Flourishing in the Entrepreneurial Ecosystem

Tanner Nordstrom knew the time was right to start his new business, Hivewire. But Nordstrom also knew he had a problem: he needed to quickly advance his skills, tools, and knowledge to move his new business from idea to entity in a fast-moving industry.

Nordstrom was no novice.

He had already started a small, successful, niche consulting business, which generated observations that led to his new venture. But this time he had bigger plans, plans that required him to find valuable mentors and personal growth opportunities. For that, he decided to pursue an MBA at the BYU Marriott School of Business.

Knowing You Need to Know More

Someone on the outside looking in might wonder why Nordstrom would even bother with an MBA. After all, he already had one successful startup under his belt. Just rinse and repeat.

“I knew that what I wanted to build next was going to be significant in ways that I had never experienced,” Nordstrom says. “It was going to be hard in ways that I could not anticipate.”

The opening paragraph of the Academics section of BYU Marriott’s MBA program website reads, “Success in business comes from knowing which questions to ask in any given situation. By asking the right questions, businesses can avoid costly mistakes. The BYU Marriott MBA prepares its students to recognize problems and ask the right questions to get to correct solutions quickly.” (italics added)

It sounded exactly like what Nordstrom was looking for. What’s more, the program offered an entrepreneurship track, with classes that seemed tailored for him: venture capital and private equity, business finance, entrepreneurial strategy, operations management, and creating new ventures.

Sold.

“The MBA program put me in an environment where I was able to challenge myself to grow in ways that I didn’t think I could,” Nordstrom says. “It’s an ecosystem of entrepreneurial success.”

This ecosystem exists on three key experiential principles: Learn, Do, and Become.

LEARN — Guided by the Gurus

The foundation of BYU Marriott’s MBA program is its faculty. Nordstrom noticed that the entrepreneurship program had made the top ten in the Princeton Review for nine straight years.

“The faculty are at the heart of student success,” Nordstrom says. “It’s not just what they teach you— which is must-have knowledge—it’s also what they can do for you. They can be your guide and mentor. They can introduce you to people and organizations that can help you.” They can even lead you to angel investors for your idea, if they like your pitch.”

During the 2017–18 school year, BYU students were supported by 140 donors and 182 mentors and were awarded nearly $630,000 to work on, validate, and launch business ideas.

DO — The Real Deal

BYU Cougar Capital is a venture capital and private equity fund run by second-year MBA students. “Absolutely the most profound experience for me in the MBA program was being a part of BYU Cougar Capital,” Nordstrom says.

BYU Cougar Capital partners with venture-capital and private-equity firms and becomes a member of the syndicate team conducting due diligence on potential investments. When appropriate, BYU Cougar Capital co-invests with the industry partners in the deal.

“The opportunity to run the fund and make real deals, analyze real companies, invest real money—it taught me so much,” says Nordstrom.

Started in 2005 by entrepreneurship professor Gary Williams, BYU Cougar Capital has produced alumni who currently work in private equity, venture capital, investment banking, government, and award-winning entrepreneurial startups. Forbes magazine designated BYU Cougar Capital one of the most innovative business classes in America.

“We started BYU Cougar Capital with about $600,000 in donated funds,” Williams says. “The fund has a market value now of several million dollars. Students have invested in fifty-two different companies since its inception.”

BYU Cougar Capital—and the MBA program as a whole—taught Nordstrom to think like a venture capitalist, observes Grant McQueen, BYU Marriott’s William F. Edwards Professor of Finance and director of the MBA program. “He learned entrepreneurial strategies,” McQueen says. “He learned how to raise money. He learned how to prepare a pitch deck so he could go to venture capitalists himself and get investments in his new business, Hivewire.”

Nordstrom agrees. “In BYU Cougar Capital, I was the venture capitalist listening to pitches and deciding who to invest in,” he says. “I saw it from the other side, so I realized what I needed to do when I made my own pitch to VCs. Now as I interface with investors on a daily basis, as I look at job applicants, as I look at how I’m managing our strategy, it’s all things that we experienced in BYU Cougar Capital every day.”

Make Your Pitch

Armed with invaluable industry and customer pain point insights, Nordstrom was prepared to enter the Miller Competition Series. This competition series takes place throughout the school year and features eight separate competitions, culminating with the f inal New Venture Challenge.

Nordstrom knew that the Miller Competition Series would be the perfect proving ground for his business pitch. If he won, he would receive funding as well as support and validation that he was onto something. If he didn’t win, he’d still receive valuable feedback that could help him refine his approach.

So Nordstrom, along with BYU computer science major Jacob Shumway, joined forces in hopes of winning the competition series. Nordstrom’s first engineering hire at his previous startup, Shumway would become the technical co-founder and CTO of Hivewire.

“Jacob and I took an early version of Hivewire and made it through to the final stage of the main competition, where we pitched in front of around one thousand people along with a panel of venture capitalist judges,” said Nordstrom.

The pair won.

Nordstrom stayed on campus that summer, holed away in a study room figuring out the best way to use the competition prize money to start Hivewire.

“Jacob and I used that summer to build a proof of concept,” Nordstrom says. “We took the proof of concept and showed it to potential customers. Their feedback has strongly informed the first version of the product that we built.”

Funding and an invaluable co-founder/CTO wasn’t the only thing Nordstrom gained from competing in the Miller Series; he also met another business partner.

Dave Christison, a 2018 BYU Marriott MBA grad, served as Nordstrom’s practice judge while Nordstrom was preparing for the competition series. Nordstrom made a strong enough case that Christison stayed with the project, eventually becoming Hivewire’s third co-founder and COO.

Investment Competition

Another valuable option in the MBA program entrepreneur ecosystem is the Venture Capital Investment 2019–20 ANNUAL REPORT Competition (VCIC). This worldwide competition features fifty-plus events per year on four continents. Divided into undergraduate and graduate divisions, participating teams of students act as investors. They listen to real entrepreneurs pitching ideas to earn investment in their startups.

Though Nordstrom didn’t compete in VCIC, Christison did.

During the competition, real venture capitalists serve as judges. Student teams choose winning pitches, and then judges score teams based on how real-life VCs would rate the pitches. Even though entrepreneurs don’t receive investment dollars through the competition, more than a quarter of them go on to raise the capital they need after participating at VCIC. The feedback they get on their pitches helps make the difference.

“At VCIC, you’ve got the top seventy MBA programs around the world,” Williams says. “It’s invitation only. If you win your region, you go on to the international competition. In the last four years, at the graduate level, BYU has taken first in the world twice and second twice.”

Nordstrom appreciates the reputation BYU has built. “I’ve talked to startup founders who have competed against BYU at VCIC,” he says. “One told me, ‘You guys are on another level—it felt more like a top-tier venture capital firm, not a group of students.’”

BECOME — The Powerful Web We Weave

The connections students make during their time as BYU Marriott MBA students are another key component of the ecosystem. Fellow students, faculty, and a powerful alumni network all come together into a world-class support system as students and graduates move through different phases of their careers.

“The Marriott MBA network provides a massive amount of support,” Nordstrom says. “My network has played a part in fundraising, product testing, making key introductions to other potential customers, and helping us find great use cases. I can reach out to those friends and associations I made during the program, and they will always be there to help.”

That support isn’t unique to Nordstrom, says Williams. “It is fascinating to see the interconnected web of support for Tanner, emblematic of the ecosystem that fosters and feeds all of our MBA students,” he says. “Tanner came into the BYU Cougar Capital class as a first-year student. When he came out, he had his pitch deck together and went out to raise capital and build his company. At one of the firms he approached, the managing director was an alumnus of the program. Tanner also presented to a Silicon Valley venture firm that he worked with during his time in BYU Cougar Capital. He found another investor in one of our MBA graduates from 2006.

“But it doesn’t end there,” Williams continues. “Tanner recruited a graduate from last year [Christison] to help him cofound Hivewire and get it off the ground. And the attorney who closed the transaction was one of our grads. The process is a living ecosystem that’s constantly growing—a powerful, dynamic resource to help you become what you want to become.”

McQueen agrees. “From idea to education, to contacts, and to fundraising, there’s this web of people along the way—teachers, fellow students, alumni—creating the support structure that has helped Tanner launch his company,” he says. “It’s the same for students in all our tracks. The MBA ecosystem helps our students launch and thrive in their careers.”

What’s All the Buzz About?

Nordstrom’s brainchild, Hivewire, is now up and running—and growing fast.

Hivewire is a software where teams create flexible workflow management tools without needing technical skills. Hivewire is for teams whose processes deserve something better than spreadsheets and Trello boards but don’t warrant a large purchase such as Salesforce or Smartsheet.

Current customers are using Hivewire to build:

• A high-volume onboarding tool with personalized views and real-time collaboration
• A lightweight CRM to track pipeline and create dashboards
• A flexible project-management tool to coordinate team tasks and deliverables

As a result, these customers are saving time and money by using the right software, created by them.

“I launched Hivewire the week of graduation,” Nordstrom says. “I recently closed a round of funding with amazing investors, and together with Jacob and Dave, we are building a dream team to make this ambitious idea become what we envision.”

The End Is Just the Beginning

The value of the program and its ecosystem, however, doesn’t end when the last exam is taken and the MBA degree is in hand. It continues into the future.

“Each MBA student has an experience unique to them,” Nordstrom says. “If you go into the program with the right attitude and a high level of engagement, you’ll find an irreplaceable opportunity to develop skills and frameworks that will elevate you personally and professionally.

“I went into the MBA program determined to launch my software idea,” he continues, “and I selectively invested my time and energy in the classes and experiences that I felt would support that goal. For me, it was exactly what I needed, and the results are evident just six months after graduation.

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Photos by Bradley H. Slade