Beloit College Magazine

Beloit College Magazine

Winter 2017 (January 30, 2017 at 8:00 am)

Rethinking the Entrepreneur


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January 10, 2017 at 2:51 pm
By Paul Engleman’76

You’ve heard it all before: Entrepreneurs are risk takers, mavericks, probably overconfident, maybe even greedy. But Beloiters on the ground prove otherwise, offering a different perspective on entrepreneurs and their roles in society.

If there is one common misconception that the director of Beloit’s Center for Entrepreneurship would like to correct, it’s the belief that the entrepreneur and the businessperson are one and the same.

“Entrepreneurship has been very narrowly construed by the popular press to be only about business, and especially businesses that are these so-called gazelles that attract venture capital and have super high growth,” says Brian Morello’85, the center’s director. “There’s a lot more to it than that. To me, entrepreneurship is the pleasure and fascination with what you can accomplish and achieve. Entrepreneurialism is both a mindset and a metaphor for the general aim of the liberal arts, in the sense that it promotes excellence in achievement and social service.”

[W17] Jaxon Klein, Delna Sepoy Straus, Caye Polanco
A trio of Beloiters are behind a biometric payment company called Keyo, Inc.
Photo by: Peter Wynn Thompson

That’s pretty much the way it’s been thought about and taught at Beloit since Economics Professor Jerry Gustafson took the plunge, or at least dipped his toe in the water, and began teaching a course about the role of entrepreneurship in society in 1984. Noted Babson College entrepreneurship scholar Jeff Timmons commented on the course in his popular textbook New Venture Analysis, calling it out as possibly the first course offering on the subject at a liberal arts college.

“There still is no precise definition of an entrepreneur,” says Gustafson, now professor emeritus and the Center for Entrepreneurship’s founding director. “The people who have been studying it for years still don’t know exactly what an entrepreneur is, and they disagree with each other anyway.”

“There is no exact definition,” concurs Morello, who graduated from Beloit the year after Gustafson dared to prop open the door between the liberal arts and entrepreneurship. Morello went on to direct and expand his family’s beer distribution business before returning to teach at the college in 2011. “We know an entrepreneur is someone who gathers resources and applies them, typically with some sort of organizational nature to solve a problem. It’s kind of a derivation of the French definition of the entrepreneur—during a war effort, it was associated with moving and logistics. The entrepreneur would be the one who gathered all the resources and kept things together as they were making different camps.”

One way to think about entrepreneurs is to consider what motivates them as they approach building an enterprise, which we do on the following pages by talking to five young alumni entrepreneurs.

“For me, the young entrepreneurs we’re featuring—they’re the heroes in my mind,” says Morello. “They’re dealing with all the ambiguity and putting their identities on the line to make things happen.”

Joey Hernandez

[W17] Joey Hernandez
Founder and Artistic Director of Resilience Dance Company, Joey Hernandez describes himself in one word: RESILIENT.
Photo by: Peter Wynn Thompson

Joey Hernandez’11 would rather be making a living hurling a baseball than twirling on a dance floor. But when he realized that dream wouldn’t come true, he decided on plan D. “If I had to choose between a dance stage and a pitcher’s mound, put me on the rubber any day of the week,” he says. “I love pressure situations. I love having people look to me to be the leader.”

A first-team all-conference pitcher for Beloit’s Turner High School in 2006, Hernandez played on the baseball team during his first year at Beloit. “Sports and athletics were always my passion, and dance was something I was just naturally good at,” he says. “But I had to make a decision. I was at the Division III level, and I knew wasn’t going on to professional baseball.”

Hernandez was also driven by challenging circumstances. In addition to coming from a low-income household and needing to earn money while in school, he suffers from rheumatoid arthritis and Crohn’s disease. “We all have issues,” he says. “Mine just happen to be medical.”

At Beloit, Hernandez took entrepreneurship classes from Jerry Gustafson, who sold him on “the impact of doing and the need to keep pursuing opportunities, to keep networking.” But he was already doing turns as an entrepreneur, partnering with a friend in a DJ business and teaching at the Turning Pointe Dance Company in Roscoe, Ill.

One opportunity worth pursuing presented itself shortly after graduation, when the mother of one of his students at Turning Pointe introduced him to the owner of the Gymnastic Academy of Rockford (Ill.). Hernandez agreed to direct the dance program there, and he soon turned it into an independent enterprise, the Resilience Dance Company. He also enrolled for an extra semester and took another entrepreneurship class, this time with current director Brian Morello’85, who, he says, “connected a lot of the dots. In that class, I wrote my original business plan for my studio.”

As an undergraduate, Hernandez did a double major in dance and health and society. In his current choreography, he is working on a triple play: running the dance company, teaching, and serving as a judge for national dance competitions. Now based in Chicago, he has put 140,000 miles on his 2013 Nissan Sentra in three years. His weekly schedule is enough to make even the clumsiest of non-dancers do pirouettes. On Monday he teaches at a dance academy in Madison; on Tuesday and Thursday, he lectures on hip-hop at the University of Wisconsin-Milwaukee and teaches a dance theory and composition course at Carthage College in Kenosha, Wis.; on Wednesday, he works at the dance studio that he founded in Rockford. From Friday to Sunday some weeks, he travels to different cities to serve as a judge in dance competitions or to guest-teach at a variety of studios and dance conventions across the United States.

At Resilience, he says, “I’m mainly the artistic director. My mother does all the front desk management.” He also has three employees who teach. The company serves between 50 and 75 students and offers a pre-professional mentorship program.

In 2013, he also started running “Dance-4-Change” events that are currently held as in-studio workshops that benefit causes, such as Crohn’s Colitis Foundation of America. With the professional contacts he’s made in the dance industry, he hopes to step this kind of charitable giving up a notch, eventually turning the workshops into a dance convention that benefits causes visiting instructors care about. “I like taking my disease and making it a positive,” he says.

Although his résumé includes a list of past performances that stretches from Chicago to Las Vegas, Hernandez says, “With my health issues, I didn’t think I would be able to dance professionally. That’s why I’ve gravitated toward mentorship and teaching. I do feel like I’m in a bit of a race against the clock. I realize that I may not always be able to demonstrate a pirouette or kick, and I may have to do this from a wheelchair someday.

“Resilience is what every entrepreneur needs,” he says. “As an entrepreneur, you can’t be afraid of failure. If you go into a venture thinking you’re not going to get to where you want to be, you won’t be successful. Life is improv. Every day something happens that we don’t plan on. The only thing we can control is how we react to things.”

Jerrica Zaric

[W17] Jerrica Zaric’12
Founder of Jerrica Zaric Interior Design, Jerrica Zaric describes herself in one word: ENTHUSIASTIC.
Photo by: Ryan Hainey Photography

Jerrica Zaric’12 can pinpoint the moment when the seed for her career as an interior designer was planted in the fertile soil of her imagination. “I was about 6 years old, and I was at my grandparents’ house on Easter,” she recalls. “I was coloring, and my grandfather said I had to stop because there was no working allowed on Easter. And I thought, ‘Oh my gosh, is coloring work?’”

From an early age to when she entered college, Zaric remained seriously enthusiastic about pursuing an art career. Of her double major at Beloit, she says, only half facetiously, “Studio art was my serious major, econ was my fun elective.” 

Shortly after graduation, Zaric landed a job as a project manager at an advertising agency in Milwaukee, where she worked on digital-based projects such as website and app development, doing budgets, and setting timelines. She worked there full-time for about two years and continued working part-time from home as an independent contractor for another six months while transitioning to her own business.

“I was lucky to get a job in the city that I wanted,” she says. “Through working in project management, which is kind of the opposite of being an artist, I realized quickly that what I wanted to do was interior design. I always had a passion for interiors, architecture, and furniture design. I was doing interior design on the side for family and friends, and I decided to try to make a full-time career out of it.”

For the last two years, Zaric has been a one-person band, operating her company, Jerrica Zaric Interior Design, a full-service, independent design firm, out of her home in Milwaukee. Soon, she plans to be in a position to rent an office and hire an assistant designer.

Noteworthy on her early roster of clients is her alma mater. She has completed two projects at Beloit College: the lounge at the Emerson Hall apartments and the new visitor center on the main floor of Middle College (shown at right). Her other clients are both residential and commercial, mainly in Wisconsin and Illinois, but she’s started offering a room design service across the country through remote consultations.

While a student at Beloit, Zaric worked at CELEB as the assistant director of Gallery ABBA, a student-run art gallery. Although her work experience at CELEB is not directly related to her current endeavor, she notes one similarity: “Getting people to sign on to what you’re selling. Sometimes it would take a lot of convincing to get a student artist to put together a show.”

In the early days of establishing her business, she says it was a challenge to identify customers who sought her services, which include layout, design, material and product selection, purchasing, competitive bidding, and management of everything from smaller budget face-lifts to full-scale renovations.

“In my first year, it was kind of a struggle to get clients,” she says, expressing some disappointment with a 50/50 success rate, bidding on 22 jobs and getting hired on 11. “But this year I’ve tripled my business,” as a result of referrals and the use of a lead generation service.

One area in which Zaric feels a need to improve her game is being able to accurately estimate the number of hours a project will take. It may be the one aspect of her business in which her optimism is not an asset. “I’m the type of person who thinks I can do it faster,” she says. “At first I was drastically underbidding. I still feel like I’m underbidding. I’m still spending more hours on a job than I’m billing for.”

She was somewhat surprised to discover that launching her own firm is “80 percent business and 20 percent creativity.” As her company grows, and she has employees to delegate tasks to, she looks forward to being able to focus more on design and less on project management.

Although Zaric has no expectation of tripling her billings every year, she is confident that the business is designed to succeed and thrilled to be on her own.

Jaxon Klein, Delna Sepoy Straus, Caye Polanco

[W17] Jaxon Klein, Delna Sepoy Straus, Caye Polanco
Founders of Keyo, Inc. Jaxon Klein’09, Delna Sepoy Straus’09, and Caye Polanco’11 in their workspace at Chicago’s mHUB, an innovation center for technology startups.

If Jaxon Klein’09 weren’t in the habit of forgetting his wallet, Keyo, Inc., the biometric payment company that he founded in 2015 with two other Beloit graduates, might not have unlocked its doors for business. But chances are good that Klein and his wife, Caye Polanco’11, and their friend Delna Sepoy Straus’09, would have found their way to launch some other sort of entrepreneurial venture.

The Keyo payment system, which the trio took into beta testing last October, takes people a step beyond the convenience of swiping a terminal with a mobile phone to pay at a retail outlet. It enables a person to pay with a mere wave of the hand over a digital palm reader and allows retail merchants to significantly reduce the processing fees that they pay to banks and credit card companies.

While students at Beloit, Klein, Polanco, and Straus all operated small businesses. On weekends, Klein and Polanco sold crepes and bubble tea from a cart on College Street to students with late-night appetites. Using his dorm room as a warehouse, they set up a store with an e-commerce platform, selling supplies to students who could order everything from staplers to condoms to ramen noodles online and receive their deliveries through the campus mail. Straus had several of her own “hustles,” including reselling used text books and refrigerators.

Neither Klein nor Polanco took part in Beloit’s entrepreneurship offerings, but Straus was all in, through coursework and as part of the WISE Foundation, a student-led component of CELEB that focuses on learning the inner workings of non-profits. She saw it as a chance “to step outside the academic environment to ponder real world applications of Beloit’s liberal arts education. I didn’t have to take entrepreneurial classes to become an entrepreneur,” she says, “but taking classes from Jerry [Gustafson] and being part of CELEB made me a good one. Jerry was my light bulb.”

After Klein graduated, he remained in Beloit and together with Polanco launched a boutique web and app development agency. Immediately after Polanco’s graduation, they got married and set sail on Lake Michigan from Door County, Wis., in a 28-foot sailboat that Klein arranged to purchase for only $1,000.

The novice sailors had a daring, if naïve, plan to circumnavigate the globe. When they reached the Gulf of Mexico, they decided to pay an extended visit to Ecuador to be near Polanco’s family. From her father’s farm outside a tiny village high in the Andes Mountains, they operated their website development company with eight remote employees and numerous far-flung clients, before returning to the United States.

The need for an alternative to traditional payment methods—what Klein calls “the inception moment” —became suddenly obvious when he and Polanco stepped up to a grocery store checkout with a full shopping cart and their two-week old daughter, their first child. When he reached in his pocket for the wallet he had left at home, the inconvenience, for them and the store employees, “seemed ridiculous,” he says. “I was there at the store, that’s all that should really matter.” Like many great ideas, the solution to that dilemma—paying with palm recognition technology—dawned on Klein during a morning shower. Although his degree is not in software engineering, Klein knows the potential of digital technology, in large part from his experience building websites. He felt certain that the necessary digital tools were available and the technological infrastructure was in place. He discussed the idea with Polanco, who said, “This is just crazy enough that we should try it.”

They conferred with Straus, who had gotten married and moved to Chicago, where she was working at the Boys and Girls Clubs of Chicago after spending two years in Washington, D.C., at the Calvert Foundation. She agreed to come on board, along with her husband, Aaron, but with a baby on the way, they decided it made more sense for him to keep his regular job.

Tapping into their own savings for initial funding, the trio met with retail merchants to validate the concept and hired software engineers to develop a prototype. “It wasn’t something we could put into a store,” says Klein, “but it was good enough that we could coherently tell a story about what we were going to do.” It also helped them raise early funding from friends and family to keep the operation sailing and ready the palm scanner for prime time.

To use Keyo, consumers register at the Keyo website by setting up a password-protected account linked to a credit card. After signing up, they can visit a participating retailer, where they follow instructions for paying by waving their hand over a digital terminal at checkout. As of last summer, two Chicago retail outlets were participating in testing the Keyo system—Cup & Spoon, a coffee shop in East Humboldt Park, and BIG & little’s restaurant in Wicker Park. 

Although they all share and wear the same hats at different times, the basic division of labor has Klein focused on raising capital and product development, Polanco managing the user experience, design and marketing, and Straus handling user and merchant acquisition, legal and finance. Klein says that the opportunity to reduce processing fees to 1 percent—the charge that they think is feasible—makes adoption of the Keyo system “a no-brainer” for retail merchants. The bigger challenge, he says, is “changing consumer behavior. We’re not solving a major consumer problem. We’re democratizing in-store payments and making the checkout experience faster, easier, and more reliable for anyone.”

For the summer pilot at Cup & Spoon, they offered customers two weeks of free coffee for signing up and trying the system. About three-quarters of the sign-ups continued to use it after the promotional period ended, and nearly all frequent users continued to do so. Those results bolstered the group’s optimism about moving ahead with a second round of fundraising. “Until then, we were pitching on a vision,” says Polanco.

“After this push, we’ll grow bigger,” says Straus. “That means we’ll be able to wear fewer hats.”

The testing also adds to their confidence that they can expand their biometric identity database of consumers and enlarge their pool of participating merchants. In addition to retailers, Klein sees the possibility for acceptance “across the hospitality and entertainment industries,” especially at locations where convenience is at a premium, places like cruise ships, amusement parks, and music festivals. “Everyone has their hand ready. It doesn’t require a battery or a monthly contract,” he says.

Although Keyo is only just getting off the ground as a payment system, the group already envisions future expansion when the system could be used to unlock doors with the wave of a hand. Klein sees hotels as prime clientele. “The problem of losing keys should no longer exist,” he says.

That prompts laughs from his partners and opens the door to another story. It seems that Klein’s wallet isn’t the only thing he forgets. 

Paul Engleman’76 is a Chicago-based writer. In addition to publishing many essays and articles, he is the author of eight mystery novels. He’s generously giving a portion of his writer’s honorarium back to Beloit for the Steven Moncada Street’77 scholarship fund. 


Truths About Entrepreneurs

After listening to the hundreds of guests who taught in his classes over 25 years (many of them alumni), and the many entrepreneurs he’s met, Professor Emeritus Jerry Gustafson has some observations to share. Lest anyone think he is using bad science, Gustafson says, “It is true that those people are partly self-selected by me—so it is not a reliable statistical sample.”

  1. “Entrepreneurs like to talk about their achievements per se. They are proud of what they’ve been able to do, but they do not talk about making money,” Gustafson says, noting that there are occasional exceptions. “And bragging about money—you just don’t see that.”
  2. Although they are interested in talking about themselves and sharing their experiences, entrepreneurs tend to be much more humble than anybody is expecting.
  3. Overwhelmingly what they like to talk about is values. That’s surprising, given the public image of an entrepreneur as someone who isn’t all that interested in ethics.
  4. They are much more contemplative or philosophical than you would think, given that they are a group of people who sometimes pride themselves on not being philosophical.
  5. Research shows that entrepreneurs have the same attitude toward risk as the general public: They are “moderate risk-takers.” That is not to say that at times they do not engage great risk. “But like most of us,” Gustafson says, “they do not enjoy or ignore it but try to avoid it.”

"Determination, follow-through, persistence, being willing to deal with details, the belief that you can find out what you need to know when you need to know it—those are qualities that come up time and time again with successful entrepreneurs." —Brian Morello’85


How Beloit Teaches Entrepreneurship

The Center for Entrepreneurship in Liberal Education at Beloit (CELEB) was established in 2002 through the efforts of Jerry Gustafson, the center’s founding director and professor emeritus of economics. With financial support from the Coleman Foundation and Beloit alumnus David Myers’49, the college purchased two adjacent storefronts on Grand Avenue in downtown Beloit. In all likelihood, CELEB is one of the reasons Beloit recently made the U.S. News & World Report ranking of “Most Innovative Schools” and Forbes’ list of the “Top 50 Most Entrepreneurial Colleges” in the country.

Current CELEB director Brian Morello says that about 10 percent of Beloit students at any given time—“100 to 150 kids” —utilize CELEB in one form or fashion. There’s a small cohort of 15 or 20 kids who are very highly engaged, spending 10-plus hours a week there. Some do it as work-study, some as a co-curricular activity, some for academic credit.

The center consists of the Coleman New Ventures Lab—an incubator for student businesses—a cable access television station, an audio recording studio, and Gallery ABBA, a commercial, student-run storefront art gallery. The WISE foundation (What Is Social Excellence) is a unique component of CELEB, a workshop where students learn the operational nuts and bolts of charitable foundations.

“It’s unlike anything else in the country,” says Morello. “Instead of being an activity organization, it’s more of a think tank. We study the best practices of an organization and explore how you take resources that you have and use them for what you want to achieve.”

Explains Gustafson: “It occurred to me that foundations exist to support mostly entrepreneurial ideals. Foundations are a booming industry and offer employment that is eminently suited to people in liberal arts.”

Morello says that Beloit’s overall approach to entrepreneurship “focuses on action. It focuses on translating your classroom mastery of knowledge into things you can take action on. I think Beloit has embodied entrepreneurship long before we called it that.”

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