In an environment of billion-dollar valuations for private companies and cloud-based software that makes start-up launches easier than ever, staying focused on academics can be challenging. Should you hit the books, or try to launch the next, great start-up when the idea and capital strike?
Over the last few years, as the economy has recovered, Garth Saloner, outgoing dean of Stanford University's Graduate School of Business, has watched the number of MBA graduates who launch ventures (in founding roles) rise to 16 percent for the class of 2015, slightly lower than the all-time high of 18 percent of graduates reached two years ago. "We've never seen that before. It's a big number," Saloner said. A decade ago that figure was in the single digits.
Of course, graduates launching start-ups is something to laud and a testament to Stanford's competitive two-year MBA program that can open a lot of doors in Silicon Valley. U.S. News & World Report ranked Stanford University's business school No. 1 for 2015, and edged out Harvard University and the University of Pennsylvania's Wharton.
On the other hand, more ventures founded out of business school also suggests students are spending a huge bulk of time creating ventures. Aspiring entrepreneurs may not be taking full advantage of lessons from professors and visiting professionals during the business school program.
"What gives me pause is when students get so engaged in the start-up itself in the second year that they devote their energy to it at the expense of their second year," said Saloner in an interview earlier this month. "That's a lost opportunity."
By the way, it's not like Stanford business school students are dropping out in droves for start-up dreams. Drop-out rates in the MBA program are nominal. The larger worry is MBA graduates who aren't preparing for the long game that is a modern career. Navigating workplaces, from multinationals to small businesses, require a variety of skills and knowledge, from accounting and finance to managing growing teams and enterprises.
"What I often see is a student who has devoted a big chunk of time to an idea that doesn't pan out," Saloner said. "Realistically most fresh start-up ideas just don't survive the rigorous tests of the marketplace," said the departing dean. He announced his resignation in September amid a lawsuit related to a contentious divorce.