First in a series of posts on the state of entrepreneurship education.
The first entrepreneurship programs began forming in earnest during the 1970s. By the end of the following decade, over 1,000 undergraduate colleges offered courses in entrepreneurship, and business plan competitions began to emerge. In the 90s, the discipline became standard in most MBA programs and accredited undergraduate business schools.
In the last 10 years, entrepreneurship reached beyond the business school, becoming increasingly cross-campus and expanding into an array of extracurricular programs (clubs, competitions, etc.). Universities established entrepreneurship centers, raised great sums of money from foundations and wealthy donors, and rankings became a standard.
Bolstered by a high degree of collaboration and sharing of best practices, most programs either looked alike or were at least modeled after the “top” ones. Opportunity recognition, business plan development, elevator pitches, social entrepreneurship, and similar concepts became foundation pieces, reflecting the study, instruction, and practice of the discipline.
But the great recession and a series of trends (flatter world, social networking, mobile devices, lean startup, free agents, accelerators) have quickly changed the landscape of how entrepreneurship is practiced, especially by the Millennial generation. Their startups require less capital, investors want different business “plans” and pitches, and a growing audience is watching (both literally and figuratively).
Along the way, it appears that little has changed in entrepreneurship programs. I went through the curricula of the top 10 programs (including the likes of Babson, Harvard, Stanford) ranked by U.S. News & World Report, and here were some of my findings:
- Most still teach business plan development and have no integration of lean startup nor business model canvases, both of which have come to represent a post-recession reality for a tech-centered startup landscape.
- Most place an emphasis on venture capital as a financing source despite the fact the only about 4,000 deals are done every year while over 500,000 new businesses are created. Few entrepreneurial finance courses even mention bootstrapping, family and friends, and angel investing, all of which represent how most entrepreneurs actually fund their startups.
- Few programs directly address significant trends – like globalization, mobile devices, and two-sided markets – and their impact on startup opportunities, the entrepreneurial process, financing, and scaling a business.
- About half still have business plan competitions despite the fact that most investors don’t want them anymore. In addition, many such competitions reward teams on how well the plan the communicated (verbally and in writing) rather than the quality of the business/investment opportunity (much more to come on business plans and competitions in a future post).
The sad truth about higher education is that the system just doesn’t have incentive and accountability built into it to stay abreast of startup trends and developments. Tenured professors lack external motivation, those on tenure track are consumed with research and attaining tenure, adjuncts don’t have the time to keep changing lesson plans, deans keep going through the revolving door, and big donors (including wealthy, experienced entrepreneurs) are kept from influencing courses and programs. Finally, students must depend on professors to know “what’s best” so even their ratings aren’t necessarily reliable indicators of whether the coursework is current.
Meanwhile, over the past five years new substitutes for learning entrepreneurship have quietly emerged: The Founder Institute, Startup Leadership Program, School for Startups, Thiel Fellowship, General Assembly, and dozens of incubators and accelerators. Almost all of these are run by experienced entrepreneurs who integrate concepts and methods practiced by today’s startups, and invite countless investors and entrepreneurs to be mentors. Nearly every couple months, I hear of another new program or initiative that is designed to help educate and support entrepreneurs. Many of these will fail over time but the point is that there seems to be growing demand for these non-degree, non-academic programs.
So while I don’t believe that entrepreneurship ed will be dramatically impacted in the near term, I worry about it in the long haul. Educational institutions are large cruise ships that can’t be as nimble and adaptive as the speedboat that is entrepreneurship. Those who practice it, as well as investors who support them, will keep pushing the envelope to find the best ways for young people to learn entrepreneurship.
Colleges and universities will continue their programs and courses but how will enrollment change over time? At what point will aspiring entrepreneurs trade in the value of a degree for the value of learning how to really do a startup? When will learning-by-doing and mentoring be valued more than learning-by-studying and teaching? And how will entrepreneurship in academia be impacted by the “tsunami” of education reform?