The Starting Line

Most people working in the business world know what to expect when they have to attend company-sponsored leadership training. They’ll file into a large conference room or lecture hall to listen to a seminar on management skills and then be required to participate in some kind of role-play where volunteers act out how best to deal with delicate work situations based on what they were supposed to have learned in the preceding lecture.

A group of Baruch College students understood how awkward, embarrassing, and ineffective that type of training can be, and they wanted to start a leadership-training company that used computer games to build management skills. That idea led to the formation of Kognito, which was co-founded three years ago by Baruch alumni Ralph Vacca and Ron Goldman, just after they graduated, and the school’s psychology department chair, Glenn Albright.

Trying to start a company from scratch can be an intimidating task, especially for young adults right out of college. But the school tries to encourage just that with its annual Baruch College and Merrill Lynch IPO Challenge, inviting students—both graduates and undergraduates—to submit their ideas for start-up businesses.

Competitions like Baruch’s are increasingly becoming applicable off campus. More than mere simulations, these contests give ambitious students not only the opportunities to conceive of useful solutions to real-world problems, but also the resources to put those solutions into action. And the result is that many young adults are running their own businesses immediately after graduating from college.

For the Baruch entrepreneurial contest, a panel of professors and local business professionals judge student concept papers in September and choose student teams to compete in the year-long program, which consists of seminars, workshops, and regular meetings with mentors. By April, the students have written drafts of their business plans that include business-launching strategies. In May, judges select the winners, who receive seed money to start their businesses.

Several of the participating teams, even those who don’t take first place, have gone on to form their own companies. Kognito was the third-place winner from 2003.

Vacca’s interest in leadership training stemmed from a curiosity about human behavior, a fascination with computer games, and the view that games can have a huge impact on learning.

So his team thought a computer game that simulated office scenarios and evaluated users’ decisions would be a useful management training tool. Trainees playing the computer game might be confronted with a scenario like this: An employee, “Joe,” is great at his job, but repeatedly arrives late to work. The game’s user has to confront Joe and have a discussion with him about the problem. The game then provides feedback to the user. With the Kognito software, says Vacca, “you can practice management skills in your bathrobe.”

After taking third place in the competition, the Kognito team split up when Vacca’s teammates took other full-time jobs. But Vacca remained committed to the concept and met another Baruch graduate, Ron Goldman, who could help him start the business.

Vacca and Goldman now work full-time for Kognito and have 10 employees, whose roles range from software design to marketing. Their clients include corporations, schools, and government agencies, and their list of products has grown from management training to other programs like Adventures in Statistics, Chemistry Lab Safety, and Guide for International Students.

And Goldman and Vacca are both serving as mentors to students competing in this year’s entrepreneurship challenge.

For Vacca, the competition forced him to do his research because there were a lot of experienced businesspeople judging his work. “I wouldn’t have had the patience to develop the business plan on my own at that point,” says Vacca. “The competition gives you a good framework and saves a lot of agony and time.”

Barry Dumas, Baruch professor of computer information systems, who runs the Baruch/Merrill Lynch challenge, says the competition gets more demanding each year and he’s working on getting academic credit for students who participate. For now, Dumas says, students enter the competition for their own professional benefit. “This is still the best learning experience they can get,” he says. “A lot of college competitions amount to a term project. This is a rigorous professional exercise, not just a classroom exercise.”

Universities and colleges aren’t the only organizations getting students on the fast track to business ownership. For the past three years, the Environmental Protection Agency has run its P3—for “people, prosperity, and the planet”—competition calling for university students to submit proposals for ways to promote sustainability, the environmental buzzword for pollution prevention and natural-resource protection. One of the competition’s first participants, a team from Oberlin College in Ohio, now has its own company based on the group’s winning entry, an energy-usage monitor for the campus’s environmental studies building.

Considered a “green building,” referring to its low impact on the environment, the Adam Joseph Lewis Center for Environmental Studies was designed to use solar energy, treat its own wastewater, and rely on its own weather station to adjust the building’s temperature and lighting based on current weather conditions. The building also has 150 sensors that monitor energy and water usage every 60 seconds.

“But there was a problem,” says 2004 Oberlin graduate Michael Murray, who studied the Lewis Center. “There were so many great opportunities with the building. The sensors were collecting so much information, but there was no way to display that technical information to a non-technical audience.”

So Murray, along with classmates Gavin Platt (’06) and Vladislav Shunturov (’05), and advised by environmental studies professor John Petersen, entered the EPA student competition to test ways to monitor energy and water usage in buildings and translate that information into everyday language and graphics so people working or living in buildings would be able to understand how they affect the environment.

They were so successful in the competition that they formed a company, Lucid Design Group, that now develops software and provides consulting services to schools across the country wanting to monitor energy usage on their campuses.

For the EPA award, the Oberlin students and faculty came up with an idea to hold their own campus-wide competition to see which dormitories could reduce their energy consumption the most. The project abstract made it through the first phase of the EPA competition and earned a $10,000 grant to develop energy-monitoring software and install it in half of Oberlin’s residence halls. Murray graduated, but his classmates and adviser continued with the energy reduction contest.

By April 2005, all the school’s dorms were competing. And by the end of the 2004–2005 school year, the environmental studies team found there was an 11 percent reduction in energy consumption campus-wide, while the buildings that used the real-time monitoring software reduced consumption by more than 50 percent.

“That showed us that occupant behavior is a big part of energy usage in a building,” says Murray. “People use less if they’re engaged in the monitoring.”

Competitions like Baruch’s and the EPA’s help students accomplish something that many adults hope for their whole lives: to work for themselves. But owning a business can be stressful. Work can encroach on personal lives when people run their own companies, and many small businesses fail. Can achieving this type of autonomy at such a young age lead to early burnout?

Vacca, 25, says he doesn’t worry about that. “I never think about what the next thing is,” he says. “I just think I’ll be here, doing this forever.”

He points out that entrepreneurs do miss out on certain things. For an older business owner, family time might be sacrificed. For someone like Vacca, going to clubs or just hanging out with friends is sacrificed. But he doesn’t worry about that too much either.

For Vacca, the major concern is about giving up on what he views as his own individual development. He is currently on what started out as a year-long leave of absence but has been extended for another year from an educational-psychology doctoral program. He says it’s difficult sometimes going to educational-psychology seminars and listening to Ph.D.’s give presentations. “I kind of wish I could be doing that,” says Vacca. “But I definitely see myself going back to school. Ideally, I’ll be able to juggle being a professor and running Kognito.”