CNBC's "College Voices 2020" is a series written by CNBC fall interns from universities across the country about coming of age, getting their college education and launching their careers during these extraordinary times. Danial Khan is a student from UC Berkeley studying electrical engineering & computer science as well as industrial engineering & operations research. The series is edited by Cindy Perman.
Microsoft, Facebook, Reddit, Insomnia Cookies. We've all heard the success stories: A college student, usually a prodigy, has a brilliant idea and works day and night, drops out of college and makes it big. But you don't have to be a prodigy and you don't have to drop out to be successful.
Pedro Pachuca is a sophomore at UC Berkeley studying electrical engineering, computer sciences and business administration. He's also the co-founder of SportVue, a start-up aimed at revolutionizing the way sport players train. Pachuca started the company during his freshman year with his friend and roommate, James Li. He says college is a great time to start a business because it's a lot easier to seek out help and mentorship.
"People want to help you if you're in college because it's like 'Ooh, bright new talent,' rather than being right out of college where they see you more as a competitor," Pachuca said.
And, then there's the financial aspect.
"It's actually less risky to do it now than later, because right now you're under the umbrella of school, and some of us have the umbrella of our parents," Pachuca said. "If this was right after school, then you're going to have to support yourself and you're gonna have to turn to venture capital much faster and dilute equity much faster."
More from College Voices:
5 tips for crushing it as a work-from-home intern
Job hunting amid the coronavirus pandemic: How to network … from your couch
How I started my own successful YouTube channel reviewing tech products
If you're working on something that targets college-age students, you have a built-in focus group all around you, said Danielle Strachman, a general partner at the 1517 Fund, a venture capital fund that invests in young founders.
In my experience, I have found being able to walk up to users in libraries or post in Facebook groups is an amazingly powerful tool.
"Also for some students, it's really helpful if they're working on something to have access to facilities and labs," Strachman said. "But you have to balance out the time constraints, you're also going to be a student."
Here are answers to some frequently asked questions about launching a start-up while you're in college and some pro tips for how to get started.
Do I need to take business/entrepreneurship classes?
There are varying opinions on whether business/entrepreneurship classes are helpful when you want to launch a start-up.
Taking entrepreneurship classes is like "building up your muscles for the big fight," said Mike Kyriacou, a lecturer at UC Berkeley who teaches "Venture Applications of Data Science." Classes are a risk-free environment where you can try out experiments — and that will help students to be more prepared when they venture out into the real world, he said.
And, never underestimate the power of making connections. Many of the people in these classes are going to go on to do interesting things.
"They're going to be execs here or there so you're building relationships with each other and you all become great dots to connect with each other in the future," Kyriacou said.
Pachuca had more mixed feelings on the benefits of these classes.
"In business classes, professors try to codify intuition and then teach it to other people, which works to an extent, but it's hard for students to pick up on intuition." He then highlighted that "I think business school really gives you a lot of good frameworks to think about. For example, they gave us frameworks on how to categorize customers which I think I've used a lot."
Chris Cherian, a business student at Wharton and the CEO of Gatherly, a start-up aimed at transforming how online events are held, adds: "It's a half-half -- some classes are super relevant while others aren't. For example, I really hope I won't have to worry about debt restructuring for Gatherly," he said jokingly. On a serious note, he said the technical financial modeling skills he learned from classes have been extremely helpful for him as he ventures into the business world.
If you don't want to take a class to sharpen your skills, many colleges have an entrepreneurship scene with amazing start-up accelerators. My time at the Cal Hacks Fellowship start-up accelerator taught me an incredible amount about the entrepreneurship world and how to start a business. In the accelerator, I learned how to talk to users, discovered the world of venture capital, and received advice on the decisions my team made.
How do I learn the technical stuff?
Taking classes can be helpful when it comes to something technical like software development – but it isn't necessary. I've found that one of the biggest advantages of a start-up is that it pushes you to do things you never thought you could. In a previous start-up idea that I worked on, my team and I had no idea how to do anything in web development, but we decided to take the leap and teach ourselves how to do it.
Kyriacou had a similar view, saying "Go for it. When you're building a company there's two things: Figure stuff out and get stuff done right," he said. Classes are a great way to learn how to figure stuff out but don't be afraid to challenge yourself into learning new things outside of them as well.
For nontechnical founders, taking technical classes can also be a powerful tool to bridge the gap between the technical and nontechnical side.
"I can talk to the engineers a lot more effectively because of my coursework" in computer science, said Amaan Pirani, a student at Columbia University and co-founder of Gatherly. Even a basic understanding of the technical side of a business can be super helpful for working more harmoniously with your team.
Where do I find start-up ideas?
"The way to get start-up ideas is not to try to look for start-up ideas," Paul Graham wrote in his article, How to Get Startup Ideas.
Most student founders create their start-up by finding a problem that they, or someone close to them, faces in their life. For example, the Gatherly team realized a need for a better way of hosting large events online when they attended a conference, where "it felt like you were in a large room with 300 people all in a giant circle." They felt that there could be a way to emulate the real life experience of walking between different conversations and talking to people without a constrained environment. So if you keep your eye out and talk to people, you may just come across an idea that makes you say "Aha!"
Pachuca explained the importance of these "Aha!" moments.
"One guy just not too long ago was traveling with a suitcase and thought 'Dang my luggage is really heavy.' So what did he do? He slapped wheels on luggage," Pachuca explained. "Suitcases had existed before this for many many years, and wheels had existed before this for many more years, but no one had thought to put them together before until he did. And this is because everyone had this pain point but just said 'this sucks,' but no one did anything about it until he thought of solving it. And that made him a lot of money because he solved a problem for a lot of people," Pachuca said.
As avid sports players, Pachuca and Li saw how common it was in both soccer and hockey for players to keep their head down, which both harmed their performance and put their safety at risk. They decided to "introduce technology in a space where technology wasn't really used before" by creating a device that notifies the player with a small light whenever they're playing with their head down too much.
So, keep your eyes and ears open — you never know when your next "Aha!" moment will strike!
How do you start a business in college?
- Come up with an idea. Be observant. Find a problem that people face – then think of how you can solve it.
- Figure out your value proposition. Basically, you need to be able to summarize your idea by saying "Our (product) helps (target customer) who need to (solve job/problem) by (differentiator on how your solution solves the problem). This ensures that your product actually solves a problem. The more specific it is, the better.
- Ask around. This is the idea of the start-up null hypothesis. Before diving into an idea, you have to test that a problem worth solving exists, and that the solution fits the needs of your users perfectly. From my personal experience, I advise that you do this before spending enormous amounts of time working on the product or service. These are called "customer discovery" interviews and are essential that you're solving a real problem.
- Make an MVP (minimum viable product). The idea of an MVP is to make something that pretends to be your product as quickly as possible, and as little money as possible. Buffer, a start-up aimed at helping people build their brand on social media, has a great "How We Did It" blog post about how they created the first version of their website that was two pages total — one that explained the product, and one that signed people up for an email list. For user testing, lots of experts use the absolute minimum effort when evaluating an idea, such as a series of slides on a slideshow that make it look like the user is using your product.
- Make something people want. This sounds rather obvious, but one of the things many founders miss out on is the importance of talking to users frequently. You solve this with "prototype interviews," where you show off your MVP to users to make sure that your product is actually solving their problem. User interviews are actually an art in themselves, and you'll get better at them as you go. You can read more about these in Zach Fichman-Klein's article "12 Tips for Conducting User Interviews."
- Ship & Iterate. This is the idea of building your product up in small bits, and speaking to users after each iteration. This helps ensure that you don't waste your time building features that users don't want.
- Make sure that your product has a business plan. This is the major difference between a product and a business, and only one of those two gets you a start-up. (However, it's important to note that even making a successful product as a student goes a long way in teaching you and getting your foot in the door.) This step involves knowing your market (you may find this Wall Street Journal article helpful) and making a go-to-market strategy (this in-depth article on how to think of these may help).
From here, a lot of start-ups diverge in their path. Depending on a lot of factors, a start-up may choose to go into marketing, raising investments, experimenting with revenue, expanding the team, and many other options. One way to know which direction to head in is to have mentors who are really experienced in the start-up field give you one on one advice on where to go next.
Of course, this is just a rough guideline — every business is different. The world of start-ups is very diverse and depending on your idea, you might go down an entirely different path.
So, when do I drop out?
Whoa! Just because Bill Gates and Mark Zuckerberg dropped out doesn't mean you have to.
That being said, balancing school with a start-up can be tricky — especially if a business starts to take off. So, you just have to figure out which path is right for you. How much time do you want or need to spend on your start-up?
Most of the student founders at Gatherly dropped out of school for a semester to make sure they were putting in 100% with their business.
"In the beginning, we were reading this book on how a lot of start-ups have this culture of 'If you don't have good output, you're fired,' and we wanted to create this culture but then we thought 'Wait, we're all 20-year-olds who are objectively bad at our jobs.' That's when we realized that input is the most important thing," Pirani explained. "For me, it would be impossible to take classes and have a high input, but for Chris [who's still enrolled for the fall semester], he's been able to take classes and still have an insanely high input, given that they're pass/fail."
Pachuca and Li, meanwhile, are working full time on SportVue and have moved across the country to Minnesota just to build a closer community with their customers. But, they have been able to juggle their coursework while they're building the business.
"I think staying in school is the right decision for me right now," Pachuca said. "Online school let my team move to the best place for our business and connect with our customers. As of now, school doesn't pose a significant barrier to my start-up but, as we grow, we can definitely see it interfering with our progress at which point we will consider taking a break from school."
Being involved in the start-up world changed my outlook on life in ways that I would never expect, and as someone from a technical background, it taught me a ton of useful skills, from interviewing people to conflict management to gathering conclusions from data. When I went through a start-up accelerator, it really changed my mind on why it's important to have personal connections and marketing skills. So even if you're not business-minded or technology-oriented, or if you've never thought about it before, it might still be worth a shot.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.