Monday, December 04, 2006

Where Entrepreneurship Comes to Die

Any guesses? That's right, my favorite place in the world: Wharton.

Why the ire? I just got out of Marketing 281, a class entitled Entrepreneurial Marketing, where a couple groups presented their business plans. Let me share their gems with you...

(Side note to the groups that presented: You didn't make us sign NDAs, but I will still respect your wishes if you'd like me to remove presentation material from my blog. Email me or leave a comment. I'm only writing about your ventures to make a point, and I'd like to think that, despite having screen shots in your presentations and names for your companies, you aren't actually planning on executing your brilliant ideas.)

The first company, called Finedorms.com (they haven't launched yet, apparently), focused on providing tenants with a space to post residential openings for subletters. Ok. They dismiss craigslist as "not targeting the college market." Their presentation goes on. "Tenants looking for someone to sublet will pay a fee to post on the site." Really? And the kicker? Their financial statement. The team of 4 confidently believes that the rolling out of their site across campuses around the nation will allow them to make, by the 5th year, a whopping $70 grand. Investors, line up.

So these guys honestly believe that an increasingly tech savvy college population will shun the immensely popular craigslist and pay money (despite being cheap college kids) to the site to get their sublet ad looked at? And all this to accumulate an annual revenue that doesn't reach $70k till 5 years from now?

But the second presentation made the first look legit. Entitled eDough.com (the URL is taken, but they may be launching under a different name...), it featured an "off campus meal plan." In reality, their idea was a bank account that could be used only for food. Seriously. Their only selling point was that "parents can deposit money."

Are you kidding me? First off, after claiming that a significant portion of Penn's students orders food online, they failed to mention those same students order from Campusfood or EatNow. Not only is their entire functionality already covered by someone who has his parent's credit card linked to his EatNow or Campusfood account, but they're also completely vulnerable to the two companies implementing their product. While eDough is out doing the time-consuming stuff (negotiating deals with individual restaurants, setting up the website, etc.), all either of the two competitors has to do is implement a "bank account" function on their site to render eDough useless. And why again do college students want a way to limit what they can spend their money on...?

And Penn wonders why their precious school doesn't churn out high profile start ups. So where's the problem? In this case, part of it is apparent: the class itself is atrocious. For half a semester, I've listened to our Professor use the same Marketing 101 buzzwords in an attempt to describe what is different about getting the word out for start ups. And, for that half a semester, he's really said nothing.

For starters, our class has a textbook. A textbook on how start ups should market. Isn't the point of the class that start ups have to think outside the box? Symbolically, a start up is like antsy chameleon, jumping around, not knowing what it is or what it's really doing, always changing and evolving. No textbook can begin to cover the tenants of how the lizard should get its name out to the world, and (even if a textbook could,) especially not this one.

The problem starts pretty high up. Culturally, Wharton is a finance-hub, priding itself on producing finance drones who will go on to work 100+ hour weeks and make $100 grand+ a year. Going against the grain, following your dreams, and being different are highly discouraged (unless, of course, you're a management-drone who will do the above with 30 hours and $30k subtracted from the respective totals above).

And Wharton's culture pretty much fits in with the (l)east coast. But I aim to be constructive, and not just a whinny SOB. So what can be done?

First off, the classes need to be revamped. Don't call something Entrepreneurial Marketing if it's not. And the faculty could do with an upgrade - hiring people with credentials in entrepreneurship could go a long ways in giving class a degree of legitimacy. I mean, wouldn't you sit up and take notice if it were Josh Kopelman teaching a class about Entrepreneurial Marketing? Maybe that's a little unreasonable, but a Professor who references their own experiences in a class, especially about this subject, is far more influential than one who is constantly referencing some text. And as a whole, the classes need to focus on actual issues that face start ups, and they need to be taught by people who know what they're talking about and understand what we want from the class (that is, an oasis from Wharton's "fall into our cookie-cutter" mentality). Out with the textbooks and trite buzzwords and in with real discussion and real lessons.

Of course, this will all probably never happen. So how to solve the problem? Looks like we may have to take things into our own hands...

(Oh, and as a side note to the "drones" I referenced: Please don't take me seriously. I love you guys. And I believe you; you do love I-banking and consulting, and it's definitely been your dream since you were a kid. And you're definitely not a douche bag. Hugs and kisses.;)

34 comments:

  1. Ravi,

    May I say this is one of the best posts I have ever read. You pretty much summed up my thoughts about Wharton, and most of the other top 10 finance focused MBA programs out there.

    In regards to the second business idea....ironically its already done.

    http://www.ocdn.com

    I was close with some of the founders. Bottom line is that they are struggling for the exact reasons you mentioned...it is the same thing as having a parent give the student a credit card with some verbal guidelines.

    To those who want an MBA program that does an ok job on entrepreneurship, check out Babson College, Stanford, and North Carolina.

    But you always need to keep in mind, entrepreneurship and building a company is the farthest thing from a set process which is why it is so hard to teach.

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  2. Ravi-

    This post is a very one sided view. If you really want to make a strong argument you might want to explore some of the reasons why going to business school would be useful for an entrepreneur and then negate them. Here is an article from the DP that argues your blog post.

    http://www.dailypennsylvanian.com/media/storage/paper882/news/2006/11/28/Opinion/Cezary.Podkul.Business.School.Is.Still.Valuable-2509776.shtml?norewrite200612051711&sourcedomain=www.dailypennsylvanian.com

    Also to the last person who commented, Ravi is referring to Wharton's undergraduate program.

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  3. Hi Ravi,

    MBAs are a crap way to become an entrepreneur.

    If that's truly your goal, focus instead on building something you would actually use. The 100K or whatever it costs for yoru school would go a long way towards prototyping your product/service. Whether or not the idea takes off, you will certainly learn more. I don't think this route is taken because very few people are afraid to fail publicly. And failure doesn't look as good on a resume as an MBA.

    Having a goal of 'I want to be an entrepreneur' is the wrong way to think. Entrepreneurship is a side-effect of building and selling something. So the question should be 'do I want to build'? 'do I want to sell'?

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  4. Teaching entrepreneurship is like teaching sex. Textbooks could not help you. Just do it! Follow your dream, create a better service, change the world!

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  5. Hey guys,

    I'm loving that this post is really generating some discussion. To respond to what's been said...

    Thanks for the kind words Brian - I definitely agree. And Stanford has it great being in the heart of Silicon Valley.

    To the first anonymous poster (who sounds suspiciously like the flatmate I share a wall with...), why is it one sided? If you're saying it's only my opinion, well, you really got me there. But what specifically is so one-sided about my opinion that it renders my analysis obsolete? I'm arguing that while some aspects of B-school may be useful, the herd mentality toward I-banking and Consulting (which I admit has a powerful sway) ultimately kills the entrepreneurial spirit in most students. Furthermore, specific to Wharton, the business program as a whole does a poor job teaching and encouraging entrepreneurship. I'll stop here, but I'd love to hear from you or people with this viewpoint in general.

    To the second anonymous poster, I agree completely - entrepreneurship comes naturally, comes from within. And great point about the $100k - that's a pretty sweet seed round down the drain...

    And to Dimitar - only thing I love more than the comment is that you're from Bulgaria - thanks for being my first international commenter. And what a great way to capture and verbalize that point.:)

    Future commenters: while I enabled the anonymous feature, I'd love to know who you are. So if you can help it, don't be shy.

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  6. Ravi,

    The flaw in your argument is two-fold

    1) There are harsh realities in the world, and entrepreneurs fail more than they succeed. I speak from experience on this as I've started a number of businesses, some of which haven't worked, and some which have (including my current business.) When those failures come, unless you've been fortunate to sock away lots of money from a great exit event, what is going to tide you over until your next great business? Your saleable skills will, and an MBA certainly helps there.


    2) While nobody can teach you to be an entrepreneur, b-school can give you valuable ways of looking at the world, to identify opportunities for businesses or transactions which you may not have considered before.

    That being said, I agree with you that there should be more of a focus at Wharton on entrepreneurship. I am an MBA here, and most of my classmates are so focused on getting jobs with ibanks and consulting firms that they don't realize that they are signing away their lives to 70+/hr work weeks for someone elses benefit, and not really all that much money comparatively (If the actually calculated the hourly rate, I think most would be surprised)

    I am here building another business in the Wharton Venture Initiation program, and instigating for change in the program to get more attention on entrepreneurship. Especially since most of the BIG donations to PENN come from successful entrepreneurs, not corporate execs.

    My focus is not on more or different classes, but ways of creating more of a support culture for those who want to pursue an entrepreneurial idea.

    So my advice is to take what you need from the classes that help and squeeze every ounce out of it, then leave the rest. And if you are interested in doing something entrepreneurial while at wharton other than reading some books, send me an email, as I've got a 3rd business that's been sitting on the table for the last 6 months, simply because I don't have 8 arms to execute it along with school and my two other businesses.

    You can find me in the Wharton email directory under bibas.

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  7. I think many people miss the general point of these entrepreneurial classes. First of all, these are CLASSES, the point of a class isn't to walk out with a real working business that generates profit. You don't go to school with the intent of starting a business AT school, you go to school to learn so you can start a business later. I don't think the professors of these classes would ever claim to guarantee that students will walk out with winning ideas as that is a function of the students, not the professors. Even your beloved Kopelman could not guarantee that.

    The point of the class is to make you go through the motions of coming up with a business plan, whether or not it actually works. It teaches students to start thinking about a product as a business rather than just a good idea. It forces students to look at how profitable a concept is, how to break into the market, etc. Whether or not the idea is a good one at the end of the day is immaterial. All that matters is that next time the student has a new idea, he/she now knows how to evaluate it and decide whether or not its worth implementing and how to go about implementing it.

    Secondly, as a Stanford undergrad, just the fact that you even have classes that undergrads can take that get kids thinking about how to come up with a business plan and how to market a new idea is a big step. While Stanford's Graduate School of Business may provide this education, at the undergrad level, Wharton is definitely many steps ahead.

    I think sometimes, when you have been exposed to the fast paced Silicon Valley world, when you have studied different business plans since you were 10 year old, you forget that for many students out there, this is the first time they've even seen a business plan. Just writing one is a big deal, let alone the expectation that it has to be a successful company. In that sense, these classes are effective by exposing them to the world of start ups.

    Finally, I don't see how there is anyway a class can teach you to have a successful idea. Out of all the startups out there, less than 10 percent make it. Out of that other 90 percent many are great ideas that would have worked but had bad luck. A class can't make you be creative, that is something you have to do on your own...unless you would enjoy paying 40k a year for a prof to tell you to sit down in a room and think until you have a good idea.

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  8. Ravi,

    I'm in the MBA program at the University of Texas, and focusing partially on finance and entrepreneurship. I agree 100% with your sentiments in general (I'll reserve my opinion of Wharton, as I attended another prestigious school up in New Jersey). While we study specific concepts of starting a business, it is a common understanding that there are things that simply cannot be taught in the classroom. I think we benefit from professors here who have started, sold, collapsed, etc. businesses on their own. Many of our classes are driven solely from student written business plans, and then built upon. It's an interesting concept, trying to get an accredited degree but also make it worth something. keep up the good work - and check out my blog if you get a chance...

    http://southpawtiger.blogspot.com/

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  9. http://etl.stanford.edu/

    Until something changes, you can watch the lectures from that online.

    Love,
    Brian

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  10. Ravi,

    The situation you described is pretty typical for the elite schools. Even in something not as prestigious, the caliber of ideas you presented are common. Most of this reminds me of the dot-com days where anyone could sell anything, even if it was the most absurd idea in the world. Regardless if it was a college student or person who quit their day job, the "quality" of entrepreneurs is still lacking.

    You also reference East v. West coast. From having experience raising funding before, the differences are diametrical, as you can imagine. On the West, ideas are more welcomed; the other coast tends to like something more tangible with less inherent risk. It is something you could never write about or read because it would offend the VC community, but it is a known secret that where you are and seek funding should be contingent on the idea you are trying to sell.

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  11. Lindsay Eierman12/09/2006 12:59 PM

    I agree with you 100% about the drones around here. I am currently a Wharton freshman, but am actually transferring into the college for a multitude of reasons. Whartonites are of a certain breed...that's for sure. I feel like every time I use the Wharton name around here, I have to apologize and explain "i'm not like the rest...i'm a caring, compassionate southern girl!"

    anyways, good luck with trying to find a better entrepreneurial course.

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  12. Ravi,

    I can empathise with you. Many of the points have already been covered by others here. Let me come to a different point.

    Look at the course title.. M.B.A..How can one be a Master of something ( say, Swimming ) unless he gets to do it atleast once ? ( dive right into the pool ).

    You are conceding too much when you say there is nothing for Entrepreneurship in Wharton courses...meaning there is something for I-Bankers /consultants. NOOOOO...Their graduates actually wreak a havoc across I-Banks...they come back with their fusillade of buzz but fare poorly when it comes to finding solutions for even simple problems. The Mckinsey guys suggest a break-up when they advise a conglomerate and drive them to consolidate when they find a string of businesses. That's all. You can check that out. I am an I-Banker from India and they are all over the place doing more of the same here. I can vouch for it.

    Haven't you seen the deals botched up by MBAs ( Ex-Wharton / Harvard )? Remember Arthur Andersen & Enron combo - teemed with these people...? Look at the disaster merger put together by these guys between Mitchelle Madison & Whitman Hart - when two $1 billion firms merged and returned less than $1.5 billion collectively.

    Most of them are just sons-of-rich-dads out with their mediocre brains and snobbish outlook. And a Wharton degree at best insulates them from further probe into their questionable intelligence and despicable attitudes - a terrible combination for doom.

    Use that $80k for seed round and chances are that you can come up with a potential Google - may be you'll have to head westwards.

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  13. 1) Ravi's comments are generally true. I took entrepreneurial marketing last fall with Di Bennedetto who was a certified joke.

    2) This is and Wharton UNDERGRAD class, not and MBA one that he is referring to and the one that he took. While the MBA program is worthless, this was not an MBA (although I'm sure they have something similar).

    3) The professor wasn't even a full-time Wharton professor. He's a Temple professor, who teaches a half-semester course here, who happens to suck big time.

    4) I don't think the class was about the business so much as about the business plans, so while the business ideas did suck hard core, the goal was to think about how to market it.

    5) I have had similar situations in management classes here with no-experience, ivory tower jokes who know nothing about management but only about theory and other gayness.

    6) The only legit degree here is Finance, although I am a management double concentrator just to make my life a little easier. But I have found a lot of the management profs utterly clueless. No wonder they are professors.

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  14. Great post. Helps to ratify my decision not to apply to Wharton.

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  15. Wharton undergrad is simply the best place to learn finance, management, financial accounting, etc.

    While you claim the entrepreurship classes aren't that good, you forget that you learn other valuable business skills and views that will be useful to you as a future entrepreneur. You can't truly teach entrepreneurship, as you pointed out, but you can learn the other valuable business curriculm that will benefit you in the long-run.

    Why go to business school if you can run with an idea? The answer: While the school can never engender an orginal idea, you are learning the rest that will help support the idea.

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  16. Can I have my 5 minutes back? Looks like you chose the wrong Undergrad class to take.

    Speaking of Josh Kopelman, he's often sighted sitting in on useless Wharton MBA classes.

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  17. haha. Hate to burst the bubble but 90% of business plans from the smart people who didn't go to business school are also ridiculous. Nothing surprising here.

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  18. Very true. The academic dorks don't get it. Your professor sounds like a typical professor who lacks real world experience. It is a shame that many Universities have this problem and don't know how to teach Entrepreneurship.

    Check out http://entrepreneurship.gcu.edu/

    They are doing a great job teaching E-ship so far.

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  19. Ravi;s post ain't one-sided. The title clearly states "Where Entrepreneurship comes to die" means a place where a place intended for teaching entrepreneurship isn't actually helping people be better entrepreneurs.

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