He launched Functional Gums in 2013 after travelling around the world procuring drugs for a leading pharmaceuticals company. He realised that there was a market for caffeinated consumables to keep drivers and travellers awake. By manufacturing a high-caffeine chewing gum – branded Drive Gum – he thinks that he can flog his chewy treat at petrol stations across the Continent and develop new products under one brand.
“Our mission is to use chewing gum as the main active ingredient [but] we have been developing other products,” Nazareno says.
Entrepreneurs at business school remain a minority but Nazareno, who graduated from IE Business School in Spain, is one of a growing number looking to education to found start-ups.
“An increasing number of students [are] being more proactive, taking charge of their own life and [are] eager to make a difference by being entrepreneurial,” says Jeroen de Jong, academic director of the MSc Strategic Entrepreneurship program at Rotterdam School of Management, one of a growing number of schools trying to master start-ups.
About 40% of RSM graduates have started a business over the past decade and 25% are active entrepreneurs, with around half of those businesses surviving the pitfalls of start-up life.
Entrepreneurs are turning to education because of instability in the markets, according to Tamara Freidrich, associate professor of entrepreneurship and innovation at Warwick Business School. For European students this is an even greater motivation. The Eurozone has struggled to regain economic momentum, while the US has motored ahead in 2014.
Tamara says that "millennials" – people born between the early 1980s to the early 2000s – have shifting priorities. “Their intentions aren’t even to seek out positions in big companies anymore; it’s to start their own companies,” she says. They are being exposed to this career path earlier in life. “People are taking their destiny in[to] their own hands,” says Tamara.
Warwick is one of a bevy of business schools that is catering to the small business world. The majority of schools offer electives and short courses in entrepreneurship, but a select few have rolled out entire master’s programs tuned to launching, funding and growing start-ups.
“Entrepreneurship has generated tremendous interest,” says Dr Andrea Belz. She’s the director of the MSc in Entrepreneurship program at the Lloyd Greif Center for Entrepreneurial Studies at USC Marshall School of Business.
The accelerated course can be completed more quickly than an MBA – the flagship business school program – and cuts out some of the core MBA topics.
It focuses on small groups of students who are intensely fixated on launching a new venture. “Many of the students already have their own businesses,” says Andrea.
A smaller group allows faculty to help students develop specific business ideas. It is a similar story at Michigan’s Ross School of Business. The Masters in Entrepreneurship course is designed to fast-track entrepreneurs through the learning phase.
About 20% of Ross graduate students have started a business plan. “The majority will launch within 5-10 years of graduation after further relationships are established, and funding is secured,” says a spokesperson at Ross’ Zell Lurie Institute for Entrepreneurial Studies.
Taught jointly with Michigan’s engineering school, it has a focus on technology and this is a wider trend in the entrepreneurship scene. A cadre of US business schools are rolling out courses which cater for tech entrepreneurs in particular.
Cornell Tech is establishing a multi-billion-dollar technology university on New York City’s Roosevelt Island with courses designed to cater for the entrepreneurial community. Stanford GSB, renowned for its links to Silicon Valley, will launch a new entrepreneurial training program in NYC in 2015. Stanford Ignite programs have been taught in collaboration with high-tech companies including Infosys, Cisco and Microsoft.
“It provides graduate students, innovators, scientists and engineers from leading companies the essential toolset for creating impactful ventures,” says Yossi Feinberg, Stanford Ignite director. Ignite’s participants have founded more than 100 “successful” companies since its launch eight years ago.
The benefit of business school to tech entrepreneurs is that they can master all the functions of a business – a technical background is not enough, according to Faviola Palomino, founder of online fashion and lifestyle market VIP SOUL.
“I’ve seen many enthusiastic entrepreneurs with strong technical background[s] suffering with his own start-up because of this lack of education,” says Faviola, who graduated from MIP Politecnico di Milano, the Italian business school.
She has grown the e-commerce website’s user base to 20,000 since winning a start-up competition in 2012 held by Wayra, the accelerator. “People who have a managerial and business background have an advantage,” Faviola says.
Although the provision of entrepreneurial master’s degrees has increased, learning from academics, particularly those with no previous start-up experience, has its frustrations. Entrepreneurs often flock to incubators to gain learning opportunities from those who have built successful ventures before.
“This strongly impacts learning because the faculty is able to speak from personal experience and connect the theory directly to practice,” says Andrea, who adds that USC Marshall’s lecturers have entrepreneurial experience.
Business schools are hindered if they just take an academic focus, according to Tamara who teaches an innovation and creativity module at Warwick.
But other schools like RSM say a blended approach is best. “We learned in the past that [using] only experienced entrepreneurs in front of [a] class does not work very well – there is a surprising number of practical lessons from academic work that experienced entrepreneurs are not aware of, and will not get across,” says Jeroen.
This is key for students who want to drive entrepreneurship from within large corporations – “intrepreneurs”.
At RSM, 30% of students work in small, high-growth firms, Jeroen says, and 25% start careers at innovative corporates like Google, Apple and Amazon. For jobs at these companies, a different kind of graduate is required. “One that is proactive, takes charge, [is] flexible, eager to learn and not eager to pursue a pre-defined career path,” says Jeroen.
The biggest hurdle for entrepreneurs, however, is usually financing. This can be particularly problematic for students in Europe, which is criticized for having a smaller venture capital scene than the US, which is led by Silicon Valley.
“There’s a lot more money to take a lot bigger risks in the US… We have a way to go in the UK in reaching that level of maturity,” says Gary Stewart, director at London-based incubator Wayra.
To combat funding problems, specialist master’s programs invite investors to come into classes to coach students on fundraising.
Michigan Ross uses competitions to spur funding opportunities – one awarding $75,000 in cash prizes – and has three student-led investment firms including venture capital firm the Wolverine Venture Fund, which is run by MBA students and has a fund totalling $7 million.
Jeroen says that RSM’s alumni network can connect students to capital.
Networking was crucial for Nazareno when he launched Functional Gums. He was able to strike a trade deal with REPSOL, the energy major which has petrol stations across Spain, after introductions by IE alumni. “It’s what you learn, but also the network you build up,” he says of IE.
About €40,000 has been invested in the company, but he hopes to raise an initial round of funding of about €500,000.
Entrepreneurial students like Nazareno are still in the minority – but they are growing in number, and in successes.
“Business schools realise they need to produce students who can start businesses,” says Tamara. “That’s why we are seeing this increase in training in entrepreneurship.”