Sean Greer came to Silicon Valley in a dark blue suit, a crisply pressed white shirt and a bright yellow tie. Facing a group of five venture capitalists and angel investors, the MBA student comes off as an earnest and passionate young man of 29 years.
Unlike most of his classmates, he has already launched a startup, a home healthcare company that broke even within four and one-half months of its launch in October of 2013 and in its first year boasted 30% profit margins. The firm, Commonwealth Care Group in Charlottesville, Va., runs out of several locations, all in Virginia. What Greer is now proposing is a growth plan based on franchising that would take him into new states. But the skepticism in the room on this sunny day in early April is palpable.
“Sean, you’re being very naive,” confides one of the VCs listening to the pitch. “You’ve only done this with three or four locations. You don’t have anything franchise-able, and you have disregarded a lot of things, like senior housing.”
STUDENT-DRIVEN INNOVATION IN AN ONLINE MBA PROGRAM
Undaunted, Greer takes in the criticism and steers ahead with his presentation. He’s an MBA student at Indiana University’s Kelley School of Business, and he’s here in Silicon Valley as part of a Venture Challenge course in entrepreneurship. But what makes his appearance here a little more unusual than the more typical MBA immersion on the West Coast is the fact that he is a student in an online MBA program, Indiana’s Kelly Direct MBA offering.
The idea to come to Silicon Valley for a no-holds-barred assessment of their business plans came from the students themselves. “This is student-driven innovation,” says Phil Powell, the faculty chair of the Kelley Direct program. Annual admissions to the program rose by 27% to 292 from 230 for 2014-2015, with the average GMAT score up 17 points. So far, admissions acceptances for the fall of this year are tracking 40% higher with average GMATs in the upper 630s. Kelley now has 812 students in its online MBA program and another 162 in its online MS offerings. A new online MS program in entrepreneurship and innovation launches this fall.
The school’s strategy is to transfer core components of the residential MBA program into the online environment to deepen student and faculty engagement. To that end, Powell has added several immersion trips, to Chicago for consulting and to Silicon Valley for entrepreneurship. Others are planned for brand management in New York and perhaps corporate finance in Charlotte. The goal is to build up to a pair of three-day immersion classes per term targeted toward career switchers to give them networking and action learning opportunities rarely provided in an online format. The school also has funded eight different online student organizations and clubs, including one devoted to entrepreneurship. “They said, ‘Phil, put us in front of VCs. We want to pitch our ideas and get real feedback.’”
SOME 14 MBA STUDENTS WITH 14 DIFFERENT BUSINESS IDEAS
So Kelley began planning this two-day excursion to Silicon Valley, asking members of its West Coast advisory board to sit in, listen and provide feedback to students courageous enough to air out their ideas. The school paid roughly half the travel costs of the students. In all, some 14 Kelley Direct MBA candidates made the trek, from Connecticut, Virginia, Illinois, Ohio, Washington, California, and Indiana. To insure that this was not just an exercise in tourism, the school told the VCs to act as if they were judging any founder who walked into their offices with a business plan. The grade for the entire course is based on their pitches and given to them by the judges—not the faculty.
“This is not for the feint of heart,” maintains Powell. “If you’re going to take entrepreneurship, the course itself should be about risk-taking.”
Each MBA has 20 minutes to present and another 20 minutes to be grilled by the VCs. They are scored on a half dozen attributes: the clarity of the presentation, the uniqueness of the concept, its market and financial feasibility, the business and operational strategy, and the responses to the judges’ questions. The business ideas run the gamut from new dog treats and a low-cost power generator for Nigeria to a home health care service and a novel way to sell and promote music via inexpensive Mp3 players. They are judged by a group of 10 Silicon Valley veterans, who include Sanjay Subhedar, founder and principal of Storm Ventures, Richard Roethke, founder and CEO of Barrington Management Co., Greg Becker, president and CEO of Silicon Valley Bank, and Diane Dudeck, senior director of strategy, planning and operations at Cisco.
REHEARSAL AT A HILTON GARDEN INN BEFORE THE REAL PITCHES
Before making the West Coast trip, students had five-to-six weeks to create their pitches and rehearse them. The group arrived on a Wednesday night, spent all of Thursday in a rehearsal before three members of the Kelley faculty at the Hilton Garden Inn in Mountain View, and then face the real music on a Friday afternoon. That’s when the students and faculty converge in a cavernous conference room at the Plug And Play Tech Center in Sunnyvale for the pitches.
“They came in with a lot of research and prepared presentations,” says Donald F. Kuratko, an entrepreneurship professor who directs the school’s Entrepreneurial Innovation Academy.
“They started out being overly technical and trying to provide too much information. We had to get them to just tell their stories.” During the full-day tryouts, the professors would frequently stop students mid-way into their pitches, providing detailed criticism that ranged from taking a slide or two out of a PowerPoint to rearranging the entire order of a presentation.