Giving students the business

Lessons go beyond classrooms when enterprising students start their own businesses

by Wendy Y. Lawton

First came Juice Guys Tom and Tom, alumni who started Nantucket Nectars. Now, in a bit of entrepreneurial evolution, comes a new Brown business. DormSnacks, Inc. is selling Nantucket Nectars - along with Pepsi, potato chips, Pop Tarts, pens, plastic cups, laundry detergent, Q-tips, boom box batteries and other dorm room staples - to fellow students at wholesale prices. Oh, and they deliver. Call them the Snack Guys.

The business, headed up by four 19-year-olds armed with incorporation papers and a marketing plan, is the latest example of campus enterprise. Brown has spawned successful innovators - think Ted Turner - and the student-run Brown University Entrepreneurship Program boasts several success stories on its Web site, from an Internet consulting company to a medical monitoring company to a business that sells, among other things, a confection called "Kelli Jelli Banana mmmm."

After eight months of research and planning, DormSnacks launched last month, delivering Gatorade, Swedish fish and paper towels to campus. As its corporate team discovered, getting a startup to start up isn't simple. There are legal issues to consider, reams of paperwork to file, spreadsheets to run. There is money to raise, customers to please, the press to court. And there is the business of building a team - not an easy trick in a University filled with lone wolves.

"The experience has most definitely changed my outlook on aspects of both life and business," says CEO Kevin Dickson. "Through the setup and operation of DormSnacks, I better understand what it means to be part of a team and have come to realize that the success or failure of the enterprise cannot be determined by my efforts alone. It's been a real eye-opening experience because, up until this point in my life, I've always tried to tackle obstacles as an individual."

Like so many students before him, Dickson was converted to the cult of enterprise by Barrett Hazeltine, professor emeritus of engineering. Hazeltine teaches "Management of Industrial and Nonprofit Organizations," best known as Engin. 9, which has launched a flotilla of for-profits, nonprofits and foundations over the years. Dickson took the course last fall with fellow freshman and friend Robert Klaber. Both were smitten: Come up with a concept, take a risk, be your own boss.

One day, Dickson was in Klaber's room kvetching about the high price of single-serve snacks on Thayer Street. One Nantucket Nectar, he bemoaned, can cost $1.60. Wouldn't it be great if someone delivered cheap snacks, right to campus, like those grocery store delivery services? Light bulb. Dickson and Klaber pulled in buddies Chris Bennett and Matt Bornstein and batted the idea around.

College students, they reasoned, are short of time, so they'd love campus delivery. But they're also short of money. If products were bought wholesale, they figured, they could keep prices low. To further tempt the clientele, they dropped delivery charges and a minimum order requirement. Then they ran the spreadsheets - and ran the idea by Hazeltine. Sounds promising, he said.

So they crafted a business plan. For the product list, they using their own dorm rooms as guides - drinks, food, toiletries, school supplies, sundries. They came up with a menu of about 500 items, which includes everything from Little Debbie snack cakes and Kraft Easy Mac to deodorant, bar soap, highlighters, notebooks and even frying pans and Ziploc bags for apartment-dwelling cooks.

They came up with an ordering system (Web-based, credit card) and a delivery system (rented van). They came up with a slogan ("You make the list. We make the run.") They incorporated, negotiated, delegated. And they got advice from Bob and Frank, aka economics lecturers Bob D'Andrea and Frank Sciuto, on what Dickson calls "our legal and tax troubles." And they ponied up startup costs.

Bennett said the hardest part was synchronizing all the elements of the plan. It didn't help that, over the summer, he was in California, Dickson was in London, Bornstein was in Massachusetts and Klaber was biking across the country.

"We had to have all our ducks in a row - a shareholder's agreement, the business accounts, the legal documents, the Web site - when everyone was in different time zones," Bennett said. "That was the biggest hurdle."

Hazeltine said that student businesses face the same challenges as any business - identifying a market, working out distribution, raising money. But he said students have some advantages.

"If you need advice or help, you can call up an alumnus," Hazeltine said. "And failure doesn't stick with you. When you graduate, businesses that don't work out disappear."

Just how successful is DormSnacks? Tough to say. The Snack Guys won't reveal the number of customers they've had or how many orders they've filled. And they won't say how much money they've sunk into the company or how much profit they're pulling in.

For now, they're focused on building a customer base. They take product requests. They make sure that on Sunday, shopping and delivery day, they're not late to drop-off sites on The College Green and Pembroke Campus. The Snack Guys even shake the hand of every customer, a technique they cribbed from Hazeltine, who presses the palm of students who offer a good answer in class.

If they build a strong base at Brown, the entrepreneurs hope to expand to the Rhode Island School of Design and, perhaps, points beyond. But do they really want to spend every Sunday shopping at places like BJ's and hauling their wares around campus?

"I think they'll succeed," Hazeltine said. "The question is whether they'll stick with it."

Bennett insists that the team will. "We're committed," Bennett said. "And we think that we've got an idea without an expiration date."