Of late, there has been a lot of talk about making entrepreneurs out of MBAs. Fundamentally, this idea seems flawed, as there is a mismatch between the objectives of an MBA and a would-be entrepreneur. While a management student is typically trying to mitigate the risk of unemployment by joining an MBA programme, an entrepreneur is, by definition, a risk-taker. I wonder how a risk-averse MBA can become a risk-taking entrepreneur.
People often talk about Stanford, MIT and Harvard, which have produced a large number of entrepreneurs. The analogy is inappropriate as Indian institutions are very different from Western Universities. Primarily Western universities attract mature students, who come with clear objectives when they join a programme. The level of peer learning and motivation in these universities cannot be compared with any Indian institution.
Our students are raw and mainly look for any job and/or an MBA degree. I said ‘and/or an MBA degree’ because there are many colleges that attract students to their MBA programmes despite their inability to find jobs for them. They cater to a large number of students who attend these colleges just for a degree. I wonder how we can convince these students to take up entrepreneurship.
Why compare unequal entities?
Second, Western universities offering courses in entrepreneurship attract and retain outstanding faculty, many of whom are themselves entrepreneurs or have worked in large corporates. Quite a few run their own consulting firms, in addition to teaching, and bring industry/consulting experience into the classroom by way of cases and examples.
Faculty members in our colleges are, by and large, ill-equipped to impart education on entrepreneurship, as they have little practical experience in the field. As in medical education, where every teacher also runs a clinic or practice in a hospital, only those who consult or run enterprises can really teach entrepreneurship.
Third, universities in the West have built an ecosystem that facilitates entrepreneurship. For example, a number of firms in Silicon Valley were incubated in Stanford which, in turn, serves as a field lab for students and faculty. Faculty members serve as consultants to these firms and the latter look up to the academics and students for new ideas that can be commercialised.
Angel investors and venture capitalists throng the University to fund novel projects and ideas. The government too offers Stanford a number of research projects. It is such an ecosystem that attracts a number of students who want to become techno entrepreneurs. Students who hold patents join Stanford MBA programme to commercialise their invention.
IIT-Madras has set up a techno park where some interaction can happen between students/faculty and companies located in the park. Some leading private universities in India too tried the idea, but the lure of capitation and tuition fees ensured that the space allocated for techno parks has been given away for additional classrooms. Most educational institutions have not even understood the idea of a techno park. We have to go a long way when it comes to entrepreneurship.
Who is an entrepreneur?
According to Thoreau, “Entrepreneurs are society’s rejects, instead of becoming hobos, criminals or professors, they start their own business.” Typically, the college dropouts and job rejects are the ones who take up entrepreneurship as the last resort. Quite often, people take up entrepreneurship for survival. They typically start as one-man outfits and a few lucky ones grow to become large organisations. Though we celebrate the few who make it really big, very few studies highlight the plight of the failed entrepreneurs.
“Some are eccentrics; some painfully correct non-conformists; some are fat, some are lean; some are warriors, some relaxed; some drink quite heavily, others abstain; some have great charm or warmth; some have no more personality than a frozen mackerel,” said Peter Drucker. There is no well-laid path to entrepreneurship, nor can entrepreneurs be put in pigeon-holes.
Can entrepreneurship be taught?
There are many who believe that entrepreneurship is a subject for the heart, whereas an MBA is for the mind. MBA is about analysis, planning and control. The students are taught to analyse facts and make rational decisions.
As these students learn more and more about analytical tools, they acquire the analysis-paralysis syndrome. Even those who entered the programme with a clear idea of starting a new enterprise end up in confusion. Entrepreneurship is all about intuition and matters of the heart, whereas an MBA is concerned largely with the intellect and the mind.
Intuition vs intellect
Does this mean an entrepreneur does not need the analytical tools an MBA student is equipped with? No, any entrepreneur should have an idea about working capital, taxation, supply chain and marketing tools. Many entrepreneurs lament that they would have saved a lot of money had they had learned these tools before jumping into entrepreneurship.
But the moot question is if they would have taken up entrepreneurship as their vocation if they had done an MBA. So, the trick lies in imparting business management skills without taking away their passion for something.
What is the way out?
To start with, we may consider delinking MBA and entrepreneurship. The moment a person gets an MBA degree, he/she gets attracted to employment rather than entrepreneurship. We could start exclusive entrepreneurship programmes.
This cannot be done by all and sundry. Like in medical education, only those institutes that are attached to an industrial park, or similar facility, should be allowed to start entrepreneurship programmes. The teachers should themselves be active or failed entrepreneurs. For entrepreneurship to thrive, the entire ecosystem should be in place. There must be polytechnics, research laboratories, techno-parks and lending institutions that facilitate new ventures.
Admission to these programmes should not be based on educational qualifications but on the entrepreneurial aptitude the candidates exhibit. After all, it seems that dropouts (school or college) have a better propensity to start new enterprises. We should develop tests and interview methods that are capable of assessing the potential of a candidate for entrepreneurship.
The main objective of these programmes should be to impart business knowledge, to the extent that is needed for an entrepreneur. They should be given practical inputs on markets, supply chain and finance. They should apply these concepts to the new venture ideas they have and prepare a complete feasibility report by the end of the programme.
This can be achieved in no more than six months. A part-time programme can possibly extend up to one year. We should keep in mind that we are imparting business skills to entrepreneurs and not making entrepreneurs out of business graduates.