How to Teach Entrepreneurship
Universities are creating entrepreneurship programs to prepare their students for a changing economy and workplace. CT looks at 4 keys to a successful initiative.
When Irv Grousbeck first began teaching business at Stanford University (CA) in the 1980s, he would see students lining up for a chance to interview with recruiters from Fortune 500 companies. Today, he still sees recruiters in the corridors but often they are "just sitting there looking at their iPhones," because business students are now searching elsewhere for opportunities. "Many of those who used to go to the Fortune 500 companies are now going to entrepreneurial companies or they're starting ventures of their own," Grousbeck says.
As cofounder, with Chuck Holloway, in 1997 of the Center for Entrepreneurial Studies at the Stanford Graduate School of Business, Grousbeck has been on the leading edge of that entrepreneurial wave. And it's a wave that a lot of universities are now looking to catch. In November 2011, for example, Harvard University (MA) opened its Innovation Lab (known as iLab) at a cost of $15 million to $20 million, while Stanford added to its entrepreneurial chops with its Venture Studio in the summer of 2012. This August, Babson College (MA), which operates the top-rated entrepreneurial program in the country, announced that it would start licensing courses on entrepreneurship to other schools.
David Soto, director of content development for The Princeton Review, says the desire--and need--for entrepreneurship education has developed in the last four or five years. "The idea that entrepreneurship as a discipline can be taught is something that has taken rise, and I think it's a possibility now," he says.
It's not a new concept, however. For the past 30 years, for instance, Babson has staged a series of semiannual four-day workshops on teaching entrepreneurship. Known as the Price-Babson Symposium for Entrepreneurship Educators, each symposium cohort draws attendees from institutions all over the world, including MIT, Harvard, and Stanford.
For schools looking to launch their own programs, such workshops can be invaluable, but Janet Strimaitis, executive director of the Arthur M. Blank Center for Entrepreneurship at Babson, cautions against any idea that there's some secret sauce for developing entrepreneurship programs--just as there's no recipe for starting a successful business. "It has to be modified to the ecosystem of wherever that other institution is," she explains.
It's a warning echoed by Andrew Bellay, a serial entrepreneur who recently graduated from Stanford with an MS in management science and engineering. He advises schools to ask themselves how entrepreneurship aligns with their core values before they launch any program. "I think that these initiatives look great on brochures to alumni and to potential donors, but the real question is, 'How are they affecting the entrepreneurial journey of students at these institutions?'" Bellay says. "That's all that really matters."
While schools should develop entrepreneurship programs that reflect their institutions' character, mission, and expertise, successful programs tend to share notable traits. Here, CT looks at four key components of entrepreneurship programs.
1) Community
Sharing ideas and bouncing concepts off peers and faculty are a critical aspect of a successful program. What Stanford "really nailed" with the Venture Studio is "a sense of community," says Bellay, who has spent hundreds of hours in the Venture Studio and still uses it even though he is no longer a Stanford student. "I can go up there and pick the brains of my intelligent entrepreneurship peers who are in the trenches with me. And they have ideas on how to get around a particular problem that I'm facing."
Indeed, the idea of bringing together bright, motivated students lies at the heart of many entrepreneurship programs. Building this sense of community, however, often requires a dual approach: one formal and one informal.
The formal aspect involves bringing together the right mix of students to work on an idea. "We try to facilitate interaction with other students so they can find other teammates and learn about entrepreneurship," notes Jodi Goldstein, director of the iLab, in an informational video. Since its opening, iLab has had more than 265 teams--about one-third of which are technology related--pass through its 100-day venture residency program.
"A lot of the programs [in The Princeton Review rankings] approach this from a cross-disciplinary approach, so pairing an engineer with a business student, or someone in healthcare with engineering," adds Soto.
On the informal side, Silicon Valley's startup culture serves as the pinup model for the kind of community that many programs try to emulate. Harvard's iLab, for example, has a café and kitchen stocked with snacks and a recreation area equipped with an Xbox Kinect. The lab is designed to be flexible, with a plethora of write-on walls, comfy chairs, and tables on casters that can be easily moved around and reconfigured. The goal, according to Gordon Jones, managing director of the lab, is to promote "structured spontaneity."
2) Broad Appeal
It's rare for a student to arrive on campus with a burning idea about the next great thing. More often, students are interested in simply learning more and testing the waters. It's important, then, that any entrepreneurship program not seem too intimidating, even as it offers a full suite of support services to students who are fully engaged.
The major university programs all offer various levels of involvement, from residency programs for students whose projects are getting off the ground to more open community initiatives that offer workshops, advising services, and visits from entrepreneurs. Harvard's iLab, for instance, offers dozens of workshops each semester, as well as an Entrepreneurship 101 presentation that provides a basic overview.
Stanford's goal "is not to create entrepreneurs," explains Grousbeck, who--with Holloway--retired as codirector of the Center for Entrepreneurial Studies in June. "Our mission is to demystify entrepreneurship, so students can make better career choices. We teach [entrepreneurship] with the idea of creating a viable career alternative for students."
Bellay's one criticism of Stanford's Venture Studio, which is open to all graduate students, is its location inside the business school, which he believes can be intimidating to nonbusiness students. "The really big upside, though, is that students have a safe environment in which they can explore entrepreneurship without having to really commit to it," he adds.
3) Networking
In business, whom you know is often as important as what you want to sell, so being able to hook students up with potential investors, mentors, and businesspeople is critical. The university's alumni can--and should--play an important role in any entrepreneurship program: They represent a huge well of expertise, plus they are usually very supportive of the efforts of students at their alma mater. The school's alumni-relations group is a great way to reach out to those alumni who have risen to prominence in business, since they are already tapping the same group for donations.
While all schools can cultivate their alumni, they can't control their geographic location. Stanford is fortunate to lie a stone's throw from the venture capital firms on Sand Hill Road in the heart of Silicon Valley. Describing Stanford's advantages, Bellay says, "The resources are sort of endless and the amount of interaction, the amount of activity, and the ecosystems here in Silicon Valley are unparalleled." Bellay is now on his third startup, MetaNeer Labs, which helps companies create a mobile presence, and is about to launch another new venture with Stanford that is still under wraps.
By their very presence, Harvard and MIT--plus the countless other colleges in the Boston area, including Babson--have created a critical mass of energized, smart graduates in the region. "We think [Boston] is a great hub of entrepreneurship and a great hub of many businesses," says Soto.
So can entrepreneurship programs that lack these geographic advantages be replicated elsewhere? In short, yes. Soto is quick to point out that the entrepreneurship programs appearing in The Princeton Review's rankings are located all over the country. "I think it's indicative of the way higher education is treating entrepreneurship," he explains. "It's not only those hotbeds [like Silicon Valley and Boston], but it has spread throughout the country."
4) Real-World Curriculum
There are thousands of great ideas that go nowhere. Being an entrepreneur means transforming a concept into a reality. To do that successfully requires imagination, business acumen, market awareness, production savvy, and a great deal of blood, sweat, and tears. Good programs will introduce their students to all aspects of launching a new business or product.
Not surprisingly, the top programs put a lot of emphasis on real-world examples and experience. Strimaitis notes that all 50 of the Blank Center's faculty have direct experience in entrepreneurial ventures.
"Students here get a tremendous exposure to the real world and what they do in the classroom is project-based and experiential learning," says Strimaitis. "And then they have access to these faculty who've been in the trenches and rolled up their sleeves, and been there, done that."
Grousbeck agrees with the need for a curriculum grounded in the real world. "There's nothing like a student opening a case that's just been written and talking about a situation that exists today, in today's economy," explains Grousbeck. "And often it's local." All the cases he uses in class are either ones he researched himself or were written under his supervision. And, in 75 to 80 percent of those cases, the protagonist of the study comes to speak to the class.
"Using a 10- or 12-year-old case from some other place that you got off the shelf is not the same as having a case writer, whom you pay $100,000 a year or so, to go out and write fresh material that's topical and germane to what we're trying to teach," says Grousbeck.
It's also important not to focus only on the sexy elements of entrepreneurship, such as product design or marketing. As Holloway notes, many of the most important innovations don't involve the product but the business model. The Center for Entrepreneurial Studies developed a concept called Total Venture Design that encompasses all the elements that go into a business model: the value proposition, comparative positioning, what your competitors are going to do, how you're going to manage against them, what to charge, how to secure capital, how to recruit people, how to target markets, how to develop a marketing strategy, the value-chain structure, etc.
But programs can go too far down that particular road, cautions Strimaitis, adding that Babson encourages its student and alumni entrepreneurs to avoid getting bogged down in research. Yes, they need to do feasibility studies and determine that their idea makes some sense. "But don't spend a ton of time doing a lot of secondary research to write an elegant business plan that becomes essentially obsolete by the time you take your first concrete action," says Strimaitis. "Our whole philosophy is to take some action, learn from that, revise your plan."