Grace Hsia is passionate about saving infant lives. So passionate she decided to become an entrepreneur and enroll in the University of Michigan’s inaugural Master of Entrepreneurship class.
When Hsia was a materials-science engineering student at the university, she discovered some sobering data from the World Health Organization: Nearly 4 million low-birth weight infants die annually. She learned that many of these deaths are caused by hypothermia because hospitals in developing countries cannot afford incubators and heat lamps, which can cost $500-$20,000.
To solve the problem, she and her partners, Rachel Rademather and Alex Chen, developed an infant warming blanket.
“My senior design project is what sparked entrepreneurship in me,” said Hsia, 23. “My adviser believed passionately about taking engineering and helping people with it, not just sitting behind a cubicle. And an infant warming blanket can be the difference between life and death.”
Hsia, Rademather and Chen started their company,Warmilu LLC (warm+I love you), and then entered business-plan competitions and boot camps to get the funding to build a prototype. By the time Hsia graduated, she was looking at taking the Warmilu product to trial in Bangalore, India. It was through that process that she realized she didn’t have the business acumen to make Warmilu a success.
“I wanted to be more useful to the company,” Hsia said. “I wanted to take my passion to save infant lives and counterbalance that with the business, financial, legal things you need to know to start a business. Entrepreneurship still isn’t the most accepted life path, so I knew this would help me. I knew the MsE would get me into the air sooner rather than later.”
Hsia was one of 17 students in the first Master of Entrepreneurship degree program at UM. They graduated in late May and are now completing their summer work component, either launching their own business or working with other startups or venture capital firms.
At the same time, the degree, which is offered jointly between the Stephen M. Ross School of Businessand the College of Engineering, is accepting students into its second class. Tuition for the one-year program is $40,000 for in-state students and $56,000 for out-of-state students. So far, 20 students have committed, and there are another two dozen in process.
“There has been a 20 percent increase in completed applications,” said Anne Perigo, the associate program director. “It’s not a hard sell; this is either the right degree, or not, especially once explained.”
The degree was started with a $1 million gift from Don Graham, a UM alumnus and founder of York, Pa.-based The Graham Group. The program exclusively admits STEM students — science, technology, engineering and mathematics — and unites them with a number of entrepreneurial resources from across the campus, including the Center for Entrepreneurship in the engineering school and the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies in the business school.
“It is an amazing trifecta that brings together resources from across campus,” said Aileen Huang-Saad, co-director of the program. “We have all of these people who really think about technology and entrepreneurship under one roof.”
“It’s not just a business degree,” Perigo added. “It’s different because an MBA, a very valuable degree, is intended to give you the skill set to manage a large, ongoing concern, but it doesn’t give you the skill set to start one and scale one.”
Beyond the how-tos of starting a business, the curriculum teaches students to identify opportunities, commercialize technology, understand value chains, build relationships with manufacturers and suppliers, protect their intellectual property and prepare for legal issues.
“An MBA doesn’t tell you how to start up a business or go through all the pain of starting a manufacturing process,” Hsia said. “The MsE is for someone who is starting their own business. It allows you to build relationships with key channels. … It teaches you how to go from an idea to a working product to something that is consumer ready.”
Michigan isn’t the only university, of course, to have a master’s in entrepreneurship. Nor is it the first. In fact, the first course in entrepreneurship was offered in 1947 at the Harvard School of Business, according to the Washington, D.C.-based Council of Graduate Schools.
“The general concept of entrepreneurship is starting to permeate higher education at many levels, both at the graduate and undergraduate levels,” said Brian Mitchell, associate provost for graduate studies and research at Tulane University and a member of the Council of Graduate Schools. “It’s probably a decade old, but even more so in the past five years.”
UM is the only institution in the state that offers a degree in entrepreneurship, but Wayne State Universityand Michigan State University offer certificates in entrepreneurship as well as significant on-campus resources, including courses, business-plan competitions, mentoring and more. The University of Detroit Mercy offers undergraduate students a minor in entrepreneurship, as does Oakland University, in addition to a concentration for MBA students.
For UM, it was crucial to offer an actual degree in entrepreneurship as a way to help students move beyond their technical degrees and commercialize their technologies.
“We recognized that as the global economy is changing, it is critical that we offer out students the opportunity to diversify themselves,” said Huang-Saad. “They can’t just say, ‘I’m a really high-quality engineer.’ That’s not sufficient. They have to understand how what they’re developing impacts the rest of society, business and the end user.”
That proved true for Steven Sherman. While studying chemical engineering at Michigan, he was looking at algae biodiesel. As an engineer, he was purely interested in the technology. But he realized that it wasn’t ready for market because customers weren’t willing to pay for it.
“I was still really an engineer and looking at the technology,” Sherman, 24, said. “But as an entrepreneur, I realized it’s about creating value, not so much about the technology.”
This summer Sherman is working at Ann Arbor-based Huron River Ventures evaluating deals and doing due diligence. Additionally, he’s working on his own startup, YouKnowWatt LLC, which will work with home energy auditors to offer electricity monitoring and analysis. He expects to work with an auditor by the end of the summer and have a pilot program in a UM dorm.
Meanwhile, Hsia completed trials of Warmilu’s warming blanket during the year and is now going through FDA approvals. She found a manufacturer in Indiana and will start a trial with hospital, EMT and EMS customers. Once their feedback comes in, the partners will set a price and begin selling by the fall. They are shooting for 20,000 units sold by the end of 2014.
“Ann Arbor and Michigan have a fantastic ecosystem for student entrepreneurs,” Hsia said. “We have innovators coming from the university, and people from Eastern Michigan University and Wayne State University, plus all of the world-class students. But you also have the manufacturers embedded here in the Midwest that you don’t have on the East or West coasts. Finally, you have the investors. There are so many ways of finding financing here in Michigan.”
Amy Haimerl, Crain’s Detroit Business.
