THE MUSK EFFECT SWEEPING OVER B-SCHOOLS
Both Ulrich and Eisenmann say their respective school’s funds have gone through big fundraising efforts to meet the demand of student entrepreneurs. Why the influx? Ulrich believes the reason is three-fold. First is a generation enamored by Elon Musk and formed in a digital universe created by Mark Zuckerberg. Next is what Ulrich says has become an “overinflation of interest” in tech. Lastly, incoming MBAs are byproducts of the last global financial meltdown.
“I think it’s always been the case for MBAs using their two-year period to transform their careers,” Mawhinney says. “But I think the financial crisis did something for the way this generation looked at the world. They began realizing these large institutions aren’t going to be here forever and aren’t going to be safe and secure opportunities. And what I’ve seen at Carnegie Mellon and the Tepper School of Business is that we have students that come back to get their MBAs knowing that they want to start a company.”
Ponzo concurs, noting entrepreneurship’s rise as a “pervasive and accepted” career option has led to more MBAs entering Columbia with either an already established business or “fleshed-out ideas.” He sees those students treating business school like a “laboratory” where they may take chances and calculated risks with fewer consequences.
Nowadays, many B-schools house some form of accelerator or incubator for their entrepreneurial-minded MBAs to explore and take risks. Young professionals come into programs and are able to use first-year coursework and networking to develop an idea and team. They then may use the summer to fully build a product or platform and test it with potential customers. When they return in the fall, students can build out second-year electives almost entirely around their startups. At Wharton, Ulrich says, he has seen increasing numbers of students spend their summers in San Francisco developing their startups and then participating in Wharton’s Semester in San Francisco during the fall — a program he pioneered a couple years ago to continue the foundation built during the summer.
TWO TECHIES TAP INTO CRAFT BEER
Before stepping foot in Cambridge, Xu and Rai knew they wanted to start their own venture. The two met at a Bay Area networking event for Harvard Business School admits in the spring of 2015 and immediately hit it off. Xu had had some success creating an in-house startup for Apple called ImHungry. After spending an hour daily waiting in lines at Apple’s cafés on the 16,000-person Cupertino, California campus, he pitched an app-based delivery and pre-order system to senior management. Upon approval, Xu recruited a team of three engineers and one designer to build the platform. Its success led to a $1.2 million grant from Apple to expand the app and has upped productivity among Apple employees.
But by the time Xu met Rai, his new passion had become microbrewed libations. As Xu points out during a conversation in his hybrid apartment-office in Oakland, beer in the U.S. is an almost $106 billion industry — and craft brews make up more than $22 billion of that amount. While overall U.S. beer sales dropped by .2% in 2015, craft beer sales surged by more than 12%. All the same, says Xu, 32, many microbreweries are small and the beer distribution channels really haven’t changed much in decades. “We thought if we could aggregate all of the small brewery owners it could be very beneficial,” he says. “Many don’t have distribution channels and very limited resources for marketing and technology.”
So the two techies began working on the idea as a side project the summer before coming to Harvard. Once on campus, they immediately began tapping into Harvard’s massive reserve of entrepreneurial-focused resources. They used its Innovation Lab and the Rock Center for Entrepreneurship at Harvard Business School. The duo even tapped into the expertise of law students and professors to navigate the thorny details of alcohol distribution and sales. In January, when fellow classmates spent the first week of spring semester interviewing for traditional internships, Xu and Rai flew to craft brew-rich — and alcohol legislation-lax — California to drive up and down the coast, enlisting brewery owners to join their yet-to-exist platform.
SUMMER STARTUPS: A TEST WITHOUT ‘BLOWING THE OPPORTUNITY OF FULL-TIME EMPLOYMENT’
Harvard Business School launched the Rock Summer Fellowship program in 2007 to aid MBAs interested in starting their own ventures or spending summers at early-stage ventures. Since then, the school has handed out more than $2 million at a clip of $600 per week (or less) to the fellows. Historically, Eisenmann says, Rock Summer Fellows have been split down the middle between those starting their own ventures and those joining early-stage ventures. This year, that’s changed: Fifty-two are “starters” and only 19 are “joiners.”
“You don’t do it because you think it’s an amusing way to spend the summer,” Eisenmann says of the “starter” track. “You do it because you think you have a business, and it’s often the case that you don’t know if you have a good one or not until you test the concept.”
Eisenmann believes three months is the perfect amount of time to fully explore the viability of an idea. Student entrepreneurs often spend the first month meeting and chatting with potential customers to nail down a problem worth solving. The next phase, Eisenmann explains, involves brainstorming solutions to the problems. Finally, ventures may hack together a prototype and test the minimum viable product with customers.
Ulrich concurs that summer can be a safe time for MBAs to test a venture — particularly for those coming from traditional MBA industries. “It’s a way to test that without blowing the opportunity of full-time employment,” he says.