New Orleans native Martin Roth is like most other entrepreneurs with a million-dollar idea and a small startup company that he dreams one day will go worldwide.
But there’s one big difference: Roth hasn’t finished college. The 21-year-old LSU senior is doing more than sitting around with hopes of getting a job after graduation. He wants to help create the jobs, and he’s getting an early start.
Roth is one of three people who comprise Feelgoodz, a 2-year-old flip-flop company that’s already gained notoriety for using a natural, biodegradable rubber sole.
His office? Until recently, it’s been his couch, or maybe a coffee shop. But now he’s part of a group of eight students selected to work in the Louisiana Business & Technology Center’s new student business incubator.
“I wanted to go someplace I felt more productive,” he says. “If you don’t have an office, then where do you go? I wanted to be in a place that fostered creativity.”
For years, LBTC has been successful at helping nurture emerging businesses, and former members of the incubator have gone on to create some 10,000 jobs in the state over the past two decades.
But so many graduates are coming to LBTC for guidance, it recognized the need to start earlier. And the shrinking job market was another catalyst for reaching out to students wanting to become their own boss.
“Knowing the job market was not good with the down economy, and seeing big companies were downsizing and not interviewing and hiring our grads,” LBTC Executive Director Charlie D’Agostino says, “we thought it would be great if, on graduation day, they could be ready to make money and be off and running with their own business.”
Jennifer Fowler, the director of the student business incubator, says the students came with sophisticated ideas, ranging from web-based services to scientific testing to oil spill cleanup.
Since Roth’s business has already been launched, he hopes the incubator will help Feelgoodz grow more effectively. But some of the other students are starting from scratch.
“We’re looking for businesses that can have more of a high-paying job for themselves and for other employees,” D’Agostino says, adding that he expects many of the students will be ready to launch their companies before they graduate.
The eight student groups work in a shared space in a building adjacent to LBTC on LSU’s South Campus. There, the students will receive guidance on starting a company, including developing a business plan and raising capital.
Students will receive the same services available to all LBTC members, except they will not pay rent for the shared space, which is intended to help the students cooperate with one another and utilize each other’s skill sets.
“If you’re a student trying to start a business, you don’t have a whole lot of people to bounce ideas off of because your friends are probably not trying to start their own companies,” Fowler says. “But we have an environment where they can learn from each other and maybe help each other. I’m excited about that collaboration, where you have an art student sitting next to an engineer.”
Red Six Media was part of the inspiration for the student incubator. The six-person advertising and graphic design company was formed during the week of their May 2009 graduation, and it has been going strong with LBTC’s help.
“We knew how to do advertising,” majority owner Kristen Morrison says. “It was everything on the business side that we didn’t know, like how to get an LLC, how much it costs and where do you go. We didn’t know anything about taxes or payroll.
“At our age, it’s really intimidating to do those kinds of things. Maybe there’s a reason that people our age don’t normally start a business.”
Another reason could be financing. It’s a tough economy in which to start a business, and lending is extremely tight for startups, let alone ones run by students.
D’Agostino says LBTC works with banks that seek small, high-risk startups with which to give microloans.
“They fund a lot of our clients, and the reason is because they have someone looking over their shoulder,” he says. “Typically, small businesses that don’t have guidance are certainly more high risk than one that came from an incubator.”
Red Six Media had to establish itself in the months after graduation, D’Agostino says. Morrison adds that it immediately benefited from LBTC’s experience as well as from other startup businesses in the incubator and that many of the businesses LBTC works with have become clients.
More than 80% of businesses that come from LBTC are still in business after five years, while the Small Business Administration estimates that 80% of startups fail during that same time.
“Maybe in the next five years or so, we can document 100 or 200 jobs created by students who stay in this community and who become employers instead of employees,” D’Agostino says. “We’re really going to attract good people, like the next Bill Gates or Michael Dell.”
