November 27, 2014

What Should MBA Programs Teach Aspiring Entrepreneurs?

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The Weatherhead School of Management at Case Western Reserve University where I teach is getting ready to redesign its MBA program.

I’d like us to put in an entrepreneurship track that teaches students what entrepreneurs think that a person should learn in an MBA program. So I’m asking all of you what that is.

Should an entrepreneurship program teach the same things that are taught to students who want to go to work for someone else or should it teach something different? If the latter, what is that “something different”?

What areas are most important to focus on: accounting, finance, marketing, management, strategy, organizational behavior, information technology, operations management, or something else?

In each area, what are the most important courses to teach? And in those courses what topics should be covered?

If any of you have thoughts on this matter, please post your comments. If a lot of people offer their opinions, it would help me make a case about what the market thinks an entrepreneurship track in an MBA program should look like.

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About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books, including Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By and Finding Fertile Ground: Identifying Extraordinary Opportunities for New Ventures

34 Comments ▼

Scott Shane


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

34 Reactions

  1. Creativity. In order to become an entrepreneur, you need a creative idea. In order to sell in today’s competitive market, you need a creative marketing plan.

    Best regards,
    Murray Trillionare
    Author of How To Become A Trillionaire and Lose 20 lbs.
    http://blog.murraytrillionaire.com

  2. I went a more non-traditional route (trombonist, salesman, and finally cartoonist), but I’d say an entrepreneur needs to 1) love what they do and 2) will willing to embrace everything else.

  3. When I got my MBA in 2004, there was a lot of focus on theory and technique. Textbook stuff. That did me no good in starting my own business. What did help, however, is my one class on entrepreneurship. We studied real businesses and offered solutions to them.

    I think classes that encourage students to think like entrepreneurs are useful. Or that get them to interact with real entrepreneurs (every town is full of them). Finance, filled with its equations, did nothing for me. Marketing and accounting, however, were useful, but could stand to take the slant of “I’m doing them myself” rather than the larger picture (we studied Wal-Mart and Coca-Cola.)

  4. Marketing.

    Without the ability to market (and sell) and idea and the outcome of that idea an entrepreneur is doomed to failure.

    Marketing is what they need.

    But as well as the traditional marketing that is already on an MBA syllabus they need more practical approaches to marketing – how do you do evaluate wants without a million dollar market research budget – how do you communicate with customers on a dime.

  5. Having nearly completed my MBA work at Babson College (ranked #1 Entrepreneurship school for some large number of years running), I can say a few “Do’s” and “Don’t’s”:

    DO:
    * Teach Marketing, and teach it well
    * Teach Finance, and make sure it pertains to an entrepreneur’s role – not just financing a venture, but how to read the numbers (accounting, particularly)
    * Involve students in real-life projects, both at a consulting level and from a learning level
    * Allow students to try their new skills by forming a “real” business

    DON’T:
    * Allow students to make their own teams too early
    * “Teach to the book”
    * Concentrate so heavily on Entrepreneurship that students leave without a well-rounded skill set

    Good luck!
    – Josh

  6. Sales, sales, sales.

    And Sales.

    Coming up with an idea is fine, but learning how to ‘sell’ your dream and your ideas to others, well that’s where the success is. But teach that sales is not the smarmy salesman, but more a concept of trust. Perhaps even advocate the use of blogs and other elements of social media in which to ‘sell’ these ideas.

    Also a good read from Seth Godin’s free ebook Bootstrapper’s bible, might be fantastic. http://www.changethis.com/8.BootstrappersBible

  7. Being a business owner for 5 years and having previously been a computer programmer the biggest single struggle I had is truly understanding other areas of business. For example I thought I knew alot about sales…because I had read a couple books on the subject…boy was I wrong. An entrepreneur needs to be well-rounded in multiple areas. I think the most important thing you can do is identify where a student is strong and then point them to the classes that will help to round them out. BTW, I am beginning my MBA in August because I want to get it. I was not able to start my MBA 3 yrs ago because I had to go and learn what I needed to run my business. And had no success finding a program that would teach me what I needed to be a successful entrepreneur.

  8. PR and Sales!
    Other than that, the previous feedback is really good, especially regarding finance.
    In general, I would say: If you know that you want to start your own business immediately, don’t spend your money on a MBA. You need it to invest.
    If you think you want to start one in the future but don’t know yet what, go into sales or PR, the two skills you will need most.
    Plus, the entrepreneurship track should be open for other majors who could take it if they think they have an idea in their expertise.

  9. The Acton MBA (http://www.actonmba.org) offers an amazing curriculum that starts with “The Entrpreneurs Journey” and proceeds to study entrepreneurship using the Socratic Method and Harvard Case Study style. I’ve audited a few of their classes and seen Jeff Sandefer speak on a couple of occasions. They make their curriculum available free through their Foundation for Entrepreneurial Excellence (FEE).

  10. Internship in a startup is vital. A few months in the mix with different hats, meetings, policy on the fly, and the real life real time interactions under pressure are important preparation. Nothing beats on the job training except on the job training combined with tailored classes.

    Andrew’s point about sales is excellent. Every entrepreneur must become an expert sales person. Dale Carnegie’s course is an excellent model. Requiring students to take that course, or one similar, and receive credits for it would help round out a program.

  11. I asked your question, Scott, on Twitter, and got these 3 responses so far, as of 11:30 AM:

    @ScottTousignant How to dream big and follow their passion and purpose

    @sdschiffli The Entrepreneurial Mindset, http://www.elientrepreneur.com

    @jaxtrx Team building, Costing models, creative thought

    Note: on Twitter you’re limited to 140 characters per message, so they’re brief.

    Anita

  12. I like what Dr. Trillionaire said about creativty. I think it would be great to teach the importance of marketing and pr, but it should be done in a way to emphasize the importance of doing so creatively. The tools are there to create any kind of content imagineable, but you need to use your imaginaton to capture the attention of people looking for the services you can provide.

    Also throw in some training on the impotance of creating (and automating) processes for routine, repeatable tasks.

  13. I’ll second the suggestions for creativity, leadership, and case studies.

    I’ll also vote for strategic planning. Entrepreneurs can get so involved in the day-to-day operations that they don’t plan well for the future. I’ve found a lot of real-world information on how to do cheap, creative marketing and so forth but so far haven’t found much on strategic planning for small businesses.

  14. Hands-on definitely! A class like that would have to operate as a mock-business. The students will have to develop their own idea from start to finish. Real world entrepreneurs would have to be brought in definitely.

  15. I spent the past three years studying and working at the Sloan School of Management. There are many budding entrepreneurs here, many who have gone on to found successful start-ups. And looking back, here’s what I see/saw:

    – well rounded core: I agree with many of the others that its important to keep the students well-rounded.

    -strong analytical/quant skills: Its really important to give them a strong quantitative and analytical background (which Sloan does remarkably well). This can be through finance, accounting, and strategy courses. Many of the students said that it prepared them well for their work.

    -interdisciplinary collaboration: This was incredibly important. I personally was involved with three courses that brought together students and professors from across the campus and forced cross-disciplinary collaboration. The resulting dialogue was very interesting, and I’ve been told by alumni that it really got them to think broader from a business sense. They are also able to relate across disciplines, which has come in handy for raising capital and gaining clients.

    -sustainability, ethics, and green thinking: When Sloan launched its sustainability curriculum, they expected only a dozen or so students to enroll. Imagine their surprise when it was oversubscribed from all around MIT!! This is the second year that they are teaching, and the student numbers have doubled!! Students are interested and want this stuff. Plus what better way to prepare them for the world.

    – practical work experience: the most popular entrepreneurship courses were lab courses, where students were paired up with start-up companies from across the globe (in various sectors). Alongside the theory, they learned about entrepreneurship first-hand, with a month-long consulting assignment with their company on site. They also learned about the differences in entrepreneurship across the globe, which has been priceless for many who have had to deal with globalization in their realms.

  16. Nurture the Right Brain. Both sides of the brain are important but most of the MBAs I have been exposed to while strong on analytics / book smarts are very short on instinct. To be a successful entrepreneur, to nurture an idea into something meaningful, you need to use both sides of your brain. Bring some truly creative minds into the mix and let the students see for themselves that the right brain isn’t scary.

  17. Anita, you may appreciate this:

    http://tinyurl.com/64zdym

    Entrepreneuriship is about the concept of ‘affordable loss’ and knowing what to do in a strange kitchen.

  18. Somewhere in this discussion we should be separating what lends itself to teaching in classrooms and what doesn’t.

    For example, you don’t teach instinct. Instinct is by definition something you have or you don’t. And you don’t teach experience, you gain it by suffering through problems, meeting challenges, and surviving. Maybe, just maybe, you can accelerate experience with stories of success and failure and case studies, but then again, maybe not.

    And then there are the things you can teach, and ought to teach, like cash flow and financial projections and essentials of marketing, basic strategy, basic people management. And creativity, maybe, if it’s taught well.

    What I’d like to see is recognition that entrepreneurship is an exhilarating mix of skills, guessing, instinct, bravery, vision, blindness, and so forth. Leave it complex and contradictory and copnfusing, because that’s the real world.

    Tim

  19. I would echo a couple of comments made earlier.

    First – entrepreneurs early on need to be more hands-on across a broad range of business functions that managers in other businesses. So they need to learn “an owners view” across a broad range of subjects.

    But they also need to know when to outsource those functions – and how to pick a good supplier. Many of the things done in-house in larger companies need to be outsourced by the entrepreneur – and hence he/she needs to know about how to select business partners and how to work with the effectively.

    Entrepreneurs also need to know how to eventually elevate themselves above the day to day running of the business and to “systematize” it so it can largely run itself without their direct involvement all the time. Many entrepreneurs see their business as their retirement plan – and so they need to know how to position their business so that they can step back from it. This is often the biggest challenge of the entrepreneur.

    Entrepreneurs alo tend to be practical, hands on people rather than theorists – so the more practcial project work that can be incorporated into the course the better. On my MBA (done at Manchester Business School in the UK 15 years ago) there were multiple Entrepreneurship, International Business, etc. projects – with the students getting out into the field and either working with companies to help them or setting up their own businesses.

    Finally – one element that is often criminally missing from MBA programs: Sales. This is especially important for entrepreneurs who often have to “bootstrap” the business and be the lead salesperson themselves initially. Yet most entrepreneurs come from a technical background – one of being good at doing something or making something or having a good idea. Selling doesn’t come naturally for them – and yet it will be critical in the early years.

    I find that most MBA programs shy away from sales for some reason. I majored in marketing and strategy – yet i didn’t have a single course on sales – there were none available. Sales is often seen as the poor cousin of marketing. Perhaps because of the sometimes unsavoury image of sales in public (or perhaps only in academic)perception (Death of a Salesman, Glengarry Glen Ross etc.) Perhaps it’s because sales is not seen as cerebral as marketing – and to be fair, I believe it has been studied much less well academically. Even in your own suggestion of potential courses you mention marketing but not sales.

    Yet the reality is that after the initial set-up of the business where marketing skills are vital to get the positioning and customer focus right – practical sales skills will take the foreground. The entrepreneur must focus on growing the sales of the business – and inevitably they will have to do a lot of it themselves using good old fashioned sales skills.

    Good luck with the course!

    Ian

  20. The following is written at the risk of lash back and with sincerity.

    The criteria for acceptance into and\ MBA entrepreneurial program is more critical than the content of the program itself. Grades are not enough. Potential entrepreneurs should be reviewed for talent and skill sets, otherwise they are being misled into believing that their education will be enough.

    Time and time again, good sales and marketing has outperformed good products and services. The criteria for acceptance into an MBA entrepreneurial program are more critical than the content of the program itself. Grades are not enough. Potential entrepreneurs should be reviewed for talent, skill sets, and most importantly, raw determination; otherwise they are being misled into believing that education will be enough.

    Time and time again, good sales and marketing has outperformed good products and services. Microsoft vs. Apple and VHS vs. Betamax are classic examples.

    Intuit founder Scott Cook succeeded with relentless gumption, something one rarely learns or acquires in the classroom.

    “Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race. No person was ever honored for what he received. Honor has been the reward for what he gave.” – Calvin Coolidge.

  21. MBA Entrepreneurial programs should be flexible and offer courses that will, on some level, tap into the entrepreneurial students natural creativity to encourage forward thinking. But, at the same time teach traditional business concepts, (sales,marketing,accounting,etc.), in non-traditional ways. For example, entrepreneurs don’t have to be great in operations management or accounting, just as long as they understand how important it will be to hire the very best accountants and managers to compliment the whole. Entrepreneurship is just as much ‘Art’ as it is ‘Science’ and Art is very difficult if not impossible to teach. The more I think about this topic, the more I realize just how difficult it would be to develop a Entrepreneurial track in an MBA program-simply getting administrators and current MBA professors to sign-off on courses that will encourage ‘creativity’ & ‘free thinking’ is a task in its own right! Good Luck

  22. Thank you all for your helpful comments. I’m going to wait a little longer to see what else people have to say and then I’m going to look at the patterns across the comments.

  23. Love this post, Scott. Great replies, too. I applaud you for making entrepreneurship in your program. If there had been such a track in my MBA program 10 years ago, I would have done it!

    Having run many businesses, including our current company that has grown from 3 to 100 employees in a few years, made the Inc. 500 list last year and now serves thousands of other entrepreneurs in helping them grow their companies, I’m happy to tell you what I would wish for in an Entrepreneurship track.

    – Sales. Sales should be championed, not looked down upon. Entrepreneurship starts with salesmanship. Sale of the vision, sale of the product, sale of stock… it’s all critical. I would say it’s the most critical part of entrepreneurship but it is not revered as it should be in MBA programs, which is a shame.
    – Marketing. Strategic marketing and positioning are essential, but shoestring marketing to get the whole thing going is vital if the venture is going to get off the ground.
    – Finance and Accounting (for entrepreneurs, not public companies). The entrepreneur is going to wear these hats in the early stages. She’s gotta understand the basics of financial statements and cash flow.
    – Organizational Behavior. This “soft stuff” doesn’t get much credit in most MBA programs, but I’ve learned it is extremely important to the culture of an entrepreneurial organization.
    – The Intangibles. Tim Berry said it well, entrepreneurship involves guts, instinct, determination, guessing, persevering and staying optimistic. Entrepreneurs have to keep their mindset right and exorcise the demons in their heads.
    – Real work in a start-up. You have to see it all in living color, soak it up and get stoked by the entrepreneurial fire.

  24. I guess all the pints have been mentioned in the comments and there is nothing left. All I want say that it’s a great concept to start a entrepreneurship program for the students. Keep up the good work.

  25. A combination of theory and practice, starting your own small business with your classmates.

    Here is one example: http://www.entrepreneur.chalmers.se/cse/

  26. I was recently looking into an MBA program, but to tell you the truth all of them fit the same bill. I’d love to be involved in a program that stresses innovation, creativity and big ideas. Most MBA’s already have the business background, but its the innovation that sets them apart.

    ~Bob
    http://www.onehalfamazing.com

  27. I got my MBA and I thought it was mostly based on the text book (except certain class such as my Statistic class. The professor was very creative in teaching and not totally based on the text book at all). But why would the school teaching students something that they can just read in the book? Should they teach students to think and be more creative in business? True, not everyone wants to go into a business but large corporations also depend on creativity of workforce.

    What do they need to know? To me, entrepreneurs have to be well-rounded. To be good in just one subject isn’t enough.

    PS: The school I went also offers a major in Entrepreneurship!

  28. I am MBA (Marketing) and want to utilize my skills to do any business. I have some projects report that can be advantage to accomplish my professional qualification.

  29. The global world may need some attention to have the creative approch into the future. Brand Promotion always trust your business with quick business boosting

  30. case study lover

    IBSCDC’s case studies on MBA and Management focus on providing the MBA students with a detailed understanding of the various business dilemmas and prepare them to analyse and apply those concepts in solving business issues. So once you visit http://www.ibscdc.org I hope you may get benfit from that site.

  31. hi guys,
    i feel to be a successful enterpreneur one needs to have 4 qualities:
    Analytical Skills
    communication skills
    team work and leadership
    Innvoation
    all these qualities can be developed by an individual. the thing which can be done in a B school is sharpen these skills.

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