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Enstitute's Entrepreneurship Lessons for College Dropouts

Can entrepreneurship be taught? Enstitute is taking a novel approach—giving (mostly) college dropouts two-year jobs with well-known founders

Published: May 22, 2013 06:07:24 AM IST
Updated: May 15, 2013 01:37:53 PM IST
Enstitute's Entrepreneurship Lessons for College Dropouts
Image: Ian LondIn for Forbes
FUNDRAISING 101: Samman Chaudhary and her mentor, venture capitalist and entrepreneur Mark Peter Davis

It’s 6.45 am, and Ben Darr is coming back from the gym to a hideous smell from the refrigerator. A roommate shuffling past the kitchen shrugs. Another confirms the bad news: Last night, in a cleaning frenzy, someone moved the fridge and forgot to plug it back in. Darr just shakes his head and unloads the dishwasher.

That’s life at Enstitute, where 11 wannabe entrepreneurs, aged 18 to 25, are packed in a Lower Manhattan loft. Shopping, cooking, eating and cleaning together, they share one remote control and many secrets in four bedrooms at night. Come daylight, they’re off to work. Just under half the ‘kids’ have already founded a company; only three have graduated from college. Maybe they’ll come out of this experiment knowing if they have the right stuff.

No one knows if you can really teach entrepreneurship. InSITE offers a one-semester mentorship in finance and tech to business and law students. Billionaire Peter Thiel pays kids $100,000 to drop out of college and pursue a startup idea. Enstitute’s edge: Learning by doing for two years with a key founder—a model it hopes to expand to three new cities next year.

Shaila Ittycheria, 31, and Kane Sarhan, 26, created Enstitute last year as a nonprofit, draining their savings and raising $300,000 from Boston Celtics co-owner Jim Pallotta and the deLaski Family Foundation, which backs social entrepreneurs. Sarhan handles fundraising, PR and recruiting companies. Ittycheria focuses on housekeeping, taking care of the kids and overseeing the mentors, who include the likes of Fabian Pfortmüller of Holstee (a lifestyle brand) and Hilary Mason of Bitly (which shortens URLs for social). The mentor-entrepreneurs pay the apprentices $200 a week.

To get the matchups right, Enstitute spends months vetting apprentice candidates through video and in-person interviews, essays and self-assessment, then reaches out to startups that will offer real work—not to an “intern”, says Ittycheria, but to a “wingman”. Apprentices meet one-on-one with Ittycheria at least once a week. The review can be devastating. “Sometimes you think you’re doing great,” says one fellow, cringing. “Shaila’s always going to be the one to tell you when you’re wrong about that.”

How well is the programme working, less than halfway through the first year? To find out I spent a couple of long workdays with Samman Chaudhary, 24, who is paired with entrepreneur, incubator and venture capitalist Mark Peter Davis, 34, and with Ben Darr, 20, who is attached to Thrillist Media Group’s Ben Lerer, 31.

It’s their first day in a rented work space on West 24th Street, and the heat isn’t working. Chaudhary and Davis, who have worked together for five months, huddle at a single desk in a stark white office. “Pull up your PDP,” Davis says, referring to the personal development plan of skills to master. Last week, term sheets. This week, capitalisation tables. It’s Fundraising 101.

“When you take an investment, you issue new shares, and that increases the denominator,” Davis explains as Chaudhary builds a document and starts mocking up a series of investments. “I started as a VC, and someone said we needed a cap table, and I was like, ‘Whaaaat?’ I flailed for weeks before figuring it out,” he says. “Samman’s going to get it in two hours.”

Chaudhary was doing postgraduate work at Sheridan College in Toronto when she read about Enstitute while scrolling her Twitter feed during a dental checkup. She was a straight-A student but unsatisfied. Enstitute offered practical skills—and a pass to Manhattan. Davis’ habitat is New York’s Flatiron District, where he’s a partner in early-stage fund High Peaks Venture Partners and co-founder and board member of four companies via his incubator Interplay.

Two weeks into her apprenticeship, Chaudhary says she felt she was doing great—showing up on time, completing every task with a smile. “I would have given myself a B+,” she says. Her mentor thought otherwise, telling Shaila at their first check-in that Samman was failing. “It was the wake-up call I needed, and it really changed the way Mark and I operate,” Chaudhary says. “I became 1,000 percent more proactive, and we now have a rule of the most brutal honesty.”

Chaudhary says she’s no longer sure whether she wants to found her own company—or continue her education. While she loves New York’s startup culture, she’s also interested in emerging markets. “If I have a brilliant idea and follow it, great,” she says. “If I move to China and keep learning, even better.”

Enstitute's Entrepreneurship Lessons for College Dropouts
Image: Ian LondIn for Forbes
SPARRING PARTNERS: Thrillist’s Ben Lerer and Ben Darr

Ben Darr, on the other hand, is hell-bent on becoming an entrepreneur. “After these two years, I’ll be ready to start my own company,” he says. Can he survive the apprenticeship? He spent a restless two years of college at three very different schools. Working for someone else, he says, “is like staying at a friend’s house: It’s fun, you do cool stuff, but it’s still awkward every time you take something from the fridge”.

Ben Lerer isn’t so sure. “If there’s one thing I can accomplish with Darr,” says the co-founder of men’s media company Thrillist, “it’s convincing him to go back to college.” Not so much to learn more as to mix with peers and have fun.

The culture at Thrillist feels collegiate. At 10.30 one morning, Lerer strolls into the boardroom at his SoHo offices, where staffers await his approval of a redesigned new mobile app. Wearing a slim-cut navy pinstripe suit, he stands out from the hoodie-and-blue-jeaned room. “Nice suit, man,” Darr elbows him as he takes his seat. “Big night tonight?” Lerer dead-eyes him and wants to get on with it. “Who’s up first?”

Darr is. He’s been testing the app, working quality assurance with the product team to find bugs. “You’ve been, like, really trying to break this thing, right?” his mentor asks. “Obviously.”

It’s tough to stand out in the rapidly moving Thrillist, where 215 employees brought in upwards of $50 million in revenue last year. The two Bens have a lot in common—from childhoods on the Upper West Side to their freewheeling styles. Darr spent the first few weeks about 10 feet from his mentor, learning about sales and becoming antsy. “I talked to Ben about joining the product team,” Darr says, and he’s been sitting upstairs with the tech team ever since. He’s getting a rounded education, including some exposure to PR (“It’s a lot of garbage”), editorial production and tech buildout.

At the end of each week, the pair sits down to discuss Darr’s progress.

Is he getting enough varied experience? Any problems? Can he do more? To broaden their relationship, the Bens are taking boxing lessons—and laying odds on who will win an eventual prizefight. “If I win, I get to be CEO for a day,” Darr laughs. “If he wins, I guess I keep doing everything he says.”

Heading home, Darr spars with a different partner: Mother Nature. The nor’easter Nemo is heading up the coast. Recalling the worst of Hurricane Sandy, everyone at Enstitute breaks from making dinner to help Sarhan, who arrives with a car packed with provisions from Costco.

Twice a week the housemates cook dinner for a guest speaker. Among them: Fashion designer Marc Ecko and Scott Belsky of Behance. Tonight they’re hosting Bruce Bachenheimer, head of Pace University’s Entrepreneurship Lab. Turns out he quit as a Wall Street trader to sail for several years, then started a teak lumber import company, taught himself boat-building, then latched on to high-tech forensics, got an MBA, launched a financial website and learnt Japanese.

A good entrepreneurial lesson in his story: If you can, exploit every unexpected twist in life.

Enstitute's Entrepreneurship Lessons for College Dropouts
Image: Bottom; Getty Images; MPI / Getty Images; Files / AFP / Getty Images; Jerome Favre / Bloomberg via Getty Images;Courtesy Of Luxottica; Jerome Favre / Bloomberg via Getty Images; Tim Whitby / Getty Images; AP Photo / Danny Moloshok

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(This story appears in the 31 May, 2013 issue of Forbes India. To visit our Archives, click here.)

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  • Nidhi

    nice story.......but what about ....others that gonna only passing marks ..and with only passing mark not easy to get placement and no one will invest capital for ur business so what they can do ......very confusing stage ....

    on May 23, 2013
  • Nidhi

    nice story.......but what about ....others that gonna only passing marks ..and with only passing mark not easy to get placement and no one will invest capital for ur business so what they can do ......very confusing stage ....

    on May 23, 2013