Enstitute: The entrepreneurial alternative to college

October 6, 2013 at 12:00 AM EDT
As the cost of higher education mounts, debt-laden students, cash-strapped parents and members of the media are asking: is traditional college still the answer? Correspondent Mona Iskander reports on Enstitute, a two-year apprenticeship program that matches 18- to 24-year-olds with some of New York's top entrepreneurs.

MONA ISKANDER: Every year, thousands of young people around the country celebrate this important rite of passage: college graduation.   For generations it’s been the traditional route to adulthood and success.

So how did 21-year-old Sebastian Stant, a college dropout, end up here working side by side with the president of a multi-million dollar tech start-up?

SEBASTIAN STANT: I feel like the sky’s the limit right now, and when I was at college, the limit was 4.0.  And, like, here it’s, like, if I work hard enough, like, I can  pretty much, like, accomplish, like, what I’m trying to do.

MONA ISKANDER: He got this job through a non-profit organization called Enstitute – it’s a two year apprenticeship program for young would-be tech entrepreneurs that aims to be an alternative to higher education.

Sebastian works with Daniel Klaus, the president of Airtime, a video communications company.

DANIEL KLAUS:  Sebastian in particular has done a great job of sort of, like, grabbing onto a task, learning about it, asking for input, having– you know, receiving input as we go, and learning along the way.  So it’s actually been really productive for us.

MONA ISKANDER: More and more young people like Sebastian Stant are looking for alternatives to a college education partly because while college grads earn much more over the course of their lifetimes than those with only a high school degree, recent college graduates have struggled. In 2011, estimates are that half were either jobless or working in a job that didn’t require a four year degree.

These kinds of numbers are what prompted Kane Sarhan and Shaila Ittycheria to act.

KANE SARHAN: We believe that you need to learn. That you don’t just graduate high school ready to run a company or– ready to work anywhere.  But we think you just need to be able to learn different ways.  And it doesn’t all have to be in a classroom.

MONA ISKANDER:  Sarhan and Ittycheria are the brains behind Enstitute. Both are big believers that learning on the job provides far more value than learning in the classroom. For Ittycheria, that comes from personal experience.

SHAILA ITTYCHERIA: When I joined the startup community, saying I was a Harvard MBA was the biggest thing to shut doors in my face before anything else. I actually stopped mentioning that I was an MBA because people have many interpretations of what that word means.  And they actually don’t really know how good you are.  So instead, I started working at another startup for free where I proved my competency and my value.

MONA ISKANDER: Soon after, when she got a job in charge of hiring new talent for a tech start up, her belief was reinforced that experience is more important than a fancy degree.

SHAILA ITTYCHERIA: Time and time again, regardless of what school these young adults came from the best Ivies to small unheard of community colleges, they couldn’t critically think through anything.  And it didn’t inspire any confidence in me. If I give you a task can you actually get this done.

MONA ISKANDER: So in November 2011, she and Sarhan, who also worked for the same tech start up, quit their jobs and created Enstitute.  They raised $90,000 by liquidating their personal savings. … and another $300,000 from private investors, including Microsoft. When they solicited applications… nearly 500 young people applied and 11 were chosen. 

KANE SARHAN: You know, we get hundreds and hundreds of applications  saying, “You know, college isn’t working for me.  I can’t afford it.  It’s not the right program for me.  This is what I’ve been looking for.” 

MONA ISKANDER: Take Sebastian Stant. He left Virginia Tech after a year and a half.

MONA ISKANDER: In college there are classes you take that won’t necessarily be part of your career but make you a whole person.  I mean, do– you miss those kinds of classes?

SEBASTIAN STANT:  No. I remember my freshman year sitting in my– astronomy class. And it was a 90-minute course and I remember just sitting in the class thinking that some other aspiring, young tech entrepreneur was using that 90 minutes to, like, further his career.

MONA ISKANDER: Sebastian and the others in the Enstitute program still spend 6-8 hours a week on academic pursuits… everything from art history to engineering. 

But they spend at least 40 hours a week working for tech companies that provide two year apprenticeships through Enstitute. The companies pay Enstitute a small fee to access applications and a recruiting fee if they end up hiring the fellow full time.  Companies include,, thrillst and flavorpill.

For the last year, each fellow lived for free in this Manhattan apartment, sharing cooking and cleaning duties, and living on their earnings of $800-$1,000 a month.

MONA ISKANDER: So an outsider looking at your program might say, it’s two years very little pay.”  no guarantee that– that any of these young people will get jobs in those industries.  I mean, it’s a big risk.

KANE SARHAN: I think when you come and sit down with our students and you ask them if they feel like they’re not going to get a job, they would 100 percent disagree with you. Right?  They see firsthand the networks they’re being exposed to, the people they get to work with, the– on the job training and education that they’re getting. 

MONA ISKANDER: Once or twice a week they invite tech entrepreneurs to network with the fellows.  

JEFF SELINGO:  The technology industry as a whole has been very used to this idea of students not going to college and getting certified.  I’m not quite sure that the rest of the economy’s quite ready for that. 

MONA ISKANDER: Jeff Selingo is an editor at the Chronicle of Higher Education, a weekly news service that covers academic affairs. He says that higher education is in a state of crisis. For public universities alone, instate tuition rose 66 percent between 2002 and 2013 – making it unaffordable for many Americans. And that’s even harder for parents of college age students to swallow, given the difficulty many kids have getting a job once they graduate. 

JEFFREY SELINGO: Right now, we have this one-size-fits-all system that treats most students alike. Students want a more flexible experience.  They want to have a chance to work.  They want to have a chance to study abroad. They want to have a chance to learn online, as well as face-to-face. This is where I think that higher education really needs to take– a cue from– a place like Enstitute and say, “how do we build into the curriculum, that kind of experiential learning?”

MONA ISKANDER: I mean, they really see themselves as an alternative to college.  Do you agree with that?

JEFFREY SELINGO: I see them as an alternative to college– at 18.  But having a college degree, at some point in your life, is still the best insurance against unemployment and getting higher salaries over the course of your lifetime. 

MONA ISKANDER: Even so, more and more alternatives to colleges are popping up for a small number of students with an entrepreneurial bent.  Pay-pal founder Peter Thiel started a fellowship giving $100,000 to young adults to skip college and focus on entrepreneurship full time. Uncollege Gap Year is a program in which young people design their own education paths by pursuing creative projects around the world.

And the Mycelium School is a 9-month residential education program for young people interested in social entrepreneurship.

Selingo says that these types of options, including apprenticeships for skilled trade jobs like electricians and carpenters should be encouraged.

JEFF SELINGO:  It used to be in the United States that apprenticeships were very big.  And the idea that not everybody necessarily went to college and that you kind of learned on the job.  And this still is true in other parts of the world.  In Germany, for example, a lot of students end up going to apprenticeships instead of college.

MONA ISKANDER: As for Enstitute, new companies have already signed up as it plans to expand to 100 fellows and open offices in Washington DC and St. Louis this January.   

And for Sebastian Stant, he’s been offered a full time job with the company where he’s doing his apprenticeship.  But he has ambitions to one day start his own business creating technical innovations in the political campaign field.

MONA ISKANDER: What happens if your dreams of building a company aren’t realized and you need to go into the job market? 

SEBASTIAN STANT: So, and I think this kind of, like– relieved my mom a little bit.  Is the idea of, like, college is always going to be there, and they’re always going to want my tuition, and there’s always going to have, like, space for me.  And so if worse comes to worse, like, I guess I can go back to college.