I’m not saying this is the only problem. And, by the way, I’m in favor of entrepreneurship education, when it’s done well. I think it helps … but that’s another post.

It’s a simple story. It’s a real problem with business education concerning entrepreneurship in top institutions. It happens way too often. Not that it’s the only problem with entrepreneurship education, but it’s harder to spot.

Take an imaginary person named Leslie who’s interested in entrepreneurship and wants to study it and then teach it, as a career. Here’s what happens.

First, she enrolls in a good graduate school intending to get a doctorate degree. In business grad schools, the MBAs study for two years to get jobs in business, not to teach business. Yet it takes a doctorate to teach business in a good school, as a career. Yes, there are exceptions to that rule, but Leslie is focused and motivated so she wants the best path to the best career opportunities, which means she needs the PhD degree. That’s a matter of academic records, standardized testing, essays, and recommendations, pretty much the same process people go through to get into college or university.

As she gets used to her studies and the general path to doctorate and teaching career she discovers, within the first year or so, that the academic study of business divides itself into standard groups; marketing, finance, operations, and so on, that don’t really include entrepreneurship (yet). And those functional divisions have generated a small set of academic journals, fewer than the fingers on one hand in most cases, that control her future. And the system of rewards and such within the small world of doctors of business is shockingly (to Leslie) well defined. Here is what she finds out:

1. She can’t get the doctorate without a thesis.
2. She’s not going to get into the upper echelon she wants for her career unless her thesis is published by one of those academic journals.
3. And those journals focus on the standard specialties: marketing, finance, operations, etc. Not entrepreneurship.

Result: if she’s ambitious, Leslie drops the focus on entrepreneurship and moves over to finance or marketing or something else that’s more established within the academic hierarchies. And you, dear reader, can go from there to the other logical conclusions.

Think about the impact on education in entrepreneurship at the big business schools. Maybe it’s a good thing because it means more real-world entrepreneurs teaching, even if they’re normally adjunct instructors instead of professors. And maybe it’s not so good because it relegates entrepreneurship and the study of entrepreneurship to a lower rung on the career ladder. I don’t know.

If you’re out there in academia, reading this, and I’ve got it wrong, please tell me. I’ve had a chance to watch how this works. I haven’t been down this path myself, but I’ve been an adjunct instructor for a few years, teaching one class per year at the University of Oregon.

(photo credit: lynnlin/Shutterstock (modified by me))

If you teach entrepreneurship, please join me tomorrow for a webinar on the top 10 tips in teaching entrepreneurship using business planning. I’m going to be looking back on more than 10 years of teaching starting a business using business plans. I hope I’ve picked up a few tips that might help.

NACCE (that’s National Association for Community College Entrepreneurship) membership is not required, but it’s a good organization, if you’re teaching entrepreneurship, you’ll find it useful.

Regardless, please join me in the webinar tomorrow, Tuesday, June 9, 2007; 4pm Eastern – 1pm Pacific Time.

Comedian Robert Klein has a routine where he grabs a consumer fruit drink that claims “contains 10% fruit juice,” and asks: “What about the other 90 percent?”
And the graduating class of Harvard MBAs last week had a special new code, A Promise to Be Ethical in an Era of Immorality that 20% of the graduating MBAs signed. The New York Times reported:

Nearly 20 percent of the graduating class have signed “The M.B.A. Oath,” a voluntary student-led pledge that the goal of a business manager is to “serve the greater good.” It promises that Harvard M.B.A.’s will act responsibly, ethically and refrain from advancing their “own narrow ambitions” at the expense of others.

And I can’t help asking: what about the other 80%?

Adeo Ressi doesn’t like what he calls a slanted field on the deals entrepreneurs get from investors. He says (I’m quoting):

Honestly, I think that the entrepreneur gets a raw deal today, and that this has gotten a lot worse since I started in 1994. Entrepreneurs are victims of a lot of predatory and exploitative behavior.

This has been bad for a while, but it’s gotten much worse. And it hurts the country, and the economy. We need to fix the availability of capital for entrepreneurs.

That led to The Funded Founder Institute, a four-month, $450 program to run selected entrepreneurs (including, by the way, wanna-be entrepreneurs) through weekly sessions with mentors and experts, ending with a certification that should smooth the path to investment. Microsoft BizSpark scholarships are available too, to pay the $450.

Adeo is serious about smoothing the path for founders. He says:

If we could eliminate all the headaches that the modern bureaucratic layering adds to start a company, and allow these founders to focus on the core business challenge, the likelihood of success increases dramatically. We want them learning how to do it right.

A brief interruption before I go on: this looks like a really good program to me, even though it’s brand new, and not certified formally by anybody else. Adeo has a good reputation, knows a lot of the right people, and he’s done some important things before. I think the certification he’s offering is likely to be very valuable. So if you’re interested apply now. Applications close for the first session, which starts this month, May 9. The application costs $50.

Look at some of the mentors already on board. Several are major Web names, founders or CEOs of Scribd, Mahalo, Socialtext, and so on. And Adeo told me has many more, including other mentors as well known as some of these, in the wings.

Adeo himself gives this program a lot of credibility. He’s the founder and main force behind TheFunded.com, a site I’ve posted about before, entrepreneurs reviewing investors. He got his skeptical view of investors the hard way, building companies. Game Trusts, one of his more recent efforts, won $15 million in venture capital and exited with acquisition by Real Networks.

He’s serious about leveling the playing field. The institute has posted sample startup documents including suggested deal terms more favorable to entrepreneurs than most. And the institute is offering to arbitrate disputes.

It’s also taking a piece of the action, which it’s hoping to reinvest in the long-term health of the program. Adeo says there will be warrants, linked to equity, as a “vehicle of valuable attribution.” That’s for “value as a sign to the mentors and the founders. And 60% of the warrant value goes right back to the participants. The remaining 40% is held by the institute as a value play.”

What if you had to take the classic business plan, developed for an MBA-level venture competition, and shrink it down to 10 pages?

Last Friday I spent a fun and fascinating day as a semi-finals judge at the University of Oregon New Venture Competition. My part of the program was evaluating four ventures developed by MBA students from Clemson, Northwestern, Penn State, and Michigan, along with three other judges. That was one of five flights, so there were 20 teams, selected from more than 100 entrants.

The new rules for this year gave them 10 pages for the business plan, plus up to 10 pages for appendices. The judges loved it, of course, because we have to read all the plans. The teams had mixed feelings.

Summarize. In this context, the venture competition, with teams of smart MBA students, it should have been duck soup (although that particular expression isn’t that popular at the University of Oregon, because the home team is the Ducks).

Keep the highlights. Stick to the headlines. Summarize. I don’t care if you’re the next big thing, with an unimaginably exciting new idea and a great team, you can still create a meaningful summary in 10 pages.

Start with a one-page summary. Then tell a story about the need, and your solution, your market, your secret sauce, your strategy, and your great team. Add in a financial summary, and don’t forget to highlight your capital needs, valuation, and exit strategy. If you do no more than 3 paragraphs in any one of these 10 main topics, you ought to be able fit that in 10 pages using a lot of bullet points and white space. Make it an attractive document that the judges, who tend to have older eyes, can read. Leave some space for some snappy graphics, a bar chart or two, and then include the financials in more detail in the appendices.

Some of the teams struggled too much with the page limitation. Some chose the dark-side option, filling the page with dense, small text. Some skipped important topics.

As we get used to these competitions, with page limitations growing more common, I’m expecting more teams to realize that there ought to be a master plan, from which these summary plans, and the presentations, and the elevator speeches, are just alternative output.

Once they get that, they should then start thinking more about the combined communication impact of the plan, the presentation, and the other elements. Can they summarize strategy briefly in a plan, and then explain it more in a presentation? I think so.  The plan and the presentation obviously overlap, but they both don’t have to cover exactly the same territory.

So today my business plan judging marathon month continues. After the event in Portland over the weekend, this evening I’m going to a three-hour meeting of the Willamette Angel Conference, reviewing business plans, listening to presentations, doing due diligence on plans.  On Thursday I leave for Houston, to judge the Rice University Business Plan Competition.

Blame the business schools? As the culprits roll out of the fancy offices in New York and Washington, it’s hard to resist the temptation. There have been several thoughtful pieces on that in the last couple months, particularly the New York Times on blaming the business schools, and Are Business Schools to Blame posted late last month on a Harvard Business School blog. If you care about business education, for whatever reason, read both of these. The first is a bit longer than most blog posts, but thorough, well researched, and significant. The second includes a long string of thoughtful comments.

I care about business education. I think there are serious issues here, and a chance, maybe, to use this crisis to promote some change for the better.

The Times’ piece raises serious issues:

Critics of business education have many complaints. Some say the schools have become too scientific, too detached from real-world issues. Others say students are taught to come up with hasty solutions to complicated problems. Another group contends that schools give students a limited and distorted view of their role — that they graduate with a focus on maximizing shareholder value and only a limited understanding of ethical and social considerations essential to business leadership.

The Harvard follow-up cites three underlying problems (and I’m paraphrasing, here; the words are mine, summarizing):

1. The traditional business school curriculum separates management from leadership. Management is analytical. Leadership is fuzzy.
2. Business school lore and legend is about making money. Get an MBA, get rich.
3. Business schools aren’t owning up to the possibility. The actual phrase is “There has been little contrition on the part of those involved in MBA education after the crisis.” Hard to argue with that. At least Harvard is there.

I see a whole lot of truth in most of this. And I believe in education in general, and I loved the two years I took to get the Stanford MBA, and I wouldn’t change a thing about that time (from 1979 to 1981). I teach one class a year at the University of Oregon business school. So I am involved in all this. And I do think there’s room for a lot more change. And good and bad news.

The Bad News

So much of what they’re saying is, at least from my point of view, mostly true.

Business schools tend to train people to be consultants and middle managers. In my class at Stanford we almost all wanted to be management consultants. Those were the best jobs. From what I can tell, that’s still true, and at all the good schools.

That idea of minding the stockholders interests, blindly, is very deeply rooted. It’s a very powerful rationalization. “Oh well,” they say, as they make the short-sighted, environmentally insensitive, socially insensitive, and even borderline unethical decision, “our job is to mind the share price.”

And the share price, meanwhile, drives very short-term views. The share price doesn’t often reward the strategic decision that sacrifices short term bumps for long-term health.

Business ethics are too often an afterthought. They should be at the core of business strategy, wound in and absorbed in product and market strategy, but they aren’t. They’re separate.

The Good News

The good news is the tremendous boom in teaching about entrepreneurship. It’s the absolute rage in business schools. Entrepreneurship programs are the bright new thing everywhere.

When I was at Stanford, there was only one course on anything related to small business or entrepreneurship. It was called Small Business Management, taught by Steve Brandt. It was a really good review of the startup process, the business plan, and getting investment. It was my favorite course. But it was also the only one offered that had anything to do with entrepreneurship. Today Stanford has a booming center for entrepreneurship and some amazing activities related to entrepreneurship: speaker series, videos, and so on.

And that’s the rule, not the exception.

Furthermore, people inside the schools are waking up to the growth in green business, social entrepreneurship, sustainability, and so on. I was at MERC 2009 the week before last: put on by the George Mason University Entrepreneurship Center, focusing on sustainability. The University of Oregon business school has a program on (a center focusing on) sustainable business. There too, that’s the rule, not the exception.

And a Hope for the Future

Maybe it’s still just a pipe dream, an ex-hippy delusion left over from the 1960s, but it seems to me that changes in the business landscape — increasing visibility, for example, in an explosion of small-scale quasi-journalism in blogs and social media — make it steadily more important than long-term successful business has to respect the fundamental values of fairness to employees and customers, sustainability in resources and the environment, and better citizenship in a very broad sense.

The world is revising the golden rule: do unto others as you would have posted and tweeted everywhere, and lodged in Web searches forever. I think that’s a good thing.

Maybe in the future the businesses will actually do well by doing good.

The New York Times had an interesting piece a few days ago about a live-in entrepreneurship program at Babson college. They called it Dreamers and Doers. Quote:

"‘Any school can teach entrepreneurship,’ he says, ‘but at Babson, we live entrepreneurship.’"

I like Babson. I've been there a couple of times. Good program, and good faculty. And a good reputation for entrepreneurship, especially.

Babson focuses on business, and E-Tower focuses, even more tightly, on entrepreneurship. The residents of E-Tower hash out new business plans at Monday night meetings, and they talk shop throughout the day and night.

“We’re really a dorm of dreamers and doers,” says Prinya Kovitchindachai, who is hoping to market a vile-tasting pill, imported from Thailand, that he touts as a hangover treatment. “College students are the largest group of binge drinkers,” he says, quietly gleeful at the prospect of such a large market so close at hand. Friends have helped him bone up on the basics of international shipping, of securing shelf space and — in a consultation with a neighbor who was wearing a towel and still dripping from the shower — of creating Web sites.

The story goes on to catalog the burst of entrepreneurship programs throughout higher education.

A report issued last year by the Kauffman Foundation, which finances programs to promote innovation on campuses, noted that more than 5,000 entrepreneurship programs are offered on two- and four-year campuses — up from just 250 courses in 1985. Full-scale majors, minors or certificates in entrepreneurship have leaped from 104 in 1975 to more than 500 in 2006. Since 2003, the Kauffman Foundation has given nearly $50 million to 19 colleges and universities to build campus programs.

Studying entrepreneurship is a luxury. If you can manage it, if you can afford it, do it. Do it because you want to, because you're going to enjoy the learning and the people you meet along the way. Don't do it for the money.

The Babson program brings people studying entrepreneurship together, even to the point of living together. Sounds like a good idea — for those who don't have families, and lives, at least.

What if we measured the effectiveness of education — any education — by the impact on human lives? What if we said an MBA degree isn't about earning power and recruiting, but thinking power and effectiveness and getting things done; by how many businesses we've started, or grown; by how many new jobs we've created; by how many houses our employees have purchased to live in with loved ones?

What if we measured education by how well we treated our fellow humans in the workplace, on the street, and in the home? Shouldn't that be a relevant scale?

Consider this, a great quote, in a business school context:

"It was our view that you need to think critically about what you are doing every 100 years or so, whether you need to or not."

That's Harvard Business School Dean Jay Light, as quoted — with tongue obviously in cheek — in Harvard Business School Discussed the Future of the MBA, on the HBS site. Yes, he meant to be ironic, and yes, the Harvard Business School is 100 years old this year. And, (third yes in a row), yes, a lot of business school leaders are looking critically at MBA programs. With depressing results.

For their research project, Datar and Garvin interviewed 30 deans and associate deans and roughly 100 students in large and small groups. They wrote case studies on MBA programs at Chicago, INSEAD, Stanford, Yale, and HBS, plus a case on the Center for Creative Leadership (all are available from Harvard Business Publishing); collected data on aggregate trends in MBA enrollments and program designs; and compiled a detailed curriculum analysis of eleven business school programs. To complete the picture, they also interviewed leading academic critics and 28 executives and recruiters. The findings presented a mixed diagnosis of the health of MBA programs, but on balance were, in the words of one HBS faculty member, "depressing."

Depressing, despite the fact that business schools worldwide are producing half a million MBAs every year, 150,000 of them in the United States.

And here's another interesting quote from that same post:

Henry Mintzberg of McGill University in Montreal devoted a book to his contention that "conventional MBA programs train the wrong people in the wrong ways with the wrong consequences."

It gets worse as you read on, even more depressing, except for the fact that these are a lot of the best schools putting their heads together and trying to figure this out. And that's not depressing, because critical thinking seems like a good step towards improving things. How do you teach business? And how, for that matter, do you measure the value of having been taught?

Here's one thing I know (or at least I'm sure of) about this subject: you don't measure the value of education by income. And you don't measure it by utility to employers.

And I'm still glad, about 30 years later, for my two years in business school. I liked the life we led as a family on campus, I liked the profs, I liked the classes, and those two years worked for me to pass me through the tunnel from journalism to building my own business. I wouldn't have missed it.

And on the other hand, I don't have much evidence that it's good for you, or the next person, or everybody.  It worked for me.

Pop quiz: What can a college student, an entrepreneurial grad student, a working mother escapee from the cubicle job world, and a 60-year-old business owner have in common on the subject of job seeking at a bad time? Read on.

But first, a story: A senior in college is in a job interview with an investment bank.

"Why do you want to work with us?" the interviewer asks.

"Because you still exist," the job seeker answers.

I heard this story during dinner late last month with a group of Stanford Univeristy seniors. It was a joke. It was followed by laughter; nervous laughter.

One of that group was my daughter, and with my daughter in the midst of this job search worst-ever year, it's been on my mind too. And for this post I'd like to make a three-way combination of people saying (sort of) the same thing.

Let's start the three-way with David Miller, of Campus Entrepreneurship, a grad student, entrepreneur, and a blogger I read regularly. In MBAs: Time to Look in the Entrepreneurial Mirror he writes:

If the state of the economy around the time of graduation is the main determinant of career earnings for those who enter the labor market upon graduation — then DO NOT enter the labor market. BECOME AN ENTREPRENEUR. Take control of your own financial trajectory. You won’t show up on the payroll data that Kahn uses when she does her research.

The path may seem more difficult — creating something out of nothing vs. taking a second choice job that pays the bills in the short term, but it will pay off in the long term.

For part two, another blogger I read regularly, Pamela Slim of Escape From Cubicle Nation. I sent her post Stop searching for the perfect job and start finding your life's work from a few weeks ago to my daughter. She said:

Jobs are temporary things, often enticing on paper until you realize that as soon as you get comfortable in your position, it will change, your boss will change, your team will change or your organization will change. That is just the nature of business. Therefore if you go into a job excited by the position or the person you will be working for and not the work itself, you often set yourself up to be disappointed.

Your life's work on the other hand, are activities that you have natural talent for, which energize you and stimulate you and do not change no matter what "job" you happen to be in. I found this for myself when I began to think about my own life's work. I reflected back on all the things I have done in my career and I came to the realization that the core of my life's work is about transformation.

Pam's been through the job mill and looks back on it.

For part three, you have me, the 60-year-old guy. Neither of those two above were writing for seniors in college. They are both right, in the long term, but neither was writing to the college seniors looking for jobs in the midst of financial crisis, massive layoffs, and so on.

Sure, in the long term, the best job is one you make yourself. However, that's not realistic for the 21 or 22-year-old just getting out of college. Many of the best of them will end up building their own new world and their own jobs with it. In the meantime, though, I understand why they want that job. They did well in high school to get into college. Now they want to do well in the next step. And they can't really jump straight out of college into entrepreneurship. Sure there are exceptions to the rule, Bill Gates and Mark Zuckerberg and all, but how many exceptions per million?

I don't blame them for worrying.

The best advice I got at a similar time in my life was from Steve Brandt, who was, at that time, teaching at the Stanford University business school.

He said it might not be practical that we the students would try to go straight out of school into starting our own companies. We probably didn't have the track record or the traction.

But what you can do, he added, is to choose which stream you're going to swim in. What you do now in your first few jobs will determine what you can do later.

Many long years ago, during the last weeks of a two-year MBA program, I was in a class that ended up discussing what we had and hadn’t learned. Disappointments came up. I was an outsider, I was happy with having spent two years in class learning things (analysis, technique) that were essentially teachable in class.

What we hadn’t learned, most of my classmates seemed to think, was a lot of the nuts and bolts of getting through the day, week, and year of business; we didn’t have a lot of practical "how-to."

What reminds me of that discussion is paging through an early copy of Guy Kawasaki’s new book, Reality Check. It just arrived over the weekend, and I’ve had time to get to know it.  It’s a book that should be on everybody’s shelves, a reference book in a way, 90-some pieces of real-world experience and wisdom on about as many business-related topics, very well packaged and condensed into easily-readable terms.

It’s a book you’ll browse more than read straight through. You’ll want to refer to it often, later on, as a refresher and thought generator on lots of real-world issues that come up randomly, in business and work life. Not just Guy’s view on the world of start-ups and investing and Silicon Valley, which you’d expect — and is there as well, also well organized and well packaged for the book version of random access — but also things such as when you have to speak in front of a group, or getting along with your boss, dealing with lawyers, hiring people, and even (although the actual topic is not what you think) "the art of sucking up."

Coincidence or not, my copy opened up automatically to page 237, which turns out to be "The Art of Blogging," a list of tips beginning with the following:

"Think "book," not "diary." First, a bit of philosophy: Think of your blog as a product. A good analogy is the difference between a diary and a book. When you write a diary, it contains your spontaneous thoughts and feelings. You have no plans for others to read it. By contrast, if you write a book, from day one you should be thinking about spreading the word about it."

This is a great one to illustrate the content in this very large (more than 450 pages) book. Much of it is familiar to me, because I’m a loyal reader of Guy’s blog. So a lot of his better and better-known blog posts, and a lot of the better stuff in some of his other books, is also in this book. For example, his famous "Top 10 Lies of Venture Capitalists" is included, and several "art of" pieces, and the Zen of Business Plans and Zen of Presentations, how to speak like Steve Jobs. A lot of this book appeared first in the blog. However, getting back to the specific example above, a lot of it hasn’t appeared in his blog. That one — the art of blogging — is not from the blog. It felt new to me, and I checked the blog, and couldn’t find it there.

The point, to make that clear, is that this is not just a compilation of earlier work. A lot of this feels new to me, but seems familiar because of Guy’s very original way of presenting new views on previously existing issues. There is a lot of material taken from posts, but there’s also a lot of new material, and all of it is organized right so you can get at it.

There’s also a nice play between "the art of," as in the art of the start; and "the reality of," which is much more the theme of this new book. The 90 chapters are divided into 12 sections, each themed on reality, as in "The Reality of Competing," and "The Reality of Hiring and Firing," and similarly practical basic themes. You get the reality of working, the reality of planning and executing, and, in the last section, a lot of Guy’s best work, "The Reality of Doing Good."

I strongly recommend this new book. You’ll keep it close, and you’ll refer back to it. It’s not what you learned in the classroom. It’s not what you missed, either. It’s something like what you learn by living it if you have the time and opportunity; plus that Kawasaki vision that adds a nice mix of humor, deflation, and, as in the title of the book, reality check.