With Jobs Scant, MBAs Consider Startups

Landing a banking or consulting job used to be the main reason for going to B-school. These days, it's just as likely to be launching a business

By Francesca Di Meglio

Business schools have quietly become the back door to starting your own business. Once considered merely the hallway to a high-salaried career with an investment banking or consulting firm, business schools are now drawing attention from those tinkering in their garages and hoping to find the next big thing. Through virtual and traditional business incubators, business schools are helping students launch startups with everything from fund-raising and networking to finding office space and interns.

During the economic crisis, many people took shelter in graduate programs, while many others who had been pursuing careers at companies large and small sought opportunities to become their own boss so they won't have to worry about the next round of layoffs. These ingredients have come together in a recipe that has graduate business programs cooking up entrepreneurial ideas like never before—from RecipeKey, a reverse search engine that has visitors to its Web site typing in ingredients to get recipes, to WallStreetOasis.com, an online community for finance professionals.

The Next Generation of Employers

The increase in interest in entrepreneurship has schools broadening their mission. "Rather than creating the next generation of employees, we want to create the next generation of employers," says Ted Zoller, associate professor and executive director of the Center for Entrepreneurship at the UNC Kenan-Flagler Business School (Kenan-Flagler Full-Time MBA Profile). Both the enrollment of courses on entrepreneurship and applications to Kenan-Flagler's Launching the Venture program are up 25% in the last year, adds Zoller.

Attendance at the kickoff to the business plan competition at the University of Chicago Booth School of Business (Booth Full-Time MBA Profile) was also up about 25% from last year, says Ellen Rudnick, executive director and clinical professor at the Polsky Center for Entrepreneurship at Booth.In the last year, 42% of MBA students at the Carnegie Mellon Tepper School of Business (Tepper Full-Time MBA Profile) took at least one class in entrepreneurship. The program saw the entrepreneurship track rise from 12 to 27 participants. And 75 of the 210 incoming MBA students chose to participate in the entrepreneurship boot camp before classes started.

Aspiring MBAs have always had an interest in starting their own businesses, say experts. But student loan debt and attractive career prospects at traditional firms have usually swayed them from pursuing startup dreams during and right out of school. Now, they're breaking with tradition and feeling less risk-averse because there isn't as much to lose. "Before students looked at entrepreneurship as job options three, four, and five," says Rob Adams, director of the Moot Corp business plan competition and lecturer at the University of Texas-Austin McCombs School of Business (McCombs Full-Time MBA Profile)."Now, it's job option one, two, and three."

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