Cryptoventures: The Next Big B-School Thing?

Three years ago Campbell “Cam” Harvey was stressed about an upcoming lecture. And that’s not typical. The J. Paul Sticht professor of international business at Duke University’s Fuqua School of Business, Harvey has led an illustrious three-decade long career in finance academia, including a seven-year stint as the editor of the Journal of Finance. “When a student asks a question, I’m going to be in good shape,” Harvey tells Poets&Quants. “If I don’t know the answer immediately, I can find it very quickly.”

Except for that lecture three years ago. Fresh off his time at the Journal of Finance, Harvey thought he’d revamp his bread-and-butter course, International Finance. So in addition to the typical lectures exploring currencies of globally and economically important countries, he decided to dedicate a lecture solely to cryptocurrency — the name given to virtual money, which includes Bitcoin. Problem was, Harvey didn’t really know much about cryptocurrency.

“I gave the lecture and I was totally nervous because it was fresh material and there were some things that I was not even sure of,” Harvey recalls, noting the inherent mathematical complexities behind things like Bitcoin. “For this lecture, I’m figuring, well, there could be some students with computer science backgrounds that are going to make me look very silly. So there is a fair bit of stress in doing this.”

SETTLING THE WILD WEST FEEL OF BLOCKCHAIN AND BITCOIN

Indeed, some techie MBA looking to exert her or his CS prowess could have let loose. Except, they loved it.

“I couldn’t believe it. I never — in my teaching experience in this course — have had students so engaged in a topic,” says Harvey, adding that he took more time preparing for that one lecture than all other lectures in the course combined. “It was magical.” Some of the students in the room even told Harvey it was the single most important lecture they had attended as MBAs.

The responses were enough for Harvey to pitch a cross-discipline course to colleagues in the law and computer science schools. Unfortunately, the law professor left for another school and the computer science professor was tied up with another course that would conflict timing-wise. Instead of a three-part elective offered through the entire university, Harvey would have to teach the entire course and move it under the umbrella of Duke’s Fuqua School.

“There was stuff in the news about Bitcoin this and Bitcoin that,” Harvey says of when he was initially considering the idea of a full-fledged course. “I talked to my colleagues and they were extremely skeptical.” Rightfully so. Bitcoin itself has only been around since 2009 and very much has a Wild West feel if you read this Deribit review on Bestbitcoinbroker.net. It’s outright outlawed in some countries. Others, like the United States, have attempted to stay ahead of the financial technology (fintech) curve by clarifying tax treatments and regulations of Bitcoin and other digital currencies.

A ONE-OF-A-KIND B-SCHOOL COURSE?

Still, some believe the U.S. isn’t doing enough and is susceptible to being passed up in cryptocurrency innovation by the United Kingdom. Earlier this summer, the European Union Parliament met to vote for “smart regulation” of Bitcoin and other blockchain technology. Of course, Bitcoin usage has also been riddled with fraud — notably Trendon Shavers’ 2015 guilty plead to securities fraud. Just last week, hackers stole $65 million from users of Bitfinex, one of the largest cryptocurrency exchanges in the world. Such cases have perpetuated legal, and practical, hesitation around the globe.

Nonetheless, Harvey saw an important opportunity. “The more I read, the more I realized this (Bitcoin) was a very well-thought-out, very careful, quantitative, mathematically correct sort of analysis that is definitely solving problems,” he says. “And has the ability to substantially disrupt many areas of business.” Duke Fuqua students seem to agree. During the first offering of the new course — Innovation and Cryptoventures — some 13 students participated. Word spread and the second rendition saw an entirely full elective with more than 75 students, 74 of whom were MBAs.

While Bitcoin-focused clubs have popped up across business schools and New York University’s Stern School of Business offers a bitcoin-specific course, Harvey says his course is unlike any offered at another elite B-school in the world. “We’re offering something that as far as I can tell, no other top business school offers,” he says, adding that he specifically designed the course to be entrepreneurial-focused. What’s more, he says, the majority of students who take the course so far aren’t even finance-focused MBAs. “It focuses on this technology that could be disruptive in many areas of business,” Harvey continues.

AN ENTREPRENEURIAL-FOCUSED COURSE

One of those students is Irakli Pkhovelishvili. A former strategic planning specialist at the Georgian Oil and Gas Corporation, Pkhovelishvili entered a U.S. MBA program specifically with entrepreneurship in mind. “The pace in which things moved forward in my country was a little slow,” the 25-year-old says of innovation and entrepreneurship in his native Georgia. But it wasn’t until his final semester in Harvey’s course that he met his teammates and found his idea.

Harvey’s course is structured in two parts. First, students learn all things blockchain. Harvey paints this historical context of money and digital money, and students are expected to become experts in everything from digital signatures to hashing, encryption, and public and private digital transactions. They do this through finding a firm in the space and presenting what the firm does — and its chances for success. “It’s relatively easy because it’s something that exists,” Harvey explains. Students then are placed in teams and expected to come up with their own business idea and 15-page pitch deck to present at the course’s conclusion. The plan and presentation is worth “almost all of the grade,” Harvey says.

“After teaching the course two years ago, I was fearful that all of the good ideas were taken,” he admits. “I was fearing the students would be out of ideas.” Instead, teams came into scheduled advising meetings with handfuls of new ideas. “They started going through their ideas and I’m thinking, every single one of these ideas is a viable idea and could be viable businesses,” Harvey remembers.