Working their way through college

Student entrepreneurs learn by doing

BY ANNE QUINN

Everyone dreams of being an entrepreneur like Paul J. Orfalea, the founder of Kinko’s copies who gave $15 million to the Cal Poly College of Business last year and had it renamed for his parents.

Orfalea’s is a classic success story, and like all great success stories it gives one hope. It turns out that the 53-year-old entrepreneur, who’s privately held company has 25,000 employees in more than 1,100 stores in nine countries, didn’t do that well in school. He was dyslexic and not mechanically inclined.

What he did have was the smarts to hire people who were leaders and who had the technological experience to do what he couldn’t. He was also lucky enough to be born of parents who always encouraged him.

Now, with his gift to Cal Poly, and the hiring of William R. Pendergast as dean of the newly named Orfalea College of Business, entrepreneurship at Cal Poly is reaching new heights.

Pendergast has top credentials, but also experience that would be hard to match. He was formerly the dean of the business school at the Monterey Institute of International Studies, and was founding dean of the first business school in Czechoslovakia in 1991, when the country was making its transition between communism and a market economy.

"The entire economy was based on monolithic, state-run entities that needed to be reformed," he said. "At the same time, there were whole economic sectors that needed to be created, such as the service sector. Communism is not service oriented."

Fresh from revolutionizing an eastern bloc economy, Pendergast created a program he now calls "bootstrapping entreprenership at Cal Poly." The term "bootstrapping"–what you do when you turn on your computer, is meant to also show what college kids can do to turn on their entrepreneurial skills.

Pendergast’s program consists of several clubs and tools for students to learn about what it takes to launch, maintain, and grow their own successful companies.

There is the Cal Poly Entrepreneurs Club, an Entrepreneurs Forum, and an on-line journal–the International Journal of Technopreneurship. This May, the college also launched the Woman’s Entrepreneur Mentor program. A new program called the Mustang Venture Fund provides capital and allows students to co-invest with experienced venture funders in start-up businesses.

The College is also one of only two in the United States to be selected by Sun Microsystems for its Sun Campus Incubator. The incubator allows student teams to enter into a high-end e-business development environment for six months where they participate in a global network of eight leading business schools sponsored by Sun Microsystems.

Students in these programs have something in common, Pendergast notes.

"Entrepreneurs are driven," he said. "They tend to be hard-working, and have a hands-on, if not a micro-managing tendency. They have a real thirst for opportunity and recognition. They also have to have the flexibility to make adjustments and experiment."

Once making a name for yourself at college meant swallowing goldfish at fraternity parties. Now at Cal Poly’s Orfalea College of Business, it means a lot more than that. Here’s a look at some of the student entrepreneurs who are giving a whole new meaning to the idea of working your way through college:

www.GirlsSurfLife.com

Sunshine Makarow doesn’t schedule interviews, or classes, until mid-morning, after she’s been surfing.

While that might sound hedonistic to some, for Makarow, developer of the successful on-line girls surf magazine, www.GirlsSurfLife.com, it’s just part of staying on top of things.

Makarow once worked as a reporter for a magazine caleld Surfer Girl, owned by a little start up company in Half Moon Bay, Calif. The company also had a website called X-girls.

When the company experienced legal problems and the hard-copy magazine folded, its core staff had to go out and find "real jobs."

What was left over was the website, which they gave to Makarow, then a Cal Poly sophomore. "I sort of inherited it. They knew I shared their vision," she said.

An on-line magazine that treats women’s surfing as a sport is needed, Makarow believes.

"In a 120-page surfing publication, there might be one page showing women surfing," she said. "Many other magazines treat women’s surfing in a manner that is fluffy."

While surfing by Morro Rock every morning, and running a successful on-line zine about what you love seems like an enviable life for a student, few would welcome the problems that Makarow, then 21, also inherited.

The first trouble was the name of the website–"X-girls."

"We were thinking of "X" as in extreme sports, but X-girls on the Internet means only one thing–[X-rated]. We got a response we didn’t want," she said.

Makarow changed the name to www.GirlsSurfLife.com and now creates its content with the goal of eventually producing her own hard copy magazine for her senior project.

Success has also brought more complications for www.GirlsSurfLife.com.

Makarow hired a web master, who apparently wasn’t a master at all. "A lot of people say they are web masters when all they know is a program called ‘Front Page.’ To build a website properly, a person really needs to know HTML, the language of the Internet. For me the situation was similar to when you take your car to the shop and don’t really know what’s wrong with it. You assume the auto mechanic knows and will fix it."

Internally, Makarow said her website was a mess. "After I had spent a lot of money, I found a real web master who could correct what was wrong with the site," she said. "That’s the challenge of running your own business. You are hiring people to do jobs for you that you don’t know how to do yourself. It was an expensive lesson, but luckily I learned it now and not down the line when I am producing my own [hard copy] magazine."

Makarow expects to benefit from Cal Poly classes such as entrepreneurial finance, and global e-commerce, but also admits that staying interested in undergraduate required courses that don’t relate as directly to her business has been a challenge. "Except geography. When it comes to coastal geography anywhere in the world, surfers are experts," she said.

www.platinumperformance.com

Mark Herthel’s college career has now extended into its sixth year because the busy senior divides his time between college studies and a rapidly growing e-commerce (and soon to be catalogue) business. He is vice president of Platinum Performance, which has more than tripled its employees in the last two years and just moved into an 8,000 square-foot new production facility in Buellton.

Herthel has always been interested in marketing, he said, he just hasn’t always had a successful product. As kids he and his brother tried to sell apples in Solvang. Their mistake is that they tried to sell them in the fall, when everyone else’s orchards were bursting with fruit.

Luckily for him, his timing has gotten better.

Mark’s father, renowned veterinarian Doug Herthel, DVM, who founded the Alamo Pintado Equine Medical Center in Santa Ynez, developed a nutritional supplement horse feed that helped horses heal faster. The feed included Omega-3, essential fatty acids, trace minerals, antioxidants, protein, fiber, and vitamins.

But it was a human that actually launched Dr. Herthel’s idea into a more profitable direction. A chemotherapy patient actually ate the feed, and found her condition improved. Dr. Herthel then set about making an all-natural wellness food that would be palatable to humans. Mark and his younger brother were the guinea pigs.

Today, that health food is known as Platinum Performance, which the company manufactures in Buellton and sells and ships directly from its website (www.platinumperformance.net) so it doesn’t have to add preservatives that would give it a longer shelf life.

The younger Herthel, who is now developing a catalog for Platinum Performance, said that ideas for the company "kept popping into his head" as he sat in agriculture business class.

Platinum Performance is available in equine, canine, and feline product lines available through veterinarians. The human wellness formula is currently available on line, and will be available by catalog soon. It comes in a powdered form, and in bars.

The company’s break came when Olympic swimming coach Mike Bottom, now at Cal-Berkeley offered a Platinum Performance bar to former gold medalist Gary Hall Jr.

Hall, 24, had just been diagnosed with type 1 diabetes and was struggling to balance his body chemistry. He had also been told by doctors that he would never compete again.

The star athlete credits Platinum Performance with helping him balance his nutrition and improve his health. He plans to compete in the next Olympics.

Hall’s endorsement brought national attention to Platinum Performance, forcing Herthel to keep expanding its production and marketing while still writing his college business plan.

www.centralcoastlinks.com

Even though he only graduated from Cal Poly last May, entrepreneur Erinn Taylor was last week’s guest speaker at the San Luis Obispo Downtown Business Association’s monthly meeting. He pitched his latest business, Central Coast Links–an on-line local business directory complete with pictures, maps, even daily weather reports, which local businesses can participate in for $60 a year.

This is the third business for Taylor, who still keeps two other balls in the air.

He started as a web site designer as a sophomore at Cal Poly. But the business that really got him going was PolyInteractive, the company he founded with fellow students Chris Fargo, Shane Forster, and Ryan O’Leary. Polyinteractive develops specialized, integrated, e-commerce software.

Taylor said that he is glad he started PolyInteractive while still in school. Not only was he able to hook up with finance wizard Fargo, the team also recruited sophomore Shane Foster, a Microsoft expert and mechanical engineering student who’d already had years of experience working for an Internet software provider. Also on the team is computer science major Ryan O’Leary, an expert in Unix systems. (Chris Mohler, a Cal Poly grad and the firm’s first marketing manager, has since left for other ventures).

 "The entrepreneurship program at Cal Poly was a key factor in creating PolyInteractive," Taylor said. "Once we were working together as a team and were focused on one goal, we took upper-level management classes in finance and economics with PolyInteractive in mind. That’s how we developed our business plan." 

In May, 2000, PolyInteractive won second place in the Ray Scherr Poly Business Plan Competition.

The attention PolyInteractive has received really shows what "bootstrapping entrepreneurship" under Pendergast’s direction at Cal Poly really means.

As one of the three top competitors, the PolyInteractive team were featured in Silicon 2.0, a business magazine of the dot com industry. Winning also guaranteed them a spot at the Central Coast Venture Forum in Santa Barbara, where they presented their business plan to venture capitalists.

PolyInteractive has also developed a niche-software product for the food industry. It is able to integrate with existing product inventory and accounts receivables databases, allowing distributors to sell their products on line, instantly create customized order forms, update inventory and process accounts receivables.

It, of course, also has a link at centralcoastlinks.com. Æ

New Times reporter Anne Quinn likes to stick her nose into other people’s business.