Startup Institutes Will Disrupt Business Schools and the MBA as we know it

I am fascinated with startup institutes. They are academic entrepreneurs themselves and teach entrepreneurship in and entrepreneurial way. A lot of e- there.

I was led to the emerging startup institute trend by one of my most dynamic, intelligent and outgoing students, Jess Williamson, currently of Techstars in London. For those of you who know here, you are gloating now at the fact that you know her. For those of you who don’t, let’s just say I could write an entire blog post on just how awesome and cool she is, and actually to think of it at some point I will do such a profile, with her approval of course. Jess took my Digital Marketplace (design entrepreneurship) course that I taught in the School of Arts, Culture and Environment at the University of Edinburgh in 2008. From there she zoomed in her startup career, working first for our Informatics Ventures organization and then for Techstars in Cambridge. She also co-founded Startup Café in Edinburgh, which provided news about the local start-up scene, in addition to helping us grow the Entrepreneurship Club at the University of Edinburgh, and her outgoing personality was ever so present and important.

So I remained interested in her career progress, and after a couple of years of not talking to her in-person, I thought it was about time to have the “MBA” talk with her. After all, my alma mater, Cornell University, was starting up Cornell NYC Tech http://tech.cornell.edu/ and I thought Jess would be a perfect match for the new program.  So I contacted her and asked if she had applied to a program yet; what was happening, it’s about time, listen to your father, and so forth.

Jesse’s response wasn’t quite as pointed as Dave McClure’s opinions on the MBA degree, but she basically got back to me promptly and dismissed them for a startup professional like herself, and pointed out that the Startup Institute (and some others) were the way to go, and that I should look into these programs. And so I did.

What I found was exactly a prescription for what was needed, what was missing from the MBA or any other postgraduate experience for start-up entrepreneurs or professionals or those that want to work for a start-up: A mix of business and technical training and development over an intensive one year (or shorter) period.  So many times I’ve had conversations with MBA entrepreneur classmates seeking that technical training.

One of the new startup institutes is, well, the Startup Institute. Its a for-profit venture. Cool. The curriculum http://startupinstitute.com/curriculum is built around the four themes of product development, sales and account management, technical marketing, and web development. Students learn skills in building strategic partnerships as well as CSS and HTML 5, for example. Apparently there are companies beating at the Startup institute’s doors for its graduates. That’s all good.

Currently the Startup Institute has schools in New York City, Boston, Chicago, London and Berlin.  They will expand further. There are more of these startup institutes in the pipeline as well. They play an important role in any eco system, and will increasingly do so as they train the entrepreneurs and their teams of the future. They may even expand into new product lines, just as any growth business does.

I don’t know what the statistics are for startup professionals or entrepreneurs entering MBA programs now. I was one of them years ago, but we had a small group of perhaps 12 in our class of 240 at Cornell that has such intentions, including Mike Masnick who founded Techdirt www.techdirt.com. This student base must be increasing. I do know that MBA programs are trying to accommodate the startup entrepreneurs and wannajoins, and many are moving slow as molasses in this regard. If you are interested, take a look at the curriculum above from the Startup Institute. How many MBA programs offer such a mix taught by practitioners — entrepreneurs and their comrades? I bet not many at all. For example, take a look at the curriculum of Cornell’s MBA in NYC http://tech.cornell.edu/experience/degree-programs/#johnson-mba and then compare it to the Startup Institute’s of NYC http://startupinstitute.com/curriculum. Is the assumption that students coming into the Cornell MBA will have these skills (in design and coding) and understanding of technology already? I am not criticizing, just pointing out the differences. Nevermind the brand but as an entrepreneur, which would you rather have?  As an potential employee of a tech startup, which would be more valuable to you in the short term? Long term?  The startup institutes offer learning from people who have been there, done it, and many of them are doing it. Practical stuff.

There is no doubt that this emerging institutes will steal market share from the business schools. The question is, how much?  It will be a long time before MBA programs are totally displaced. There will always be a market for high-end analytical skills and development in business education. But a bit of the traditional business school’s value-add has just been eroded by competition. How long will it be until startup institutes or their likeness invade the marketing departments of business schools as marketing shifts to the new era? What about finance? or even organizational behavior for that matter?  Will the damage just be limited to a small audience portion of current MBA programs and is this just the usual Valley backlash on the MBA degree* as we’ve heard from the likes of Don Valentine http://techcrunch.com/2013/09/11/vc-titans-tom-perkins-and-don-valentine-articulate-what-makes-a-good-vc/ for years and more recently Dave McClure http://hippoland.tumblr.com/post/47028538520/why-dave-mcclure-is-wrong-about-mbas-in-startups  “I’d rather spend a $100K to be a case study than spend $100K to read case studies” says the master of 500. Vivek Wadha actually discourages startups from hiring MBAs  http://blogs.wsj.com/accelerators/2013/04/01/vivek-wadhwa-why-i-no-longer-advise-startups-to-hire-m-b-a-s/

I’m not in the middle of MBA program strategy sessions but it sure would be interesting to be a fly on the wall just now.  What will it take in terms of innovation for MBA programs to continue to turn out the CEOs of tomorrow? Should they just focus on the traditional pillars of finance and consulting and forget about those geeky startup dudes and dudettes? (“Consolidate and leverage core strengths” or some such in MBA-speak”)

*If you are deciding whether or not to get the MBA as a startup entrepreneur, you might want to read Steve Blank’s article here http://quibb.com/links/should-i-get-an-m-b-a/view which is quite thoughtful in its approach to answering the question “Should I get an MBA”.

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