By ten minutes to seven, Fuqua’s Geneen Auditorium buzzes with preparation. Organizers shoo away early comers while the tech crew repeatedly tests the video feed and microphones, consulting over headsets. Each of the 450 seats has a program on it; many also sport a Thunderstick, a hollow tube for claquers to pound on or hoot through. The crowd will be big—and noisy. Welcome to the 13th Annual Duke Start-Up Challenge Grand Finale.
At stake on this warm April evening is a $50,000 prize and recognition as Duke’s top entrepreneur. After a months-long process of elimination, 118 teams have been winnowed to three, two led by undergraduate liberal-arts majors. To earn a shot at the grand prize, they beat out thirty-four teams from the business school, thirty from the engineering school, and sixteen led by faculty. They’ll have ten minutes to pitch.
One of them is James Sawabini, a lanky senior who paces restlessly, practicing his speech in his head. In an open-necked checked shirt and sport coat—“Just managing the brand,” he laughs—Sawabini has launched a start-up called Zamsolar, which would sell solar cell-phone chargers and solar-powered light fixtures in Zambia. The venture already has won a $1,000 “track prize” for being the contest’s best social-enterprise idea. Tonight he’ll try to sell it to a dozen skeptical judges: successful entrepreneurs, potential investors, hard-minded business people with a soft spot for Duke.
When I saw him earlier in the week—he had changed the location of our meeting three times in nine hours, finally settling on a coffee shop—Sawabini had admitted to being terrified of his presentation. “I pretty much cleared the decks this week to practice,” he said. “It’s like a lamb to the slaughter. I see the holes in our plan as well as they do. There are a million ways to say, ‘What you’re doing is crazy, and I’m not interested.’ But go to Zambia, go to Tanzania, go to Uganda. Most people have never seen these products before, and these products can change their lives. It’s not about making money. It’s about taking an inefficiency and fixing it.”
Winning the $50,000 prize would enable Sawabini to go to Zambia after graduation and get Zamsolar on its feet. His business partner, a senior at Yale University, will not be coming down for the grand finals. If he fails tonight, they plan “to chase private investors all over the place.”
Out in the hallway, Sawabini’s competitors have been working the well-wishers and the well-wired. Vijay Agarwal, who grew up in San Francisco and has been starting companies since he was sixteen (“Nothing we ended up taking to market was successful”), strides into the auditorium and introduces his business partner, an engineer just in from California. Wearing a snappy black tie and an ultra-conservative black suit, Agarwal, too, is managing the brand, right down to his hospital pager. A second-year resident in neurosurgery at Duke Hospital, he is touting a plastic clip designed to replace the titanium ones commonly used in brain surgery. Being plastic, the clip doesn’t interfere with MRIs or CAT scans, allowing doctors to spot postsurgical problems. “In the ICU, where I spend a significant portion of my time, I could show you how this device would help people,” he boasts.
Having grown up in the Bay area, Agarwal knew what he was looking for; he chose Duke precisely for its supportive climate for innovation. “The way the neurosurgery program here stepped up has been phenomenal. People meet me in between OR cases when they should be eating. They stay up at night going over stuff when they should be sleeping.”
"There are a million ways to say 'What you're doing is crazy and I'm not interested.'"
Agarwal’s company, CranioVation, also found favor early on, winning last fall’s elevator-pitch competition for health-care ventures. With just a few moments before showtime, he excuses himself to make a call.
Last to enter the room is Ting-Ting Zhou ’13, who has formed a company called Nanoly with two other women, one a Berkeley undergrad she’s known since childhood, the other a Stanford grad student. Nanoly wants to test and market a hydrogel that could revolutionize vaccine delivery, especially in the Third World, by eliminating the need for cold storage.
The Nanoly team has been busy, talking to PATH, an international nonprofit that leverages government and foundation money to address world health issues; applying for grants from the Bill & Melinda Gates Foundation; and approaching the U.S. Department of Defense for research funding. They look to the World Health Organization as a first customer and to a major big pharma player eventually to acquire them.
“This semester,” says Zhou, an officer in the Duke Association for Business Oriented Women, “has been about entering as many competitions as we can. The Dell Social Innovation Challenge, Cornell, Berkeley. Berkeley has a lot. Any pitch competition, we’ll just try to go.”
Entrepreneurism is not something Zhou picked up from her Duke education, at least not directly. “None of my classes have been entrepreneurial at all,” she says. “Writing a business plan—you can Google that. Everything’s on the Internet. Yes, there are professors who may have worked in venture capital in the past, but it’s not the same as the Internet.”
Where the Internet fails, another kind of network succeeds. Needing a pitch video for the competition, Zhou reached out to friends in the Program in the Arts of the Moving Image and in the Center for Documentary Studies to shoot and edit one. That professional-looking video has already helped snag $20,000 for Nanoly, which won the Start-Up Challenge’s undergraduate track and women-led track.
“One of the amazing things Duke has given me are the relationships, the people I’ve met. I never take meals alone, ever. My calendar is filled with lunch and dinner two weeks in advance. When people cancel, I immediately call someone else to say, ‘I have an opening.’ ”
Though Zhou’s West Coast partners are not coming tonight, Zhou will be cheered on by her parents, who have come down from New Jersey for the event. In the early going with Nanoly, they were encouraging, Zhou says, but cautioned her to keep her grades up. “I said, ‘But I want to change the world, Mom.’ ”
Students like James Sawabini, Vijay Agarwal, and Ting-Ting Zhou can leave you breathless, inspired, exhausted. Whatever happens in Geneen Auditorium tonight, all have vowed to continue pursuing their peculiar passion. Although the restless intensity of their ambition may set them apart from typical students, they are emblems of a deeper sea change at Duke (and perhaps in society at large) of which the Start-Up Challenge is only the most visible manifestation.
Let’s not overstate the case: Entrepreneurship still gets fewer hits on Google than the Bible or Qu’ran. But from President Obama on down, the word is on everybody’s lips. Entrepreneurship is sexy, maddening, and arguably critical to our country’s emergence from the economic doldrums. It’s capitalism working right for a change. Yet the concept is boring, fuzzy, and overused; its center is everywhere and its edge nowhere. It’s a stalking horse, a shibboleth, a panacea, a paradox. If you want to save the world, start a company. If you want to make money, create wealth. If you’re worried about getting an A, forget it.
"You're trying to re-create AT&T in Zambia."
For years a half dozen of Duke’s schools have sported degrees, programs, centers, clubs, and certificates focused on entrepreneurship; there have long been courses, clinics, practicums, mentoring, incubators, and lately even shared living space, with onomastic redundancies sufficient to make your eyes glaze. There’s a Center for Entrepreneurship and Research Commercialization; a Center for Entrepreneurship and Innovation; an Enterprising Leadership Initiative; a Markets and Management Certificate Program; a Program for Entrepreneurs; a Center for the Advancement of Social Entrepreneurship; and much more. Faculty members have their own demesnes, including the Duke-Coulter Translational Partnership Grant Program to get engineers and doctors inventing together, as well as the longstanding Office of Licensing and Ventures to help push brilliant ideas into the marketplace.
But while the antechambers and outbuildings of innovation and entrepreneurship were well furnished, the central room has remained vacant until very lately. Students, for example, complained about the difficulty of obtaining course credit for new ventures; alumni complained about the difficulty of finding like-minded classmates. To be an entrepreneur at Duke you had to make yourself an expert on way more than just your Big Idea. As Kimberly Jenkins ’76, M.Ed. ’77, Ph.D. ’80, puts it, “The culture was organic, not intentional.”
Jenkins, a former trustee who has worked alongside both Bill Gates and Steve Jobs, has been one of the key drivers for changing that culture. Serving from 2010 until this July as senior adviser to the president and provost for innovation and entrepreneurship, she crafted a strategic plan and helped raise money—including a $15 million gift from trustee David Rubenstein ’70—for new programs such as Mentors on Call and Duke in Silicon Valley. Duke’s vision in this area owes much to Jenkins’ own.
“I have a deep passion for entrepreneurship based on the joy it has brought me,” says Jenkins. “Our students are wellrounded, sociable, fun, incredibly smart, passionate, and relentless. Those are the same qualities it takes to be an entrepreneur. But entrepreneurship is harder than most people think.”
Tony Brown would concur. He’s a fixer, an instigator, a coach, a gadfly who founded the Enterprising Leadership Initiative within the Sanford School of Public Policy’s Hart Leadership Program and who can rattle off dozens of examples of successful social and commercial enterprises led by his alumni. But he points out “there’s a difference between entrepreneurship, entrepreneurship preparation, and entrepreneurship education. Most entrepreneurship happens five years out of college, ten years out of college, and to make the bet that we’re going to scale entrepreneurship rather than entrepreneurship preparation—you gotta be careful of that.” Asked if he plans to attend the Start-Up Challenge finale, he waves his hand dismissively.
Yet Brown, too, has noted the sea change, and noted it with pleasure. “My work is now mainstream,” he nods. “Duke is serious about this. The challenge is to be clear about our objectives.”
For a growing cast of faculty and staff members, students, alumni, and parents, the objective is to weave an entrepreneurial way of thinking into the very fabric of Duke’s culture. The best way to do so, they reckon, is by using entrepreneurial techniques: favor networks over hierarchies, prefer hard work to a brilliant idea, let everybody play.
"I want to be sure the plans and pitches that come out of Duke are at the top of the heap compared to those anywhere in the world."
The Start-Up Challenge is a perfect example. More than 300 volunteer judges winnowed the original 118 teams down to three, each of which includes members from other universities or the private sector. The finale is run by Fuqua and Pratt students, who seem lighthearted about the fact that none of their schools’ sixty-four teams made the cut. Behind each business plan there’s a lot of mentoring, sharing, trust—and yes, hard work.
But are entrepreneurs really different? Tonight’s show is a decent test case. The audience starts trickling in, students bringing beer and wine, and the atmosphere becomes jovial. The Blue Devil is working the crowd, and the room takes on an almost-rowdy disposition, more like a sporting event or a concert, a scaled-down version of American Idol. And as with Idol, there’s a paradox at play in the equally tantalizing possibilities that any one of the finalists may dazzle the crowd or be eaten alive by the judges’ critiques.
One of those judges is Reid Lewis ’84, cofounder and president of Group Logic, a company that integrates Apple products into Windows-based server systems. Although it can easily take a couple hours to review and comment on a start-up proposal, Lewis knows hundreds of hours go into writing one. “As an undergrad there’s an immense array of things that distract you from that work. We want to make sure people get the best possible feedback and that they can create not just a good ‘student plan’ but a good business plan,” he says. “I want to be sure the plans and pitches that come out of Duke are at the top of the heap compared to those anywhere in the world.”
Lewis sees the Start-Up Challenge as fitting under the rubric of the Duke Global Entrepreneurship Network—DukeGEN— which he helped create back in 2008 as a support network for entrepreneurs. Although DukeGEN has a speakers’ series, networking events from coast to coast, a website, a blog, and an extremely active LinkedIn discussion group, at bottom “it’s not a place—not even a virtual place—but a set of relationships and potential relationships,” Lewis says. “It’s organic, it’s reactive, ever-evolving, self-sustaining. It’s a community whose utility and intelligence are invisible, baked in.” And it’s only for Dukies. Anyone with a Duke connection can join, and many quickly discover that they “can have a huge impact on other people’s efforts, on their trajectory, with a little bit of time and knowledge that [they] already have.”
“DukeGEN is all about providing value,” agrees Howie Rhee M.B.A. ’04, looking over the crowd with a proprietary air as the auditorium fills. As managing director of the Center for Entrepreneurship and Innovation and himself a founder of two start-ups, Rhee is DukeGEN’s straw boss, apologist, and troubleshooter, the man behind the curtain. He makes sure that DukeGEN stays focused not on events but people— on helping people start their business, assemble the right team, get answers quickly. “Duke is a very risk-averse culture,” he notes. “I think of what I’m doing as actually creating a movement. I want to engage people such that students, alumni, faculty, and staff are part of the movement, such that this is a bigger lifelong change for them.” It’s this kind of attitude that has turned the thirteen-year old Start-Up Challenge into a phenomenon.
"Entrepreneurism is a skill, like shooting a basketball, and if you want to get better at it, you have to practice."
Rhee envisions a continuous Dukecentered entrepreneurial community from matriculation to death, with the Start-Up Challenge somewhere near the front end. “Starting a company can be pretty lonely and stressful. You feel like you’re on your own in the middle of nowhere. Through this movement we’re trying to make it feel like you’re part of something and that people will help you.”
Or help you back up again. Among entrepreneurs, failure isn’t something to be forgiven; it’s almost a badge of honor. “Entrepreneurism is a skill, like shooting a basketball,” says Rhee, “and if you want to get better at it, you have to practice. Part of getting better at it is just doing it again and again.”
Tony Brown puts it bluntly: “Unless somebody’s failed a couple times, I’m not going to fund them. Some kids come to Duke without having tasted failure. It gets in the way of their efficacy.”
What good fortune, then, that on the night of the Start-Up Challenge two of the three finalists will fail. Indeed, the road is littered with corpses: Two-thirds of the entrants didn’t survive past written summaries; the forty that moved on had to create a website and a video pitch. Judges whittled those down to nine semifinalists, all of whom are invited to the grand finale. Those who didn’t make the final three get to do one-minute elevator pitches, a kind of warm-up act for the main attraction to follow.
The audience rises to the occasion with hoots and whistles as we zoom through presentations on a new crowd-funding site, a “revolutionary tool that aims to bridge the disconnect between the physical and digital worlds,” a DNA-based marker for keeping frackers honest, and a scheme for providing home health care in China. One presenter brings in a prototype of athletic apparel, inviting the judges to stroke it; another finishes with a balletic leap to get offstage within his minute. A third forgets that the projectors are shining his presentation right across his face.
Keynote speaker Rich Lee, a Duke parent and serial entrepreneur who has donated half the $50,000 prize money, takes the stage to invoke Archilochus’ ancient notion that “the fox knows many things, but the hedgehog knows one big thing.” The lesson for entrepreneurs, Lee concludes, is that “somebody will pay hedgehogs for what they love to do.” The crowd roars with delight, and the three champions stir. Vijay Agarwal’s knee is oscillating at about 180 beats per minute as he looks darkly at his pager and reaches for his mobile phone. Hospital calling.
In past years, the winner has been chosen in advance behind closed doors, but this time the event has been tweaked so it all happens live. There’s no rehearsal, no safety net. The raked slope of the auditorium makes the stage seem like a gladiatorial arena; the judges, holed up at center left, are the lions.
Agarwal goes first. He skillfully navigates his material but then seems to dodge a question about his pricing model. Someone whispers—eliciting a groan—that the neurosurgical device is a no-brainer; but how do you monetize it? The on-deck undergraduate speakers clutch their hands, fold their arms, cross and uncross their ankles.
When Ting-Ting Zhou gets up, she rocks slightly from foot to foot as she talks, racing, forgetting to enunciate. In an interview before the event, she had revealed a possible Achilles heel: Turns out the intellectual property underlying Nanoly’s product is owned by the University of Colorado at Boulder. “They’ve agreed to license it to us,” Zhou assures. “Well, we’ve pretty much assumed they will agree to license it to us. The guys in the lab are willing.”
A few mumbled words get lost in the Q&A, but Zhou acquits herself with valor: Her team members have already engaged the FDA, Merck, patent lawyers, and venture capitalists. She’ll be taking the summer off to raise another round of funding.
James Sawabini speaks last, emboldened by having the most vocal contingent in the audience; indeed, he also won the pre-contest Facebook popularity contest, getting up early to text his friends around the country and amass more than 600 votes.
“Hey, guys,” he begins with a disarming smile, and like the others he has a lot to say. Showing up early pays off—he’s comfortable with the room and stage—but he stumbles over a transposed phrase, recovers, laughs with the crowd, and then gets cut off at the end, reaching his ten-minute mark just as he tumbles to a conclusion. The judges are sympathetic but skeptical. “You’re trying to re-create AT&T in Zambia,” one challenges immediately. Asked how his team would manage the large organization required, he describes running his high-school newspaper.
In another bit of American Idol showmanship, the three finalists gather back on stage to hear the judges’ pre-vote critiques. While there is considerable praise for the quality and depth of thinking in all three business plans, the panel gets quickly to the nitty-gritty. “Two of these three businesses— Zamsolar and Nanoly—sell to customers who don’t have any money to spend,” says one judge flatly. “Investors need to make money.” Another questions how Sawabini and his business partner could put together an African distribution network. “What if,” someone wonders gently, “you did a smaller market with more than one product?”
“Focus less on the idea and more on the execution,” advises another.
But Agarwal’s CranioVation, which looks like it might have the lead, also takes a hit for his being perhaps too eager to exit the market at almost any time. And, notes judge Karen LeVert, president and CEO of Southeast TechInventures, “all the projects are undercapitalized.”
Finally Tom McMurray B.S.E. ’76, M.S. ’78, Ph.D. ’80, president of Marine Ventures Foundation, poses a question to all three. “If you were approached by a major foundation that said, ‘We’ll give you $50 million if you agree to become a nonprofit and never take more than $200,000 a year out of the business,’ would you pursue the business plan under those terms?” Zhou instantly answers affirmatively, and after a pause, so does Agarwal. Sawabini is silent.
The presenters step down, and the audience starts tweeting in votes, which count for 20 percent of the final tally. The judges, who get the other 80 percent, form a football huddle onstage. Some kneel, others lean in to hear better as behind them the Blue Devil hurls Tshirts into a screaming audience.
After a few moments, the din recedes, and Rich Lee emerges on stage with an envelope, which he opens to a Thunderstick drumroll. “Ladies and gentlemen, tonight’s winner…” Lee beams, “Nanoly.”
Ting-Ting Zhou is mobbed, looking like a beauty queen as she poses with the inevitable gigantic check. I fight my way through the crush to ask her what she wishes she had done differently. “The Q&A,” she says immediately and earnestly. “I should have been better prepared.” Her parents hover in the background, letting her have her moment.
I ask Agarwal the same question. He shrugs. “We would have won if I’d had a better answer about pricing.”
Sawabini lingers as the boisterous mob thins out. I raise an eyebrow at him. “I guess I could have talked more about profitability and all that crap,” he says irritably, then pauses.
“You know this is only the first iteration of our plan.”
Baerman M.B.A. ’90 is a playwright and essayist. He lives in Chapel Hill.