The entrepreneurial revolution at business schools continues to gather steam.
The once sparse union of student founders is now a bandwagon of seasoned entrepreneurs who are uprooting the traditional MBA career path.
A mass shift in mentality that has seen MBA students shun corporate careers is crashing through Europe, the US and Asia at the likes of Babson, INSEAD and NYU Stern.
“We’ve seen a substantial number of people who want to start their business straight from the MBA,” says Jeff Skinner, executive director of the Deloitte Institute of Innovation at London Business School.
He says the whole place is fizzing with business innovation. “They are disrupting,” he enthuses.
Start-up ventures are red hot among MBAs, from ex-Goldman Sachs bankers to Bain & Co strategists, who are inspired by Silicon Valley start-ups like Snapchat, Uber and Airbnb.
Stewart Thornhill, executive director of the Institute for Entrepreneurial Studies at Michigan Ross, says: “There’s been this real shift in what people want out of a career.”
Even if students don’t found companies during their MBA they are likely to do so later in life.
“They have a combination of exposure to the right opportunities and can assemble more resources,” says Stewart, after graduation.
One example is Lending Club, the peer-to-peer lender that floated on the NYSE last Christmas and was founded by HEC Paris MBA Renaud Laplanche, its CEO. Kolltan Pharmaceuticals, a Harvard MBA’s biotech company, was poised to join the Nasdaq in January but quashed an $86 million float.
Success has been plentiful. Okta, an identity and mobility management start-up from MIT Sloan, raised $155 million from investors including Andreessen Horowitz, the Silicon Valley fund that backed Facebook and Twitter. SoFi, the P2P financing platform that has raised $766 million including from PayPal founder Peter Thiel, was launched by Mike Cagney, a Stanford MBA.
“Entrepreneurship as a path has been embraced in a way like never before,” says Bethany Coates, assistant dean at Stanford’s business school.
Silicon Valley is increasingly the focus. “The Bay Area is a huge centre of start-up activity and innovation,” says Kimberly MacPherson, co-director of the Center for Health Technology at Berkeley’s Hass School, which has a campus on the fringes of the Valley.
Europe’s schools are keen to get a slice of the innovation. MBAs at Cass Business School in London sought out on a Bay Area trek Google, video game maker Electronic Arts and Zillow, the Nasdaq listed real estate database. Oxford Saïd is bringing the CEOs of cloud company Evernote and Avalanche Biotechnologies – both Silicon Valley stalwarts – to its campus this month.
Diane Morgan, associate dean at Imperial College Business School, says MBA students are increasingly aware of how start-ups have successfully challenged traditional players. “They want to be a part of that,” she says
The key to success in innovation hubs is that founders give back and nascent entrepreneurs learn from those who have gone before.
Jo Mills, deputy director for the Centre for Entrepreneurial Learning at Cambridge Judge Business School, says: “We get an ecosystem developing of alumni coming through the business school and university.”
This ecosystem has produced at Cambridge at least 14 companies that joined the $1 billion-plus valuation club, including tech group ARM Holdings, listed on the LSE, and software business Autonomy, which was scandalously acquired by Hewlett-Packard for $11 billion.
Shailendra Vyakarnam, director of the Bettany Centre for Entrepreneurship at Cranfield School of Management, describes the MBA mentality shift as a “great social movement”.
But she points out that business schools have vested interests in leadership and management development – and not in start-ups.
Still, she stresses that entrepreneurship is now a more viable career path. “There is more money about and there are way more ideas in the environment to inspire people to make entrepreneurship a career,” she says.