STUDENTS STARTING BUSINESSES DECLINING SLIGHTLY AT PROMINENT SCHOOLS
Still, the number and percentage of students starting businesses directly after graduation has dipped slightly in recent years. Some 7% of Harvard’s full-time MBA graduating class of 2016 reported starting their own business three months after graduation. Those 65 graduates represent a decline from the 84 (9%) a year earlier.The percentage and number is the lowest reported since 2012 when 7% (63) of the class reported starting their own businesses. Same goes for Stanford’s GSB where 61 members (15%) of the Class of 2016 chose to start their own businesses. After a peak of 70 graduates (18%) in the Class of 2013, the GSB has seen a consistent decline to this year’s number. Pennsylvania’s Wharton School actually saw an increase this year — up to 50 students (6%) starting ventures compared to 36 in 2015 (4%). Still, the 50 student entrepreneurs is lower than 2014, 2013, and 2012.
“I would say we’ve actually seen a bit of a slow down in the past few years,” confirms Deb Whitman, the director of Stanford GSB’s Center For Entrepreneurial Studies. “If you look from 2008 to now, we’ve seen that slope start to slow down a bit.”
Ponzo also cautions that many of the ventures on this list and portrayed in media are exceptions to the norm. “People only hear the things that are cherry picked or success stories,” Ponzo explains. “And people’s definition of what it means to be an entrepreneur, what the realities of it are, what the realities of working at a startup are, can get a little warped when you’re just sort of feeding off that top positive layer of news and success stories.”
SACRIFICES, PERSEVERANCE, AND INGENUITY LEAD BRANCH TO 12th
One venture to make this year’s list which knows that struggle is Branch. The software company, which essentially provides deep technology linkage for app developers, was founded by Alex Austin, Mada Seghete, Mike Molinet, and Dmitri Gaskin. Austin, Seghete, and Molinet earned their MBAs from Stanford in 2014 and Gaskin dropped out as an undergrad at Stanford University to pursue Branch. The trio of MBAs met in Stanford’s infamous Launchpad course. After a failed “Fitbit for dogs” and a successful-but-not-a-home-run photo printing venture, the team realized that while their previous two ventures weren’t the world beaters they were looking for, they had put together a crack team of marketers, engineers, and coders.
With a solid the team in place, all three MBAs turned down summer internships between their first and second years — which often pay at least $10,000 a month — to work together. Molinet lived on whatever friend’s couch was open at the time because he couldn’t afford Silicon Valley rent. Now he lives in Seghete’s garage — where he’s been since graduation — and makes some of the furniture in Branch’s three-story downtown Palo Alto office. They had to look past massive consulting offers some of their fellow classmates were juggling. And social events were often forgone.
The sacrifices have paid off. Months after receiving a $300,000 angel round from Pear Ventures right after graduating in June of 2014, the team received a $2.75 million seed. Five months later, they announced a $15 million Series A. And less than a year after that, the team raised a $30 million Series B. In 2016, Branch more than doubled its staff from 40 to 90 employees. Branch’s B-school lesson? Commitment.
“If you really, really want to do it, commit 100% to it and don’t get distracted by events, by fun activities, by other people getting internships and full-time offers that seem lucrative,” Molinet says. “Because if you really, really want to do it, none of that matters because you should be so committed to the business and building something in general, that you shouldn’t give a shit about that other stuff.”
ENTREPRENEURIAL THOUGHT GOES WELL BEYOND LAUNCHING VENTURES
Molinet’s point about the importance of devotion to a business idea is a valid one. According to Whitman of Stanford, about 93% of last spring’s graduating MBA class took at least one entrepreneurship course. Last year, some 468 graduate students — about half of which were GSB students — participated in the Venture Studio, the GSB’s signature startup program. Yet, only 15% of the graduating class of 2016 actually launched businesses. One reason could be that 21% went to work for early-stage startups, according to Whitman. Still, Whitman adds, students entering Stanford’s full-time MBA program have at least some interest in entrepreneurship — reflected in the 93% of the Class of 2016 taking at least one course in the subject.
“One of the reasons you see so many companies coming out of Stanford in the first five years is there is a lot of self-selection going on,” explains Whitman. “Students who are keen on coming here have that interest.”
At Columbia Business School, Ponzo says the entrepreneurial focus goes beyond starting a business — a growing trend among many MBA programs. “Entrepreneurship isn’t just about starting a businesses,” he says. “It’s also being able to innovate, experiment, take calculated risks, and do the customer discovery process before you launch into things. Those are still things that have a long way to go in terms of permeating the business culture.”
A common narrative for Ponzo and Columbia is to make sure students know the difficulties and risks that go along with attempting to start a business. “We’re not doing anybody any good if we pat them on the back and send them off into the world without explaining to them really how difficult it is to start a business,” Ponzo says. “Or how different working at a startup is from working at a big company.”
Ponzo and company try to make it clear from the get-go that being entrepreneurial isn’t exclusive to launching a business. “At the beginning, we tell people it’s not just about starting a business,” Ponzo explains. “And I think what that does for our students is it’s no longer a binary relationship between a corporate job at a bank or a consulting company or starting a business.”