From Startup Dreams to a Cubicle Life

While entrepreneurship students get MBAs with the goal of launching a startup, many make corporate pit stops before they go into business for themselves

By Erin Zlomek

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Mike Norelli, a 2010 MBA graduate from MIT, experienced a collegiate entrepreneur's dream when an investor pledged seed capital for the startup he and a few classmates had founded to convert food waste into fuel. Just as the venture was to receive that financial boost, however, Norelli backed out to accept a job at GE Energy, whose recruiter met with him after Norelli arrived at MIT's Sloan school of Management (Sloan Full-Time MBA Profile).

"No matter what I do afterwards, I'll be in a better position—and that includes doing a startup," Norelli says of his GE experience.

Like Norelli, numerous business students are experimenting with entrepreneurship while at school. But most of those who will do something entrepreneurial in their careers—join startups or venture capital firms, found their own companies, or become early stage investors in companies—are unlikely to do so until years after they have graduated. A growing number of large public companies are trying to appeal to this group, reframing job opportunities to align entrepreneurial ambitions with corporate interests and prompting schools to make entrepreneurial students more aware of those options as they decide how to pursue careers after graduation.

In a 2011 survey of second-year entrepreneurship students at the Harvard Business School (Harvard Full-Time MBA Profile), 70 percent said they expected to wait one-to-seven years after graduation before pursuing an entrepreneurial project.

Addressing "Founders' Dilemmas,"

"The question then becomes 'What is the best way to be spending the next five years or so in preparation for that?'" says Timothy Butler, director of career-development programs at Harvard Business School.

The topic resonates strongly with students, many of whom are exploring positions at startups, consulting firms, and large companies. The students from the 2011 HBS survey were enrolled in "Founders' Dilemmas," an HBS course started in 2009 by entrepreneurship professor Noam Wasserman after he had spent a decade researching early choices founders make that tend to cause problems later.

Enrollment in the class exploded to about 250 students across four sections in 2011, up from a single section of 42 students at its debut. The course won Wasserman an HBS Faculty Teaching Award.

A 2008 study of the collegiate backgrounds of more than 650 U.S.-born tech entrepreneurs also explored how long MBA graduates wait before starting companies. In that sample, the 31 percent who held MBA degrees started companies fastest, waiting an average 13.1 years after graduation. This compares to an average wait time of 14.7 years for all masters degree holders, 16.7 years for those with bachelor's degrees, and 20.9 years for those with PhDs.

Many business schools are seeing more graduates take startup jobs after graduation. In 2010, 7 percent of HBS grads went to work at startups, up from 3 percent in 2008. Surveys of about 90 business schools found that more startups recruited MBAs for full-time positions in spring 2011 than in 2010, according to data from the MBA Career Services Council.

Startup Case Studies at Harvard

As interest in startup careers grows, schools are offering greater resources to help students consider all available career options. In Wasserman's class, for example, students examine two case studies: one of an entrepreneur who worked in a corporate environment for 25 years before starting a company and another of an MBA who turned down a job at a consulting firm to start a company right after graduation. Students examine the pros and cons of each path. "Being aware of the minuses will hopefully enable students to avoid them," Wasserman says.

Wasserman also polls his students to gauge their immediate career plans when the course begins. In 2011, 22 percent planned to take jobs at large private or public companies, 20 percent planned to join startups, 17 percent expected to enter consulting, 16 percent had plans to found a company immediately after graduation, and 12 percent planned to enter private equity.