Most business students with entrepreneurial ambition wait until after they have graduated to start their companies, but that didn’t stop James Li (MSB ’13) and his partner Yeo Zuo from starting their own business as college sophomores.
Having been involved with community service projects since high school, Li sensed a disconnect and a lack of trust between non-profit organizations and the donors who fund them. In May 2010, he and Zuo founded a consulting firm, RE:action Strategy Group that aims to help non-profits and other social entrepreneurs improve relationships with their donors through social media, events, photos, and videos.
Though not even a year old, the group has already worked with non-profits like the Corp, BuildDC, an entrepreneurship-focused college preparation program, and WellDone, which works on clean water projects in West Africa. Li, Zuo, and the rest of their team of 12 college students are optimistic that their venture can both increase giving to nonprofits and be a profitable business in the long term.
“For most of us in RE:action it’s not just a college project. The ultimate goal is to get it to be a full-fledged business that we can seriously launch as we graduate,” Li said.
Li is a part of Compass Fellowship, an organization founded by Georgetown graduates Arthur Woods (MSB ’10) and Neil Shah (MSB ’10) in 2009 to help student entrepreneurs get their business ideas off the ground. The group concentrates on promoting “social entrepreneurship”—the idea that business ventures can be dedicated to improving the world or helping other people while still being profitable.
Part of the reason for the group’s success is the increasing appeal of social entrepreneurship to both students and investors. Sarah Stiles, a professor of social entrepreneurship at Georgetown, who defines the concept as “a holistic approach to positive change predicated on the notion that each human being, as well as the natural world, is worthy of love and respect,” says the idea is on the rise nationally.
While social entrepreneurship is gaining ground across the country, Stiles said Georgetown’s Jesuit values made it a natural place for a social entrepreneurship program like Compass to take off.
“Georgetown is uniquely positioned to lead the social entrepreneurship movement in Washington,” she said. “Being a Jesuit university, Georgetown has always couched its educational mission in terms of love and social justice and those are terms that have been conspicuously absent from what has been ‘business as usual’ in the United States.”
The program takes 15 freshmen through a year-long process intended to provide them with the tools and mentorship they need to form viable companies. At the end of the year, the 15 students present their ideas to potential investors in hopes of making their projects actual businesses. About half of last year’s inaugural group of students received funding to realize their ideas.
The companies are diverse in scope, ranging from a baked goods delivery service to a group that specializes in investing in socially conscious Iranian companies, but all of them attempt to blur the line between non-profit and for-profit businesses. Several are already looking to expand beyond Georgetown.
Junho Lee (MSB ‘13), whose talent agency Apollo Talent helps student musicians schedule concerts at restaurants and bars in D.C., has plans to expand to Howard, American, and George Washington Universities and to establish a tutoring service at D.C. public schools for students interested in music. Angela Morabito (SFS ’13) is already moving to expand her Headlines clothing brand nationally. Selling scarves and other trendy accessories branded as “smart wear for smart women,” her company donates a percentage of its profits to global literacy initiatives.
“I am totally impressed,” said Adjunct Lecturer William Finnerty, who works for UBS and teaches a class on entrepreneurship at Georgetown. “Compass is such an amazing organization both by the pace at which it’s growing and the quality of the fellows. Having had a chance to see what they were putting together, I had to get on board.”
Finnerty now serves on the board of directors for Compass.
The idea of blending positive social change and making profits isn’t new. Compass Fellowship’s founders, Woods and Shah, began social entrepreneurship projects during their time at Georgetown. But without any outside assistance, Woods’s farmer’s market delivery service and Shah’s fair-trade tea distribution company didn’t make it off the ground.
“We had no idea what we were doing,” Shah, who currently serves as the Compass Partners executive director, said.
Simple resources, like the know-how to file tax returns or connections with other D.C. entrepreneurs, would have been invaluable to them as undergraduates, Shah said.
“We started [Compass] because we wanted to build the program we wish we would have had,” Shah said. “We developed a program for students based on a student’s perspective.”
In addition to Compass Fellowship, Shah, and Woods created Compass Incubator, a free consulting firm which provides marketing, finance, education, and information technology services to students who apply.
Compass Incubator was attractive to students like Compass’s D.C. regional director Nabil Hashmi (SFS ’12), who study other subjects but have an interest in business.
“Being in the [School of Foreign Service] and being an International Political Economy major, I was interested in business, but I really had no outlet for learning more about it,” he said. “There’s really a demand for learning more about business and social entrepreneurship amongst students.”
Now in its second year, the program has already spread to Tufts, American, George Washington, and Indiana Universities. Next year, Shah plans to extend the program to roughly twenty schools in San Francisco, Boston, and New York. Ultimately their vision is to create an international fraternity of socially conscious entrepreneurs whose community will represent the idea that business can change lives for the better and still be profitable.
Though barely over a year old, Compass has already attracted the support of a few powerful figures, from regional tycoons like Andy Shallal, founder of the U Street restaurant and bookstore Busboys and Poets, to national leaders like Blackboard Inc. CEO Michael Chason.
Student fellows say the high caliber of people involved with Compass has been an integral part of the program’s success.
“Everyone has the common language of being passionate about social causes at a very base level,” Li said.
Li and 29 other undergraduate entrepreneurs have benefited from the community support provided by Compass over the past two academic years, but Georgetown’s most successful social entrepreneurs had to start their projects without such assistance.
In 2007, Nicolas Jammet (MSB ‘07), Jonathan Neman (MSB ‘07), and Nathaniel Ru (MSB ‘07), dismayed by the lack of healthy food options in the Georgetown neighborhood, decided to found Sweet Green, a salad and frozen yogurt restaurant whose mission is to provide “food that fits” by using local and organic ingredients, minimizing its environmental footprint, and building positive relationships with the surrounding community.
Though they did not have the benefit of the guidance and mentorship of a program like the Compass Fellowship, Jammet credits the strength of Georgetown’s McDonough School of Business, particularly the advice from Finnerty, his former professor and current mentor, as a huge inspiration.
“[Finnerty’s class] really gave us that spark that combined a curriculum learning with real life experience,” Jammet said.
By using biodegradable utensils and recyclable bowls, Sweet Green has begun receiving attention from national media sources. Its introduction of Salad Blasters, reusable salad bowls, is an example of Sweet Green’s win-win-win business model—making decisions that are good for the business, the customer, and the earth.
“Our ultimate goal is to change the way people think about eating healthy,” Jammet said.
Unqualified successes like Sweet Green are few and far between among start-ups, but they are nevertheless inspirations to the current crop of Georgetown undergraduates interested in entrepreneurship. These aspiring entrepreneurs dream of turning their passions and personal causes into viable businesses that contribute to society.
“It’s really important to us that our ventures are not just financially sustainable, but that they’re also intended to create a wider change,” Marcy Humphrey (MSB ’13), one of the original 15 Compass Fellows and a mentor to the current class of fellows, said.
As a mentor, Humphrey is responsible for connecting with the next class of Compass Fellows by providing guidance through the entrepreneurial process. Specifically, mentors help plan weekly module events and hold small group meetings with the fellows to answer questions, brainstorm startup ideas, and receive feedback about the program. This mentorship element of Compass was huge for Li.
“The mentors for Compass were basically my mentors not only for my business, but also for my freshman year,” said Li.
Though Li’s advisors were the program’s founders, Woods and Shah, this first class of fellows has really stepped up to provide some structural integrity to the mentorship process, which is central to the Compass Fellowship program. And now, with graduates of the program serving as mentors for the next cycle of Compass Fellows, the supply of mentorship and advice is sure to continue in the long term.
The ultimate goals of the society are to operate much like a fraternity with a network of alumni supporting and expanding the Compass community. Though still in its fledgling stages, the emphasis on the legacy and the continuity of the Compass Fellowship are clear.
“When you become a Compass Fellow, you’re a Compass Fellow for life,” Li said.
Whether or not Li’s RE:action Strategy Group or any of the other Compass projects become lasting, profitable business, the fellows will leave Georgetown with a philosophy uncommon in business—that money is not the most important motivator.
“There’s a good quote from the book Good to Great by Jim Collins that says that things like money and finances are like the blood and the food. They’re necessary to live, but they’re not actually the reason you live,” Li said. “It’s the same thing for a company. Business at the bottom line keeps us alive, and it’s fun, but in the end it’s really the whole social aspect that allows us to recruit great people and have a lot of fun while doing it.”