Why are business schools failing at the education of entrepreneurship?

Dear MBA friends, professors, fellow entrepreneurs:

It's time for a real discussion about why our business school programs are failing at the education of entrepreneurship.

This is not yet-another rant about how business schools students suck at startups.  That's been done, over and over again.  I would like to engage you all in an actual discussion.  I have one goal: to help our business schools get better at teaching entrepreneurship.

I judged a business school entrepreneurial pitch event in May.  Teams of hard working MBA students had spent 10 weeks preparing investor pitches for their companies. Faculty were heavily engaged.  Successful entrepreneurs were brought in to judge the teams.  And as I listened to each team present, all I could think about was how silly this all was.  Absolute silliness.  These students' presentations were so removed from what actual investment presentations look like.  One judge told me in the hall that he had seen more entrepreneurial savviness from a 12 year old's lemonade stand.  He was only half-joking.  And this was an elite top 10 program.  What is going on? Seriously, what is going on with our MBA programs??

It wasn't from lack of effort.  They had worked really hard.  I talked to many of the teams and this project was one of the most important activities they had done in business school thus far.  They were truly proud of their hard work.

It wasn't from lack of support.  The faculty were fully engaged and passionate about teaching these students.

It wasn't from lack of good ideas.  Some of these students had ideas that I know could be immediately fundable if done right.  I saw several that had the potential to become big businesses.

Seriously.  What is going on?  I talked to several faculty members.  These are scholars and teachers for whom I hold the upmost respect.  I told them that this whole eship program was a disservice to these students.  The students had not only failed to learn about entrepreneurship, they had learned many things that were just plain wrong, totally divorced from real world application.  This program was not a foundational piece of education that would help them be successful once outside of classroom. It would hurt them.  As in, they would literally have been better off without going through the experience.


And here's the kicker.  The faculty members agreed.


That's right.  They know.  They know this is awful stuff.  And they're desperate to get it right.  They know that their entrepreneurship programs are an eye-sore, and they want to make changes.  They're turning to alumni for advice.  They're creating strategic steering committees to discuss the problem.  They want solutions.

It's time for a real discussion.




I've been thinking a lot about this for the last several years.  And I've got some opinions to share on the topic.   Let's be real though.  There aren't going to be easy answers.   We need to dive into some tough topics, and I need your help to do it.  For the time being, I'm focused specifically on helping actual business schools.  As a Y Combinator alum, I know that there are other ways to teach entrepreneurship outside of the classroom.  This is my attempt to focus on fixing it inside the classroom. I've listed out a few initial questions I would like to tackle:

1. What are the root causes leading to business schools failing at the education of entrepreneurship?

2. What are the current best practice for teaching entrepreneurship in a business school setting?

3. What solutions can we recommend to business school faculty to help them make real positive change in the curriculum?

I would like your help with these questions.  Please feel free to leave your comments here on the blog or on Hacker News.  Also feel free to write your own blog post and link to it in the comments.  Please email me your more substantive thoughts at humbledmba AT gmail.com.  I would like to find several people that are interested in joining me in a collaborative follow-up post.  Please send me your perspective — I won't publish anything without your permission.

Please also forward this on to your MBA and entrepreneurship friends and colleagues.  I am contacting Tuck, my alma mater, to have some candid conversations with them.  I would love to hear from people at other schools.  I'm going to do several more posts on this subject.

I'm really looking forward to this discussion.


Most Sincerely Yours,


Jason Freedman




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I'm Jason Freedman.  I co-founded FlightCaster.  
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30 responses
The trouble is I'm not entirely convinced you can teach entrepreneurship; you can teach the business stuff, particularly the more mechanical approaches and basic accountancy stuff, and I think you can teach some ways to give pitches (if you teach *a* way you'd be failing your students). You can certainly teach ways to carry out some due diligence on your ideas and so eliminate the worse ones.

But successfully executing on a business idea? What are the skills for that? Mostly it seems it is about dealing with the unknowns and you know what the problem with dealing with the unknowns is.

On the other hand, what would I know, I'm not a successful entrepreneur...

Good stuff Jason. I have to say I wholly agree with this. A couple comments I'm thinking of as I read this post:

1. What are the root causes leading to business schools failing at the education of entrepreneurship?

- Firstly, remember that much of what schools teach is theoretical and doesn't always get applied, or only a slice of what is learned is actually applied. The idea of business plan writing is to encourage students to think about all the aspects of a business. Even if a business owner never writes a business plan; they still should know the answers to what would have been on their business plan. If only in their minds.

Secondly, don't forget that we are somewhat swayed by being in the tech field. If you are a small business owner that wants to open a bakery or a construction company, and you are looking for traditional debt financing, then you probably need a business plan to go to the bank with. This is different from the VC / Angel investment world tech startups live in.

Finally, I have an MBA in entrepreneurship from Bentley College - and while it was a good experience I can tell you I learned 10x as much from launching my first startup (Short Sale Artisan) which cost 1/10th what it cost to get the MBA. I think in general the best entrepreneurial courses are ones that include a lot of hands-on discussion from real business owners and merge that in a meaningful way with theory.

2. What are the current best practice for teaching entrepreneurship in a business school setting?

- I think one of the best things schools can do is bring in actual business owners. I still remember meeting the guy at B-school who invented the Perfect Curve thing for his hat. Stories and experiences of people who have really done it help inspire and show the reality of what life as an entrepreneur is like.

Although I don't have highly considered thoughts on this right now, I wanted to chime in with support. Thanks for kicking it off.

A year and a half ago I was one of those MBAs pitching a business plan in the UK. We did pretty well in that context. A few weeks later we travelled to the Valley to pressure test it with designers, VCs, and domain experts. It went fairly well, but they started poking very relevant holes in our plans. We learned a ton. A few months after that I began working with AngelList and moved to SV. I was instantly surrounded by thousands (literally 8K pitches) of entrepreneurs. It was a schooling I never could have had during the MBA. And I'm just starting now with a 3-person startup. I'm not a founder myself, but mix closely enough with them that I've moved a long ways from the MBA.

A few scattered thoughts:

- MBAs are among the most applied grad degrees one can take. I'm not sure that says much, but they are better than research-focused grad degrees.

- They aren't designed to help students start new companies, as much as that's sexy. They're there to learn how to become the next Jack Welch.

- I really think it's about immersion. What has helped me (hopefully) become more relevant to startups etc is not that I've read the material, but that I've been surrounded by them, and worked with them on a daily basis. This has schooled me more than anything. And for MBA programs to really foster entrepreneurship, they need to get students immersed in groups of people who relentlessly build things. And provoke students to *actually build things*, not just talk about it. We are, at least in part, a reflection of our surroundings.

I appreciate the chance to ramble. This is a great discussion. Thanks for triggering it.


I've responded on HN, but want to offer a counterpoint to Brendan's point about the MBA being "applied": it is certainly true in principle, but the way this is declined is the complete discouragement to build any hard skills. A solid computer science foundation is 100% theoretical, but instrumental to building thing. A master in financial engineering is pure math, but gives hard tools to operate on a quant desk from day 1. Having two years to actually be able to go and hang out with relevant audiences is a wonderful possibility that an MBA gives (and many hard theoretical grad programs don't), but that is something a minority of people (e.g. Brendan) do. In fact, it is slightly discouraged by the prevailing cultural norms of the anthro lab that is an MBA (the norm: party your ass off, travel the world as a tourist, be done with thinking about your future career with a couple on-campus interviews).
My late mentor's one time on TV featured this funny/sad quip: "There are only 5 schools of business, all the rest are academies of corporate middle management". Sadly true in many ways... b-schools don't teach business. It's not their target market, is it? But funny in that he got a zillion supportive phone calls (all of which ended with "but WE're one of the 5, right?" LOL)

Great timing, Jason - just left the annual cutting-edge Babson Research Conference I was part of a great discussion on what the best entrepreneurship education works so well.. and so many others work so poorly. The key is being deeply transformative - we are creating entrepreneurial thinkers... *expert* entrepreneurial thinkers. And that requires instructors who themselves truly get it, Those are rara avis.. but they are out there, kicking butt... and growing entrepreneurial minds.

There are many great entrep training programs in universities. They may be a minority and particularly lacking at elite schools. But take a long look at NCIIA.org for examples of killer programs.

But note that many are NOT in b-schools & are often cross-disciplinary, even university-wide. I don't think that is a coincidence..

Here's the "problem", Jason -- the best entrepr education is deeply experiential. You need true problem-based learning (in ed psych terms, constructivistic not behavioristic). But to have it truly experiential - thus truly transformative? You need expert mentoring to guide the process; you need instructorswho get PBL approaches (pretty scarce in most B-schools, rarer still in top schools- structurally, it just doesn't fit the model.)

Google Steve Blank's new course based on the lean startup model - pretty cool. (Also check his slides/video on why accounts don't staet businesses.. the part about the "Durant" school!)

You are spot-on w/r/t immersion, Jason... Think TechStars, think Y-Combinator, even think Startup Weekend. That is how you change deep beliefs/assumptions & change people toward the entrepreneurial mindset.

I'm typing this in the AMS airport en route to the Intl Council for Small Business conference where there will be even more great entrep educators. (And if it's not too cheeky, check my blog, next to last post - http://bit.ly/NKblog )

This is an important question - but what if the ultimate answer isn't 42, er, that b-schools should quit trying?

Norris Krueger, PhD (entrep PhD & recovering tech entrepreneur)

This is not just a b-school problem. Any field where changing deep cognitive structures is critical...

Here's a recent review of some killer work. (Wieman, btw, is THAT Wieman - Nobel Laureate, now empassioned to fix higher ed)


This is a simple question: Isn't one of the fundamental issues that B-school programs are heavily laden with .... B-school students?

If I were going to design an MBA experience that would "teach" entrepreneurship, it would involve the "holy trinity" of tech entrepreneurship: Hacker, Designer, Hustler. Each class would be carefully selected so that groups formed would be equipped to actually build and launch.

Even if that meant that my institution would have to sponsor or discount tuition for designers and programmers, I would make this a priority. B-school students without some capacity for building product are locked into the "case study" thought-experimenting trap.

As a b-school undergrad, I wish that my university would create organic ways for CS students and BUS students to team up on large projects.

This type of experience benefits all parties involved and prepares them for the world of new-school lean entrepreneurship.

Isaac - does your school belong to NCIIA? They fund exactly those courses. Look at UC-Davis's green tech commercialization program & Colorado State's progrma on designing for emerging markets/developing countries. Look at Stanford's D-School.

I know very few schools have the faculty talent to do these... but they can get started. (I'm an officer in the Academy of Manageent's Entrep Divison; if I can connect you with someone in your city, let me know.)


I also agree that immersion helps a lot.
But in my guts I doubt there is time inside a MBA to teach everything in the course plus entrepreneurship.
My feeling is that at the end of the day, there is so much to teach that people should create a new thing like a MBE (ntrepreneurship), since you don't have much to administrate with a startup in the early stages. In case you succeed and you startup starts to grow, you can do then the MBA to learn how to administrate it.
Maybe ask guys like Bill Gates for help... he has expertise, time, money, and his goal now seems to be helping other people.
The underlying problem is that you're assuming sitting on your ass and listening to some academic who's never gotten their hands dirty will somehow magically transform you into Andrew Carnegie.

While the experience is appropriate for technical details on Law, Finance, and Accounting, you can't learn "entrepreneurship" from sitting in a classroom. You have to do it.


No, I go to a small state school (CSU Monterey Bay) and I would love to try to help bring my school into the 21st century. It seems that my B-school is focused on the regional players (agriculture and hospitality) so they aren't that concerned with tech entrepreneurship. Color me sadd.

- Isaac

I think the root cause is that students at B-schools aren't (for the most part) interested in entrepreneurship.

Most of them are thinking that:

(1) I'll make a large investment of capital in making an MBA, and
(2) this will get me a good safe job with a big corporation

the ones who want to make entrepreneurs will take the money they would have spent on an MBA degree and spend it starting a business, not going to school.

Maybe the problem with business schools is not the curriculum, it's the students. I chose to get a grad degree in a technical field and pick up business skills in the workplace. I advocate finding alternative ways instead of business school to prepare oneself for success in business. Why would anyone who is industrious want to spend enormous amounts of money to learn what they could learn in a more concrete way with in a company setting? Also, MBA degrees are no longer the major differentiators in the workplace: the degree is ubiquitous.

If schools really want to form good leaders, they should give people stipends or work-study paid programs to facilitate real world learning and not burden them with debt. It may be that attractive entrepreneurs are not finding their way through the schools gates anymore. They may be taking the roads less traveled (isn't that what entrepreneurial types do anyway?)

This post is an excellent starting point. It reminds me of a conversation I had with a Sloan alum and serial entrepreneur a few months ago - when I asked him about the much-lauded MIT100K event, he told me that this was merely "mental masturbation" and didn't provide any value to the student. This resonated deeply with me. I think we need to take pitches and other mental masturbation out of the entrepreneurship curriculum.

More time building products, less time building slides.

I don't think you need an MBA if you want to become an entrepreneur. And schools which market their MBA programs with concentration in Entrepreneur, I'm not sold on that. I would say entrepreneurship basics (like how to start company and stuff) should be part of each and every course be it computer science, math, medical. Schools have been teaching how to become an employee and go work for someone in the choice of their field, whereas they should be teaching how to create something from scratch with the field of study students are interested in.
Nitin - there are wonderful programs for K-12... just as with science & math, you can nurture the mindset pretty amazingly if you do that.
Entrepreneurship = Life Skill!


"2011 <u>will</u> be the Year of the Entrepreneur!"
Norris Krueger, Ph.D. Entrepreneurship Northwest
twitter blog SSRN slideshare bio more 
         "How can I help <u>you</u> to help grow entrepreneurs?" 

Could it be that entrepreneurship is about "doing," and school is about "talking about doing," and thus it's not doing... thus entrepreneurship doesn't happen. Instead of a classroom curriculum maybe they need to turn the program into a lab, an incubator, team up the students and have them start businesses. They could still hold some classes, like finance, business management, operations etc. but focus most of the time on the incubator.
Can we place some blame here on the VCs and the "business plan competition" network that pervades academic pursuit of entrepreneurship?

We all know that learning to start a company is an experiential thing, you can't just read about it in the classroom environment. So the b-school (and undergrad) response to that are projects where you put together a business plan.

Any real entrepreneur knows that a business plan (or any derivative thereof) is useful to raise money and nothing else.

When Jason and I were pitching FlightCaster, we had a multitude of powerpoint decks to pitch (and earlier, word docs!). To some extent, we were just MBAs trying to figure out how to do it. But we were also catering to what VCs want! Charts with numbers going to $100mm, market sizes of $1b+, etc.

And these VCs are the people who are funding business plan competitions, encouraging this futile behavior.

So maybe a business school entrepreneurship project deliverable should be a product and market validation, NOT a powerpoint on market size?

The problem is most b-school students (myself and Jason included) simply cannot do that -- we don't code (relavent for internet start-ups, of course).

Idea: Team b-schoolers up with undergrad CS students. Produce real products, not business plans. Let CS students learn hackery with a cause, let b-school students learn product, marketing, and business model development commensurate with real entrepreneurship.

What do you think? At least it would be a start...

Business schools are failing by not teaching students HOW to evaluate a business startup. 6 areas of Study and Evaluation:
1 Company: Are you attached to a successful company or proven plan?
2 Products: Are your products NEEDED by Baby Boomers et.al?
3 Trends: What are people looking for (health and welless, retirement income)?
4 Timing: Is the timing of your product or service filling a growing need?
5 Compensation: Is the compensation plan proven and fair?
6 System: Is there a system to follow that has proven success in your business area?
I agree that knowing how/why exactly the presentations were bad would be helpful here.
working to drive entrepreneurship at NYU and though not focused on the education piece per se, would love to discuss with you.
We have restructured our Entrepreneurship module at TSM Business School in the Netherlands. It is more like a module with limited theory and is aimed at applying and integrating the knowledge from other modules.

The module now has an open format and starts with forming entrepreneurial teams and generating business ideas. After a viability check, the students set-up the actual company and develop their business plans. In the meantime they have access to business coaching. Some of them go all the way and really started a business. Others stop at the business plan and market research stage. Although we have made progress in improving the module, the only groups that really experience what entrepreneurship means are those that actually start a business. In these groups entrepreneurial spirit exists at personal level and potential conflicts of interest with current employers are absent.

My personal experience as a former MBA student is that the more theoretical Entrepreneurship module I did, inspired me to start my own company. For success in entrepreneurship the MBA knowledge has been helpful, but entrepreneurial spirit and a load of practical stuff they don't teach you in an MBA was critical for success.

There are also multiple goals going on and different goals for different classes. For instance, my class is an introductory course and is as much mean to help students figure out whether entrepreneurship is for them or not (as well as to teach them some general skills) as it is trying to help them be successful with this particular idea. I expect most of them learn things that will make them more successful years down the line. We run other classes and programs that are more geared towards students who really want help in creating a specific company. If half the class figures out by the end that entrepreneurship is not for them (and if those would have been the failed entrepreneurs) then that's a good outcome.
@rimalovski - happy to help! Do you know Prof Jill Kickul at NYU? Trevor Owens? (@to2)


"2011 <u>will</u> be the Year of the Entrepreneur!"
Norris Krueger, Ph.D. Entrepreneurship Northwest
twitter blog SSRN slideshare bio more 
         "How can I help <u>you</u> to help grow entrepreneurs?" 
Jason, as a "recovering" entrepreneur, I don't think colleges and universities can teach entrepreneurship. The best way to learn is to do it in the real world, hang around entrepreneurs, and be a continuous learner. There is no other way. Higher education has very good intentions, but a professor and some speakers isn't going to get the job done. When asked whether I had an MBA, is say "no", I have a better degree: real world experience.
As someone who recently dropped out of my business degree program because it was getting in the way of my new business and frustrating me with its inefficiencies and inanities, I have some suggestions:
1. Get teachers who actually have experience. Would you learn how to drive from someone who'd never gotten behind a wheel but knew mechanics and physics really well? I mean, seriously.
2. Teach only relevent things: Back to the driving illustration: A driver needs to know how to drive. Not how the engine works or the history of cars. An entrepreneur doesn't need to become a CPA, he just needs to learn how to tell a story off of a financial statement (how to check the fluids and tire pressure, etc). He doesn't have to become a mechanic to drive, he needs to learn how to hire/befriend/cajole a mechanic.
2b. Teach self-teaching. Teach students to go out and meet business-people and become Chamber of Commerce members. Teach them to contact industry specialists and ask them to be coaches. Teach them to do favors for players in their field of interest who will let them tag along to business functions. Teach them to apply for internships and be humble. Teach them that learning never ends and that a degree doesn't keep you current or make you likable.
3. Teach team building. In school, cooperation and outsourcing is often referred to as "cheating". In entrepreneurship, delegating is a core competency. You can hire someone to edit your papers and beat you over the head when you need it.
4. Teach mistake finding-and-fixing. In school you're punished for making mistakes. If they were teaching driving, you'd read 200 pages of automotive history, then get failed for your first fender-bender. School needs a different attitude about mistakes and exploration. Maybe an assignment should be to find cases of mistakes in a students' favorite businesses and report how they were fixed. Also, allow students to redo assignments to teach iteration.
5. This question is actually inherently incomplete. School produces ineptitude partially because of the curriculum, sure... but also partly because it weeds out the iconoclastic youth who will become entrepreneurs, leaving only those who will be successful at school but will be less able to handle the gritty entrepreneurial life. In other words, school didn't just make them that way, it selected them that way. Your question is like asking how to get a mechanics school to produce race-car drivers.
(5b.) School is inherently anti-entrepreneurial. I hire a teacher, and if he is wrong about something, I can't fire him or correct him, and he has no accountability to his "client". He has tenure that is separate from market value and customer satisfaction. Teachers don't have to market their services or put ads out for their classes to survive. They don't "fire clients", students who take up too much time. School is inherently almost the opposite of the free market. A student responds to assignments. An entrepreneur creates them.

If you want to recreate business schools, talk to Robert Kiyosaki in Scottsdale, Arizona. He wrote the book on it. Literally. "If You Want to be Rich and Happy, Don't Go to School". He's also a successful entrepreneur who is creating his own financial/business education models. His website is richdad.com.

I dropped out of college last semester figuring that the 11K I'd spent after grants was a sunk cost. It was my price to pay for being afraid and looking to school to equip me to implement my business idea. School doesn't teach you guts, it teaches obedience and safety. I needed to be More rebellious against fear of rejection and mistakes, not More afraid of "bad grades". I needed to spend less time on irrelevant things and status quo, not more. I needed initiative and industry contacts, not mindless obedience to market-insulated, punitive gen-ed teachers.
In the end (just a few months ago), I decided that if I spent 4 years failing at my new business, I'd still have learned more and ended up in less debt than if I'd gone to school.
Since I dropped school in April, I've given public presentations, had a nation-wide newspaper article about my business, and been contacted by Google saying they want to feature me in a blog piece. Now customers are calling me instead of my needing constant marketing. And most importantly, I know I've helped a lot of clients in lasting ways. I didn't learn that in school. Honestly, I wouldn't go back to school if someone paid me. I do pay coaches and tutors, however. And I read incessantly. Sure and I need to learn a lot more.
I've asked people why I should get an MBA? Most of them said that many businesses won't even consider hiring me without one. So that's it. It's an admission ticket. It's paying to get into a club. I don't think I'd want to belong to any business that had that admission process. Besides, I can start my own, hire people smarter and cooler than me, and learn from there. Maybe once I'm through the bootstrapping stage, I'll need to hire an obedient MBA, and I'll be grateful for their work ethic, stability, and brains.
They can manage my business while I retire. ;)

Wow, straykatstudio has hit the nail on the head. Looks like colleges and universities have a long way to go!
A good brain to pick- Saras Sarasvathy at UVA's Darden School. She's shaking up entrepreneurship with the Society for Effectual Action - not unlike some of the practices in Rework.


Hi Jason and Friends, rather than look at the problem, could Jason, maybe you, set up a space where we could proffer solutions and build the new universities, including for entrepreneurship rather than about it? I am doing my best to flip the classroom...and we also offer non-edu programs in e-ship- without content! The content emerges from experts (practitioners) and apprentices(students) being placed in direct contact with each other- with a suitably co-designed challenge being the initial trigger. My/our trainers role is to keep re-jigging, building and switching the tracks for the emergent organisations- we also break the start-up paradigm that dominates biz school courses by looking at existent firms, buy-ins, etc...e2a (entrepreneur2apprentice approaches) My tuppence for now- but let's build a solutions space, no? Jason, maybe your next post could be along the lines of 'how to seize business opps in the failing biz school market for entrepreneurial learning?' Now that would be being entrepreneurial in entrepreneurial learning;). Look forward to it.... http://www.linkedin.com/in/edgonsalves
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