Each year, we at the MIT Entrepreneurship Center at the Sloan School of Management travel to Silicon Valley for a three-day immersion program with our MBA students who have a very entrepreneurial spirit and interest. While we make visits during other parts of the year, this is different in that it is a 24×7 analysis of what is going on in Silicon Valley. We visit dozens of companies, hear guest speakers from the venture capital sector as well as entrepreneurs, attend receptions with other universities in the area (Stanford and Berkeley), connect with alumni in the region, and visit multiple incubators.

While all of this is fantastic, the most fun is the discussions that we all have with each other in the cars, at meals, and at night. These discussions are an analysis of what was heard by the hundred-plus students and staff on this trip. They often carry on and develop over multiple days, and we all get to retest our hypotheses through the many interactions we have each day. We start in the morning together and then spread out over the Valley to multiple companies in groups of usually 4-8 to visit companies and often hang out in common areas in Palo Alto, San Francisco, Menlo Park, or another Silicon Valley spot. We then come back together at night and share our findings.

Within three days, we get a sense of what the new buzz words are and then we gain an understanding of the underlying core concepts—and then, we quickly start to see their limitations and tire of them. Last year it was “pivot” and “lean startup” and this year it was “social graph” and “repotting.” But more importantly, we get a real visceral sense of what the latest trends are that we could not have gotten from anyplace else or a quick drive by. In this vein, here are some of my personal observations:

1. Quora: Wow! Man is this company hot! It is a far from a foregone conclusion that they will be the next huge thing but I would not bet against it. A very quirky company in many regards but they have harnessed a potential major force that we have known about for a while—crowdsourcing—and seem to have found a high quality way to execute it unlike anyone else before them. They have taken the next step to hybridize a key element of Facebook and Wikipedia and are executing on it very well so far. If they can establish themselves as the standard, there are definitely networking effects that could make them the next eBay, Facebook, or YouTube. I had heard their name before but did not realize what a powerhouse this company has the potential to be. They also have Academy Award–winning software developers leading the way. Oh by the way, it is not just me that thinks they are hot, the people in the know loved them too.

2. Facebook Approach vs. Google Approach. While these companies might seem to be similar in many ways, there is a fundamental and profound cultural difference in their approaches. This was pointed out by one very astute entrepreneur and then we tested it for the rest of the trip and it rang true. Google’s approach to problems is a technology-centric solution, i.e., we can solve this with a smart algorithm or some sort of powerful technology breakthrough. Facebook on the other hand has a product-centric solutions approach. This is not to say that Facebook does not have some incredible technologists, they do (and vice versa – Google has some great product people), but rather … Next Page »

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If you’ve spent much time around Boston, you know that the name Babson College is pretty much synonymous with “entrepreneurship.” Centered in Babson Park, MA, adjacent to suburban Wellesley, Babson’s MBA programs seem to churn out startup founders at a rate that’s far out of proportion to the school’s size (1,600 graduate students) or its endowment (just $171 million). The entrepreneurs I met during my three years with Xconomy Boston hailed from Babson just as often as they did from Harvard Business School or MIT’s Sloan School of Management.

Now Bay Area businesspeople who’d like to earn Babson MBAs don’t have to move to Massachusetts to do it—and they don’t even have to take (much) time away from their jobs. In a move that directly challenges local B-schools such as the Stanford Graduate School of Business and the Haas School of Business at UC Berkeley, Babson has set up the second off-campus version of its Fast Track MBA program in San Francisco. The first cohort of 34 San Francisco students began their studies this spring, and the school is already interviewing students for its next class, which will come together starting in March 2011.

It’s a daring and entrepreneurial move, but perhaps not a surprising one for a school that tends to practice what it preaches. After Babson president Leonard Schlesinger joined the school in 2008 from Victoria’s Secret parent company Limited Brands—where he was chief operating officer—he said his goals for Babson were to broaden the definition of entrepreneurship and extend the school’s reach around the globe. “This is our time…and the world can benefit enormously from a much more expansive diffusion of what it is that we do,” he told Xconomy CEO Bob Buderi in an interview last year.

Schlesinger says the principles of entrepreneurship are “documentable, codifiable, and consequently teachable to anybody.” And the Fast Track program is a case in point, representing the school’s attempt to repackage its two-year MBA program into a form that works for busy Bay Area workers who don’t want, or can’t afford, to leave their full-time jobs.

The program involves a combination of face-to-face classes, taught by full-time Babson faculty members, and Internet-mediated distance learning. First-year students start out by traveling to Babson’s Massachusetts campus for a five-day bootcamp. Then they use wikis, blogs, and Web conferencing tools such as Adobe Connect and the Blackboard learning management system to pursue remote projects. Every six weeks, the students gather at UCSF’s Mission Bay campus in San Francisco for an intense two-day session of classes and discussions (8:00 a.m. to 5:00 pm on Friday and Saturday).

“Unlike a typical evening MBA program that requires students to go to campus once or twice a week for the duration, here the students need to come to campus just once every six weeks,” says Raghu Tadepalli, the Massachusetts-based dean of Babson’s Olin Graduate School of Business and one of the architects of the San Francisco program. “We find that allows students, for the remainder of that period, to work or travel, and the only thing they need to access the material is a broadband connection.”

The Fast Track program is competitively priced—the program costs $70,000 for two years, compared to roughly $160,000 at Wharton and $140,000 at Columbia. And it’s tailored for the West Coast’s entrepreneurial culture, with high-decibel give and take between students, according to Tadepalli. “If the Boston program was going at 60 miles per hour, San Francisco is going at 90,” he says. “The students’ expectations are just that different.”

Tadepalli is careful to spell out what the Babson Fast Track program is not. It’s not an online-only degree program like those offered by the University of Phoenix, because … Next Page »

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This is one of the stealthiest and most intriguing cleantech companies in New England. XL Hybrids, based in Somerville, MA, has just received $300,000 in investment from an undisclosed professional fund, which brings its total seed funding to just over $1.8 million. The company previously had raised a little more than $1.5 million in angel investment, about half of which we reported back in February.

XL Hybrids is keeping things quiet for a while, but I’ve gleaned some new details about the operation from talking with Tod Hynes, the company’s co-founder and president. Hynes is a lecturer at the MIT Sloan School of Management, where he teaches a course on energy ventures. He is also the co-founder of the MIT Clean Energy Prize, and has been working in the cleantech industry for eight years, having made his name in wind power development.

The idea behind XL is to convert commercial fleet vehicles—town cars, duty vans, and trucks for hire—into hybrid (gas-electric) vehicles. The company is initially targeting vehicles that travel more than 30,000 miles a year, Hynes says, but that figure will go down with the cost of the XL system. By retrofitting conventional cars and trucks with lithium ion batteries, electric motors, and other integration and control technologies, he says, XL can reduce fuel consumption by 15 to 30 percent, depending on how the vehicles are used. Hynes declined to give details about the retrofitting process, saying it’s proprietary.

Of course, retrofitting existing vehicles to make them hybrid or electric has been a popular idea for some time. What makes XL unique is that it’s focused on low costs and the ability to deploy its technology quickly in a large number of vehicles, Hynes says. Hence the focus on conventional hybrids instead of pure electric or plug-in vehicles. “Our strategy is to focus on the most cost-effective system,” he says. “Our target is a good economic solution…that will reduce petroleum consumption very rapidly.”

“It’s a great economic opportunity,” Hynes adds. “You have to deal with the vehicles on the road. You need to have a hybrid before a plug-in.”

Hynes founded XL Hybrids together with four other MIT alums in 2009. It currently has six full-time employees. The company has been developing and testing its technology over the past year, and is now lining up pilot tests in the Boston area for this fall. If all goes well, the plan is to roll out national pilots soon thereafter.

It probably doesn’t hurt XL’s prospects that crude oil is currently above $75 a barrel. Hynes acknowledges that the price of oil “has a big impact on the business.” But he maintains, “We can make the numbers work down to $50 a barrel.”

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[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.

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[Corrected, 1:40 p.m. May 10, 2010] For teams of student entrepreneurs in Boston, early May means one thing: the culmination of the year-long MIT $100K Entrepreneurship Competition, the country’s oldest and most prestigious business plan contest for young startups, and of its even more lucrative spinoff, the $200,000 MIT Clean Energy Prize. Last week, judges chose finalists in each of the five tracks of the $100K competition and narrowed down the clean energy contenders to just five remaining teams. The big winners will be announced at a public finale event at 7:00 p.m. this Wednesday, May 12, at MIT’s Kresge auditorium.

I got to speak with all but one of the final $100K teams (KarDo) and both of the MIT teams vying for the clean energy prize at a cocktail reception and dinner last Friday at the Beacon Street townhouse of Bob Metcalfe, a general partner at Polaris Venture Partners and one of the $100K judges. My big takeaway was that there are no duds among this year’s finalists. In every case I was impressed by the ingenuity and audacity of the teams’ business ideas and the poise and enthusiasm of their members. While the reception wasn’t technically part of the competition, there were judges, VCs, and journalists such as myself on hand—so the teams, mostly composed of graduate students and business school students, knew they were on stage, and breezed through the speeches and networking with professional aplomb.

Below is a quick rundown of the teams and their concepts. One of the five energy contestants will win the $200,000 clean energy prize after one more round of judging on May 11, and if that team is from MIT, it will be back on May 12 to compete with the five track winners for the final $100,000 prize. (No team has ever won both prizes.) The cash for the prizes comes from a group of sponsors including leading technology companies, investment firms, and service providers.

Aukera Therapeutics—finalist, Life Sciences Track. Team leader Meredith Unger, who will finish her MBA at Harvard Business School this year, said Aukera hopes to treat the devastating neurodegenerative disease amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease, using a form of angiogenin, a naturally occurring protein that stimulates nerve growth. Researchers at Harvard Medical School have shown that the protein is effective against an ALS-like condition in mice (although the big caveat there is that mouse models of human ALS aren’t especially accurate—the only existing drug for ALS, Sanofi Aventis’s riluzole, doesn’t work on mice at all). Aukera hopes to raise money to take the molecule into human clinical trials. She says the good news is that there’s lots of non-dilutive capital available for such a venture, since a number of foundations and government agencies are interested in finding ALS treatments. Aukera plans to stay small and virtual, outsourcing nearly all of its lab and clinical activities.

Insulin Chewing Gum—finalist, Product and Services Track. Every year, the complexity of existing methods for getting insulin into the body lead to complications or death for millions of people with Type 2 diabetes, according to Manijeh Goldberg, a Sloan Fellow at MIT and Harvard Medical School. Her company has a simple concept: put insulin molecules into chewing gum, attached to nano-particles that promote absorption through the tissues of the mouth and throat. Goldberg is getting help with the technology from Praveen Vemula, a postdoc in the laboratory of Robert Langer protege Jeffrey Karp in the Harvard-MIT Division of Health Science and Technology. (I first met Vemula at a Kauffman Foundation reception in Kansas City last fall, where he was being honored as one of the first Entrepreneur Postdoctoral Fellows selected by the foundation.) Goldberg says the company’s platform could also be used to deliver energy supplements or painkillers.

KarDo—finalist, Web/IT Track. Co-founder Hariharan Shankar Rahul says big companies with lots of PCs waste billions of dollars in IT administrators’ time every year on repetitive tasks like configuring laptops to operate within virtual private networks. KarDo aims to solve this problem using compiler analysis and machine learning algorithms developed at MIT. The software … Next Page »

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[Editor's Note: The other day, upon checking Xconomy's e-mail, we discovered the following message, encoded using quantum encryption. We ran it through our nifty decryption matrix, and at first all we could decipher was the reply-to address---MIT's Howard Anderson. But then we realized that we'd intercepted the description for a new course that Anderson is teaching at MIT's Sloan School of Management this spring.]

You are Harrison Ford or Matt Damon and you’ve been dropped into an alien world. Your mission: find the Golden Key which will save the comely damsel and/or unlock the next Billion Dollar Idea from Fortress MIT. You know it’s hidden behind one of the 1,000 doors, each of which is virtually identical. Your time is limited…and evil competitors are racing against you for that exact Golden Key!

What would you do first? Second? That’s exactly what Bill Aulet and I are exploring in an upcoming class at MIT’s Sloan School of Management, 15.390A: New Enterprizes. We’ve recruited Ric Fulop, co-founder of A123 Systems, to help, if only because he has actually done it. The alien world? MIT, and not much is more alien than that. 1,000 doors? That’s the 1,000 professors at MIT and their labs. Evil Competitors? Clearly, the venture capitalists and the snarly mega corporations.

First eliminate as many doors as possible—maybe by bypassing the English and Latin Departments. Math? Music? Better not. Remember Akamai and Guitar Hero.

Second, pay attention to the hirsute gaggle outside each of these doors. They are the starving, caffeine-hyped acolytes sometimes called Graduate Students, motto “Will Kill for Skittles.” They speak in semi-intelligent tongues, if only you can decipher them.

As you frantically sprint down this Infinite Corridor, you are tempted to hire guides, but they speak in riddles. They can’t answer direct questions (“which door?”) but can tell you about patent applications. When you open a door, you can query the recalcitrants inside, asking which of their neighboring doors are potent. Beware! They often send you on goose chases—they have a special power called “tenure.”

Behind each door comes encrypted noise, sometimes called Research Papers, most of which give boredom a whole new meaning. They are read only by the Chosen and their mothers—and they are about arcane processes that only give you a hint about the Billion Dollar ideas.

You are tempted to stop and build the ultimate expert system… a supercharged ATM machine into which you could feed these formula heavy scientific papers, and, if you get exactly the right one, billions of dollars would spit out from the bottom. But don’t. It’s an endless sidetrack, and that damsel is starting to worry! Should she have put her faith in the HBS guy who keeps telling her how good it’s going to be…someday?

Should you go to the exact same door that spilled Billion Dollar ideas before? No! That room is too crowded. Maybe look for solutions to The Big Problem…like curing world hunger or finding a parking space on that MIT lot when there are 10 times more permits than available spaces.

Aha! Why not build a team of junior Harrison Fords—and send some only to those colored doors where they speak the Tongue…and reassemble at midnight and trade insights. Can you trust your team? Are there spies? Does someone have a key that was made for one door… but opens another?

Sound like a fun class? Okay, alert the Hasbro boys that we have their next boffo new game, and cue Matt Damon that we have the sequel to Good Will Hunting and his next blockbuster!

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Business school applications require many thousands of words’ worth of essay questions, usually dealing with those universal but ephemeral corporate themes of Teamwork, Impact, and Dealing With Difficult Situations. Somewhere within this morass the applicant is generally expected to answer the question, “What are you going to do with an MBA?” To this there are three types of answers:

1. The Exceedingly Grandiose (“Harness the power of sustainable development to change the fate of the Third World”).

2. The Believable But Contrived (“Leverage my current skill set and augment it with a top-notch experiential education”).

3. The True But Obviously Unacceptable (“Get a job that doesn’t make me want to kill myself”).

Needless to say, upon matriculation these claims are immediately forgotten, as the practical matters of schoolwork and socializing take over. But right around the time that everyone starts giving serious thought to their summer internship, the question, unbidden, comes roaring back. What am I going to do with my MBA?

The summer internship, as the mid-point of the two-year MBA, carries far more import than regular people usually ascribe to the word “internship”. It is often assumed that upon graduation the student will give serious consideration to a full-time position at the summer employer or, at the very least, remain in the same general industry. This past January, at the MIT Sloan School of Management, anxieties around internships began to escalate. As a first-year, I found the whole process to be like a pop quiz, blindsiding me into making a life-changing decision before I was ready. I mean, I came to business school to escape the real world.

Eventually, however, an attractive opportunity presented itself. Through an old colleague I was introduced to a startup in Boston called WordStream, which got its funding a year ago and launched its product in January. WordStream is run by Rob Adler, a serial entrepreneur who was brought in a month after the company’s funding to be CEO. Rob, a Harvard Business School grad, exudes enthusiasm, and is one of those mysterious people whose number of connections on LinkedIn is listed as “500+”, which always make you wonder exactly how much larger than 500 people their network is.

WordStream is still at the stage where the company’s strategy is constantly being reexamined and openly discussed amongst everyone in the company (there are currently only 18 full-time employees). Who is our target customer? What exactly is our value? How should the product change?

The entrepreneurship professors at Sloan, veteran entrepreneurs themselves, often speak in quasi-romantic tones about working for a startup as a capitalistic ideal, the intersection of high-minded business strategy and dirty, sweaty reality. They could not be more correct. About a week after starting at WordStream, Rob came over to me, looking grave. “I’d like to speak with you for a minute,” he said. He brought me into … Next Page »

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Today marked a milestone in the legislation relating to non-competes in Massachusetts. The Joint Committee on Labor and Workforce Development held its public hearing on two house bills that would attempt to redefine the rules governing “restrictive employee covenants and non-compete agreements.”

This effort began in early January when Rep. William N. Brownsberger (24th Middlesex District) filed House Bill No. 1794, which would effectively prohibit restrictive employee covenants in line with similar provisions in the State of California. Rep. Lori Ehrlich (8th Essex District) also filed House Bill No. 1799, which made significant clarifications to non-compete agreements in line with the State of Oregon. Subsequently, compromise legislation was drafted by Rep. Brownsberger and Rep. Ehrlich.

A good summary of the salient points of this bill can be found at the Trade Secret and Noncompete Blog that is run by Russell Beck of the Foley and Lardner law firm, who participated in the drafting of this legislation.

The hearings on non-competes began with introductions by Rep. Ehrlich and Rep. Brownsberger, who cited complaints over abusive and over-reaching non-compete agreements. They highlighted the fact that the current law is over 200 years old and the rewrite has been long overdue. Attorney Russell Beck and Robert Mantell of the Massachusetts Employment Lawyers Association provided a detailed summary of the compromise legislation and described the key provisions of the bill.

At one end of the spectrum, the committee heard from those who made the argument that the original Brownsberger-Jehlen Bill No. 1794 was “the only ethical thing to do.” The committee also heard testimony from those who felt that the “200 years of jurisprudence” was perfectly adequate and did not need any change.

Up until now, the discussion of these changes has been largely in the blogosphere, and the participants represented members of the high technology sectors of the industry. At the hearing however, members of the non-high technology sectors and small businesses presented strong argument against the proposed changes.

“Talented individuals are leaving the state in large numbers because they see non-competes as unfair,” said one concerned individual who favored changing the current law. “I am willing and able to work but no one will hire me because of the … Next Page »

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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 … Next Page »

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If you are a student enrolled in a MBA program these days, phrases like “Boy, your timing in going back to school has been perfect!” and/or “This is the best time to be a <fill in your standard business school career choices>” are serenaded quite often in your direction. Typical reactions to this would range from a self-congratulatory smile to a deadly stare. Ah, the wonders of summer internship recruiting season for first year MBA students!

Across most business school campuses, the months of December and January bring with them a flurry of activities: case discussions like your life depended on it, mock interviews on getting your “story” right for a career in finance, and trying to find reasons why your background in Romance languages is a great fit for a career in energy. We first-year MBA students at the MIT Sloan School of Management are no different. If you happened to stumble into Sloan’s main building any day in January you would not have missed the organized chaos of summer recruitment preparations.

With the economy in its current state, students’ anxiety levels are naturally all over the charts. I don’t yet have a quantitative picture of this spring’s recruiting season, but I have come across a range of interesting opinions and statements from students on campus. I have also looked briefly at a few trends in recruiting from past years.

The top recruiting industries at most business schools are consulting and finance. General management, operations, and marketing/sales round out the industry pools that recruit at MBA-granting schools. At MIT Sloan, there’s historically a large group of students interested in entrepreneurship as well. Students have had interesting recruiting experiences in all these industries this spring.

“In most years we would have given you an offer” was one of most common responses students got after their final round interviews at consulting firms. There is no question that internship offers in this industry are down. I went back and looked at the recruiting numbers for consulting the last time we had a recession and noticed an interesting trend. Officially the last recession started in 2001 and ended in 2003. At Sloan, consulting offers dropped from 35-40 percent of of the class in 1999 to 15-17 percent in 2003 at MIT Sloan. It took almost two years for those numbers to climb back up to earlier levels.

Recruiting for finance internships has been equally interesting. It’s a safe assumption that with the financial sector at the center of the economy’s malaise, internships would be hard to come by. Students who poured their hearts out at MIT Sloan (and other schools I presume) preparing for finance interviews found out first hand. The consensus opinion was that the internship pools at most banks have shrunk significantly. One could sense the frustration in a classmate when he saw a posting for “Career in Finances” lecture in mid-January. He said, “Let me guess: they aregoing to tell us how this is the best time to start a financial career. Same **** different day.”

Notwithstanding the lull in traditional hiring, industries recruiting for general management, operations, marketing, strategy and sales functions has been active. Some students who had their minds set on traditional MBA internships are re-evaluating their interests and strengths and are finding other avenues to learn during summer.

There has been an increasing focus at MIT Sloan on entrepreneurship in the past few years. While debates rage as to whether entrepreneurship can be taught in a classroom, students seem to believe so. Enrollment in the entrepreneurship and innovation program at MIT Sloan has been steadily increasing. Some of the students in this program are making plans to either work on their own startup in the summer or spend time at a startup to learn what it takes to be a successful entrepreneur.

Times may be less than optimal for us MBA students now, but there is still an abundance of optimism on campus. There is a strong belief that most industries will recover to a certain extent by the time our class graduates, in 2010. Until then most of us plan to hunker down, use our time to build a strong foundation, and smile and nod whenever someone says, “Isn’t this the best time to be in business school?”

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It’s no secret that the Massachusetts economy benefits from the presence of large, prestigious, star-studded universities and the companies started by their faculty and graduates. In fact, these universities take every opportunity to remind people of their importance: Just a few weeks ago, Harvard put out a report
taking credit for nearly $5 billion in economic activity around the Boston area in fiscal 2008.

But it turns out that area universities may not be tooting their own horns loudly enough. Companies founded by the alumni of a single university—MIT—are responsible for more than a quarter of all sales by Massachusetts companies, or some $164 billion per year, according to a report released today by the Kauffman Foundation. If the revenues of all active companies around the world formed by MIT graduates were aggregated, the study estimates, they’d surpass $2 trillion a year—which is more than the gross domestic product figures of all but the 10 largest nations in the world.

The study, which will be released in full this morning at a briefing in Washington, D.C., was conducted by MIT Sloan School of Management professor Ed Roberts and doctoral candidate Charles Eesley. The point wasn’t just to cheer for the home team, but to build a detailed, quantitative picture of how one university’s entrepreneurial alumni—especially those in technology fields—contribute to regional economic growth. “We found that the MIT alumni-founded companies have a disproportionate importance to their local economies because so many of them are manufacturing, biotech, software or consulting firms that sell to national and world markets,” Roberts said in a statement.

The Kansas City, MO-based Kauffman Foundation, which focuses its spending on programs that foster entrepreneurship and innovation, paid for the study in part because it needed more ammunition in its fight to get more universities and state and local governments to support university-industry exchanges, says Lesa Mitchell, a vice president at the organization.

“Though everyone might tire of hearing about MIT, the reality is that they continue to encourage the things in terms of university-industry collaboration that we fear are really getting broken in other places,” Mitchell says. She points to efforts such as the Deshpande Center for Technological Innovation at MIT, which provides seed grants for proof-of-concept work by MIT faculty and graduate students and matches MIT innovators with experienced business mentors.

“There out outcries in Washington about too much interchange between universities and industry,” Mitchell says. “But in fact, it’s industry that is leading the idea process, and it’s the relationship between universities and industry that allows that to happen, because as ideas get funded and supported in the university they will spill over and land either in small companies or big companies. Having that porous boundary, we think, is unbelievably critical.”

On average, MIT graduates form just under 1,000 companies every year, according to an executive summary of the report shared with the media before today’s announcement. Massachusetts is home to some 6,900 alumni-founded companies, while another 18,900 are scattered around the world, including 4,100 in California. MIT alumni-founded companies employ just under a million people in Massachusetts, 526,000 in California, 231,000 in New York, 184,000 in Texas, and 136,000 in Virginia, the study found.

The study expands on a similar report about MIT’s economic impact published in 1997 with funding from BankBoston (now part of Bank of America). The earlier study was apparently far less thorough: it turned up only 4,000 companies founded by MIT alumni, with annual world sales of just $232 billion. The new study was based on … Next Page »

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When I first moved from Detroit to Boston a year ago, I discovered a plethora of opportunities in technology companies that are not available anywhere else. Unfortunately, I’ve found that personal connections sometimes matter more than resume credentials in finding a job in the start-up technology space.

As a second year MBA student at MIT Sloan School of Management who graduates in May, I will be jumping head-first into the
workforce in an economically difficult time. I am focusing exclusively on Boston start-up technology companies, which means I may not have a finalized job offer until April. Start-ups rarely know what their cash position will be three weeks from now let alone three months from now. If this all seems a little gloomy, well, then you are spot on. Business has never been tougher in recent history for fledgling ventures (unless you ran a dot-com back in 2000). So what is a poor MBA supposed to do?

Network as if your life depends on it.

Putting together a cold-call campaign is quite a daunting task for one person. The sheer volume of companies in the Boston area is enough to make my head spin. Furthermore, a target company may not have the time or resources to recruit and select from dozens of individuals who want a full-time job. Assuming I do not wave a stack of venture money in front of him or her, I find it hard to believe that a CEO will take an hour of his or her time to chat about jobs with me. How am I going to solve this dilemma?

Well, if I brought a group of MBA students all at once on a company visit, the company saves on recruiting costs. In addition, my classmates and I would get access to top executives at the companies of our choice. Sounds like a plan to me!

Years ago, a group of MIT Sloan MBA students and school administrators had the same revelation and called it the “tech trek.” The MIT Sloan School of Management created the Massachusetts Technology Trek (MTT) to give students an advantage by connecting them face to face with Boston area startups. The premise of the MTT is simple. Small groups of students meet with local companies to listen to a presentation by top executives. Students run the whole program with the assistance of school administration and this year they arranged for 32 company visits over 3 days.

Connections are the name of the game in this tough economy. From this couple of days of networking I received a solid foundation to begin my job hunt this spring. I netted follow-up coffee chats and e-mail conversations with some of the fastest growing tech companies in the greater Boston area. CEOs and directors from startups such as Vlingo, Pongr, JumpTap and HubSpot all took a seat to talk with me about their companies. The conversations got rolling along and I am now further toward getting a job than my classmates who did not attend the MTT.

So can you get a job out there? I assert that you can, but you need to get in the door first. Using the MIT brand name certainly helped me to open doors. Alumni want to help you; otherwise, they would hide from the alumni database. Leading a pack full of focused, excited MBA students also helps to get the ball rolling. Strength is always in numbers.

However, I think the most critical traits for getting a job in this economy are being creative and being assertive. The organizers of the MTT did not wait for CEOs and directors to call them for a time-slot. My fellow students sold themselves as an asset this company would want to have visit any day. So too will I sell my strengths and create projects that bring instant value to any start-up I join. Companies have pains and you can use this to your advantage. Is your dream startup running out of cash? Come in the door with a list of alumni VCs or maybe a few sales leads for their flagship product. Your imagination is the only bound to what value you can bring.

Now back to the issue of MBA-level jobs. I feel better now that I see all the work that someone needs to do inside the companies I visited. Cash-strapped companies desire the biggest bang for their VC dollar in terms of talent, now more than ever. Building companies is a full-time job and I think there is plenty of work to go around. If you are a MBA student and you’re graduating this year: keep your head up—and network hard.

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Want to know who’s hiring the top young business talent around town? Just ask Saleem Hussain, an MBA student from Boston. In a brutal market for tech industry jobs, he gave me a fresh perspective on the next-generation talent pool and where it’s headed, in terms of both big companies and startups.

Hussain is a first-year MBA student at MIT’s Sloan School of Management in Cambridge, MA. He is one of the organizers of a 16-student Sloan contingent that made a “tech trek” to Seattle last week, on Thursday and Friday. It’s part of an annual program that takes 150 Sloan MBA students to companies in Seattle, Silicon Valley, and the Boston area to make job and internship contacts and learn about the respective markets.

In the Seattle area, the group visited Amazon, Microsoft, Expedia, Adobe, Starbucks, and Digeo. The students met with recruiters and executives to ask about business challenges the companies are facing, and to learn what MBAs need to do to land jobs in the current market. “As far as internships go, there are lots of opportunities at big companies,” says Hussain.

Despite the economy, he says, Amazon and Microsoft “seem to be really hiring in full swing” on the MIT campus. Adobe has a lot of openings in Silicon Valley, he adds, but not as many in Seattle. Interestingly, Google and Yahoo usually host the Sloan students (in Silicon Valley), but did not this year. “A lot of companies are delaying,” says Hussain. “They’ve held back interviews, putting hiring on hold.”

I also asked Hussain about Sloan’s contacts with Seattle-area startups. If there’s one hiring issue I hear about in the innovation community, it’s the relative dearth of top management, sales, and business development talent—so tapping programs like Sloan’s seems like an obvious way to address the matter. The Sloan tech trek focuses on bigger companies that tend to hire on campus, but Hussain says organizers would embrace meetings with startups as well. “In Boston, we have a lot more access to small companies and strategy consulting firms, because of neighbor relationships,” he says.

As for broader impressions, some in the Sloan group were expecting a wary market for new jobs and internships, given tightening budgets and the prospect of layoffs seemingly around every corner. But the Seattle companies were very receptive, Hussain says. “They seemed surprisingly welcoming in talking to MBA students.” As for any wariness or uncertainty (about internships anyway), he says, “we didn’t see any of that.”

“A lot of people in business school are excited about coming out in this economy,” Hussain says. “For companies, it’s very pivotal for them. It’s such an important time to be working at these companies. That’s what makes it so exciting, and that’s what drives our visits.”

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Updated (see below): A student group at MIT’s Sloan School of Management has been named one of three national finalists in a contest seeking YouTube video proposals for the creation of a new X Prize in Energy and the Environment, the X Prize Foundation announced today.

Jonathan Dreher’s 2-minute proposal, “Energy X PRIZE: Reduce Home Energy Usage,” notes that renewable energy technologies could have a big effect on our energy future by increasing the supply of energy. However, he notes, “This approach is already getting plenty of attention and may not benefit from a prize for additional incentives. The other, often forgotten way, is to reduce our demand for energy.” And, as Dreher notes, “Unlike a technology-based X Prize, every American can participate.” He claims that a $10 million prize focused on energy conservation could have a $1 billion impact.

(Update, Nov. 17: I finally reached Dreher, who noted first off that he worked with two fellow students, Jeremy Stewart and Michael Norelli, on the proposal. All three are in a dual-degree program that will garner them a Sloan MBA and a master of science in engineering systems from MIT. Neither Steward nor Norelli was mentioned in the X Prize release.)

The X Prize Foundation, of course, is famous for its huge prizes that address key technology and innovation challenges. In 2004, a Burt Rutan-led team financed by Microsoft co-founder Paul Allen won the $10 million Ansari X PRIZE for suborbital spaceflight. Since then, the foundation has created the $10 million Archon X PRIZE for Genomics, the $10 million Progressive Insurance Automotive X PRIZE, and the $30 million Google Lunar X PRIZE. The foundation and its partner, BT Global Services, are now in the process of developing prizes in Space and Ocean Exploration, Life Sciences, Education and Global Development, and, of course, Energy & Environment.

Which is what the Crazy Green Idea Contest is all about. The contestant whose video garners the most votes before the end of this month stands to take home the $25,000 top prize. And, according to today’s announcement, their Crazy Green Idea will be “explored as the next X PRIZE in Energy and the Environment.”

In addition to Dreher’s proposal, the other two finalists (out of 133 submissions—does that sound low to anyone?) were:

—Alan Silva, from Roy, UT. His idea, The Energy Independence X PRIZE, is described as: “A prize to develop energy-independent homes that exist completely off the grid.”

—Kyle Good, of Irvine, CA: His concept, The Capacitor Challenge, centers on development of “a new storage medium, an ‘ultra-capacitor’.”

We’ve embedded all three proposals below. You can find all the finalists and vote for your choice, here.

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Yes, we are biased—we admit it. But, hey, six months of dealing with Verizon customer service agents who can’t get your order straight, keep losing records of your calls, erroneously cut off your service (and then charge you to have it turned back on)—and are snarly about the whole thing to boot—kind of makes you lose your objectivity. And that was after the Verizon installation guy spent a couple hours on his cell phone and billed us for the full time he was in our offices supposedly working. So we decided to check in with our readers—and fellow entrepreneurs—to gauge their point of view. Maybe our experience, after all, was the exception.

We crafted a poll (see the bottom right corner of the site) that asked readers for their view on the hardest thing about launching a business, cleverly concealing the true intent of our survey by listing “Dealing with Verizon’s ‘customer service’” as just one of the choices, along with other basics: raising funding, hiring core workers, finding customers, and IP protection.

And guess what? For a week, Verizon was at the top of the results, with more than 50 percent of the vote. And while, admittedly, fewer votes have been cast in the poll than in the New Hampshire primaries, Verizon is still surprisingly high up the ladder–in a three-way tie for second place with “raising funding” and “hiring the core team,” all at 23 percent of the votes, and just a hair behind first-place “finding the first customers,” which has garnered 26 percent of votes cast.

Think about this: successfully installing and managing phone and Internet is as hard for entrepreneurs as raising venture capital and finding core customers—and it’s harder than acquiring key technology. Does this mean the folks over at Harvard Business School and the Sloan School of Management need to be thinking about a new entrepreneurial seminar? Have their curricula overlooked this fundamental aspect of starting a business?

Of course, the returns aren’t all in, and Verizon might plummet to the bottom of the list as more votes stream in. But geez, Verizon, this has got to tell you something.

Hello, Verizon?

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For the first time in more than 40 years, MIT’s Sloan School of Management has reached outside its own ranks to pick a dean, tapping the deputy dean of the University of Pennsylvania’s prestigious Wharton School to help expand its reach.

The new Sloan leader will be 52-year-old David C. Schmittlein, a longtime professor of marketing. The Boston Globe‘s Rob Weisman nicely frames the issues confronting Sloan, which is a perennial top-ranked management school but not quite as widely esteemed as Wharton or Harvard Business School. “I do think there are great opportunities to make Sloan more visible and more deeply engaged with business leaders,” Schmittlein told the Globe. The new dean said he hopes to boost enrollment and faculty by at least 10 percent. Sloan currently plays host to 750 full-time MBA students and 101 professors and other faculty, making it roughly half the size of Wharton, Weisman notes.

Schmittlein, who will begin his term on Oct. 15, succeeds Richard Schmalensee, who announced last June that he was returning to teaching after serving nine years as dean.

Provost Rafael Reif notified faculty and students yesterday via e-mail in advance of today’s public disclosure. In his message, Reif called Schmittlein “a noted scholar, international marketing consultant and widely published author and commentator.” He added that, “Professor Schmittlein is well-known for his research on the impact of a firm’s marketing actions, designing market and survey research, and creating effective communication, promotion, and interactive marketing strategies. His current work focuses on marketing research methods, models for marketing decisions, advertising, new product development, market segmentation and direct marketing.”

Reif also cited a list of leading academic journals where Schmittlein had published; notably, the list did not include MIT’s own Sloan Management Review. Schmittlein’s bio is here.

The hunt for a new dean was led by an impressive mix of insiders and outsiders. The search advisory committee was chaired by Gabriel Bitran, Sloan’s deputy dean. Seven other Sloan or MIT professors served on the committee, as did an advisory group that included Alex d’Arbeloff, co-founder and former CEO of Teradyne, Desh Deshpande, founder and chairman of Sycamore Networks, and Carly Fiorina, former chairman and CEO of Hewlett-Packard.

The choice of an outsider clearly has raised some eyebrows. “It’s what the search committee felt was appropriate for Sloan at this time,” says Paul Denning, Sloan director of media relations. He adds that Reif has cited the need to enhance visibility and engagement in the business community—and that Schmittlein seemed the best choice for doing that.

To learn more about the inside reaction, we pinged a few Sloan faculty or staff members, most of them Xconomists, for their comments.

Bill Aulet, a senior lecturer at Sloan and Entrepreneur in Residence at The MIT Entrepreneurship Center, replied: “As an insider, I really like the team they had to pick the new dean, so it looked like a good process. They took their time to get to the conclusion, which is probably good. The person looks very good but is not a Sloan insider, grad, or any connection that I can tell—which begs the question why? I like to think he is just that good.”

Ken Morse, managing director of The MIT Entrepreneurship Center and also a Sloan senior lecturer known for his dry humor: “We warmly welcome our new Dean. If he has not yet experienced the magic of MIT’s special brand of high tech entrepreneurship, that is not a problem! Here in Kendall Square and at MIT we have a strong, world class entrepreneurial ecosystem. He will get access to the best teachers and friendly mentors…and he will have the full support of all of us at The MIT Entrepreneurship Center and the many other members of our community. Almost 40% of this year’s incoming MBA class expressed keen interest in being entrepreneurs at some point in their careers. At MIT, the spirit of innovation and entrepreneurship is in our DNA, and in the walls of the place. It is easy to become contaminated.”

Howard Anderson, William Porter Distinguished Lecturer at Sloan and a big fan of punctuation: “I think the answer is that they benefit from going outside…they needed someone with serious academic cred…this still is mit….but who was also mainstream…and nothing is more mainstream than wharton (says Howard, a U of P graduate). mit recruits a different kind of student…than harvard or wharton….everyone else gives good or even great lip service to technology…at mit…..it’s how they define themselves… having said that,,, mit. probably needs to expand the box….to make their degree more relevant in todays world… to make their graduates more likely to get the corner office….right now mit sloan grads get put in a box….”great at technology”…. but other graduates…harvard, stanford, seem to be making more progress… and wharton just about owns wall street. sloan is always listed as one of the top five mba prorgams…but it is different… his challenge is to keep the differences, but to expand the franchise.”

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