Why Business Schools Struggle to Teach Entrepreneurship
blogs.forbes.com
blogs.forbes.com
Business schools are setup more like trade schools to teach marketing, finance, management, and accounting. Those have little to nothing to do with how to create a product, how to get your first customers and so on and so forth. Most business schools presuppose and existing, successful business of some sort. Take away the existing business and most of what they teach is not terribly useful.
Also, the best teacher of entrepreneurship is not school at all. It is experience. Starting a company, incorporating, getting customers, building a product, hiring workers all seems impossibly hard and confusing at first until you get some practice. Starting a business isn't hard, but it's a much different experience than being an office manager or accountant at a fortune 500.
I learned more starting my first company about how a business should be run than I ever did sitting in classes. There is no class that can teach you how to start a business unless it actually forces you to start a business.
Running a business should be taught like an art school or a culinary school - by doing. Try learning how to cook by just reading recipes or watching cooking shows, but never actually cooking a dish by yourself. Sounds absurd right? Ok, try learning how to start and operate a successful business without ever actually starting or running a business.
That is what business schools do and that is why they fail.
They also do a bit more than act as trade schools to teach skills. There's the huge networking value (only worthwhile at GSB, HSB, (+maybe MIT Sloan or UPenn Wharton for very specific disciplines too)), and they do teach some useful information beyond technical skills.
They are still probably not the best opportunity cost weighted use of time for most people (unless you want to work in the highest levels of large companies or government), but they might have some net positive value; lesser MBA programs have negative value. Getting an employer-funded MBA while living through a 2y lockup period after M&A does seem like a great choice though :)
When my friends and I decided to start a business based on my idea, I was finishing my PhD in physics and had no idea how to run a business -- no knowledge of accounting, management, marketing... I didn't know the difference between debt and equity. I took classes at the business school of my university. It gave me the quick and dirty knowledge I needed to get it started.
Among the classes I took in entrepreneurship at business school, I wrote my first business plan, learned breakeven analysis, spoke to entrepreneurs, got mentors, got connections to investors, employees, patent lawyers, eventual board members, did my first market research, which involved speaking to successful entrepreneurs in my field, I could go on...
The resources available to a student at a university are incalculable valuable to someone who knows how to use them. If all you do is sit in class and accept what they tell you, you won't get much out of business school. You probably won't be great at starting a business either.
Business school entrepreneurship programs deserve criticism and could do better than they do, but few of the comments on this thread hit them. All fields' best teacher is experience, not just entrepreneurship. School gives a foundation -- no more no less. Everyone in every field learns more in the real world than sitting in classes, or nearly so. That doesn't mean school can't help.
To say no class can teach you how to start a business misses what they can do. They can teach you the overall process, connect you to networks that can provide resources like capital, labor, business services, marketing, experienced and connected mentors, prestige, and so on. They can give you perspective on wider business issues beyond start-ups. They can help you understand what happens after the start-up phase.
The programs may not be for everyone, but that means they aren't a match for all, not that they have inherent problems.
After my business was up and running I went back to finish my MBA -- a decision based on experience and knowledge.
I would suggest that the mechanics of setting up a company is mostly a list of things to follow: incorporation, taxes, shares, contracts etc. some with branches that needs to be followed. But it is something you only do a limited amount of times (I have done half a dozen).
The key thing, I think, is to teach how to create great teams. It is your core team which defines your future. Maybe you want to look at going through an abbreviated version of Steve Blank’s “Four steps to Ephiphany” as well.
An MBA is neither a necessity nor a setback en route to a successful career as an entrepreneur. That's why you can quickly come up with stories of the Mark Zuckerberg's, Andrew Carnegie's, and Steve Jobs' who never graduated college, but just as quickly come up with stories of the Mark Pincus', Phil Knight's, and Jeff Skoll's who got MBA's and became immensely successful entrepreneurs. In fact, MBA's as a whole have a pretty good winning percentage. This could be due to a number of factors, very few I would guess actually having much to do with the education obtained in the MBA program courses themselves.
The big takeaway I have is that everything you learned running your first startup is generally not applicable to your second startup, except those things you learn in a b-school (tax law, forming corporations, equity, etc...). And surprisingly this is also true of management in a F500 company too, but just at GE it's a lot harder to rock the boat -- for better or worse.
If Hacker News could crowdsource me a textbook for next time around that would be amazing ;)
Maybe a program would be too structured for your tastes, but implemented well; it can reinforce potential entrepreneurs' knowledge. They could, of course, offer them in instalments as some entrepreneurs know some stuff and don't know other stuff but that's a different topic.
A startup is not some mythical entity that works in mysterious ways. There is a lot of overlap with how larger businesses are run - namely, hiring practices, advertising, market analysis, negotiations etc. These are common themes that are covered in business schools, and startups can benefit from them as well as larger corporations.
Sure, startups need to be a lot more inventive in how they deal with early growth, but I don't think an MBA precludes any of the required skills.
Taught courses can help in all the above areas but only to a limited extent, entrepreneurship is no different.
Music schools only (or can only) teach students the compositions of other great musicians.