The Secret Ingredient
The young woman with a clipboard walked up and asked: “Would you be interested in a stationary bicycle if it also generated electricity?”
Since the setting was a trade show for green energy ideas—a trade show in Vermont, to be specific—everyone was talking about alternative forms of energy like wind, solar, biomass, and geothermal. But pedal power? No one was thinking about that; yet for Kara Montbleau, the Middlebury sophomore with the clipboard, pedal power was very much on her mind.
“Do you use any hand-powered tools or appliances?” she asked. “Have you ever considered a pedal-powered machine for anything other than exercise?” “If it produced enough power to charge your laptop or run your television, how much would you be willing to pay for one?”
Kara was doing research for a Vermont start-up company that is close to bringing a new product to market. And while she appeared to be just another volunteer with a survey, she’s actually an undergrad who was preparing for Professor Michael Claudon’s economics course called Competition and Strategy.
It’s the class known as the Middlebury Solutions Group, or MSG.
At the start of each spring semester, representatives from five or six “early-stage” Vermont businesses pitch their ideas to the students in Economics 356, and this year three start-ups were selected by the undergrads. Over the course of the next 12 weeks, with Claudon as their guide, the students met with their clients, performed market research, studied financial models and projections, prepared analyses, practiced public speaking, brainstormed, strategized, and wrote business plans—all in an effort to put emerging companies in a position to attract financing.
The course culminates in an Entrepreneur’s Forum—this Friday, May 7, at 3:30 p.m. in McCardell Bicentennial Hall, Room 216, and open to the public—where the MSG students will make their pitch for funding to an audience of potential investors, entrepreneurs, and Middlebury students, faculty, staff, and alumni.
In the eight years since Claudon launched the course, MSG students have served 62 clients and 50 of them, or just over 80 percent, were funded and are still operational today. Former clients include the Vermont Frost Heaves, the semi-pro basketball team now heading into its fifth season; the Skinny Pancake, a successful creperie on Burlington’s waterfront; and New England High Purity Inc., a high-tech firm providing solutions to the semiconductor, solar, and life science industries.
The gray metal warehouse sits close to the road surrounded by an empty parking lot. On one end of the building is a boatyard. On the other end there’s a small entryway strewn with bicycle parts, a radial arm saw, and enough steel shelving to start your own convenience store. There is no signage anywhere.
Welcome to the headquarters for the pedal power project.
Located less than 30 minutes from Burlington, the entrepreneurs have invited their three “venture coaches” from Middlebury College—Kara, Brian Sirkia, and Nathaniel Kelner—to their headquarters for a Friday afternoon lunch meeting.
It is about the fifth time the solutions group has met with Andy, the lead engineer, and Steve, the lead entrepreneur. Andy is a cycling nut and builder of cool stuff, while Steve is a programmer and web developer. The partners have started new companies before, so they are familiar with the challenge of securing financing for a new venture.
After gobbling down turkey and avocado sandwiches, it’s time to get down to business. With Steve at the computer, the quintet goes slide-by-slide through the presentation they will make at the Entrepreneur’s Forum, deciding what to keep, what to scrap, what to revise, and who’s going to speak to each point.
The students are valued consultants to the entrepreneurs here. They have surveyed hundreds of potential buyers and researched the market for a human-powered machine that will 1) operate mechanical devices like a blender or a grinder, 2) produce electricity and store the power in a battery, and 3) provide the user with a cardiopulmonary workout.
According to Kara, Brian, and Nat, there are three segments to the market for the pedal-powered product: homesteaders, people living off the grid, and a new demographic group called LOHAS, or people exhibiting lifestyles of health and sustainability.
The solutions group also identified the magazines, blogs, and web sites where the start-up can expect to gain publicity. They have secured quotes for paid advertising in the media typically used by the three segments. They have identified the “pain point” for green energy customers and the “key value drivers” for the product. In short, they have a lot to contribute to the conversation.
Back on campus, the Middlebury Solutions Group meets for 75 minutes, three times a week. (There are 11 students and a total of three teams this semester; the other two teams are working with a snowboard company and a software firm.) Public speaking is 20 percent of the students’ grades in this class, and Professor Claudon has them on their feet talking from Week 1, when they prepare and deliver an “actionable response” to Starbuck’s new decaf strategy, through Week 13, when they will pitch their clients’ products to real investors with real checkbooks at the Forum.
One in-class exercise during Week 9 was to prepare and deliver a 90-second “elevator pitch” on behalf of their clients. Another called for each student to deliver a presentation on their own “Big Hairy Audacious Goal,” a term coined by James Collins and Jerry Porras to represent a vision that is both strategic and emotionally compelling. A third was to give a persuasive presentation on a business topic using as few PowerPoint slides as possible.
Most everyone on campus recognizes that the solutions group goes a step further than most courses at Middlebury in terms of preparing students for a life in business.
“MSG’s secret sauce is how it leverages and extends the liberal arts beyond the classroom and into to the often-ambiguous real world of live problem solving and entrepreneurial endeavors,” said Claudon.
“Our solutions group alumni have gained critical experience and confidence, and have refined skills that will help them build great careers after college.”
Now in his 40th year at Middlebury, Claudon has found a powerful way to bridge the gap between the College and the business community. His students have helped launch enterprises capable of raising capital, operating profitably, and creating jobs in Vermont.
Dispatch update: At the Entrepreneur’s Forum on May 7, the snowboard firm Powder Jet received the most positive votes from an audience of about 25 potential investors. Pedal Power Engineering finished second. – RK