When’s the best time for students to start a business? Now.nearly 5,000 start-ups created by UK university students last year.
Other recent data suggests as many as 17% of students in the United States run their own business while at college, a figure which is 11% and 10% in Australia and the UK respectively.
There are many examples of products we use every day such as Facebook, Google and Snapchat that were developed by students at university. So, it seems there has never been a better time to start a business as a student. But how easy is it to start a business at university in reality?
There are several conflicting elements for students wanting to start their own business. On the one hand, they lack real-world industry experience and the detailed unwritten rules of how the industry works, and most have very little capital and the credibility to approach investors. Added to this, data suggests that US student debt is influencing students’ desire to start a business in the US.
On the other hand, students have nothing to lose. Most have no dependants and are not yet used to a comfortable income. They can take a risk and even if the venture fails it is still looked on favourably by future employers who value the entrepreneurial skills gained.
University is still a time when you can experiment with what you enjoy, with some students using entrepreneurship to pay their way through university rather than getting a traditional student job, such as bar work or retail.
Student businesses are quite varied, from making arts and crafts to IT solutions. The biggest factor emerging, however, is probably the joined-up support that is available for students, both inside and outside university, along with positive role models who have shown the way.
Institutional support and funding
Entrepreneurship education can be thought of as three different aspects: raising awareness of entrepreneurship as an option, skills building and practical support.
This pipeline of support is now much more joined up, from idea to reality. There is organised support within the university from accelerators and incubators as well as access to mentors and academic experts, help with filing intellectual property claims, in addition to the vast resources of market databases and journals the university has access to.
Many external actors to the university are also very student friendly – Station F in Paris is the world’s biggest business incubator, housing more than 1,000 start-ups and is aimed at young entrepreneurs; and the T-Hub in Hyderabad, India, which involves government, universities and private companies; as well as the Y Combinator accelerator in the US, which has spawned businesses such as Airbnb, Dropbox, Reddit and Coinbase – and all welcome graduate entrepreneurs.
There are numerous funding opportunities – including venture competitions, seed funds and grants to help students get started. Competitions include the Rice University business plan competition, where FluxWorks won the top prize of US$350,000 in 2023; and the Venture Further Competition at the University of Manchester in the United Kingdom, now running for 20 years, which has categories for social, technology, environment, healthcare and services start-ups and a £100,000 (US$124,600) prize fund.
The Global Student Entrepreneur Awards, which have a US$100,000 prize fund for students who run and own their own business, was won in 2022 by Nick Cotter of Cotter Agritech who was studying at University College Cork in Ireland.
The benefits of a university setting
Diversity is important for entrepreneurship, with several studies suggesting a diverse range of founders is more likely to lead to success – and universities are extremely diverse places, with students from around the world and with experts from a range of subjects.
There are more on-curricular units now that mix students from different subjects to solve problems, often aimed at entrepreneurship or sustainability. Overall, university culture has changed greatly to reflect an interest in entrepreneurship by students.
Students are in a great position to spot opportunities – all the classical ways an entrepreneur can identify opportunities and solutions are open to students. They can bring ideas that are successful elsewhere in the world to their home countries and apply them to new markets; they can use their subject specialism to solve problems; they can experience problems for themselves and develop solutions.
Even COVID was an opportunity for some, with the development of Hopin, a digital conference platform and the highest growing start-up during COVID at one point, founded by University of Manchester graduate Johnny Boufarhat.
Mindful of the importance of hands-on experience and the time required, some universities such as Bennett University in India allow students to take a semester-long internship to run their venture.
For training future entrepreneurs, Millikin University in the US has an on-curricular course where arts students, who are often self-employed on graduation, actually run an existing business for a year, such as a theatre or art gallery, and are assessed by non-traditional methods, including reflective journals and mystery customers.
Networking is vital for entrepreneurship and there are opportunities to meet others from outside your immediate subject area at entrepreneurship societies, which are often among the biggest societies at university.
Hackathons – normally centred on a specific problem (often now increasingly directed at social issues) – are especially important for bringing different skills together and the growth of ‘Makerspaces’ allow for experimentation outside of the curriculum.
Often, extracurricular activities work well as you can focus on the practical rather than the academic side and don’t need to create a potentially constraining assessment. However, entrepreneurship education can have some unintended effects. Sometimes it can actually put students off starting a business as confident students prior to the course begin to realise how hard it could be and realise it is not for them.
Nevertheless, students are increasingly keen to leverage entrepreneurship for both earning money through their studies and as a potential career on graduation. Moreover, employers value entrepreneurial skills highly. They help to keep the firm innovating and offset the well-documented phenomenon of companies losing their entrepreneurial spirit as they grow when the company becomes siloed into separate departments with rulebooks and standard operating procedures to be followed.
Universities should therefore ensure there is the infrastructure available, both physical and intellectual, to facilitate entrepreneurship and help normalise it as a career path for their students and graduates.
Dr Robert A Phillips is senior lecturer in entrepreneurship at Alliance Manchester Business School, University of Manchester, United Kingdom, and runs both on- and off-curricular entrepreneurship activities at the University of Manchester. He has a PhD in biochemistry from the University of Southampton and an MSc in biotechnology from University College London. E-mail firstname.lastname@example.org. Twitter @DrRobPhillips.