A commonality between many entrepreneurs is that they were pushed.
Whether by boredom, a sense of naivety, or grave need, something sparked them to jump off the proverbial cliff and into business for themselves.
For Lewis Sheats, a serial entrepreneur, lecturer at NC State University and founding member of the new NC State Entrepreneurship Clinic at HQ Raleigh, it was a need. And hundreds of NC State entrepreneurship students along with dozens of Triangle-area startups have benefited as a result.
As the clinic prepares to kick off its second semester of putting students to work on local startup projects (Startups can apply here) along with publishing research on entrepreneurship in this region, we sat down with Sheats to hear his startup story and get behind what’s driving him to make NC State a national leader in entrepreneurship education.
Early Entrepreneurial Sheats
It all started at the young age of 22, when Sheats was a full-time student at NC State and warehouse clerk at Rex Hospital with three mouths to feed.
In the late 90s, Rex began working on a “just in time system,” which had previously only been implemented at Stanford University Hospital. This system was designed to increase the efficiency and decrease waste in the hospital by eliminating the need to carry inventory of various medical supplies.
Rex began ordering supplies only as needed, thereby reducing inventory cost.. Sheats noticed an opportunity for the more frequent shipping and delivery required, so he started a courier business called Interstate Logistics.
“I already had a van (…) so I figured it could work,” he says.
But Sheats had a problem. As is common among young entrepreneurs, he never made a plan and quickly figured out how difficult it was to run a business. Soon after launching his venture, he adopted the slogan “anything, anytime, anywhere,” and began fielding all kinds of requests for delivery services.
“So that meant moving organs one day and cheese sticks the next,” he jokes.
His wife helped him maintain the business but they only charged $11 per delivery, cutting margins pretty slim.
The big break for Interstate Logistics came after Sheats got a call to move some items from a nursing home to pharmacy warehouses—this forced him to develop routes to increase the efficiency. From then on, the majority of revenue came from these dedicated routes and the business took off. Six years later, after boredom set in, he found someone to manage it. Later, he sold the company.
The next decade of startup
Over the next nine years, Sheats created four more startup companies, including an on-site oil change business and a corporate gift company, which was eventually sold. The most notable locally was Securus, which made GPS-enabled mobile security devices to keep track of pets, children, seniors or cargo. That company was sold earlier this year.
But Sheats left its day-to-day operations years ago because he’d become so enamored by teaching. It all started in 2002, when he began giving talks to an entrepreneurship class taught by Gary Palin, a globally-recognized entrepreneurship professor who now teaches at Elon University.
As he spoke more and more about the process of starting and building companies, his talks evolved into a teaching position at NC State. There, he’s become passionate about helping students learn from his biggest mistakes—naivety, lack of capital, and a complete lack of focus.
He also realized the most common challenges to entrepreneurship for college students, the impetus for the new clinic and his evolving course offerings at NC State as head of its entrepreneurship curriculum within the Poole College of Management.
Those challenges are lack of true experience, which leads to “blindness” of all the different entrepreneurial opportunities around them. They also lack a good network. Most of their relationships involve other 20-somethings, severely limiting their funding and mentor prospects.
Finally, most graduates are broke, making it incredibly difficult to start a business.
Innovating in Entrepreneurship Education
Sheats now teaches undergraduate classes to address these problems—25 student startups have spun out of classes like Finance and Accounting for Entrepreneurship, where they learn revenue models and how to validate pricing, and New Venture Planning, where student go out and talk to customers and validate their ideas using the Lean Business Canvas Model then pitch to angel investors.
He also serves as director of the NC State Entrepreneurship Clinic, which launched in January at HQ Raleigh to give students real world experience and embed them in the local startup community. It brings students interested in entrepreneurship together with early stage companies that need help with some aspect of their business. Students help companies complete projects like market research, marketing strategy, business plans, customer acquisition and more.
So far, more than 85 companies have applied to work with students on various projects and 19 companies are on a waiting list for the fall. Projects range from creating social media marketing plans and implementing short-term campaigns to completing six-month market analysis research.
For Vital Plan, an HQ Raleigh-based startup that makes and markets natural herbal supplements for people as they age, teams of graduate and undergraduate students completed projects over the last year. One undergraduate helped monitor analytics during the previous semester—the more experienced group (affiliated with the clinic) conducted important research about Lyme disease around the world, helping co-founder Braden Rawls to better understand her market as she plans for expansion.
“Having NC State behind you brings a lot of credibility,” she says. She was able to mention the students work for the first time at an investor meeting last week. “The value was when I could say, ‘We’ve done our research but we also had a team of students look at our analytics and give a second opinion.'”
The need for students to be a part of the growing entrepreneurship culture—outside the walls of the classroom—is what has propelled the growth of the clinic, Sheats says. While some students are required to participate for class credit, many choose to for the experience of working with local companies and building their resumes. 96 students were engaged in the clinic in the first semester.
His goal is to make the clinic truly interdisciplinary this fall, inviting engineering, computer science and general business students to participate in projects. He’ll also create some hierarchy, in which sophomores and juniors participate on teams led by seniors who have already worked on projects in the past. Most companies have been between launch and series A funding so far, but he also expects to start bringing in earlier stage projects, especially if those companies are led by fellow students.
Innovating in Entrepreneurship Research & Finance
Sheats is also committed to collecting important data about the companies and founders involved in the clinic to help understand the value the clinic is bringing and the mindset of local entrepreneurs over time. Student teams collect some of that data daily as they are working. The second piece is a quarterly survey open to all Triangle entrepreneurs. Sheats calls that the Quarterly Outlook of Triangle Entrepreneurs Survey or QuOTE. He believes its unique because companies are surveyed in the midst of their journey, rather than after some piece of it has happened.
“The goal is that we can look back and see if there are some characteristics or factors that can lead to success, whether it is openmindedness or funding or the team,” he says. He expects the findings to dictate how the clinic works with future teams.
To help solve students’ final problem—lack of funds—Sheats is also advising two former NCSU students on the creation of Malartu Funds, a crowdfunding platform that allows student-led and other young startups to raise seed investment from accredited investors.
“For the real early-stage, younger entrepreneur, it’s tougher,” Sheats says. “It’s hard to get the Marks of the world to meet them.”
Sheats hopes that by eliminating the challenges and providing unique opportunities through the clinic, it will be easier for students to make the decision to continue with their startups after graduation. The clinic will also be an important tool for helping determine the most promising of those students.
“There really isn’t a standard set of characteristics that defines entrepreneurship,” Sheats says. But he adds that one thing he knows that separates true entrepreneurs is action.
”They tend to say something and then follow through with it,” he says.
That seems to be true with Sheats as well. He believes he can affect change in a community, and he does so.
Sheats’ famous advice to all his students is this: “Embrace ambiguity because things will always change, but you have to thrive for the action, if not, you’re just a talker.”
ExitEvent Editor Laura Baverman contributed to this story.