STATE COLLEGE — Sometimes the first idea for a business isn’t quite right but sets you on the right path.
Before founding LinkedIn, Reid Hoffman founded a failed online dating service called SocialNet. Arianna Huffington had her second book rejected by 36 publishers before launching The Huffington Post. And for Penn State juniors Michael Miller and Jack Quinn, their first idea was LineHopper.
LineHopper set out to solve the problem of students having to wait in long lines at the HUB-Robeson Center by being able to pay for someone else already in line to buy your food though an app.
“We thought it was a pretty good idea and we just wanted to go for it and build it,” Quinn said.
But figuring out the next steps were a little blurry so they applied for the Idea TestLab, a signature program of Invent Penn State’s Happy Valley LaunchBox in downtown State College. The program helps entrepreneurs validate the feasibility of their idea becoming a viable business.
The next Idea TestLab will run in October and the deadline for applications is Sept. 15. Teams accepted into the next Idea TestLab will meet weekly for four two-hour sessions from 6 to 8 p.m. on Wednesdays Oct. 2, 9, 16 and 30. Participants also have 24-7 access to LaunchBox during the program, one-on-one mentoring and can receive up to $3,000 for customer discovery.
“All businesses start with an idea. The trick is finding out how to turn one into a viable business. This is what we focus on in the Idea TestLab. We work to give people the tools they need and to demystify the process of starting a business,” said Lee Erickson, Chief Amplifier at Happy Valley LaunchBox.
The program is ideal for testing business ideas sketched out on the back of napkins like LineHopper. Over the four weeks, Miller and Quinn talked to potential customers, tested assumptions and questioned whether they were working on a problem worth solving.
“After going through the Idea TestLab, we realized our idea had a lot of issues and decided to pivot,” Miller said.
The students concluded their app needed a two-sided marketplace of student who didn’t want to wait in line, as well as those who did, which can be difficult to grow. Additionally, after speaking with dozens of potential customers, it wasn’t clear anyone would pay for a service like LineHopper.
“The TestLab showed us the more people you talk to, the more you see what they’ll pull out their wallets for,” Miller said.
Undeterred, Miller and Quinn brainstormed other problems they could potentially help solve for their fellow students—eventually seeing an opportunity around college loans.
“We talked to students who had loans and many didn’t really know the best way to pay them off,” Quinn said. “Lots of people talk about avoiding $3 coffees but we saw the biggest problem is not daily purchases. It’s taking out $10,000 in loans and not having a plan to pay it back.”
Miller and Quinn’s new business, loancrunch, gives students a strategy to pay off their loans with less effort. Currently, the cofounders are going through the same process they learned at the Idea TestLab but this time, the results are more encouraging.
“The Idea TestLab was a springboard for us learning how to build a viable startup. The cool thing is that it all starts with an idea but where it takes you, you never really know until you try,” Miller said.
For teams that have businesses beyond the idea stage, Happy Valley LaunchBox runs the FastTrack Accelerator, a 15-week program that takes a validated idea and tests it in the market with customers. The LaunchBox is also encouraging community members, students, faculty, staff apply to that program by Oct. 26.
For more information visit launchbox.psu.edu/application. The Idea TestLab application deadline is Sept. 15.