When you think of the University of Michigan Ross School of Business, entrepreneurial prestige might not be your first thought. At a school well known for its strong general management and social impact emphasis, entrepreneurship could easily take a backseat. But that’s not the case, according to the newly appointed entrepreneurial head at Ross, professor Stewart Thornhill. While on a West Coast meet-and-greet tour for Ross alumni, he stopped to speak with Poets&Quants to discuss the school’s entrepreneurship initiative.
Truth is, Ross entrepreneurship dates back to 1927 when the school offered the nation’s first small business management course. In 1971, the first entrepreneurship management class was taught. Soon after, in 1975, the first entrepreneurial track was established.
The creation of the Zell Lurie Institute for Entrepreneurship in 1999 has helped Ross place as a top three school in entrepreneurship by the Princeton Review and Entrepreneur magazine for the past three years. Ross also placed fifth in this year’s Poets&Quants’ ranking of top schools for MBA startups.
According to Thornhill, what has led to Ross making waves on the entrepreneurial map is the well-rounded focus on entrepreneurship. “We are not just focusing on startups but also on the funding side of things,” Thornhill says. “So we have a world-class array of programs in terms of students applying for grants and internships so they can spend summers working with startups. We have standard business plan competitions and some other competitions. Those are the table stakes in entrepreneurship programs these days. But on the other side of the table, we have three current student venture investment funds and a fourth getting ready to start where we have capital pools available for students to do early stage investing.”
STUDENTS DISH OUT NEARLY $7 MILLION TO VENTURES
Students can choose between the already established angel/seed, VC and social impact funds. Later this year, the additional fund will be for undergraduate students only. The total funding for the three funds already in place is almost $7 million. Students are the sole decision makers in which ventures receive that amount.
“Why I think this is valuable is while many of these students won’t go on to become VCs because that’s a very small industry, the challenge early stage entrepreneurs have is raising funds and knowing how VCs think,” Thornhill says. “So by giving students the opportunity to be on the other side and doing due diligence to put together term sheets and evaluations and understanding that full spectrum, by going through that process they won’t be operating on the same level of naivety as a tech entrepreneur that hasn’t gone through that cycle first.”
The other strength the institute is drawing upon is cross-school collaboration with other Michigan departments. “We’ve got world-class faculty and students across schools,” Thornhill says. “My original training was as an engineer before I went back to business school and right now we have a joint incubator that we run with the college of engineering, we have an accelerator that we’re just opening this year that is also joint with the college of engineering, and it’s that cross-college collaboration that is part of the secret sauce we talk about.”
Despite some differentiating strengths that Thornhill hopes will draw in top talent, he says while Ross might compete with “the usual suspects” of Harvard, Stanford, MIT, Booth or Kellogg for the best students, once those students are in the schools, there is a very collaborative nature across the different campuses. “As soon as one of us comes up with something new, the others race to imitate,” Thornhill says. “So having a top-notch faculty and funding and resources is essential to keep up.”
Thornhill believes some of this collaboration is a result of entrepreneurship programs attempting to compete with more traditional business functions for legitimacy.
“In a lot of ways, entrepreneurship centers are the business school children of the last two decades,” Thornhill says. “Since 2000, the growth has been explosive. Entrepreneurship is an upstart and that’s why you find so much collaboration amongst schools. We are all trying to establish our legitimacy when compared to marketing or finance or consulting.”
‘INFECT THE STUDENTS WITH A VIRUS’
As for what the goal of training entrepreneurs at Ross, Thornhill says the base-line expectation is to “infect the students with a virus.” According to Thornhill, it means planting a seed of self-confidence and a mindset and turning their sense on to be looking for opportunities while also creating a state of readiness to act.
“The timing of that depends on each individual student,” Thornhill says. “We give them the mindset but when they act on that mindset is different for everyone. It begins when they see an opportunity and have an idea and can’t sleep at night because they are obsessing over it. Maybe that happens right after graduation or maybe that happens after 10 years of a consulting career and they are faced with the challenge of walking away from that to pursue that opportunity.”