Entrepreneurs have to take risks to hope of ever achieving success. How do you teach risk at business school? You make entrepreneurial-minded undergrads take a pass-or-fail business plan course in their senior year where the outcome rides entirely on the opinions of a panel of judges. If the panel likes what they see, the student passes. If they don’t, the student doesn’t graduate—at least not with their classmates in May, says Donald F. Kuratko, creator of the course that is now taught at Indiana University’s Kelley School of Business.
The latest batch of budding entrepreneurs in the course, called New Venture Creation, will find out if they get to don cap and gown when they present their business plans to a panel of venture capitalists, angel investors, and other successful entrepreneurs on April 26.
The course was originally created for Ball State University, Kuratko’s former employer, and it honors the professor’s late father, entrepreneur Donald W. Kuratko. “My father always said, ‘Until a student goes to bed at night and feels his spine sweat, he can’t understand the whole entrepreneurial process,’” professor Kuratko says. This quote birthed the course’s nickname, the “Spine Sweat Experience.” Students who pass earn a certificate that says they have survived the Spine Sweat Experience, and many say they hang it up right next to their diplomas, Kuratko says.
The course is a requirement for “independent entrepreneurship” majors focused on launching their own businesses. About 5 percent of all the students who have taken the course have failed, but over the years the failure level has declined because Kuratko and his team have perfected their counseling of students, he says.
It’s been offered every spring for the last nine years at Kelley, and students are told to come into the class with “passion and a good idea.” Kuratko admits that some students withdraw to avoid the possibility of failure, but those who stick around have a lot of support. Throughout the four-month course, students are given a chance to meet with experts, including lawyers and CPAs, who offer advice on their business plans. The faculty also lends them a hand and provides one-on-one help. Attendance is not required. “We tell them they never have to come to class,” Kuratko says. “But we say, ‘Don’t cry to us if you fail.’”
Still, there are escape clauses. If an idea is rejected, and you’re a double major, you can graduate with your other major and not have entrepreneurship on your degree. Those who are not double majors can take extra courses and graduate in the summer, as opposed to May. Or you can stick around and retake the course the next year and graduate then, which some students have done to prove to themselves they can do it, Kuratko says.
When Austin Bristow took the course in 2010, one of his classmates failed. He says it was a “reality check for the rest of us.” Bristow, who presented a plan for creating a music rehearsal facility that the judges liked, says the class ranks among his top three college experiences.
As a field execution manager for Fair Oaks Farms Brands, Bristow says the course has helped him deal with budgets, effective communication, and always thinking of the next step. And he got the message about risk, too. “During the Q&A when I was presenting to the panel of judges at the end of the course, they were asking me about financials,” he says. “I felt sweat going down my spine, and I thought, ‘This course is very aptly named.’”