Many students in business school enter with the idea of getting a respectable job at a large company, such as a top consulting firm, a tech firm, or a bank. Most of these students secretly, or not so secretly, harbor dreams of starting their own business in a few years or at least going to work for a small but ambitious start-up.
Traditionally, Master of Business Administration programs have catered to short term plans of corporate success by equipping students with knowledge, through academic lectures by experts, engaging students to think like businessmen. However, with the tech bubble in the late 1990s and the current tech boom stretching from the later 2000s, more and more students are entering business school with no intention of entering into the corporate world, but instead, jumping out on their own and becoming entrepreneurs right out of business school.
Entrepreneurship is no easy task. The difficulties in becoming an entrepreneur are discussed not only in business school, but have recently been highlighted in popular culture as well. One of the most popular shows on television, ABC’s Shark Tank, now in its 6th season, features entrepreneurs pitching new ideas to venture capitalists who can choose to take a stake in the company. Time after time, the entrepreneur’s pitch falls short because of a logistical failure on the entrepreneur’s part, presentation problems or lack of business foresight. Many of the most polished presenters on the show are business school graduates from esteemed programs, but even they are not always on point.
Entrepreneurship Track at HEC
A businessperson traditionally gains an education in entrepreneurship through a slow series of successes and failures in the real world and not the classroom. A professor at HEC’s School of Management in Paris, one of the top business schools in Europe (ranked #1 in France), has constructed a novel approach to address this problem and prepare business school students for life as an entrepreneur. A prepared entrepreneur is more likely to be successful if he or she has an idea of what hurdles he or she will face on the way to success. In order to enable future entrepreneurs around the world, Professor Michel Safars, a successful serial entrepreneur who has started several companies in cities including San Francisco, New York, Boston and Paris, implemented a hybrid program that features a core of “learning by doing” coupled with lectures by both academics and current practitioners.
At its inception, the program relied on two pillars, the curriculum and a dedicated workspace for students to develop entrepreneurial ideas. To address the first issue, Professor Safars determined that the study of entrepreneurship was a subject that he wanted to redesign academically. To create the program for HEC Paris, Professor Safars visited the top business schools in the world, traveling to the East and West Coast of the United States as well as Scandinavia and Israel to observe how entrepreneurship was taught in different regions. Already enabled with his years of experience, Professor Safars decided that his program at HEC would be focused on “learning by doing,” where students would not only be educated in the classroom by academics and professionals, but also on the field learning what it takes to build a successful business from the ground up.
Additionally, because of his insight into the importance of technology transfer departments from a role at INRIA, the French Institute for Research and Computer Science and Automation, Professor Safars wanted to ensure a close relationship with the technology transfer departments (TTO) at Université Paris Saclay. HEC Paris has a distinct advantage of being located in one of the premiere innovation clusters in the world at Université Paris Saclay. Each year, research scientists apply for a competition for funding for applications of their research where they present their ideas. Professor Safars, with Pierre Gohar, the Director of Innovation and Industrial Relation at Université Paris Saclay, molded the entrepreneurship program to work alongside this competition, where the best of the best of the Université Paris Saclay competition are paired with HEC MBA entrepreneurship students to help the scientists understand how to build their business, get funding for their projects and to enable the students to get real life experience. Since the program’s inception, however, the entrepreneurship program associate partnerships has grown – the Fall 2014 institutions included not only scientists from Paris-Saclay, but also a foundation associated with world-renowned cancer doctor Professor David Khayat and Open Compute, an association launched by Facebook, Intel and others to open source the clusters computers design.
After the curriculum was set, Professor Safars needed a “dedicated place to focus on learning by doing.” Thanks to donors led by Pascal Cagni, a Director at Kingfischer Plc and Independent Director at Banque Transatlantique, this space came to fruition late in 2012, in the form of the eLab, which stands for the “Entrepreneurship Laboratory”, a space in the HEC School of Management that acts as a classroom, a workspace, and increasingly, a venue for young entrepreneurs to showcase their works. The eLab is equipped with advanced video conferencing technology, dry erase paint walls that are often covered in students’ ideas and large couches. It has the ethos of a startup company in Silicon Valley or Brooklyn. Throughout the day and weekends, participants in the entrepreneurship program meet at the eLab to work on school projects or to develop their own entrepreneurial ventures. The eLab, although earmarked only for entrepreneurship students, is one of three workspaces called “connectors”, including “Le 503” and “Le PROTO204”, developed in the Université Paris Saclay to foster the nurturing of innovation.
With the curriculum and the workspace in place, the Entrepreneurship track was ready to launch with a program that consisted of both traditional business school lectures as well as field learning.
At the beginning of the semester, students take a heavy course load, considered the most intense track at HEC. These courses are meant to prepare students for interaction with the scientists and technology transfer professionals. The core course, Entrepreneurship Backbone, features Professor Safars and other guest speakers who have ascended to the top of the corporate world. They discuss methodologies that have worked in their previous ventures and others that did not. Speakers included French entrepreneurs, investors and a highly successful entrepreneur from the United States that studied under Professor Safars at HEC and has appeared on the cover of the New York Times and Time magazines. A focus of this course is the adaptation of “soft skills,” or personal interaction and discovery of motivation, a skill that most entrepreneurs have to learn through interaction.
Another unique course that is taught early is Investing in Science and Technology, a course that covers how Venture Capitalists approach new investments and how dilution of a company can take place and leave an entrepreneur with a small return on his initial investment. During this course, several current Venture Capitalists working for both large VC firms as well as in house at top tech firms come in and discuss their strategies and what goes on in their minds when they choose to invest.
The remainder of the courses helps students to learn hard skills that are necessary for entrepreneurship such as intellectual property protection, entrepreneurial finance and technical product development, taught by international professors.
Real World Experience
What is truly unique about the Entrepreneurship Track is the real life experience of bringing an associate scientists’ idea to market. Early in the semester, students are divided into groups of three based on complementary skills and experiences. Each student takes on the role of the CEO, CFO, or CTO and from the first week of October until mid-December, each student has to work about 20 hours a week on developing the project. Companies in Fall 2014 included personalized cancer diagnostics, smart heart stents, and geolocation technology to name a few. The students’ work involved speaking with the scientists to understand the scope of their vision, observing competitors, reviewing government filings, speaking with attorneys or anything else the students may consider that would improve the project, much like an entrepreneur would do with his or her own project. One of the most important duties that the students had to undertake was to contact potential clients and Venture Capitalists to get them interested in the idea. This required full understanding of the scope of the invention and the competitors in the field. By going out into the field, students can understand what each metric measured in an entrepreneurial venture actually means, whether it be supply, operations, competition or barriers to entry.
What makes this learning by doing even more unique is that the students have a potential incentive available at the end of the program. Professor Safars requires that each of the institutional participants consider that if the students produce a good work product at the end of the program, the company must be willing to allocate some shares in the company to students that would be interested in continuing to work for the company.
At the end of two and a half grueling months of research, phone calls and interviews, the students conclude their entrepreneurial education by giving a presentation on their new company to a panel of CEOs, executives, Venture Capitalists, journalists, scientists and academics acting as potential investors in an HEC auditorium. The acting CEO of the team gives the one minute elevator pitch followed by a concise 10 minute PowerPoint presentation detailing the aspirations of the company, the growth potential, present and future competitors and most importantly, why this company would be a good investment.
The judges in attendance, including Head of M&A of a $15 billion company and Venture Capitalist who flew in from New York City, one of the directors of the largest private wealth management companies in France, and a former Pfizer executive, observed the seven teams give presentations this past December 2014. As a testament to the education and the hard work they put in, no team exceeded their time limit or went under by more than 30 seconds. After the presentations, the panel of judges was given the opportunity to cross-examine the students to determine the depth of their understanding. At the finish of the presentations, one judge commented that the presentations were of a higher quality than presentations he had seen at a renowned worldwide entrepreneurship competition. The teams prepared full business plans, Go To Market direct strategies and business models to propose to the entrepreneurs.
This type of hybrid lecture and learning by doing looks to be the forefront of a new age of MBA education. It combines the necessary academic learning with skills that the students would not even get through high level internships. The emergence of this type of education bodes well for the future of entrepreneurship.