Northwestern Kellogg: Where MBA Ventures Go To Thrive

Between 70% and 73% of full-time and part-time degree-seeking students at Northwestern Kellogg enroll in an entrepreneurship course offering during each academic year, according to data provided by the school. In the spring quarter, through the KIEI, Kellogg offered 11 entrepreneurship courses, with often multiple sections offered for more popular courses; six were experiential. During the previous winter quarter, 12 entrepreneurship courses were offered and seven were experiential. This is in addition to other courses run through the other departments, like VC & PE lab courses. In all, 5.6% of the Class of 2018 and 4.4% of the Class of 2019 launched a startup while earning their MBAs or within three months of graduating from Kellogg. Data for 2020 is not yet available.

David Schonthal, clinical associate professor of innovation and entrepreneurship, is the faculty director of Zell Fellows program. He teaches New Venture Discovery, a class designed to help students navigate the earliest stages of starting a new venture. He says in terms of educational value, last spring was one of the most productive quarters he can remember.

“Remarkably, it turned out to be one of the best sections of New Venture Discovery I think I’ve ever taught,” Schonthal tells P&Q. “And I’ve been at it for nine years. So I guess that says something.”

Schonthal’s class is “all about the fuzzy front end of starting a new venture,” he says: identifying an interesting problem that you want to solve by creating a new business. That meant something entirely different at the beginning of the quarter than it did in March.

“Almost overnight, the world was presented with a bunch of meaningful new problems as a result of Covid,” he says. “What was really interesting is that my students decided to respond to the moment instead of pursuing problems they might’ve been interested in with the world in steady state. Many of them turned their attention to trying to solve problems that were presented by the new environment that we worked in: telemedicine, remote therapy, helping people age in place at a time of loneliness. So they adjusted their problems to fit the moment and I think it made for a particularly impactful experience.”

BAD TIME TO START A BUSINESS? THINK AGAIN

A layperson might look at the current business environment and see a bad time to launch a new venture. David Schonthal’s MBA students know differently.

“I think it’s a great time to think about starting a business, for a bunch of reasons,” Schonthal says. “But maybe at the top of the list is that one of the reasons that it’s hard to get somebody to adopt a new product, or adopt a new service, or an organization to adopt a new product or new service, is because those organizations and individuals seem to be pretty ingrained in their ways and in their habits. And the status quo bias typically stands in the way of them trying something new.

“But we now live in a world where habits are being broken hour by hour, day by day. People are having to find new ways to get things done. And so what used to be relatively intractable behavior is now all of a sudden up for discussion. So people’s receptivity to trying new things is at an all-time high, for as long as I’ve been working in entrepreneurship. So I think there’s tremendous opportunities to solve problems, old problems in new ways, and new problems in new ways.”

Which is not to say that huge challenges don’t exist, or persist, for entrepreneurs.

“I think the challenge is seeking investment for those businesses, because in the world of venture, one of the key ways you diligence a business is by spending time with an entrepreneur and getting to understand how they work and how they operate,” Schonthal says. “And that’s a little bit tricky to assess in this world, where it’s hard to get together face to face with a business. So while there may be a lot of opportunity in the market, there are some challenges in terms of how you capitalize a business. But that’s not insurmountable relative to the opportunity, I think.”

Based on his experiences in the spring, Schonthal says the school tried some things out of necessity that will stick in the course longer-term. Among them: video conferencing and video diaries as a means of doing research.

“In the analog world, in the world that we normally live in, when we teach students how to discover a new business opportunity or solve a problem, much of the front end of the class is learning research methods that uncover insights that maybe other companies haven’t figured out,” he says. “And traditionally that would be things like interviewing and ethnographic research, but there’s always a bit of a barrier to how much people will let you into their lives to do that research.

“And one of the interesting things that we learned this year is that by being on video and having people be in their homes when you’re doing these interviews and when you’re actually asking them to show you how they solve the problems today, there’s a lot more transparency. You get a lot more contextual information about how these things fit into their lives, by virtue of the fact that you’re interviewing them while they’re in their living room or while they’re actually going through the process of struggling through the problem.

“So I find it’s a more interesting and powerful window into the world of the users we’re trying to help than just doing something in the way that we would have done it in the analog world. So that, I think, will very likely stick in the class in the longer term. The other thing that I would say will likely stick is, I found I interacted with student groups more in quote-unquote ‘office hours’ because their schedule was more flexible and my schedule was more flexible. We could have more one-on-one interaction time. And that was something that Zoom facilitated and teleconferencing facilitated. It would have been a barrier or a challenge were we trying to get together in person, and it allowed us to have more frequent check-ins as they were working through their ventures. So I think that will also be something that will stick around in the longer term.”

A CRISIS REVEALS NEEDS & ACCELERATES TRENDS 

Evening & Weekend student Will Notini, who will finish his MBA next year, was in David Schonthal’s New Venture Discovery class and says he enjoyed the challenge of virtually discovering and prototyping a new venture.

“I think it’s a great time to be an entrepreneur,” Notini tells P&Q. “I think there are a lot of problems worth solving. I think there are a lot of people who really have the energy and a lot of desire to help solve them. I think it’s a great time to do that sort of work.”

Before coming to Kellogg, Notini was in a market research role, doing primary research for the food service industry. What entrepreneurship looked like there was helping restaurants and food and beverage manufacturers innovate. Coming to Kellogg, he was looking to expand not only his entrepreneurial but also his intrapreneurial skillsets.

But he also planned to continue to work full-time — and that’s what he was doing when Covid-19 happened.

“The sort of purpose of the class is to identify a problem worth solving and then find product market fit within some sort of new venture or service product, whatever it may be. I think I was heartened, and impressed, by how the curriculum was adjusted, and how the classes were run. The thing about being remote is, it flattens geography. For me as an Evening & Weekend student, I was anticipating taking Friday off from work in order to manage to go up to Evanston and back. But this allowed me to support and show up for my team at work, and also show up and support my team at Kellogg. It really made it quite simple actually. That was one of the positive things.”

Another positive: how quickly Kellogg adapted to the new situation. “I was really impressed with my classmates, and my teammates, and how dedicated and enthusiastic we were in working remotely,” Notini says.

“David Schonthal’s class is about discovering problems worth solving. I think in moments of crisis, there are a lot of great innovations that come out of it — in part because these moments of crisis lay bare a lot of the needs that exist in the world that may have been concealed beforehand, or less obvious. In addition to that, it also accelerates a lot of trends. For instance, the project that we were doing was regarding restaurants. So it accelerated this trend toward off-premise dining. In that light, we were encouraged to think about not only problems that were existing within the context of the pandemic, but also, what are problems that can continue to be worth solving in the new normal, whatever that looks like? I’m not sure any of us know yet.

“And the second sense is that I think there was an appetite for, and a sort of spirit of, thinking how learning can be done in the best way. There was this moment of opportunity to co-design what classes could be like in a remote setting. I think there was just a positive attitude around that as well.”