Entrepreneurs are investing in a business education. As the global workforce evolves into nations of self-employed workers, upstarts are looking for a way to form teams, develop ideas and fund and launch ventures.
As universities scramble to offer courses to an ambitious generation eager to pursue its own ideas, budding start-up founders are warming to top business schools like Harvard, MIT and INSEAD.
The question of whether to fund education while growing a company creates a dilemma for upstarts. But skilling up and scaling up are not mutually exclusive pursuits. “Students see paying the fees as an investment in their business,” says Joanna Mills, deputy director of the Centre for Entrepreneurial Learning at the UK’s Cambridge Judge Business School.
There is a rich vein of potential talent to tap. Entrepreneurs are modern rockstars and enterprise is riding high on business and government agendas. From London to San Francisco and from Shanghai to Nairobi, clusters of innovation are forming.
Business students are buying in. “There are the building blocks in place and it’s easier to have a go,” says Jeff Skinner, executive director for the Deloitte Institute of Innovation at London Business School. At Babson College, 39% of MBAs launched a company. For MIT Sloan, 36% of MBAs started-up. “That rising tide lifts all boats,” says Jeff.
LBS’ Entrepreneurship Summer School provides a route for entrepreneurs in the UK capital and beyond to launch ventures, costing £6,000, and runs a separate start-up incubator.
Graduates of the summer school include Ismail Ahmed, MBA and founding chief executive of online money transfer market WorldRemit, which recently raised $100 million in venture capital funding. “We’ve seen a substantial number of people who want to start their business straight from the MBA,” Jeff says.
London has lured Stanford GSB, a leading US business school, which launched Ignite in the UK capital, a part-time 10-week program that aims to teach leadership and strategic thinking skills to entrepreneurs.
Bethany Coates, Stanford’s director of global innovation programs, is stunned by how quickly the course has grown. Launched in 2013, Ignite has now been taught in Paris, Bangalore, New York, São Paulo, Santiago and Beijing. She does not rule out further expansion and highlights the Middle East as attractive.
“Overall interest in entrepreneurship as a path has been embraced in a way like never before, not just in Silicon Valley but over the world,” says Bethany, in an interview with BusinessBecause.
She says there is sometimes a gap between what high-potential students learn within their undergraduate and master's programs and the skill-sets needed to start a company.
But by leveraging peers and mentors, entrepreneurs can navigate early pitfalls, she says.
Ecosystems are essential. Diane Morgan, associate dean at Imperial College Business School in London, says: “Entrepreneurs try to surround themselves with ideas, influential networks, potential funders and partners. Business schools are a great environment to supply all of these.”
Imperial competes with courses run nearby by LBS, Stanford and Cass Business School, based on the fringes of the City. Cass did not respond to requests for comment.
Imperial recently launched the two-year ELITE program for 20 chief executives of SMEs in partnership with the London Stock Exchange. It also runs an innovation, entrepreneurship and design module within the Imperial MBA curriculum.
For business schools, a push into entrepreneurship is part of a wider bid to innovative. There is a growing realization among the academic community that they must evolve to suit the needs of society.
Joanna at Cambridge says: “We certainly have taken the view at Cambridge Judge that we need to put entrepreneurship centrally to what we are doing.”
One of the challengers educators face is teaching the growing number of people who see themselves founding disruptive start-ups, inspired by the likes of Uber and Airbnb, and not in corporate companies that are viewed as rigid.
Entrepreneurs have been wary of business schools in the past. Brent Hoberman, a renowned British entrepreneur and investor who founded and sold Lastminute.com for £600 million, penned a widely circulated opinion piece in the Financial Times in which he branded business schools as “wrong for today’s entrepreneurs”.
For start-up founders at school, the need to balance studies with time working on their companies is one of the biggest challenges.
Coupled with tuition and other costs, this can deter entrepreneurs who already run companies. “Whatever your source of debt… [A] lack of capital is always going to be an obstacle to starting a business,” says Stewart Thornhill, executive director of the Institute for Entrepreneurial Studies at Michigan Ross School of Business in the US.
But he argues that there are distinct benefits for entrepreneurs who launch ventures while at school – in particular an alumni network and the ability to test ideas in a safe environment. “It’s all well and good to have a piece of code, but tech in itself isn’t a business,” he adds.
Technology helps ease time fears. “Technology adoption – especially the internet – is the key,” says Dr Shailendra Vyakarnam, director of the Bettany Centre for Entrepreneurship at the UK’s Cranfield School of Management.
Cranfield has been educating entrepreneurs for more than a quarter of a century. Launched in 1988, its flagship Business Growth Program is run part-time. The Postgraduate Diploma in Entrepreneurship delivers 70% of content online, adds Shailendra. “There is increasing interest in blended learning and weekend events.”
Providing an education for both entrepreneurs with an idea and those trying to scale start-ups can be difficult but student variety improves the quality of education.
“There’s a value in having that diversity – those that are new to it benefit from hearing people’s experiences; those who are more experienced benefit from the energy and ideas and enthusiasm of [less-experienced students],” says Joanna at Cambridge Judge.
Cambridge – which along with London and Oxford forms the corners of the “golden triangle” cluster of tech start-ups in the UK – runs a Postgraduate Diploma in Entrepreneurship. It caters to both future entrepreneurs and founders, and uses a virtual learning environment.
Cambridge University has spun-out noteworthy tech ventures – among them are ARM, the Nasdaq-listed microchip designer whose chips power iPhones, and Autonomy, the software group that was controversially acquired by HP for $11 billion in 2011.
Whether such success stories will be enough to make education a “must have” for entrepreneurs however, remains to be seen.
Goncalo de Vasconcelos, Cambridge MBA and co-founder of crowdfunding platform SyndicateRoom, says entrepreneurs with an idea should skip an MBA and go straight to starting a business. “You will learn a lot more by doing that than sitting down in a class.”
But he adds that an MBA provided him with credibility, a co-founder and acted as a safety net. “It opens doors.”
The prevailing view among the heads of business schools is that it comes down to investment. Entrepreneurs will need to weigh up the cost-to-benefit ratio.
“We are trying to change people’s mind-sets,” says Cambridge’s Joanna. But business schools have yet to convince many entrepreneurs that their qualifications are more than a “nice to have”.