Best Schools for Entrepreneurship
(List in alphabetical order, not ranked)Babson CollegeUniversity of California-BerkeleyMassachusetts Institute of TechnologyUniversity of PennsylvaniaStanford University
Also consider: Columbia University, University of California-Los Angeles, Dartmouth College, Harvard University
Source: Admissions consultant survey, BusinessWeek research
Imagination and Process
By Sonal Rupani
Bill Gates dropped out of college. So did Michael Dell. More recently, Facebook whiz kid Mark Zuckerberg waved goodbye to Harvard and headed out to sunny California to devote his attention to his immensely successful online venture. Does the evidence for the "can entrepreneurship be taught" debate lean a little bit toward the negative? Not so fast—there's a lot more to an entrepreneurial education than meets the eye.
The first thing to consider is the distinction between "being taught" entrepreneurship and "learning" entrepreneurship. There is undoubtedly a certain amount of internal drive and forward-thinking perspective that won't necessarily come from being in the classroom, but you can definitely learn the tools that will make your startup as efficient and viable as possible.
DUAL COMPONENTS. Professor Noubar Afeyan, who teaches the New Enterprises course at MIT's Sloan School of Management, says there are two components to entrepreneurship. There's a creative side of imagining an unmet need and being inspired about how to fill that need, and a process-driven side, which involves methodical techniques of analysis, channel development, and dealing with marketing demands. "I'm not here to teach people creativity," he says. "It's like teaching someone how to paint—you can't teach people where to get their inspiration, but there is also technique in it. That's why people will sit there and paint a fruit bowl, because you can separate the technique from the inspiration."
In entrepreneurship classes, students learn skills that will take them from initial conception and design of a business plan, to financing a startup and managing a growing company, through to creating partnerships and strategies. Classes often invite practicing CEOs to come in and talk about their experiences, providing a learning opportunity that most students agree can be both practical and inspiring. Similar to classes in other departments, schools have focused on "learning by doing" by challenging their students to develop their own business plans and have their presentations critiqued either by fellow classmates or actual venture capitalists.
While Afeyan admits that an education in entrepreneurship is not absolutely necessary for people who want to start their own companies, he recognizes that it would have been helpful to him to have had that framework to work with when he was fresh out of college in 1988 and looking for people to finance his business idea. "The stock market had just crashed in '87, I was 24, had a Ph.D. from MIT, but not much else," he recalls. "I developed a whole new range of measurement systems that would be used to accelerate discovery and development of new biotech drugs."
MEETING A LEGEND. Interestingly enough, even though Afeyan didn't study entrepreneurship, his inspiration stemmed from a meeting with Hewlett-Packard (HPQ
) co-founder Dave Packard when he was a student at MIT. "Hewlett-Packard had started to make new measurement tools for engineers and that kind of stuck in my mind," Afeyan says. "When 30 to 40 years later a new kind of engineer was being born, biotech engineers, it made me think of how they might need new measurement devices."
Afeyan's ability to identify an unmet need, identify prototype products, find customers, and eventually raise some money led him to mind-blowing success. When the company PerSeptive Biosystems went public in 1992, it had annual sales of $800,000. By the time the company merged with Applera (ABI
) in 1998, that figure had reached over $100 million.
However, entrepreneurship is certainly not for everybody, and it involves a huge amount of responsibility that often goes unnoted in the dramatic success stories that inspire would-be fortune seekers. The very same field that can be intensely satisfying with success can be devastating with failure. This explains why entrepreneurship students are grateful for the opportunity to take a couple of practice shots with a safety net before plunging in head-first. As with anything, practice makes perfect, and no one knows that better than an entrepreneur.
Rupani is an intern for BusinessWeek in New York
Major in Entrepreneurship?
He's just a few months out of college, and Eddie DeSalle has already established the business plan, pricing, software development, and human resources structure of his startup company, Net Irrigate. But maybe that's because he got more than half of this work out of the way before he even graduated from the Kelley School of Business at Indiana University.
The very idea for developing irrigation data technology originated from the experience of a classmate from Kansas who had grown up on a 10,000-acre farm. According to DeSalle, agriculture accounts for 60% of water usage and has been under the strict scrutiny of the federal government. DeSalle and his classmate identified a very real demand for efficient water-tracking technology that could save farm owners the hassle of driving around to every irrigation system once a month to log water usage.
HATCHING THE PLAN. When it came time to pitch their business concept, not just to classmates, but to actual venture capitalists in their venture screening class, the positive feedback encouraged DeSalle to take the project further. He took a business planning class where he actually wrote out the plan for the company before taking a pricing class to master the difficult art of determining the price for a new product which has no standard for comparison.
"Essentially what you have to do is find similar things out there and put them in a matrix and find out which attributes are similar and try to price those individual attributes," he explains. "Then you think about what is different about my product and what additional value my product will add and then quantify that value."
With only about $86,000 spent in developing the software technology, DeSalle is aiming for his venture to become profitable by the end of next summer. "If the conservation efforts of state, federal, and local governments go at the rate they've been going, this is going to turn into a high-growth company very quickly," he says. "Out of the 12,000 wells that are registered for irrigation, about only 30% have a metering device, and out of that only 5% have a telemetry device."
VALUABLE EXPOSURE. DeSalle is resolute in his advocacy of entrepreneurship education. "Did I need to take these classes to start a business? Absolutely not," he acknowledges, "But did these classes allow me to make better decisions and spend less money in getting the business started? Absolutely."
For dedicated entrepreneurs an effective business school program can help students get their foot in the door by encouraging them to actually develop new business plans while they network with practicing entrepreneurs and like-minded peers. For many, simply the exposure to real entrepreneurs gives them the opportunity to learn from the mistakes of others and be inspired by their successes. Speakers provide affirmation that entrepreneurs are real people, and, with extreme dedication, launching a successful venture is in fact within the realm of possibility.
But a concentration in entrepreneurship is not solely for the risk-inclined who are constantly cooking up ideas for new businesses. The education is also prime for those looking to enter midsize or big companies that are constantly creating new divisions or that want to have business development deals with smaller startups. Another option is for those who want to be venture capitalists and would prefer to get involved in the financial risk of funding these companies.
VC SIDE OF THINGS. Nathan Dintenfass, a 2006 graduate of the University of California at Berkeley's Haas School of Business, found that his entrepreneurship and venture capital education prepared him well to understand the structure and rationale of venture investments. "I have done work with venture capital firms where my knowledge of deal structures and due diligence processes was invaluable," he says, "and I have advised numerous entrepreneurs."
A number of programs now also try to provide the much-needed financial resources for students who have a promising venture proposal. The most acclaimed of these is MIT's 100K competition, which is open to all schools and majors, and awards the winner with $30,000 and runner-ups with $10,000 to finance start-ups. The competition that started in 1990 as a 10K competition has resulted in 60 successful ventures with a reported aggregate value of $10.5 billion.
But the final and perhaps most significant reason for considering a career in entrepreneurship is the personal satisfaction that often comes with owning your own company. In addition to the satisfaction of watching their companies grow, DeSalle says entrepreneurs have the unique opportunity to fulfill a consumer demand. "That's the greatest feeling because at the end of the day you can say 'I deliver value.'"