For now over 75 years, The Baylor Line has been publishing vivid storytelling from across the Baylor Family. I don’t think our archives full of deep, inspirational features should live solely on shelves, so we are bringing them back to life in BL Classics. This April 1983 Classic explores Baylor’s pioneering Center for Private Enterprise and Entrepreneurship, one of the first university programs in the country to combine private enterprise ideals with hands-on entrepreneurial training. From evaluating inventions like a gasoline-saving device to helping students launch real businesses through the Venture Assistance program, directors Calvin Kent, Donald Sexton, and John Pisciotta built a national model for teaching economic literacy.
It could have happened this way. An imaginative caveman named Me-gog conceived the idea of the wheel. But he had had some pretty strange ideas before, and he was not absolutely sure this invention would work. He also was not positive that he would be able to convince the clan leaders to consider it because they were accustomed to using the travois, a perfectly good transportation device that had been around for generations. The grizzled elders were concerned that using the “wheel” might frighten the dogs that pulled the travois on their journeys, and that would definitely be a bad omen. The inventor of the wheel might have given up initially in frustration.
But Me-gog’s cousin, a more forceful type named U-gog, thought that the wheel had potential and was confident that the problems could be worked out. He was willing to take some financial risk for the idea, so he paid for Me-gog to make up four wheels as samples. After some fierce arguing, he convinced the clan leaders to try them out. They worked. U-gog was an entrepreneur.
The point is that if Me-gog, the budding inventor, and U-gog, the budding entrepreneur, had been able to utilize the services of the Center for Private Enterprise and Entrepreneurship in the Hankamer School of Business at Baylor University, mankind might have had the wheel sooner. And it would not have hurt the furry elders with their ingrained resistance to novelty to take part in one of the center’s programs designed to define the value of private enterprise in human development.
This unique center helps both inventors and entrepreneurs in its scope and also attempts to develop an understanding of the private enterprise system in public school students and teachers in Texas and in the general public as well.
While the center does not say that it can create inventors or entrepreneurs from scratch, it does believe strongly that entrepreneurial skills can be taught to and sharpened in receptive minds. This is done in classes such as Steve Hardy’s “3340- Entrepreneurship and Small Business Management,” and in projects such as Venture Assistance, in which teams of students work directly with small-business owners, solving problems at the site. Through its Innovation Evaluation program, inventors are able to have their drawing board ideas assessed to determine their feasibility and marketability. Asserting that the forum necessary for inventors and entrepreneurs to flourish is the private enterprise system, with all its good points and its flaws, the center is vitally committed to education in this area.
The Hankamer School of Business, under the direction of Dean Richard C. Scott, was so convinced of the validity of individual initiative and private enterprise that it forged ahead in 1978 into the largely undeveloped and academically unrecognized field of entrepreneurship and opened the center. Today Baylor is one of only three universities in the United States offering graduate and undergraduate degrees in the entrepreneurial format, with a doctoral degree program hoped for in a few years. Baylor is the very first university to develop a center like this, which combines the goals of preserving private enterprise ideals and fostering entrepreneurial skills, simultaneously.
It is all happening in the east wing of the white marble Hankamer Business School building at the corner of Speight and Fifth Streets. The letters designating the center are about two inches high and sedately black on the glass wall. They ought to be glowing red neon and flashing on and off — that would be more consistent with the activity inside. Phones ring constantly, three full-time and five student secretaries coordinate schedules, the directors and professors dash in and out, students queue up for conferences, businessmen and guest lecturers arrive, sometimes inventors come in with new products, and journalists come and go. Rocketing ions of energy are almost visible. This is no place for sissies.
In 1983, the center is still operating in uncharted territory. “The exciting thing,” explains Dr. Calvin A. Kent, director of the center, “is that we are on the cutting edge in this. It’s not like we are even in the second rank. We are right there leading — leading the Harvards, the Chicagos, the Stanfords. They are the ones calling us saying, ‘We hear great things about your program. What are you doing?’ We want to stay out in the front so that the top twenty business schools — the Dukes and the North Carolinas — will call and say, ‘How did you do it?’ We are in the same position with entrepreneurship education as Harvard was when it initially began doing case analysis, which was revolutionary at that time.”
The other “shakers and movers” at the center are Dr. Donald L. Sexton, who heads the entrepreneurial programs, and Dr. John L. Pisciotta, who handles economic education. Other faculty members actively involved in the center’s projects are Dr. James W. Henderson, who also teaches finance; Stephen R. Hardy, who teaches management classes; Carlos Moore, who teaches marketing; and Ed Walker, who teaches accounting.
“If there ever were a concentration of overachievers, it’s the people down here,” Kent says in his forthright way. “Everybody is very enthusiastic about what he does. This affects the secretarial staff; it even affects the students who work for us. We maintain a high level of excellence and expect to be rewarded for it by the university. Everybody down here recognizes that this is a place where less than excellence is not tolerated.”
The center does run at “full throttle,” as Kent said, and it has already accomplished all the goals of a five-year plan in two and a half years and is now working on the goals of another five-year plan.
The energetic Kent, appointed to the Herman W. Lay Chair of Private Enterprise, came back to Baylor to head the center after teaching at the University of South Dakota and serving as chief economist to the South Dakota legislature. At first Kent, who can be described as a combination of Frank Shorter and Demosthenes with a Ph.D. in economics, was a “one-man show,” giving more than two hundred speeches on private enterprise throughout Texas and in fifteen other states in his first eighteen months on the job.
Sexton was named to the Caruth Chair of Entrepreneurship in 1979. Dean Scott said, “We felt we were really lucky to get him. It is hard to find a man with a Ph.D. from a good school who also has real-world experience.” Sexton had that in spades. He had a productive sixteen-year career in industry, where he specialized in “turning-around” failing businesses into profit-makers. Sexton as CEO brought four struggling firms into the black, each in less than eighteen months.
Pisciotta, who had been chairman of the Department of Economics at the University of Southern Colorado, joined the center in 1980 as the E. M. and Thelma Stevens Professor in Private Enterprise and Entrepreneurship. Kent had heard him making a presentation in Toronto, Canada, before the U.S. Joint Council of Economic Education and its Canadian counterpart and was so impressed with Pisciotta’s knowledge, delivery, and enthusiasm that he persuaded him to join the team at Baylor before the conference was over.
The center’s activities have drawn national media attention almost from the beginning and they have been reported in such diverse publications as the San Francisco Chronicle, the St. Petersburg Times, The Wall Street Journal, Newsweek, Business Week, and Hindu, India’s national newspaper. Clippings make up a press packet over two inches thick. Kent estimates that thirty-five million people have read or heard about the center in some way. He received the prestigious Freedoms Foundation award in 1980 for “excellence in private enterprise.”
Probably the most notorious coverage occurred last fall, when an enterprising Baylor student and his friend displayed uncommon ingenuity and some show business flair. During the height of the Tylenol scare, they thought up the idea of a personal poison detection kit. They asked another student to test it in a campus chemistry lab. It worked. Later they held an unsanctioned press conference in the student center to announce the product. A less- than-thorough journalist reported that the kit had been developed by Baylor University, itself, and this misinformation was disseminated nationally, causing concern in the administration offices. The story ended happily with no damage done to the university, and the two students subsequently sold their royalty rights to a pharmaceutical firm for a handsome sum. They are now doing well in other ventures.
The Innovation Evaluation Center was featured in a recent PBS film clip and this, too, quickly generated a lot of publicity. Plans for about twenty inventions a month from all fifty states, Puerto Rico, Canada, and Europe cross Sexton’s desk; and he can foresee this service building to several thousand a year.
The program provides an opportunity for inventors to buy insight into the commercial feasibility of their invention for the reasonable fee of $75. “This program is unique among the nation’s universities,” explains Sexton. “A few private firms offer a similar service, but they are far more costly. An inventor could spend as much as $2000 getting comparable consulting services from a commercial firm.”
A team of three to five businessmen or other experts evaluate the innovation to determine its merit, using thirty-three criteria, such as product safety, probable payback period, level of demand, and ease of distribution. This information is fed into the Baylor computer, which tidies it all up and estimates the chance for success. “A big plus is that the center has no financial stake in the innovation and can be totally objective,” Sexton says. “About ten to fifteen percent of the ideas turn out to be marketable products.”
The glamor product to come out of the operation right now is PX-19, a gasoline-saving device which fits snugly on the fuel line and, developers claim, adds twenty-five percent to car mileage. “I have had one on my car, testing it,” says Sexton, “and I am going to keep it on forever.” Other winners on the market are a stick joggers can carry for protection, an oil additive to reduce friction, a hunting rifle rest, a tool for cutting the filters used in air conditioning and heating units, and, of course, the Aggie’s Rubik Cube, which is the same color on all sides.
Sexton sees promise in a couple of ideas not yet on the market: a fertilizer spreader which can be mounted on a lawnmower and a barbecue grill that burns newspapers. He is really excited about a woodburning stove that burns cleanly enough to be used with a heat exchanger. “This would revolutionize the industry,” Sexton says. “And there is potential for using coal in the stove, too. It is that clean-burning.”
Inventors can trust the integrity of Baylor’s team for if they feel that they lack the technical expertise to judge a product, they will send it back immediately, rather than calling in people outside the team and risk having the idea stolen. A large number of the inventors are retired people, whom Sexton sees as maybe having always been inventive but probably just now having the time to fool with their ideas.
Through the Venture Assistance program Baylor business students get out of the “marble mausoleum” and into the trenches. They don’t just shuffle papers; they get into the real world of small business, coping first-hand with the problems faced by businessmen in today’s world, problems they themselves will face in a few years. This program has helped over 300 small-business proprietors in the Central Texas area since 1979. Teams of students, usually seniors, under Sexton’s close supervision, are assigned to cases and act as business consultants. The center tries to focus on new ventures which are just beginning or are at the point of some expansion. They were so successful with one firm that the company’s competition has come in and asked for help.
All kinds of “ventures” seek assistance. Scott Williams, a senior entrepreneurial major from Manassas, Virginia, helped a beekeeper successfully expand his growing honey market last year. Now he is drawing up a business plan for another Baylor student who intends to offer a moped rental service named Dif’ Rent Spokes in Waco, Austin, and College Station, with plans to go nationwide eventually. This young entrepreneur envisions meeting the needs of students for transportation if plans are put through to close the Baylor campus to automobile traffic in the fall. Williams is gathering data about motorbike rentals through a computer search and is preparing incorporation papers and a financial statement for the fledgling venture. “The hardest thing to get,” Williams says, “is the financial data, especially since no one else has done this in the area.”
Sexton says that the center’s programs are geared to be as useful and practical as possible. “Our goal is to see a large number of our graduates become successful in their own businesses, and we want to provide the background to make that possible.”
“The eighth wonder of the world is private enterprise,” says John Pisciotta, “and the ninth wonder is how little people understand it.” Kent and Pisciotta are out to change all that. They are always devising new ways to promote economic literacy. The center, in cooperation with the Waco Chamber of Commerce, sponsored a poster contest among high school students about private enterprise and then proceeded to get an outdoor advertising firm to display the winning posters on 300 billboards throughout central Texas. That was getting the ideas out of the classroom!
Public school teachers might groan, “Oh, no, not another lecture on economics!” before they hear Pisciotta, but they won’t afterwards. This exuberant professor delights in making complex ideas understandable. “I believe in simplifying,” he says. Pisciotta was not satisfied with the customary, and boring, use of charts and graphs to get economic points across, so he devised a portable water-powered model — called a macro-economic tank — to display vividly the ways in which various parts of the economy respond to changes in consumer confidence, business expectations, and government policies, as well as inflation, recession, and employment.
“I can go into a group of government teachers,” Pisciotta explains, “and without saying a word I have their interest when they see that crazy model. They want to understand how it works. I can also use it to get my message across in a limited time. Say, if I am going to talk at a meeting of the Tyler Chamber of Commerce and I only have thirty minutes, I can do something with that model.”
Pisciotta has developed another model, a balance scale, to meet another need. Since existing teaching aids were canted toward demand-side economics, there was a need to explain supply-side economics, since President Reagan’s economic policy is largely based on that theory. The balance scale does that.
Pisciotta can manipulate discs on the scales to show graphically how the two sides of the economic balance — demand and supply — influence each other. He has another device, called the monetary policy simulation, which focuses on the monetary policies carried out by the Federal Reserve System.
Pisciotta likes to give handouts at the beginning of his talks, including basic information that he will cover. “I don’t want teachers scribbling down every word I say. I want them listening, too.” On one handout he included a cartoon depicting people chatting at a party: “I’m an Episcopalian on my mother’s side and a supply-sider on my father’s.” Pisciotta wants to promote enthusiasm so that teachers will want to teach economics. “I don’t want them to do it just because they are being beaten over the head with all these requirements.”
On a typically busy day, Pisciotta might talk to two high school assemblies of over five hundred students and then conduct a teacher workshop that night. “I’m not a preacher, but in a way I do have a message; and when reaching teachers, this has a multiplier effect.”
Student entrepreneurs have come to Baylor because of the center from all parts of the U.S., England, and Australia. There are forty-seven entrepreneurial majors, but their classes attract other business students. Steve Hardy’s 3340 class has about forty-four students, and Ed Walker’s 4340-Venture Accounting and Taxation has proved so popular that it has now expanded into two sections of over one hundred students.
Students are encouraged to have a dual major — such as entrepreneurship and finance or entrepreneurship and marketing — so that they can be fully prepared for the current job market. Kent points out that students today generally recognize that there are three areas in which there are possibilities for them to become really rich: sports, entertainment, or entrepreneurship.
More myth than fact is known about what makes entrepreneurs, but it is generally believed that they have a high need for achievement, like to be in control and be their own boss, and are risk-takers, but not excessive risk-takers. The center has been examining its own raw material — student entrepreneurs — and in its most recent study, Sexton and his graduate assistant, Nancy Bowman, an MBA candidate from Corpus Christi, have done a comparison of student entrepreneurs with other students. They have discovered that there are about twelve areas in which the entrepreneurs differed significantly from the control group.
A paper based on this material will be presented in the entrepreneurial interest section at the Academy of Management meeting next fall and will be published in its Proceedings. “I like doing this research,” Nancy Bowman says. “I believe that entrepreneurship is good for the country as a whole, for our economy. Entrepreneurs generate ‘real’ profit in economic terms, and real growth stems from this — from the work of entrepreneurs, innovators, and inventors.”
Bowman, and students Dee Crowe and Buddy Norman are living definitions of the term. Bowman sold her first company, a catering company with over one million dollars in revenues, when she was twenty-two. Since then she has owned a travel company, a computer software company, and a consulting service. She says, “When I work for myself, I know what is best for me. When I work for myself, I am working for the best boss I could.” And she adds, laughing, “I’m nice to my employee, me!” She has the next five years of her life planned— teaching two more years and then going away to get her Ph.D.
Dee Crowe, a senior entrepreneurship major from Belzoni, Mississippi, has the next ten years of his life planned. He intends to be the “Catfish King” of Humphreys County, which calls itself the Catfish Capitol of the world. Crowe has been running a thriving business of raising specially bred blue channel catfish on a family farm since he was nineteen.
Last summer he built a fish hatchery out of a cotton trailer and efficiently raised about three million fingerlings. He admits that he is “kind of proud” of that since a competitor could raise only five million with more than twice the facilities. One of his processing plants sells to the HEB grocery chain in Waco right now, and Crowe is considering several options in the catfish business.
“I have multimillion dollar plans if they work out,” he says, “but I tend to think big. When I was only fourteen, I wanted to go into three businesses all at the same time.” He originally intended to attend Baylor for only two years and then transfer to an agricultural school. “But I didn’t do it,” he says, after discovering the entrepreneurial programs. “They fit my needs right here.”
Buddy Norman, a junior entrepreneurship major from Rosenberg, has been running small businesses since he was fourteen. He has had some failures. “But I don’t call them that,” he says, “they are learning experiences.” Norman transferred to Baylor after reading about the center in another university’s library. “I’ve always wanted to own my own business, and I knew that I needed small- business classes. I think I want to start a restaurant business next. It’s a good mark-up business, but it is a very risky one.” Norman is also considering commercial real estate.
Norman, a free spirit, says he wants to go to the Cayman Islands this summer because he knows that he can support himself. “I might teach tennis lessons or do gardening in the resort areas. That would be my first choice,” he explains. “The other choice is to go to summer school.” Norman says that what he has learned most at Baylor so far is “business smarts.” Before he came, he says, “I didn’t even know what a feasibility study was. I had energy, but I did not know how to direct it.”
The original progenitors of the ideas behind the center in the business school had wanted to figure out a way for Baylor, a private school with relatively limited resources, to use its particular strengths to make a real impact. The center, with its innovative programs and its hustle, has done just that, and in its first five years of growth its directors have won prestigious awards, recognizing their abilities in their jobs.
But, in true business accounting, the bottom line may be this: although job offers to college graduates in general have been decreasing in today’s tight economy, offers to Baylor graduates are up. These figures are due, in part, according to Leonora Crowder, placement director, to the growth of the business school. And a vital part of the business school is the Center for Private Enterprise and Entrepreneurship. Entrepreneurship may be an idea whose time is now.
All twentieth century Me-gogs and U-gogs, please apply.
