Is Startup Culture Becoming Too Pronounced at Business School?

The first concerns about the startup culture in evidence at business schools are starting to be heard, amid rising student interest in joining or founding startups directly after graduating.

“We’re not the graduate school of entrepreneurship,” Garth Saloner, dean of Stanford GSB until the end of the current academic year, told the Wall Street Journal (WSJ), adding that students intent on founding startups might be better placed at a business incubator rather than a business school.

Stanford GSB doesn’t want students to put all their eggs in one basket

This might seem surprising for a school from which 16% of MBAs launched startups directly after graduating this year, yet the same WSJ report shows that faculty and staff at Stanford GSB are united in their concern that some students might be neglecting the full business school experience by being too focused on the allure of startup culture.

Firstly, Stanford GSB’s career center says that it is trying to make sure students appreciate the full extent of opportunities available to them, after noting that on-campus recruiting events held by established firms aren’t drumming up the same level of interest they once were. Furthermore, Leah Edwards, an MBA alumna of Stanford GSB who now runs its Center for Entrepreneurial Studies, says that she encourages students to seek summer internship positions with existing companies even if they feel convinced that the startup culture and life is the one for them.

MIT conference considers growth of graduates joining startups

The extent of startup culture’s current appeal was also examined at an event held last week at MIT, at which the proportion of graduates joining startups is said to have grown from 1.5% to 15-20% in the space of a decade.

At the MIT Startup Ecosystem Conference, however, the focus fell on what established firms might be missing out on when talented graduates are taking their innovative ideas to small and freshly launched companies instead of to leading players in, say, the technology or pharmaceutical industries.

One point made was that many startups will still require industry partners and may also be open to acquisition further down the line, so John Chisholm, head of MIT’s alumni association, outlined the advantages in building links to emerging talents through business school initiatives, such as mentorship schemes.   

The importance of such initiatives seems just as high from the student perspective, especially for those with resolute ambitions to launch an enterprise of their own. As much as schools may want to caution their charges against leaping into startup culture when failure is a very distinct and real possibility, they certainly wouldn’t want to be accused of ‘dampening’ - as the dean of UC Berkeley’s Haas School has put it - the passion and carpe diem spirit displayed by students.

In many ways, this puts more pressure on a business school, or university for that matter. At the MIT conference, professor and associate dean of innovation Vladimir Bulović pointed out that the shift in innovation away from industry and to startups and small companies also makes the training and preparation provided during a degree program all the more important.