The reasons for embarking on the “mission MBA” may include contemplating top managerial positions within your current company, considering relocation to another country, or the desire to change your career direction. One of the more popular reasons over the recent years for people to decide to pursue an MBA is the decision to start up their own business.
According to the “Follow your passion: MBA to Entrepreneur” GMAC survey, each year about 5% of business school graduates globally plan to pursue an entrepreneurial career. Ever since the financial crisis of 2007–2008, various statistics indicate a growing interest in entrepreneurship among aspiring and current MBA students. Today more than ever before, MBA graduates choose to go solo after graduation and the reasons for making that choice are not surprising at all. Harvard Business School Professor Noam Wasserman said in an interview with the Financial Times that students “see entrepreneurship as a way to have much more impact, and impact much sooner, than they could in almost any other post-MBA job. They are excited about heading out into new terrain, developing ideas and businesses that fill needs that aren’t yet being addressed. They are heading into that terrain with far more knowledge about what awaits them and how to avoid the recurring pitfalls that have plagued the dreams of past entrepreneurs.”
All those reasons notwithstanding, the GMAC survey reveals that the main motivator for diving into entrepreneurship for 94% of the graduating MBA entrepreneurs is simply passion and doing what they love. An entrepreneurial career gives you the type of freedom that you wouldn’t have in a corporate career. It is indeed more risky and there is no job description that would list all of your responsibilities, but owning your own business is a venture that can give you personal and professional levels of satisfaction that probably no other career could. Additionally, MBA alumni who reported starting their own businesses over the past decade (2000–2010) have seen quantifiable success on many levels. According to another survey by GMAC, 53% of alumni who delved into entrepreneurship during the past decade now oversee multiple employees, 41% report more than USD 250,000 in total revenue in 2010, 28% run businesses with a multinational focus, and 27% own multiple companies.
How can B-Schools help you start on your own?
Even though there are many successful businesses today whose owners do not hold an MBA degree, the elite business degree is reportedly one of the best ways for aspiring entrepreneurs to start up their own businesses. Not surprisingly, B-Schools are the best place to get your ducks in a row and lay the foundations for a prospective own business venture. The various teaching models used in different business schools around the globe are meant to not only deepen and strengthen their students’ academic knowledge in all aspects of today’s business but also to help them cultivate their own leadership style and scope.
According to the same GMAC survey, business schools give you the tools to unlock your ideas, do what you love, gain skills, develop new ideas and measure success. About 44% of the entrepreneurs from the MBA class of 2012 actually started their businesses while they were completing their MBA programmes. When choosing their postgraduate programme, more and more MBA candidates make their decision based on which school places emphasis on entrepreneurship and offers plenty of teaching mechanisms and models to help students prepare for launching their own business. Some of the main skills listed by graduating students that are crucial for the success of a start-up, and were developed during their MBA programme, include learning how to lead the company and how to grow the business, developing financial projections, writing a business plan, conducting market research, and contacting prospective customers.
A strong emphasis on entrepreneurship is important
If you have a clear career goal to start up your own business after graduation, it is important to pick a programme that has a proven track record for focusing on entrepreneurship. That is why researching your choices thoroughly is a crucial step in your MBA selection process. Some of the most authoritative and respected sources that rank MBA programmes for entrepreneurship include Bloomberg Businessweek, Entrepreneur Magazine, Business Insider and Poets & Quants. As business schools aim to stay up to date with the current trends in today’s business arena, making the top of the list on such ratings is really important for their programmes’ popularity among MBA candidates.
Schools that are famous for having a strong focus on entrepreneurship and that have versatile curricula that prepare students for various aspects of starting up own business ventures with a number of up-to-date business incubators and simulation models include EDHEC Business School (France), Chicago Booth (US), HEC Paris (France), Vlerick (Belgium) and IE (Spain).
MBA programme content helps business ideas become reality
Each of those schools offers special tracks or courses in their programmes that are linked to the various stages that occur when you set up your own business, such as how to build an efficient business plan and how to be efficient when pitching for investments etc. The goal of the various tools used throughout the duration of the MBA programme is to take the students beyond the classroom, allowing them to test their entrepreneurial ideas in real world settings. One such tool available to students in many MBA programmes globally is the business incubator. Originally dating back to the 1950s, today numerous universities have real-life business incubators attached to them.
The incubators are designed to support the development of companies set up by the programme’s students through an array of business support resources and services. These incubators are open to both current students and alumni and, according to GMAC, they allow students to develop business or product ideas in a low-risk environment, tap into the vast array of innovative research, access early funding opportunities through grants and investors, find team partners and mentors within their school or through the local business community, and network and build relationships with potential business investors and customers.
The schools usually have exclusive entrepreneurship labs equipped with stateof-the-art interactive technologies that stimulate creativity and communication. Such ventures move forward from inception to business plan completion through hands-on exercises and challenges integrated into course work, as well as through tasks and deliverables scheduled outside of regular courses.
One of the b-schools with great focus on entrepreneurship, IE, gives its students access to The Venture Lab Accelerator. This is where IE students and alumni can take their business ideas to the next level by being accepted into a “bootcamp” which helps them make their projects “investment ready”. “The Venture Lab provides you with the opportunity to take your course projects, or others that you may decideon later, to the next level…to make them investment ready, ready to be presented at VentureDays to angel investors, venture capitalists and other local entrepreneurs. These Venture Days, twice a year in Madrid, and now for the first time internationally, in locations like Shanghai, Bogota, Mexico City, Sao Paolo and others provide you as students and alumni with a unique opportunity to reach international investors”, says Paris de l’Etraz, Managing Director of Venture Lab.
Knowledge + Idea + Network = Success
The industries in which graduates choose to start their own businesses vary greatly. The choice of the kind of business professionals set up depends on a number of factors, including your interests and former entrepreneurial attempts, the contacts you make during your MBA programme and the network of likely investors that you develop during and after your studies, to name but a few. According to GMAC, the graduating entrepreneurs per industry are as follows: 2% go into non-profit and government-related ventures, 5% go into health care, 6% go into the energy sector, and another 6% into manufacturing, 7% go into finance and accounting, 17% enter the tech industry, 20% set up consulting businesses, and the largest percentage – 37% – get involved with various products and services ventures.
Successful start-ups that were created by MBA graduates in such simulators include Birchbox, an e-commerce company, founded in 2010 by Hayley Barna and Katia Beauchamp, who graduated from Harvard Business School (US) later the same year. The company is based in New York and has over 400,000 paying monthly subscribers.
Rent the Runway is another e-commerce company that was founded by Harvard Business School graduates Jennifer Hyman and Jennifer Fleiss in 2009. The startup is also located in New York.
Social Finance Inc. (SoFi) was founded by Stanford Graduate School of Business graduates in 2011 – the year they graduated. The student-lending business, started by Mike Cagney, Ian Brady, Dan Macklin and James Finnigan, went on to raise USD 90 million in equity and has provided more than USD 250 million in loans to students at 100 schools.
If you have an entrepreneurial spirit and have decided that you want to develop professionally on your own, the right MBA programme will help you meet like-minded people that either look in the same direction or already have some valuable experience that can benefit you in your future endeavours. Additionally, a programme that focuses on entrepreneurship will give you all the necessary up-to-date academic skills and knowledge, but will also grant you access to simulators and incubators that are the perfect climate for a business idea to emerge and mature.