5 Entrepreneurship Basics B-Schools Don’t Teach

The other day I posted 5 Entrepreneurship Basics B-Schools Can Teach. It’s natural to follow that list here with the exact opposite: 5 other entrepreneurship basics the business schools can’t teach. But I couldn’t quite do it. I had to change can’t to don’t. That, to me, is a significant difference. So here they are  (things they don’t teach, not necessarily things they can’t teach):

1. Dealing with people

Sure, you can teach organizational management, and there are rules for employees, lots of advice on selling, buying, leadership, and all that. But can anybody really teach empathy? Do you learn how other people feel by sitting in a classroom, or by working with (and living with) them. I like the new network television show (Lie to Me — pictured here to the right) where they read physical signs like facial expressions to know who’s telling the truth and who’s lying. The rest of us need a lifetime to figure that out, and, let’s face it, we probably never do.

How about the basics of self interest, like starting every business communication with “you” and the benefits for the reader or listener? Or figuring out who’s likely to be a long-term ally, and who isn’t? Or figuring out that selling right is listening first, and solving people’s problems? Some business schools try to teach that stuff. Most fail.

2. Right and wrong

I know business schools are trying to teach business ethics, but it’s so hard because there are so many different views, and social and political constraints; and ethics means different things to different people.

My bias on this point is that businesses that act in ways that help the community, and their employees, and their customers, and the earth and the environment, and all that jazz, will do better over the long term. Things like fair play and, at the very least, doing no harm, are critical to long-term success.

Fairness is so important. No business deal or alliance will work over any useful time frame unless it offers benefits to both sides. Screwing people is not a successful business model. But can that be taught? I can’t even prove it, let alone teach it.

3. Having a life

With all the baloney we spread about entrepreneurship passion and perseverance and persistence and all, where in the curriculum do we teach putting business in the right order of priorities? Who teaches that it’s easier to find a new job, or build a new business, than a new spouse? Which class is that?

Business schools and business academics undervalue life as they (we) teach starting a business as the classic high-end getting financed and getting an exit. There’s way too little attention to what we (with a sneer, usually) call a “lifestyle” business, or, for that matter, starting up via bootstrapping instead of outside investment. And nobody teaches how to decide what to do when a crucial business meeting interferes with a kid’s soccer practice.

Every class in entrepreneurship should have at least one session with somebody who got so obsessed with the business that they lost the rest of their life. It happens a lot. It needs to show up in the classroom too.

4. Managing risk

I don’t mean the technical side of risk management. Business schools are generally excellent at teaching the numbers and analysis of risk, mathematical tools to evaluate the time value of money, for example, and formulas to compare technical investment risk like the internal rate of return (IRR).

I do mean living with risk. Not betting things you can’t afford to lose. How to sleep at night when your customers owe you enough to destroy you simply by failing to pay what they owe. How to figure out which spend is a reasonable risk for generating a future payback, and which isn’t. How it feels to take a second mortgage, or how it feels to tell a graduating high-school senior with a great record that there isn’t enough money for the college he or she has earned.

Don’t take risks if you can’t live with the downside consequences.


5. When to hold and when to fold

One of the hardest thing we do, in startups and small business, is figuring out when to stick to the plan and when to back up and try something else. There are no magic formulas, no software that can do that for us. It wraps up a combination of guessing the future, projecting different possible scenarios, understanding what’s at stake, and figuring out where assumptions were wrong, where sticking to the plan makes sense, and where it’s going to be like running your head against a brick wall over and over.

Reflection: teaching with stories

How do we teach any of this? The best hope, I think, is by telling stories: Stories of failures, stories of problems, challenges met, situations, and so on. We do deal with business cases in business schools, and cases, when done well, are a lot like stories. Of course the value depends on a couple of important factors, like the case itself (real business, or big business?) and the teacher. True stories, told by the people who lived them, can be better than business cases.

Final thought:

Am I wrong on this? Maybe my experience is out of date. If the business schools are getting better on this, I’d like to know. I’d be very happy to be proven wrong.


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  • Jay Lebo says:

    I did indeed learn numbers 1, 2, 3 and 5 at business school.

    Not all business schools are created equal, and more often that not the people who claim “business schools don’t teach X, Y and Z” never went to one. (I know that’s not you, Tim).

    The average person would be very, very surprised to find what the best business schools teach. It’s not all “screw the poor and become Warren Buffet” stuff.

    These things can be taught, as your title concedes. Many schools do teach them. Not all, of course. But don’t tar all b-schools with the same brush. Just because some schools give away MBAs like they were CrackerJack prizes doesn’t mean they’re all like that.

    I am obviously a bit sensitive about this. I value my MBA very, very highly. I get defensive when people suggest, without really knowing, that I missed out on some critical part of a business education because I added a degree on top of my experience. I learned more about numbers 1, 2, 3 and 5 in one year of b-school than I would have in two decades of experience.

    I graduated in 2007. I don’t know how relevant that is, but I put it out there.

    • Tim Berry says:

      Jay, that’s a good endorsement for the Ivey School of Business at the University of Toronto (I googled you) and I’m glad you added it. I’m very proud of my Stanford MBA degree and I’ve written here and elsewhere of how valuable it has been for me, and I’ve always forgiven them for what they didn’t teach because what they did teach was extremely important. It was essentially philosophy neutral, so there was no “screw the poor” at all. I was already in my 30s when I started, and throughout I was comfortable with the idea that I would learn about business in business school and life elsewhere.

      As for this post, to be honest, I’d be happy to be wrong.

      • Jay Lebo says:

        Small correction. The Ivey School of Business is at the University of Western Ontario. The University of Toronto is home to the Rotman School of Business. I’ve attended both universities, but my MBA is from Ivey, which is at UWO.

        If you change the title to “5 Entrepreneurship Basics Many B-Schools Don’t Teach”, you’d satisfy me, because that would be true.

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  • April Olsen says:

    Business ethics, you had it in the title: right or wrong Period. There are no variations in business ethics or multiple dimensions to it–right or wrong. The reason business ethics becomes muddy is because people make it muddy. Muddy enough to get away with whatever greed at the moment will give you. I know many who go by right or wrong and have no ‘issues’ as to the definition of ethics. But the ones that have issues with it are generally not there for anyone other than themselves. Then you have the denial types that insist they don’t understand it or have problems with it but swear they aren’t out for themselves. LOL.

    • Tim Berry says:

      April, thanks for the comment, it’s a welcome addition. I don’t think I agree with you that right or wrong is always clear, with no variations … business ethics can be muddy for reasons other than greed, like trying to figure out what’s best for employees, customers, and owners, when choices come up, as they always do. For example, when you give in to an unreasonable customer you cause extra stress to your own employees who take the phone calls and would rather have you stick unwaveringly to fair policy as laid out in black and white. What’s best? For whom? I think things like that come up a lot.

  • Adwords Secrets says:

    Great Post, really got me thinking about how many skills be actually posses, if you where given this list before you began I probably would not have started.

  • Perth Sheds says:

    Great Post… Negotiation might be another one..

  • How To Increase Sales says:

    Another thing that I’ve notice they don’t teach is Sales.

    They have Marketing, how to attract the customer, but for the most important revenue activity of a business there doesn’t appear to be any Majors in Sales.

  • Paula Crabtree says:

    I reflected a lot on your question of how we learn empathy – much of what we learn intellectually doesn’t stick if it has no meaning and meaning is related to our feelings – to our emotional intelligence or our sense of connection.
    Metaphorically, you just zoomed in on the background details of the photo, which are intrinsic to the whole but which only those with an eye for detail ever take in. Maybe the topics you mention are only dealt with superficially, because they take us out of the concrete, external world of business and into the mushy, inner realms of our human experience. Possibly, this also accounts for why stories are able to engage us so powerfully; we are able to reach into the depths of our feelings and resonate with our common human experience…

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  • Acton MBA says:

    Great post – you’re right, most business schools don’t teach any of that, to the detriment of entrepreneurs. That’s one of the reasons why the Acton MBA in Entrepreneurship is so different: for example, we have a Life of Meaning course that focuses on finding a balance in your work and family life and finding a calling so you have a job you’re good at, that you love, and that solves a problem/meets a need in the world.

    Your final conclusion about teaching by stories is also dead on — this is why, in addition to using the case method, every single professor is a practicing entrepreneur – so that they can share their stories and experience. Check us out: http://www.actonmba.org and http://www.actonmba.org/blog.

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  • @BrianJRussell says:

    I’ve not been to business school, but am part of a real estate development company in North Africa. Would love to have you teach on these 5 basics (along with others) to our team, as well as the other Moroccans and Egyptians we do business with.

  • Andy Brudtkuhl says:

    I think you are right on. While I valued my time at B-school once I got into the real world it felt like I had learned nothing. Part of the problem is that professors have gone academic and lost touch with the real world. In fact by best professors were the ones who were freelance consultants in their off time.

    But I’m not sure these are things you can teach in a book or with powerpoint. These are learned experiences you can only acquire by getting your hands dirty – which is the biggest reason anyone serious about business should take internships while in school. That’s where you learn the intangibles – and you are ready when it’s time.

  • Mark Harrison says:

    Thanks for these thoughts, Tim. I agree with many above that these skills can be taught in b-school, that many schools try to teach them, and that many fail to truly incorporate these lessons (even while trying). At the same time, I wonder why there aren’t more companies out there using mentorship programs to foster some of these traits. Who says you need to go to graduate school to learn these lessons? To me it seems that these are things you learn in practice (often by failing); having someone on board to point out the teachable moments in real life would seem like a good approach.

  • Robert Hacker says:

    We could add to the list leadership, public speaking, writing and cultural studies to name just a few. B School will never be all encompassing. Educators at all levels bear a responsibility to properly prepare students for a career in business.

    Having said that, the post is a good list of important themes for MBAs to think about.

  • varun says:

    wow……..it is really an eye opener……..i have really learnt a lot from this article.Even i am also doing MBA in delhi,India so got to know the truth,That a B school cannot teach all these important things.So as a manager one must have knowledge of all these..I would like to share one quote,,,”Education is not the answer to the question. But education is the means to the answers of all questions.

  • margaret mariani says:

    Agree that many of these basics are real life lessons. My husband is attending a top 10 MBA program and a lot of these ideas are thought through the case study method that they utilize. But most importantly, all 5 of these ideas are common sense skills that can’t necessarily be taught. Either you have them or you don’t. Real leaders are born and raised not made. And for one of these lessons, Kenny Rodgers taught us best in the “Gambler”:
    “You got to know when to hold ’em, know when to fold ’em.
    Know when to walk away, know when to run
    You never count your money, when you’re sittin’ at the table.
    There’ll be time enough for countin’, when the dealin’s done.”

  • Lawrence says:

    I happened to go to a university that taught these principles, so I was lucky. However after being out in corporate america, I do question whether professors were able to delve enough into the topics to give a fresh perspective. I think managing risk, knowing when to hold and to fold, and having a life now in business mean very different things now than if you’ve been removed from school 10-15 years.

  • Jay says:

    I completely agree with Doug and Sampath. I’m currently in my 2nd year of the Babson Fast Track MBA program and the topics discussed in this article are being discussed in class and our conversations.

  • Paul Klipp says:


    My ethics classes didn’t teach me right from wrong. I agree with you that can’t be taught. What my business ethics class did a great job of impressing on me is how hard it can be, in the pressure of the moment, to recognize an ethical crisis when you’re in the middle of one. Knowing when to stop and think hard about what you do or say next is the most important aspect of ethical management, in my opinion, and a course can help you to recognize the kind of scenarios that might lead to an ethical crisis and the kinds of feelings, pressures, and situations that should make you stop and think carefully about the right thing to do.

  • Paul Klipp says:

    I think my MBA program handled these important topics very well, at least back in ’98 when I graduated. That was a decade ago and I still remember the talk on ethics by the engineer responsible for the safety of the space shuttle Challenger and the talk about work-life balance by the multi-millionaire who spent most of his adult life regretting the fact that his entrepreneurial success cost him his marriage. The theme of our orientation was community service. Nearly all projects were done in groups, emphasizing teamwork and collaboration. There was also a big emphasis on developing public speaking skills. I think the most valuable lessons I learned were from my fellow students, from small workshops, and from the many great guest speakers sharing personal stories of failure as well as triumph. I certainly hope that MBA programs haven’t lost all of that in the past decade.

  • The Big Idea Blog says:

    Tools and techniques…

    With 3 kids in college, I think frequently about what they can learn, what they will learn and what they might miss.

    Thought -provoking articles:

    5 basics that B-schools don’t teach Tim Berry

    5 things B-schools CAN teach entrepeneurs Tim Be…

  • Anthony says:

    #2 SHOULD NOT/CANNOT BE TAUGHT AT B-SCHOOL. You can bring different points of view in, but ethics are chosen. Your life philosophy and what you value is something you choose. Does that scare you? Your ethics/values/philosophy may scare me as well, does that give me the right to push you into an education class of what I think is right?

  • Kit says:

    My first thought after reading this article was, “this guy didn’t go to Babson” I’m a 2006 Babson graduate and every one of these topics was covered either through case studies, professor advice, experiential learning, or the businesses we started while there.

  • McNeal says:

    Tim – This is a really great post. It echoes a lot of the things Henry Mintzberg advocates in b-school education. I think it’s hard to teach ethics, but definitely possible to show the benefits. Lots of studies have been done recently to show the effect of sustainable business practices on the bottom line. Dov Seidman’s book “How” has a lot of information on the topic.

  • BobOnBusiness says:

    Great post! Here are a few more that I wrote about recently:
    “5 Traits That Are Mandatory For Business Success”

  • SagaciousThink says:

    I think the 5 items you mentioned are critical skills. I am not sure the broad brush you applied here is appropriate. I got my degree at Johns Hopkins Carey School of Business, and I can say that they touched on all these topics. Of course it depended on the instructor like everything else, but the folks teaching entrepreneurship had been in the trenches and wanted to share their lessons learned.

    They painted a realistic picture of how it was a struggle, the crazy hours they worked, the ethical issues they faced, and how they handled them. Their stories offered a richer education than we could have ever gotten from a textbook. I’ve had many of those moments where I encounter something or hear a similar story from an entrepreneur that I can directly tie back to what I learned.

    Given the international focus, they went one step further and explained some of the cultural confusion that can crop up, that is a topic that I think needs to be more fully understood by the entrepreneur.

    Thanks for providing another thought provoking post.

  • Laura Alumbaugh says:

    Great list Tim! I am like some of the others that posted and have an MBA but graduated 20 years ago so it is difficult to judge what schools are presently teaching. But, one of the things I would add to your list is teaching the skill of networking! This is one skill that is not innate to everyone and so critical to any business owner.

  • Rob says:

    I’m glad you went with don’t instead of can’t. Business school can and does teach these types of lessons. I got my MBA this past may and had lessons in each of these points, though usually not in the classroom.

    Doug’s right that In order to make an MBA more than an academic exercise, you have no choice but to put your heart into the program and go beyond showing up for class, doing to readings, assignments and tests. You join and lead student organizations in the subject matter you’re interested in pursuing and seek out knowledgeable staff and faculty and work with them.

    If you are willing to go the extra mile in business school, you will most certainly be exposed to each of these points.

  • KBarr says:

    Most “Ethics” courses I’ve ever taken (some even voluntarily!) seemed more focused on how to bend the rules and then justify it, rather than on right and wrong behaviors.

  • Sampath Jayaprakash says:

    I completely agree with Doug Giuliana. Babson College – Olin School of Business does an excellent job covering all the 5 topics that Tim presented here. I was a recent MBA graduate from Babson and took management position on a startup soon after. The lessons learned at school on all these 5 topics helps me incredibly in my current job.

  • Alyson says:

    As a recent bschool grad who now has a business, I found this article right on the money (no pun intended). One of the things I struggled with in school is that I felt in many cases these very important issues were often pushed aside to focus on financial models and strategy.

    While I don’t believe they can be taught, I do believe they can and should be addressed and discussed. I knew I would go out on my own and that it would involve trying to balance everyday life, a family and financial risk. It is not easy but I often feel like both the school and my peers do not consider my venture as legitemate because it is a “lifestyle” business. It is a delicate balance but running a lifestyle business is no more or less difficult than any other business, except in how you define it.

    Bschool taught me so much and I don’t believe I could have had the confidence to go on my own without it. But it didn’t give me the understanding or the support to know that there is a very human face to the business that I would have to address everyday.

  • Jim Tucker says:


    Your points are very valid as is your encouragement to use stories just like the rabbis did centuries ago as they kept generations aware of laws important to human survival. After 3+ decades in business, I’ve adopted something I call the four corners of “my world.” They are: (a) Truth is not optional. It is an objective reality. That’s why they call it “THE truth”; (b) Loyalty is the highest compliment one can pay to a relationship. Starts with your relationship with God and goes on from there; (c) Only your best will do. If you aren’t willing to bring your “A-Game” to every assignment, you are not a professional; (d) People are more important than money. A “business” is nothing more than the reputation you have earned and the willingness of clients to testify to it.

  • Brian says:

    I graduated from Babson’s MBA program just a couple years ago and started my own business. I would say that in my experience a lot of these topics were covered pretty well. It obviously wasn’t from a textbook, but it was from all the professors who had this life experience and the entrepreneurs that they brought into our classrooms to discuss these issues and told the stories. I believe that is about as good as you can teach these topics, listening to the stories of those who have lived it.

  • Deb says:

    Tim –
    Nice job with the points. I think though, by the time you get to business school, you should already know these things. Why not teach this in kindergarten? And then reinforce it all throughout the schooling phase. Just a thought.

  • Michael Thompson, Ph.D. says:

    I believe that you are right on with your comments and insights. People skills (emotional intelligence skills), a sense of right/wrong and life balance are possible to learn. The combination of intuition, “life” experiences and learned people skills are essential to the success of our MBAs. I was a faculty member of a new program at Kellogg that focused on helping graduating men/women develop more ‘right brain’ skills. The program is designed to combine academic study, personal reflections and measurable actions that will help these young men and women be better prepared for their professional and personal journey’s. Thanks for your insights!

    Mike Thompson, Ph.D.

  • Yong-In S. Shin says:

    It will be hard to find business schools which covers all of your five areas perfectly. I noticed that Marriott business school in Brigham Young University has a good program in the areas of the business ethics and work and family balance.

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  • Himie says:

    Tim, very good points. I have the MBA. However, the touchy feely side of business management was not taught. Perhaps a class on human relations from the MBA perspective should have been taught. This class would focus on the human and ethical side of doing business. Perhaps you should include this in your curriculum.

  • Kate Putnam says:

    Hi Tim,
    So long as books that compare business to war sell well, it will be difficult to teach ethics, collaboration and cooperation. Those go out the window in battle.
    We did have a mandatory ethics class in business school 30 years ago at NYU. It was a joke, however purposeful the teacher and the course material. My first observation of blatant cheating on an exam was in business school. I don’t think ethics are learned in school, although schools can reinforce them.

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  • Suzanne Muusers says:

    I graduated from business school 20 years ago (oh dear, I’m showing my age) and #2 comes to mind for me. Ethics – understanding what’s right or wrong should be taught. It wasn’t at the University of Hawaii where I went to school. Suzanne

  • Michael Frye says:

    I can’t speak to whether business schools are teaching these things – though I suspect they’re not – but kudos for identifying these areas of knowledge that are essential for business and life.

  • Doug Giuliana says:

    Tim, you make some very valid points here. But what needs to be stressed is that most of these CANNOT be taught in school. It isn’t that b-schools are failing, but that these things are not learn-able in the classroom.

    However, I believe Babson is doing a much better job at addressing these than most. As you point out, these important lessons are learned in the trenches, by “doing” business. Babson provides real opportunity for taking business education and putting it into action. The Hatchery at Babson provides support, space, counseling, and real connections to help students get their ventures going so they can tackle these challenges head-on.

    As proof of its success, Babson grad Phil Tepfer was a winner in the 2009 StartupNation.com Home-based 100 with a business he started while at Babson. His “Sail Proud” clothing company uses sustainable, eco-friendly materials and sponsors a program that helps developmentally challenged children. While this may not address every point in your list, I think it shows a move in the right direction.

    Clearly the take-away is that business school may show us a path, but we still have to walk it ourselves to see where it goes. And nothing could be truer.

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