Bootstrapping entrepreneurs might think the hallowed halls of academia are for those avoiding the cut and thrust of the private sector. After all, an MBA is for those looking to skip a few rungs on that creaky old corporate ladder. Right? Wrong. Business schools around the country are now focused on supporting and developing your entrepreneurial streak. More than ever before, higher learning is one ticket to start-up success. Jodie O’Keeffe reports.
There’s a lot to do when you start a business. You need to come up with your idea, research your market, research your competition (not necessarily in that order), prepare a business plan, protect your intellectual property, get funding, find an office, set it up, hire staff, manage them, and that’s before you have offered anything to the market. You’re way too busy to go to school.
However, if you skimp on the fundamentals of starting a business, you might soon be busy looking for a new job. Sure, the ‘fly by the seat of your pants’ start-up is an exciting ride. While you can always learn from your mistakes, the most confident entrepreneur is one who knows what to expect. And if you know what to expect, you can be prepared. If you’re prepared, you save those most precious business resources: time and money.
Melissa Anderson is an entrepreneur and, of course, she’s impatient.
After completing a Bachelor’s Degree in International Business, she hot-footed it to China, spending several years developing and running businesses and establishing networks. “I was a self-taught entrepreneur. My undergraduate degree took me to a certain level, but not the practical application of starting a business. Being self-taught, I didn’t have any mentors and I did things by gut instinct. This worked for me, but I lacked confidence that I was doing the right thing at any point in time,” she says.
Although Anderson struggles with impatience “on an hourly basis”, she decided to take time out to come back to Australia and do an MBA at the University of Queensland Business School.
“I saw the MBA as a way of making sure I had the best or optimal framework. Also, I had a weakness in corporate finance and that’s really the backbone if you’re serious about doing business,” she says.
“When I went back to do the MBA, everyone said to me, ‘You won’t finish it, you’ll get bored, you’ll move beyond it.’ That actually gave me the incentive to stick with it. I did find it challenging to go back, but at the same time it was so rich because I had years of experience in business and so much to reflect on as I moved through the .”
Anderson’s favourite subject was Advanced Entrepreneurship, where students take a real life business idea to the next level. “UQ Business School’s MBA includes a subject in Entrepreneurship as a prerequisite to the very exciting Advanced Entrepreneurship subject, introduced in 2005,” says Professor Tim Brailsford, head of UQ Business School. “Students enrolling in Advanced Entrepreneurship can choose to work on their own projects or select from a range of high-quality business ideas provided by UniQuest, the University of Queensland’s main commercialisation company,” he says.
Anderson had an idea ready to develop and treated the Advanced Entrepreneurship subject as a business incubator. “The subject is tailored to entrepreneurs – so those with short attention spans – but with enough theory to provide a framework to lean on. I had the opportunity to pitch my proposal to the adjunct professors, experienced entrepreneurs with successful start-ups, and they provided constant feedback. It gave me the confidence to pitch to a number of private equity investors, off-the-cuff over coffee. It was fantastic,” she says.
While Anderson received offers for immediate investment in her new venture, she took the advice of her UQ Business School mentors and decided on a slower funding model, allowing her to retain higher equity. She is set to launch her venture in innovative children’s education early next year. “The MBA taught me to do things in a measured fashion and not just rush in like a bull at a gate, as I used to. That way you get far better results, with much less pain.”
CULTIVATING CULTURAL CHANGE
According to Kevin Hindle, Professor of Entrepreneurship at Swinburne University of Technology and co-author of the Global Entrepreneurship Monitor (GEM) Report, Melissa Anderson is just the kind of entrepreneur Australia needs – an educated one.
In the latest GEM report, “An Overview of Australian Entrepreneurial Activity 2005: Implications for Entrepreneurship Researchers, Policy Makers and Business Owners,” early-stage business owners in middle-income countries, such as Argentina, Brazil and Thailand, were found to be more highly educated than in high-income countries like Australia. According to the report, the implications of this scenario are clear: “If our business proprietors are relatively under-educated, our percentage of truly innovative, high-growth ventures will be less and our global competitiveness will fall over time.”
Hindle is passionate about affecting cultural change in Australia, so that becoming an entrepreneur is as valid and respected a childhood ambition as any other profession or trade.
“If people were more educated about entrepreneurship, about what it offers them as a career and how to do it properly, it could offset that propensity not to do it. The more you know about entrepreneurship, the more you understand the risks, the less likely you are to fear it or play the safe option. Hopefully, that can address some of the imbalance and get more people with tertiary qualifications willing to have a go at creating a new venture,” says Hindle.
If you thought you were too far gone in your career to consider becoming an entrepreneur, think again. Hindle believes entrepreneurial education is valid for everyone, as an awareness-raising exercise, but the tools of the trade are best learnt at post-graduate level.
“People should have a solid level of business experience before they study something as difficult as starting a new venture. In schools we should be educating our children about the value of following this path: that creating a career by building your own job rather than getting one from somebody else is desirable, rewarding and achievable. But focused, post-graduate entrepreneurship education is the most valuable.”
THE FOCUS IS FOCUS
In the mid-1980s, some senior engineering academics at Swinburne decided that the area of ‘focused, post-graduate entrepreneurship education’ was an unfilled market niche and established the Master of Entrepreneurship and Innovation (MEI).
Professor David Hayward, Dean of Swinburne’s Faculty of Business and Enterprise, says the philosophy of the course founders still rings true.
“They always knew they would be dealing with a different market: people that had substantial business experience and a great drive to succeed, but they weren’t necessarily motivated by money. The motivation was around seeing an opportunity and being able to realise it,” says Hayward. Now, around 250 students are enrolled in the MEI and, while the faculty also offers an MBA program, Hayward says the MEI students are typically more driven, livelier and more creative than the average MBA student.
“They defi ne themselves first and foremost as entrepreneurs, they’re committed to the cause and they’re very proud to have that as their identity,” he says. “They’re all hyperactive; they can’t keep still. Most of them are working on their own businesses, as well as studying. They’ll have successes and failures and they’ll just keep trying,” he says.
The entrepreneurial bug is spreading. Last year Hayward’s staff offered a subject called New Venture Creation as an undergraduate elective to the entire university. The first intake amounted to 20 students.
“This year we’ve got 120. These are engineers, IT people, students from all disciplines. It just indicates that the area has this growth momentum behind it,” he says. While the Swinburne MEI is unique in Australia, MBA programs are becoming increasingly entrepreneurial, teaching more than how to turn the handle of a mature business in a mature market.
The Queensland University of Technology Brisbane Graduate School of Business (BGSB) is at the forefront of this movement, running a flexible MBA degree that mandates entrepreneurship, creative problem solving and innovation management as core units.
When Professor Evan Douglas took over as Head of the BGSB nine years ago he surveyed students, academics, employers and industry about which areas of business were most important to learn in an MBA program. The response included the usual areas of finance, law and economics, but entrepreneurship and the ‘softer’ disciplines, like human resources and leadership, also rated highly and Douglas restructured the course accordingly.
“We took the top 16 specialisations and structured the course around those. But there were too many to fit into the timeframe, so we cut the academic year into six teaching periods. That provides the flexibility of six entry points and six exit points each year,” says Douglas.
The shorter teaching periods enable students to do a wider range of core units, and more electives. Importantly for the entrepreneur, they can also scale their workload up or down according to the demands of off-campus life, and choose electives to suit their needs at any particular point in time. Electives are heavy on new venture development and innovation.
“We went from a ‘just in case’ model to a ‘just in time’ model. Instead of learning all the business disciplines just in case you need them, you can choose the subjects which are really useful now, when you need them,” says Douglas.
ENTREPRENEURIAL MBA: OXYMORON?
Of course, higher learning in entrepreneurship does not guarantee start-up success. Depending where you sit on the nature versus nurture issue regarding entrepreneurs, you may believe that further education increases risk aversion.
Australian expat Larry Marshall was an established Silicon Valley entrepreneur when he completed a six-week executive MBA, just to cover the basics. He believes entrepreneurs are born that way and that the entrepreneur’s passion is complemented by the MBA graduate’s knowledge. “It’s ironic because a lot of MBAs come out thinking they’re going to run a start-up. But the selection criteria for an entrepreneur… it’s a kind of self-selection and it has nothing to do with degrees or anything else, it’s more about the fire in your belly to take an idea and turn it into a business. Having said that you definitely need to understand the fundamentals: economics, profit and loss, balance sheet, cash flow statement and so on,” says Marshall.
“You’ll hire MBAs, but you don’t necessarily need to be one and, in many cases, I think it’s an impediment. In general, they don’t do so well in start-ups because they tend to overanalyse and can’t see the wood for the trees.”
However, even if you’re not a natural born innovator, you can benefit from thinking like one. Your genetic make-up, the mortgage and the two kids might restrict you from being the next Richard Branson, but that doesn’t stop you from learning to be more enterprising. The most mature, established organisations can benefit from giving their employees an entrepreneurial bent.
Queensland-based energy company Energex is a state government-owned corporation, with 3,300 employees and an 85-year history of power distribution. The company has put over 100 employees through the QUT BGSB MBA program, to promote a more enterprising organisational culture.
“Given that we’re a business anchored in engineering, the MBA challenges our people to think commercially,” says Peter Weaver, General Manager of Customer Services and himself a QUT MBA graduate.
“They could go on not questioning – we are a mature business, this is how we’ve done it for 85 years, why should we change it? By educating staff to think like entrepreneurs, they’re not going to become another Crazy John, but they’re evaluating business opportunities. The entrepreneurial training triggers a lot more commerciality in what is a fairly staid, engineering-based business.”
STEPPING OVER THE LINE
Far from the stereotype of academia being disconnected from the so-called real world, today’s business courses are blurring the line between theory and practice. Seasoned entrepreneurs moonlight as adjunct professors, ‘school projects’ morph into real live businesses and MBA courses are brimming with new venture subjects.
Whether you’re burning with ambition to start a new venture, or want to shake up your current job with some enterprising ideas, Australian business schools offer plenty of options to feed your inner-entrepreneur.
Sure, you can still fly by the seat of your pants: but with some entrepreneurial higher learning, you have the map and compass to reach your ultimate destination. Buckle up and enjoy the ride!
To download the GMAA Star Rating Assesment for Australian MBA courses, 2005, click here.