Entrepreneurship In Business Schools
Maria |
December 5, 2023

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.

Episode Transcript

[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

Right.

 

[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
  1. 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.

 

The Economist Dis on MBAs: Is the Degree Still Worth It?
Business School News | General | P&Q Podcast "Business Casual"
Entrepreneurship In Business Schools
Maria |
December 5, 2023

[00:00:00] John Byrne: Well hello everyone, this is John Byrne with Poets and Quants, welcome to Business Casual, our weekly podcast with my co-hosts Maria Wich-Vila and Caroline Diarte Edwards. Today we have a special guest, Heidi Hillis from Fortuna Admissions. She is based in Australia, is a senior expert coach for Fortuna, and has three degrees, all from Stanford, a BA in English literature, that’s my degree, an MA in Russian studies, and an MBA from the Graduate School of Business. And we have Heidi here to discuss some really fascinating research. Here’s what Fortuna did. They dug into the last Two class profiles of the Stanford Graduate School of Business.

That’s the class of ‘23 and the class of ‘24. They looked up all these folks on LinkedIn to identify a little bit more about their backgrounds, including their former employers and their places of undergraduate education to come up with an incredible analysis. Heidi, welcome.

[00:00:46] Heidi Hillis: Thank you. I’m glad to be here.

[00:00:48] John Byrne: Heidi, what is, what are the big takeaways from your deep dive discovery?

[00:00:54] Heidi Hillis: It’s hard to know even where to start. I think there’s a quite a few interesting kind of trends that we’ve seen that have taken place over the years. We were mentioning before the call that traditionally there hadn’t been, 10 years ago, if you’d looked, you wouldn’t have seen so many tech companies represented, but now there’s a big presence of tech companies who are feeding a lot of these MBA programs in Stanford in particular.

I think that the thing that was really interesting was, looking, not just at where the companies that were feeding the students, the applicants to Stanford. When they were working there, when they were applying, but actually the paths that they took prior to their current job.

So how many people were working, if you look at McKinsey, for example, or Bain and BCG, those are obviously companies that feed a lot of applicants to the program, but we found 20%, which seemed to be normal of, the class came from consulting, but if you actually look into the numbers in their background, You would see that actually 37 percent of these two classes had worked at McKinsey sometime prior, or actually in consulting, so it was, it’s The kind of the patterns that are behind, what you would normally see in terms of what Stanford tells us.

So you get a sense of the paths that people have taken. And so that’s something that was really interesting to see.

[00:02:16] John Byrne: Absolutely. And of course, this is this analysis goes so far beyond what any applicant would learn by simply looking at the class profile that the school up because, this level of detail is never available to people.

[00:02:33] Heidi Hillis: No, and yeah, for example, you could see that, Stanford will say that they have around, each year around 50 percent of applicants are international, which is a great statistic and gives you lots of hope if you are an international student. But when you dig into the numbers, you actually understand that.

75 percent of the people who get into Stanford actually went to a U. S. University. So even if you’re international, it does have does seem to have kind of an advantage of having been educated in the U. S. That seems to be something that they look for. However, I think. The concentration of universities in the U.

S. that are feeding to Stanford is something also that, if you’re looking at it, you might find a little bit dis, disconcerting. There’s a few programs that are really, obviously the top. Programs as you would expect places like Harvard, Stanford, Yale, the Ivies but if you look at the international universities very diverse from all over the world, really lots of people from different places, which is also really interesting.

[00:03:38] John Byrne: Yeah I tell you, one of the things that struck me in the data is how consistent it is. 10 years ago, we did the same exercise at Stanford and a bunch of other. Schools from Harvard and Dartmouth and Columbia and talk and a few others and back 10 years ago, we found that 25. 2 percent of the class of 2013 were from Ivy League colleges.

And the Ivy League 8 schools, not including Stanford. And if you included Stanford, it would have been 32. 6%. So now, let’s move forward to your data. And in 23, 30. 7 percent went to Ivy League schools, even above the 25. 2. And in 24, 27. 9 percent went to Ivy League schools. So it looks like Stanford has gotten even a little bit more elitist than it was.

Yeah,

[00:04:41] Heidi Hillis: It’s, it is it’s what the data says, right? Obviously, this is a sample. We have 80 percent of the two classes. So we don’t know where those other people went. And that might skew the data a little bit in another direction. But it is, if you look at there’s 15 schools, that include the Ivy’s and then you have UC Berkeley and obviously Stanford that really are contributing, 49 percent of the class of 23, 47. 3 percent of the class of 24. So that is a pretty heavy concentration and But, if you actually look into the data, you see a lot of people also, each of these is actually an individual story.

You see a lot of people who come from other schools as well. So it’s not like you have to give up hope if you come from a different school. I see a lot of individual stories that, from the whole range of U. S. schools that really are feeding into Stanford. So I think what the data doesn’t also tell you, unfortunately, is how many of these Of people from these backgrounds are actually applying.

So

[00:05:39] John Byrne: good point.

[00:05:40] Heidi Hillis: It’s it’s hard to know. And sometimes I think people this is. A path that a lot of people who go to these schools plan to take from the very beginning. So I would see, it would be interesting to know that I don’t know that we will ever find that out. But, um, that’s something to keep in mind as well.

[00:05:56] John Byrne: Yeah. And that’s a fair point. Because how reflective are these results of the applicant pool reflective of an elitist attitude probably a combination of if I had to guess, but, it is what it is, and these institutions obviously are great filters, so you come from McKinsey, Bain, BCG, and you go to Harvard or Stanford or Penn, and you pass through a fine filter, and it makes you less of a admissions risk than if you went to, frankly, the University of Kentucky and worked for a company that no one knows of.

That’s just the reality of elite MBA admissions, right?

[00:06:40] Heidi Hillis: Yeah. And so you will see that the people who are not going, you’ll see a lot of the people who you would, the profiles that you would expect, the Harvard undergrad that then goes to Goldman that then was working at a PE firm.

That’s a really typical profile that you’ll see. But you’ll also see some really, unique and interesting ones, which I think, Okay. Helps you understand that if you don’t have that path, you also have a real chance at these schools, and maybe even more of a chance, again, not knowing, how many of those Goldman P.

E. Harvard grads are applying. So I’m thinking of the guy that I saw who he went to UPenn undergrad, studied engineering, started out a kind of pretty typical path working in private equity, but then made a big pivot to work for go to Poland where he was working in a real estate investment firm and the head coach of the Polish lacrosse team.

So you have really interesting profiles like that, that you can see that. aren’t necessarily taking that typical path. And sometimes that really does help you stand out.

[00:07:42] John Byrne: True. Maria, what surprised you most about the data?

[00:07:48] Maria Wich-Vila: Wow. I think we already covered, the, one of the biggest ones was the number, the percentage of people who would had some sort of either their undergraduate or graduate education within the United States.

Intuitively, I had felt that was true. And sometimes when I try to, give some honest, tough love to applicants from certain countries, and they’ll say, oh, but Maria, I think you’re being a little too pessimistic. After all, X percent of the applicants at these schools are international, and Y percent are from a certain geography internationally.

I’ll say yes, but that doesn’t mean that they’re all Solely from that area. A lot of them are, do have significant international educational experiences. I think another, speaking of the international piece the percentage of people who had significant international work experience as well was something else that really jumped out at me.

Because it would signal to me that Stanford really does value this global perspective both within probably its domestic applicants and also its international applicants. So I thought that was also a really interesting piece of data that jumped out at me.

[00:08:52] John Byrne: Now remind me what percentage was that?

[00:08:56] Heidi Hillis: People who are international

[00:08:58] John Byrne: who have had international work experience.

[00:09:01] Heidi Hillis: I think it was 30%.

[00:09:02] Caroline Diarte Edwards: Yeah. Yeah. Yeah, it’s pretty

[00:09:04] John Byrne: impressive.

[00:09:04] Caroline Diarte Edwards: 30%, which I was thrilled to see. As well as coming from in Seattle and Europe. Obviously the international schools put a heavy emphasis on international experience and I hadn’t fully appreciated that. A school like Stanford would also.

really value that to the same extent. And it’s great to see that candidates are making the effort to get outside of the U. S. and get international experience because I think you gain so much from that exposure. And you bring more to the classroom if you’ve got that experience. I know that both Maria and Heidi.

I’ve worked outside of the home countries as well. Pre MBA and I think that you just have so much more to contribute to the whole experience. And it was great to see that 30%.

[00:09:50] John Byrne: What else struck you, Caroline?

[00:09:53] Caroline Diarte Edwards: We talked about the concentration of academic institutions, and I was also surprised about the concentration in employers.

So while there is a very long list of employers where the students have worked pre MBA when you dig into the career paths that they’ve taken there is some interesting concentration. Heidi had noted that the reports that There are 26 companies that account for nearly one third of the class in terms of where they were working right before Stanford.

But when you look at their whole career history, those same 26 companies represent over 60 percent of the class. So that is, yeah, that’s quite extraordinary that so many of the class have experience of working at quite a short list of companies.

[00:10:46] Heidi Hillis: I think that’s reflective of, if you really think about it, you have a lot of these companies.

You’re talking about the Goldmans and the Morgan Stanley and McKinsey that have really large programs that recruit out of undergrad that are really training grounds for. A lot of people that then on to do, work in industry or go on to work for in finance in particular, a lot of people starting out at some of these bulge bracket banks and then going into.

Private equity or smaller firms. So the diversity within finance in terms of where they were working prior to MBA is quite large compared to consulting because there just aren’t as many consulting firms, but a lot of people in financing, a lot of different firms, but they, a lot of them really do start out in these training programs, these analyst programs that are so big and popular.

[00:11:34] John Byrne: Yeah, true. And looking back, I did this exercise as well. The feeder companies to Stanford 10 years ago in the class of 2023, 22. 8 percent from McKinsey, Bain, BCG, and your data, 22. 5 percent work there. Incredible consistency over a 10 year period. When you look at the top six employers 10 years ago, they were McKinsey, BCG, Bain, Goldman, Morgan Stanley, and JP.

Morgan Chase. They accounted alone for 34 percent of all the students in the class of 20, 2013 at Stanford. In your data for 23 and 24 they account for 29. 8%, just a few percentage points less. So remarkable consistency. And I think you’re right, Heidi, this is a function of the fact that these firms bring in a lot of people who are analysts and actually expect them after 3 to 5 years to go to a top MBA school.

So there’s a good number of them in the applicant pool to choose from and let’s face it, they’re terrific candidates.

[00:12:46] Heidi Hillis: Yeah. I think another pool of really terrific candidates that you see, and I don’t know what the 2013 data was saying, but is the US military, which is really, I think, again, something that I felt having worked with lots of military candidates myself, understand that, Yeah, intuitively, I would have expected, but to see it in the data is actually really interesting.

You just see Stanford in particular, I think, is really looking for leadership potential, and it’s so hard to show that as an analyst, as a consultant, but as in the military, these people have such incredible leadership experience that it really helps them to stand out.

[00:13:23] John Byrne: Yeah. And let’s tell people what the data shows.

How many out of us military academies,

[00:13:28] Heidi Hillis: In all in total, we had, 20 over the two years. So that’s in the two classes that we found. So that’s, a pretty large number. And they come from all the different academies, right? So you’ll find them from different, not academies, in the army, navy and the marines.

So you’ll see that. And you also see quite a few, in the data we’ll, we see a lot from the Israeli military as well, but that’s actually a little bit difficult to because every Israeli does go into the military. So it’s they have that in their background. Any Israeli candidate would have Israeli military background as well, but again, that’s.

Place that people can really highlight their leadership. So you had eight people from who had been, who were Israeli and obviously had military experience where they were able to demonstrate significant impact and leadership prior to MBA.

[00:14:18] John Byrne: Yeah. In fact, 10 years ago, roughly 2%. of the class went to either West Point or the U.

S. Naval Academy. Good number of people actually from the military. Maria, any other observations?

[00:14:34] Maria Wich-Vila: Yeah, I was also surprised at the fact that within those top employers And when we look at the tech companies, it was Google and Facebook and Meta with a pretty large showing. Google was actually the fourth largest employer after the MBBs and, but then, I was expecting there to be an equal distribution amongst those famous large cap technology companies.

So I, I would have expected even representation amongst Google, Meta, Microsoft, Apple, Nvidia, Amazon, et cetera. And yet. Apple and Amazon only had one or two people each versus Google at 25. So I thought that was really fascinating and it makes me wonder if perhaps it’s a function of maybe Google and Meta might give their younger talent more opportunities to lead impactful projects, perhaps.

I’m just guessing here, but maybe Apple and Amazon perhaps are more hierarchical. And maybe don’t give their younger talent so many opportunities, but I was really surprised by that. I would have expected a much more even distribution amongst the those famous those famous tech companies.

[00:15:40] John Byrne: Yeah. You’re right. And I crunched the numbers on the percentages and Google took three and a half percent of the two classes and that’s better than Goldman, Morgan Stanley, JP Morgan Chase. Facebook had 2. 7 percent and Microsoft at 1. 5, and I was shocked at Amazon because, Amazon is widely known as the largest single recruiter of MBAs in the past five years.

At one point, they were recruiting a thousand MBAs a year, but in, in one sense, maybe Amazon quite doesn’t really have the prestige. For Stanford MBAs who might rather work elsewhere, I think that might be is, you look at the employment reports at a lot of the other schools and Amazon is number one at a number of schools and very low percentage of people from Amazon going to Stanford.

We don’t know, of course, how many. Leaving Stanford and going back to Amazon, but it can’t be that many.

[00:16:41] Heidi Hillis: I wonder if there’s something about just a proximity effect here. You have the plate, like the meta and Google just being so close to Stanford, maybe it just, attracts more people applying because they.

They’re almost on campus and maybe, just being Amazon all over the world and different places could be not attracting as many. I don’t know.

[00:17:03] John Byrne: Yeah, true. The other thing, the analysis shows, and this is what you also gather from the more public class profile is really the remarkable diversity of talent that a school like Stanford can attract year after year.

It is, it blows you away, really. The quality and the diversity of people despite the concentration of undergraduate degree holders or company employers, it’s it’s really mind boggling, isn’t it?

[00:17:33] Heidi Hillis: Yeah, they come from everywhere and really interesting paths and even the people I think that, have those kind of typical paths, you see a lot of diversity within them as well.

So I think, even if you’re coming from a Goldman or a McKinsey having lived in another country or gone to done a fellowship abroad or running a non profit on the side. These things are actually what helped them to stand out. But you do see some really interesting, I think, profiles, too, of people who’ve just done, you get a sense of what it would be like to be in the Stanford classroom.

People from really unique and different backgrounds. People who come from all different countries and lawyers, doctors people who have run, nonprofits in developing countries people running large programs for places like Heineken or Amazon too. But, it’s a real diversity of backgrounds.

[00:18:27] John Byrne: Now, Heidi, I wonder if one is an applicant. Is this discouraging to read and here’s why if I’m not from Harvard, Stanford, Penn, Columbia, Brown, Cornell, Dartmouth, and if I didn’t work for McKinsey, Bain, BCG, Goldman, Google am I at a disadvantage and should I even try? Some people look at the data and come away with that conclusion.

[00:18:52] Heidi Hillis: I think it’s a reality check for a lot of people. I think it’s just, it’s really, it just helps people understand, what it, the difficulty of this, why it’s so competitive, but I think that there is, again, behind the kind of the percentages, you do look at these individual profiles and I would get, I would actually take a lot of hope from it if I were looking, as an applicant, because especially if you are.

Maybe a little bit more of a big fish or small fish in a bigger pond or big fish in a smaller pond you go to Rice or you go to Purdue or, and you do really well, those are the people who, they’re definitely looking for that diversity of background as well as the international.

I think that’s really neat. think that, instead of looking at the data and saying, why not, why I shouldn’t even apply, it’s why not me look at these other profiles of people who have taken really unique paths that that do get in. So I think it is actually a Kind of a mix of both, it is a reality check for a lot of people, but it’s actually, there is so much diversity in the data as well.

I think also one thing that we haven’t really covered is about is just the prevalence of social impact in, that’s really taken hold of the class. I don’t, again, going back to your 2013 analysis, I’m not sure how easy it was to tell that, but a lot of you can see reflected in the both the types of organizations people are working for, but also their titles and the kinds of work that they’re doing that that there’s a huge 40 percent of the class of the two classes had some kind of social impact in their background.

Whether that’s, running their own nonprofit on the side or volunteering or. Running trans transformational kind of programs within companies that are, either in finance or consulting or in industry. That’s a big trend. I think that people can take heart from as well.

So if you’re working if you feel like you’re in an organization where you’re not getting the leadership that you. can use to highlight your potential for Stanford, that’s definitely a place you can go is working for in volunteer capacity for a non profit or on the board of a of some kind of foundation.

Those are the kinds of places that you can highlight your potential

[00:21:00] John Byrne: true. And I know we have a overrepresented part of every applicant pool at an elite business school are software engineers from India. And I wonder in your analysis, how many of them did you find from like the IITs?

[00:21:18] Heidi Hillis: That’s a good question. The IITs, it was again, it was one of these you have about 50 percent of classes internet, so 25 percent of the class. was educated outside of the US. The IITs are going to be up there. Let’s see from India, 2. 1 percent of the class came from India. So probably, I don’t know offhand exactly how many of those were IITs, but

[00:21:43] John Byrne: I’ve had a lot of them.

[00:21:45] Heidi Hillis: Yeah, probably a lot of them. Although I think, that’s the other thing is that people who come, to work with me from India, they feel like if they haven’t gone to IIT, then that’s going to be a disadvantage. But I think, you’ll find that there are, there’s representation of other universities as well.

Definitely.

[00:22:00] Caroline Diarte Edwards: Yeah, I was just looking at the list of undergrad institutions. And for example, you’ve got Osmania University from Hyderabad. So it is not, it’s not all IIT. Okay.

[00:22:12] John Byrne: Yeah, exactly. And Caroline, 1 of the things about the institutions that are really represented here and that I don’t really see unless I missed it.

I didn’t see a Cambridge or an Oxford. Two of the best five universities in the world. And I wonder if that’s just a function of fewer people in the applicant pool or what? What do you think that could be about?

[00:22:36] Caroline Diarte Edwards: I had a look through the uk Institutions and you have got cambridge in there.

I think I also noticed. Bristol university there are a few different universities. So i’m aston university, which is not it’s not on a par with Oxford or Cambridge. So I think that speaks to the point that Heidi made that you don’t have to have been to an elite school to get into Stanford.

Aston is a good solid university, nothing wrong with Aston, but it’s not it’s not one of the top UK universities. So there’s definitely some interesting variety in the educational backgrounds of the students going to Stanford. And

[00:23:16] John Byrne: then, yeah, it is if you’re a big fish in a small pond, like Afton, you’ll you could still stand out in the pool.

[00:23:26] Heidi Hillis: Absolutely. There’s a lot of really interesting background, you have look hard on blue and you have Miami University and some really smaller universities abroad. I think. Again, it’s really, if you look at that, it does give you hope because it’s really what you do afterwards and if you, obviously, if you come from one of these schools, you probably want to be in the top, 5 percent of the graduating class, you want to show that you have the GPA that can support an academic background that they feel comfortable that you’ll be able to compete academically, but, and maybe that’s what you’re Offset by the, the GMA or the scores, you don’t know, we don’t have those on here.

But, um, the path post university really becomes much more important in those cases. What you’ve done since then where you’ve, how you’ve risen from starting at a entry level position to, running a division or heading a country group or something like that.

[00:24:21] John Byrne: And as far as Cordon Bleu goes, every good business program needs a Cordon Bleu, for God’s sake, right?

You want to eat well at those NBA parties, don’t you?

[00:24:32] Heidi Hillis: Absolutely.

[00:24:35] John Byrne: Maria, I’m sure that was true at Harvard.

[00:24:38] Maria Wich-Vila: I wasn’t the one doing the cooking but I certainly, I was certainly a member of the wine and cuisine society where I happily participated in the eating and consuming a part of that.

But to, to the point that we were just recently talking about. regarding being a big fish in a small pond. Not only have I seen it personally with applicants that I’ve worked with who did not attend these elite universities, but even many years ago, I attended a, an admissions conference where Kirsten Moss, who was the former head of admissions at Stanford, she actually told stories about how they’ve accepted people who even attended community college.

But within the context of that community college, they had really moved mountains. And she said that one of the things that they look for is, Within the context and the opportunities that you’ve been given, how much impact have you had? So maybe you don’t have an opportunity to go to Yale or MIT or IIT for your undergraduate, but whatever opportunity you have been given, have you grabbed that opportunity and really made the most of it and really driven change?

So she specifically called out, I believe, I believe there were two students that year at the GSB who had both started their educations, their higher educations at community college. Anything is possible. It really is about finding the people who, wherever they go, they jump in and make an impact.

[00:25:55] Heidi Hillis: Yeah, I think that to that point, I think it can almost be a more difficult if you’ve gone to Harvard and then worked at one of these, gone on one of these paths because we know that there’s, that’s an overrepresented pool in the applicant pool to stand out among those to have had that, that pedigree sometimes can be a disadvantage, right?

If you haven’t done as much as you should have with that, or if you started at that high level to show that level of progress over the course of your career is actually a little bit more difficult. Okay. And coming from a community college and rising to, a country level manager in some places is actually puts you at a significant advantage, I would say.

[00:26:31] Maria Wich-Vila: Because it’s hard for those people, it’s hard for those people to stand out, but also I think some of them go on autopilot, right? I think some people are on this kind of achievement, elite achievement treadmill, where they’re not even really thinking about what do I want to do with my life?

They’re always reaching for whatever that next, what’s the best college to go to? It’s Harvard Princeton. Yeah. Okay. Now that I’m here, what’s the best employer to work for? It’s McKinsey, Bain, BCG and without actually perhaps stopping to think about what is my passion? What impact do I want to make in the world?

And so I feel sometimes those autopilot candidates, I feel a little bit bad for them because they’re doing everything quote unquote and yet sometimes when you speak with them, that passion just isn’t there. And I do think that may ultimately harm them in the very, very elite business school.

Admissions because business schools want people who are passionate because at the end of the day, in order to do hard things, you’re going to need passion at some point to get you through those low periods. And so I think that’s something business schools look for. And I do think that sometimes these.

These kind of autopilot candidates might sometimes be at a disadvantage.

[00:27:29] Heidi Hillis: Yeah, I think that, to that point look in the data, when you look at it, you see so many people who’ve gone to McKinsey, Bain, Weasley, or Goldman, but then there’s a, you see a lot of success for people who’ve actually pivoted.

So those pivots that are post The second or third job really do show you that, if you’re if you get a candidate who’s coming from, still at McKinsey, okay, that’s fine. They have to be the top 5 percent of McKinsey, like they have to be going to get so many McKinsey applicants that the only the, you can look at the data in a couple ways.

One is, oh, my God, they took 12 people from McKinsey and the others. Oh, my God, they only took 12 people from McKinsey, right? That’s So if you want to be one of those 12, you have to be the top 12 in the world, right? Whereas if you’ve gone to McKinsey and then done an externship at a health care startup and then moved on to be a product manager at for health at Google, that kind of a path is definitely showing a little bit more, maybe risk taking, maybe ability to follow your passions.

So I think that. When I see candidates who come to me, for example, and they’re like, not thinking about applying now, but maybe in a year or two, I say, look for an externship, maybe think about pivoting out of one of these places and looking for some operational experience.

And because you see in the data that works.

[00:28:42] Maria Wich-Vila: And they’re doing themselves a service not only in terms of enhancing their admissions chances, but even just in terms of determining, what do I want to do with my career? If I do eventually want to go into industry, what functional role do I want to have?

What industry do I want to work in? So it’s, it actually benefits them in the long term to do that as well, even if they don’t go to business school. I think those secondments and externships and second job, post consulting jobs are extremely valuable. Totally agree with you.

[00:29:06] Caroline Diarte Edwards: And I’m sure they also bring more to the classroom as well.

I would think that’s also why Stanford is selecting some of those candidates, because not only have they worked at McKinsey, but they’ve also led a non profit in Africa or worked in private equity or whatever it is. So they have much more breadth that they can bring to the classroom. And I think that It’s seen as a very valuable contribution

[00:29:29] John Byrne: in Heidi.

Did you see that? The majority of the candidates to examined actually did work in more than one place, right?

[00:29:37] Heidi Hillis: Yes, most of them did. There were very few that, you see working at one place. And I would say that those are people that would have really risen through the ranks.

Someone who’s worked at Walmart and become, started in, I don’t know, in one state, but then to become a regional manager and things like that really are going to onto a global role. The people who have stayed at one place really have shown significant career progression within that.

And then the other people I think you do see a lot of movement. The big. The most typical would be from investment banking to private equity and then you do find in finance, there’s a little bit less kind of movement into other industries. You see a lot of people staying within finance, but within finance.

Yeah. Yeah. The other industries, especially consulting or other, tech, people are really moving into other places and it’s becoming, it is a little bit difficult. We have these categories that we’ve talked about, for example, healthcare, but it’s hard to categorize some of these companies.

Are they healthcare? Are they tech? There’s a lot of overlap. And so everything’s a little bit of tech in something nowadays. So whether it’s finance and fintech or education and ed tech or health care and health tech, these are all merging and combining. It’s hard to categorize them.

[00:30:53] John Byrne: So looking at the data here I wonder if you’ve seen your old classmates in the sense that these new people are very much like the people you went to school with at Stanford. I

[00:31:05] Heidi Hillis: put this out and it’s really interesting to a lot of my classmates downloaded the report and read it. And a lot of them came back and said, oh, boy, I would never get in now.

It’s these people are super impressive. I think that you see a lot of. It’s just become more and more competitive. And I think that with more information and more people every year applying, it is becoming really difficult. I think that you do see a lot of, I am encouraged by the diversity part of it that you see still Stanford.

I feel like they do take risks on some really interesting profiles and candidates that maybe some other schools are less likely to do. And so that’s what does give me. A lot of hope when I get some kind of really nontraditional candidate who wants to, their dream school is Stanford. I feel like, I say all the time, there’s a 6 percent chance.

You’re going to get in, but there’s 100 percent chance. You won’t get in if you don’t apply. So you’ve got to, you got to give it a go. And that’s, the attitude that we take to it.

[00:32:04] John Byrne: Indeed. So for all of you out there read Heidi’s article on our site, it’s called who gets in and why exclusive research.

Into Stanford GSB and I’ll tell you one conclusion I have about this is that, man, if you really want to get into Stanford, you need a Sherpa, and and Heidi would be a great Sherpa for you because the, just the profiles of these folks, where they’ve been, what they’ve done, what they’ve accomplished in their early lives is so remarkable that To compete against, in this pool for a spot in the class you need every possible advantage you can get.

And and having an expert guide you through this trip probably would be a really big advantage. So Heidi, thank you for sharing your insights with us and the research, the very cool research.

[00:33:01] Heidi Hillis: Thank you

[00:33:03] John Byrne: and for all of you out there. Good luck. And if you want to go to Stanford, you got to check out this report.

Okay. It will inspire you to up your game, even if you are from Harvard, Stanford, Wharton, or wherever McKinsey, Bain, BCG, Goldman, Google, you want to look at this report and you want to really think about. What it will really take to get in. I think it will inspire you, motivate you to really put your best foot forward.

Thanks for listening. This is John Byrne with Poets& Quants.

Maria

New around here? I’m an HBS graduate and a proud member (and former Board Member) of AIGAC. I considered opening a high-end boutique admissions consulting firm, but I wanted to make high-quality admissions advice accessible to all, so I “scaled myself” by creating ApplicantLab. ApplicantLab provides the SAME advice as high-end consultants at a much more affordable price. Read our rave reviews on GMATClub, and check out our free trial (no credit card required) today!