The idea initially came as something of a joke.
Earlier this year, a team of six Harvard Business School MBA students was brainstorming ideas for a new startup business. They came up with a peculiar takeoff on all the online dating sites: a Facebook application for Jewish mothers to set their children up with potential marriage partners.
When the team shared the idea with fellow students, it heard nothing but skepticism. “They said there were a lot of barriers to entry,” recalls Jyll Saskin, 24, one of the team members. “Others said they didn’t think the market would be that big for it.”
The feedback led to some serious rethinking. “We said, ‘What if we expanded the idea to leverage the power of friend networks?’ adds Saskin. “Friends could serve as yentas to recommend dates for their friends.”
With $3,000 of seed capital from Harvard Business School, Yenta was launched into the world last week along with as many as 150 other new startups in what might well be the largest single experiment in entrepreneurship ever undertaken. The so-called “micro-businesses” range from a company called Kinsey that sells “premium undergarments” for men to another called 4n Friend that is creating an online network that matches language tutors with students all over the world (see “Startup Ideas Coming Out of Harvard Business School“).
‘ENTREPRENEURSHIP WITH TRAINING WHEELS’
It’s part of a bold and highly unusual initiative as part of Harvard’s new MBA curriculum. The ultimate goal isn’t to encourage students to become entrepreneurs. Instead, it’s to allow MBA candidates to apply the knowledge they have learned during their first year of study at Harvard. “It’s kind of like entrepreneurship with training wheels,” says Youngme Moon, a Harvard marketing professor who is chair of the MBA program. “The idea is you are going to start something up, we are going to give you support and teaching along the way, but you are going to have no time to think and will experience everything in this process in an accelerated fashion.”
Of course, many business schools, including Harvard, boast business plan competitions and elective courses that guide MBA students through the creation of a new enterprise. But no school has made the launch of a real business a requirement of its curriculum until now.
The logistics and prep work by Harvard to even attempt the effort has been monumental. Lawyers had to draft legal documents to allow students to create limited liability companies. During the course of the term, the school technically owns the ideas. On the last day of the term, the intellectual property is transferred to student teams if they are in unanimous agreement.
HARVARD BUDGETED $750K IN SEED MONEY, BUT ENDED UP NEEDING MORE
Harvard budgeted $750,000 in seed capital, roughly $5,000 for each team, to help the students fund their businesses. It turned out that more has been needed. The school also arranged for an external company, TopCoder Inc., to do software programming for the students (About 50 teams had an initial conversation about using TopCoder and 34 actually went forward with the process, says a TopCoder spokesperson). Harvard developed a proprietary software platform to allow students to trade in the stocks of the business concepts dreamed up by their fellow students. A faculty advisor, ten in all, was assigned to manage 15 teams at a time.