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The mbaMission Podcast
Ep 63 | Does an Entrepreneur Need an MBA?
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In today's episode of the mbaMission podcast, we're tackling a question that we're hearing more and more often these days: can business school really prepare you to be an entrepreneur? Harold Simansky and Jeremy Shinewald discuss their own post-MBA experiences as entrepreneurs, and whether the skills they developed in business school are necessary for aspiring founders. If you're dreaming of building your own venture, or want to understand how business school can shape a startup journey, this episode is for you.
00:00 Welcome to the mbaMission podcast
02:34 Modern entrepreneurship
06:00 Entrepreneurship through acquisition
09:18 Can you teach entrepreneurship?
16:30 What entrepreneurship resources do business schools offers
18:41 When is the right time to start a business?
25:29 Benefits of an MBA for entrepreneurs
28:36 Best business schools for entrepreneurship
32:19 Buying a company
35:50 Do you need an MBA if you're already an entrepreneur?
43:58 The benefit of alumni networks
Read Malcolm Gladwell's New Yorker article "The Sure Thing" here:
https://www.newyorker.com/magazine/2010/01/18/the-sure-thing
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Book your FREE 30-minute MBA admissions consultation with Harold or another one of our experienced MBA admissions consultants by filling out this form.
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Can you teach entrepreneurship? Can you sort of make somebody more risk seeking? I'm not sure. Being an entrepreneur is the worst of all jobs except for everything else. With it comes a lot of pressure, unpredictability, mouths to feed. Business school teaches you that ideas and a business are fundamentally different things. If you are an entrepreneur and you're applying business school, you definitely have to make a very clear case for why you want to be there.
Welcome back to the NBA Mission Podcast, your go-to resource for everything NBA admissions and beyond. Today's topic is a big one and a question we hear all the time. Can business school really prepare you to be an entrepreneur? Today, Jeremy Shinwald and I will talk to you about our own adventures after we both got our MBAs, about the companies we built, what we learned in business school, and how business school made our entire journey easier. In this episode, we're digging into the real value of an MBA for entrepreneurs, the lessons, the network, the credibility, and yes, the things you might not expect. We'll also talk about how aspiring founders should think about selecting schools, shaping their MBA experience, and using it as a launch pad for something big. If you're dreaming of building your own venture or just want to understand how business school can shape a startup journey, this conversation is packed with honest insight and practical advice. So, you know, Steve Jobs never got an MBA and neither did Bill Gates or or Jeff Bezos. Yep. That's that's right. So, hey, or Mark Zuckerberg or or I'm trying to think of some ancient entrepreneur before the NBA even existed. Uh, right. Well, Warren Buffet did not get an NBA. Got a masters from Columbia, not an NBA. But um let me give you a couple responses. The first is true except Andy Jazzy who's running Amazon now got an NBA from Harvard. He was a member of Deviani's class, a member of our team. There we go. And of course Tim Cook, Duke Fuga, Sachella, uh exactly Microsoft. Yeah. And all those got guys got NBAs and like I think Larry Ellison didn't even finish high school and we're really but listen Bill Gates never finished college, right? And like I'm sure he didn't tell us to finish high school because he was just an entrepreneurial kind of guy. Yeah. Um but uh you know for every like well I don't I don't think you need an NBA to be running a massive company. Um but you know there there are lots of exceptions and then there are some there's some some MBAs out there for sure. Right. Right. I just want to say something you were actually an MBA who became an entrepreneured. I was an MBA who became an entrepreneur. So can you teach entrepreneurship? Well, I mean, I guess I I guess maybe before we even talk about can you teach entrepreneurship, maybe taking a step back and just like even defining entrepreneurship in today's context, right? Because I think obviously there's the concept of like yes, someone I guess like me who um had an idea and just was like I'm going to I'm going to try and build this thing. I'm trying to build around them and try to make it as you know fortify it, make it as strong as possible, make it profitable, make it something that that benefits all stakeholders. That's sort of very conventional sense of entrepreneurship. Yeah. And um and I think that is what overwhelms people's brain, right? Uh when they think about entrepreneurship and think about going to business school. I'm going to I will leave and I will start my company. As it turns out, it's not that common that that people leave and start their own company, right? Um with the exception maybe of a couple of of of programs. And even then, a couple pro a couple programs it's they don't break down their specific entrepreneurial stats. And so people leave to be entrepreneurs, but many of them fall under a new category that I think has developed the last 10 years or so. Um, you know, entrepreneurship through acquisition. That's right. Or I was even going to say entrepreneurship. This notion here of you can be before we talk about ETA, we'll talk about this notion that many MBA graduates are actually very entrepreneurial. They're very innovative, but that's within bigger companies. It it would not be unusual for someone to be at a big company. I mean general luxury sort of your classic case where you go in there for a couple years and then you start seeing things differently and then they actually give you you know your own balance sheet your own income statement say go run that in fact again I don't have statistics about that but that feels to me like a fairly common thing to have happened for someone who's in his career three four five years with an MBA right like if you're if you're a product manager you're responsible for some product features and you start to improve your product and you you know if you can find uh you know anything from I you know, some, you know, massive product like like the iPhone or some small thing like a yogurt at General Mills and you can find a new way of, you know, I remember for I remember there was there was an article a long time ago about someone who like figured out how to do like squeezable yogurt or and it was like that person like shot up the ranks and um and uh I I the CEO actually from Darden, Steve Ryan, who um was at at Pizza Hut and and and was basically made his name in getting the delivery process going which we take completely for granted right now and revolutionized that business and shot up the ranks at at Pepsi. So there all sorts of different kinds of examples and now I'm going to give you an example. Kellogg MBA consultant just ate terribly terribly terribly and she got in her mind okay let me see if I can do some healthy snacks. So she did that great company $700 million later she truly is one of the most successful Kellogg MBAs. Katherine Bernell of Reh Harvest a 2018 Kellogg graduate. Oh wow. I never was that recently. Wow. Good for her. Exciting news. You can now access OnTrack by MBA Mission for free. Take our twominute onboarding questionnaire to personalize your learning path. Choose the free plan and you'll have unlimited access to our complete modules on MBA application timelines, standardized testing, your professional background, community leadership, school selection, and more. You'll also get access to select lessons from our brainstorming, personal statement, essay, resume, and recommendation modules. It's a great introduction to the OnTrack platform and will help you jumpstart the MBA application process. Get started today at ontrack.mmbbam mission.com. So there's there there's entrepreneurs as we conventionally think of them. They're entrepreneurs and and then there's one that's become quite popular which is um you know entrepreneurship through acquisition. Uh I remember a couple years ago, yeah, Jessica Schclar, one of the one of our colleagues, uh had an individual who he was he was basically afraid to even apply to Harvard and and she kept pushing him and and he applied and got in and and um and when he was there, two professors backed him in in a in a search fund which led him to they they search fund basically they uh you find backers who will uh you know Yeah. Yeah, a bunch of the money to search and then they get a first claim on on on an opportunity to invest when you find the company. And um and he went out and he bought I believe a pest control company uh somewhere in the Midwest or something like that is running it right now. It's quite we have to have on the podcast some point. I happen to like entrepreneurship through acquisition and I I just really like it. When I was leaving Bayon Company, he said, "Hey, I want to be an entrepreneur." And honestly, I had one vision of what it meant to be an entrepreneur. And one of the partners who was very close to said to me, you know what you should do? Go out and buy yourself a company. And because first of all, you there's nothing like a company that's actually making money. You know, and it's like talk about entrepreneurship. If you want to make money, that's not a bad place to start. Absolutely. As well as this notion here of it's hard to be an entrepreneur when you buy another company. You bring partners, you bring wisdom with you. And for me that is is such an important piece of the puzzle. Right. Right. Right. And I think I think I I've received a whole bunch of memes in the last little while of like you know a bunch of a bunch of people in gray suits or something and and and you know the sort of like the chiding meme of like uh you know these are these are the the future HBS grads who will own HVAC companies because That's right. That's right. It appears like there are certain segments that a lot of entrepreneurs through acquisition um have really keyed in on in the last couple years and you know very stable businesses with recurring revenue that are serviceoriented that maybe aren't aren't too complicated. I mean I think it would be complicated to actually you know fix the HVAC systems. I'm sure you need to have a lot of education around that. Um but uh yeah there are a couple of industries like that where like service industries that are that where with recurring with recurring revenue that have really been taken over by a lot of MBAs. I think I think we're looking for a new thesis these days. Exactly. One was at my house yesterday name is CILA S I L an HBAC company. Um it actually is backed by Goldman Sachs and they have been going around the country and sort of you know pulling all these mom and pop shops together and suddenly they overlay systems on top of that. they suddenly leverage marketing in a different way. They sort of have all this back office happening right there and you know very very I don't want to say very quickly but very deliberately they start building out actually very big companies. Right. Right. Exactly. I think once you get the once you get like sort of the core process figured out and you can bolt on other acquisitions. Exactly. So I so it sort of leads us back to you got entrepreneurship entrepreneurship uh entrepreneurship through through acquisition. Um I are we missing anything that we got it covered. So with conventional conventional definition we know all these MBA entrepreneurs. We know some people were who were entrepreneurs without an MBA. Yes. Can you teach entrepreneurship? When you say teach entrepreneurship I guess what do we actually mean by entrepreneurship? What do we mean by teaching? So on the one hand entrepreneurship entrepreneur right entrepreneur is a businessman right? So at the end of the day, any businessman needs to know accounting. Business man, business woman needs to know accounting. They certainly need to know some basics of marketing. Uh the reality is there's an operations piece to everything. So can you keep um can you teach that? Absolutely. If you're talking about sort of risk tolerance, can you sort of make somebody more risk seeking? Right. I'm not sure. Or more like Yeah. Or more a more of a strategic thinker and like a combined with that risk takingaking. Right. Right. Yeah. Like that. That's interesting. So I can only speak well I can speak from my own experience as an entrepreneur. I I you know I was a speech writer as anyone who's listening this podcast knows and I had no foundation in like I I clearly understood what like marketing was or accounting was but I I couldn't identify I couldn't really understand them as disciplines and understand how they interacted with each other. So for me I felt like I was always a fairly creative thinker. I've always felt like I was going to start a business at some point in my life. But having the foundation to understand like simple things like how to manage cash flow or or or how to create, you know, how to create like an environment that people would want to be a part of, how to how to treat people fundamentally, right? All of that for me came from a a core curriculum. And I was I felt very fortunate that that Darden had a entire first year core curriculum that was connected to those disciplines operations, marketing, accounting, finance, strategy and um you know slightly nuanced names but that's basically what they were to give me that found. Now maybe not everyone needs that but but but for for me I felt like it was almost I I I think maybe maybe the reverse for a lot of people like I think that a lot of people have those disciplines and they want to learn how to try and identify and find think about how they interconnect and how everything is strategic decision right that's true but I think like I think a lot of people come into business school thinking like I want to go I I feel like I have the I have some of the education I want to go to business school to like be inspired to think about the next big thing so I can go after And I think for me at least I was I was probably the opposite where I was like okay I can get excited after it what works. I need to understand how to run a business financially if you know fundamentally and and I think that is actually undervalued by a lot of people. I think a lot of people think it's the idea. Like business school teaches you that ideas and a business are fundamentally different things, right? There are a lot of great ideas out there and there a lot of like third 15th movers. Like it's not just that there was, you know, MySpace and Friendsster before Facebook. There are probably 50 other people who had something like that idea that didn't even get it to Friendster or MySpace status. They got it to like to like 12 friends, you know? There's just it isn't it's it's ironic like the idea is actually a very very small very very small piece. It's all about the execution. Absolutely. I mean listen I've done some entrepreneurial things over the years. I've certainly gotten to know a lot of people. I cannot tell you how many people come up. Hey, here's a great idea. Here's a great idea. Yes, it's a great idea. I agree with you. It's a great idea. Turn it into a business. Yeah. And business schools can help you do that. The thing that I liked about business school and I saw it certainly at MIT, a lot of other schools see it is you have to almost get some muscle memory about what a good business looks like and it almost is sort of industry agnostic. So in the sense of you know you go in there and you've been in this situation sometimes you go into a business I mean in very personal ways you go into business and you're like you look around you see what's happening it's like this is a no-go and sometimes it's just almost by feel. So if you're in a business school where you're seeing, you know, business after business, you know, business fund competitions, you're not even participating, you're seeing them or they have an incubator, you're seeing it and you're see talking to classmates who are doing interesting things. Are there people around sort of the the entire university who are doing um other interesting things? At some point, you start picking up. It's like, you know what, there's sort of all this, you sort of get a sense of where the magic will happen and where it won't happen. And people always say, "Oh, you have to really, as a businessman, you have to sort of dig in and really," and I'm sort of on the opposite, which is like you got to go out there. You got to see a lot of stuff. You have to constantly even, you know, dipping your toe in at times, which business school allows you to do. And then at that point, you're able to say, "Okay, now I know what's going to work." I I I had a I had a business school professor who had started many businesses um some some really big ones and and he he said to our class and it was I think before entrepreneurship through acquisition was a term. That's basically what he was talking about. He was he was trying to trying to show us this avenue. Um and he said, you know, if you want to go go go buy a small business, it's got to be like a full-time job. You've got to be fully committed to it. You've got to be constantly reviewing. like you're not going to go out there and bump into your neighbor and be like, "Oh, your business is for sale. We can work on a deal." He's like, it might have been that way in the 1940s. He's like when there was like a totally, you know, there wasn't a a transparent market and where there weren't there wasn't, you know, signals weren't being received. like maybe maybe your your world of buyers was small at that point, but now you know, you can put a business on a on a website and get, you know, I'm on a whole bunch of list serves for businesses and get you'll get you're competing against other people who are in that list serve. Like it's it's hard to get that, you know, that HVAC business or that tree pruning business or whatever it is that that wholesaler or um you know, whatever it might be, right? You're right. You've got to see a lot of businesses. One thing I will say when it comes to entrepreneurship through acquisition, we're having this conversation beforehand. First of all, the entire concept, the entire, you know, echos ecosystem for it is really matured over the last few years. And again, business schools, I was looking at the list of ETA competitions, conferences, it's all over the place. The Southeast in particular, a place like Vanderbilt, Duke that never had it in the past, now have their own conferences, which is amazing. On the other hand, there's also the world of business brokers and people, you know, this notion here. It used to be, oh, you know, talk to your your accountant's brother. He's selling business. Now, it is actually, I looked up the number. There's 5,000 business brokers out there. And that's just tremendous. And again, I want to sort of I'm sure people watching the podcast want to hear about sort of the trai traditional more the uh Facebooks. But the reality is is if you are thinking about entrepreneurship, certainly one way of looking at it is in fact going out and buying a business. Business schools now do a much better job at helping you do that, right? Yeah. Yeah. For sure. better ecosystems and even like there there are schools um you know Chicago Booth has the hide park angels they an affiliated angel group that will that will support uh you know not just blindly obviously they'll critically evaluate and support uh you know Chicago grads as as an example um you know there there are others out there for for sure you know there's you're right there's a there's a much much better developed ecosystem now than there was years a than there was years ago. But so but going back to kind of the fundamental question maybe in the traditional sense um right can you teach entrepreneurship I I think that over the last 20 years you know and maybe Stanford was like a bit of a leader here with like the startup garage you know that type of thing there there's there's been you know a a growth in courses that kind of try and take you through force you to to go through the early stages of developing a concept recognizing that like you know 19 out of 20 or more probably 49 out of 50 of these things are going to go nowhere. Um, still make you go through the process of iterating on a product and figuring figuring out if it's going to work and putting together a different every school has their own different but but but forcing you to kind of take the early stages and at least walk which is fantastic. I mean it's a great way to test yourself in a risk-free environment, right? And it also forces you to find teammates who are likely much different from yourself. Yeah. And I think that's always the hardest thing. sort of an entrepreneur working on their on their own, they're likely going to be talking to people who are sort of like them as opposed to if you go to business school and suddenly you have the sales guy sitting next to the finance guy sitting next to the tech guy. And that's what makes for successful companies, right? At at the end of the day, the Steve Wnjak for the Steve Jobs relationship, the Steve Balmer versus Bill. Exactly. But but you know the the and then the schools many schools you know take this even further where they'll say well they'll say like we have a summer program you can go into our summer accelerator we'll give you some legal advice you know you'll have a mentor we can even you know we recognize there's some risk associated with that we can even give you a lot of several schools have stipens for those individuals that's right the rock center over at Harvard has a stipen for those I I got a call the other this week from someone from Northwestern asking uh asking for some advice on on uh on his startup he's a first year student and he said he said he said you know it's wonderful like if I if I can if I can get this off the ground I can get a bit of a stipen from Northwestern from Kellogg and it'll give me the liberty to try this and I was like oh that's amazing good good for you absolutely and these schools are competitive like where one has a stipen the other will figure out the other will figure it out yeah absolutely but this notion of going to business school with a idea that you're then going to turn into a business I always push back and say listen you're about to spend $250 $50,000 two years of your life. If you really have that burning idea and you're ready to do something, take that money, take that time and all in on that, right? You know, and and and people say, "Well, when when's the right time to start a business?" And I I often say the right time is is like it's like when you can't sleep at night because you're thinking about it so much. You're like, "It's not that I want to do this. Like, I've got to do this. Like, someone else might do this if I don't get moving on this now. Someone else might figure it out." you it's not like it would be cool to be an entrepreneur and and and in that respect as an applicant I remember many years ago talking to uh D Leupold the former director of missions at Harvard Business School and it was during a time maybe like right after Instagram was sold was like eight guys and they sold for $2 billion and suddenly everyone thought like whoa this is easy I'll just go do my own Instagram exactly I'll get seven friends together we'll all be almost billionaires and um And so suddenly people were writing about how they want to be entrepreneurs and she kind of joked she's like it's like people saying I want to be in a band like they want they want to be rock stars they just don't necessarily have the musical talent and they don't realize how hard it is and they don't realize how rare it is and and uh and so I always I always thought that was that was funny and and an apt analogy um because you know not everyone is just going to go to business school with an idea and lock out an entrepreneur and there are realities of right of having you of having debt or uh you know having having to uh to Exactly. One of my professors Yeah. said, I was going to say one of my professors said, uh, most important thing in being an entrepreneur is making sure your spouse or partner has healthare, right? Your life has to go on. At the end of the day, life has to go on and sort of romanticizing this notion, oh, I worked 150 hours a week, right? And the reality is it's like I was all in on that. Yes. But recognize and maybe business school teaches you in different ways. Maybe one of the things that they teach you it's like it god it's going to be a slog and you have to recognize that and you have to sort of make your life work in that in that case. Sure. I I I've said to my wife before that I don't think I could have started a business had I had I like like I needed the first eight nine years starting NBA mission and running it just to put my head down and do it. Like if I had another mouth to feed I I probably couldn't have I probably couldn't have kept the business aloat. Like like I needed to reinvest all my time, energy, money into building the apparatus to make it work. Yeah, I I also remember when I was at Darden talking to um you know schools have amazing entrepreneurial guest speakers that they bring through every school. cavalcade of grads people, you know, no matter who you are, you love the feeling of getting in front of a group of impressionable people and telling about the great decisions you made and uh and so Jonathan Leiddki came through and he has owned he's taken many companies public. He's owned a couple sports franchises. Uh uh I think he owned the Islanders for a while. He also I want to say owned he's owned he's owned a few he owned a piece of the Capitals and he came through and I said to him afterwards I bumped him in the hall. I said, you know, can I ask you a question, Mr. Leki? Said, you know, like I want to start a company and uh I said, you know, would you say like start it off right away, like right after school? And you know, you say wait, like when's the when's the right time? Kind of, you know, like and and I didn't have the the the hindsight to say the right time is when you can't sleep at night, right? And and he say he said to me the same thing you just said. And he he said, "Look, you've got to make sure you can you can pay your bills. You've got to make sure that you can live." He's like, "You're not going to be an effective entrepreneur if your credit cards are maxed out." Like, he's like, "This is the thing of romance." That's right. It is the thing of romance. Absolutely. He's like, "If your credit cards are maxed out and you can't make your bills and that's like 6 weeks from now, like you're, you know, you're not going to be able to make it as an entrepreneur." He said, "If you have to save for a couple years, there's just if you're really an entrepreneur, you'll be an entrepreneur in two years and three years." I thought that was very, very good advice and very fair advice. Right. Listen, I I also say being an entrepreneur, you have to recognize the fact that maybe you know something that other people don't, but also recognize the fact that maybe you don't. You know, you know, at the end of the day, being an entrepreneur, I think, is really about having tough conversations with yourself, having tough conversations with people, and recognizing, yes, I'm an entrepreneur, but you still, you got to build a business. You have to be realistic that like I've been at it for three years. I've made no money. Guess what? You don't have a business. I hate I hate to say that, but you don't. I I always paraphrase uh I always paraphrase Churchill who said, you know, democracy is the is the worst of all systems except everything else. And I'm like being an entrepreneur is the worst of all jobs except for everything else, right? it like with it comes a lot of pressure comes uh some unpredictability mouths to feed uh you know it's it's not the same as having a job at McKenzie or or or Deote or or any other number you know United Technologies or or any other number of of of places where people you know go after after business school it's it's a very very different choice for you and like there are some cool program there are some cool um classes at schools which are like I I think outside of the box for a lot of people are thinking about entrepreneurship where I think they're thinking like I want to go to a a class on like ideiation and I want to go to a class on on you know product development and I want to go to you know to the to the uh you know the the D school at Harvard and figure out all sorts of creative ways to look at products but like there there are classes in organizational behavior where you actually get to know more about yourself you actually do a lot of introspection to understand your risk profile, start to really like look at your life thoughtfully and kind and really understand maybe what you're capable of, what type of risk like again risk profile, what characteristics you have as a leader and maybe you know maybe that's where you are kind of taking a step back and saying one of these things is for me or maybe this is for me later you know that's the thing I think is it for me later but also there's almost like an old truism if five years into your into your career your decisions were are not just about people about helping people, talking to people, working with people, getting most out of people. If you're not focused on people, you know, 5 years out of your career, something has gone wrong. This idea here of you 5 years after an MBA, you should not still be doing spreadsheets. You should not be doing PowerPoint. So, the place where you can sort of figure out your leadership skills, figure out how to work with people, negotiate with people, and everything else is business school. There's actually really no other great place to do it where it's so risk-free at the end of I'm 21 years old and I did a spreadsheet and used some PowerPoint yesterday. No, do it. Okay, cuz you got to get to know more people. I think it is. I I think that's it. So that business school happens to be very good and people I think take it a little bit for granted. Business school is very good at helping you understand relationships better sort of you know negotiation sort of the nature of power. I think that's what's really interesting. So I think we're going to sort of like bucket it. I think we would say that most business schools if you want to be a conventional entrepreneur are going to at this point are going to give you opportunities to take a class where you incubate an idea um where you test it um business plan competition business plan competitions every school will have one of those uh where you will um you know also have some you know you know there'll be an entrepreneurship club you'll have some access access to some the ability to potentially pitch alumni or like network alumni with alumni if you have a good idea. Most schools should be good at if you are achieving liftoff giving you some of the next steps to access alumni who might help you along the way whether it's like individual agel donors or you know those who are running VC funds um that are connected to the school at some level or you know even if they're not alums you know the professors old associate who started a a VC fund or you know so there's there's there's there's an ecosystem in in the and and we're just this is just the tip of the iceberg there of Again, there are funding options during the summer for people um there opportunities relationships with different type of people, find co-founders, uh for sure. So, there's there's this kind of ecosystem. Um there's entrepreneurship, which I think is more just about, you know, following your nose when you're in business school. Um, that's right. You know, really just developing whatever weaknesses there are in your profile because if you if you are a brand manager coming into business school, uh, you know, maybe you're focusing on operations and maybe you're focusing on strategy to kind of round out your skill set to be more capable uh, within your within the company you go to next or maybe you're pick up strategy or whatever it might be, right? And then I think there's this there's also of course this entrepreneurship through acquisition. Yes. Um, uh, you know, ecosystem as well, right? which is about learning to vet and you know learn to vet existing companies learning to do the diligence learning to again to develop your own uh your own investor group potentially if you're going to do that there are conferences and competitions right right and and listen entrepreneurship through acquisition I again I'll come back to it and it's really interesting in the sense of entrepreneurship through acquisition allows you also to acquire founders partners generally it's the person who's selling the business who spends a couple of years working with you and I think that that in a nutshell is what business school can do very effectively help you find people who are very different from who you are and actually then understand how they work understand how you work and at that point that I think is something that business school really does help you do right yeah so right y so I guess the key we we haven't really specifically talked about any any particular school I think we're just talking sort of conceptually in this one um but you know I I think the key is for for individuals to kind of say themselves, well, okay, which one of these paths might I be on and how should I change for you? Um, but which one of these paths might I be on? And then and then I mean, we're talking about we're talking about, you know, three different approaches across like, you know, 15 20 schools. We couldn't we couldn't cover all of them, but it's a good future podcast topic for us. Maybe we can go through the we can go through the ETA schools, you know, we go through the absolutely the entrepreneurship schools. I think the entrepreneurship schools are a little bit more challenging. Um, so let me throw out some ETA schools in particular. Uh, Kellogg, you already mentioned Kellogg and Booth every year. Yeah, they do together an ETA conference. Traditionally, also the Midwest, a little bit of a stereotype, have those types of companies that sort of look like companies other people buy, you know, I hate to put it in that way, but it's like you think old industry, old economy, sort of, you know, businesses that are slow growth can be very profitable. And I just feel like in the Midwest, middle of the country, it just feels sort of from a environment perspective, just a place that would be ripe for buying certain types of companies, putting them together, getting them better, faster. So for me, I'm going to highlight Booth and Kellogg as first of all, they themselves a great ETA curriculum, but then also they're located in a place that probably lends itself to some great entrepreneurship through acquisition opportunities. I mean, look, Stanford uh you know, Stanford Yeah. Yeah, invented invented the concept. David Dodson at at Stanford um kind of was the individual who started the the uh the entrepreneurship acquisition for the search fund concept and has an ecosystem out there that's that's extremely strong and they've got glasses in it. And um in addition, you know, there are firms out there that are like search funds of funds that are that are that are out there um you know, funding funding searchers to go out there and find those businesses uh and scaling them up. of all things, I got I got an inquiry recently from an individual just graduated from MIT who was who was asking me if he could have access to uh our to our clients and and in order to try to find people who would be successful searchers in the coming years. I thought about it for a while and it just sort of went beyond our point. We couldn't share information. I suppose we could make the opportunity open to some people. Um, but I think like you know most schools that are obviously known for entrepreneurship are going to have uh are going to have you know some of those resources built out but clearly it's like a no-brainer that that Stanford has that Stanford has that. So to go the opposite direction if you will I think there's a couple of schools that have been very smart. It's I think it's called the Southeast Acquisition Conference ETA conference which is Duke, UNCC, Georgetown I think maybe Vanderbilt. they have all sort of come together to really develop their own, you know, ecosystem of folks looking for to buy companies as well as companies looking to be sold. And I think that that's first of all the southeast and again I'm very frequently I'm very geographically minded in terms of what I what I recommend to schools and just sort of the nature of sort of different communities and I feel like the southeast again may be a a set of states communities where businesses are actually for all sorts of different reasons some of the generational the industry what they are overlooked a little bit. So I think going to a Duke or UNC if if you're in a major city and you're looking for an HVAC company right now. Those valuations have gone up from like five times to like 12 to 15 times at times. Exactly. Um because everyone in the world is trying to buy you've got institutions trying to buy those company. You've got individual searchers. I bet you these people who are running them and are very happy are very tired of getting the getting solicitations every day from the interns at uh you know at the at the search funds. Yeah, let me just talk a little bit about sort of the dynamics of buying a company because it's something that was sort of new to me and actually can be very exciting in the sense of many of these companies. You're eligible for a small business administration loan. That means you're putting down 10% only. The government's helping you out, banks are helping you out and suddenly this is a very accessible way of becoming an entrepreneur very very quickly. I think you need collateral for those. Now maybe the maybe the company has collateral but there is you're still in mind you may be putting your house up as collateral which which could be which could be great or you would be terrible you know and I think you can borrow up to $5 million I think with the SBA loan I think that that's listen good place to start. Yeah there's a classmate of mine Sam boy I believe is is running that program the SBA is I believe that's great. Yeah call Sam I make sure he's actually still running that program. It is. I I'll tell you and again I don't want to we could do a whole podcast on ETAs. So I'm going to just push on one other point. I'm a like I said before I'm a big believer in geography particularly when it comes to entrepreneurship. So there are certain cities that I think are just very entrepreneurial places which then really gives some of their business schools a leg up in terms of being entrepreneurial places themselves. What comes to mind is Pittsburgh which is a very entrepreneurial city uh very techfocused city. So Carnegie Mel and Ter has a really good entrepreneurship community. I mean we all know sort of your standard great entrepreneurship schools sort of the Harvard the MITs the Stanford the Berkeleys I think Columbia has a wealth of resources like Silicon Valley's got this this one pager that you can download at least the last time I was on their site that gives you all these different tracks and all the different resources I was just like blown away by what they had right Washington University St. Louis St. is again there must be some reasons there but it's a surprisingly entrepreneurial city. Yeah. I mean, I think it's interesting is I even think of I think of my own hometown of Winnipeg, Canada, where I think to myself that is an entrepreneur entrepreneurship through acquisition paradise because frankly it's it's not like everyone's number one place in the world to live and a lot of young people move away and so there are a lot of family businesses that will turn over that don't have another generation and like private equity isn't isn't really sniffing out the the the you know the $20 million business in in in you relatively isolated part of Canada. You know, again, you might not want to move there. Your family might not want to move there, but like the bottom line is the more efficient the big the bigger the city, the more efficient the market. So, if if you're in Boston, it's going to be harder to find a to find a business on the cheap than if you're in Tulsa. I Nothing against Tulsa. Tulsa is a great city. Oklahoma City now is getting to be a great city. Yeah. Actually, they have their own basketball team, so that has to mean something. I was just going to say I will say one thing here. I think there's a romanticized view of what happens at business schools in terms of entrepreneurship. There's this notion here. Exactly. There's this notion back of the napkin, you know, showing it to the venture capital. It's like, oh, here's $10 million. It doesn't work that way. There was a moment in time when I was in business school and the web was going bananas when it actually did work that way. Those days are done. Don't even think about that anymore. You have to go in there. You have to be smart. You have to prove that an idea is a business. But that said, business schools, I had a professor, Ed Roberts, great professor, one of the I guess the founding director of Mar Trust Center over at MIT, just an incredible guy. And people would say, "Can you learn to be an entrepreneur? How can you teach it?" And he would turn and simply say, "Listen, at MIT, we've created $2 trillion of annual revenue through the startups coming out of our university. We got to be doing something right." Right. So, Jeremy, frequently I'm asked, I'm already an entrepreneur. It's like, why do I even need to go to business school? Is there any value for an MBA if you're already an entrepreneur? Right. I think there I think there there are two pieces that answer. There's the practical piece about how to apply as an applicant if you're an entrepreneur and then there's the the sort of the core question that you're asking. If you are an entrepreneur, you and you're applying to business school, you definitely have to make a very clear case for why you want to be there because they don't want to believe that you're um using them as like a as like a landing ground for like a quick vacation and like an upskill and then you'll go back to go back to your your business. Especially if you're if you're currently running the business, like if if you're current currently running the business, you have to say to them, I've got a plan. I'm going to I've got a CEO in place or my partners are going to take over, right? So, there are some people who will say, "I've got a plan. Uh, I'm going to take my MBA. I'm going to go back to this business and I'm going to grow it this way." That's a very compelling argument because you're saying, "I need to scale up to take my company to the next level." Um, there are other people who are saying, "I'm transitioning out." And it's like, "What skills do you need to develop?" Um, so I just think you you've really really got to have your story down because they don't want to they don't want to think, hey, we're giving up a valuable seat in this class to someone who's going to be actively running their business and barely attending. Yes.
Now, I can think of different people that we've worked with over the years who've gone back to who've gone back to business school. Uh, and I can think of different schools they've gone to. Uh, one fellow in particular who went back to the Columbia J term because that's a program for people who are entrepreneurs in some ways. It's like doesn't have a summer internship, come in, get the education. And this person was very much a happenstance entrepreneur. amazing story actually. He I can't tell you too much about it, but during the pandemic, he found a way when people were panicking, he found a way basically to lease a ton of of of of very cheap space. And he used that cost advantage to build out a series of stores that that had just had enormous costs built into leases. He had he had a competitive advantage and built it and sold it. And it was like he kind of felt like he was I I maybe I'm putting words into his mouth, but kind of felt like he was he was in the right place at the right time, saw an opportunity, was lucky, but maybe didn't have the full suite of of capabilities and skills and he wanted all the context. Like I said before, he wanted the he wanted the market. Like he had all the risk and he had the intelligence and he did it and he he was he has nothing to apologize for. He did an awesome job, but he felt like, hey, if I'm do this again, I want a little more context for what I'm doing, right? Um, I've had a whole bunch of people in family business who've been in an entrepreneurial environment supporting someone who said, "Look, like I don't I'm not I don't want to be the boss's son or the boss's daughter. I want to go in there and I want to really understand the business and I want to be I want to build this thing for the next generation." Like, I'm not thinking about two years from now. and and so you know to me I've got skills that I want to develop for when this is a totally different company. So that's another one that I can think of where it's it's there the argument is there. Um listen I think I can think of individuals who made mistakes even there. There's an individual who I I can think who had he sold the business uh for for $10 million right before going to Harvard. Um he had lots of partners. I don't believe that he received that all that money himself. Uh, and he he's he talked candidly about some of the bumps and bruises along the way and some of the mistakes they made. And I I think in reading between the lines, I think maybe he was he was sort of maybe even squeezed out after the acquisition and was looking for the next place to jump. And he was he was humble and he said, "I've got a lot to learn as an entrepreneur. I want to do it again." That's right. I think that what you can't do is kind of say like, "Yeah, like I'm I'm an entrepreneur and I'm I'll uh I'll learn a little bit more and I'll figure it out." Like you got to have a real purpose, right? You have to look down a decade from now, 10, 20 years from now and say, "Okay, what do I know now? And how am I going to learn it?" Yeah. And some of those things you can learn in business school. Like for me, I always come back to this notion of leadership. This idea here of you're going to have to talk to a lot more people, negotiate and just have you different types of relationships. Yeah. And one way to accelerate your relationship building skills is through business school. Uh and then also just this notion of okay, how is the world changing around me? just what your career will look like 10 years from now, what sort of skills you're going to need and being very honest. Yeah. And like, you know, think about think about the NBA as like a foundational layer and think about you're just after that you're growing through experience. Like there are still things I'm learning every day. There's there are still, you know, we we've done an acquisition as as a firm. Uh and that was a massive educational pro process for me cuz I cuz I I you know was very much steeped in a tradition of like you just organic work at it every day make your product better your service better you know make your people better everything gets almost like atomic habits everything gets a little incrementally better every day and your the gains for your company are enormous and I feel like we lived that for 20 years um and but then it was like hey there's another another opportunity here there's another a whole other set of skills that I develop that'll be really interesting and challenging for me and um you know it wasn't like I learned that in business school how to acquire a um a small complimentary competitor in this case we acquired accepted which does everything we don't do in education uh so they help people with college um law med grad school and and and really you know understanding that like I wasn't I wasn't I the company wasn't capable I wasn't capable of that 15 years ago Yes, I'm not sure if we were capable of that 10 years ago, but like we really have learned so much and scaled to the point we have these we have these um functions in our company that we can responsibly do this and be great stewards of another company. So like some of the learning just it comes way later on. That that's right that that's absolutely right. Yeah. Like I think we think of we think too much of entrepreneurship as and and there's a great Malcolm Gladwell article about this where he talks about how people think that entrepreneurs are uh maybe we can link it in the bottom. People think that entrepreneurs are like are like individuals who are just shooting for the stars when in fact they're individuals who see the who who who have who have imperfect information that benefits them. So the example he gives in that is I something like Ted Turner who people think is like just a cowboy. Yeah. Um he got it he had there was a UHF TV station that he inherited from his father at the age of like 29 and they were broadcasting Atlanta Braves games and the Braves came up for sale for about the same amount that they were paying for the broadcast rights so he bought the Atlanta Braves and people like Ted Turner bought the Atlanta Braves at 29 or 30 whatever it was. It wasn't that he bought he he he just looked and said the amount of money I'm spending on on TV rights I may as well buy the team. And so and and then he just figured out how to grow the team and the rest is history. I believe the UHF station slowly. Yeah. No, that's you know again I think like our conception is that these are just complete cowboys when in fact it's it's really the opposite. And you can see that even in like I believe the other another example in that article is um John Pollson who during the during the uh during the financial meltdown was one of the few people who really saw the uh the the the credit crisis fall apart saw the opportunity to get into the credit credit swap default game and made billions of dollars. He fundamentally like Michael like Michael Barry and others fundamentally just saw the hole in the market was like there's something wrong here. I see risk in a different way than everyone else right now. And that's not being a cowboy. That's I mean maybe it required a lot of nerve in that regard. But like he just he understood risk differently and was able to make his fortune that way. So it's not always about about just like let's max out the credit cards, mortgage the house, go in on a product and the whole thing's going to be go down. Absolutely not. which is a one reason to go to business school obviously is to meet some of these people. You think about the the networks of these schools and you think about the alumni and the ability of the schools to connect with the alumni. So this is so random but I I was on vacation. Yeah. I saw someone who maybe it was 10 years older than me wearing a Darden hat and I just walked up to introduced myself because you see few of them and it's it's fun. Small school, small alumni base. uh and got to talk to this person and I believe he was a manufacturer of of roofing solutions shingles um and from talking to him it seemed like it was a pretty substantial business and he told me that again I think before that name really existed it was just entrepreneurship through acquisition he had he had run a business well he had found some backers who helped him to to find find this business and he's he had been growing it successfully and he looked at me and he and I'll never forget it he looked at me and he said you know when you're done with your business, when you sell your business, he said, "Give me a call." He said, "If you need," he said, "If you need funding for your next business because you'll do something bigger," he said, "Give me a call." He said, "You know, I've got the same group of guys. You seem like you're a good guy. We'll do it for you." And I said, "Oh, we'll do it with you." And I was like, "Oh, that's that's so flattering. That's so nice." And he said to me, "But the but the he said, but the rule is he said, "The first $5 million of profits are yours. The next million dollars you have to give to Darden, otherwise we're not we're not doing it with you." Fantastic. And I was like, it was such a hilarious thing because because not only had he just met me and had this like I I I I assume, you know, unjustified confidence in me based on based on our own network and his own understandings of my education. But he it was his basically he was basically operating on the assumption that it was a guaranteed $5 billion and and after that we'll see what happens. It was it was a it gives you a sense of how how networks you know this environment work and the confidence of alumni in each other and that's a uniquely American thing that doesn't really exist in my hometown my own country of Canada you don't see people talking that way behaving that way um and that should be very heartening I think for even if especially any internationals who come here and maybe don't recognize the power of the alumni networks okay great well good luck with your entrepreneurship if if you've been listening good luck with your journey I'm sure we hope that one day someone will call us and say I watched that podcast. Exactly. And I went to business school. I'm an entrepreneur. And now I'm giving you $1 million. I'm giving Dart $1 million. There we go. Terrific. Then well, listen. Seriously, give us a call. Free 30-minute consultation to speak to me, to speak to Jeremy, or speak to any any member of our team. And uh whether you're an entrepreneur or or or not, we're happy to give you advice. Exactly. We're always here to to speak to you. Exactly. Yeah. Perfect. If you want to be one of our success stories, sign up for a free consultation with a member of our full-time MBA admissions team. Since we've worked with tens of thousands of applicants over the past two decades, we can give you our honest opinion on your chances, and help you put together your very best application. That is not a sales call, but rather your first session with one of us for free. We can give you a profile evaluation, answer specific questions about the process, review your resume, talk about your school choices, and so much more. Sign up at mbmission.com/cconult.