This summer, students will be given the opportunity to test their business plans on the university’s dollar.
For the first time, 10 student teams from the University of Iowa Pappajohn Entrepreneurial Center will work toward developing business models based on their ideas during the summer while the university provides resources for the young entrepreneurs.
“What better way to get students involved than to pay them to do an internship-like program but working on their own business ideas,” said Jennifer Ott, the center’s associate director for training and engagement.
Each participant will receive $2,000 for living expenses, three credit hours, and as a team, students can earn up to $3,000 for meeting all six milestones, funded by Iowa Economic Development. These milestones include students answering key questions — such as the target audience — about their business plans.
The teams will learn today’s industries are moving away from traditional business principles.
“In the old-school version, you’d go out and build a plan, spend money, and use time based on a bunch of assumptions that weren’t previously tested,” said Ben Anderson, an Entrepreneurial Center graduate. “Now, before you do that, you need to interact with potential customers, people from the industry, and other competitors. So as you build your product, and as you spend time raising money, you’ll know it’s time spent toward a concept that will be well-received by the public.”
The center is taking applications for the first student accelerator program until April 2. The accelerator program will begin May 27 and will consist of the 10 teams working alongside entrepreneurial mentors such as Anderson, and a teaching team made of local industry members and business attorneys.
While the paid accelerator program is not considered an actual internship, Lynn Allendorf, the director of the Entrepreneurial Center, said it serves as a beneficial alternative for students interested in entrepreneurship.
“We will be targeting this toward students at the Bedell Lab, as well as students who have competed in business plans and elevator-pitche competitions over the years,” Allendorf said. “We’ll give them a lot of hand-holding, but they’ll also have the independence to pursue their own dreams rather than working in a corporate environment.”
The new student accelerator program is similar to the venture school program offered last fall. Last fall’s program was geared more toward community members and did not include financial incentives.
Julian Valencia, a UI M.B.A. student, was one of the participants in the fall program.
Valencia, along with two other M.B.A. students, originally planned to create a business model for a résumé editing service aimed at college students. But after conducting potential customer interviews, they realized the college demographic may not be the best market.
“The whole idea of the program is to research your market as much as you can before you develop a product,” Valencia said. “For example, say I was really passionate about chicken wings. There’s no point in spending all of this money and opening a chicken-wing restaurant if everyone in Iowa City hates chicken wings. But I wouldn’t know that if I hadn’t had tested my hypothesis on the population here.”
After receiving a few calls from Iowa State University, the program will now be extended to interested students from around the state.
“This is not a theoretical class; we are actually applying business concepts and putting together a business model they could very easily take to an investor,” Ott said.