Yesterday, we welcomed Chris Byers and Mike Salaway, 1989 Monmouth College graduates and entrepreneurs in Central Illinois to our class. Both Chris and Mike earned degrees from Monmouth and then Physical Therapy degrees before launching their careers. Each had been successful in their own ventures before realizing they shared a similar vision for how to provide the best rehabilitation and sports medicine service. Of course they were friends at Monmouth College too. The network of common friends and philosophy resulted in a great partnership that grew from one clinic in 1997 to nine clinics in 2010. See the link to their website for more information on their successful company :

http://www.advrehab.com/about-us/about-us.html

Chris talked about the medical doctor that was their “angel investor” when they started since they did not have the start up capital to aggressively launch the clinics. They were grateful for his involvement that made the business possible. But this angel wasn’t always helpful. This silent partner who owned 51% of their business until 2006, let Mike and Chris sweat out every monthly payroll in the first few years as their full-time staff grew to 60 physical therapists and about 60 professional staff.  Philosophically, they differed in their approach and what they believed to be ethical and fair. Chris and Mike differed from their investor in their approach to patient care and how to train and handle staff. One example is the way Advanced provides incentives for profitable clinics. “in the early days, everyone in health care didn’t pay much attention to cancellations or a poor repeat visit record. We track those metrics and reward our staff based on hitting certain numbers or thresholds. One key metric is customer satisfaction and willingness to refer us to their friends and neighbors.” We had a philosophy about patient care, too. One thing we found is when the the therapist sits down with the patient (rather than standing while they are talking) and spends a few extra minutes listening the patient will respond much more positively than if they are hurried in and out.” One big issue is the new health care legislation and the poor rates of medicare reimbursement. Advance has had to adjust to a myriad of changes in how insurance and healthcare is billed and collected. “We could depend in the past that for every $100 we billed, we would get $85 back in payment for our services.” Now we collect less than 40% with the usual and customary charge adjustments from insurance companies and reduced medicare payments. “We don’t know what will hapen in the future, but it is too hard to predict.”

Advanced has been successful in three key ways: 1. They focused on smaller towns and hired people with strong local ties and contacts. 2.  They worked closely with other health care providers as an outsourced solution and revenue source. One example is their management of Cottage Hospital’s PT services. 3. They worked with their patients so that they could afford their co-pays and deductibles.

“Workman’s comp is another key area of our business because so much of our marketing is tied to physicians and their practices. We depend on their referrals and referrals from sports coaches and trainers”

Chris and Mike are paying back their good fortune to Monmouth College too. “We sponsored the new football scoreboard and we have hired 15 Monmouth graduates in various staff positions.” Despite the unclear future, it was obvious they love what they are doing. As Monmouth College looks to begin construction on a new science and business building, Chris Byers and Mike Salaway are perfect examples of why these two disciplines belong together.

Why study Entrepreneurism at Monmouth? A student who completes our Business  major will be able to: 

• Create business plans that effectively integrate marketing, management, and finance in order to create value for customers, owners, employees and the communities they serve.
• Interpret and explain data necessary for decisions in our complex world-making the process to assess trade offs among alternatives more quantitatively clear
• Simply communicate (sometimes) complicated ideas and business strategy through effective oral and written presentations
• Identify the social, legal, and ethical factors involved in business strategy and incorporate these factors into decision making.
• Engage in civil discourse with those who disagree and acknowledge the strengths, weaknesses and risks associated with alternative actions. 
• Contribute to the success of a team-based work as a leader, peer, and subordinate.

What future business leader doesn’t need that skill set?

Tierney, MTV co-founder, speaks                                         

to large crowd at his alma mater                                              

         MONMOUTH, Ill. — If pressed to give a short answer to the question, “How do you succeed in business?,” Dwight Tierney, a 1969 Monmouth College graduate and a co-founder of MTV, might choose the word “research.”

         Tierney told Monmouth students that research was a key to the success of MTV and its sister Viacom network, Nickelodeon, and he also told the students how they can apply research to their own aspiring careers.

         “At MTV, it was our job to know the customers, to know you guys,” he said while gesturing to an overflow crowd in the lecture hall of the college’s McMichael Academic Hall. “We tell you what the trends are. But the dirty little secret is, you told us, then we articulated it a month before you did. We always stayed ahead of the curve.”

         That approach worked with the teenage and twentysomething demographic, and Tierney said it also applied to the primary viewers of Nickelodeon – kids.

         “We did a lot of telephone research,” he said. “We’d call homes at 6:30 p.m. and ask the parents what their kids were watching. They knew their kids were being entertained, but they couldn’t tell us what it was. We were talking to people up here (Tierney’s height), and we needed to be talking to people down here (at Tierney’s waist). Our business quadrupled when we began talking to kids. Knowing your customers has always been the key.”

         Tierney also explained how the students – many of whom attended the talk as part of MC’s “Midwest Entrepreneurs” senior capstone class in political economy and commerce – could experience success in the job market.

         “Each of you has the unique selling proposition of you,” he said. “How are you branding you? What makes you unique?”

         To stay competitive during an era when more college graduates are entering the work force than ever before, Tierney said mixing that branding with research would pay big dividends.

         “Learn about the company where you’re interviewing,” he said. “Know more about the company than the person interviewing you. Then tell them how your skills will translate to their business.”

         Back in the day of his first post-graduate job, Tierney’s skills might have been a match for his position, but he admitted a major shortcoming.

         “I was hired by the admission office at Monmouth College,” he said. “I hated it, and I sucked at it. I had no passion for what I was doing. (Former admission counselor) John Wilbur came down to St. Louis and he fired me, and it was the right thing to do. But he also left me with something. He told me, ‘Find out what it is that you want to do.’”

         Tierney returned to his native New York, where he followed his passion, seeking employment related to media, entertainment, TV and music. He was eventually hired at CBS, which he called the “Rolls Royce” of broadcast TV in an era when there were only three national networks.

         Among the things that stayed with him from his time at CBS were the stories he heard from men who had been at the company since the 1940s and early 1950s.

         “I learned a lot from them,” he said. “They were pioneers. Almost everything they were doing was new. And if they tried something that didn’t work, they didn’t let it stop them. They just laughed about it and moved on.”

         That pioneering model, coupled with an interesting idea, led Tierney to do something of which his mother did not approve. With three children and a mortgage, he quit his job to follow a dream – the dream that turned into MTV.

         Tierney explained to the class that in the late 1970s, music videos existed, but they were only shown to people inside the industry to promote bands for concerts and radio play, and they typically featured footage from live performances. There was a group of people who saw music videos as an art form, and they began to make concept videos. That led to an idea for a business – to put those music videos on TV.

         “It was pioneering, just like those old-timers from CBS,” said Tierney of his career decision. “But I had to listen to my mother yell at me for being irresponsible.”

         Showing creative concept videos to music fans was a great idea, but Tierney and his colleagues still needed two big breaks.

         “Lo and behold, here comes cable TV,” he said before explaining to the class how that industry was born in a valley in Pennsylvania. An appliance dealer couldn’t sell his television sets in the valley because signal reception was so poor. Tierney said the dealer ran cable from mountaintop antennas to the homes in the valley, not with the intent of creating more channels, but simply so that his TVs would sell.

         The other break came from getting MTV on the airwaves in New York City. Tierney said that in 1981, he and his colleagues predicted $7 million in advertising revenue, but brought in only $4 million. The next year, they again predicted $7 million, but sold only $3 million. They almost had the plug pulled on their fledgling network, but after those rough two years, distribution began in New York City, home of Madison Avenue.

         “That’s where the advertising community lives,” he said. “In 1983, we predicted $7 million again, and we sold $14 million. The next year, we predicted $21 million and sold $42 million. And on and on and on it went from there.”

         While research is definitely a key, Tierney might choose a different one-word answer if asked about his personal success – “passion.” It was missing from his Monmouth job, but he grabbed it with both hands at MTV.

         “There were 26 of us when we started, and all 26 of us were entrepreneurs and risk-takers,” he said. “We all had passion and vision. We kept creating new businesses (such as Nickelodeon), and that kept us all creative and engaged. The passion stayed because we kept reinventing ourselves.”

         In fact, said Tierney, MTV was reinvented so many times that it stopped being “music television.”

         “The network is now reality and scripted TV, so a little while ago, they officially changed the name to MTV. It doesn’t stand for ‘Music Television’ anymore.”

         Tierney was part of MTV and Viacom until 2007, when he took an executive position with New York’s Madison Square Garden. He retired from there at the end of 2010.

         Tierney closed his talk by discussing his days as a college student. He told the audience, “You can’t be anonymous at Monmouth,” then gave two examples of why that’s a good thing.

         “When I looked at a place like the University of Illinois with a lecture hall of 300 kids, I said, ‘That’s not me.’” Tierney also told the students about a communication professor, Tom Fernandez, going above and beyond the call of duty on his behalf.

         “That’s what Monmouth was about,” he said.

         In addition to the entrepreneur class members in attendance, there were also some special guests of the college – a handful of prospective students who were on campus for the weekend. They were impressed by what a graduate of Monmouth had accomplished and by the messages he conveyed.

         “It was a neat experience, and it was very interesting,” said Corey Landers of Kaneland High School.

         “It was pretty cool to be able to see a guy who had that much impact on our culture,” added Evan Stone of Lyons Township High School. “I really understood everything he said.”

Dwight Tierney, Co-Founder of MTV will speaking Friday at 3pm in McMichael Academic room 308 on the start-up and initial growth of MTV. The discussion is open to the public.

Becky Ellison – considered by many to be the best caterer in Monmouth area visited class and spoke last Thursday. She is our choice if you want the best food served and are willing to pay for it. She is the caterer of choice at the Monmouth Country Club for weddings and parties caterer – not necessarily fancy food and/or fancy decorations – just great food that tastes good. Becky was born and raised in Monmouth. She earned a WIU degree in home economics and minor in marketing.

She is married and had three  kids. Becky started a day care center in her home to care for her three kids and 15 others. One of them included Alex Morgan who participates in our Entrepreneurism class.

She always loved cooking – it’s her passion – a passion that became a business

A friend’s caterer dropped out 30 days before the wedding – the friend begs – “help me out Becky; do this for me”  – “I don’t know how”  — “you can do this; I need you, please” – she and friends cater the wedding and end up staying up all night before the wedding working to it get ready – had immediate success.

Word spreads – “please do my wedding” – one wedding after another. Seasonal business.

Soon she was hiring someone to care for the kids in her day care so she could prepare food.

How did she decide to start the business? Her decision to start a catering business was subtle– she bought $200 worth of dishes at an auction in Macomb as her first official step.  Her business is conducted out of her home – never sought any bank financing to grow.

She had struggles too. One big piece of her story – Warren County WAS one of the only counties in Illinois without a health department – so legally she could cook at home and sell serve the food.

“I did not choose my business, it choose me”

She has catered events from Springfield to Peoria to the Quad Cities – catered events as small as dinner parties for 15 people such as “the class of 1936” to weddings as large as 800.

Marketing-wise she relies on word of mouth advertising only – Becky takes the first paid contract on a specific date – if a later bigger offer comes in she honors her commitment and says “sorry I am booked” – its a costly decision to honor every contract but that her reputation is too important to tarnish.

It now  employs four people in the part time business – all family members — she is in business with her mother – her mother keeps track of purchasing and cash flow.    Becky meets each client personally, talks thru the event, type of event, number of guests, type of guests (males, females, farmers, business types, high school kids, etc – I have to know who I am serving in order to know what type of food to make, what would be appropriate, and how much to make).

Everything Becky makes is created from scratch, even when making it from scratch costs more – “if you want cheap food, don’t hire me.”

There are no set schedule of prices like most other caterers – Becky prefers to sit down with her clients. “They tell me what they want, and I will buy all the ingredients and cook it and serve it – you pay for the ingredients and then pay me that much and little more for my labor – I like to balance the bill at about 60% labor and 40% food but sometimes it is closer to 50%/50%. When the event is over, I offer all the extra food to client – I have no room or use for leftovers – How can I ever use so many  leftovers, anyway?”

“I decided to not work for anyone that will not sit down with me and talk about what they want and what I can do – that process (step) prevents misunderstanding and unhappy customers – customer service is king for me – Tell me what you want, I will tell you what it costs. Then I will deliver what I promised and it will be excellent.”

One of the headaches of the business is its erratic hours and seasonality. This irregular stream of customers – sometimes 60  straight daysof events and then two weeks of nothing can drive other managers crazy when trying to line up help. It is hard for her to commit to full-time help since she never knows what the next week will bring.

She cooks about 300 days a year – sometimes three or four different events in one day – she already has booked two weddings for 2013  – wow!

Becky has felt the effects of the Recession. She has noticed that although she still get parties they payers or sponsors are skimping on the meals compared to pre-2007. However, she has many steady customers – weekly and monthly such as the Monmouth Rotary, banks, seed corn companies, corporate board meetings, and employee dinners. The changing business conditions has forced her to make some changes to her business model.

Two years ago she served 38,000 meals for Monsanto research farm south of town — That equated to $120,000 of sales.  For 2010 Monsanto was down to $17,000 in sales. Becky said “The Monsanto corporate belt-tightening really hurt my business. ”

Two years ago the Warren County health department was established – so she can no longer cook at home and serve food – she organized a commercial kitchen and now she operates it separately from her home business.  She entered into a leasing/sharing arrangement with Monmouth Country Club – Mike Connell and John Twomey – it is a new business model for both Becky and MCC – customers sign a contract with Becky for food & customers and sign a rental agreement with MCC at the same time – this new joint venture is an evolving business model for both sides – she catered and MCC rented to Monmouth College for the recent Presidential portfolio meeting for 25 faculty members and administration.

She serves food at MCC and at other venues with similar arrangements.  Becky has no business plan — She learned by doing – followed her passion – but her future is uncertain “I will do the best I can for my customers, and if that leads me down a good path, I will follow it”.

John Wooden said “It is very easy to get comfortable in a position of leadership. Your players (or employees) believe you have all of the answers if you enjoyed some success. People start telling you are the smartest one around. But if you begin to believe them, you become the idiot. You stop learning and listening to those creating innovative new strategies and techniques. That is one of the main reasons it is so hard to stay on top”. If there is one key to success it is experience, and most entrepreneurs do not possess much experience unless they paid their dues working for someone else or failed in the same business previously.
Once you’re #1, it is easy to believe your press and adoring fans. But you must work even harder at the point you achieved success because each subsequent success will take an even greater effort. Avoid the temptation of believing past achievements signal future success. As a leader you must never be satisfied or content that you know everything about your business, customers or employees. No two customers or employees are the same. Each individual under your management is unique. No one customer is representative of everyone you will serve.
Wooden said “There is no one formula for getting your team to play well together”. It is science and art at the same time—and that is difficult to pull off, let alone be perennially successful. John Wooden won 10 NCAA championships and 88 straight games as UCLA’s head coach. He might know something about staying competitive and managing for success.

I am proud of my current Midwest Entrepreneurs class because they represent great promise for the future. As part of a learning organization these students depend on faculty guides to discover meaningful knowledge. It is analogous to learning a language from skilled native speaker versus listening to CD–the coaching makes the difference. As an instructor I am their coach and mentor in learning what it takes to be an entrepreneur.

But what makes something meaningful to learn? Here are a few short answers I have heard from current students: Does the knowledge or skill add purpose or direction to their lives? Is it something that will help them be successful? I consistently challenge myself to find new methods of helping students gain knowledge of entrepreneurial methods, then we apply that knowledge so it will stick. These activities involve follow-up discussions, activities, assignments or tasks related to that area. Examine some of the student comments on this blog as an example of student work in Midwest Entrepreneurs.

Gaining knowledge is a gift but applying it takes time and practice. All of us make mistakes and get tired. Most of us fear failure even though it is by failure that we learn the most meaningful lessons. Be careful what you dream for, you may get it. These students have heard this repeated over and over by our guest speakers.

Can the lessons learned from the guest entrepreneurs really help students successfully apply the skills they honed while here at Monmouth? For most of these students the answer is a resounding “yes”. These students don’t even have to graduate in May and start a new company to appreciate this gift.
Below is one reason Monmouth is different. It is why I think the knowledge they are gaining will stick in their minds long after graduation day:

Humans have two types of memory: spatial and rote. From my experience, the difference between today’s graduates and the average 22 year-old is the graduate can apply their knowledge to solve problems–even when the relevant facts are embedded into a complex problem or challenge. It is analogous to the ability to solve a quantitative word problem instead of a straight computation.

That is why our business graduates are often more valuable to employers than other candidates. It is also the reason we graduate so many future entrepreneurs such as Kevin Goodwin (Sonosite CEO) and Walter Huff (HBO President).

The main purpose of a Monmouth business education is for students to gain knowledge and construct meaning from facts or figures, not just memorize the “right” answers (or regurgitates someone else’s meaning). The focus is on why, rather than how something is done a certain way. Why? Because the methods and practices will change, but the ability to analyze and solve problems is something we practice continually….no  we drill it into our graduates.
How is that different from any other learning system?
“Normal” students are taught at a young age that education is a means to an end. How many times have you heard “If you have to cut corners or cram for an exam, it is fine”? It is rationalized because the end of graduating with a degree or achieving an “A” grade justifies those short-cuts to success.
The end for “normal” students is a high paying job or valuable skill, not the acquisition of knowledge. A degree is a degree, right? I believe Monmouth is different. But it is ironic that these parents and instructors teach their children to skip steps, cut corners, or even be unethical. This kind of behavior is justified/rationalized in their minds–even though these kids will need real skills and capabilities to respond to life’s challenges.

It is a counterfeit business education and it’s spreading like wildfire around our country. I believe real skills and capabilities come from the knowledge students’ gain through practice. Cutting corners is accepted based on the high cost of failure. It costs a lot to attend any college or university. No one starts out thinking they will quit school. The dropout rate at Monmouth is relatively low, but most institutions only graduate 40% of those that start. Why? The education they are receiving becomes meaningless or marginalized while escalating in cost.

Many students start college by dreaming big but are tripped up by natural barriers to gaining useful knowledge and experience. Many are academically dismissed for poor performance because they lacked to role models in their darkest hours. The “going got tough and they quit” principle applies here.

Why is it so difficult to make one’s education meaningful? One answer is the student doesn’t appreciate the gift of knowledge they are receiving. Remember the story of young man who wanted the wisdom and knowledge of Socrates.

Students become discouraged easily. It is not unusual for them to be discouraged when they fail an exam or do poorly on an assignment. How do they know they are really learning something of future value? It is not as easy as it sounds. Instructors like myself have a difficult time creating exams that truly sift the wheat (quality learning) from the chaff (route memorization).  Creating  open ended/essay oriented tests  or grading presentations are time-consuming and more difficult to grade. It is easy to create an exam with a series of true/false questions or multiple choice from a test bank and run it through a “scan-tron” machine that will automatically grade the results.

We have recently invested hundreds of thousands of dollars in instructional technology so that Monmouth instructors can use the best tools and techniques. But without a thirst for knowledge, the greatest technology cannot make up for a student or instructors’ sloppiness or laziness. As a teacher, I talk about not cutting corners, and being a life-time learner. Recently I was told by President Ditzler that those speeches, sound like “blah, blah, blah, integrated learning, and blah, blah, blah, life-time learning” to parents and some of our students. It isn’t real to them. In other words this idea that “knowledge is gift” fell on deaf ears. But on graduation day, parents are often grateful we held up a higher standard and expected their children to combine the learning and theories from one discipline to another and demonstrate an ability to understand and solve complex problems.
That is why I am so grateful for our visiting alumni and guest entrepreneurs.

Hearing their stories, their commitment to learning and the opportunity to gain knowledge about their industry, customers, and market forces has been inspiring.
It is helping us mold a great group of  2011 graduates.

Scientists believe in testing theories and assumptions. This testing applies metaphorically to all aspects of life. We are constantly learning from our mistakes. Good habits reinforce successful patterns of living. At Monmouth, our faculty is constantly improving their pedagogy. We teach by engaging students based on the instructor’s knowledge, along with outside resources like a texts or videos. Bringing in speakers is one of the highest forms of knowledge creation since the entrepreneurs demonstrate their knowledge and passion. Each presentation starts with an overview of the business, major problems, and the market opportunity. It is another thing that sets Monmouth apart.

When instructors want students to remember important concepts beyond the final exam, experiential learning is the best. But we can’t always find the ideal internship, simulation, or hands-on activity to hone the student’s skills. In Midwest Entrepreneurs, the guest speakers fill that void. They can illustrate what sacrifices are worthwhile and what price must be paid to succeed. So I see this method of learning equally worthwhile to experiential learning. With this crop of graduates, bringing in outside speakers is a catalyst for intellectual growth. The guest speakers make the difference. They bring in fresh material every week. According to the feedback I have received, the freshness is what is so exciting. These conversations with the entrepreneurs really get through to students because it is what’s happening now in the marketplace.

Importantly, Monmouth students connect theory to current practice, and these visiting entrepreneurs can change perspectives and instill desire. These women and men truly “connect” with our students in meaningful ways.
How is our discussions and experiences in Midwest Entrepreneurs different than witnessing a good lecture or requiring students to regurgitate facts from their notes?

In my past experience, some of my most brilliant colleagues assumed that because they were making an effort to “teach” from their latest cutting edge research, students must be learning something a great value. But the lesson wasn’t relevant to the student or not delivered at a level that the student could digest. It didn’t get through even if it was brilliant stuff to the so-called “experts” in the field of study.
Teachers at other institutions will claim that because their students were reading their text or memorized portions of the most widely acclaimed text in the field, they must have learned something of great value. Both assumptions appear to be false more often than not. Students quickly forget the facts they memorized, or lacked the background to understand the great oration from class.

But when these entrepreneurs engage students and answer their questions, something magical happens. The students see the value of the knowledge and understand it for what it is–a gift. They gain the desire to withstand any necessary struggle to solve problems and meet new challenges. It is why I love what I do.

While working on this blog I came across following quote in the 1973 movie The Paper Chase based on the author’s experiences as a student at Harvard Law:

“Here we use the Socratic method: I call on you; I ask you a question; you answer it.

Why don’t I just give you a (brilliant) lecture? Why don’t I give you the answers to complex problems?

Through my questions you can learn to teach yourselves.

By this method of questioning-answering, questioning-answering, we seek to develop in you the ability to analyze that vast complex of facts that constitutes the relationships of members within society.” Professor Kingsfield in the Paper Chase

Today at 4pm, one of the founders of Innkeeper’s Coffee was on campus to speak to the Midwest Entrepreneurs class. The discussion was open to anyone, so if you missed it….well you missed a classic story of how one of the best secrets in Galesburg became a $1 million business selling specialty coffee, desserts, and lunch. Mike Bond spent 20 years working in management for Bergners (http://www.bergners.com) and had a dream. Don’t be afraid to “dream big” Bond told the 20 students in attendence. “But be careful what you wish for”. His partner Johan worked in New York City and even opened the Belmont Kitchen in Washington, D.C. before starting Innkeepers Coffee in 1997. We thought we might open a nice B & B in Galesburg since we saw a classic victorian during our 20th year renuion, but that business model was not viable. “We listened carefully to our coffee customers, and we did a lot of what they suggested. They wanted food, so we added pastries, breakfast items, then a full lunch menu. They asked for desserts and we did that along with chocolate. It wasn’t what our business plan said we were going to do but it made sense to follow the business. Some of our best customers do business with us 21 times a week.”

It is amazing to see how Innkeepers Coffee succeeded in a small market where Starbucks failed by taking a greater share of wallet from each customer, thus avioding the need to sell thousands of cups of coffee monthly. The volume you would need to sell the 500-1000 avid coffee drinkers in Galesburg that have the means to buy daily coffee didn’t work for Starbucks but by going deeper and getting that greater share of wallet, InnKeepers has been very successful. There current challenges: Innkeepers best customers are 50+ and they want to appeal more to the 20-30′s crowd. Another big challenge–Finding great people who are articulate and willing to work hard.

The simple answer is yes. Of course, your talents, abilities, or weaknesses will be evident to those with whom you work. The potential success of any venture depends on how well the entrepreneur can leverage her assets. The more advantages the better. 

Many people claim you either have that “x-factor” that makes you a great entrepreneur or you don’t. Many of those same people believe that entrepreneurs are born to start companies and the rest of us are meant to find jobs with large and small companies following the lead of someone else. Please see the post on intrapreneurs for more information on this topic. Below are some facts I gathered from cognitive science research:

• Teachers of entrepreneurism must immerse their learners in complex, interactive experiences that are both rich and real. One way entrepreneurs refine their skills is internships or assignments to create and execute events. Another good example is starting or leading clubs or organizations. A good metaphor for learning the skills of an entrepreneur is the idea of immersing yourself in a foreign culture to learn a second language. Entrepreneurs immerse themselves in their projects and try and persude others to join them in that effort.
• As instructors of entrepreneurism, we want to help would be entrepreneurs to use all of the skills at their disposal. Learning basic economics, management, marketing, and finance is part of the critical fundamentals. But emotional intelligence is critical too. Often entrepreneurs must make many decisions simultaneously–thus taking advantage of their brain’s unique ability to parallel process.
• Students must have a personally meaningful challenge or value the skills of an entrepreneur to be able to apply them in practice. In an earlier post we discussed the skill of handling or dealing with abiquity. Such challenges stimulate the student’s mind to the desired state of alertness. Add financial risk to the mix and you can imagine that each student’s ability to handle stress differs dramatically.
• In order for a student to gain insight about a problem related to a start-up venture, there must be intensive analysis of the different ways to approach it, and about learning the business in general. This is what educators call the “active processing of experience.” It creates the ideal petrie dish for creating new entrepreneurs. Or did they just discover that passion? Are entrepreneurs born or nurtured?

By JUSTIN LAHART

Husband-and-wife business partners Matt and Rene Greff are on track to open the first out-of-state branch of their Michigan brewpub later this year—in Bangalore, India.

Brian Widdis for the Wall Street Journal Matt and Rene Greff, at right, plan to open a brewpub in Bangalore.

At Peter Frykman’s Palo Alto, Calif., irrigation-equipment company, seven of the 20 employees are located outside the U.S., in China and India, while Gangesh Ganesan’s communications-chip firm, in San Jose, has about a quarter of its staffers in Istanbul, and others in Tokyo and Taipei.

While big companies have been the trailblazers of globalization, a growing number of relatively small businesses are following in their footsteps. Like their larger counterparts, they are drawn by new markets that are often growing much faster than those at home.

Their forays abroad are made possible by technologies like file sharing and video conferencing, which allow managers to communicate easily across continents. Though these technologies aren’t new, their price has fallen sharply over the past decade, putting them within reach of more companies.

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DriptechPeter Frykman, in hat, demonstrate’s Driptech’s irrigation gear in India.

Still, crossing borders doesn’t come easily. Advances in technology haven’t done away with the need for small-business owners to spend face time with employees and clients in other countries. PharmaSecure Inc., for example, is based in Lebanon, N.H., but Chief Executive and co-founder Nathan Sigworth says he has been spending more time in India, his primary market, than at home.

Venturing abroad also requires small companies to put a lot of care into choosing the employees or local partners who will represent their interests overseas. The task often requires bridging cultural differences and navigating complex and unfamiliar bureaucracies.

The Greffs, in Ann Arbor, Mich., were skeptical when Gaurav Sikka, a former University of Michigan student, approached them last year about opening a brewpub in Bangalore. Mr. Sikka, a native of India, was a regular at the couple’s 200-seat Arbor Brewing Co. The couple had recently opened a small brewery in nearby Ypsilanti, and worried about stretching themselves too thin. “We said no, we don’t have any time or money,” recalls Mr. Greff. “He said: ‘Don’t rule it out of hand.’ ”

The Greffs traveled to India, where they came to believe Mr. Sikka’s idea was feasible. They found that southern India had a beer-drinking culture, as well as lots of U.S.-educated professionals, including plenty of University of Michigan grads. Moreover, it was an untapped market for traditionally crafted microbrews like the ones the Greffs serve in Michigan.

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Credit: DriptechFarmers watch the installation of a Driptech irrigation system. The system is designed as a low-cost means of delivering water to crops

Now, a group of local investors, led by Mr. Sikka, is supervising arrangements for the Bangalore opening. The Greffs will have a stake in the new brewpub, and will receive consulting and licensing fees.

According to the Census Bureau just 2% of U.S. companies with fewer than 100 employees sell their goods in overseas markets. Though there are no hard figures available, the number of small businesses that have invested directly in overseas operations, which typically requires a bigger financial commitment than exporting, remains relatively small. But it is growing, says Larry Harding, president of High Street Partners Inc., an Annapolis, Md., company that helps small firms set up foreign offices. A year ago, he says, his company was working with about 200 companies; now it’s working with more than 300.

“There’s an explosion of 50- to 100-person companies that are going overseas,” he says. “We’re not even scratching the surface.”

Mr. Frykman, the irrigation-gear executive, was part of a group of Stanford University graduate students who in 2008 came up with a method for making drip irrigation systems inexpensively. After testing them in Ethiopia, “we saw that this could help farmers across the world,” he says. He put his plan to get an engineering Ph.D. on hold and formed Driptech Inc.

A pilot project in India went well and caught the eye of Chinese officials. In 2009, the company made its first sales, in India and China, and began to seek angel investors. Last spring it raised $900,000 in funding.

Seven of Driptech’s employees are now working in its offices in Beijing and outside of Mumbai, and Mr. Frykman expects that within a few months half of its workers will be overseas.

Having offices in three countries is a challenge, he says, but thanks to the revolution in communications technology he is able to hand off work in the evening to his co-workers in Asia, and pick it back up in the morning. “If you get the rhythm right, you can really be working around the clock as an organization,” he says.

PharmaSecure got its start in 2007 when Mr. Sigworth and his friend Taylor Thomson came up with a low-cost way to combat counterfeit drugs, a big problem in the developing world. PharmaSecure’s system, which combines mobile-software apps and databases, allows customers to send text messages containing the codes printed on drug packages and get a reply indicating whether the code is legitimate.

After a year of traveling, the partners decided that India, the source of much of the developing world’s drug supply, was the best place to begin. Now, most of the company’s 15 employees work out of New Delhi.

Mr. Sigworth says the ability to communicate cheaply has been crucial. “We use [Internet telephone service] Skype a lot; we use email a ton,” he says, but he adds that just as important has been the company’s ease and comfort working across cultures.

Born in Germany, Mr. Sigworth grew up in Connecticut, and spent summer breaks from high school working in Botswana. Many of the company’s Indian employees went to U.S. universities or have worked for major U.S. multinationals.

Ubicom Inc., which produces chips for products such as wireless routers, made its first international foray three years ago when it tapped a Turkish employee to start an office in Istanbul. Now about 20 of its 85 employees work there. Ubicom also has offices in Taipei and, as of this month, Tokyo, as well as a group of engineers in the U.K.

To videoconference, chat and work together on projects, Ubicom’s offices use technology that would have been too costly for the company a decade ago, says Mr. Ganesan, the CEO. He adds that he doesn’t think a company like his can do without an overseas presence.”Even though we’re a small company, our customer base is truly global,” he says.