There was a declaration of independence you might know about.
Every fall, Northwestern Student Holdings seeks dedicated freshman and sophomore applicants for their Analysts Training Program. New members are placed into a class where they learn fundamental entrepreneurial skills, develop their own business proposals, and are placed into a position within an existing NSH portfolio company to gain practical operational experience before — if the idea is good enough — potentially starting their own company. Just this past October, the group received 102 applications to fill ten spots in the program.
As of the 2009-2010 academic year, however, NSH is now a separate organization. They broke from the Institute for Student Business Education, a brainchild of former ASG president Neal Sales-Griffin, who sought to create more business-oriented leadership roles at Northwestern.
According to NSH leaders Kathy Duan and Alex Hayes, there were differences in ideology concerning the promotion of the “entrepreneurial spirit” — which Duan and Hayes say differs from the traditional financing or banking areas of interest at Northwestern.
“ISBE’s mission is very different than ours,” says Duan, NSH’s current chief marketing officer. “NSH wants to provide hands-on, real world experience. ISBE provides more passive learning opportunities.”
According to other people working within the executive boards of the companies, ISBE’s passivity also translated into their operations.
“NSH was doing much more than the rest of ISBE,” says Sandeep Paruchuri, Wildcat Express Delivery’s Chief Financial Officer. “They were using us as their crown jewel.”
ISBE, according to their website, is “the largest business organization on campus.” But Paruchuri says they lack a particular amount of ambition or preparedness — qualities NSH leaders say are fundamental to their organization. They have been separated for only a year, but perhaps the qualities that separated NSH from ISBE are the same qualities that allow the group to claim the distinction of being a student business group that made nearly a quarter of a million dollars in revenue during last school year.
The Three Colonies
Wildcat Express Delivery, AirHop, and NU Tutors make up the troika of portfolio companies that received their startup funds from, and are all overseen by the NSH student executive board, which is composed of veteran student analysts and the presidents of the three companies. The student board is in turn overseen by an advisory board, where university faculty members and community business leaders give advice to the fledgling entrepreneurs.
All three NSH companies function as any traditional company would, offering products or services to actual clients and turning over an actual profit. Unlike most companies, however, these enterprises are required to turn over their black ink to NSH to foster investment in even more student-run companies. One begets another.
Wildcat Express Delivery is by far the largest of three companies and contributed the bulk — around $200,000 — of last year’s total revenue to the organization, according to Paruchuri. Members on the WED student executive board are nearly positive that the figure will rise this year, pointing to almost $100,000 in revenue this fall quarter alone as proof.
It’s a far cry from where the young company was only just a year ago.
“We were fighting for survival a little over a year ago,” Paruchuri says. “Now we’re fighting for expansion… I just can’t believe it.”
Both NU Tutors and AirHop posted around $20,000 in revenue. AirHop began operations in fall 2009, and charges $10 or $15 to bus Northwestern students to O’Hare and Midway airports at the ends of the school seasons. Most recently, AirHop also provided the busing services for A&O’s Fall Blowout. They incorporated a United Center/CTA-inspired plan to move nearly 5000 students to Welsh-Ryan Arena in forty-five minutes, explained Rose Plomin, NU Airhop’s vice-president of finance.
NU Tutors has been around just as long as WED, but differs from the rest of the companies: it’s the only one that focuses its efforts on non-Northwestern students. They collect well-performing Northwestern students to tutor under-performing (or sometimes even other well-performing) North Shore kids. They advertise at local high schools and charge parents between $40 and $50 dollars per hour for someone from NU Tutors to assist them in virtually any subject, ranging from math to history, French to SAT prep.
By the People, For the People
Along with making a consistent profit, NSH companies are expected to provide services that benefit the Northwestern and Evanston communities, says Duan.
“The companies have to have a tangible positive effect for the Northwestern or Evanston communities,” she says.
The services that the company offers students — a more efficient way to get to either Chicago airport, tutoring for North Shore kids, food runs that cost $3.25 plus the cost of the meal — are nice, but there have been and will be times when students will live without these little luxuries.
Jobs, then, may actually be the biggest benefit NSH provides.
NU Tutors employs almost thirty tutors and has one of — if not the absolute — highest student wages at the university. According to Weinberg senior and NU Tutors president Rachel LeCavalier, her company receives nearly 200 applications every hiring cycle.
“Our tutors get paid $20 an hour for on-campus tutoring and $30 an hour for off-campus tutoring,” LeCavalier says. “We try and hire the best of the best.”
AirHop is the only company that does not currently employee students, but hopes to implement a staffing plan in the future, such as hiring student ushers to get people on and off AirHop buses.
“We would like for students to be able to help with the loading processes,” says Plomin. “That way, if one of the exec members isn’t available, we can still offer our services in a sustainable manner.”
WED has created almost twenty hourly jobs (and are currently accepting employment applications), ranging from callers to delivery drivers. The job pays $10 per hour with potential for raises. According to Paruchuri, WED chose to avoid reaching out to non-students to fill their positions.
“One of the founding beliefs when we first started this company is that it was for students by students,” he says.
There is nothing extraordinary in business leaders having vague hope for future growth in the back of their minds. What is intriguing about NSH, however, is how consumed the student members are with idea of expansion.
“We have four group goals,” Duan says. “Number one is increasing the NSH brand and building that up.”
There seems to be an insatiable desire — a manifest destiny — to expand as wide and far as possible but not to the point where the executive board becomes “bloated,” as Paruchuri puts it.
“We’re going to keep expanding until it stops being profitable,” LeCavalier says.
The spelling of “starting” and “Hayes” has been corrected. Thanks to commenters Danny and Please fix. North by Northwestern sincerely regrets the error.