Response to the discussion at the SIE-hosted session on entrepreneurship at institutes for higher education.
Part of our Stanford REE Series from the Roundtable on Entrepreneurship Education.
One of the great advantages of starting a company at university is the wealth of human resource at arm’s reach. Student-entrepreneurs are surrounded by designers, engineers, web developers, marketers, and technologists. One question raised at the Roundtable on Entrepreneurship Education (REE) earlier this month was this: How can we manage this human resource to build more and better founder teams at universities?
Among the student population, MBAs are a key resource for fledgling student companies. MBA students are older and more experienced than their peers on other degrees. Some have started businesses before, or worked at large organisations. In general, compared to many other would-be student-entrepreneurs, MBAs are more worldly, and better trained in the art of making money.
However, few MBAs ever get involved with startups. This problem was highlighted at REE by both Business School faculty and external participants. Business schools are ranked based on the post-graduation salaries of their alumni; thus, a business school that sends its students directly to high-ranking management positions outranks a school that promotes entrepreneurial MBAs. (Unless your MBAs found a company like Groupon. Hey, there are always exceptions.)
In addition, MBA students are offered little opportunity to build social capital—i.e. to build strong personal and professional networks—while they study. Their programmes only last one year, so they have little time to integrate into the local business and startup communities. And if they come from outwith the Euro zone—as many MBA students do—it is difficult to obtain permission to stay in Scotland to work. That means MBAs have even less incentive to devote themselves to small, risky companies.
What’s the upshot of all this? The most experienced, business-savvy group of students on campus is largely absent from the bulk of student startup activity, and we can be almost certain that this negatively impacts both the scale of student ventures and their overall success rate.
Bottom line: Although MBAs have particularly valuable skills and experience, significant structural hurdles mean that they remain largely inaccessible to student startups.