Allied Strategy sets path for Raikes School startups

While the Jeffrey S. Raikes School of Computer Science and Management at the University of Nebraska-Lincoln (UNL) is a gateway to corporate positions for some graduates, others use this honors program education and experience to start them on a different path – launching their own companies.

The startup stories of two Lincoln companies that raised significant outside capital demonstrate the ways the Raikes School fosters entrepreneurial development. Formerly known as the J.D. Edwards Program, the school not only blends computer science and business management education, but also aims to integrate entrepreneurial concepts and examples throughout the curriculum.

“The vision is that we don’t teach entrepreneurship as a senior elective,” said David Keck, Ph.D., director of and professor for the Raikes School. “We are continuously building the entrepreneurial perspective into everything we do from the ground up, without distracting us from also doing accredited, rigorous, scholarly work, but we do encourage students to take entrepreneurship elective courses.”

As an example of this integration of entrepreneurial topics, Keck said in his finance class he has deemphasized bond capital calculations and emphasized equity venture capital calculations like pre- and post-investment value, related risk and return and the number of shares issued to the venture capitalists.

The stories of Allied Strategy and Agile Sports demonstrate an ongoing collaborative relationship between the companies and the school. The school provided a setting, education and tools that fostered startups capable of attracting significant capital. In turn, the companies’ founders, all graduates of the program, give the school feedback on how to improve entrepreneurial education, serve as mentors for students and have hired Raikes School students and graduates as interns and employees.

Founders of both Allied Strategy and Agile Sports say the close relationships they formed at the school with students of similar interests and abilities were important to their companies’ formation.

“Never underestimate putting all those people in the same place and having them get to know each other,” said Colby Thomson, co-founder and chief executive officer of Allied Strategy.

The Raikes School’s setup primes the pump for such relationships to develop. Honors students with interests in business and technology leadership sleep, eat, study, attend classes and work under one roof at the Kauffman Academic Residential Center, modeled after Oxford University’s residential colleges.

In addition, founders of both companies say a unique feature of Raikes School education, Design Studio, was a key component in their businesses’ growth and development.  Design Studio enables juniors and seniors at the Raikes School to work as technologists and business managers on real-world software development projects.

Milestone celebration

For Allied Strategy, the idea for their main offering occurred after the students who would become the company’s founders participated in a Design Studio project with Mutual of Omaha their junior year. Working with the company helped the students understand problems in the insurance industry. Thomson and Allied Strategy’s other founders, Jeff Runyan, Allied Strategy’s chief operating officer, and Britton Nielsen, the company’s chief information officer, realized they could create a solution for some of these industry-wide problems.

“You never really have the ability to be confronted with that unless you see inside of a system, and say ‘Wow, there are huge opportunities here,’” Thomson said.

Companies who want to contract Design Studio projects pay a fee to the Raikes School for the work. Since students aren’t paid for Design Studio work and projects are considered “work-for-hire,” the University of Nebraska-Lincoln doesn’t maintain rights to intellectual property students create, which is an incentive for companies offering students these experiences.

In 2003, while the founders were still students, they decided to contract a Design Studio project with the Raikes School to work on their ideas for Allied Strategy.

In addition, the founders took a business plan writing class available to all UNL students that resulted in an award-winning plan for their company. In 2004, they won the undergraduate division of the Nebraska Center for Entrepreneurship’s New Ventures World Competition, earning a $7,500 prize. Their team was the first Nebraska winner in the competition’s 18-year history.

They also won prizes in Colorado State University’s Venture Adventure competition and were finalists in the NU Venture Capital Competition round, notable since they were still undergraduates.

In 2004, while working on MBAs at the Raikes School, they contracted another Design Studio project.

In 2006 when the founders graduated, Allied Strategy began full-time operations. The company started out in a shared low-rent building with ISoft Data Systems, Agile Sports, and other startups until some of the businesses moved into Turbine Flats, an office space with a collaborative atmosphere where Thomson is the co-founder and vice president of its board of directors.

Allied Strategy group photo

Their first two Allied Strategy hires after the founders came from the Raikes School, and they contracted a third Design Studio project in 2007.

Today Allied Strategy has about 20 full-time employees and plans to hire several more this quarter.  Eight of their current employees were Raikes School students.

Runyan said the ability to hire developers from the Raikes School was one of their top reasons for staying in Lincoln.

Alumni activities provide another win-win for the school and local Raikes School graduate-founded companies. The founders mentor students and speak at the school regularly. As alumni they can attend small closed sessions with Design Studio speakers, which have included Bill Gates, Tom Osborne, Jeff Raikes, and Twitter co-founder Evan Williams.

Allied Strategy’s mission is to improve the insurance experience for consumers, an issue Thomson is passionate about after watching his mother deal with insurance concerns arising from health issues and a house fire. Their first product, SEMCAT, helps insurance agents compare prices of insurance offerings and enables them to interact with consumers on the Web. SEMCAT is now used by thousands of insurance agents in the United States and European Union and supports more than 250 U.S. insurance companies. The team is planning several new products to assist consumers, and releases new features on a weekly basis.

In an email, Thomson said the company received unsolicited acquisition offers shortly before reaching profitability last year.

In addition to the Raikes School, Turbine Flats and the Nebraska Center for Entrepreneurship, Thomson said entrepreneurial resources helpful to Allied Strategy include the Kauffman Foundation, the Entrepreneur’s Exchange in Kansas City and Big Omaha/Silicon Prairie News.

In a future post, Nebraska Entrepreneur will examine the history of Agile Sports and its relationship to the Raikes School.