The University of St. Thomas (UST) is the largest private university in Minnesota with ~10,000 students. The business school, the Opus College of Business, is #2 in the state for undergraduate business education. The Schulze School of Entrepreneurship, named for Best Buy founder Richard Schulze, is #1 in the state and nationally ranked. Digital transformation and education trends are driving big changes at the university in how entrepreneurs are educated and how startups are supported.
This year the university announced the end of its full-time MBA program, and a focus on part-time and online MBAs, citing the changing demand for graduate business education. The decline is part of a local and national trend trend, as Minneapolis-St. Paul MBA program applications are down 20% in the past five years, and as top ten business schools even see double digit declines.
We’re not here to argue for or against an MBA, but to call attention to the fact that the perception of the degree is shifting, and UST is shifting with demand.
At Great North Labs, we don’t prioritize pedigrees. Whatever your background, what is important is whether or not you can execute. Whether you’re working from theory or practice, it comes down to the product and your delivery of it.
Elon Musk weighed in on MBAs with the Wall Street Journal recently, saying, “I think there might be too many MBAs running companies. There’s the MBA-ization of America, which I think is, maybe not that great.”
So that begs the question: outside of the MBA program, how is UST supporting innovation? What is UST doing to get students “onto the factory floor” and spending time with customers?
How University of St. Thomas Raises Up Startup Entrepreneurship
For answers, we turned to Great North Labs own Mike Schulte, JD/MBA ’17. Mike has experience with the Opus College, the School of Law, and the Schulze School, as well as the university’s other programs and initiatives. He is not only keyed in to the school’s programs, but speaks as an investor and startup ecosystem supporter through Great North Labs, and can speak to how his educational experience has helped his career in venture capital.
The Aristotle Fund provides real investing experience to students. The fund is a 100% student-managed investment fund, and is the ultimate in experiential learning. Gerald Rauenhorst, the founder of a construction company that became The Opus Group, (and UST Trustee from 1966 to 2012), provided the initial $5M for the fund. The gift was kept anonymous for the first 17 years, until 2016. Rauenhorst stipulated that there be no faculty oversight in the investment decisions. Consequently, though it is run as a class, every student manager is invested in the Fund’s performance to the point where it is a full-time job.
Official mentors include accomplished portfolio managers at top local investment firms. One attends the class every week to give feedback on pitches, and they pull no punches. Mike has acted as an unofficial mentor for the class, and continues to make connections through his former classmates.
“This was the best educational experience I ever had, and I could easily find 20 other people to tell you the exact same thing. When we get together we still talk about spending hours in front of the Bloomberg terminal scouring analyst reports and how it has shaped our careers,” said Mike. “I would not be able to do what I do at Great North Labs if it weren’t for the Aristotle Fund. That is why I recommend these students for positions.”
Servant Leadership creates ethical behavior in entrepreneurs. Servant Leadership is prioritized as part of the UST mission, with both the law school and the business school focusing a lot on self development. They bring in examples from industry to exhibit how this looks in practice, which include Pat Ryan of Ryan Companies US Inc., Dennis Monroe of Monroe Moxness Berg PA, and Alan Page, former Minnesota Supreme Court justice and NFL Hall-of-Famer. They challenge their students to adopt these same principles.
UST talks a lot about Servant Leadership as a foundation of their mission, and it is visible in everything they do. Laura Dunham, Associate Dean of the Schulze School of Entrepreneurship, was recently featured in the Stanford Innovation Lab podcast episode “Teaching Ethical Entrepreneurship”. The podcast focuses on elevating applied ethics in the field of entrepreneurship.
“I have students reaching out to me all the time to ask for career advice, and I never say no. I helped one student with an internship at a law firm I worked for. I’ve written letters of recommendation on behalf of students. This is what servant leadership looks like,” said Mike. “I really believe that faculty choose UST for the culture and that is why they punch above their weight class in that regard.”
At Great North Labs, we also believe in the principles of servant leadership. We support and give back to the communities we belong to, including organizations making a difference in the startup ecosystem. In addition to cash and time, we donate equity through our Founders Pledge so that when Great North Labs has a win, we all benefit.
The Schulze School of Entrepreneurship pays students to work at early-stage startups. St. Thomas is arguably the most aggressive university in Minnesota at placing their students in early-stage growth companies. This sets them up to learn the skills required to execute and operate a successful startup business. These internships provide the “factory floor” experience that isn’t found in the classroom.
The Summer Internship Grant program provides funding for some students while they intern at an early-stage startup. Companies interested in entrepreneurship students can inquire through the “Hire a Tommiepreneur” page on the St. Thomas website.
gBeta St. Thomas program. gBETA is a program of gener8tor, a nationally-ranked startup accelerator with programs across the US and Canada. The seven-week accelerator is for early-stage companies, and is free, requiring no fees nor equity. Great North Labs is a proud partner of gener8tor, and a supporter of gBETA Greater MN-St. Cloud.
gBETA St. Thomas is exclusively available to students and alumni of the University of St. Thomas. Companies of any stage, industry, or business model can apply to participate. The next cohort is July 13th -Sept. 3rd.
Mentor Externships give you a dose of the day-to-day reality, before you’re committed to it. The mentor-externship program at the School of Law requires at least 1 hour of “experiences” per week, where students are in the field, with mentors (usually UST alum), learning what lawyers do on a daily basis. This is completely self-directed, and students pick the fields they want to learn about.
“For me, it was actually helpful in teaching me what I didn’t want to do which, in hindsight, was incredibly valuable. When I entered law school, I liked the idea of spending my days as a litigator in the courtroom… when I dug a little deeper, I determined that it wasn’t for me,” said Mike. “In addition to the externship, there was one semester where you worked 2-3 days a week in an internship. I worked at St. Paul City Hall. I had always liked local politics, but in practice… that was not the case. Every student’s experience was unique in this program, but I have no doubt that it was far more valuable than sitting in a traditional classroom setting.”
Real consulting experience with real clients. The Applied Business Research course takes a team of 4 and assigns a client with a marketing need. The consulting team spends 6 weeks putting together a project, just like a marketing agency would do.
“My project was for Code42. Code42 was considering a new product launch and wanted to know how to market it. Our research, including secondary, IT executive interviews, mass surveys, etc., uncovered that their customers cared less about the new product and more about security concerns,” said Mike. “Today, Code42 is positioned as an enterprise security software company. While I’m sure they weren’t relying on our research independently, I do think we provided valuable insights.”
By the Numbers
St. Thomas has 34,000 business alumni worldwide. 96% of them found employment, or went on to graduate school, within 4 months of graduating. Undergraduates from the School of Entrepreneurship have gone on to raise $42.9M in subsequent funding. 71% of the companies started by undergraduate alumni in the last 10 years are still in business. gBETA St. Thomas has helped develop and support a dozen local startups, without extracting capital or equity from the founders.
Mike Schulte has seen first-hand the founders, talent, and startups that St. Thomas’s programs generate and support. He himself launched his career in venture capital thanks to the experiences he had at St. Thomas., and has been with Great North Labs for 3 years.
Mike isn’t the only UST success story with Great North Labs. Two of our portfolio startups, TeamGenius and Clinician Nexus, are led by UST alumni founders. Our portfolio of startups employs 19 University of St. Thomas alumni all together. That’s almost one alumni for every startup we invest in!
Why it Matters
Though the market for full-time MBAs is fluctuating, UST is pro-actively adjusting to emerging trends. The school is re-thinking it’s educational offerings, as it adjusts to meet demands, but is maintaining rigor and efficacy. In short, digital transformation is fueling innovation instead of fueling attrition.
While that change might not quite reach the level of “Hey, teacher! Leave the kids alone!”, it’s definitely not business as usual. The entrepreneurial support programs that have emerged across disciplines, schools, and functions are signs of this shift, and of the continued commitment of UST.
Those programs have continued to produce and support startups, founders, and talent, even as ideas of entrepreneurial education evolve. And during these challenging times, St. Thomas’s values have shined through, with the school emerging in the national scene as a leader in ethical entrepreneurship. That’s a mark of smart leadership for the largest private university in Minnesota.
The world is changing, and a new wave of tech entrepreneurs are shaping the new normal. The tech sector is performing well as the need for innovation, necessitated by the pandemic, becomes more urgent.
As digital transformation accelerates in all sectors, and our country re-establishes its economic future, we are working to cultivate tech entrepreneurs in the Upper Midwest. By increasing the capacity of our innovation ecosystem, we can produce more startup successes locally. This benefits not only current founders and investors, but contributes to a sustainable economic future of the entire region.
We build capacity by donating time, money, and equity to organizations that support founders. Not every organization, but the ones we see as most impactful. By donating to those organizations, we support founders, the startup ecosystem, and the entire innovation economy.
Startups are fantastic drivers of economic activity. They are growth engines that take in capital and put out jobs – as well as create their own value. That’s why it’s so important to support them- and the organizations that encourage, enable, and enhance their existence.
So have we put our money where out mouth is? Any returning newsletter reader can attest that we certainly talk about building up the ecosystem enough. Well, now it’s time for us to shut up and put up. Check out our complete cash, equity, and time donations to date, along with the organizations we donate to.
If you are a founder or startup employee that is interested in rising to the challenge, check out our Founders Pledge. It is as simple as pledging to donate 1% or more of equity to the nonprofits that you find worthwhile. If you eventually have a big exit, that donation can mean MAJOR impact for a nonprofit organization. Our founding partners have pledged at least 2% of their personal interests in our debut fund, and we look forward to sharing our success with these impactful nonprofits.
“The question ‘does this make for a better society?’ is a question we don’t typically ask entrepreneurs to think about, but they should be” says Laura Dunham, Associate Dean of the Schulze School of Entrepreneurship at St. Thomas University. Dunham was recently featured on Stanford Innovation Lab’s podcast, eCorner.
Dunham speaks specifically to ethical behavior among entrepreneurs, but the same principle applies to us. So, does our investing make for a better society? Do our capacity building efforts bear fruit?
Time will tell on the tech side of things, but we can share some impact metrics. So far we have invested in 22 early-stage startups. They have attracted $138.4M in total funding, and have created ~750 jobs. Of those startups, 2 have rural presences (HQ or significant office), 4 have female founders, and 3 have minority founders and combined. These startups from underrepresented categories account for 30% of our invested capital to date.
Here is a mix of upcoming events, for investors, founders, and/or ecosystem supporters. All events are virtual unless otherwise noted.
- Nov. 9-11th, Wisconsin Early Stage Symposium. Speakers, panels, and networking plus opportunities to connect investors and founders. Ryan Weber will attend and connect with WI founders.
- Nov. 18th, 2020 2020 Tekne Awards. The Minnesota Technology Association’s (formerly MHTA) flagship event is going virtual this year. Our portfolio company Structural, and partner gener8tor, are up for the Technology Partner award!
- Nov. 19th, 2020 Customer Driven Innovation Workshop. FREE training in the Lean Startup School with Red Wing Ignite and ILT Academy. Go from “wantrepreneur” to entrepreneur by kicking off your startup journey. Great North Labs is a proud sponsor along with MN DEED. Applicants or their businesses must reside in, have ties to, or serve Greater MN.
- Dec. 2-4th, 2020 Web Summit From the folks who recently brought you Collision, this is the annual European version. Virtual.
- Dec. 1-3rd, 2020 Rise of the Rest Virtual Tour: Equity Edition. Black-founded startups based off the coasts compete for $2M in funding. Days 1 + 2 feature town halls: “Building Inclusive Startup Ecosystems” and “Entrepreneurship and HBCUs”. Day 3 is the Pitch Competition Finals.
- Dec. 2-4th, 2020 Powering Inclusion Annual Summit. This is the Center for Economic Inclusion’s Annual Event. Virtual this year, “The Summit is for leaders at every stage of the journey of building racially inclusive organizations, communities, and economies”.
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