The number of business school students launching ventures during school is seeing tremendous growth. According to Garth Saloner, outgoing Dean of Stanford University’s Graduate School of Business, at least 16% of the GSB Class of 2015 began a startup company – that percentage was in the single digits less than a decade ago.
While this occurrence is predicted to see steady growth in the coming years, it may actually be a Trojan horse when the long-term effects are factored into the equation. Saloner encourages MBA grads to consider the long game when it comes to their education, and to take caution when forming a startup while still in school.
With the revolution brought about by cloud-based software, founding a startup is easier today than it has ever been. Entrepreneur courses designed to facilitate this process are available at many schools even to non-business majors, and there are also many startup summer camps and incubators available for student entrepreneurs to take advantage of. Additionally, the first nine months of 2015 saw $98.4 billion get invested in venture capital-backed companies – an 11% jump over the amount for the full year of 2014. All of these factors have come together to create an environment favorable for students to take the leap and begin their own startup. Unfortunately, there are more dangers than what readily meets the eye.
Even though the facts and figures make startup creation incredibly tempting, there are potential downfalls to consider before getting started. While students will typically have the rest of their life to take advantage of all that startups may have to offer, there is only one chance to make the most of their time in school. Neglecting studies will usually result in lost opportunities.
Time spent distracted from coursework may end up quite costly, since the average tuition at public and private non-profit universities is approximately $70,000 per year. That figure, coupled with the fact that most first ventures will inevitably fail, can spell out financial disaster for the immediate years after graduation.
While there are many unfavorable side effects to consider, it is still possible for students to launch a startup during their business school years. When faced with a conflict of interest, students should ask themselves which action they will learn the most from. Startup activities should be thoughtfully scheduled around existing coursework obligations.
Business students may be able to make the startup process less cumbersome by taking on a partner or outsourcing certain aspects. Most schools now offer tools specifically to help student entrepreneurs – these resources should be fully taken advantage of by students who are considering a career in entrepreneurship or even thinking of working for a startup. Realistic goals should be set to ensure that valuable studies and experiences are not neglected.
While there are people like Steve Jobs, Bill Gates and Mark Zuckerburg, who dropped out of college after founding startups in their dorm rooms, not everybody will see the same amount of good fortune. By prioritizing education over immediate wealth, business students will receive a better education overall and gain more control over their future.
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