The passions and privations of the start-up entrepreneur

Mark Ostow

Deputy director Shana Schneider ’00 and director Jim Boyle ’94PhD help nurture student inventors and entrepreneurs at the Yale Entrepreneurial Institute. View full image

Before he came to Yale, Arun Gupta ’11 was an avid tennis player. Doubles was his game. He played for his high school team, and his partner, Greg Nemeth, was also his best friend. The duo typically practiced early in the morning and, much to their chagrin, found that the quality of their practices was highly erratic. Some mornings they were smashing winners, and other mornings they simply couldn’t. After a while, Gupta noticed that his personal performance appeared to be directly correlated with how he felt when he rolled out of bed. If he woke up feeling alert, he played well; if he woke up feeling groggy, he usually ended up playing poorly.

One day after practice, Gupta mentioned this pattern to his partner, and Nemeth posited an explanation. Gupta was groggy, said Nemeth, on the days when he failed to wake up during the REM stage of his sleep cycle.

On any given night, we cycle through REM sleep four or five times. In REM sleep, our breathing, heart rate, and even the electrical activity of our brain cells look much as they do when we’re awake. For this reason, REM sleep seems to be a natural precursor to waking. In general, if we rise from REM sleep, we feel more alert, but if we’re pulled out of a deeper stage of sleep by an alarm, we feel blearier and more listless.

When Nemeth explained all of this to his doubles partner, Gupta asked half-jokingly why his alarm clock wasn’t smart enough to wake him up at the right moment in his sleep cycle. The more he thought about the concept, the more he liked it: a device that would allow him to wake up on the right side of bed for the rest of his life! He briefly obsessed over the ideal of a REM-sensitive alarm clock.

But the idea remained a pipe dream. High school ended; Gupta went on to Yale and Nemeth to Boston College; and Gupta forgot about his alarm clock until his sophomore year at Yale. It was then that he discovered the newly created Yale Entrepreneurial Institute (YEI)—an incubator for aspiring inventors and entrepreneurs. And suddenly Gupta was obsessing over alarm clocks once again.

The origins of YEI can be traced to an article that ran in the Wall Street Journal in the fall of 2006. The article highlighted a recent graduate who had concluded that New Haven simply didn’t have the resources to support young entrepreneurs. Jon Soderstrom—who, as managing director of Yale’s Office of Cooperative Research, helps academics build viable products and companies based on their research—was dismayed by the article. He shared it with several colleagues, including Rich Madonna and Jim Boyle ’94PhD, and the two began looking for a solution. They consulted with Sean Glass ’03, Mark Volchek ’00, and Miles Lasater ’01, who, in 2001, had founded a student organization called the Yale Entrepreneurial Society (YES), not to mention Higher One, a successful New Haven–based business. (For more on YES, see the December 2002 issue on our website at yalealumnimagazine.com/archive.)

Ultimately, Boyle and his colleagues decided that what Yale needed was a networking hub—a place where entrepreneurs could meet, find mentors, get advice, and connect with venture capitalists. The project opened with a ten-week summertime crash course in starting new ventures. Yale administrators liked the idea, and in 2008 they made YEI an office of the university and appointed Boyle—himself an entrepreneur, who had started his own first venture while a graduate student at Yale—as its director. Fellows typically receive $5,000 stipends and attend seminars on, for example, writing a business plan and creating a proof of concept for a product or service. Students also get a bit of polish by hobnobbing with business executives. “We will bring in a senior guy at eBay and he will give an hour lecture,” explains Boyle. “And we strongly encourage our fellows to seize the opportunity and start building a relationship with him then and there.”

For the most advanced and promising ventures, YEI offers subsidized office space at its own headquarters, above Ashley’s ice cream parlor on York Street. When I first visited the place, in February of 2009, there were several phone discussions taking place on the narrow, dimly lit stairwell leading up to the institute. Undergrads, dressed in jeans and sweatshirts, were talking on their cell phones: “Our CFO won’t be back until Sunday, so let’s schedule the meeting then,” one was saying. “Yes, sounds good!” another exclaimed. “We’ll be meeting with the investors by then.”

Upstairs, I bumped into Jonathan Hartman ’09, who was developing a robotic forklift. Despite the current state of the economy, Hartman was gung ho: “I have no mortgage, no wife, and no kids—you know, why not!” (Hartman has since mothballed the project and is now at Sikorsky Aircraft.)

I stopped in at the office of YouRenew, a Web-based company that will buy your old cell phone and then resell it or recycle it. Rich Littlehale ’11, the company’s cofounder, had just dropped out of Yale temporarily and said he was putting in 90 to 100 hours a week. His co-founder, Bob Casey, told me his parents actually want him to party more. One night when he called, they said, “You’re calling home and it’s eleven o’clock and you’re still in the office. Why aren’t you out? It’s Friday night!”

Casey and Littlehale had seen some financial ups and downs. Until just a few days earlier, they had been completely out of money. “We’ve given every dime we had in savings, every dime we made from summer jobs, from Yale on campus jobs—anything we had, we’ve given to this,” Casey said. They had been two or three months behind on the minimal rent for their YEI office. Then, finally, some investors committed. “We went from being tens of thousands of dollars in debt to being ahead of the curve,” said Casey giddily. (That summer, they would receive another infusion—$950,000 in all.)