Why Top MBA Programs Are Shifting from Suits to Start Ups in the Millennial Era

Recently, Poets & Quants published an article highlighting the trend of more and more MBA students in top programs shunning traditional corporate jobs to start their own businesses.

In particular, the piece highlighted that Stanford and HBS grads are 3x and 2x more likely to start a business upon graduation, respectively, when compared to their peers in on other MBA programs. Naturally, this is absolute geek porn for me. I’ve been harping about this trend and my insistence on aplplying to programs that not only talk about entrepreneurship in fluffy, college brochure-like lingo but that produce actual results evidenced by graduating entrepreneurs.

MORE VIABLE OPTIONS THAN I HAD IMAGINED

Though I’ve brought up on this trend in several previous posts, I’m pleasantly surprised that it seems to be moving with more fervor than I’ve ever imagined. You see, when I first began considering business school, I thought that I would only be applying to 3 or 4 schools–the usual suspects for entrepreneurship: Stanford GSB, MIT (Sloan), Berkeley (Haas), and possibly USC (Marshall). However, my research has revealed that schools like Penn (Wharton), Chicaco (Booth), Harvard, Northwestern (Kellogg), Dartmouth (Tuck), Yale SOM and Columbia are all doing a heck of a lot to support and foster entrepreneurship in their programs as well.

WAS I BORN TOO SOON?

While having this many viable options is quite a nice conundrum to have on one hand, it is a bittersweet pill on the other. When I was a new entrepreneur, I was actually taught to AVOID business schools like the plague by those who came before me. They opined that business school was where entrepreneurial innovation went to die; not where it lived.

I would have died and gone to heaven to have experienced this kind of a shift when I was 25ish. Unfortunately, the dot com bust and September 11th had the whole business world clinging to every corner of brick and speck of mortar in sight.

The mere mention of a “tech start up” would have been likely to get you slapped in the face by someone who lost half their savings investing in one. Hmm…perhaps I was just born 9-10 years too early; or maybe I was right on time.

THE SILVER LINING

One big up side to the not-so winding road that I’ve traveled to arrive at this point in my life is the broad and deep training that I’ve gotten to experience in areas like sales, operations, marketing, leadership and risk management (my own, not someone else’s). Many times, when VCs complain about MBA’s they are referring to the fact that they (newly minted MBA’s) may lack this kind of know-how and/or experience; the kind of know-how that is all that matters during the first 1-2 years of a new company when everybody should be on the front lines and had damn well better be able to either code, sell something or both.

I also don’t believe that an entrepreneur can be made. I’ve always maintained that it is more of a personality type than a career choice–like Pavarotti or Baryshnikov. On the other hand, I’ve known enough entrepreneurs over the past decade and then some to also know that most fail due to a lack of the proper training and knowledge on certain aspects of growing a business; enter my primary reason for pursuing an MBA.

A LIFE OF LEARNING

When I was watching the YouTube video of Facebook COO Sheryl Sandberg’s speech to the 2012 graduating class of HBS, I really connected to much of what she had to say. Like her (minus oh, a few BILLION dollars) I could not have planned the path that I have taken.

During each transition, I’ve gone after the next opportunity that would teach me what I lacked and needed to know; this strategy has made me particularly well rounded and suited for entrepreneurship. This would be true whether I matriculated through an MBA program or not.

Here are some of my personal thoughts on why we are seeing more business schools veer toward supporting entrepreneurial activity.

1. IT’S WHAT THEIR MARKET WANTS

Millennial (and not-so millennial, like me) MBA applicants are demanding support for their entrepreneurial aspirations in increasing numbers. IMO, no single variable has contributed to Stanford’s unprecedented ascendancy than the differentiation that it has firmly established around its entrepreneurial ecosystem.

Ultimately, business schools are…well…businesses. Those who delight their customers get to keep their doors open for another day. Meanwhile, those that do not will undoubtedly have some price to pay down the road for neglecting the wishes of those who pay the bills.

2. (FROM A PR PERSPECTIVE) ENTREPRENEURS : BANKERS = SANTA : THE GRINCH

The economic collapse of 2008 cast a dark cloud over the business schools whose graduates ended up holding many of the smoking guns that blew massive holes in consumer confidence, trust in business and the morale of a nation. Products of top b-schools were (and are–though often unfairly) characterized as lying, cheating, money-grubbing grinches  intent on draining the pockets of every tax payer to fund mansions in the Hamptons.

Entrepreneurs, on the other hand, are seen as creators of jobs and keepers of the American dream. Which of these two images would YOU rather be associated with?

3. HEADLINES, HEADLINES, HEADLINES

New companies are just down right sexy; not to mention that they garner a tremendous amount of media attention. When universities can tout founders and top executives behind brands like Google and Facebook, it not only works wonders for the cache of the school’s name but it validates that they (and their alums) really are as good as they say they are. You couldn’t BUY advertising that good.

4. ERASE THE PARADOX, JUSTIFY THE INVESTMENT

The very idea of a “business school” not producing many of the best and brightest people who start and build actual businesses is absurd; it always has been. I’m glad to see so many institutions straightening out that (not-so) little kink.

5. IT’S WHAT THE WORLD NEEDS

The world is starving or ideas, innovation and leadership to help it solve the programs of the next several generations. Business schools are all about finding and  developing leaders that make an impact; and right now, there is no greater impact that can be made than building a wildly successful organization that is then able to help thousands (or millions) of people.

6. IT IS THE MOST NATURAL PROGRESSION

The previous point about impact really illustrates that business schools eventually embracing entrepreneurship with such open arms was nothing short of a natural progression when one considers the (eerily similar) mission statements of most of them.

FROM SUITS TO START UPS

It will be interesting to see if and how this trend develops over the next 10-15 years. Hopefully, I’ll have the opportunity to sail my own ship on this rapidly rising tide.

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About mbaover30

Wharton 2015 MBA

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