Stanford and startups simply belong in the same sentence. Based in Silicon Valley at the world’s modern epicenter for entrepreneurship and innovation, the Graduate School of Business has been churning out entrepreneurially-minded MBAs for decades.
Over the past three years, an average of 16% of the graduating full-time MBA classes have elected to launch a venture immediately after graduation. At 47%, Stanford’s GSB has a higher percentage of elective courses focused on entrepreneurship and innovation than any other full-time MBA program (see Best MBAs For Entrepreneurship: The Data Dump). And nowadays, every single MBA at Stanford takes at least one elective in entrepreneurship and innovation.
Highlighting those courses is the iconic Startup Garage, which was launched by Stefanos Zenios nearly seven years ago. Since its creation, the course which uses a unique and eclectic approach that includes lean startup theories, design thinking, and flipped-classroom instruction has produced more than 30 ventures. Some of those include DoorDash, which has raised over $2 billion in funding, Going Merry, which connects future college students with financial aid opportunities, and Nimble, which uses software to help school districts hire the best teachers, to name a few.
STARTUP GARAGE: BUILDING THE ENTREPRENEURIAL MINDSET
But for Zenios, the architect of one of the most prolific entrepreneurship courses in MBA education, entrepreneurship is about preparing the general manager with an entrepreneurial and constantly evolving mindset–not creating student-run startups.
“We learn from our students, from the marketplace, and we learn from research,” says Zenios, who has been at Stanford since 1996. “At the high level, we’re a school of general management, and we believe in the core competencies that managers will need to develop. It’s not something that is restricted to entrepreneurship in startups, but it’s a mindset of building successful managers in large corporations as well. Philosophically, that is something valuable that we do.
“We’re mindful to connect what we teach to the fundamental business needs like finance, economics, organizational behavior, accounting in many different ways to the elective portion of our curriculum. We then use the Silicon Valley model as a model that can provide our students with a view of the entrepreneurial area.”
THE LAUNCH OF THE SEARCH FUND GARAGE
How exactly does Zenios approach teaching entrepreneurship in the Startup Garage? It’s about moving beyond simply writing a business plan and creating an environment so the students can get a hands-on sense of what it’s like to actually launch a venture in a short amount of time.
“When I took over the course Startup Garage seven years ago, I came up with some example business plans and we recognized the process of starting a venture wasn’t about the process of writing a business plan, but the process of formulating hypotheses and helping them to use experiments,” explains Zenios, whose primary research focus is innovation. “We developed a framework for starting a venture while making it experiential. Our students experience what it takes to launch a venture over the period of two quarters and we have created this environment to make this possible.”
That mindset is something the GSB continues to invest in as the school constantly evolves programming and curriculum. “There are different paths to entrepreneurship,” Zenios acknowledges. One adjustment and innovation was to launch Search Fund Garage last year. Similar to Startup Garage, the Search Fund Garage Course is set up in a way to prepare students seriously interested in pursuing funds to buy into a business immediately after graduation through experiential learning.
A NEW COURSE WILL PAIR MBAS WITH SILICON VALLEY STARTUPS
“There is the path to starting a business and there is a path of entrepreneurship by acquisition. We have a traditional case-based class where the students learn about the model, how it works, what it looks like from the investors’ perspective, why are investors investing in search funds, what approaches the searchers take, and how they search for businesses to acquire,” Zenios explains. “But then last year we launched Search Fund Garage in which our students actually develop their own search fund approach. With close mentoring and interacting with previous searchers, they develop their own approach.
“That’s one thing we invest in a lot, those experiential learning opportunities.” In fact, the newest course by Zenios will launch in January. Called The Founder’s Right Hand: From Inspiration to Launch, it will pair MBA students with SV startup founders to work on key projects. The course will tackle issues like understanding founders, interviewing potential customers, analyzing the market opportunity, developing and testing a value proposition, generating and testing a go-to-market strategy, running and analyzing results from pilots, and providing advice to other teams (see Stanford GSB Ups The Ante On Experiential Learning).
Besides the new course and Search Fund Garage, Zenios says that increasingly, “silos” are being broken down between entrepreneurship and social entrepreneurship.