Why Business Schools Are Still Missing The Mark On Entrepreneurship

How do you teach entrepreneurship then?

Hands-on, get-the-hell-out-of-the-classroom experience. We use the classroom as a way to summarize what teams have learned outside the classroom. Obviously entrepreneurship is a combination of theory and practice, but teaching entrepreneurship without practice is like teaching surgery and never touching a patient. Yes, you need the theory, but I want you to have the practice or you’re going to kill a lot of people. Entrepreneurship works exactly the same way.

Of course we want to teach theory, but if there isn’t a hands-on, practical simulation of what they’re going to be doing in the real world, you’re really cheating your students. It was okay before because we really didn’t know what it was. But I’m suggesting that we now have at least one model. Let me be clear – a model, not the model – of what one of those classes could look like. I’ll guarantee you that people will make better ones in the coming years, but I think we’ve moved the bar substantively.

Could you elaborate on the hands-on, practical experience in your Lean LaunchPad course? 

The class mirrors the theory of what a lean startup is. A lean startup is not a smaller version of a large company. We know that. A large company knows what they’re doing – they’ve been doing it for a while. They know who their customers are, they know pricing, they know competitors.

But a startup is just a series of hypothesis, a series of guesses. We want to figure out how to frame those hypotheses, and then get out and test them as accurately as we can, and then change our assumptions if they’re wrong. It’s just like science.

We use something called a business model canvas to frame those hypotheses, a process called customer development to get feedback, and iterative engineering to build minimum viable products that get more sophisticated as you learn. That’s the theory part. But actually, that theory maps into practice and usually really simply.

We teach students each part of the business model using the online materials, and every week there’s a lesson: here’s what a customer is, here’s what a channel is, here’s what a partner is, here’s what demand creation is.

As we teach them the new subjects, they have to get out of the classroom as a team and talk to 10 to 15 customers or partners to validate or invalidate their hypothesis for that part of their business model. Then, they come back to the classroom the next week, and every team has to present their findings.

Last time we spoke, you mentioned that entrepreneurship is best taught by entrepreneurs. But being an entrepreneur doesn’t necessarily make you a great teacher. 

Absolutely. Teaching itself is a real art. Just because you were successful in business, doesn’t necessarily make you a great educator. And just because you’re a great educator, that doesn’t necessarily make you a great entrepreneur. I think that’s why you need a combination of the two.

I ended up learning how to teach at Berkeley because they were smart enough to pair me with some great educators, and they had a great on-boarding process for adjuncts. So eventually you get to write and teach your own courses. It’s actually a pretty rigorous process. At Stanford I had to co-teach other people’s classes under observation before I received permission to do my own.

As much as people bitch about adjuncts, some schools use them really well. At least that’s the case in the engineering school at Stanford and the business school at Berkeley. Both of these institutions embrace the fact that adjuncts actually have valuable experience and that, of all places, entrepreneurship is where we want to put then. But they don’t confuse them with research faculty, who are actually pushing the envelope in other areas.

As an adjunct, I benefited greatly from the research insights of tenured faculty, and it’s the combination that makes it great. Different schools treat adjuncts differently. If you have faculty who’ve never run a startup trying to teach the class, it doesn’t mean they can’t teach it, but it’s like asking a priest to teach sex education.

What should prospective MBA students consider when assessing B-schools?

Here’s a test: If the curriculum of your school in 2015 looks like it did in 2005, then you’re at the wrong school. Has the world changed for business school graduates over the past decade? Yes. If it looks anything like it did in the 1990s, then run away fast.

And here’s a canonical problem: I’ll use Stanford as an example. Stanford is an outward-facing university, and by outward facing I mean it has continuous contact with commercial entities – startups and corporations. Some universities are inward facing: “Oh, we’re great research people, we write lots of papers, and we deal with consulting firms.” And that’s it.

You really find a difference in speed, energy, and attachment to the outside world between the two types. So if you’re at an inward-facing business school, you’re really at a disadvantage because the world hasn’t stood still.

Are there any other red flags MBA candidates should watch out for when selecting a business school?

If none of the faculty have any innovation experience and you want to know about innovation, you’re at wrong school again. Or, if their capstone course is on how to write a business plan, then run away fast.

Obviously I have my biases and that’s where I’m starting from, but those things are symptomatic of how fast the school is moving to adopt what’s clearly not a fad, but where the world economy is going. You don’t want a school that gradates MBAs to manage companies from the last decade or the last century. You want a school that produces graduates to manage the next decade’s companies. That’s a big idea.

DON’T MISS: Q&A With the Father of the Lean Startup or Behind The Scenes Of A Startup MOOC