Listen to this article
Just over a decade ago Divya Narendra was an undergraduate at Harvard University, studying for an applied mathematics degree.
In his spare time, he was working with twins Cameron and Tyler Winklevoss on HarvardConnection (later ConnectU), a social-networking tool for students. He imagined it could become a big business. Then the three student colleagues got wind of Thefacebook, a rival platform co-founded by fellow Harvard student Mark Zuckerberg. Much legal dispute — and a film, The Social Network — was famously to follow about the genesis of the site.
Zuckerberg’s start-up would, of course, eventually drop its definite article to become Facebook, the world’s largest social-networking business. Zuckerberg and Dustin Moskovitz, a co-founder who later became Facebook’s chief technology officer, followed the classic Silicon Valley model of leaving formal education to learn the art of creating a company “on the job”.
Narendra did not quit his studies. He finished his degree, took a salaried job in the mergers and acquisitions team at Credit Suisse and as a hedge fund analyst at Sowood Capital Management in Boston. In 2009, however, he returned to full-time study, completing a dual programme combining a law degree and an MBA at Northwestern University’s Kellogg School of Management near Chicago in 2012. This time, however, Narendra did become an entrepreneur, using the time between lessons to develop an online idea-sharing forum called SumZero.
The difference between Narendra and the other social-networking pioneers was that he kept faith with business education. He is now the New York-based company’s chief executive, and remains convinced that business school, rather than the “university of life” approach taken by the college dropouts, was the best way to nurture his entrepreneurial ambitions.
“There is no doubt that learning on the job is a must,” he says. “However, grad school gives you broad exposure through case studies, panels and direct networking to how other industries and companies work, in a way that would not be possible if you were working full time at any given employer.”
It was not only the classroom teaching that helped, although the practical skills in financial management that he learnt were useful, says Narendra. As important as these were the connections made by faculty staff and alumni — SumZero’s largest customer was introduced through a Kellogg connection.
It might be expected that someone who has invested so much of his time and money in higher education should be enthusiastic about the benefits to entrepreneurs of a formal education. What is interesting is that Narendra’s former social-network business rival at Harvard has also become involved in the business education market again.
Last year, Zuckerberg joined the advisory board of Tsinghua University’s School of Economics and Management, one of China’s top business schools. The man who had previously dropped out of a formal education at an Ivy League college even delivered an address in Mandarin to students at the Beijing university.
The irony is not lost on Narendra. “There are even many examples of folk who went to top-ranked business schools and law schools who ultimately became wildly successful and yet think the degrees were a waste of time,” he says. “There are other examples of people owing all their success to the number of degrees they carry with them. Going to grad school is a personal decision and not always solely driven by money or the return on investment on tuition.”
Zuckerberg’s involvement may have less to do with concern about his personal development and more with finding talent to work for his multibillion-dollar company, as well as gaining a foothold in a potentially lucrative market for Facebook. The site has grown rapidly from a start-up in 2004 to one of the world’s largest companies by market capitalisation and a big employer in need of brilliant minds.
“Tsinghua University is one of China’s leading universities, with a world-class school of economics and management,” a spokesperson for Facebook said in a statement. “They obviously feel Mark is an innovator and leader who will be a valuable addition to their board. Joining the Tsinghua SEM advisory board is a perfect fit with his passion for education, entrepreneurial experience and interest in China.”
Narendra agrees with this logic. “Mark is actively involved at a lot of universities, which makes a lot of sense for Facebook from a recruiting standpoint,” he says.
Zuckerberg and Narendra are not the only former Harvard students with business school connections involved in the social-networking story. The Winklevoss twins graduated with MBAs from Oxford University’s Saïd Business School in 2010. While at Oxford, they rowed for the university against Cambridge in the annual Boat Race on the Thames and they have both spoken fondly of their time at the school.
However, they were clearly eager to get back into the world of start-ups and soon set up a venture capital business, Winklevoss Capital, which says on its website it that backs “determined” entrepreneurs.
That a group of high-profile figures involved in the birth of social networking have so publicly endorsed business education must be gratifying to deans around the world. Business schools are eager to rebrand their schools as entrepreneur-friendly institutions in an age when many potential MBA students are increasingly drawn to the idea of founding start-ups.
The problem is that within the current generation of founders, particularly those involved in fast-growing digital start-ups, a formal business education is seen as an expensive way of obtaining skills, both in terms of time and money. Many opt instead for “the university of life” approach or bring on board a non-executive director as a teacher and guide.
Narendra has some sympathy for this reasoning. “It’s very difficult to both run a business and go to school full time,” he admits. “That said, for entrepreneurs contemplating launching start-ups, if you are able to raise capital as a student, the tuition becomes well worth it. It is a small price to pay in the grand scheme of a 40-plus year career.”