation looked up to CEOs and big corporate leaders, but now it’s Musk and Zuckerberg.”
There are several dynamics at play, he posits, driving the current popularity of entrepreneurship: There’s the cultural dominance of the “bright, shiny aspirational individual” a la Zuckerberg, and the democratization of startup and investing culture through TV shows like “Shark Tank.”
“People can watch ‘Shark Tank’ and say, ‘My idea is better,’” he maintains. “It’s really made the idea of success accessible to anyone with a good idea.”
Younger kids are interested in starting companies too, Thornhill says. With an increase in high school entrepreneurship programs as well as easy entry into the world of Amazon reselling or creating paid YouTube content, children today appear to have more entrepreneurial avenues to explore than ever.
“They might be on their third company by the time they get to us,” he says.
