From Startup Dreams to a Cubicle LifeBy
Mike Norelli, a 2010 MBA graduate from MIT, experienced a collegiate entrepreneur's dream when an investor pledged seed capital for the startup he and a few classmates had founded to convert food waste into fuel. Just as the venture was to receive that financial boost, however, Norelli backed out to accept a job at GE Energy, whose recruiter met with him after Norelli arrived at MIT's Sloan school of Management (Sloan Full-Time MBA Profile).
"No matter what I do afterwards, I'll be in a better position—and that includes doing a startup," Norelli says of his GE experience.
Like Norelli, numerous business students are experimenting with entrepreneurship while at school. But most of those who will do something entrepreneurial in their careers—join startups or venture capital firms, found their own companies, or become early stage investors in companies—are unlikely to do so until years after they have graduated. A growing number of large public companies are trying to appeal to this group, reframing job opportunities to align entrepreneurial ambitions with corporate interests and prompting schools to make entrepreneurial students more aware of those options as they decide how to pursue careers after graduation.
In a 2011 survey of second-year entrepreneurship students at the Harvard Business School (Harvard Full-Time MBA Profile), 70 percent said they expected to wait one-to-seven years after graduation before pursuing an entrepreneurial project.
Addressing "Founders' Dilemmas,"
"The question then becomes 'What is the best way to be spending the next five years or so in preparation for that?'" says Timothy Butler, director of career-development programs at Harvard Business School.
The topic resonates strongly with students, many of whom are exploring positions at startups, consulting firms, and large companies. The students from the 2011 HBS survey were enrolled in "Founders' Dilemmas," an HBS course started in 2009 by entrepreneurship professor Noam Wasserman after he had spent a decade researching early choices founders make that tend to cause problems later.
Enrollment in the class exploded to about 250 students across four sections in 2011, up from a single section of 42 students at its debut. The course won Wasserman an HBS Faculty Teaching Award.
A 2008 study of the collegiate backgrounds of more than 650 U.S.-born tech entrepreneurs also explored how long MBA graduates wait before starting companies. In that sample, the 31 percent who held MBA degrees started companies fastest, waiting an average 13.1 years after graduation. This compares to an average wait time of 14.7 years for all masters degree holders, 16.7 years for those with bachelor's degrees, and 20.9 years for those with PhDs.
Many business schools are seeing more graduates take startup jobs after graduation. In 2010, 7 percent of HBS grads went to work at startups, up from 3 percent in 2008. Surveys of about 90 business schools found that more startups recruited MBAs for full-time positions in spring 2011 than in 2010, according to data from the MBA Career Services Council.
Startup Case Studies at Harvard
As interest in startup careers grows, schools are offering greater resources to help students consider all available career options. In Wasserman's class, for example, students examine two case studies: one of an entrepreneur who worked in a corporate environment for 25 years before starting a company and another of an MBA who turned down a job at a consulting firm to start a company right after graduation. Students examine the pros and cons of each path. "Being aware of the minuses will hopefully enable students to avoid them," Wasserman says.
Wasserman also polls his students to gauge their immediate career plans when the course begins. In 2011, 22 percent planned to take jobs at large private or public companies, 20 percent planned to join startups, 17 percent expected to enter consulting, 16 percent had plans to found a company immediately after graduation, and 12 percent planned to enter private equity.
"Some of my students who normally would have been an early hire at a startup—and on their way to becoming a founder—are showing interest in the rotational programs at large public companies," Wasserman says.
Norelli joined this type of program at GE Energy after completing studies at MIT. "They are able to get this broad base of skills that they can then see applying down the road in a startup," Wasserman adds.
At the South by Southwest annual technology and arts conference in Austin, Tex., in March—the event known for the debuts of Twitter and Foursquare—the University of Michigan's Ross School of Business (Ross Full-Time MBA Profile) sponsored a mixer for students interested in startup jobs.
GE's Drive for Entrepreneurial MBAs
GE (GE) advertised job openings at the SXSW event, part of its strategy to target potential MBA startup talent. The company has spent years honing its strategy.
Initially, a GE recruiter would visit a school such as the Stanford Graduate School of Business (Stanford Full-Time MBA Profile) and pitch student entrepreneurs. "But there wasn't much appetite for it. They would basically say 'Why don't you let us come up with the ideas and start the companies, and then you guys buy it," says Erin Dillard, GE's director of commercial development programs.
Since then, Dillard says, the company has developed a better sense of the kind of MBA entrepreneurs who are most open to their offer. The company now devotes campus trips to programs with those candidates. GE has had the most success pitching to MBAs focused on marketing and entrepreneurship, she says, and frequently hires from Cornell (Johnson Full-Time MBA Profile), Duke (Fuqua Full-Time MBA Profile), Indiana (Kelley Full-Time MBA Profile), Northwestern (Kellogg Full-Time MBA Profile), and the University of North Carolina (Kenan-Flagler Full-Time MBA Profile), among other schools.
Dillard says that this year, GE has doubled the number of MBAs it hired from entrepreneurship programs for its Experienced Commercial Leadership Program, in which Norelli chose to partake. ECLP targets MBAs with five-to-seven years of work experience and puts participants through three eight-month rotations within a GE business.
Microsoft Acquiring Entrepreneurs
Microsoft (MSFT), too, tailors its recruitment pitch to entrepreneurial MBAs. Half the candidates the company targets for openings say they hadn't previously considered applying to the software giant, say company recruiters. Microsoft's corporate development area, which was responsible for the company's $8.5 billion acquisition of Skype in May, often competes with startups and venture capital firms for talent.
"Even if they are only here for three-to-five years, that is actually a huge amount of work and return we are getting out of them," says Stacey Stovall, Microsoft's university staffing manager.
Indeed, large tech companies usually have an easier time drawing parallels between working in their smaller units and working at a startup, says Cheri Paulson, director of career development at Babson College's Olin Graduate School of Business (Olin Full-Time MBA Profile).
Sifting Unlikely Opportunities
Still, health-care, consumer-products, and financial-services companies are also willing to hire students with entrepreneurial goals and Paulson focuses on finding unexpected opportunities among them. She sorts through job listings across industries and searches for those with titles such as "market intelligence analyst" and "internal consultant"—anything that might describe a position evaluating internal strategy or identifying opportunities for new markets. These positions usually replicate the responsibilities of entrepreneurs, she says.
As the number of Wharton students looking for jobs at startups has increased, Halpern has developed new ways of identifying job opportunities for those students as the school's senior associate director of MBA career management. A big part of that effort involves tracking which startups are receiving the largest injections of venture capital, which often leads to new hires. A further strategy is to track emerging industries in search of smaller units created by—or acquisitions made—by large companies.
Many Wharton students are interested in cleantech, for example. With startup hiring scarce in that field, Halpern will often make candidates aware of parallel opportunities within the energy units of Cisco Systems (CSCO), IBM (IBM), or at the energy practice of a Houston consulting firm, for example.