17 October 2013 1:25am
Whether business school can teach you the skills for startup success is still up for debate
CAN you teach entrepreneurship? With a 2013 survey of applicants by QS TopMBA finding that a third of candidates see themselves running their own business in a decade’s time, that’s the question budding entrepreneurs are hoping business schools can answer.
Of course, plenty of successful entrepreneurs haven’t been to business school. Bill Gates dropped out of university; Zara’s late founder Rosalia Mera left school aged 11 to work as a sales assistant in a clothing shop. And whether the traits shared by many entrepreneurs – an appetite for risk, tenacity, and the personality to get investors on board – can be taught remains up for debate.
FROM IDEA TO EXECUTION
Nonetheless, business schools are picking up on entrepreneurship’s surging popularity. Many are “taking on professors with a history in entrepreneurship,” says Jim Hall of Said Business School, who has founded a number of organisations in the US. And top schools now offer targeted elective options in entrepreneurial subjects, as well as extra curricular opportunities in the form of incubators or financial and administrative support.
London Business School (LBS), for example, has a portfolio of eight different courses which take students through the entire life-cycle of a startup. And in November, Said Business School is hosting “Silicon Valley Comes to Oxford” – a series of masterclasses with the Valley’s finest, giving students both mentoring and networking opportunities.
Indeed, as a recent Insead graduate tells me, “not only did I learn about entrepreneurial finance and strategy around building companies, but I was given a wide network of like-minded individuals across the globe”. But Rob Symington, co-founder of Escape the City – which aims to help its members make more entrepreneurial career choices – thinks throwing himself into building his company for the past four years means he’s created a network for himself, and in the areas he’s interested in. So is an MBA really the right choice for potential entrepreneurs?
Fees at the most prestigious schools can reach as high as £60,000 – money that could be spent developing a product, or getting an idea to proof-of-concept stage. And the curriculum is still aimed at students whose ideal destination remains large, established companies.
Indeed, the QS survey also saw an increase in the number of respondents who see themselves as a director in a large company (23.5 per cent). The kind of skills these firms seek can be far removed from the requirements of an early-stage business. As Matt Robinson, co-founder of online payments system GoCardless told City A.M. earlier this year: “The qualification fails to target the needs of the modern startup”.
And while an MBA can provide the tools to help students identify a gap in their chosen market, it cannot give them a business idea. But schools are doing their utmost to help students reach that lightbulb moment; they have a vested interest in their alumni’s success. Nick Badman of Cass Business School, for example, is eager to tell me about Alva (which now employs 25 people), the first business to receive investment from the Cass Venture Fund.
But despite investment opportunities, debt from high fees and time spent out of work may put off many young entrepreneurs. Symington thinks applicants should instead get real experience in a startup by doing an internship. “MBA graduates price themselves out of the startup market. What skill sets or qualifications prepare someone for the entrepreneurial arena? Is it £50,000 of debt and two years at business school?”
LOOK TO THE ALTERNATIVES
As such, it is important to consider the alternatives. London is now home to a budding alternative eduction market – with evening classes in coding, digital marketing and product management, “all skills that have a lot more currency in tech startups” says Symington. At €33,200 (£28,200), courses like the EMLYON Business School’s Global Entrepreneurship Programme are less of a financial burden than the $56,175 (£35,200) you would pay in tuition for just one year of Harvard Business School’s two-year MBA course.
In addition, LBS runs an entrepreneurship summer school, which enables students to “learn what it takes to turn their idea into a fundable business”. The school is free for current students, or costs £6,000 for external applicants. And since its inception in 2001, alumni have founded over 200 businesses. Alternatively, “thought leaders across the globe have blogs you can read, books you can study, and Twitter accounts you can send questions to,” says Symington.
If you’re confident that you already have the idea and the necessary skills to execute, you may find the school of life is the best teacher of all. If not, an MBA could prove invaluable. What’s more, if you decide mid-way through that entrepreneurship is too risky, at the very least an MBA will help you climb further up the corporate ladder.
CASE STUDY: CASS BUSINESS SCHOOL
Nick Badman, chair of the Peter Cullum Centre for Entrepreneurship, says the school is seeing a lot more interest in entrepreneurship among its student cohort. So Cass does three practical things to help its students develop their entrepreneurial skill sets:
First, its Centre for Entrepreneurship runs a new venture creation programme, which “helps students to think of the strategic issues and practical pitfalls around entrepreneurship”.
Secondly, it offers its best MBA students intensive incubation. At any one time, the centre has five or six pre-revenue businesses, which have desk space in the centre, and daily contact with the school’s professors, the investment director of its fund, and with other entrepreneurs.
And finally, what “differentiates Cass from other business schools in Britain is its Venture Fund, which has up to £10m available to finance startup and early-stage businesses”. Already, the fund has invested in seven businesses, with a handful more currently in incubation.
CASE STUDY: FLAT CLUB FOUNDER NITSAN YUDAN
Nitsan Yudan went into his MBA course at London Business School with a job offer from American Express. But while there, he started to consider a new business idea. “So I learnt how to build a business plan, and work with investors. But the best tool I was given was not academic; it was the network and reputation.”
When he launched Flat Club, a website for short-term accommodation, he had five flats available in London. “I sent one email out to the LBS community, and after two weeks we had 70 apartments in three cities.”
Yudan joined LBS’s one-year incubator programme after graduating. Today, two of Flat Club’s investors are faculty members at the school; the third is one of LBS’s biggest donors. “Every step along the way, the school helped. We had students doing projects for us to get experience – giving us access to invaluable talent.”
“Of course, there are hundreds of successful entrepreneurs who didn’t complete an MBA. But it gave me the skills that I needed to make my business a success,” he says.