Category Archives: Business Education

Business Plan Contests Grow Up and Mean Business

Business Education, Business Plan Contest, Business Plan Marathon, Venture Contests, , , , , , ,

It’s time to note a major change. Just a few years ago business plan contests were an academic oddity, a dress-up exercise at a few business grad schools. Suddenly, or so it seems, they’re pretty much for real. Some very powerful new businesses are appearing at business plan contests, winning significant money, attracting investors, getting funded, and turning into real businesses.

Rice ContestFor milestones, try this: last weekend Rice University hosted the first business plan contest to offer $1 million in total prize money. This is a serious event now. If you’re at all curious about how strong some of these businesses are, read Lora Kolodny’s ‘I Want This Drug on the Market by the Time I Need It!’ on her You’re the Boss Blog at the NYTimes.com.

How important are these contests? How real? Well Lora wasn’t the only journalist at Rice last weekend. Fortune and CNN are covering that contest in detail. Expect to see some of these major contests in the Wall Street Journal.

Brad Burke, head of the Rice Alliance for Technology and Entrepreneurship, chief host and organizer of the Rice contest, likes to point out how many of the teams entered have gone on to be successful:

More than 97 past competitors have gone on to successfully launch their business, including 33 of the 42 teams from the 2009 competition. In total, past competitors have raised more than $220 million in funding.

Moot Corp, meanwhile, the first of these competitions, started in 1984, has trouble keeping up with all of its Moot Corp success stories. Moot Corp will be taking place in Austin again this year, in early May, gathering together the winners of several dozen other competitions.

And at the University of Oregon’s annual New Venture Competition, of which I’ve been a judge 12 times, all four of the teams in my semi-finals track looked like real companies with good probability of making it in the real world. That’s impressive. I’ve seen a lot of good companies in that one before, but never before have I done a track in which all four of the four groups seemed likely to be real viable companies in the real world.

Read This Before Getting an MBA Degree

Advice, Business Education, MBA, , , , , ,

Here I am, father of five grown-up children, 37 to 22 years old, all of them working in small high-tech companies, all of them college grads, two of them with graduate degrees. And, while my MBA studies were exactly what I wanted, and worked great for me, not one of my five kids has a business degree, much less an MBA. Yesterday somebody asked me why that is. This post is my response.

1. Don’t do it for the money

Search Google for Is an MBA degree worth it? and you’ll find lots of people showing that the average incremental income linked to an MBA degree doesn’t compensate for the expense plus the lost income for two years. They’ll use buzzwords like opportunity cost. Ironically, I’m sure my MBA degree paid for itself in money terms many times over, but the analysis seems to indicate I’m the exception, not the rule.

So why do it (and if you have to ask, that’s a bad sign)?  You do it because you want to learn about business: entrepreneurship, marketing, finance, operations, strategy, management, planning, and so forth.

2. Don’t do it when you’re on the way up

Don’t ever quit an exciting new job to go get an MBA degree. Do quit a boring job or one you’ve mastered so much you’re not learning any more. Do use an MBA effort as a catalyst to change locations, the life you’re living, your business interests. Don’t do it when times are good.

3. Don’t do it if you hate school

If getting your undergrad degree was a long hard haul; if you don’t like school or classes or homework or teachers; then you’re going to hate the MBA program. You know who you are: some people like school, and some don’t. If you don’t like school, even if you successfully dragged yourself through it because you’ve got good discipline and you’re highly motivated, then you’re going to hate the MBA classes. And that’s hell. That wasn’t my case. I’d grown up (finally) when I went back to school.

4. Do it at the best school you can get into

Listen carefully for a while and you’ll start to hear people saying so-and-so is “Harvard MBA” or “Stanford MBA” or “Wharton MBA” and so on, in a way that changes the title to incorporate the school name. Northwestern also works for that, Duke, Babson, and for sure a few others (and I apologize for leaving them out). I have to recognize that this is easier said than done, because they are tough with admissions and expensive, but there is a difference between an MBA from one of these name schools and the MBA from one of the others. Even that return-on-investment analysis that I brought up in point 1 above looks much better when it’s an MBA from a name school.

5. Don’t do it if you can’t afford it

My wife and I worked my way through. I didn’t have scholarship or family money. I worked a lot at consulting while studying full time. We ended up with a lot of debt. But in the end, we were able to afford it. It was a lot cheaper back in 1979. If you can’t make the money side of it work, if it’s going to be two years of financial hell, don’t do it.

6. Don’t sacrifice a lifelong relationship for it

There’s a catch 22 problem here: first you have to say, if it’s a matter of either your marriage (or a lifetime couple relationship) or your MBA degree, forget the MBA. Lifetime relationships are way more important. But the catch is: in a healthy relationship each person makes the other one better. When I quit a job to get an MBA my wife encouraged me. “Let’s take the risk,” she said, “if we fail we fail together.” We’re still married. If you’re married or in a real long-term relationship, and your spouse, partner, or significant other doesn’t like the idea, it could easily destroy your relationship. That’s too big a sacrifice.

And be honest with yourself on this point too: if you really want it and the boyfriend or girlfriend doesn’t care enough about what you want, realize it’s a bad relationship anyhow, one person pulling the other down, then go get the MBA anyhow. Meet somebody new.

Yeah, I know, that last bit has too much paradox.

Note to MBAs: Drop the comma MBA, Please!

Business Education, Business Mistakes, MBA, Rants

imageI just got another email from somebody whose email signature is “So-and-so, MBA.” Which reminds me of the business cards, and letters, and promotional material I see where people brandish those three letters after their name.

I don’t think that “MBA” thing behind your name works out for you.

imageHave you heard the joke about how to create a small business? The answer is take a medium business and put an MBA in charge. And the magic MBA investment formula for guaranteed profit? The answer is buy MBAs for what they’re worth and sell them for what they think they’re worth. Do you know how many people blame MBAs in general for the current financial disaster?

It’s not a matter of licensing and regulation, like MD or CPA. It’s just a master’s degree. In this country alone, accredited institutions grant several hundred thousand masters degrees every year. That’s not including the fake degrees.

So that MBA you earned? Put it on your resume, put it on your blog’s “About” page, and put it in the management team section of your business plan when seeking loans or investment. Use it to know what you’re talking about. But leave it off your name.

5 Entrepreneurship Basics B-Schools Don’t Teach

Business Education, Business Stories, , ,

The other day I posted 5 Entrepreneurship Basics B-Schools Can Teach. It’s natural to follow that list here with the exact opposite: 5 other entrepreneurship basics the business schools can’t teach. But I couldn’t quite do it. I had to change can’t to don’t. That, to me, is a significant difference. So here they are  (things they don’t teach, not necessarily things they can’t teach):

1. Dealing with people

Sure, you can teach organizational management, and there are rules for employees, lots of advice on selling, buying, leadership, and all that. But can anybody really teach empathy? Do you learn how other people feel by sitting in a classroom, or by working with (and living with) them. I like the new network television show (Lie to Me — pictured here to the right) where they read physical signs like facial expressions to know who’s telling the truth and who’s lying. The rest of us need a lifetime to figure that out, and, let’s face it, we probably never do.

How about the basics of self interest, like starting every business communication with “you” and the benefits for the reader or listener? Or figuring out who’s likely to be a long-term ally, and who isn’t? Or figuring out that selling right is listening first, and solving people’s problems? Some business schools try to teach that stuff. Most fail.

2. Right and wrong

I know business schools are trying to teach business ethics, but it’s so hard because there are so many different views, and social and political constraints; and ethics means different things to different people.

My bias on this point is that businesses that act in ways that help the community, and their employees, and their customers, and the earth and the environment, and all that jazz, will do better over the long term. Things like fair play and, at the very least, doing no harm, are critical to long-term success.

Fairness is so important. No business deal or alliance will work over any useful time frame unless it offers benefits to both sides. Screwing people is not a successful business model. But can that be taught? I can’t even prove it, let alone teach it.

3. Having a life

With all the baloney we spread about entrepreneurship passion and perseverance and persistence and all, where in the curriculum do we teach putting business in the right order of priorities? Who teaches that it’s easier to find a new job, or build a new business, than a new spouse? Which class is that?

Business schools and business academics undervalue life as they (we) teach starting a business as the classic high-end getting financed and getting an exit. There’s way too little attention to what we (with a sneer, usually) call a “lifestyle” business, or, for that matter, starting up via bootstrapping instead of outside investment. And nobody teaches how to decide what to do when a crucial business meeting interferes with a kid’s soccer practice.

Every class in entrepreneurship should have at least one session with somebody who got so obsessed with the business that they lost the rest of their life. It happens a lot. It needs to show up in the classroom too.

4. Managing risk

I don’t mean the technical side of risk management. Business schools are generally excellent at teaching the numbers and analysis of risk, mathematical tools to evaluate the time value of money, for example, and formulas to compare technical investment risk like the internal rate of return (IRR).

I do mean living with risk. Not betting things you can’t afford to lose. How to sleep at night when your customers owe you enough to destroy you simply by failing to pay what they owe. How to figure out which spend is a reasonable risk for generating a future payback, and which isn’t. How it feels to take a second mortgage, or how it feels to tell a graduating high-school senior with a great record that there isn’t enough money for the college he or she has earned.

Don’t take risks if you can’t live with the downside consequences.

 

5. When to hold and when to fold

One of the hardest thing we do, in startups and small business, is figuring out when to stick to the plan and when to back up and try something else. There are no magic formulas, no software that can do that for us. It wraps up a combination of guessing the future, projecting different possible scenarios, understanding what’s at stake, and figuring out where assumptions were wrong, where sticking to the plan makes sense, and where it’s going to be like running your head against a brick wall over and over.

Reflection: teaching with stories

How do we teach any of this? The best hope, I think, is by telling stories: Stories of failures, stories of problems, challenges met, situations, and so on. We do deal with business cases in business schools, and cases, when done well, are a lot like stories. Of course the value depends on a couple of important factors, like the case itself (real business, or big business?) and the teacher. True stories, told by the people who lived them, can be better than business cases.

Final thought:

Am I wrong on this? Maybe my experience is out of date. If the business schools are getting better on this, I’d like to know. I’d be very happy to be proven wrong.

5 Entrepreneurship Basics B-Schools Can Teach

Business Education, Weblogs, ,

I’ve been asked a lot lately about business schools and entrepreneurship, which is why I did this post, last Friday, about one thing wrong in that area; and then this one yesterday, on whether business schools can teach entrepreneurship. That’s become a very interesting discussion. I expect to post on it again, if only just to summarize some of those comments.

So, in the meantime, looking at Twitter and comment reactions to yesterday’s post, I sat down today and thought about what you can learn about entrepreneurship in a classroom, that will help you be a successful entrepreneur. Not that you can’t also learn all of this from books, websites, mentors, and advisors too; but learning it in class might be more efficient.

 

1. Cash flow

Cash flow is critical but not intuitive. Cash isn’t profits. That ebb and flow of cash related to accounts receivable and inventory management, collection days and payment days. This one by itself justifies studying entrepreneurship. Studying this in the classroom is way better than learning it the hard way. One cash flow disaster (running out of money) in business can cost you more than two years in business school. Easily.

2. Business planning

Yes, I really like business planning. I’ve liked it since I was first exposed to it in the middle 1970s. Don’t get bogged down in the formal academic full business plan, necessarily; but business planning is a great way to see a whole business, from strategic focus to objectives to specific milestones, tasks, responsibilities, management, sales, marketing, and finance. And it’s a great tool for teaching.

3. General business fundamentals

Never underestimate the fundamentals of strategy, marketing, data gathering, finance, and analytical thinking. There’s a lot to be said for learning how to translate concepts to numbers and back to concepts. Not to mention vocabulary, and analytical frameworks, and methodologies for isolating problems and layout out solutions. Disciplines and methodologies are good to know. And hey, buzzwords don’t hurt.

 

4. Communication skills

Writing — clear, simple communication, in practical English sentences — is so important. It is so often underestimated. And presentation skills, focusing on what’s most important and communicating that to others. My experience is that good business schools teach that.

 

5. Skepticism

A good education can teach you what not to believe, and why not. Enthusiasm is great, and you hear so much about passion and persistence and all, but not without a basis for reviewing what makes sense and what doesn’t.

Can B-Schools Teach Entrepreneurship?

Business Education, Entrepreneurship,

The question continues: study entrepreneurship, or just jump in? Does a degree help? Can anybody teach entrepreneurship in the classroom? Can anybody learn it?

You may have seen this post here from last week, about one problem with entrepreneurship education. That post was enhanced by John Wren’s comment there:

I haven’t seen any research that shows a connection between being a successful entrepreneur and having studied entrepreneurship, have you?

Interesting emphasis on research there. Can anything be true or false without research? Does a tree fall in the forest if there’s no rigorous research that says so? It would be hard to research this right, because entrepreneurship is a relatively new idea in university business schools. The idea has exploded in the last 10-20 years, but a lot of the all-stars didn’t really have a choice. That makes meaningful research less likely.

Research or not, education is good when it works; when it fits with life. Short cuts are good too. Knowledge is good. Wasting time is bad. All of that can be school.

Education in trade or business related subjects is about making things better, faster, and easier. If you can learn in a day in class what would take you a roller-coaster ride through the hard knocks, is that better? If Bill Gates did Microsoft without studying entrepreneurship, does that mean you don’t want to?

Things change. Shakespeare didn’t have a PhD in Literature. So how did he learn Shakespeare?

I think the value of studying entrepreneurship depends a lot on the specific case. Not that these are the only cases, or polar opposites, but:

  • Start with the basic truth of studying what interests you. Don’t study business to get ahead in business; study business because you’re interested. Don’t study literature to get ahead, or science or math, either.
  • If life gives you a valid choice, general education is better than business education. I’m really glad I studied Literature first, then Journalism, then business. I’m glad my children majored in education, history, psychology, and political science instead of business. First learn to think, analyze, read, and write, and you can learn business later. Not everybody gets that choice. Not everybody wants it. But if you can, that’s good.
  • Entrepreneurship is the best of business. You have to get your head around the whole business, not some functional part. Studying entrepreneurship is the best way to study business.
  • It’s not for nothing that I’ve spend a long time focused mainly on business planning. That’s also about getting around the whole business, not just parts. Strategy, operations, marketing, finance, they all come together in startups and small business. Which we call entrepreneurship.
  • When it works out right for you it can be a big advantage, you’re already in school, and you’re interested in the subject, it’s a natural part of that time of life that people dedicate to learning, it can be a huge advantage. I did business school exactly at a career inflection point, jumping from business journalism to business, and it worked really well for me. Entrepreneurship would have been even better, but that wasn’t an option. Today, for you, it is.

Ultimately, there’s no formula here that works. You have to decide for yourself. I’m really glad for my two years in business school, even if they weren’t teaching entrepreneurship. That doesn’t mean I recommend it for everybody.

One Problem with Entrepreurship Education

Business Education, Entrepreneurship, MBA, ,

I’m not saying this is the only problem. And, by the way, I’m in favor of entrepreneurship education, when it’s done well. I think it helps … but that’s another post.

It’s a simple story. It’s a real problem with business education concerning entrepreneurship in top institutions. It happens way too often. Not that it’s the only problem with entrepreneurship education, but it’s harder to spot.

Take an imaginary person named Leslie who’s interested in entrepreneurship and wants to study it and then teach it, as a career. Here’s what happens.

First, she enrolls in a good graduate school intending to get a doctorate degree. In business grad schools, the MBAs study for two years to get jobs in business, not to teach business. Yet it takes a doctorate to teach business in a good school, as a career. Yes, there are exceptions to that rule, but Leslie is focused and motivated so she wants the best path to the best career opportunities, which means she needs the PhD degree. That’s a matter of academic records, standardized testing, essays, and recommendations, pretty much the same process people go through to get into college or university.

As she gets used to her studies and the general path to doctorate and teaching career she discovers, within the first year or so, that the academic study of business divides itself into standard groups; marketing, finance, operations, and so on, that don’t really include entrepreneurship (yet). And those functional divisions have generated a small set of academic journals, fewer than the fingers on one hand in most cases, that control her future. And the system of rewards and such within the small world of doctors of business is shockingly (to Leslie) well defined. Here is what she finds out:

  1. She can’t get the doctorate without a thesis.
  2. She’s not going to get into the upper echelon she wants for her career unless her thesis is published by one of those academic journals.
  3. And those journals focus on the standard specialties: marketing, finance, operations, etc. Not entrepreneurship.

Result: if she’s ambitious, Leslie drops the focus on entrepreneurship and moves over to finance or marketing or something else that’s more established within the academic hierarchies. And you, dear reader, can go from there to the other logical conclusions.

Think about the impact on education in entrepreneurship at the big business schools. Maybe it’s a good thing because it means more real-world entrepreneurs teaching, even if they’re normally adjunct instructors instead of professors. And maybe it’s not so good because it relegates entrepreneurship and the study of entrepreneurship to a lower rung on the career ladder. I don’t know.

If you’re out there in academia, reading this, and I’ve got it wrong, please tell me. I’ve had a chance to watch how this works. I haven’t been down this path myself, but I’ve been an adjunct instructor for a few years, teaching one class per year at the University of Oregon.

(photo credit: lynnlin/Shutterstock (modified by me))

Marketing Textbook in Top 250 Blog List

Management, Marketing, Teaching Business, , , , , , , , , , , , ,

What if the question was: what’s the best book about marketing to read and recommend? And the answer was: read this compilation: Top 250 Blog Posts – Advertising, Marketing, Media and PR Spotlight Ideas. How things have changed. 

Not Kotler’s Principles of Marketing, not Seth Godin’s Permission Marketing, not even Jay Conrad Levinson’s Guerilla Marketing. But read the 250 posts included in this top 250 posts list at SpotlightIdeas, and you’d have a marketing education.

The posts are divided into meaningful categories, and include a highlights list of best bloggers in any of these marketing-related topics. Seth Godin, Chris Brogan, Leo Babuta, Robert Scoble, and many other generally-recognized blogging leaders.

Webinar June 9 on Teaching Entrepreneurship

Business Education, Entrepreneurship, , , ,

If you teach entrepreneurship, please join me tomorrow for a webinar on the top 10 tips in teaching entrepreneurship using business planning. I’m going to be looking back on more than 10 years of teaching starting a business using business plans. I hope I’ve picked up a few tips that might help.

NACCE (that’s National Association for Community College Entrepreneurship) membership is not required, but it’s a good organization, if you’re teaching entrepreneurship, you’ll find it useful.

Regardless, please join me in the webinar tomorrow, Tuesday, June 9, 2007; 4pm Eastern – 1pm Pacific Time.

MBA Pledge: What About the Other 80%?

Business Education, Business Ethics,

Comedian Robert Klein has a routine where he grabs a consumer fruit drink that claims “contains 10% fruit juice,” and asks: “What about the other 90 percent?”
And the graduating class of Harvard MBAs last week had a special new code, A Promise to Be Ethical in an Era of Immorality that 20% of the graduating MBAs signed. The New York Times reported:

Nearly 20 percent of the graduating class have signed “The M.B.A. Oath,” a voluntary student-led pledge that the goal of a business manager is to “serve the greater good.” It promises that Harvard M.B.A.’s will act responsibly, ethically and refrain from advancing their “own narrow ambitions” at the expense of others.

And I can’t help asking: what about the other 80%?