For aspiring entrepreneurs navigating an MBA programme while launching a business can be the perfect lesson in management.
Pursuing a venture alongside a rigorous full-time curriculum comes with its own set of rules, however. Instead of attending sought-after and time-consuming recruitment events entrepreneurs are nurturing their fledgling businesses, while the student-professor relationship assumes a more important mentoring aspect.
In order to launch an online identity management company while studying at Insead, Paris, MBA student Tom Eilon created a set of objectives: including not panicking during exams and working at his start-up. “If you don’t prioritise you can be busy all year and not get anything out of it.” On the other hand, grades were a lower priority: “I’m not here to get the top mark in the year,” he says.
Networking with classmates, a staple of the MBA experience, must also take a back seat. Uzi Shmilovici at the University of Chicago Booth School of Business says he rarely spends time socialising with fellow students.
“As an entrepreneur you want to work 24 hours a day and it’s very hard to balance that with school,” says Mr Shmilovici, whose company builds software for small businesses.
Financial uncertainty creates pressure too: unlike their peers entering corporate jobs, entrepreneurs do not have a guaranteed income on graduation. So it can be difficult to resist the traditional MBA career path.
Clemens Raemy, a 28-year-old co-founder of an online site that helps people to find taxis safely in South America, says it is hard to resist the pull of a career when those around you are taking jobs. He founded the company with three other Harvard Business School students, but they took finance jobs in their second year. “A lot of people like the idea of starting something, but it’s very tough to follow through … with offers from banks and consulting,” says Mr Raemy, who works with new partners.
Despite the challenges, professors say more students are sticking to their own ventures after an MBA programme. “Being an entrepreneur is now a valid career path,” says Jim Pulcrano, executive director at IMD Lausanne. Ten years ago, he says, “the reason you [pursued] entrepreneurship was because you couldn’t get a real job”.
For their part, business schools are offering practical tools. At IE Business School in Madrid, students are encouraged to target their elective courses with their entrepreneurial idea in mind. After core classes, including a mandatory class on entrepreneurial management that helps them devise a business plan, students can choose from courses aimed at helping them to launch their venture. The most feasible ideas are selected to be part of IE’s Venture Lab, which gives access to outside mentors and hands-on training.
Saras Sarasvathy, a professor at Darden School of Business at the University of Virginia, uses the Starting New Ventures course to simulate the life of an entrepreneur. Participants are encouraged to involve spouses and partners. Students need to learn to launch a business alongside other distractions just as they would during a full-time job, says Prof Sarasvathy.
As options expand, schools are becoming known for their entrepreneurship offerings alongside established tracks. “People apply to Chicago to do entrepreneurship, I don’t think that happened 10 years ago,” says Steven Kaplan, entrepreneurship and finance professor at Chicago Booth. The entrepreneurship concentration started in 1988 and enrolment has tripled in the past 15 years, with 300 of the 581-strong cohort graduating with the concentration in 2010.
Some schools see their role as teaching entrepreneurship within the scope of an MBA. At IMD, entrepreneurship courses are mandatory; chief executives need some exposure to entrepreneurial thinking, explains Mr Pulcrano. Only a handful of graduates pursue entrepreneurship, he says. “It sounds really sexy but they don’t understand the 18-hour days and what it’s like going without a salary.” He advises some students to gain corporate experience before starting a business.
However, fledgling entrepreneurs do find their MBA can be used immediately – testing concepts for example. “For entrepreneurs, especially, it’s not about the [MBA] title,” says Mr Shmilovici.