In this episode of Business Casual, hosts John, Maria, and Caroline discuss entrepreneurship in MBA programs, featuring insights from Professor Yael Hochberg of Rice University.
Professor Hochberg, with her extensive background in entrepreneurial activities and finance, including roles at prominent institutions like Kellogg, Cornell, MIT Sloan, and Chicago Booth, underscores the importance of an entrepreneurial mindset in business education. They discuss how this mindset is crucial not just for launching startups but also for innovating in various sectors, including corporate and government environments. They also emphasize the significant advantages of incubating business ideas in MBA programs, where students have access to a supportive environment, mentorship, networking, and resources to experiment and learn from failures. The discussion highlights how business schools offer more than academic knowledge; they provide a comprehensive platform for aspiring entrepreneurs to develop skills, understand execution nuances, and prepare for successful entrepreneurial ventures.
This episode is definitely a must-listen as Professor Hochberg’s experience, combined with the hosts’ perspectives, illustrates the integral role of MBA programs in nurturing the entrepreneurs of the future, emphasizing the value of these programs in fostering innovation and leadership in uncertain business landscapes.
[00:00:07.370] – John
Well, hello, everyone. Welcome to Business Casual, our weekly podcast. This is John Byrne with Poets and Quants. I have my co hosts on as well, Maria Wich Vila and Caroline Diarte Edwards. And today we have a guest. We have a really terrific guest. In fact, we’re going to talk about entrepreneurship in MBA programs and entrepreneurship in general at business schools. And we have a professor from Rice University who’s in charge of the entrepreneurship initiative there and is a professor in entrepreneurial activities as well as finance, Yael Hochberg. And she has a really interesting background. In part. She is, of course, an entrepreneur herself, or has been. Prior to her appointment at Rice University, she worked at the Kellogg School of Management at Northwestern and the Johnson School of Management at Cornell University. She’s been a visiting faculty member at MIT Sloan, and she’s currently a visiting faculty member at the University of Chicago Booth School of Business. So welcome.
[00:01:11.910] – Yael
Thanks so much, John. I’ll make a little correction this year. I am no longer visiting the Chicago booth. I am visiting Kellogg this year. Oh, you are? We get around.
[00:01:24.810] – John
We get so, you know, my big question is, why has entrepreneurship remained such a vital part of business school teaching and business school approaches to business? You would think that this area had peaked a while ago, because it’s been a long time where business schools have been pouring a lot of resources into this field. And in general, at most schools, 5% of the graduating class tends to do their own startup right out of school. And in a few schools, including Rice, of course, and Stanford, it’s much larger, but pretty much it’s 5% across the board. But yet there has been still incredible interest in entrepreneurship. How come?
[00:02:17.690] – Yael
I think part of this is just that entrepreneurship is a key part of what drives economic growth here in the US and globally. I think that is very enticing to people as they think about where does the future go, what is going to be the future of the economy. But I think there’s actually something that goes beyond that, and that is if your business school is doing it right, what they’re teaching is not just not entrepreneurship. Go be an entrepreneur. What they’re teaching is entrepreneurial mindset. Right. We’re teaching you a set of skills and frameworks and ways of thinking that help you deal with business situations where there’s a lot of uncertainty, where markets are new, where products are new, and we’re teaching you how to be a leader in uncertain areas. And then you can take that and apply it in so many different places. You can be entrepreneurial within a corporation when I worked at Oracle. One of my first jobs out of college, I was in a skunk works. Right. We were entrepreneurial within Oracle as a technology group. You can take it to a big corporation, you can take it to government, to public policy if you want to, you can take it to nonprofits, or you can take it and build your own thing.
[00:03:33.880] – Yael
You can take it to invest in new things. Right. So I think there’s a lot of applications for what we teach that go well beyond just starting a company. And I think that is part of what the appeal is to the students.
[00:03:45.690] – John
Yeah. The other thing is teaching an entrepreneurial mindset is essentially teaching people to innovate with limited resources. Yes?
[00:03:56.810] – Yael
Yes. I think another big piece of it is teaching people how to innovate and make decisions in a world where things are uncertain, where you don’t have a history of a market and competition to go look back and see how things are performing, you don’t have long histories of financials and sales numbers to project off of. You don’t know who’s going to pop up as your competition. So it’s partly limited resources and then limited resources when the unexpected is going to happen.
[00:04:33.160] – John
Right? Exactly. Now, how has it changed since you’ve been involved in this on business school campuses for many years? And I’m assuming one big change that I have noticed is the interdisciplinary nature of entrepreneurship. It used to be that when entrepreneurship was taught in a business school, you had a bunch of MBAs trying to figure out what to do. Now, increasingly, you’re basically allowing them and encouraging them to collide with computer scientists, engineers, medical students, law school students, so that there’s some real IP oftentimes involved in these things. And MBAs are no longer creating dating apps.
[00:05:17.510] – Yael
Yeah, no, I think you hit the nail right on the know. I did my PhD at Stanford, and I’d say Stanford in some ways was ahead of the curve with this. We had organizations that specifically collided us as business school students, with students from engineering, even with undergraduates, so that ideas could bubble to the surface and you could come up with a startup company that was based on some sort of technology or software, something that was coming out of the Stanford campus that wasn’t just the business school students. And that trend has really started to hit in the last few years, and you see it at all of the schools that are really making great strides in entrepreneurship. How can we take the business talent who we’re training and combine that with the technical and scientific talent and as a result of that, create real value for the world? By helping to liberate more of the cutting edge discoveries that happen on campus into the world and the market for hopefully, the betterment of all of us.
[00:06:25.930] – John
Right. Maria, what’s your take on this?
[00:06:29.390] – Maria
Well, as someone who entered business school without any intention of ever becoming an entrepreneur under any circumstances and who is now an entrepreneur, you will find few cheerleaders quite so actively rah rawing the teaching of entrepreneurship in MBA programs as I. So, no, I think this is wonderful. And I think the more business schools get involved, at a minimum teaching on entrepreneurial mindset, the better. Because I think a lot of students, myself included, right. When I went to business school and there was a mandatory entrepreneurship course, I thought to myself, well, I’m going to work in big businesses and big companies the rest of my life. I’m never going to do this. But then I realized that even just developing that mindset is going to be useful in pretty much literally every industry. And if you’re working in an industry that will not benefit from an entrepreneurial mindset, it’s probably a dying industry and you should get out of it. So I think it’s wonderful that more and more business schools are teaching this.
[00:07:24.830] – John
Yeah, no, absolutely, Caroline. Of course, in European schools, this is a big issue as well, right?
[00:07:32.850] – Caroline
Yes, it is. And I observed when I was working at INSEAD how entrepreneurship became really an integral part of the curriculum.
[00:07:42.920] – Yael
[00:07:43.170] – Caroline
It used to be sort of a niche interest, I would say sort of 15, 20 years ago, and now it’s one of the most popular, if not the most popular area for people to take electives in and has really sort of infused other parts of the curriculum. And I’d be interested in your perspective, Professor Hochberg, on the challenges for people internationally, because I know that you’ve studied in Israel, I’m sure that you often teach international students, and we have a wonderful ecosystem here in the US, and I’m about 3 miles from the Stanford campus and here in Silicon Valley, which you know very well, there’s this extraordinary ecosystem for entrepreneurs. But what are the challenges that you see that come up in the classroom for you with the international students and people perhaps from back home in Israel or not? Sure if that’s where you’re from, but I’m sure you have a lot of connections there or in other countries. I think it’s often quite a different landscape for entrepreneurs as they sort of think about how they’re going to get something off the ground. It’s much more challenging than it is often in the US.
[00:08:52.590] – Yael
Yeah, no, that’s a really good point and good question. So I think there’s a lot of variation. So if I encounter a student who’s coming from know, that’s going to be a very different story than encountering a student who’s coming from Brazil or a student who’s coming from Poland or coming from Denmark or wherever it may be, simply because the entrepreneurial ecosystems in those countries are very differently developed. So one of the things that we try to do in our classes, or at least I try to do in my classes, is really make sure we have some international content so that people can, both our students from the US and the international students can get a good understanding of the fact that things have to change when you’re in different ecosystems. And understanding the ecosystem and what you’re playing and what the resources are that are available to you is pretty important. The other thing we try to do is help them figure out where the ecosystems are back home. Right. What does it look like if you’re going to go back know, you’re going to go back to India, you’re going to go back to Vietnam, wherever it might be, Australia, and try and start something.
[00:10:03.460] – Yael
And I do think that we, as business schools probably, I think we’ve all been trying to step up on the international content and the recognition that many of our students not just come from other countries, but also want to go back to those countries. There’s probably more for us to do. And like you said, we’ve often been really us focused. The good thing is that at least the principles and frameworks that we try and teach to help students be better, to execute better in entrepreneurship are common themes. The things that differ are the venture capital term sheets and the contracts and where you’re going to find that money and more intellectual property issues, legal issues. But a lot of the core principles, right? How to think about customer discovery, how to think about design, how to think about scaling, how to think about cash management, how to build good models for tracking your business. Those are universal. And that’s the good news. I think we have it easier in some ways than some of my colleagues in different know.
[00:11:11.530] – John
If you could outline all the different things that Rice has done, because obviously Rice has a terrific reputation in this field and has had a really good reputation for a long time. And I’m really just amazed at the extent to which the number of courses, the number of projects, the center, how you bring people together, the prize money. I mean, it’s a pretty complete program. So give us the outlines of it.
[00:11:41.520] – Yael
Sure. So within Rice’s entrepreneurship program. I’d say we have two primary organizations. One of them has been around for a while. It’s the Rice alliance for Technology and Entrepreneurship. They run the Rice Business plan competition, which many people are familiar with and which, as you mentioned, is one of the largest in the world. We draw teams from all over the world to compete for investment prizes and cash prizes every year. And they are a group that also engages community and creates all these very interesting opportunities for people to get together, like these venture forums where startups and big corporates can get together and talk about different things of interest. And then the second organization, which I run, is the Liu Idea Lab for Innovation and Entrepreneurship, and the Rice Entrepreneurship Initiative, which is really an internally focused organization that has built out the classes and the programming that our students see, and actually now our faculty as well. So I try to take a holistic approach to this. So I’m going to have students who want to take six classes or ten classes and see the entire curriculum during their MBA. I’m also going to have students who want to dip their toe in the water and get a sense of what this is about, or who need exposure to specific topics.
[00:13:05.680] – Yael
So we not only have classes, but we created the blue idea lab with the idea behind it that there needs to be a space for people to come and try things that isn’t necessarily committing to three credits over the course of a term or a semester. I think the bulk of what we do is actually running these cocurricular programs. So we do this during the year, we do it during the summer. But it’s things like we have an internal accelerator that runs during the year called Launchpad, where we take the students and we get them outside mentors and help them build a board and refine their ideas and work on them. They don’t have to be in a class in order to do that. They can be teams from all over the university. We do things like I think most schools do. We’ll bring in a founder of Zoom and hop on a coffee chat, or do a fireside chat and fill a room with eager students. And we do a lot of things that are really meant to help the founders support each other. So we do founders dinners, we do ladies who lunch for women entrepreneurs.
[00:14:22.990] – Yael
I’m worried that I don’t know if we’ve copyrighted that name or someone else has, maybe, but we try to think about a variety of opportunities that the students will need in order to really move their ideas along so someone can come in business school as a freshman and start taking classes and really be sitting in the space working. We have a co working space for the students. A PhD student in sciences and engineering can come in from day one and start getting involved with what we’re doing. We do premature programs that are mixed for MBAs and other graduate students, and prematureculation programs for the undergraduates, the incoming freshmen. We have a summer venture studio, which is our summer accelerator program that’s a customized program that kind of builds on the classes and really looks at the teams and what they’ve managed to accomplish already in the classes themselves, all of which are designed to be experiential in some way or another. And we do other programs that are really trying to mesh together, like you said, the different disciplines. So we run a program called Innovation Fellows, where we take PhD students from sciences and engineering and we buy out a day a week from their advisors, from their labs, so that they can work on commercializing the science and technology that they’re actually doing their dissertations on, or the science and technology that they’re working on with their advisors.
[00:15:52.120] – Yael
So we’ll do this with PhD students and postdocs, and then we’ll put them in what we call the tech commercialization lab for the MBAs and connect them with MBA students who want to think about how do I take a technology and find a market application for it. So there’s a whole host of things. We have an internal business plan competition that at the end of the year that’s really meant to sort of be the culmination for the students as they’re going through. And we have an undergraduate minor and an MBA concentration. And I’ve probably forgotten a dozen things that my staff would yell at me about. But hopefully that gives you a sampling at least of what we’ve tried to build over the last. Honestly, it’s been only six or seven years since we started all this.
[00:16:36.240] – John
Yeah, that’s amazing. Now, let me ask you something that often comes up when you talk to people about whether or not they should use a business education as an incubator for an idea. A lot of people will say, are you crazy? Why would you go to business school and spend all that tuition money to try to do a startup? You should take the money you would otherwise spend on tuition and just use it as your seed capital and start from there. I mean, what’s business school going to do for you that you can’t do for yourself? What’s your response to that?
[00:17:09.850] – Yael
So my response to that is, I think that there is a lot to learn from failure. And I can also tell you from my research that most entrepreneurs fail. They tend to fail in large part. They fail because of execution, right? They may have a great idea, they may have a great technology, they may know that they are solving a real problem, and yet they don’t actually know how to think about all the pitfalls and all of the roadblocks that they’re going to hit as they become an entrepreneur. And I do think that one of the things that business school offers is an opportunity to get structured help and frameworks and ways of thinking and frankly, to experiment. And you may come in with an idea and say, I want to be an entrepreneur. And through what you learn from us, you’ll realize that maybe that idea is not going to work, or maybe you missed something when you thought up your plan, but now you’re better equipped to go out and find the next thing. We see this in both our undergraduate population and in our MBA population, students who come in with the idea they’re certain is the right idea and maybe wind up iterating on two or three as they go through the classes and the accelerator and then eventually launching with something at the end of it that’s much, much more likely to succeed than the original idea that they had come in with.
[00:18:40.390] – Yael
And I think that’s okay. There are people out there who, they may not need the business education in order to push through and be successful. But I think for many students who really don’t understand what is involved and what is going to be required and who don’t have the business experience coming out of technical jobs, the business school education is just invaluable.
[00:19:04.290] – John
Yeah. Plus you have guinea pigs, you have your fellow students to try your ideas out on, and you have the kind of mentorship, and let’s face it, when you’re particularly an MBA or even an undergraduate business student, and you call someone up and you tell them that you’re at so and so a school, they’re far more willing to take your call and far more willing to want to help you. And that’s just the reality. And that goes beyond alumni, which of course is a core place to go for help and support and encouragement. People want to help students. It’s just a natural kind of thing. And they may want to help students more than they want to help entrepreneurs.
[00:19:47.450] – Yael
Absolutely. The value of the network is pretty tremendous. And I think you’re right. You’ve got the guinea pigs, you’ve got the perfect test bed for experimentation, and that’s a really good resource. Plus, you’ve got us to mention.
[00:20:02.370] – John
Yeah, and a lot of reward money sloshing around to help fund your idea. So, yeah, you’re paying this tuition, but you might very well earn it back if you have a great idea and you enter a bunch of contests and find that you’re just knocking them dead and bringing in that money to help your business grow.
[00:20:23.350] – Yael
Yeah. And the mentorship that you get and the time that you will get from faculty and from the mentor networks that we build out in these entrepreneurship programs, we have a formal mentor network. We help students connect. We help them build boards of directors. Those are resources that sometimes it’s hard to get to if you haven’t gone through a program where someone is being paid to offer you those services.
[00:20:49.260] – John
Yeah. And to play devil’s advocate, I’ll just say, you know, Bill Gates, Steve Jobs, Mark Zuckerberg, they all dropped out of college, never mind getting a graduate degree. They couldn’t even get an undergraduate degree, and look how successful they were. Well, here’s my response, and I’m sure it’s yours as well. Well, if you think you’re a Bill Gates or Steve Jobs, go right ahead. You start your business without any help and without a safety net, without mentors, without a board, and let’s see how far it goes. I’m sure that maybe you say that to your folks who may ask that question.
[00:21:26.040] – Yael
So I actually have a former student who has very successfully built a massive design business in Asia. I believe now there are well over 100 employees. He dropped out in his sophomore year. He walked into my office and he said, look, I’ve sat through your classes for two years. I’ve learned a lot. I can’t wait. Class, going to classes, taking distribution requirements, learning these things that are not of interest to me, I just don’t need. Like, I can go and do this now. And off he went to Silicon Valley and then over to Asia, and he’s got a company that’s, I think, present in at least four asian countries that, you know, you can join and leave, I guess. But you’re right. If you’re the Bill Gates type, if you’re the person who chafes and can’t sit there, maybe business school is not for you. But those people are few and far between.
[00:22:24.080] – John
So I want to talk a little bit about idea generation, because while obviously the fundamental skills of building a business are things you will learn, ideally, one might bring an idea to a program, and I wonder what kind of ideas you see and what the quality of them actually are, how well hatched or how wacky are some of the ideas that you see coming from students today?
[00:22:52.870] – Yael
Some of them are wacky, I will readily admit. Some of them could probably incubate a lot longer. I think the ones that are most successful, the ones that have the most promise, are the ones where a student is coming with an idea because of something they saw, a real problem. They saw in the industry that they were working in before business school, where they really saw an opportunity for a tool or a solution, or they see a pain point and they think they have an idea how they can address it. That comes out of sort of real world experience of understanding that industry and who’s experiencing that pain and what it looks like. And those ideas tend to have a lot more promise to them. They tend to be a little bit better baked than some others that we see. The MBA students in particular have a tendency to come with that kind of idea. The undergraduates don’t have that experience. They don’t always do it. But my feeling and what I tell the students is you really want to try. If you look around, you can identify pain points from your own experience. Every one of us experiences frictions in our work life daily.
[00:24:09.960] – Yael
And in some cases those frictions are big enough and bothersome enough that someone will pay you for a solution. And those are the places to start digging. Right? And I think those are the ideas that we see that come in that have the most promise.
[00:24:24.910] – John
What’s the most successful idea that you’ve seen so far in all your years of helping students launch businesses? And what would be the most hair brained, half baked, silly idea that you tossed out immediately?
[00:24:40.730] – Yael
The ones that we get, it’s not even just one. The ones we toss out on the regular are campus delivery services. We’re somehow going to be cheaper than Uber Eats and things of that nature. I’ve had students do all kinds of interesting things. I’ve had students do things in the battery business and be highly successful in compressing gasses, things that come out of the labs that have really been interesting. We had a team at MIT that went off and did Ministry of Supply, which you may have heard of, which was one of the first business clothing out of athletic fabrics so that you can ride your bike to work wearing your dress shirt. You still look like a banker when you arrive and not offend your colleagues with the associated we. I’d say they vary. Pillpack came out of one of these entrepreneurial strategy classes and one of the hackathons at MIT. I have a student from Kellogg whose business just launched on, I believe it’s Amazon and target in a big way, who started out out of business school saying, I see this problem with people needing their car seats for their kids clean, and turned that into a business called Tatsuad, which I’m really excited about the prospects for.
[00:26:14.870] – Yael
So I don’t know that I think about the biggest successes necessarily in terms of who built the highest valuation. I think about them in terms of the people who’ve built successful businesses that they are extremely proud of and that helped them achieve the change that they wanted to achieve.
[00:26:37.070] – John
Right now, when businesses fail startup businesses, I’m assuming it’s because people, the market may be too small, they lack capital, they may not have assembled the right team of people to allow them to execute on the idea. Are those like the three key reasons why startups fail?
[00:26:58.470] – Yael
I think actually what research shows is that the number one reasons that startups fail is actually interpersonal conflict between founders and team members. So it’s not so much I didn’t assemble the right skill set so much as founder conflict, which is a big driver of why things fail. Failure on the execution side of the business is also a big deal. Just not really understanding how you’re going to need to manage cash and you sell something and you may not see that money come in for a while and you’re going to have to chase after the vendors, but meanwhile your suppliers are going to be on your back and they’re going to want it net 30 no matter what. So there are a lot of execution issues that come up and then I think market too small, or the problem you thought was a big problem isn’t a problem or isn’t as big a problem and people are either it’s a vitamin rather than a painkiller, so no one’s willing to shell out, or it just wasn’t as big of a problem as you thought it was. You thought about the target market as maybe yourself, and didn’t do the research to figure out how big of an issue it was.
[00:28:17.100] – John
Yeah, that makes sense. Now, Maria solved the interpersonal problem by being the sole and complete boss of her enterprise. Isn’t that.
[00:28:26.110] – Maria
Know, it’s so funny, as you were saying that I actually remember a case from business school that we did on Zipcar, and how the founders of Zipcar, they started the business and they split it essentially 50-50. And then one of the founders was like, never mind, I’m not going to do any of the work. But yet that person still owned 50% of the company. And so it was a real problem. I mean, this was something that I learned in business school. And so when we talk about why you should get an MBA, it does help you avoid these sorts of problems. The cases might change from year to year, but the fundamental lessons that are being taught, no matter how they’re being taught, right, whether they’re being taught through a textbook or through a lecture or whatever it may be, the fundamental lessons that a business school is teaching you about entrepreneurial success and failure and how to mitigate those risks is pretty valuable. So chalk one up again. Like I said, I’m a big fan of the entrepreneurship, pursuing the MBA for entrepreneurial reasons. But absolutely, I remember that being one of the big lessons that sticks out at me, one of several from my first year class in business school.
[00:29:33.670] – Yael
Yeah, Zipcar is one of those exhibit a and why you should have a good founders agreement in place. But again, even if you have that, sometimes things go sour, even if you’ve tried to put all the safeguards in place. So I think learning, understanding that you need to know what you don’t know is really important. And that is one of the things that we give you in an entrepreneurship program, whether it’s an executive education entrepreneurship program or an MBA entrepreneurship program, and certainly you’re going to get everything you need in the MBA program, except maybe the grit. You have to have your own grit.
[00:30:11.020] – John
Yeah, grit’s important. Absolutely. The fire in the belly, an essential ingredient to be a successful entrepreneur. Now, Caroline, you’re the opposite of Maria, where you have co founders, and I wonder how you handle differences among your co founders. I think the problem with your co founder issue is they’re all too nice.
[00:30:33.450] – Caroline
They are extremely nice, and I’m very fortunate. And what you said about that really speaks to me because I’m the daughter of an entrepreneur and my dad for many years ran a business with a partner. And after about 20 years, it turned very sour and became very difficult and very stressful and very painful situation for everyone concerned. And so I grew up with that kind of crucible moment in our family and was very aware of the potential pitfalls. And I’m extremely lucky, especially given. So we are three co founders, and one of our co founders, I didn’t actually meet until in person, until two years after we started the business because we both had young children and we were on different continents and it just wasn’t feasible to travel. But Matt, who’s the other co founder, knew both of us very well, and I had huge trust in him. And unfortunately, it has played out very well. But I think that that is absolutely critical, having those strong relationships in place and being able to trust each other through thick and thin. And I feel very fortunate that that has worked out well eleven years down the line.
[00:31:48.770] – Caroline
Something else I wanted to ask you about is we’re all watching with great fascination how things are playing out in the world of AI, and that’s a huge opportunity and a huge threat for many businesses. And I’m curious how you’re addressing that in the classroom because it’s such a fast moving situation and who knows what is around the corner, right? What is coming down the line in six months or a year or so. It’s anyone’s guess, really, right, how this will pan out. So I’m curious what you’re telling people and how you’re getting engaged in the space of AI.
[00:32:32.610] – Yael
Our students jumped into it immediately. I think the students jump into it faster than the professors in some ways, right? They’re constantly playing with new things. But we feel that AI, it is going to change how we educate. It’s also going to change what students can do. A student who wants to mock up an interface, a student who wants to write some basic code and do an MVP, now has the opportunity to go into code interpreter, one of these different llms, and produce code really quickly. They have the opportunity to analyze data and collect data and do a lot of interesting things very quickly. And yeah, the models hallucinate and you have to check everything, but all that’s going to keep progressing, right? The reliability is going to keep progressing and so forth. I think it’s very difficult to predict exactly how AI is going to affect things. And the tools are changing so often that we thought about having a class on how to use AI for business. Kind of have somebody put this together for the spring. And we decided that it was moving so fast that a class was going to be too slow.
[00:33:52.630] – Yael
And instead we have someone who’s doing workshops and working with the students. But we’ve already brought it into our entrepreneurship classes and used it as demonstration tools for students to say, think about a problem that you have now let’s go use that interface to ask questions about that problem and what solutions there are and get ideas which you can then go and do some more. I would say traditional forms of discovery on. But I think anybody who is not paying attention to this is going to eventually be blindsided. And there are obviously industries that will be affected more quickly by this and industries that will be less affected by it. And not every student startup is going to need to have AI. But it’s a really interesting space with really interesting dynamics. So it’s kind of close eye on that. It’s going to change how we teach mbas as well. Has to.
[00:34:53.680] – John
Yeah. Yes, that’s happening a little bit, but the full effect of that is yet to come, I assume. Okay, let’s say I am a person who has an idea and I, in fact, want to use an MBA program to incubate my idea. How do I know what the best opportunity is for me to do that? Because now you’ve had exposure to at least five schools and the entrepreneurship efforts in five different places, all, frankly, very different from each other. How does someone on the outside navigate and negotiate this world and know the best place for me would in fact be Rice, and Rice would be better than Kellogg or MIT or Booth or Cornell or whatever. How do you figure that?
[00:35:43.070] – Yael
- That’s a good think. You know, one of the key things is going and looking not just at do they say they have entrepreneurship, do they say they have classes? But what the entire support system is that’s wrapped around that. Because I think a lot of the value that you get out of an entrepreneurship program is not just about what we teach in the classrooms. I think you can go and talk to students who have gone through the programs. I think that’s really important to get a sense of what kind of support they had. You can also, generally speaking, reach out to the faculty or the staff with the entrepreneurship center. I would recommend, generally speaking, reach out to the entrepreneurship center and find out from them what it is that they’re doing. We talk to prospective students all the time. An individual faculty member in the finance department might not be talking to prospective students all the time. But if you go to entrepreneurship.rice.edu and drop an email to the staff there, somebody is going to be willing to talk to you and point you to the right resources. But I think in a lot of cases, you can just go online, you can see what resources the schools say they have, and then you should probably do a little research, show up on campus and talk to people and find out what their experiences are and talk to alumni about their experiences.
[00:37:10.610] – Yael
So I’d say that would be my first pass.
[00:37:15.210] – John
Yeah, that’s good advice. Now, do you see this field growing in business schools or do you see it has reached a peak and you don’t imagine it can grow anymore?
[00:37:25.240] – Yael
I think it’s professionalizing. I think when I was in business school, and I want to be clear, I’m not saying this about the business school that I attended, Stanford, which was a little different than this, but certainly when I graduated from business school, in a lot of the schools, there was somebody who had been hired as an adjunct, who used to be an entrepreneur, used to be an investor, who was sort of the dean said, we need entrepreneurship. We have no idea what that is or what that should be. So here’s somebody who used to be an entrepreneur investor. Please teach a class in entrepreneurship with no Oversight, no idea what was going into it. And there was a lot of what I call inspiration classes, standing around and telling the war stories, et cetera, but not necessarily real frameworks. And now, over the last 20 years, we’ve really developed the frameworks, we’ve developed the structures for the courses. We’ve thought carefully about how to blend experiential with academic theory, with the research and the findings to really give students that mix between the practical, which is so key, and real ways of thinking, the same way we would in a finance class when we teach you about NPV or teach you to Catham, et cetera.
[00:38:47.950] – Yael
So I think entrepreneurship is professionalizing. And as it professionalizes, I do think it becomes larger in the sense that if you know that there are real tools out there and that you can develop that mindset about creating new things, people get more interested than when it’s know a couple of classes and unclear content. So in that sense, I think it is growing. The other thing, and I think, John, you and I have talked about this before, is the current generation that’s coming into the business schools. And I saw this six, seven years ago when they were coming through undergrad. This generation really wants to create change. They want to control their own destinies. They don’t like the idea of being cogs in the machine, and they don’t like the idea of waiting to get to that position where they can do things. They just want to go. So that’s a cultural generational tendency that I think pushes towards seeing more students in entrepreneurship classes, even if it’s just to figure out how can I be more entrepreneurial in a corporation, or how can I be more entrepreneurial in a nonprofit setting, or whatever else it might be.
[00:40:04.790] – John
Yeah, that’s true. If you look at polls that show lessening faith in institutions, not only government institutions, but the big corporations, the big consulting firms, you look at a John Oliver’s takedown of McKinsey recently, you got to know that this generation is more skeptical about joining large organizations, which had been the mainstay of the MBA employment game for so many years, people are probably more willing to go off and want to do their own thing, control it, and do exactly what you said, try to have a more positive impact themselves, but also not be told what to do. I find this young generation doesn’t like to be told what to do, and they don’t like to do even what might be expected of them.
[00:40:56.770] – Yael
I think that’s right.
[00:41:00.050] – John
Maria and Caroline have children. They’re not yet of college age, but I’m sure that in their younger children, they even see this trait, right?
[00:41:11.190] – Caroline
Oh, yes. It’s quite painful. As a parent.
[00:41:17.290] – Yael
John, I think the other place we’re going to see growth is precisely because of this generational cultural thing. Students in undergrad who may not have thought about, oh, I should also take some business education, not just my major in mechanical or aerospace engineering or computer science. They’re thinking in this direction already when they’re freshman or sophomore year, and they’re thinking about the fact that they want to take these classes and know how to do this, even if it’s not going to be the first thing they do out of college. And the students in the graduate programs and engineering and the sciences are thinking in this direction as well. They’re not taking for granted that they’re going to be postdocs in a lab somewhere for six years and then maybe make the cut for an academic job or more likely, then wind up having to go into a research job in industry. They’re thinking about, well, I’ve put that effort into this research. What can it become? What can I do with it? So they’re showing up in MBA classes, in MBA entrepreneurship classes on force. Right. So I think there’s growth that comes from those quarters as well.
[00:42:30.240] – Yael
That’s also going to be really interesting to see over the next few years and really exciting for us as faculty.
[00:42:35.980] – John
Yeah, really true. Well, congratulations on doing so much in so little time at Rice and also in really having your hand in helping to lead and guide the initiatives at other major business schools. And thanks for joining us. Really appreciated your insights.
[00:42:56.830] – Yael
Well, thanks for having me. This is great. It’s been a great, fun conversation, and keep doing the great work.
[00:43:04.170] – John
Will do. Okay. You’ve been listening to Professor Hochberg, who is the head of the Rice University Entrepreneurship initiative. She’s also the Ralph S. O’Connor professor in entrepreneurship and finance at Rice and has been involved in entrepreneurship at the Kellogg School, at Booth at MIT, Sloan, and met Cornell Johnson, and now very involved at the Jones Graduate School of Business at Rice University in Houston where we sat down and chatted a few weeks ago, and I met Professor Hochberg. So thank you so much. And for all of you out there, if you have a business idea, I think business education would be the right place to incubate that idea, to gain support for it, to find like minded people, find your tribe who would be helping you, your mentors, your funding, and people like the professor who just lives and breathes this topic day in and day out, because you can’t get help like that anywhere else. You really can’t. So thanks for listening. This is John Byrne with Poets and Quants.