ENTREPRENEURSHIP@ Kellogg: Newest Zell Fellows Settle In

This post originally appeared in its entirety on clearadmit.com

Though best known for producing a steady stream of crackerjack consultants and marketing mavens, Northwestern’s Kellogg School of Management is also making inroads when it comes to educating entrepreneurs. Through the Kellogg Innovation & Entrepreneurship Initiative (KIEI), the school is pioneering a lean methodology approach to launching new ventures that is steeped in experiential learning.

To complement its “new venture creation” track, coursework that takes students through the full life cycle of new ventures from ideation to launch, Kellogg also features a special program offering support to MBA students who are trying to get ventures off the ground by graduation. Called the Zell Fellows Program, it is open to students who are either founding a startup or looking to grow an early-stage venture. In December, nine students were selected as the newest cohort of Zell Fellows, with ventures ranging from a service that takes the stress out of packing lunch by delivering customized, allergy-friendly meals directly to families’ homes to a platform that creates interactive guides that hotels can give their guests at check in.

According to David Schonthal ’09, program director and clinical assistant professor of innovation and entrepreneurship at Kellogg, more than 100 students expressed interest in the program this year and roughly 60 submitted applications to be considered for participation. The cohort size remains small, though, because that’s part of the program’s unique, intrinsic value.

“The fact that they go through this program together as a nine-person cohort is super powerful,” Schonthal says. “They develop strong relationships with each other, enhance and support one another—they really become an advisory group for themselves almost like a Young Presidents’ Organization,” he says, referring to the global peer network of CEOs and business leaders. The support continues well after graduation, he adds.

Of course, the financial support Zell Fellows receive is another main benefit of the program. “It provides a lot of resources that are often hard to get as you’re just starting a business,” Schonthal says. With approximately $30,000 in funding per student, the program helps pay for business services ranging from graphic designers and coders to prototype shops and legal assistance. “We believe their first job is to be a good student, so if we can provide services to help them advance their businesses while still focusing on being students first, that’s great,” he says.

And then there’s exposure to entrepreneurship beyond Kellogg. In addition to treks to the San Francisco Bay area, students go on a trek every year to Israel where they spend time with the program’s benefactor, Equity Group Investments LLC Chairman Sam Zell. “We want them to get a sense that as Zell Fellows they are part of a global network of entrepreneurs,” Schonthal says.

New this year is an executive coaching component, pairing Zell Fellows with seasoned entrepreneurs who serve as mentors and advisory board members and provide coaching tailored to individual entrepreneurs’ needs. “We offer lots of different resources to support each of them on their path,” he says.

Now it its third year, the Zell Fellows Program counts 28 fellows, 19 of whom are running or have founded businesses. Collectively, they have raised more than $5 million in funding, and 17 of the student-founded ventures are still active.

An Accelerator of People, Not Businesses
But Schonthal stresses that the program’s success metrics are not tied to whether or not the students raise funding or successfully launch their businesses when they graduate, though many do. “We are really focused on giving people a very unique experiential opportunity so that down the road when they get this entrepreneurial itch they have the confidence to follow that path,” he says. “The program is meant to be an accelerator not of businesses but of people.”

For Blair Pircon, a second-year Kellogg MBA student selected as one of the 2015-16 Zell Fellows, the resources provided by the program have helped her develop as an entrepreneur while also developing her venture. Called The Graide Network, it’s an online marketplace connecting teachers with qualified teaching assistants who can grade student assignments. “The Graide Network is really unique and will revolutionize how teachers are teaching,” Pircon says. The “graiders” are highly qualified and vetted undergraduate students training for careers in teaching. They grade and correct the assignments to fulfill fieldwork hours as part of their degree. Pircon’s company charges a technology and management fee for the service, which is paid by schools on behalf of the teachers.

Before coming to Kellogg, Pircon worked on Wall Street as a senior equity research associate at Robert W. Baird & Co. covering the education industry. That’s where she became passionate about the need for a technology revolution in schools. But her entrepreneurial roots run far deeper. “I’m a fourth generation entrepreneur, so it’s really been in my blood and always something I wanted to pursue,” she says. It began with her great-grandfather, who started a chicken and egg company in Omaha, Nebraska. “I will be the first female entrepreneur in the line, which I really take great pride in,” she says.

Pircon went to Kellogg with the hopes that her entrepreneurial path would begin sometime in her two years there. She credits the school with facilitating opportunities for like-minded students to meet each other and pitch ideas, and it was at one such event that Pircon met a former teacher who underscored how much teachers are in need of more support. “I was able to pair my market research background and view on education technology with a teacher who had been in the classroom—that was a magical moment,” she says.

Pircon then took part in Kellogg’s new venture creation track, which is titled “Discover. Test. Launch.” She skipped over the first course, “New Venture Discovery,” diving right into the second, “New Venture Development,” and proceeding from there into the third, “New Venture Launch.” As part of these later courses, students take the ideas they’ve come up with in the Discovery course, develop prototypes, stress test them with real customers and understand what helps position ventures for a successful launch. Having just completed the final Launch course, Pircon is now taking a course on business law for entrepreneurs while doing a ton of work outside the classroom to run a live pilot with customers for The Graide Network.

“Right now we are about to launch our second big pilot,” she says. It will extend over 15 weeks and include a larger group of both teachers and graiders than the previous pilot. Schools taking part in this pilot are spread across Illinois and Tennessee, and graiders currently are drawn from eight different universities. The hope eventually is that The Graide Network will expand nationwide.

Support from the Zell Fellows Program is already helping her startup complete this necessary testing, Pircon says. The weekly and monthly check-ins with advisors tailored to her venture—along with customized executive coaching—have also been enormously valuable, she adds. “Trying to start a business and become a business leader at the same time is hard—programs like Zell really help.” And the tight-knit community that grows within each cohort of fellows is also great, she adds. “We are always asking each other about everything you can imagine, from accounting software to referrals for graphic designers.”

Finally, she’s found that participating in the program has helped keep her accountable. “I have set a range of goals along the way. My goal at graduation is to be fully funded through a combination of grants and early investors,” she says. “After that, I plan to continue pursuing this full force for the next decade and grow as much as we can.”

Weekly accountability check-ins with each other and advisors help keep the Zell Fellows on track both in the near term and with regard to the big picture, she says. “What we are maniacally focused on in the near term is operating a pilot that is successful for graiders and teachers, and then we plan to scale that in the future.”

Beyond the Zell Fellows Program and the new venture creation track, Pircon also praises Kellogg’s support for social impact entrepreneurs. She won a social impact award and funding from Kellogg and edtech hub LEAP Innovations that allowed her to work on her business full time throughout the summer out of 1871, a co-working space for entrepreneurs in downtown Chicago. “That helped us build the first prototype of our platform and line up users,” she says.

Chicago Entrepreneurship Community Is on Fire
Working out of 1871 also helped her connect to and draw from a larger entrepreneurial community. “The Chicago entrepreneurship community seems like it’s on fire from the perspective of current students, and 1871 is the most visible way for Kellogg students to encounter that,” she says.

Schonthal, too, cites Kellogg’s proximity to Chicago as a major advantage for would-be MBA entrepreneurs. “Chicago is a super diverse economy—unlike the West Coast, which is heavily weighted in tech, or New York, which is heavily weighted in finance and media,” he says. “Maybe it seems ironic, given its location in the middle of the country, or maybe not, but it has this incredibly diverse ecosystem. A lot of our students find it’s a wonderful place to get started.”

Kellogg is also really good at taking full advantage of the fact that it’s on a campus that has a lot of world-class programs. “From the business school to biological sciences to engineering—we wind up finding a lot of opportunities for our students to collaborate with students in these other programs, and they end up collaborating in really amazing ways,” he says. “What happens is we have these young students getting exposure to advanced R&D, advanced materials, biological sciences,” he continues. “I think it is really cool that our students have their business acumen complemented by students with such technical acumen.”

In an effort to foster precisely this kind of cross-pollination, Northwestern recently launched an 11,000-square-foot, multi-disciplinary shared working space located near Kellogg, the McCormick School of Engineering and Applied Science, the School of Communication and multiple other research institutes. Coined The Garage—it was built in a former parking garage—it is open to the entire university, so it is always housing startups of all kinds, Schonthal says.

The diverse expertise provided by Kellogg’s entrepreneurship faculty is also a huge value add, he says. “Faculty members with strong research backgrounds are complemented by faculty who bring tremendous practical experience, from venture capital firms, operating roles, design,” Schonthal rattles off.

Schonthal has been impressed with each of the Zell Fellows cohorts that have come through the program. This year’s is the first to feature multiple businesses focused on education, such as Pircon’s, and also several that have very strong social missions, he says. And, for the first time this year, there is also a nonprofit included in the mix.

Are Social Impact Ventures Trending?
Does this reflect growing interest in social impact at Kellogg overall? “I can only speak from what I see, but my answer is yes, absolutely,” he says. Schonthal teaches the Discovery course of the new venture creation track, which calls on students to bring problems into the classroom that they are passionate about solving. “Having taught this class to I don’t know how many groups of 50+ students over the past four years, more and more every year and every quarter these problems trend toward things with high degrees of social mission, impact, community orientation,” he says.

Just as Pircon has her near-term goals and grander vision for The Graide Network, Schonthal has near- and longer-term ideas for the Zell Fellows Program. Just a few weeks ago, seven students kicked off an additional Zell Fellows cohort focused on entrepreneurship through acquisition. “Up until now, we’ve been really focused on startups, but not all entrepreneurship involves starting a company from scratch,” he says. A pilot this year, the Zell Fellows Acquisition and Ownership track is expected to launch at scale next year, with a cohort of 10.

Beyond that, Schonthal would love to see the program expand into industry-specific tracks—perhaps in healthcare, social impact, real estate. “I don’t want to see us add more students to individual cohorts—I think the smallness really makes it special,” he says. “But I do think the shared experience of going out and building healthcare businesses, for example, could be valuable.”

What really sets the Zell Fellows Program apart, Schonthal stresses, is that as much as it may support the growth of a venture, it is really designed to support the growth of the entrepreneur. “I think it’s pretty unique,” he says. “Not only will it pay dividends in terms of building businesses today—we are betting long on all of these students, and we think this is a really formative experience that will pay dividends far into the future.”

View a complete list of Zell Fellows past and present.