Going to business school is often a pathway towards earning a promotion within an established company. Those who have completed an MBA program will likely attended a variety of networking and recruiting events, where firms aim to snap up the best graduates around. However, if people pursue an MBA because they have an interest in a startup, they may need to think differently.
Startup companies also need MBA graduates, but they usually use regular job postings to hire them, as this will cost a lot less. While some will give presentations at clubs within business clubs, they often do not have a clear presence there. Fortunately, there is an increased number of business schools that offer so-called “incubators”. These help graduates find employment with a startup company, or give them the necessary skills to start their own.
When a school offers an incubator, it ensures budding entrepreneur students are able to connect to experienced pros. They will receive extensive advice on funding, marketing, and new technology. Usually, within these incubators, you will find both business students and established entrepreneurs, each interested in launching something completely new. Most importantly, these incubators help them to become “cash positive”, which means they become profitable.
• 1,250 incubator programs currently exist in this country, including at the University of Missouri’s Trulaske College of Business, Wake Forest University’s School of Business, and the University of Virginia’s Darden School of Business.
• 32% of incubators receive academic institution sponsorship.
• 93% of incubators are nonprofit organizations with an economic development focus.
By their very nature, the resources of incubators are very limited. Hence, only those who meet specific eligibility criteria are invited to join. Once a member, however, they can develop ideas together with students from a variety of backgrounds, as well as professors on specific subjects. One of the main eligibility criteria for membership tends to be that they must have a business idea.
Things to Think about When Considering Joining an Incubator
If you are interested in joining an incubator, you should ask the following questions:
1. What type of industry the incubator focuses on, and whether that aligns with your own interest. 54% of incubators are mixed-use, but 37% focus specifically on technology, 6% have a focus specifically on service business, and 3% focus on manufacturing. If an incubator does have a specific focus, it usually also has very stringent requirements in terms of the financial viability of any companies that join.
2. What do you have to study in order to become a member? In almost all cases, you have to be in the process of completing an MBA. However, other business degrees may also be accepted. Entrepreneurship is about working together, after all.
3. How long can you remain a member of the incubator? If you are an MBA student, you will usually spend the first year focusing strongly on academic work. Hence, your membership will usually not start until your second and final year. You may, therefore, need to stay in the incubator after graduation to get the greatest benefits.
4. Are you ready for the challenges of incubators? While incubators are excellent tools, they are also some difficulties that must be surmounted. You may, for instance, be paired up with someone with knowledge in the specific field you want to set up a business in. For instance, if you are an MBA student, and you are interested in setting up a company that manufactures toys, you may be paired up with a scientist specializing in plastics. Being able to accept that both your skills are equally viable can be surprisingly hard to accept. Creating a true partnership is an important lesson to be learned from incubators, but also a very difficult one. Another important challenge is that you will have to work very hard. While starting a new business is always hard work, this is even more tso if you are also in the process of completing a degree program.
Collaboration through Common Traits
If you are interested in starting a new business, you are likely to have a passion for something specific. In fact, this is cited as the number one reason for launching a startup by 94% of graduates. In addition, entrepreneurs have a number of common traits besides passion, including innovative thinking, inspiring others, taking risks, and wanting to set direction.
Membership in an incubator gives you the opportunity to gain new skills that enable you to lead and grow companies. This is true regardless of the kind of MBA program that you have completed. In fact, 91% of MBA graduates say that they value their management education as it enabled them to create a business incubator by:
1. Using a low risk environment to grow and develop their product, service, and business ideas.
2. Taking advantage of a resource library of innovative research, using this for support and ideas.
3. Being able to access various funding opportunities through angel investors and grants.
4. Finding mentors and partners to work on the business idea.
5. Being able to build relationships and network with future partners, competitors, and customers.
Statistics on Graduating Entrepreneurs
There have been a number of interesting statistics on MBA graduates who see themselves as entrepreneurs, including the fact that:
• 44% were able to start their business when they were studying.
• The other 56% were planning on starting a business as soon as they graduated.
• 37% were focused on products and services, 20% wanted to go into consulting, and 17% wanted to enter the high tech sector.
Those who have been able to start their own business have reported that:
• 53% have a team of employees to manage.
• 41% had an annual revenue in excess of $250,000.
• 28% have a multinational focus in their business.
• 27% own more than one company.
The Future of Business Schools and Incubators
Clearly, incubators serve an important purpose. It is also known that 30% of all those who want to enter an MBA program have entrepreneurial goals, and these numbers are pretty similar across all delivery formats for such programs. This means that there are always opportunities available to network and brainstorm with other like-minded individuals while in school. It is also known that 20% of people who take the GMAT test do so because they want to focus on entrepreneurship. As a result of this rise in interest, more schools are adapting their availability of courses that relate to entrepreneurship, while also now offering incubator programs in their schools.