When Charlie Olson stepped onto Stanford University’s campus to start the full-time MBA program in the fall of 2015, he didn’t consider himself an entrepreneur. Those were the “hyper-creative” types who had the ability to build something out of nothing — a mindset, and a skillset, he just didn’t have.
Or so he thought. Olson’s outlook began to change early in his second year at Stanford’s Graduate School of Business, when he met Eric Lax, who was studying for both an MBA and a master’s in data science. “He had the brightest, most creative, most innovative mind that I had ever met,” Olson says of their first meeting. “I thought, ‘Hey, you know what, I actually have a shot at entrepreneurship as long as I pay attention to Eric.’”
Pay attention he did. One coffee meeting turned into many, and less than a year later Olson and Lax launched Pando Pooling, a platform that allows groups of people to pool their future career earnings together. A little more than three years into the venture, San Francisco-based Pando has raised about $11.6 million in venture capital backing, has more than a dozen employees, and is currently looking to hire more.
Has Olson changed his mind about whether an MBA program is the right time for exploring entrepreneurship? Completely. “This is two years for you to explore,” he says. “This is two years to try things you’re not good at. That liberates a lot of competitive individuals. And then you have all of the clubs and professors and lecturers who have done extraordinary things in entrepreneurship.”
50 BUSINESS SCHOOLS IN SECOND ANNUAL JOINT RANKING WITH INC. MAGAZINE
It’s that entrepreneurial climate at top business schools around the globe that Poets&Quants set out to measure when we created our annual entrepreneurship ranking with Inc. magazine last year. And while we expanded the ranking from 27 schools in 2019 to 50 this year, the winner held on to earn top honors again. For the second straight year, the full-time MBA program at Olin Business School at Washington University in St. Louis placed first in our joint ranking.
Following WashU is Babson College, which climbed one position from last year’s third-place finish. The University of Michigan’s Ross School of Business also moved up from fourth to third this year. Entrepreneurial stalwarts Stanford’s Graduate School of Business and Harvard Business School rounded out the top-five, respectively. Among the top 50 schools, the U.S. clearly dominates, accounting for 42 of the entries, including 16 of the top 20.
The study proves that entrepreneurship can indeed be taught in a classroom. Despite massive resources poured into entrepreneurship programming by business schools, of course, skeptics abound questioning whether a true entrepreneurial mindset can be cultivated by academics in a university environment. After all, so many successful founders never stepped foot on a college campus and most never got an MBA. Still, business schools are turning out thousands of graduate entrepreneurs who are the beneficiaries of millions of dollars in funding and who have created some of the most successful startups of the past ten years.
ONE IN FIVE MBAs AT WASHINGTON UNIVERSITY HAVE LAUNCHED BUSINESSES THE PAST THREE YEARS
The result of months of data collection and analysis, this year’s ranking attempts to measure what schools are providing ideal launching pads for entrepreneurial-minded MBAs. Not every school in the ranking agreed to supply the necessary data for the ranking. As a result, Poets&Quants relied on its own examination of publicly available data on school websites and other sources, allowing each school to correct our reporting. Some schools, however, declined to verify the data, in some cases because they hadn’t collected all of it before.
In any case, the ranking is based on 10 core metrics that reflect the resources devoted to entrepreneurship as well as the results of those efforts. The methodology places the most weight on the average number of startups launched by full-time MBA graduates immediately after graduation and the percentage of full-time MBA elective courses that focus solely on entrepreneurship and innovation. Each of those two data points represents 20% of the ranking. Other metrics include the amount of on-campus accelerator space available for MBAs, the amount of startup award money available to students, the number of entrepreneurs-in-residence, and the percentage of MBA students in the school’s entrepreneurship club, among others.
Between 2017 and 2019, some 19.7% of Washington University MBA graduates elected to launch startups immediately after graduation — more than any other school. At the China Europe International Business School (CEIBS) in Shanghai, nearly half (47%) of elective courses available to full-time MBAs in the 2019-2020 academic year were focused on entrepreneurship and innovation. And such schools as the University of Chicago’s Booth School of Business and Rice University’s Jones Graduate School of Business both have set aside at least $1 million in startup competition money each year for budding MBA entrepreneurs.
ENTREPRENEURSHIP AND CREATING STARTUPS REMAINS STRONG AT TOP B-SCHOOLS
Recent startups coming out of B-schools have been some of the most influential across the globe. Harvard Business School-founded and Singapore-based Grab has changed the way people transport themselves and get food. Similarly, Stanford GSB-founded DoorDash has proven extra valuable for food deliveries since the coronavirus outbreak. Fellow GSB-founded financial technology startup SoFi has upended the loan market with its refinancing algorithms. Other recent MBA founded companies like Warby Parker, Rent the Runway, Harry’s, and Stitchfix have changed the consumer product goods game.
At many of the best business schools, entrepreneurship is not only alive and well, but it is also thriving. In the past five years, between 2014 and 2019, 421 Harvard MBAs decided to launch a company immediately after graduation. At Stanford, 384 MBAs started a venture immediately after graduation during the same timeframe. And the University of Pennsylvania’s Wharton School had 251 MBAs create startups.
Many of these startups have caught the watchful eyes of angel investors and venture capital firms. They have funneled more than $3 billion in support of the 100 MBA startups on Poets&Quants list of the best-funded new ventures created by MBAs over the past five years. MBA entrepreneurs at Stanford alone have raised more than $1.4 billion in support of their new companies.