The need for innovative business models, particularly in Upstate, is something I’ve called for in the past. It’s now starting to happen. Yesterday, Alison Damast of Bloomberg Businessweek wrote an article describing Clarkson University’s latest idea for attracting talented young entrepreneurs.
Last fall the university setup the Young Entrepreneur Award program to find potential students who have started companies prior to enrollment freshman year. The first deal was formed with Matthew Turcotte, a Clayton, NY native who launched a web development business at age sixteen. For every semester Matthew completes, the university foots the tuition bill in exchange for 1.25% of his company. If all goes well, at the end of four years Matthew will have received eight semesters worth of free tuition and the university will have retained a 10% equity stake in his company.
This sounds like the deal of a lifetime for most high school seniors. Unfortunately, the current setup precludes a large portion of the student body. The deal is only good for students who enroll in the business school’s entrepreneurship program. So for example, if a young entrepreneur also wants to become an engineer, they’re forced to double major if they want to reap the same benefits. Should a student who operates their own company (hypothetically one as promising as Matthew Turcotte’s) and wants to study physics instead of entrepreneurship have to pay full tuition? My guess is Marc Compeau (the director of Clarkson’s Center for Entrepreneurship) and other faculty are open to suggestions as they iterate the concept towards a more favorable model for all students.
When it comes to developing a favorable model for all students, we need to consider just how many slots the university has to offer. For each student who enters the program, the university makes an equivalent investment of $150K over the course of four years. This means it would cost the university $375K each year to have ten students enrolled in the program. Beyond what limit is the model no longer sustainable?
Having posed my concerns, I think it’s a great first step forward. The program is said to be the only one of it’s kind, but it’s only a matter of time before a business model like this catches the attention of top universities around the country, maybe even the world.
Thanks @MDEredita and @Sean_Branagan for the tip!
