Build a better mousetrap, and the world will beat a path to your door.
That's an old saying, often used to encourage budding entrepreneurs. But how can you do it with only $20?
That's the question posed to students in Introduction to Entrepreneurship, a course taught by David Hayes, a faculty member in the Gigot Center for Entrepreneurial Studies.
The course centers around the "$20 Challenge," a program in which Hayes personally lends each student $20, with which they have to start a business. Students can pool their money in teams of two or three, but Hayes requires each project to generate a 700 percent return, meaning students have to turn $20 into $160 in just a few weeks.
Students can use their own personal resources, but may not contribute their own money to the business.
"They have $20, and they're otherwise broke," Hayes said. "If they use their own assets, they have to charge themselves rent."
Hayes said he enjoys putting his own money at risk, because it inspires confidence in his students.
"I like doing it myself," he said. "It allows me to say, 'I'm putting faith in you.'"
At the completion of the course, students pay back the $20 interest-free.
"I tell them I'm the least expensive banker they'll ever meet," Hayes laughed.
After writing business proposals, making cash flow projections and planning for contingencies, students are ready to jump into their own business. Hayes said the challenge allows students to combine small-business principles with hands-on experience.
"In addition to learning about the characteristics and behaviors of entrepreneurs, we get to do it," he said. "We see all the things that happen in the real world."
"We have partnerships that people regret ...and we have great surprises that the market just embraces."
In particular, Hayes singled out the highest-returning project to date, a calendar produced by former Irish basketball player Karen Swanson. In the fall of 2001, Swanson developed the calendar, which features photos of women basketball players. Copies sold like hotcakes, leading to an astonishing 55,000 percent return, and allowing Swanson to donate $4,000 to support the education of children orphaned by the Sept. 11 terrorist attacks.
Many students donate part of their profits to charities, though it is not a course requirement. Hayes said that students' projects have generated over $60,000 in profits, and over 10 percent has been contributed to nonprofit organizations.
The program has become wildly successful. Hayes said that of about 150 projects over the five-year history of the course, only two have failed to hit the 700 percent target, and none have lost money.
"The average is always much higher than 700 percent, probably closer to 900 percent," he said.
Successful business begun in the course have run the gamut of commerce, from Tyrone Willingham-themed "Ty Ties" to massages.
Seniors Megan Horner and Margaret Mason are currently in the course. Their business centers around a campus-wide video game tournament, which will pit students against each other in Madden 2004 for prizes.
The students have spent the last week promoting the tournament, which will be held after spring break. Would-be digital gridiron stars pay a $5 entry fee, and compete for a $100 Best Buy gift certificate. The winner's dorm will also receive a $75 prize. Sign-up sheets are posted in the lobby of each residence hall on campus.
"We're trying to make this a dorm pride thing," Mason said. "But off-campus students can do it too."
Mason said the games will be held in at least two locations on campus, probably in dorm lounges.
"We're trying to have a North Quad location and a South Quad location," she said. "Once we make the brackets, people will just go there and play."
Students unable to attend at the appointed time will be able to make up the game and report the results, similar to the procedure followed in the Bookstore Basketball tournament.
Horner said the event will likely appeal to men on campus, many of whom are avid video game players, but she welcomes female participants.
"Going into it, we knew our target market was going to be mostly limited to guys, but we'd love to have girls," she said. "But most girls play Mario Kart if they play video games at all."
