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Entrepreneurship Education: Bootstrapping At B-Schools?

Posted on Monday, Feb 15th 2010

I know I have a number of readers at various universities … can anyone comment on a business school (or just any old college or university program) where bootstrapping is taught as part of the entrepreneurship curriculum?

Of course, I am a HUGE proponent of bootstrapping, having written the recent book, Bootstrapping: Weapon Of Mass Reconstruction, as part of the Entrepreneur Journeys (EJ) series. The EJ Methodology is heavily rooted in using bootstrapping to get an idea validated, and raising money only after it has moved from being an idea to a business. I also regularly teach entrepreneurs to bootstrap their ventures at my weekly online strategy roundtables.

It is my observation that not bootstrapping and not validating their ideas with customers before going out to raise financing is one of the most common causes of the Infant Entrepreneur Mortality (IEM) disease. And b-schools seem to be spreading the IEM virus by encouraging entrepreneurs to raise VC money as an essential success factor. This led me to write the recent Forbes column, Why B-Schools Set Up Entrepreneurs To Fail?

This segment is a part in the series : Entrepreneurship Education

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Absolutely! I am a professor at the University of Colorado’s Leeds School of Business, in the Management and Entrepreneurship department. Part of the curriculum for the Certificate of Excellence in Entrepreneurial Studies that we offer our students is a course named “Start-up Execution”. You may navigate to the URL I have included to see a brief synopsis of the course, but suffice to say that it relies heavily on the principles and practice of bootstrapping.

I will also add that I direct my students – all second year MBAs – to your blog often, as I find the topics you cover to be relevant and complementary to our curriculum. If you’re passing through Denver/Boulder in the future, I would welcome a visit! Thanks for all you do…

George Deriso Monday, February 15, 2010 at 4:49 PM PT

Sramana,

I think Tina Seelig, Executive Director of Stanford Technology Ventures Program, shares our passion for bootstrapping:) http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2267

Irina Patterson Monday, February 15, 2010 at 4:52 PM PT

Thanks, George! Good to e-meet you and learn that you and your students are finding the blog useful. Are you using the EJ case studies, btw? I will let you know when I am in the Denver/Boulder area.

Irina – Tina Seelig indeed is a bootstrapping afficionado. Other people have talked about her as well. I have to ping her. Thanks for the reminder.

The issue I am trying to address is that we’re seeing too many b-school students wanting to raise money right away for their ventures, and by and large failing. This is another entrepreneur mortality cause that can be very easily plugged with an outreach to the b-schools.

Sramana Mitra Monday, February 15, 2010 at 6:01 PM PT

Hi Sramana,

I find that most B-school students are brought up with the mindset that you need to raise money to succeed. Many top schools have venture incubators and make it a big deal to be recognized and seeded by their centers of entreprenurial excellence. Bootstrapping I feel, is taken for granted. That is, if anyone could bootstrap, they already would before looking for funding. This is so incorrect.

Regards, Ram

Ram Tuesday, February 16, 2010 at 12:25 AM PT

Sramana,

We not only teach bootstrapping throughout our curriculum here at Belmont University, but I have also recently published the first text book on the topic. It is published with Prentice-Hall/Pearson.

Jeff

Jeff Cornwall Tuesday, February 16, 2010 at 5:45 AM PT

I agree, Ram.

Sramana Mitra Tuesday, February 16, 2010 at 10:57 AM PT

Great discussion. My undergrad New Venture Creation class is discussing financing this week and I will be sure to ask them how many have considered bootstrapping? Venture Capital still holds incredible mindshare amongst students. Thanks again for the great discussion.

Campus Entrepreneurship Tuesday, February 16, 2010 at 3:49 PM PT

The Harvard-MIT Health Sciences and Technology program seems to be. They sought me out as a speaker last month specifically to have an entrepreneur present a case study about how they bootstrapped their company.

Doug Bates Wednesday, February 17, 2010 at 8:15 AM PT

Because entrepreneurship education is still relatively “new” as a discipline, what schools offer is often reflective of the faculty involved in creating the programs. I teach at Bellingham Technical College–most of my work has been with community colleges and small business centers–and I always include bootstrapping and the concept of non-debt start-up in my courses. Entrepreneurship education has gone through some phases; from a focus on personality type to an emphasis on business plans and loans and finally now (at least in MY courses) a focus on strategies and competencies that lead to success.

Karen Southall Watts Wednesday, February 17, 2010 at 9:42 AM PT

My name is Greg Stallkamp and I am an entrepreneur that launched a social networking website focused on fitness, http://www.holosfitness.com. I feel my story may be appropriate, because I am also a part-time student in Kellogg’s MBA program. During the day I work on Holosfitness.com and at night and on weekends I attend classes focused on entrepreneurship and strategy.

For the most part the entrepreneurship classes I take do not focus on bootstrapping. The general idea is that while bootstrapping may be necessary at the start of a business venture, if the business model has merit, you should be able to attain outside financing and support from investors. I think the curriculum at Kellogg is realistic on the idea that adequate financing is one of the most important aspects of a business. While bootstrapping may be necessary early on, as you search for commitments from investors, over time you will need a more structured capital base in order to effectively compete in the market.

That being said, my own company, Holosfitness.com is completely bootstrapped. I have taken no money from outside investors, and instead focused on the most cost effective ways to launch and grow a company. While to some extent this strategy has limited our growth, Holosfitness.com has seen incredible success in the year that it has been launched and we are currently poised for an even better 2010.

Greg Stallkamp Wednesday, February 17, 2010 at 9:56 AM PT

My name is Trey Goede and I am an entrepreneur and adjunct professor in the 16th best Entrepreneur Department of the Business School at St. Louis University. We spend considerable time on bootstrapping across the entire curriculum as we move students through feasibility studies and full business plans as part of course work. We also draw on our own experiences in business, as full time professors, or adjunct like myself. I personally have bootstrapped every company that I have started or been a part of, and typically find very creative ways to do so. Bootstrapping is a very necessary business practice, especially in light of the current economy. At St. Louis University, we apply real world bootstrapping examples and scenarios to impress upon students the need to conserve cash and be fiscally responsible(frugal!).

Trey Goede Wednesday, February 17, 2010 at 10:40 AM PT

I teach entrepreneurship at both the undergraduate and graduate levels, to business students and to non-business (usually engineering and computer science) students, as well as leading new venture bootcamps throughout the state of New Jersey (usually at university-affiliated incubators). Bootstrapping is an important part of the training for several reasons.
First, as everybody will tell you, capital is hard to acquire, especially in the current economic environment. As many VCs will tell you, although they are still funding companies, they are being far more selective, and valuations are lower. A startup may have to choice but to bootstrap.
Second, the funding process always takes longer than companies expect. A VC I was having a conversation with yesterday was talking about times ranging up to 18 months between the first meeting/pitch, and writing the check. The company has to be able to survive on it’s own resources during this interim period.
Third, the techniques of bootstrapping can be very useful even for funded companies. Bootstrapping requires a strong focus on capital efficiency, which investors are more concerned about now than ever before.
Fourth, a company may increase it’s valuation by bootstrapping. The more milestones you can meet before you need outside capital, the lower your risk, and the greater the value of the company. This is especially true if one of those milestones is sales.
Finally, if the startup is one which can be bootstrapped “all the way” (not always possible depending on the industry/product), the founders will end up with 100% of the company rather than just a few percent.

Aron S. Spencer, Ph.D.
Innovation and Entrepreneurship
Assistant Professor, School of Management
New Jersey Institute of Technology
Newark, NJ 07102

Aron S. Spencer Wednesday, February 17, 2010 at 11:26 AM PT

Sramana,
My name is Sara Gaum and I am an entrepreneur that launched the online event planning community, http://www.VendorBar.com. I began VendorBar while attending b-school at the F.W. Olin School of Business at Babson College.
Despite being ranked the number one business school for entrepreneurship, most of the courses at Babson did not focus on bootscrapping. We did have a couple exceptions. During our first year, we had a case study on a former Babson grad that bootstrapped his company. The focus of the case was not how to finance your start-up, but to ensure that your bootstrapping methods were ethical. A more targeted course on bootstrapping came was Entrepreneurial Finance taught by Prof. Les Charm. The focus of the course was discovering different ways to finance your start-up, none of which could be venture capital.
I agree with Mr. Stallkamp that the focus of most business schools is to search for investors. VendorBar.com has been funded by money that I originally saved for grad school, but saved by doing well on my GMAT’s and earning scholarships. Despite not having capital from outside investors, VendorBar.com has grown steadily during our first year of business. I look forward to future growth and expansion of the company in 2010.

Sara

Sara Gaum Wednesday, February 17, 2010 at 12:12 PM PT

Greg,

I disagree with you on this comment: “I think the curriculum at Kellogg is realistic on the idea that adequate financing is one of the most important aspects of a business. While bootstrapping may be necessary early on, as you search for commitments from investors, over time you will need a more structured capital base in order to effectively compete in the market.”

I have done case study after case study of entrepreneurs who have built very successful businesses entirely by bootstrapping. I think, and the reason I opened this discussion in the first place, is that there is precious little awareness or acknowledgment of this phenomenon in b-schools. As a result, in my opinion, many b-schools are sending out students to the world setting them up for failure. Trying to raise money early on for a first time entrepreneur in this day and age, without validating a business idea with real customers – is a flawed strategy.

Sramana Mitra Wednesday, February 17, 2010 at 12:20 PM PT

Hi I’m with Greg above (despite that he’s with Kellogg and I went to Chicago). My Company Stick-e Brands (maker of innovative patented award winning non-slip yoga accessories) is completely self funded and bootstrapped. However, I am sure that my growth would be greater if I had a strong financial base to draw upon. My products are carried by Amazon.com, Walmart.com, Sport Chalet, City Sports, Paragon, and soon in Sports Authority, Dick’s, REI and Target.com BUT I am at the stage where I really need an investor to insure the success in these retailers. If anyone is interested in learning more about me or my business, please see: http://www.YogaStickySocks.com!

Libby Andrews Wednesday, February 17, 2010 at 2:14 PM PT

Sramana — Back to your comment — it really depends on the company and how capital intensive the opportunity is. A services business will need much less capital than a consumer products business that needs to have minimum levels of inventory manufactured, EDI systems for large retailers and tradeshow attendance for exposure not to mention all of the legal fees for the intellectual property.

Libby Andrews Wednesday, February 17, 2010 at 2:18 PM PT

I have been teaching entrepreneurship at FIU in Miami for 5 years. Focus of the course is on building big companies (revenue over $100MM) rather than self-employment or family businesses. I generally focus on friends and family as the first round of capital because of the importance of capital raising in most growth businesses. I generally discuss bootstrapping in the context of capital efficiency and certain business models/industries that lend themselves to this approach, such as certain web businesses with high margins and low start up costs.

Robert Hacker Wednesday, February 17, 2010 at 2:35 PM PT

Robert, A business can only become big if it can first get off the ground. The problem with your assumption is that someone else is responsible for getting the business off the ground. And your students then come out and try to raise money immediately and fail. This is something you should worry about. The startup phase.

I might add, this is why b-school grads make good executives, bad entrepreneurs.

Sramana Mitra Wednesday, February 17, 2010 at 2:42 PM PT

Libby, Yes, partially true. But once again, there are ways of bootstrapping even capital intensive opportunities. Read “Bootstrapping to billions” in EJ2.

Sramana Mitra Wednesday, February 17, 2010 at 2:45 PM PT

Yes, I do think bootstrapping is undervalued in business schools, and under-represented in the curriculum, for several reasons: 1.) academic inertia, meaning that business schools teach entrepreneurship as being about developing a business plan and getting financed bny investors, and they have for a generation or so (well, at least half a generation) now, and it’s hard to change. 2.) The visible successes in entrepreneurship, meaning the Googles and Yahoo!s and Apple Computers take the high road, meaning, again, developing a plan, getting financed by profgessional investors. 3.) bootstrapping is harder to teach, it’s a much broader range of possibilities, takes a lot more flexibility and case-by-case thinking. 4.) the literature, textbooks, and such tend to emphasize the business plan and get investors variety of entrepreneurship.

Tim Berry Wednesday, February 17, 2010 at 2:57 PM PT

Yep. And also, there is this prejudice – as Robert displays above – that you can only build mom and pops by bootstrapping.

How very wrong.

Sramana Mitra Wednesday, February 17, 2010 at 3:09 PM PT

As a serial entrepreneur who has started a few businesses of my own, and an entrepreneurship educator, I can tell you that I am a firm believer in bootstrapping. Our new venture creation courses in the Entrepreneur Development Program at UC San Diego ALWAYS involve a discussion of bootstrapping. Unless you are a bio tech/hi tech/clean tech darling with “many multiples” return potential, VCs won’t talk to you. Angels are also particular about their portfolios these days, so if you are not one of the above that pretty much leaves you 3F financing (family, friends & fools) or bootstrapping to launch your new venture. By the way, my definition of “bootstrapping” is broader than the ‘a self-sustaining process that proceeds without external help’ variety. I also include such critical sources as trade credit, and even factoring as sources of sufficient cash flow to maintain operations.

Rob Fuller Wednesday, February 17, 2010 at 3:10 PM PT

Sramana,

We teach bootstrapping at California State University San Marcos (www.csusm.edu), a 20 year old university in north San Diego County. In fact, we not only teach it, we model it for the students. Case in point –> just this past month, our Cougar softball team opened the season on a softball field that was built at 1/20th of the projected cost.

In the Creativity, Innovation, & Entrepreneurship course that I teach, one of the first myths that I debunk is “you have to have money to start a business.” Instead, I share examples of companies that have been started by students with nothing more than an idea that meets a market need or solves a pain. My examples include some big names like Honest Tea and Kernel Seasons, but also include some local newcomers like TweetPhoto and Digital Group Audio.

I agree with you that there’s too much emphasis in entrepreneurship education on “business plan writing” and “VC schmoozing” and not enough attention directed toward idea validation and UVP positioning.

I would also like to echo what Aron wrote, “Bootstrapping requires a strong focus on capital efficiency.” This is more sorely needed now in large and small companies than perhaps ever before.

Bennett Cherry, Ph.D.
Associate Professor of Entrepreneurship
California State University San Marcos
http://edgeofentrepreneurship.com

Ben Cherry Wednesday, February 17, 2010 at 8:43 PM PT

It is a shame that bootstrapping is not taught more widely in business schools – as it goes to the heart of what entreprenurship is all about. There is no better way to prove that your business model works. And I agree that there is a hidden bias – if you say you are an entrepeneur but has not sought or received any VC funding, people assume you are not very successful. Having bootstrapped multiple technology companies I know that this is sheer nonsense – as it is indeed possible to start small, and sustain it with profits and grow it to become a profitable venture. Maybe it is harder, requires more discipline and takes longer – which is why it is not very popular.

Arun Shroff Wednesday, February 17, 2010 at 8:44 PM PT

Sramana
Completely disagree with your comment. Only certain very capital efficient business models are suitable for bootstrapping. Notion that capital raising is “someone else responsibility” is illogical. Good plans get funded and grow and bad plans implemented by the founders do not. The responsibility is the founder’s and not the funding source.

Risk in this unqualified advocacy of boot strapping is that you end up with a lot of capital starved businesses that never reach their potential. If we expand the definition of bootstrapping to include bank borrowing, factoring and other non-VC funding then we might agree.

Robert Hacker Thursday, February 18, 2010 at 5:23 AM PT

Most of the savings would be gone in funding their b-school studies for experienced professionals.
For freshers, B-school study would carry a baggage in the form of loans.

Then why would someone need a B-school education which would teach them again that you should bootstrap. Where do the funds come from to Bootstrap. I’m bit confused or may be I didn’t understand it properly

venkat Thursday, February 18, 2010 at 6:36 AM PT

I, too, have been successful ‘bootstrapping’ and supplemented by customer-funded development (the IDEAL non-dilutive financing!).

I now teach the award-winning ACTiVATE program at UMBC where we discuss all types of options in funding – including how, when, and why of bootstrapping. There are plenty of cases where technology product development can be funding from services, essentially bootstrapping the company. Note, though, that ACTiVATE is not a for-credit program. It is an applied program (meaning they go through the program working on their business idea) that is aimed at mid-career women.

Julie Lenzer Kirk Thursday, February 18, 2010 at 6:45 AM PT

Robert, Only after you have bootstrapped the validation phase of an idea is there any remote chance of getting financing in this day and age. By not teaching bootstrapping, you are setting expectations that some VCs are waiting to fund power point slides. This simply isn’t true. I am not against financing later on, but if you don’t teach your students to bootstrap at least 9-18 months of a venture, their ventures would NEVER get off the ground.

I might add, this is one of the single biggest reasons for infant entrepreneur mortality.

Also, by raising money with a validated business plan, entrepreneurs get to preserve ownership and not get fired prematurely as investors take control of their companies.

Do you teach all this? Do you teach the dirty world of down rounds, wash outs, and other details of a cap table destruction that goes on in venture capital?

Sramana Mitra Thursday, February 18, 2010 at 8:18 AM PT

Yes, this is what makes it so difficult for b-school students to become entrepreneurs. Engineers become entrepreneurs because their graduate studies are usually funded by scholarships, teaching and research assistantships. MBAs, because of their loans, have little choice but to go work for a number of years to pay off their debt. But after the debt is paid off, the same issue remains – that you need to bootstrap the early stages of a venture to get it off the ground.

Sramana Mitra Thursday, February 18, 2010 at 8:24 AM PT

Howard Van Auken, the Bob and Kay Smith Fellow in Entrepreneurship at Iowa State University, is traveling, but reports in an e-mail that startup financing, including bootstrapping, is covered in depth in university entrepreneurship courses. Van Auken is a noted researcher who has published extensively on small business financing.

Mike Ferlazzo Thursday, February 18, 2010 at 9:23 AM PT

Bootstrapping is important in our entrepreneurship program at Washington University in St. Louis, Olin Business School. In fact research shows that it is the most common source of funding for new ventures. Students that use bootstrapping approaches always seem to develop solid value propositions for their ventures. This often leads to early success, lower failure rates, and greater market momentum. It’s especially important for undergrads who are still unproven and have difficulty getting funding.

Ken Harrington Thursday, February 18, 2010 at 10:06 AM PT

I definitely stress the importance of bootstrapping new and young ventures in my courses. However, what really drives the point home for my students is that bootstrapping becomes an important strategy when they are trying to get their businesses up and running, as their grade depends on their team’s business’ success. The value of bootstrapping is quickly learned.

Jay Azriel
Assistant Professor of Entrepreneurship & Strategy
York College of Pennsylvania

Jay Azriel Thursday, February 18, 2010 at 10:58 AM PT

Sramana,
Some of us MBAs bootstrap our education by our spouse’s salaries or having worked for a few years or working in parallel while pursuing an MBA. I hope we are the kind that will cultivate a habit of bootstrapping to become successful entrepreneurs.

Ram Thursday, February 18, 2010 at 12:33 PM PT

I hope so too, Ram. And I hope more of you will stop chasing the speculation mirage.

Sramana Mitra Thursday, February 18, 2010 at 2:52 PM PT

Sramana,

At the University of Southern Mississippi, bootstrapping is integrated into every aspect of the entrepreneurship curriculum. As a matter of practicality, students are taught bootstrapping concepts and techniques. Subsequently, they are expected to incorporate these techniques into every business function including marketing, financing, operations, distribution, human resources, etc.

We also encourage using Effectuation in order to facilitate bootstrapping. Students at Southern Miss seem to really appreciate this grounded, very realistic approach to business startup.

SherRhonda Gibbs, Ph.D.
Assistant Professor of Management
Department of Management and International Business
University of Southern Mississippi

SherRhonda Gibbs Saturday, February 20, 2010 at 1:41 PM PT

Sramana,

We are a student-run program called IDEA (Inter-Disciplinary Entrepreneurial Accelerator), which is an extracurricular activity at Northeastern University.

We are a resource and connector for NU students with venture ideas. You mention the startup phase is of utmost importance in saving ventures from the risk of “entrepreneur mortality.” We address this issue by guiding students through the startup phase, and, if appropriate, providing funding for milestones. IDEA focuses on students in any of three different stages of development – which we refer to as Ready – Set – Go.

Students who are in the “Ready” stage of development have a venture idea. They are assigned a coach, who then works with them to assemble a team, develop a resource plan, do research and contact technical expertise.

Next is the “Set” stage in which our ventures set milestones. IDEA assigns mentors and provides in-kind services to guide them through this process. Once a venture has identified the “gap” between where they are and the milestones they will accomplish, we have a fund that will grant money to accomplish those milestones – what we call “pre-seed” funding. These are small infusions of capital which the venture must apply for. In effect, we do not finance ventures, we are financing milestones.

These small amounts of money are grants that we hope the student entrepreneurs will one day be able to pay back in the form of contributions to NU and the IDEA program. They will aid ventures through the “Go” stage – helping to execute plans in order to accomplish established objectives and milestones. We focus all three stages on getting ventures to a place where there is some value that they can attract investors with.

To repeat what Aron Spencer said, “The more milestones you can meet before you need outside capital, the lower your risk, and the greater the value of the company.”

IDEA has created a very focused and structured bootstrapping model. While we are still a relatively new concept at Northeastern, we plan to grow into a powerful venture incubator that will serve to properly guide ventures to their own successful businesses.

The IDEA Team
http://www.neu.edu/IDEA

NU IDEA Tuesday, February 23, 2010 at 6:03 PM PT

This is excellent. Delighted to hear about IDEA.

Sramana Mitra Tuesday, February 23, 2010 at 7:42 PM PT

Sramana,

I enjoy reading your articles and happened to come across this last posting. Coincidently I graduated from Northeastern University and remember hearing that the IDEA program was in the works. If I may add my own opinion: When I was a student at Northeastern, the entrepreneurial spirit was contagious. Supporting the passion for innovation while applying the necessity of strong financial and strategic training NEU provided a high-caliber experience in business education. A Venture Creation and Entrepreneurial Finance class my senior year even inspired me to change my career path from investment banking to working with a start up, something that I will always be grateful for.

Thanks again for your engaging site!

Catherine Wednesday, February 24, 2010 at 10:08 PM PT

I participated today in today’s round table. I liked it. I wish there could be a little more roundtable and a little less pitch. With regard to your question The Lally School at RPI does cover bootstrapping in many of its courses.

I am a 5 time entrepreneur who is currently the CEO of a Software Technology firm. I am in complete agreement that bootstrapping is a great way to start an entrepreneurial venture. However, it is not the only way or even the preferred way. It really depends on the start-up. In my two most successful start-ups, we had $1M+ investments and it paid off. I have also been part of 100% bootstrapped ventures that have also done well. The point is that both approaches are valid.

Thanks for the round table!

Remy Arteaga Thursday, February 25, 2010 at 2:27 PM PT

I think your definition of bootstrapping is different from mine. I don’t advocate zero-outside financing as the definition of bootstrapping. I espouse delaying raising outside capital to be able to preserve equity, and hence bootstrapping the early stages of a venture. This gives the entrepreneur the choice and negotiating leverage to decide whether or not to raise money when the business is validated and can command higher valuation.

As for pitch versus roundtable, the forum is for entrepreneurs to pitch their ideas and get feedback from me. It is very easy to criticize, much more difficult to deliver value, you know.

Sramana Mitra Thursday, February 25, 2010 at 3:28 PM PT

Sramana, I am so with you on the topic of easy criticize, more difficult to deliver value and consistency. So much, so, that I want to re-post my response that I just left on Fortune Tech site, the story http://bit.ly/cPPZq3 went on and on and on criticizing Russian state of affairs and American delegation that just went there and how they will never be able to do anything because of that and this and that… So, I said:

Let me share this.. I am a Russian in the USA and I followed #rustechdel closely on Twitter for 3 days and just by following it I was able to connect and talk with Russian techies and tech community organizers and they are doing real work there despite all the obstacles, corruption and etc. etc. etc.

As for Silicon Valley-type mentorship, check our Silicon Valley-based project 1M1M http://bit.ly/cGiRbs that aims to guide young entrepreneurs worldwide, including Russian entrepreneurs, to develop value adding, revenue generating, profitable and sustainable startups.

I am on this project responsible for working with Russian entrepreneurs and #rustechdel helped me to find some of the key community organizers.

The project was launched by Sramana Mitra http://sramanamitra.com , a Silicon Valley-based, M.I.T grad, entrepreneur, all by herself, without any funding or government or paperwork.. Amazing, right?

Sramana developed a method where we don’t have to be physically in Russia or any other part of the world to help startups to develop viable, workable, revenue generating businesses. We believe, once first 1M1M-ers will start generating solid revenues, others will follow and it will snowball from there…

We had Russians attending our Silicon Valley-based online strategy roundtables today. http://ping.fm/vzl6t And you should see their reaction: Awesome! They are getting the same support and mentorhsip from Sramana as any Silicon Valley startup would.

In conclusion, I say, yes all things you mentioned in your story about Russia is true. Now, lets do something. If a single person, Sramana Mitra, can launch quietly without any media, celebrity or government involvement a very worthy initiative, think what other entities that have much bigger leverage, could do!

Irina Patterson Thursday, February 25, 2010 at 3:47 PM PT

Thanks for writing about bootstrapping. I graduated with an MBA from Idaho State University, and while my education has served me very well, it would have been helpful to have a small (micro) enterprise focus. As it turns out, I’m one of the legion operating a small service firm out of my house. I make a very good living, and have substantial time flexibility. Given the way the economy is going, micro enterprise has substantial advantages, and in fact, may turn out to be the way many of us make a living and pay taxes. Roughly half my circle of friends have both worked in “traditional” large company settings and now have home-based services businesses. To a person, they are all better off financially and have better lifestyles. Needless to say, all these firms were boot-strapped. So, business education in the context of firms that can achieve $100 million in sales is really not that helpful for the vast, vast majority of people in business schools.

John Fry Friday, February 26, 2010 at 7:58 AM PT

Universities and business schools are educating the next generation of entrepreneurs. Since many businesses fail due to poor planning, lack of knowledge and naive expectations, we encourage entrepreneurs to increase their chances of success with a solid educational foundation.

We encourage schools and universities to use the Funding Roadmap as a standardized platform to help educate those students and replace templates and other inefficient tools that cannot provide their digital-age students with the knowledge they need in these difficult and transitional times.

Our platform helps to develop the entrepreneurial spirit of today’s students
so they can “road test” their new venture concepts using the Funding Roadmap and they can broadcast their ideas to a world of investors.

You can take your Idea from conception in a class room to launching in the real world, and you can use a mix of bootstrapping, friends and family funding to a small business loan or Angel/ VC investment and you never move the information out of our platform in the clouds.

The bigger question is not where the funding comes from but can you provide proof of concept and defend your ability to execute on your business idea and create a return on the investment even if its to yourself and your own funds and sweat equity.

Ruth Hedges Friday, February 26, 2010 at 8:47 AM PT

My name is Ruchika Abbi and I’ve launched http://www.Youpid.in, a matrimonial social network, where Singles can use the larger network of their friends and family to find matches.

I went the bootstrapped way and have self-funded my venture. I keep comparing notes with friends in B-schools and I’ve started feeling that by bootstrapping my venture, I’m actually paying for my own MBA. :) What I’m learning through it is similar, yet seems to be more grounded. I have factual data and numbers when talking about the market and strategies whereas they have a lot of projections based on assumptions. Also, I’ve noticed that a lot of what they learn is catered towards selling to the VC’s and not the customers. I think when you bootstrap, your biggest concern is selling to the customer.
It’s too early for me to say what really works, but my observations so far has been that when it comes to the VC’s right now, neither MBA nor bootstrapping is a plus point, rather the number of users to your product is, however you’ve achieved that.

Ruchika Friday, February 26, 2010 at 9:27 AM PT

Hi Sramana,

A common mistake is to dualize the discussion about entrepreneurship paths: you’re either building a lifestyle (I prefer the term “cookie-cutter”) or funding-driven venture. Bootstrap entrepreneurship is, in fact, a third way, distinct from the other two.

The key issue is the business model and when it is created. In cookie-cutter, you’re not inventing a new business model, but rather making a copy of an already-proven one. So the model is clear up front. In funding-driven, you’re trying to invent a new business model and reap the reward of doing so. However, like the lifestyle, and due to investor’s decision-making criteria, it also has to be articulated up front. Funding-driven therefore plays right into the key business school tool – the business plan. Because biz schools are predisposed to teaching business planning, they are usually unable to detect or articulate bootstrap and dismiss it by conflating it with cookie-cutter.

With bootstrap, you’re creating a new business model, as well, however it is an EMERGENT property of the process, NOT designed up-front. In the bootstrap map we created for our Bootstrap Austin community (bootstrapaustin.org/map), it’s only in the GROWTH stage that the business model can be articulated, many years after the company was founded!

The key driver in innovating to a new model via bootstrap? Constraint! It’s precisely constraint that drives innovation and so the worst thing a bootstrap entrepreneur can do is to flood the venture with outside capital in the Valley of Death Stage! Bootstrap founders consider funding only when they arrive at the Growth Stage, using capital for the one thing it’s good for: scaling.

Categorizing the 3 paths of entrepreneurship helps us exit the dualistic deadlock and see the bootstrap path clearly. It also reveals the structural bias in academia for the funding-driven path.

The final nail in the coffin? The price of getting an MBA. It’s really hard to consider bootstrapping when you’re -$80K (or whatever the going rate is these days).

bijoy

Bijoy Goswami Friday, February 26, 2010 at 9:35 AM PT

Hi Sramana,

I am Abhishek. Four years ago I started a defense technology company (by dropping out of my PhD at a top 4 CS school). We build a fairly complex technology for the military and based on my business experience I believe in conscientious bootstrapping. Also, I clearly differentiate between bootstrapping and private investment (I will touch upon that later)

Bootstrapping as a funding strategy should be evaluated in the context of the ‘cost’ of getting started and the final business objectives of the founders. Let’s look at the first dimension -cost. The cost of getting started depends tremendously on the target market(s). The marginal cost of customer acquisition in a web startup is vastly different than an enterprise business like defense, or even B2B (say enterprise search technology). As one could see this cost is a function of technology development and sales/marketing. The higher this cost, the harder it becomes to bootstrap.

Let’s look at the second dimension – business objective of the founders. If their goal is to have a 20 people company with a healthy cash flow, and nominal margin of say 15-20% then bootstrapping is very attractive. It will take them longer to get there but they can do it. However, if the goal is to create a company that could go public or be acquired bootstrapping could not get you there alone. You will need a strong VC funding strategy and you will have to structure your business that way.

Having said that I am a firm believer that there are some technology businesses that cannot be bootstrapped. Atleast by first timers like me. So we have to juggle crystal balls ‘creating investor value’ and ‘growing our customer base’. This makes running a startup a lot more fun.

Now, let me jump to b-school education and entrepreneurship discussion. I don’t necessarily agree b-schools look down upon entrepreneurs. However, they do look down upon ‘cookie-cutters’ because those folks are not case-study material for anybody. There is definitely an elitism about ‘disruption’ that every school craves for. Frankly, there is nothing novel and interesting in selling IT-services to sub 100 million financial institutions. You bootstrap it or not has nothing to do with you being taught in school and taken seriously as an entrepreneur.

My final comment is we should decouple bootstrapping from private investment. Bootstrapping is what Sergey and Larry did, and private investment is what Gordon Moore and Robert Noyce made when they founded Intel. Their investment formed the basis to attract larger investment to ‘get started’ because processors cant be built incrementally. You go at it in a single shot.
They are both taught in b-schools irrespective. Simply, because they are both success stories.

Abhishek

Abhishek Sharma Friday, February 26, 2010 at 10:45 PM PT

It was my privilege to work for many years at the Hewlett-Packard company, now the largest computer company in the world. Their beginning in a small garage in Palo Alto is much better known than is their absolute dedication to self-financing. Even after reaching billion-dollar revenue status, they refused to use long-term debt to further their growth. We engineers learned that our products had to be good enough that customers would pay the price required for our self financing. Then it deserved the label HP, which meant it was endorsed by Hewlett and Packard. It was a good idea.

Alan Bagley Saturday, February 27, 2010 at 8:11 AM PT

Read the Finisar case study in Entrepreneur Journeys Volume One – Bootstrapping to Billions. The company is today $700m, public, and in 2001, went public at a $5b market cap. So your point that you can only build small companies is plain WRONG.

This is the misconception that I have been addressing rampantly.

Also, see above, I said, bootstrapping the early stages is essential to get a good valuation in later stages.

Sramana Mitra Saturday, February 27, 2010 at 9:33 AM PT

My name is Minhaaj and I am an independent educational consultant. I am originally from Pakistan but studying towards Masters in Management in Umeå University, Sweden. In addition to already having an MBA, i am doing it again just to get imperialist equivalence. It took me quite sometime to realize how fruitless is the subject itself. Entrepreneurship and Ethics are something that can never be taught. Its important to understand the tools and opportunities web 2.0 and post-war industrialization has offered humankind but at the same time ivory tower construction and restrictive legislation is a curse for our collective morality. Entrepreneurship often springs from opportunities and freedom which is unfettered. I didnt take an entrepreneurship course here in Sweden but apparently, there are various entrepreneurship incubators often assosciated with universities. Unlike often perceived as socialistic regime, Sweden holds quite alot of international patents, which by the way i strongly detest. Intellectual property is an absurdity i would never support. I know it would be quite shocking for most of people reading the discussion, but the way we are treading, it only will take our entrepreneurial creativity to the pit.
Thanks,
Minhaaj

Minhaaj Rehman Monday, March 1, 2010 at 3:20 AM PT

Hi Sramana,

As an enterpreneur and consultant i think it depends on the dirving forces (professors) of each business scool. If it’s the finnace perspective, than financing is related as most important aspect. If it’s the marketing perspective than you find the bootstraping option.

It takes me back to the long debate regarding business plan structure and content. In the early 8o’s and 90′s most of the the BPs were prepared by finance oriented people, reflecting tidious dealing with numbers, details, financial reports and less than a paragraph regarding the market and marketing aspects. When later business development and marketing oriented people started preparing BPs, the market, the go to market strategy, the business model recieved thier rightous wheigt.

Memi Genosar Monday, March 1, 2010 at 3:52 AM PT

As someone who has bootstrapped multiple companies and doing one as we speak, the issue is not one of bootstrapping or not bootstrapping. It is teaching what it takes to build a business. My current company dunnitt.com has a business model that is easy to bootstrap because it is a web 2.0 company. If I were to start a pharma company or a biotech company it may require millions of dollars just to get off the ground. What they need to teach is the fundamentals of building a business and that may or may not take bootstrapping. Business schools may have brilliant people who don’t need any courses and go on to build great companies, bootstrapped or otherwise. But for others if the focus is on figuring out whether they need to bootstrap or not and then how to go about it would be a wonderful set of things to learn!

Nari Kannan Monday, March 1, 2010 at 6:30 AM PT

I can speak mostly about B-schools in India and a little about B-schools in US and west as well from what I have heard from people who have joined there.

Most of the curriculum in revolves around managing large organizations, operations management and financial management and so on.

Many small business owners, people who are having a bent of mind to bootstrap completely get disappointed by what they teach even in the most reputed B-schools. Part of the problem is probably the folks who influence curriculum in these schools as a natural choice come from large reputed companies and it could be a possible problem.

Rarely B-schools invite people from startups even for guest lectures, unless they have just become famous and big and are on their way to build a large enterprise! Part of the problem may also lie in the disinterest of bootstrappers to B-schools as well.

It would be a fantastic idea to get some startup folks who have not yet made it big bring in fresh perspective even if it means demolishing sacred beliefs.

Nagendra Setty Monday, March 1, 2010 at 6:37 AM PT

That is a tough one since the very people who support many university events (i.e. law firms, accounting firms and other professional services) are the very ones who will not as agressively promote bootstrapping since it will take the income away from them. Name a lawyer who would not make an tech entrepreneur feel they can not go to market without a patent. This is not to isolate lawyers since I do believe in them (and have them), but you have to be VERY careful who are the advisors and all motives since bootstrapping lies in direct conflict.

Brian Javeline Monday, March 1, 2010 at 8:31 AM PT

Wow- great to see the names of so many colleagues. Most entrepreneurship classes do cover bootstrapping – we are hearing from those who do it well.

Let me first quote my old mentor Al Shapero who once quipped on TV “There are only 5 schools of business in America, the rest are academies of corporate middle-management.” Point being that as AACSB keeps telling us, b-schools’ target market is not us ; rightly or wrongly, they perceive that undergrad & MBAs are headed to larger firms.

Sraman, there are a couple of huge studies getting underway to study best practice in entrep education, you might ping Benson Honig (McMaster) and Will Baumol (NYU) – both are great folks.

Anyway, it is very hard to raise $ from VCs/angels (& as noted, a relatively rare situation) but great bootstrapping is not easy either. I’d agree that in many b-schools there is a bias toward the 10X types of businesses (It’s hard to win a b-plan contest otherwise – but are we teaching students to serve customers or win ‘beauty contests’?)

Having taught the strategy capstone as entrepreneurship, one thing I’ve noticed is that finance classes tend to not be as helpful as they might be for entrepreneurs of any stripe.

As a couple of you have noted, great bootstrapping requires rigorous application of a deep understanding of financial structures & processes & I keep being surprised that students (even finance majors) seem to lack these basics. (Ratio analysis doesn’t work in theory so… LOL)

I like to give a talk on “credible financial projections” -whether you’re bootstrapping or looking for the 10X hockey stick.. isn’t that critical? Yet in school it’s often glossed over given the hypothetical nature of case studies & especially b-plans.

Sramana, thanks for provoking this discussion – and it’s encouraging to hear from Jeff & Robert & SherRhonda & Aron & the rest of those onhere that I know to do great work. (You’re probably not hearing from those who really NEED to be reading this, LOL)

Again I’d encourage you to contact Benson or Will – tell ‘em I sent ya.

Norris Krueger, RE* PhD
[*Recovering Entrepreneur]
norris.krueger@gmail.com; @entrep_thinking

Norris Krueger Monday, March 1, 2010 at 8:44 AM PT

As a recent MBA graduate, it took me a while to figure out why my program wasn’t offering many courses on bootstrapping or even entrepreneurship. Our program was fairly small, only about 80 people in our class and demand was not very high.

However, the program had little reason to push many of these courses because MBA rankings are based on hire rate after graduation and starting salary. For this reason it was hoped that most of us would take starting jobs with fortune 500 companies to help improve the rankings.

At larger programs, having several students won’t alter the rankings much and can even raise the visibility of the program if their venture is successful. There is a positive benefit to this economy however. As the corporate jobs are disappearing, more and more students are giving entrepreneurship a serious consideration. Ignoring all the “is entrepreneurship right for them” issues, this has at least gotten more MBA’s thinking about alternate paths.

Stephen Murphey Monday, March 1, 2010 at 10:16 AM PT

What is the definition of entrepreneur?
My opinion is leadership that can shape and change what they like to achieve.

You either born being an entrepreneur or not, MBA or any other relevant business academics are just there to guide you and provide structure, processes and procedures.
Why I did my MBA, because I like to know how and what people think / act/ react and overall being in common with the people at that level.

entrepreneur is an individual and usually very different in the way they do things, who believes in different way of living.

Again, this is only from my own personal opinion.

Bobby Wilson

Bobby Wilson Monday, March 1, 2010 at 1:28 PM PT

Sramana, I am member of 1M/1M, I believe in this program and I am sure over a period of time with evolution it will bring upon desired results. However, for a moment I also think sometimes that outside capital is also important. One the biggest reasons for this is the entry barrier of information access is too low and because of this, even if one entrepreneur has a great idea and he is able to do well lets say in one city, it is easy for someone with capital to copy them and build a competition. We see this happening everyday at the global giants level so there is not way to assume this will not happen at a small entrepreneurial level. I still believe that 1M/1M would have to come out with more strategies to help and identify those 1M entre if you would really like to see these ent. grow beyond first few years.

Navneet Monday, March 1, 2010 at 5:42 PM PT

I am not averse to outside financing. But as you will see in the way I will build 1M/1M, it will be a pragmatic approach, maximizing the entrepreneurs’ chances of success, as opposed to encouraging them to go bounce around against walls trying to raise money without validating ideas.

Sramana Mitra Monday, March 1, 2010 at 5:45 PM PT

An angel just sent me a link to this discussion. Having just started my 5th startup, I’ve done bootstrapping and the traditional VC route. Before you can even think about doing a startup, you really have to do your own due diligence on the company you wish to start. I’ve been teaching seminars at the University of New Mexico / STC on this very topic. So far we’ve covered doing a cheap bastard startup and finding the cute baby. The bottom line on this approach is to focus on the first two key milestones: 1 – getting a paying customer and 2 – getting to cash flow break even.

Idea slide decks are wasted on investors. Instead use them for customers. Get them to say “Yes, I would pilot this product and if it works I will buy it.” Then raise as little money as possible to get to that point from wherever you can get it. Deliver the bare minimum to get a happy paying customer. Then go back and raise just enough money to get to cash flow break even. That’s difficult discipline.

I discourage anyone from starting a company until they have that first customer lined up and ready to buy. It’s that simple and it’s that hard.

The other thing that b-schools don’t teach is embracing failure. You will fail. Every time. I encourage people to plan for failure. Fail early, fail fast, move on. Always have milestones and alternative paths. Know when to push on, and know when it is over.

And IMHO the best source of financing is institutional investment. Call it pre paid royalties if it makes you feel better. But that way you have no obligations to pay it back and you give up no equity. A winning combination.

bruce fryer Monday, March 1, 2010 at 6:54 PM PT

I did a minor in Entrepreneurship (and thus some relevant coursework) while in school at UF. I have to admit that most of the things I remember focused on getting funding and building a proper business plan to that same end.

Perhaps we should have been taught more about surviving the first couple of years in a startup, but most relevant to this discussion, bootstrapping was usually named first when it came to funding sources.

Julio Franco Tuesday, March 2, 2010 at 1:17 AM PT

I think the overarching issue here isn’t that b-schools aren’t teaching enough about bootstrapping vs venture capital but they’re not effectively teaching the real world of company building. Too many schools are stuck on the business plan (beauty contest, as my friend Norris says)as the ‘holy grail’ rather than understanding that the plan is really step 1, and a flimsy and degradable step at that. I’ve interacted with many bus plan winners, and others graduating with entrepreneurship MBAs, who have no real knowledge on how to proceed with launching and/or growing a business, bootstrapped or equity funded. I’m currently pursuing innovative ways that bootstrapped and equity-funded entrepreneurs can be guided through a high quality, real-world master’s level entrepreneurship education that gets to the reality of venture building. As another poster mentioned, this also requires taking corporate clients out of the financial driver’s seat and focusing totally on entrepreneurs. Great hearing from some of the leaders of the field. Sramana, I’m out in Palo Alto in a few weeks and would like to delve into this further. Trish Costello — tcostello@innovativeentrepreneurship.com

Trish Costello Tuesday, March 2, 2010 at 9:08 AM PT

Interesting article…I’m a 2nd year at Wharton getting my MBA and I agree that the majority of the curriculum is geared toward landing angel or VC money. There are, however, certain classes and a hands on entrepreneurial community of students here that helps support student start-ups.

In particular, a class I am taking now called Legal Aspects of Entrepreneurship is COMPLETELY AGAINST taking VC or Angel money and the professors repeatedly emphasize the importance of bootstrapping.

That doesn’t mean that students arent chasing VC money, but there are schools and small pockets of entrepreneurs like myself (I run WallStreetOasis.com) that have been bootstrapping since Day 1 and don’t plan on raising capital (even if we could) any time soon. There is still some students that see VC as a stamp of legitimacy, but there are also others that see it as selling their freedom.

….so to say that B Schools are setting us up to fail is a bit melodramatic. The students that think the world is a fairy tale and that VCs will be chasing them for their idea are probably not the ones willing to put in the work to actually capture value from their idea.

Patrick Curtis Tuesday, March 2, 2010 at 12:52 PM PT

Trish, You should take a look at the Entrepreneur Journeys series of books and the methodology that I have been teaching at my roundtables.

http://www.slideshare.net/sramana/ej-methodology-feb-4-roundtable

Sramana Mitra Tuesday, March 2, 2010 at 1:22 PM PT

Patrick,

Interestingly, you just reminded me of the worst entrepreneurship course I ever took at MIT’s Sloan school in 1995 [I was not a Sloan student; I was in EECS]. It was taught by a lawyer who, in hindsight, understood absolutely nothing about entrepreneurship. Oh well!

Sramana Mitra Tuesday, March 2, 2010 at 1:24 PM PT

Yes, bootstrapping is important but a poorly planned business that does not address real market needs and does not consider how all the elements of the infrastructure interact to facilitate delivery and profit is going to fail regardless of how it was financed.

I’ve had students who bootstrapped and have had students who got angel capital in 000,000s and frankly, whether the business succeeded had virtually nothing to do with how the business was financed.

What seemed to matter was the thoroughness of the planning (which did not always include a Bplan), the adaptive attitude of the lead E or team to changes in the industry and marketplace, and careful cash management during the ‘cash crunch’ of the second and third years.

I think B-schools fail Es as well as SBOs if we don’t teach these fundamentals. The focus on financing is the tail wagging the dog.

That being said — what is so wrong with an educational process that suggests students aspire to having businesses large enough to be VC backed? What a waste of time, money and effort if we don’t provide aspiration as well as reality.

PS: I’m not just an academic but an E as well.

Connie Marie Gaglio Tuesday, March 2, 2010 at 2:08 PM PT

I don’t think anyone said that b-schools should NOT teach financing, venture capital, and other tools of entrepreneurship. The discussion is about the singular focus on fund-raising, which is leading entrepreneurs into IEM territory because they cannot get their ventures off the ground without external financing.

IEM = Infant Entrepreneur Mortality

Sramana Mitra Tuesday, March 2, 2010 at 2:23 PM PT

There are several reasons why these b-school entrepreneurship programs fail. First, these classes are often taught by people who don’t have the breadth of business background to provide insights into all aspects of business. Strong business generalists are a rarity in a world that places great value on specialization. Second, these programs don’t recognize the evolutionary nature of business. Entrepreneurship classes should extend over several years. The first year or two should be devoted to revenue generation, identifying the business’ ideal customers and pricing. As the business grows programs on leadership, productivity, productivity tools and finance should be added. Each additional year’s education should contain the element of relevance for that stage of growth of the business. For example, once a business has experienced success in generating revenues from its ideal customers, there should be a program that helps them avoid the trap of trying to gain “market share” by pursuing customers who have only a moderate interest in what they offer. The pursuit of market share in this manner requires discounting and growth in infrastructure costs. This one-two punch can be and often is devastating to previously successful businesses. By staging the entrepreneurship programs to meet the evolving needs of growing businesses, the b-schools and their students will both enjoy greater success.

Dale Furtwengler Wednesday, March 3, 2010 at 5:25 AM PT

Sramana, all;

A compelling thread, thank you !!

As an entrepreneur who has successfully bootstrapped a company to $100M in annual revenue, and a long time student of entrepreneurship may I offer the following:

First, businesses that cannot generate revenue, and profitability are not businesses, and their owners are kidding themselves. Too many entrepreneurs loosely, and incorrectly call the businesses and people using their offer “customers”, when in fact there is no monetary transaction that takes place. Being paid is the true test of value.

Second, it seems to me that there is some context missing from this thread relative to growth funding, and it should not be overlooked that a company that cannot produce revenue with a clear path to profit is not worth “funding”. Period. No matter what market space they aspire to play in. Too many entrepreneurs spend too much time dreaming about becoming the next, next big thing, and too little time tending to business fundamentals. The venture market has long complained of to few “quality” deals, and continues to respond accordingly.

Third, I don’t think enough entrepreneurs do the simple calculations that relate to the cost of capital. Venture funding exceeds, BY FAR, the “cost” of any other form of capital.

Fourth, somewhere, I think, we have gotten the incorrect idea, as a society, that an entrepreneur has to be a technologist. The predominate segment of U.S. GDP comes from small to medium business, and those same businesses have and continue to build wealth for the top 1% of the population. Entrepreneurship can exist in any business, and is fundamentally about making a more compelling offer than that of your competitors. That takes skill, which can be acquired, and is not a birthright.

Finally, and in closing, in the entrepreneurial landscape; there seems to be too much focus on business “planning”, and not enough focus on business “doing”. Due to technology and globalization the world is moving than ever before. Sramana is right on the money with her; quest, approach, and offer. Those that can hear her, and follow will clearly benefit in much more than simply building a successful business !!!…

David Bookout Wednesday, March 3, 2010 at 8:29 AM PT

I’ve been co-founder or team member of several startups, both bootstrapped and VC-funded. After my third startup, I went back for my MBA, where they exclusively taught the VC-funded model of starting a business. It was striking to me because none of the businesses I’d been involved with (all successful) had used VC.

I’ve long pondered why the business schools are wedded to a model of entrepreneurship that is so far removed from how most successful businesses get started (VCs fund a vanishingly small percentage of the businesses that actually get started and succeed). There are a couple of reasons I suspect:

* Entrepreneurship in b-schools often evolved from the finance department, which uses ROI-based corporate evaluation methods to look at opportunity. The only part of entrepreneurship amenable to this approach is raising VC funding (VCs are largely finance folks), so that’s been where the focus is.

* Many professors, at least at HBS and MIT, have close ties to VC firms themselves. They may be biased towards VC because that’s their business. Or it may simply be selection bias. Since all they see is people coming for VC funding, they forget there are other models out there.

Stever Robbins Wednesday, March 3, 2010 at 9:05 AM PT

I recently participated in a panel discussion for an audience of entrepreneurs who were competing in a business plan competition. Listening to the questions from the audience and the responses from my fellow panelists I sensed that the conversation was still tinged with the mantra of the past 10-15 years “You must get funded!”
It’s taken me over a year to break from that mindset myself. That’s a precious year of time when I could have been working on the bootstrapping and alternate funding strategies that I am working on feverishly as my personal resources dwindle.

Rob Mathewson Wednesday, March 3, 2010 at 9:23 AM PT

I just posted on my blog a list of issues at b-schools and how the global initiative 1M1M that Sramana just launched addresses each issues, one by one: http://bit.ly/cSIMqw

I am proud to be one of the volunteers for 1M1M.

I talk about my state of Florida, but it applies to most b-schools.

Irina Patterson Thursday, March 4, 2010 at 11:35 AM PT

The debate with Sramana continues on my blog in this post…
http://sophisticatedfinance.typepad.com/sophisticated_finance/2010/03/response-to-sramana-mitra-of-forbes.html
but it is starting to look like the differences of opinion are not so great. Make sure to read the comments.

Robert Hacker Monday, March 8, 2010 at 12:26 PM PT

According to Babson College Prof. Candy Brush, chair of Babson’s Entrepreneurship Division, “The VC model is broken so we don’t emphasize it so much at Babson. More of our classes are about owner-managed businesses – starting and buying businesses, and how you grow them — rather than private equity.”

Michael Chmura Tuesday, March 16, 2010 at 5:16 AM PT

Catherine-
This may be a bit delayed, but hopefully you’ll come across this in the near future… Regarding IDEA and Northeastern, I’d love to get in touch with you to hear more about your opinion on our program as well as what you have been doing since graduation. Please feel free to shoot me an email – mlinebarger89@gmail.com. Hope to hear from you soon!

-IDEA Management

NU IDEA Tuesday, March 16, 2010 at 4:45 PM PT

George, the coursework looks great and I'm glad to see startup methodologies seeping into academia. Keep it up

Samuel Friday, July 1, 2011 at 2:51 PM PT

The actual entrepreneurs are not being set up to fail, they are failing and successful outside of school while learning the language, connecting and often questioning everything including their investment. The majority will seek IB, consulting anyway, or teach.

David Sandusky Tuesday, December 27, 2011 at 10:12 AM PT
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