How do universities teach entrepreneurship?
The most popular way is to place the writing of a business plan at the center of the curriculum. Almost every school has a business plan competition at the end of the semester.
Yet most real-life entrepreneurs do not put much stock in business plans. They think they’re overrated. Recent studies show that VCs don’t care what is in a business plan; the content of plans has little to do with which businesses get funded.
So there’s a gap between how schools teach entrepreneurship and how entrepreneurship is being practiced in the real world. Students graduate with an entrepreneurship major and when they start their first business they think, “Step one is write a business plan!”
To be sure, business plans have their merits. Writing a business plan forces you to think about all the fundamentals of your business idea.
But even entrepreneurship professors would probably agree that the best way to learn about how to start a business is to start a business. If you’re a college sophomore interested in running your own company, start businesses while in school and learn by doing it. This is what they do at Babson and Bentley.
Alas not all students can get real businesses off the ground while tending to their studies. So what’s the next best thing?
Start micro-businesses. Start affiliate businesses. Sell stuff on eBay. Do web design. Write and sell e-books. Heck, write a blog and try to gain huge readership. A micro-business, which requires less than full-time work and could be operated out of a dorm room, probably would teach more than taking a class on entrepreneurship and writing a business plan.
Finally, you might just consider not studying entrepreneurship in school. Wait till you’re out of school and start your business then. Meanwhile, study topics (philosophy?) for which the classroom has a comparative advantage over self-education and real-world learning. Business and entrepreneurship are probably near the bottom of the list in terms of teachability in the classroom.
One of the best pieces of business advice I ever got was from an accountant. Yes, I had a business plan, which I proudly showed her, and I was about to start writing a procedures manual for my business.
To that she said, “Martha, you need to stop *writing* about business and start *doing* it.
Great post. One example of effective teaching of entrepreneur was a class I took during my last semester at UC Berkeley.
I was taking a software engineering course — it’s one-project class. Each student team was asked to identify, spec, and then build a prototype of one software application. The professor also cross-taught the class with the business school, and paired one MBA student with each project team. So, basically, we built a business plan and we created an actual prototype.
This was 12 years ago. But, even today, I’m still close to most people on my project team. The MBA student went on to become a serial entrepreneur, and one of my teammate has built a company from one person to several thousands.
I agree strongly about the disconnect; however, the fact that business plans are largely irrelevant in the real world does not mean they are a bad teaching device. To write a decent business plan you have to (a) write – at which many entrepreneurs are poor; (b) sell your ideas – obviously critical; (c) think through some of the major strategic and tactical issues associated with the business. Knowing, for example, that you eventually will need to figure out a sales plan is important stuff – many rookie mistakes can be avoided if you learn these things. In fact, I might claim that school is the only place where a complete business plan is somewhat useful!
A BP is just a first cut, the messenger. It portrays a scenario as the writer sees it, a testimony to the writer’s insightfulness, her level of probity and diligence. The gaffe is in believing it to be the way the business will eventually shape up. So why shoot the messenger?
As a successful entrepreneur several times over, I’m a firm believer in not wasting your time with a business undergrad of any sort. Do a classic liberal arts, engineering, computer science, learn how to think and get to work. Sure, getting a job with a liberal arts is tougher than with an undergrad business degree, but you ought to be more interested in something than the few months you spend looking for a job. After four to six years, do your MBA or grad work in something at the best school you can get in.
While I’m not exactly an expert, I’d say there shouldn’t be such a thing as an entrepreneurship major. Classes, sure. But a whole major dedicated to classroom learning of running businesses?
It’s a silly thing to try to teach in a classroom format. Similar to what the first comment says, it’s a doing kind of thing, not a studying kind of thing.
Basically, what Dan Erwin said. I’m guessing that since you go to a liberal arts school, you’re fairly sympathetic to such a line of thought.
Ben–this is a great point because entrepreneurship is one of those things you can only learn by doing. However, I think business plans can be a great learning device, if taught properly. I’m not talking about the plans that have 43 sections and cover minutiae that is obviously impossible to know before you start. I’m talking about the 1 pagers, the ones written on napkins (like IBM’s business plan which is housed at HBS). I wish courses would cover more of that because that’s where I see the magic.
The book that I saw do this well was: How to Write a Great Business Plan by William A. Sahlman (http://harvardbusiness.org/search/write%2520business%2520plan/0).
Also, another shortcut to writing out an entire business plan could be: Will It Fly by Thomas McKnight, which includes an Excel scorecard to evaluate your idea (kind of like a plan, just a pre-plan stage IMHO) (http://www.prenhall.com/willitfly/)
@lcpelaez
Great post, Ben. There’s a great blog dedicated to personal freedom through the creation of an unconventional “micro-business.” Check it out:
http://chrisguillebeau.com/3×5/
Thanks for your post! Business plans are useful for us to have a direction but it’s really up to us if we are ready to take the risk and start running the business. We can really never tell unless we “START” doing it.
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Patricia
http://dataentryjob-s.com
Great post! if your looking to start your own business then the simple matter is you need a great business plan…
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