Logo BusinessBecause - The business school voice
mobile search icon

MBA Start-Up Founders Bring Disruption To Traditional Business Models

Disruptive start-up ventures launched out of business schools have been wreaking havoc on traditional business models everywhere.

Thu Jun 11 2015

The Chinese lunar calendar has 2015 penned as the year of the goat. For business, 2014 will have been the year of the “disruptor”. In the past year, so-called disruptive companies have been wreaking havoc on traditional business models everywhere.

As technology enables innovators to use new tools, the boundaries between one sector and another are being torn asunder. Airbnb has become the world’s largest hotel business without owning a single lodging. Amazon has revolutionized book selling, and has fused a global thirst for commerce with the convenience of the internet. And cabs have been brought to the pockets of consumers in more than 300 cities in 50 countries by Uber.

Innovation is as old as business itself. But slow moving industries are being forced to adapt more quickly to disruptive challengers and creative entrepreneurs.

“Start-ups have successfully challenged traditional players over the past 10 years,” said Diane Morgan, associate dean at London’s Imperial College Business School.

Innovation is often destructive, forcing companies out of business and, sometimes, people out of jobs. But disruption also presents big opportunities — for consumers, entrepreneurs and established companies, as new tools such as crowdfunding and big data analytics become widely used.  

Some of these disruptors have launched their ventures at business schools, taking advantage of the access to experts, financial support, and opportunity to incubate.

Business schools are not traditionally associated with mass entrepreneurship. But Jeff Skinner, executive director of the Deloitte Institute of Innovation and Entrepreneurship at London Business School, said this is changing.

“We find our students succeeding in the unlikeliest of industries — industries they should not be able to penetrate. It’s quite humbling. They are disrupting,” he said.

But innovation is a risky business, and there are plenty of examples of abandoned ventures that failed to take off. “There are some entrepreneurs who will see a failure as a learning opportunity and start again, and some others might give up,” said Nitin Pangarkar, director of the MBA program at NUS Business School in Singapore.

The lure of success however, plastered into the minds of the many, who are inspired by stories from the likes of Facebook, Xiaomi and Netflix, remains strong.

As Margaux Pelen, executive director of the Entrepreneurship Center at HEC Paris, said: “It's never been so cheap to launch a company, and there are plenty of opportunities to do so.”

Lending Club

Renaud Laplanche, an MBA graduate of France’s HEC Paris, founded Lending Club in 2006 after noting the discrepancy between the interest rate on his credit card and the money being paid on his bank account.

His idea, to use an online platform to match borrowers with lenders directly and cut out the banks, offering higher returns for lenders, proved a roaring success.

Renaud, a guest lecturer at Columbia Business School, has said he sees evidence that Lending Club can “underwrite, price and service personal loans more efficiently than the traditional banking system”.

The “peer-to-peer” financing platform has grown to extend more than $9 billion worth of loans through its site — sealing its reputation as the top P2P lender, and paving the way for its flotation on the New York Stock Exchange last Christmas.

“We believe we can make the system more cost-efficient, more transparent and more customer friendly,” Renaud said in a statement. After his MBA, he joined the law firm Cleary Gottlieb Steen & Hamilton. In 2000 he founded his first software company, TripleHop Technologies. By 2005, it was acquired by Oracle.

A year later, Lending Club was born. With more than $1.6 billion of loans extended last quarter, the Silicon Valley based lender will be hoping for a bigger slice of the $3 trillion consumer lending market in the years to come.


TransferWise, the online money transfer network, is here to shake up a banking sector that is ripe for disruption, according to its MBA co-founder Taavet Hinrikus.

Five years ago, the Estonian entrepreneur was co-president of INSEAD’s entrepreneurship club. Today, he is helping to lead one of the world’s fastest growing financial technology start-ups.

Taavet founded TransferWise the same year he graduated from the international business school, a time after becoming Skype’s first employee.

The London-based fintech venture this month said more than £500 million a month is being moved on its platform — a new milestone which Transferwise claims saves users £22 million in fees.

“It shows a fundamental shift in people’s awareness of how banks, brokers and others take advantage of customers by hiding the real cost of international transactions,” said Taavet last week.

The London based business recently raised $58 million in a funding round that was led by Andreessen Horowitz, the US venture capital group that was an early backer of Twitter and Facebook.

Despite transferring “tens of millions” each day, there is much room to grow —Transferwise has approximately 2% market share of the international money transfer market.

“This figure is only going to grow as customers become fed up with the traditional banking sector and look for fairer alternatives,” said Taavet.


FlatClub, the rentals marketplace which draws comparisons with the business model of Airbnb, the revolutionary flat sharing site valued at $20 billion, has carved out a chunk of the sharing economy.

The medium term property rental start-up is geared toward students and alumni of top universities.

Guests and hosts verify membership through university and corporate networks known as “clubs”, and choose who to rent with through an online platform.

Users are typically students and interns of companies such as Microsoft, Google and Skype, who need temporary accommodation in European cities or New York.

“Guests benefit from special, discounted offers and many hosts enjoy the ability to…Find trusted guests by browsing their profiles,” said founder Nitzan Yudan, an MBA graduate of London Business School.

Set up in 2010, the London based start-up has 75,000 verified members, and features property from the alumni of more than 50 of the world’s top universities including UCL, King’s College and New York University.

Nitzan said his time at LBS provided the two most important things for an early stage business — a network and a reputation. “The support of faculty, students and alumni has been critical in building the business, leveraging resources and raising funds,” he told BusinessBecause.

“Even two of my investors are faculty at LBS,” he added. FlatClub raised $1.5 million in a funding round in 2013 from backers including MLC50 and InterCapital, the venture capital groups. 

Student Reviews

HEC Paris




On Campus

Cultural experience

I have met the most competent and diverse batch in this school. These people not only thrive on their own but also makes sure that you are doing it with them. The professors will take your had and walk you through all milestones and make sure you are not left behind. I have found their extracurriculars extremely engaging. There was always a room to have social life after academic life. The only hindrance is the location of the school, it is slightly outside city and living in city is expensive.




On Campus

Internationality and diversity of opportunities

About my programme I would say it is very international and flexible: we have the opportunity to choose exactly the courses we want. But at the same time, the frame of the campus is crucial in students' life and enable us to create friendships.




On Campus

Great selection of people

While HEC's MBA is highly selective, I really enjoy the type of people HEC's selects to make sure everybody gets the best out of their MBA experience and networking opportunities. Not only it's an incredibly diverse pool of people (~60 nationalities) but most importantly they make sure to let in friendly empathic and curious people.





Best in France for Grande ecole

A prestigious business school. Languages ​​are important. It is better to have a scientific baccalaureate with excellent grades in high school and good assessments. The courses are well designed as per the latest trends and practicality of learning in stressed upon. Overall, a very good experience.




On Campus

Diversity and quality of fellow students

Very international and interesting place to be and opens a lot of opportunities, however the administration is very french and facilities are subpar (gym, classrooms) meaning the academic affairs is pretty much useless and lastly we are graded on a curve which can create a toxic environment because of the competition. With that being said the pros outweighs the cons by far.




On Campus

The quality of the teachers, the campus, the clubs

The school is very international indeed, we have courses with international students and share things with them within the extra academic life (in the social clubs especially). We have great career prospects if we prepare ourselves well - however, the global curriculum is still very finance-oriented, which is a pity for other interesting domains of the company world, which does not rely on finance only. The social clubs are good practice for the management and for now, are quite independent.




On Campus

HEC Paris awaits you

HEC Paris is really a nice place to do a master's in business. Many classes are useful and interesting (corporate finance, financial accounting, contract law…), some are less - but the curriculum is to be reviewed in the year to come. Regarding the student life, it is incredible, with about 130 clubs, lots of great parties with even greater people. The Jouy campus offers a lot of opportunities to do sports, and you can breathe fresh air every day. HEC also helps a great deal to find an internship or a job.





A dream institute

Enrolling in the HEC MBA was by far the best decision I made for myself. The people and faculty are great, with lots of opportunities to meet people and expand your horizons. Very nice campus where I have had some good running sessions. The alumni network is superb and very helpful. It also has a good support system for entrepreneurs. Would definitely recommend it!




On Campus

Good choice for a career boost

The classes were extremely practical and relevant to the current challenges that businesses are facing. You have access to a wide range of professionals and good career prospects once you leave the university.