The University of Colorado at Colorado Springs has opened a laboratory where its student entrepreneurs can wade into the shark tank.
Instead of competing for an investment, six student teams have to show continued progress to stay in The Garage, a space that previously housed a prototyping lab in the school's engineering building that student companies can use to turn their business ideas into companies that generate revenue and profits. The six companies must give monthly progress "pitches" to persuade three faculty members to not replace them with a team with a better idea; two teams have already been replaced in the nine months The Garage has been operating.
"The key to a space like this is to co-locate companies from different industries. They have a spillover effect with the knowledge each management team has about their market, technology and customers that they could not get if they were operating somewhere else on their own," said Tom Duening, one of three UCCS faculty members from the El Pomar Institute for Innovation and Commercialization that operates The Garage. "We are a hybrid between a (startup) accelerator and a co-working space. We also bring in speakers, so it is educational in every sense, and we mentor the teams."
The Garage is open to all UCCS students, but teams must apply through the laboratory's website - garageatuccs.com - by providing details that include basic information such as name, location, date founded and number of employees, social media presence, management team members, target market, customers, product or service, competitors, current funding, past financials and projections, business plan and pitch presentation and video. Three student companies are on the waiting list to replace any of the six now in the program that fail to make adequate progress.
All participants must enroll in an independent study class with one of the three professors during which they work on developing their companies, and their grade is based on how much progress they make, Duening said. Students are not required to give the school a stake in the company, nor do they have to pay royalties on sales, he said.
The six companies are spread across a variety of industries and are in different stages of development. They include:
During their required presentations Tuesday to the faculty members - which include Duening, Terry Boult and Michael Larson - five of the six companies focused on milestones they had completed and those that remain to be completed. Bear Hands plans to make its presentation this month. Duening said SOCÜL is the closest to graduating from the program and becoming a self-sustaining company, but Peak Social Insights is already generating revenue, and Lot Spot is "close" to signing a contract with UCCS to offer the service in its two parking garages and many surface lots.
Much of the feedback Boult, Duening and Larson gave to the student entrepreneurs was aimed at helping them avoid a common difficulty many startups face - developing a solution in search of a problem - making potential customers and a large enough target market difficult to find. They also counseled several of the companies to get their products to market earlier, even if that meant introducing a product that wasn't quite perfect, and focus less on the mechanics of their technology and more on the business applications for that technology.
Two companies left the program, Aztlan Customs LLC, which was developing custom-made fishing poles, and Narativ Inc., which was developing a mobile application that would have allowed users to read, contribute to and rate sections of stories created by others. Aztlan founder Danny Morales said he put the company on hold after landing a job with another startup. Despite winning two business plan competitions, Narativ struggled to find customers and eventually shifted its storytelling efforts to the wedding industry before shutting down this year.