Entrepreneurship 2013

SET YOUR COURSE FOR LIFE

Latest trends in teaching entrepreneurship Experts tips on starting up your own business Guidelines for selecting an MBA programme with entrepreneurship options

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CONTENTS

Entrepreneurship 2013 SET YOUR COURSE FOR LIFE

Latest trends in teaching entrepreneurship Experts tips on starting up your own business Guidelines for selecting an MBA programme with entrepreneurship options

05

Foreword by the editor

06

Payback

www.educationpost.com.hk/entrepreneurship-2013

- Starting a business?

An MBA degree will help

07

The Choice

- Take care to choose the right course

08

06

07

08

09

Hot Tips

- 10 Steps for MBAs to consider - Expert advice for taking the plunge

10

Case Study

- Dropping out to get ahead

10 Entrepreneurship 2013 is published by Education Post, South China Morning Post Publishers Ltd. All rights reserved.

Cover image: iStockphoto

Entrepreneurship 2013

03

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Foreword by the editor Entrepreneurs are leaders. What enables them to outperform others in the corporate world is the fact that they are ready to take on financial risks, no matter how large or small their business. In other words, apart from the capability to lead and manage people, an entrepreneur must also be well-versed in capital financing and risk management, and have extremely good networking skills plus every one of the hard and soft skills involved in expanding the business and making it sustainable.

It is now commonplace to find many entrepreneurs are MBA students or graduates.

Whether or not entrepreneurship, a skill similar to leadership, can be taught and practised in class has long been debated. What is at stake here is that business schools are increasingly stressing the importance of entrepreneurship, not only in their modules but most importantly, in support of it.

In Hong Kong, most top-tier MBA providers, including Hong Kong University of Science and Technology Business School, the University of Hong Kong and the Chinese University - to name but a few - have all established entrepreneurship centres to provide students and alumni with networking opportunities, facilities and a variety of means of support to turn their business plans into action. City University of Hong Kong, for example, has been running an entrepreneurial mentoring programme which allows their MBA students to learn from and be coached by outstanding leaders and senior executives in the business world.

A number of recent developments demonstrate this trend. Last month, the Australian Graduate School of Management (AGSM) launched a new initiative with Sydney start-ups to provide its students with hands-on entrepreneurial experience by letting them get involved in a project over a period of 12 weeks. And in early September, Henley Business School announced that they had partnered with the Entrepreneurs Club (E-Club) to launch a joint initiative to encourage entrepreneurship in Hong Kong and across the Asia region by offering financial assistance to E-Club members wishing to study on the EMBA programme.

To keep you abreast of the latest issues and trends, we are featuring five articles from the MBA Centre of Education Post in this special digital supplement. Even though this may not be enough to answer all your questions and concerns when choosing an MBA or deciding whether or not to pursue one, we hope it can at least give you some useful information, an idea of how far an MBA can take you, or what you could achieve with it.

Ginn Fung Editor

Entrepreneurship 2013

05

Payback Photo: iStockphoto

Starting a business?

An MBA degree will help - Donna Lin Niles If you have dreams of launching your own business, you might be wondering if an MBA degree actually helps. Many new companies have been successfully started by MBA graduates, but there is still a good deal of discussion about whether having the qualification really counts. In my opinion, the support and resources available to MBA students do make those programmes a great incubator for entrepreneurs. The pros greatly outweigh the cons and there are numerous reasons why an MBA can make a big difference to a start-up.

“

The support and resources available to MBA students do make those programmes a great incubator for entrepreneurs

�

Knowledge is power, and that is a crucial factor for an ambitious entrepreneur. In practical matters, there is no better place than business school to learn about start-ups. General courses cover the principles and problems which all companies can encounter on a daily basis. The programmes also deal with the intricacies of marketing, finance, accounting and much else, subjects which will undoubtedly come in useful wherever you

06

Entrepreneurship 2013

end up working. There are courses, too, specifically focused on entrepreneurship which will show you how to write a business plan, pitch it to investors and, one hopes, turn that plan into action. Many schools gear their entrepreneurship programmes directly to like-minded go-getters.

However, the opportunity to learn does come at a cost.

Depending on how you finance your further education, it may add to personal debt or reduce the funding available to launch your new business. It is therefore important to consider carefully the amenities and opportunities your target MBA programmes offer. A top five school may not have a reputation for training entrepreneurs, while a lower-ranked option may be known for supporting small businesses through a variety of well-funded schemes and initiatives.

If you do take the plunge, it is important to remember that great programmes attract top talent and high-achieving professionals. This provides the chance to talk through business ideas, consider different plans and approaches, and sound out possible partners.

There may be many other potential entrepreneurs in your class, who could be interested in striking out together.

The many successful new businesses launched by MBAs are growing evidence that the qualification can indeed make a big difference to a start-up.

The Choice Photo: AFP

Take care to choose the right course - Diana Mah As cliched as it sounds, entrepreneurs tend to take the road less travelled more often than their counterparts in mainstream corporate business. However, shifting trends indicate that things are changing. Nowadays, there are more opportunities for start-ups and small businesses to succeed. People with MBAs are not automatically taking up corporate roles. Instead, they are becoming more inclined to follow their gut feelings and pursue the dream of starting their own business. Of course, doing so takes more than just interest, innovation and creativity. And that is where an MBA in entrepreneurship will come in handy.

“

Having exposure to a broad spectrum of professionals and the tools necessary to build a business will help personally and professionally

�

Making the decision to do an MBA is difficult for anyone.

Be forewarned: the programme is not for everyone.

Business school is a huge investment financially and requires two years of dedication and commitment, or a minimum one year for an EMBA. It will push you to your limits with long hours and endless projects, and that is not the sum of your worries. It all starts with the battle of applying and being accepted, perhaps having to take the GMAT, collecting references and recommendations, and preparing for interviews.

If you are keen to be an entrepreneur, choosing the right programme can make a big difference. MBA programmes specialising in entrepreneurship are widely available these days from a range of business schools, so take your time to do the necessary research. Find out about their alumni, professors and programmes to see what best suits your desired career path.

Investigate the resources available outside the classroom and, for example, look for schools which have incubator or accelerator programmes. Some provide funding for office space and mentoring for start-up projects and small businesses. Later on, take advantage of all the resources available. After all, they come as part of the hefty fee you will be expected to pay for tuition.

Having exposure to a broad spectrum of professionals and the tools necessary to build a business will help personally and professionally. Classmates, professors, alumni, mentors and others you come across taking an MBA can eventually become business partners or clients. Don’t be afraid to seek help and advice or to make a pitch.

Whether or not entrepreneurship is in your blood, having an MBA provides the structure and network needed for a running a company. So, if your start-up fails, the qualification will still help you bounce back and succeed in another field.

Entrepreneurship 2013

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Hot Tips Photo: iStockphotos

10 steps for MBAs to consider - Marium F. Mohiuddin Since 2005, the University of Pennsylvania’s Wharton School of Business has tracked the number of students who have gone on to start their own business. The study shows that the start-up trend is on the rise. Some 7.4 per cent of MBAs in the class of 2013 aimed to strike out on their own, up from a mere 1 per cent eight years before. In view of that, here are 10 steps for MBAs planning a start-up to consider.

1. Stick to your initial visions and goals. The first priority should not be the bottom line, but a real passion for the business concept.

2. Building a successful company takes time and patience. It will not happen overnight and you shouldn’t expect it to.

3. Learn how to survive with a small budget. Keep an eye on your bank account statements because that is where the truth about your business lies.

4. Start-ups are a continuous exercise in deciding what not to do. You can sometimes get ahead by not doing things faster than your competition.

5. Forget the art of marketing and learn the art of customer development. Strong interpersonal relationships will take you further in building a base of loyal customers and advisers. There is nothing better than a referral from a satisfied customer.

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Entrepreneurship 2013

6. The customer isn’t predictable. Academic theories on efficient pricing will not prepare you for what people actually do. Finding the “optimal” price may not be easy, but it is worth the effort and the negotiations.

7. Get to know and like your partners. A business partner must be someone you would be happy to have over to your house. With this in mind, still plan for an exit strategy, such as taking the partnership to a mediator, in case things do turn sour.

8. Adaptation is crucial. Learn to “tweak” to make your product or service the best it can be. The first version will not be the best, but start selling and get it out the door. From then on, listen to your customers and let them guide you on working out the kinks.

9. Keep your team motivated. Employees may not be motivated by the same things that inspire you. Find out how to keep them engaged and interested in the company.

10. Keep teaching yourself. The most important “takeaway” is to learn how to learn by yourself. You will have to discover how to forge your own path to success.

Start-ups can be a lifetime commitment with a price tag that rises and falls with sales and changes in the broader business environment. But if entrepreneurs learn to survive the pressures of a start-up, the rewards can be tenfold or more.

Hot Tips

Expert advice for taking the plunge - Assiye Keskin

Photo: SCMP Graphic

If you want to be an entrepreneur, it is best to get advice from people who have been there and done it.

Therefore, we have compiled some sage advice from seasoned entrepreneurs who learnt their lessons the hard way. Hopefully, their insights and experience will give inspiration to aspiring MBA entrepreneurs.

The financial crisis of 2008 saw many people losing their jobs and many others questioning their roles in finance and related industries. With nothing to lose, a significant number took the leap to start a business, some ultimately successful and others not. The path is filled with challenges, especially for graduates straight out of business school, but here are some top tips for getting started:

“

Always test the product, know your target customers, and be well aware of the price they are prepared to pay

”

Choose the right people. According to Barbara Streisand, people who need people are the luckiest people in the world. She may not have been singing about budding entrepreneurs, but people are still the most important asset in any business. That applies especially in a start-up where the right choice of staff and partners can make or break a business. The staff you employ set the tone for the entire company.

Therefore, it is important to choose people who are doers rather than talkers, and who will hold you

accountable to high financial and ethical standards. You will almost certainly be working long hours, so surround yourself with people you are prepared to spend time with.

Find a mentor. There is nothing wrong with not knowing everything from day one. However, knowing who to ask or where to look for the answers is essential.

Developing a relationship with a successful entrepreneur who is interested in your venture will provide a source of expert help and support plus experience and useful connections.

The product comes first. It may seem obvious, but the product is the core of your business. Unless you have a solid product – or service – there is no point investing in marketing and selling something no one wants. Early on, pitch your product to as many relevant people as possible and gather feedback. Negative comments are an essential tool to help refine and improve. If you still believe in what you have after repeated reviews and criticism, then the chances are you have what it takes to survive. Always test the product, know your target customers, and be well aware of the price they are prepared to pay.

The biggest advantage of business school for entrepreneurs, is being surrounded by such a diverse range of people. They will provide guidance and feedback and reject “unbankable” ideas. The world needs more talented people to become entrepreneurs, creating new products and services, providing solutions and offering new jobs. Entrepreneurship is a big leap, but thanks to those who have already jumped in the deep end and lived to tell the tale, you don’t have to leap into the unknown.

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Real Case Photo: Reuters

Microsoft CEO Steve Ballmer dropped out of Stanford’s MBA programme to help Bill Gates start the software company

Dropping out to get ahead - Parker Whiteway What’s behind the new wave of MBA entrepreneurs? In the last few years, surveys have shown that more MBA students are starting their own companies, even if it means cutting class or dropping out of their programme.

“

If you have a great business idea, an MBA may be a wise choice.

Increasingly, schools provide support and flexibility for students with start-up aspirations

”

Indeed, a survey of administrators and advisers at top-tier schools found that 5 per cent of students had set up a company immediately after graduating in 2011.

That was up from a figure of 3 per cent in 2010. The last time we saw such a clear upward trend was in the late 1990s during the dotcom boom. The question, though, is why would someone with an MBA, having just taken time away from their career and, in most cases, taken out hefty student loans, take the risk of launching a new company in what is still an uncertain economic climate.

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Entrepreneurship 2013

The short answer is opportunity, which might just be the chance of a lifetime. In a classic example, Microsoft’s Steve Ballmer dropped out of Stanford’s MBA programme to help his friend Bill Gates start a software company. That is not the norm, though. Most MBA students, even those with entrepreneurial aspirations, realise that completing the course confers a degree, extensive training, increased experience, and a bulletproof insurance policy. So, if their start-up doesn’t work out, they can still find a more traditional job.

Business school has intrinsic value, even for students who, from the outset, plan to start their own companies.

Many soon find that the most valuable resource is what their fellow students know. Typically, people who are driven, intelligent and outgoing sign up for MBA programmes, which leads to collaborations, connections, and the exchange of ideas, regardless of whether the students go on to found start-ups or to work in more established companies.

If you have a great business idea, an MBA may be a wise choice. Increasingly, schools provide support and flexibility for students with start-up aspirations. And if the right opportunity comes along, business school training and the network that goes with it can be a real driving force.

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