300-Plus Sloanies Graduating Today—Forming 34 Companies (and Counting)
[Updated, June 4, 2010---see below]—A small whiteboard set up in the offices of the MIT Entrepreneurship Center is covered with a hand-scrawled list of names—so many that E-Center acting managing director and Xconomist Bill Aulet says they had to pick up the list on the other side of the board. The long list is a result of a survey the E-Center did of today’s impending graduates of MIT’s Sloan School of Management (of which the center is a part). And it represents the names of all the new graduates planning to start companies after they graduate.
So far, Aulet says, the list tallies 34—and counting. When you consider that the entire Sloan graduating class numbers close to 350, he says, that means that “approximately 10 percent are starting companies—that’s huge.”
Aulet thinks the rate is especially remarkable when you consider that an MBA degree from a place like Sloan can often command salaries in the $100,000-$200,000 range, and that by choosing to go the startup route, you could be trading that for not knowing “if you’re going to make payroll next Friday.”
Now, keep in mind that Aulet had no comparison stats to offer, so we don’t know if the 34 new Sloanies planning to start companies is more or less than usual, or how that number stacks up against other management programs—though his own opinion is that “people from most business schools don’t do that” the way Sloanies do. And after I met him at lunch at Legal Seafood in Kendall Square yesterday, I learned about this New York Times article by former labor secretary Robert Reich, who points out that a wave of entrepreneurship could be a reflection of the still-poor economy. “In a word, unemployment,” says Reich as a potential reason for such a boom (he was speaking of the economy in general and not Sloan!). “Booted off company payrolls, millions of Americans had no choice but to try selling themselves. Another term for ‘entrepreneur’ is ‘self-employed.’” So it could be that even Sloanies are having trouble lining up jobs.
Still, somehow I don’t think that is a huge part of what Aulet is talking about. Given the plethora of new programs and competitions for entrepreneurs here in Massachusetts-everything from TechStars to MassChallenge to incubator programs like Polaris’s Dogpatch Labs—you have to wonder if a new era of more abundant seed capital is helping to attract and encourage entrepreneurs. In any case, this will be a big topic for discussion on June 17 at XSITE 2010—the Xconomy Summit on Innovation, Technology, and Entrepreneurship—where we will have plenary panels on both the new wave of angel investing here in New England and a look at the future of venture capital that includes the move to smaller, more seed-stage funds.
The subject of entrepreneurship will also no doubt come up at today’s pizza party at noon here in our offices. We’ll have guests John Harthorne of the MassChallenge startup competition and Michael Greeley of Flybridge Capital Partners, who is driving the 12 x 12 effort to match Bay State entrepreneurs with experienced mentors—so let’s get the debate going.
As for Aulet, he doesn’t seem to have any doubt that the spirit of entrepreneurship runs deep in Sloan graduates, which is why after lunch he insisted I come by the office to see the “wall” of names, as he called it. He also told me they had gotten a read on what types of startups the group was looking to form. Perhaps not surprisingly, “the lion’s share,” he says, plan to form software or Web companies. That no doubt reflects the ease of starting such companies these days on a low amount of capital. But Aulet says “a decent number” are also planning to start clean energy companies.
“I would attribute that to the ecosystem [here in Massachusetts] and clean energy prize,” he says, referring to the $200,000 annual MIT Clean Energy Prize competition. As for life sciences—not many Sloanies are going there. Biotech and other life sciences startups, says Aulet, will most likely spring more from other parts of MIT that specialize in biology.
Update: June 4, 2010—Bill Aulet reports the number of Sloan grads planning to form companies is 35.