Startups by the MBAs - The Entrepreneurial Stroke!

Working for a startup has always been an attractive option for the MBA graduates. Despite the inherent risks involved, the fresh ventures provide flexible work arrangements, a great degree of autonomy, high reward prospects, and an incomparable learning experience. Indeed, all this cumulate to varied leadership opportunities packed with a real impact.

As the instincts would have it, business graduates eventually do prefer coming up with their own startup rather than simply working for someone else's. From the Wharton founders of an eyewear company Warby Parker to the two Harvard ladies behind Birchbox, more and more successful newbie now boast of a top business school graduate as a co-founder or as a member of its top executive board. According to a report, the number of fresh MBA graduates turned entrepreneurs in the US increased by more than 50% between 2010 and 2011, as compared to the earlier years. Of all the companies founded between 2003 & 2013 and worth over $1 billion, one-third had an MBA as a co-founder.

Let us consider why this shift is taking place:

Changing focus of business schools: Some studies suggest that the startups are scouting for more MBA talent than the established companies are. In a survey of 80 schools, 53% reported increased campus recruitment by the fresh companies. As a result, top business schools are enhancing their focus from traditional disciplines like finance and marketing to entrepreneurship and technology as well. The Schools are setting up new academic concentrations, enterprise incubators, and grants. This change largely reflects the evolving global market. The business schools now play an increasingly important role as talent feeders into the startup spaces as well, not just the corporate skyscrapers.

The lure of 'making it big:' With the media hype and expanded capital flow around the recent Silicon Valley legends like Facebook and Uber, building a disruptive startup with millions in funding and strong exit prospects has become the new 'it.' Despite the grueling reality of a staggering 80-90% startups failing within their first three years in operation, fresh MBA graduates are willing to take the plunge. They are game for endless working hours and Ramen dinners to create the next life-changing application, platform, product, or technology.

Well-oiled alumni links: It is much easier for an MBA graduate to find well-heeled investors through their extensive alumni networks, which the prestigious schools invest millions in building and maintaining. The alumni provide critical connections in key industries. Their helping hand also asserts the credibility of a new entrepreneur in the market. The support of such networks is quite possibly the biggest advantage a business graduate has over an average entrepreneur.

Interestingly, some prominent entrepreneurs and venture capitalists believe that an MBA degree is unnecessary for or is even detrimental to a successful entrepreneurial career. On the other hand, more and more management talent is being absorbed into the startup ecosystem. These driven troops are selling their lives beyond just the corporate investment dollars and trading markets. They are here for the power of new ideas and innovative products. In turn, all this deliverable may help make the world a better place.