Can Business Schools Teach Entrepreneurship?
When the Dow is sitting at half its 52-week high, the U.S. economy is shedding about a half million jobs a month, and the financial institutions of entire countries are collapsing, it’s as good a time as any to do some hard thinking about your professional future. At business schools these days, more and more students are trying to figure out whether this is the best time to start a business. With entrepreneurship as the flagship program at the MIT Sloan School of Management, the chatter here on this topic is loud.
Since we started in the fall, every professor, keynote speaker, and panelist has said that this is a great time to be an entrepreneur. The reasoning goes that The Party is over, most of the money is gone, and the only people left are the Serious People. And if these Serious People can create products that others need, then there will be suppliers who want their business, and plenty of cheap office furniture. This is what we’ve been told.
“Go for it”
The best way to figure out if this is a good time to be an entrepreneur would be to start a company. Instead, we decided to examine entrepreneurship and its relationship to business school. Can entrepreneurship be taught at a business school? What are the tools that students can use to start new ventures? What kind of environment facilitates budding entrepreneurs? What needs to be changed to encourage entrepreneurship at business schools? Armed with these types of questions we talked to several first-year, second-year, and alumni MIT Sloan students who either have entrepreneurial aspirations or have already started new ventures.
So what did we find out? In our conversations with a select pool of people, there was a near unanimous agreement that MIT Sloan is indeed a fertile ground for aspiring entrepreneurs. Environment, competitions, classes, and access to resources are some of the many factors people cited that help MIT Sloan students build new ventures.
We also found that not everything is perfect. A few small changes would ensure that an even higher proportion of students gets excited and succeeds in starting new ventures.
It’s the Environment, Stupid
The entrepreneurial environment at MIT Sloan was the advantage cited most often among all the people that we interviewed. On paper, MIT Sloan has essentially the same diverse mix of students as other business schools. But here, students hear directly from successful entrepreneurs every day, many of whom were sitting in their seats only a few years before. These entrepreneurs are at once river guides, role models, and catalysts for our own startup ambitions, inspiring us to action.
The ClickDiagnostics founding team is a perfect example of a group of individuals with diverse skill sets, from an MIT neuroscientist to a consultant, who came together as a result of the entrepreneurial ecosystem at MIT and the Cambridge/Boston area.“The idea was so big and we needed passionate people with so many different skill sets—where could we have gotten them all, nowhere else but MIT,” said Tania Aidrus (Sloan 2008). Tania and Ting Shih (Sloan 2009) helped co-found ClickDiagnostics while they were students at MIT Sloan. ClickDiagnostics and their non-profit arm ClickHealth connect rural patients with remote medical specialists through community health-workers equipped with mobile phones.
“Coming to Sloan exposed me to a real network of entrepreneurs,” said Jeff Vyduna. Vyduna is a co-founder of PollEverywhere, which claims to be the most affordable way to make events interactive by displaying and counting real-time text messages and votes from your audience directly in your PowerPoint presentation.
Vyduna is an interesting case study in that he started at MIT Sloan in 2007 but took a leave from the program after the spring 2008 semester to concentrate on PollEverywhere full time. Vyduna said that being around like-minded people at MIT Sloan that he could bounce ideas off of gave him enough confidence that he was right about his idea to go all-in.
Shuba Swaminathan (Sloan 2010), with one venture already under her belt, felt that her Silicon Valley network was inadequate. “My network in the Valley consisted of mostly engineers. Business school was a quick way to diversify and grow the network with top notch people,” said Swaminathan, who is now working on another new venture in the high-tech space.
Although she has only been at MIT Sloan for only seven months, Swaminathan has already felt the power of association with MIT. She believes that the main reason she got an audience with a Fortune 500 CEO was because she was at MIT. “My email to the CEO would have been ignored if it had not originated from the @mit.edu address, I am sure,” said Swaminathan.
Getting an audience with investors, usually not an easy task for many entrepreneurs, gets easier at business schools. Josh Miller (Sloan 2009) says, “As a student, reaching out to other entrepreneurs and VCs for advice, or to invite them to speak, is so much easier. There’s less pressure because we’re looking to them for advice rather than for something more tangible like a job or money.” Miller is a co-founder of 3Play Media, which delivers high quality transcription and web video captioning at low rates.
Even those who did not know what to expect of the effect of the entrepreneurial environment seem to have been pleasantly surprised at MIT Sloan. “I underestimated how much excitement you can generate in others and in yourself by just being around people who are interested and excited in innovation. I feel rejuvenated,” said Chris Mather (Sloan 2010). Mather added two of his current classmates at MIT Sloan to his new venture, which is building an enterprise solution that combines social networking with knowledge management in an organizational setting.
Learn and Compete
The environment, while very important, can only take a new venture so far. Entrepreneurs must test their ideas in different forums. Being at MIT provides entrepreneurs with this highly important outlet in the forum of competitions and courses. The MIT $100K Entrepreneurship Competition, now in its 20th year, was cited by most of our interviewees as vital in the initial formation and expansion of their businesses.
Akshay Nanduri, Sloan 2009, said “I utilized the $100K as a way to develop a business plan and get comfortable with an industry I was not familiar with.” Nanduri, with a background in mobile and Web technology, co-founded a new healthcare venture, RefleXion Medical. RefleXion Medical is developing a novel radiotherapy solution for cancer treatment.
“If there was no $100K then this probably wouldn’t have happened. Getting the feedback and exposure and support was incredible,” said Aidrus and Shih of ClickDiagnostics. ClickDiagnostics was the winner of one of the tracks of the $100K Competition in 2008.
Coursework, both standard (accounting, finance, and economics) and entrepreneurial, were cited as being highly beneficial. Courses in New Enterprises, Energy Ventures, Developmental Entrepreneurship, and Technology Sales offered at MIT Sloan give entrepreneurs the opportunity to form teams, develop ideas into business plans, and figure out how to sell. The ClickDiagnostics team was formed out of a Developmental Entrepreneurship class, and Nanduri worked on the seed of RefleXion in a New Enterprises course. Vyduna said that he uses the basics of micro-economics in his daily business activities. “I, fortunately, took the coursework very seriously while at Sloan and am very glad I did,” he says.
Don’t Get Too Smug
Does this mean everything is hunky dory? No. Everybody we interviewed had suggestions on how to improve and build on the entrepreneurial ecosystem at MIT Sloan. “I wish I had more classmates wanting to jump into a new venture right after school,” said one of them. Another budding entrepreneur said, “More specific advice rather than the generic type that we hear in some courses would be more beneficial.” “Having more access to IT infrastructure and incubation space similar that on the West Coast will provide more resources to cash strapped students,” added another.
But on the other side of this issue, Miller said, “I don’t think you can ask schools to hold someone’s hand too far. The entrepreneur has to really want it and do it himself or herself, otherwise it’s not their company.”
How to Keep it Going
The entrepreneurial “gene” (or perhaps it’s a virus) is, from our conversations and observations, is clearly alive and thriving at MIT Sloan. There is, however, a constant need to keep students motivated, excited, and involved. It is up to students to push themselves and their peers to find their inner entrepreneurs, and up to administrators and professors to listen and keep improving the curriculum. It is this community of students, faculty, classes, and competitions that help students become and grow as entrepreneurs.
But can this community of entrepreneurs be renewed as new students—many with no interest in entrepreneurship—arrive on campus every year? As one anonymous student put it, “Absolutely. Students here are like stem cells, put us in the right environment and we can do whatever the f*** we want.”