Entrepreneurship Gains Ground At Business Schools
London Business School MBA Ammar Halabi runs start-up business Funryde
A convoy of vehicles snaked through Shanghai‘s financial district in the early hours of the day in 2008. With haste, the fleet of trucks and vans pulled up outside the offices of Leman Brothers, the once-booming investment bank that employed thousands across mainland China.
The vehicles were there to shut-up shop. The bank’s entire physical operation was to be relocated, and the removals workers were eager to cash in on the financial giant’s giant fall.
The brain behind the operation, and many more business relocations, was Ben Tyrrell. His fleet of removals trucks and warehouses, spanning three continents, had grown from a promising pretender into a sprawling operation with more than 60 employees.
Ben was capitalizing on the aftermath of the global financial crisis. In the business of removals, firms’ losses are your gains. As trade dries up in times of economic instability, businesses pull out of markets – and Ben was there to provide a means to an end.
Hong Kong-based Relocasia, a start-up he launched in May 2004, would go on to achieve more than eight years of upstart success across China, Singapore and the United Arab Emirates.
The business plugged revenues to the tune of $10 million in 2013. In March that year he sold the entire operation to a giant Indian conglomerate, which cannot be named, for an undisclosed amount.
While his excursion to the Far East is not common, Ben is one of a legion of business school graduates who have shunned traditional jobs and bought into entrepreneurship.
The Bath SoM MBA, British by birth, has no plans to rest on his laurels. “The course was pitched as having an entrepreneurial vent, which was attractive to me,” Ben said.
“There are a huge amount of small businesses that are doing amazing work – and there’s one I think I’ll be moving into. By nature of looking into different markets, it [an MBA] gives you the confidence to knock on doors, and open doors.”
Entrepreneurship has been gaining ground at business schools, which are keen to trumpet an emerging trend of upstart hopefuls and fledgling founders breaking ranks with traditional career paths.
Before the financial crisis, it was a rarity for many MBA graduates to diverse from the corporate track. Today, however, students are flocking to entrepreneurship electives and incubators in droves.
Thorsten Klein, careers services manager at St. Gallen, the Swiss business school, said: “Many of the students coming through the doors of the St. Gallen MBA have a deep-rooted entrepreneurial spirit... Many enrol on the MBA with the intention of setting up their own businesses at some point in their careers.”
The elite schools, once known for their links to the financial world and consulting firms, are seeing massive increases in MBA students pursuing entrepreneurial ventures.
At Wharton School, five times as many of their graduates launched companies than in 2007. In a study of over 30,000 Wharton graduates, researchers found that more than 7% of 2013 grads were launching their own ventures, up from 1.5% in 2007. More than 70 students also interned at start-ups last year.
Yet since 1990, a quarter of all Wharton graduates have become entrepreneurs.
“We consistently hear that students want to plug in and make an impact at the earliest stage,” Maria Halpern and Michelle Hopping said in the report.
“This year we noticed that students were starting and joining start-up companies across a broader range of industries,” they added in the 2013 study.
According to a survey released last week by QS, this trend is set to continue. There is a drop in MBA applicants aiming at general management positions, and a rise in those with entrepreneurial ambitions, according to the survey of nearly 6,000 business school applicants.
More than 32% of them are pursuing business education to start their own business, the second consecutive yearly increase. A further 33% of the applicants intend to specialize in entrepreneurship, say QS, ahead of marketing.
The picture is similar in Canada according to Jesse Rogers, director of the Creative Destruction Lab, Rotman School of Management’s start-up incubator. “MBA’s financial benefits come from the potential upside of joining or founding an early stage company that has the potential to grow quickly,” said Jesse – although this benefit is not distributed equally amongst students or ventures.
Like other business schools, Rotman offers electives for its MBAs. Students can major in innovation and entrepreneurship, beneficial for those who want to start their own ventures, and MBAs who want to invest in or finance start-ups.
Dartmouth Tuck’s Entrepreneurship Club counts a large chunk of its MBA cohort as members. At the US-based business school, the club aims to foster and support a Tuck entrepreneurship community, said its president Isabella Liu.
“In the past, the Entrepreneurship Club has organized on-the-ground programming such as skills workshops and idea white-boarding,” Isabella said. It is part of the school’s Entrepreneurship Initiative – a series of coordinated programs for MBA students.
About 40% of students recently listed entrepreneurship as one of their main subjects of interest upon enrolment. “The initiative brings in lots of great speakers, often as part of the Entrepreneur-in-Residence series,” added Isabella.
Ammar Halabi found a great deal of support when he launched his start-up venture out of London Business School. The MBA, and CEO of Funryde, a ride-sharing mobile application founded 12 months ago, made it onto the school’s incubator shortly after launch.
It is this support that is encouraging students to turn to entrepreneurship. “We got financial support from Deloitte, but the main thing we got from LBS was the office space – we got the network and the mentors that were around to help us,” said Bassem Barake, Funryde's other co-founder.
Bassem earned his MBA from London’s Cass Business School. He added that the school’s network is the biggest entrepreneurial benefit. “The experience that you learn is huge – it’s like having another degree.”
Other business schools are learning from the US’s Silicon Valley. Oxford University’s Saïd Business School sent a crop of MBA students on a Silicon Valley trek to meet start-ups, as well as tech giants Google and Facebook.
The school runs a mandatory entrepreneurship project, designed within the MBA curriculum. “Students take what they have learned in the classroom and combine it with lean start-up principles to start a real venture,” said Jim Hall, executive director of the school’s Entrepreneurship Centre.
He said that MBA entrepreneurs benefit from a diverse cohort, which brings different cultural perspectives to the table.
Jim added: “I think that this sense of community, in which people exchange ideas, make connections, and learn from each other’s failures, is one of the most valuable aspects of entrepreneurship teaching.”
Léo Denes runs Pacific Media and Consulting Group, a firm he set up to consult companies, and Australiance.com, an online guide designed for those who want to discover Australia.
He graduated from a Master’s program at France’s EMLYON Business School, before relocating to Australia. Léo left a consulting job at PwC, one of the big four audit firms, to pursue entrepreneurship.
He said: “What French business schools do well is getting practical experience, and some kind of entrepreneurial program. It gave me good people management skills – and obviously the network.”
For Jorge Gari Sanchez, entrepreneurship is a reward worth the risk. The IESE Business School MBA launched Moove Sports, a sports event and competition organizer, in Barcelona in 2011 after two years auditing at PwC.
Jorge said: “To be six months without having any income – it is a risk. But would you prefer to be in a place that you don’t like and don’t care about, or try another option? In the end the experience, even if it’s a risk and even if you fail, is better – and the result will be better.”
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