The number of students from Stanford University’s Graduate School of Business who have chosen to start their own businesses within four months of graduating has grown to 16% among the 385-member class of 2011—more than a fivefold increase since 1990, according to the university.
Only 3% of the 1990 class founded their own businesses shortly after graduating, says the school. …
That doesn’t surprise me. It’s convergence. The big companies are struggling. Big consulting isn’t as glamorous anymore. The Stanford GSB curriculum has embraced entrepreneurship. Big winners — Bill Gates, Mark Zuckerberg, Steve Jobs, Phil Knight — are household names. The Stanford business school hosts a parade of insightful entrepreneurs filling guest spots. Take a look at — for example — the Stanford eCorner or the Stanford Business School channel on YouTube. You’ll see what I mean.
Not that Stanford is special in this regard. Entrepreneurship has taken over business schools up and down the prestige ladder. Harvard, Wharton, Northwestern, same thing. I point out Stanford because those are the emails I get, and the groups I join. And I’m glad the GSB has changed and adapted since I was there, 30 years ago, and most of us wanted to be management consultants.
I wonder if we as a society are ever going to figure out how technology can disrupt our antiquated systems for educating our children.
Think about what’s happened to information, social interaction, research, and business over the web — not to mention mobile technology — and then think about education. Preschool, K-12, and higher education.
Would anybody disagree that the institutions we depended on as kids are now embattled and crumbling as a result of political and economic factors? Higher ed has had the worst inflation of any industry I can think of over the last two generations. And the K-12 still depends on the old model of the teacher and two or three dozen students in a single classroom.
Innovation, yes, all over the place … but has it really changed anything yet?
(The innovative minds at TED have brought a new educational video website to the head of the class. Today, TED-Ed launched http://ed.ted.com a site that features TED-Ed’s original K-12 animated videos with accompanying lessons and quizzes. On top of that, the site allows educators to create original lessons for any YouTube video, rendering the video on a new link where teachers can monitor student progress.
And I’ve subscribed to several and offer several courses at udemy.com myself. And by this time we’ve all heard of Kahn Academy, another compilation of online courses.
How many universities are offering online courses? How many of those are simply free to users? How many at very attractive prices?
But what about attendance, homework, kids doing things they don’t want to do, people growing up, validation, certification, leverage, consistency?
My angel investment group is looking in detail at EdCaliber, which offers online tools for K-12 teachers. And I saw two additional education business plans over the last three weeks at business plan competitions at Rice and the University of Texas.
I’m hoping something really changes public education for the better. I haven’t seen it yet.
Here’s a great tip for anybody presenting anything to an audience:
Skip the boring preamble. Many times we feel like we have to do a lot of prefacing, but four minutes goes by quickly. If you spend two minutes on background, you’ve lost an opportunity to grab attention. Far better to leave the identifying bits until the second paragraph, or to the overhead PowerPoint image, or to the person charged with giving the introductions.
Start in the middle. Start at the most interesting point. Choose powerful first words, with immediate interest. Grab your audience quickly. The worst ways to start a presentation (or any story) is “My name is ___ and I’d like to talk to you about…”
Is there any generalized institution in the world that needs disruption more badly than education? Right now there are more than a billion people under 10 years old. How well do you think we adults are doing with educating all those kids?
You can’t have a leading economy and a lagging educational system
I know for a fact that you cannot have a leading economy and have a lagging educational system. You cannot lead as a country when your education system is failing.
How much do you think technology has changed public education in the U.S.? Could we measure the impact of word processing on writing, or calculators on math? I have to step away from the computer for a minute and clear my mind to remember when I was in high school and college and research took rifling through the index of periodicals, and the card catalog in the library, and finding the physical printed hard copies of everything I needed. How much has online video changed things?
The Stanford article ticks off some advances, like new developments:
DreamBox Learning customizes the way information is presented to pupils, an approach company CEO and President Jessie Woolley-Wilson says helps students understand multiplication, division, and other concepts more quickly.
Ireland-based electronic-learning company RISE operates a network of education centers across China that teach English to Chinese children using an American curriculum designed specifically for Asian students who ultimately want to attend college in the United States.
An online program developed by internet-based Knewton teaches math tailored to each student’s abilities. The service can “predict in advance if you’re going to fail at a concept before you ever see it.” If so, it deploys a more appropriate learning strategy
During the past 5 years, 181 education-focused U.S. companies have received venture capital funding.
Ambow Education Group is China’s first e-learning platform.
K12 Inc. provides proprietary curriculum and online education programs to students in grades kindergarten through 12.
But of course that’s just a drop in the bucket, a few stories. Think of what technology has done for, say, television, or media in general. Published music? Mail? Business? Then compare that to education, where our kids, in this country, still depend on teachers and books and classrooms; and in poorer countries they don’t even have that … how badly does education still need disrupting?
What bothers me is this whole topic quickly projects me back to the early 1980s when I was a market researcher for a company specializing in forecasting technology business. Some 30 years ago technology was going to change everything in education; or so we thought. We made a big deal of Control Data Corporation’s push to change education with online learning.
I love this, a very short snippet video from venture capitalist Ann Winblad of Hummer Winblad Ventures. This is one of Stanford’s eCorner videos. I like their summary:
Ann Winblad advises entrepreneurs to boil down their business plan and tell everyone in the company the top five assumptions for success. “As time goes on, turn the assumptions into facts,” says Winblad. She also reminds entrepreneurs to constantly reevaluate these assumptions as their company moves forward.
New research takes a fresh look at this topic. Jennifer Aaker and Melanie Rudd at Stanford University, and Cassie Mogilner at the University of Pennsylvania, published “If Money Doesn’t Make You Happy, Consider Time,” in the Journal of Consumer Psychology, 2011. They discuss how happiness is indeed a consequence of the choices people make. So what can people do to increase their happiness? Their answer is surprisingly simple: spend your time wisely.
Author Alice LePlant offers a good summary of a collection of research pointing towards the same conclusion. Among several points she brings up, this one is particularly striking for entrepreneurs and small business owners:
We spend most of our time at work. So understanding how we should be spending our time at work is much more important than people think. It has been interesting to observe which companies are doing a good job of creating opportunities for employees to manage their own time. This goes beyond providing opportunities for flexible hours, telecommuting, and independent contractor relationships. Which companies are allowing opportunities for employees to fundamentally design how they spend their time both at work and outside of work — in ways that are creative and innovative? As Millennials enter the workforce, these types of demands will become even more common.
The networking connections are one of the most valuable benefits of an MBA. Five to ten years down the road these people will either be running their own businesses or have high-level positions in large companies.
That’s a comment to my post here and on Small Business Trends. I said the value of my MBA degree was what I learned, not what I earned.
That networking idea, especially connected to business school, has been around for a long time. It was already there in B-school lore, thoroughly entrenched, ironically, even before there was actual networking – the web, social media, Internet, email, etc. I did my MBA from 1979 to 1981, and we heard it a lot even way back then. And they meant it then exactly as it’s used here.
But I don’t like it. To me, the term networking smacks of people as career stepping stones, and relationships as business assets. And insincere grins and car salesmen wearing white buck shoes and green checked sports coats. And pinkie rings. And people who barely know each other asking for favors. It makes me feel like after I’m done networking I should take a shower.
Friendship, on the other hand, I like. Friendship is about people, and life, and it’s always good. Also community, and discussion and keeping in touch. I’m fine with that. I like the idea of people who do higher education together becoming friends for life. That’s cool. I haven’t been the best at keeping up, but I’ve always liked the idea. I’m still in email with some people I met at Stanford and even with friends from Notre Dame, my undergrad school, where we were the class of 1970. But that’s not networking, it’s life.
And social media, by the way; I like that too. I’ve had lots of twitter relationships end up as face to face or phone, and these are friendships, not networking. These are people I like. Communicating (well, publishing) about things they like. If that’s networking too, then it’s not so bad.
You tell me, please: am I making something out of nothing? Is networking just another word for friendship? Does the new world of social media turn networking into something different than its meaning in the MBA context?
At first glance, Paying Star Employees Well is a Good Strategy for Innovation in a Stanford business school newsletter seems like one of those "no-doh" discoveries that happen when academics turn their focus on the real world and end up confirming the obvious. But I clicked, and read, and it turns out to be much more interesting than that. They researched what people and companies actually do, not just what they say.
The article admits that the research conclusion is obvious:
Is there a link between the market strategies of software companies and how much they pay their employees, particularly the best and the brightest? There is. Software firms competing in volatile sectors in which the potential payoff for innovative products is the greatest — and the penalty for failure is severe — pay more to star workers than companies in more stable segments of the industry.
And then gets to the much more interesting topic of how they researched it:
The paper is noteworthy for more than its insight into the software industry. It’s an example of how insider econometrics, the careful analysis of rich, new sources of data, combined with interviews of industry insiders, is leading to a much clearer understanding of the efficacy of management strategies in general, and human resources practices in particular.
Now that’s intriguing. I dislike research that asks people questions and codifies their collective answers. Most of the time the people asked are a skewed list. And then there’s a huge gap between what people say and what they think, and another huge gap between what they think and what they actually do.
In this case, though, they studied what companies actually pay, and to whom. None of this is based on polling people and analyzing answers:
Testing that assumption would have been difficult in the past. Detailed data on a broad sampling of employees was simply not available, which is why most compensation studies until recently have focused on CEO pay. Empirical studies, say the researchers, had yet to establish a link between product market strategy and human resource practices using data covering more than a small number of firms or a select group of employees.
Now, however, much broader and deeper data is available through the Longitudinal Employer-Household Dynamics Program of the U.S. Census Bureau. The researchers analyzed salary and revenue data from software firms in 10 states, including exercised stock options and bonuses. Using that data, they were able to calculate the different potential payoffs for various types of software products and how those payoffs related to compensation.
Not only was there more data available for use in this study, it’s of better quality. For example, many studies that use income information derive it from surveys or interviews, while the "Stars" study used unemployment insurance data to find out exactly what people were paid over a period of time, rather than relying on their memories.
The researchers needed to understand the range of payoffs of software projects. To do this, they used firm-specific data for companies in 30 software sectors from the Economic Census. Ultimately, they created a "product payoff dispersion" measure for each company, which in turn created a model of project selection.
The research did eventually get into talking to real people in the field, asking their opinions. But even that phase wasn’t a poll, but rather a series of in-depth interviews, which I think (hope) means that researchers were able to get through the objectivity of simple polling and look into what people really do.
Conclusion: research is good, data is good, but knowing what people actually do is way better than just knowing how a group of people answers a set of questions.
I’ve been meaning to post about this for a couple of weeks now, ever since somebody tipped me off to Gentle Nudges Work to Get People Exercising on WSJ.com. That report cites research showing that regular reminders helped people get regular exercise. Phone reminders from real people worked better than computer reminders. And both kinds of reminders worked better than no reminders. And people exercising in teams were more consistent than people exercising alone.
I’ve often compared business planning to nutrition and exercise. It’s a process, related to good and bad habits, properly applied over a long term; not a sudden burst. And people who cite the misuse of the business plan document as an argument against good planning are using the same faulty logic as people who cite starvation diets and running a marathon without training as arguments against nutrition and regular exercise. In all three cases, what works is the long-term consistency instead of the short-term burst. Good business planning is like regular exercise, not like running a marathon all at once.
Here’s a snippet of the WSJ report:
In the Stanford study, 218 people were divided into three groups. [For a first group], a Stanford health educator called her and other members of her group every three weeks, on average, for a year to ask about their compliance and to cheer them on. A second group of participants received calls not from humans but from a computer programmed to make similar inquiries.
After 12 months, participants receiving calls from a live person were exercising, as a mean, about 178 minutes a week, above government recommendations for 150 minutes a week. That represented a 78% jump from about 100 minutes a week at the start of the study. Exercise levels for the group receiving computerized calls doubled to 157 minutes a week. A control group of participants, who received no phone calls, exercised 118 minutes a week, up 28% from the study’s start.
Think about that related to business planning. Regular reminders worked. The goal was consistency over time. Real business planning for real entrepreneurs and small business isn’t a matter of creating a big formal business plan, but instead, setting goals and metrics and tracking and following up with management and steering. It’s a planning process, not a plan. While the thinking and insight in developing a plan can be valuable, the more more significant value comes from the process of the plan review and tracking and course corrections that follow.
In my writing, my workshops, and whenever I get a chance, I say start a business plan by doing a review schedule first. That’s a good way to establish, from the beginning, that the plan is about planning, and it’s a process, where the value is consistent application of plan review and course correction over the long term. Consider that a kind of pre-scheduled reminder system.
If you’re serious about building or growing your business, build in the business plan review meetings from the very beginning. And remind all the team members. And stay true to that process, so you meet once a month to review and revise the plan.