“Our customers like to touch and feel the product,” says Aditya. He’s an MBA graduate of Spanish business school ESADE who plied his trade at a tech-focused management consulting firm before taking on the start-up challenge.
IML Jeans launched in 2012, the result of a moment of rare inspiration inside the first company Aditya ran, which manufactures chemicals for the garment industry. To shift more chemicals he realized he could use stores of the stuff to craft denim jeans with a premium edge.
The ambitious entrepreneur has grown the business by about 200% in two years, but now IML Jeans is generating enough revenue to cover operational costs he wants to grow 800% year on year.
“First when we started, [the first] few months was just cracking the first order. Then we cracked the first 500, then first thousand,” he says. Aditya will have expanded his team to about 30 by the end of this year but he creates most of the products by himself with the help of two in-house designers, importing fabrics from across Europe.
“The idea is about celebrating your own individuality,” he says. Aditya knows that the e-commerce industry is about to blossom in India but insists on a multi-channel sales approach. He sells through his website but most of the traffic passes through his pop-up shops. “We need the customer to be involved.”
Still, the tech sector is booming and the trend is flooding the world’s business schools from Bombay to the Bay Area. At Stanford Graduate School of Business, seen as a recruiter for Silicon Valley, 32% of last year’s MBAs chose careers in technology.
But even the most traditional MBA educators are doing away with their corporate roots and embracing the tech innovation and entrepreneurship scene. At Wharton School, known as a feeder to investment banks and financial services groups, 55 MBAs from 2014’s crop started their own businesses or are self-employed; double the figure from five years ago.
The Ivy League institution runs courses that are tailored for entrepreneurs, especially from its San Francisco campus, according to Peggy Bishop Lane, vice dean of the Wharton MBA for Executives.
She says: “Students can major in entrepreneurial management, but can also take part in Wharton’s business plan competition… A start-up pitch competition in San Francisco, and numerous speakers and conferences focused on innovation and entrepreneurship.”
This trend is not restricted to the big US brands, either. Business schools are becoming global catalysts for entrepreneurship. Sections of Europe are emerging as innovation hubs and continental business schools are pushing their students to entrepreneurship, particularly in tech.
At Cranfield School of Management, based just outside London, 17% of 2013’s MBA cohort started their own businesses.
London is emerging as one of the world’s tech start-up hubs and has clusters of sector specific tech groups ranging from fashion to “fintech” – financial technology. Nick Hungerford, CEO of online wealth manager Nutmeg, developed his business model while studying an MBA at Stanford in California.
Since relocating to London the entrepreneur has raised $32 million in funding from investors including venture capital firm Balderton Capital. “We believe our digital model epitomises the future of investment management,” says Nick.
On executive MBA programs, once the preserve of the corporate client, students are self-funding themselves to break company ties and launch start-up businesses. “Many EMBA students make a career change,” says Professor Eric Waarts, Rotterdam School of Management’s dean of degree programs.
To help executives become entrepreneurs, the Netherlands-based business school deploys the services of the Erasmus Centre for Entrepreneurship. “The ECE has organised workshops, coaching, a network and shared offices as well as an entrepreneurship bootcamp,” says Eric.
MBA students don’t always come into class wanting to throw hard-earned managerial careers into the attic while they experiment with co-working spaces, incubators and angel investors, however.
But the start-up sensation often catches hold of them once they arrive on campus, according to Paul Almeida, senior associate dean of executive education at the McDonough School of Business in Washington.
“We do give them the skills, tools, the relationships [and] maybe the mind-set that triggers that path,” he says.
The trend is spreading like wildfire into Latin America, Asia and the Middle East as business schools look away from academic-heavy professors and bring successful entrepreneurs on board to teach students the Silicon Valley specialty.
Jeroen de Jong, academic director of the MSc in Strategic Entrepreneurship at RSM, says that he brings failed and successful entrepreneurs to class but adds that a blend of teachers is important in the education of entrepreneurs.
“There are a surprising number of practical lessons from academic work that experienced entrepreneurs are not aware of and will not get across [to students],” says Jeroen.
Helen Jihan Zhong came to Shanghai to study a master of finance but ended up using a business school competition to found Nature Gift, a start-up that provides child care services to companies and universities. “We help them take care of their children so they can bring their children to school,” says Helen.
Her business school, the Shanghai Advanced Institute of Finance, has invested about $80,000 in the fledgling firm and such aid is not uncommon at other local schools in China. China Europe International Business School, of the same city, has two in-house VCs available for students and alumni with combined capital of more than $100 million.
“This year we have record interest in entrepreneurship,” says Roy Chason, an assistant director at CEIBS.
Access to funding is one of the biggest barriers to entrepreneurial growth and it is no different for business school students. Liansheng Wu, director of the MBA program at the Guanghua School of Management in Beijing, says innovative crowdfunding platforms are improving the investment landscape.
“That’s the amazing thing about entrepreneurs; they never seem to fail to find solutions, even to unexpected problems,” he says.
Manish Ranjan founded NanoHealth, a healthcare technology start-up, while on an MBA at the Indian School of Business with a clique of classmates. The tech they developed risk-profiles patients in India’s urban slums for diabetes and hypertension, helping to combat the low levels of health spending and the subsequent strain on the country’s healthcare system.
“People are ready to pay for a good service, but it’s not reaching them,” says Manish. He is just secured $1 million in seed funding and plans to expand his network of health workers to create a greater social impact.
But Manish is not alone in his diversion from the traditional track, according to ISB’s dean Ajit Rangnekar. “In 2009 when this financial meltdown happened globally, we saw a huge spurt in entrepreneurship,” he says. Six years ago there were hardly any VCs in India’s investment scene – and they were extremely picky, says Ajit. “Now, that part of the funding is very easy.”
ISB, like many business schools, is helping to ease MBA’s transition to small business founders by paying the tuition fees of a select group of entrepreneurially minded students.
Andy Fishburn, head of investment at Virgin StartUp, says that it’s important for the next generation to develop an entrepreneurial mind-set from a young age. “There comes a natural point when you feel like: ‘It’s all in’,” he says. But he adds that you can throw it all away too early. “It’s hard for a student.”
Many MBAs develop business plans on the side of studying, and try to pursue full-time jobs. However Gary Stewart, director at start-up accelerator Wayra UK, says that you should either commit full-time or not become an entrepreneur.
“If it is something you feel is really burning inside you, take a leave of absence,” he says. “If it’s not, enjoy it. But don’t think you’re going to create the next Facebook.”
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