Most startups are founded by engineers. What about MBA graduates? Are they only good for working with others? Today’s Business

Zerodha founder and CEO Nithin Kamath didn’t have a Plan B. “If I were an IIM or Harvard student, I would have known that if this didn’t work, I would be able to find another job.” A B-school education is a good umbrella, but it would have kept him from achieving his dream, he says. Whatever success the online stock trading startup has had, which has run positively in terms of cash flow, he feels it goes back to the 10-12 years he spent in the capital markets before he co-founded the venture with his brother Nikhil. His company, Zerodha, is among more than 100 unicorns in the country today – the culmination of a startup story in India where it now hosts the world’s third largest startup ecosystem after the US and China – with more than 77,000 registered startup DPIITs. “Our country needs hundreds of thousands of entrepreneurs because of our diverse client base, geography and demography, and tons of very real problems,” says Padmaja Ruparel, co-founder of the Indian Angel Network and co-founder of the IAN Fund. But 90 per cent of Indian students focus on getting a high paying job after completing their education. We are in a job-oriented economy, not a start-up economy,” says Rajiv Warer, executive vice president of Wadhwani Foundation’s Wadhwani Entrepreneur. The National Network for Entrepreneurship program enables institutes to set up an entrepreneurship program to support aspiring founding students and startups as well as train faculty to support these students.

Even among the few students who start entrepreneurship, founder engineers dominate the scene. Graduates of the country’s other islands of educational excellence – B schools, especially Indian Institutes of Management (IIMs) – have often been stuck in risk-averse corporate jobs. One would imagine that B-school graduates would be at the forefront of creating new businesses, after absorbing business experience during their management course. But that is not the issue. A sample of this: There are 5,489 startups founded by graduates of the Indian Institutes of Technology – Bombay, Delhi, Guwahati, Kanpur, Karajpur, Madras, and Rocky – while graduate IIMs (Ahmedabad, Bangalore and Kolkata) have produced 1,517 startups as of October 10, 2022, According to Tracxn data. Out of the 108 unicorns in India, 60 founders are from the same group of seven IITs mentioned above, while there are 25 founders from IIMA, IIMB and IIMC. It would be useful to say that there are many more founding engineers in the country today than there are founding managers. Number of (administration) students who start work on their own [after graduation] It could be around 2-3 percent,” says Rishikesha T. Krishnan, Director of IIMB. Of course, the sheer number of engineering graduates far outnumbers MBA graduates with India producing an estimated 1.5 million engineers and over 300,000 MBA graduates. annually.

Then, there is an overall focus on technology among Indian start-ups. “Anything that is not driven by technology tends, perhaps, to not attract the same level of interest or support from investors,” says Suresh Ramanathan, dean of the Great Lakes Institute of Management based in Chennai. Add to that the average age of engineering graduates versus management graduates, and the difference in meaning begins. Says Bhagwan Chaudhry, Principal of I-Venture College @ ISB, Accelerator and Incubator of the Indian School of Business (ISB), Hyderabad. And let’s not forget the huge loans that most of the students have to take to finance their course management courses which are worth between Rs 25-30. Often times, students have to repay loans. Even if they have good entrepreneurial ideas, they may not want to pursue them right away. But if you look at it five and 10 years from now, many of them will be taking on leadership roles, says IIMB’s Krishnan. All these reasons combined certainly delay the entrepreneurial immersion of management graduates, further shrinking the pool of founder-managers compared to engineer-founders. Vikram Gupta says, “The risk capacity is higher at the undergraduate level and lower at the MBA level… So, this makes it somewhat less feasible for them to end up in entrepreneurship, although the skill set Top”, founder and managing partner of IvyCap Ventures, a local venture capital (VC) firm with IIT/IIM alumni, whose portfolio includes Purplle.com and Bewakoof.com.

While management graduates who transfer onto the entrepreneur ship straight from college may continue to be a small number for the foreseeable future, B schools are not immune to the fascination of the startup space. “We decided a few years ago that every IIMB MBA student needs to develop their own entrepreneurial orientation,” says Krishnan. Chowdhury says ISB started 20 years ago with the idea of ​​preparing managers to work at Amazons and Googles. “Now, we notice that many of our graduates graduate from those corporate jobs, and start their own businesses. Today, entrepreneurship is a big part of business education,” he adds. Great Lakes’ mission is to develop future-ready business leaders as well as entrepreneurs. “We want to participate in the startup ecosystem. Entrepreneurship is an essential part of our curriculum,” says Ramanathan.

The way they look at it, it’s not necessary to create start-up founders and certainly not right after second school. But it’s about creating a problem-solving mindset among students and demonstrating that they don’t have to be limited to working for big companies. Varun Nagaraj, Dean of the SP Jain Institute of Management and Research (SPJIMR), sees two age groups for entrepreneurship: 21-22 when recent graduates are eager to test a brilliant technology-driven idea; And seventeen years after completing university education, in that time they had a good range of experiences, broadened their horizons and built a network. The second category is where B schools can add value to future entrepreneurs, if they have an MBA. “If you’re 21 and trying to build a business, you’re thinking: I use this app. Can I invent someone else doing something else? If you’re 29, you might be thinking: How can the electric vehicle charging infrastructure around Mumbai be improved? ?” Of course, MBA graduates in large numbers are required to direct several companies in India. But even in startups, they have a role to play, the professors say. “In the early stages, founders often need partners with complementary knowledge… Many startups today like to bring an MBA graduate to the founding team,” says Krishnan, listing examples of Delhivery, WhiteHat Jr and bigbasket that have IIMB alumni in their founding teams. Investors also point out that tech founders and non-MBA founders who advance too quickly sometimes struggle with management skills. Besides, B Schools also serves as a meeting ground for the co-founders and future core team members.

The institutes are stepping up their efforts to inspire entrepreneurial thinking. For example, the IIMAvericks Fellowship Program, launched by IIMA in 2012-13, pays final year students who decide to become entrepreneurs a stipend for two years. If their startup process doesn’t work out, they can go back and sit back for positions again. ISB launched a similar one-year research vessel for students interested in entrepreneurship from the class of 2023. The International Institute for Small Business – located in the emerging capital of India Bengaluru – introduced a mandatory course on entrepreneurship a few years ago, and has an active entrepreneurship club, students get Work with incubated companies on campus, offering deferred positions. Great Lakes – which saw good enrollments in its entrepreneurship courses offered last year – is exploring scholarships to start a business. But the professors admit that adoption is very low. I wouldn’t say that there are a large number of current students interested [in the scholarship programme]. But there are so many other people that we are planting the seeds for, because we know they will be back in this game five years from now,” says Choudhury.

A second-year student at IIM in Lucknow, who wishes to remain anonymous, says the quick and rigorous 18-month curriculum, excluding two months of internships, leaves them little time to think about startup ideas: I will graduate in five months, but I haven’t seen anyone discuss a business idea here yet.” According to him, entrepreneurship can come in two ways – out of curiosity to start something of your own, or when a traditional job isn’t working. For example, he points out that consulting jobs have a rate of High return.

The challenge becomes urgent with the lure of higher paying jobs. “The challenge is how to change the student’s mindset and introduce an entrepreneurial culture, which becomes very difficult in top-tier institutes due to high paying job offers,” says Warrier of Wadhwani Entrepreneur, who has partnered with IIMC. IIM Nagpur, and the Institute of Engineering and Management, among others. He adds that a good start-up idea with minimal value proposition and potential customers will be taken up by India’s startup sponsorship ecosystem. “But the problem is, the ideas don’t get to that point.” This is where B Schools with their vibrant incubators – bringing together talent, ideas, academic expertise and industry nurturing – can play an important role in the story of Indian entrepreneurship by guiding students towards upcoming fields, potential startup ideas and experts say. “Only then will students consider starting as an option and talking to potential users,” says Warrier, himself an IIMB graduate.

In fact, many high-ranking institutes are setting up their own incubators, entrepreneurship cells or accelerators. Not just their students or alumni, budding startups from anywhere that discount can get physical space to work along with access to the best management professors and laboratories equipped with the latest technology. They also leverage their rich network of alumni to establish relationships with founder, mentor, and investor to help startups get the right story, get funded, and grow. The earliest examples of such initiatives are IIMB’s NSRCEL and IIMA’s CIIE.CO which were set up over 20 years ago. In September 2021, ISB started I-Ventures @ ISB to sponsor startups and connect them to its 13,000-strong alumni network. It also plans to build a global corridor by March 2023 by partnering with a few Silicon Valley schools and venture capital in London and the Netherlands to enable startup ideas from India, which may be more feasible outside the country and vice versa. Lakes started the establishment of the AIC Incubator- Great Lakes Balachandran in November 2019.

But that’s a small percentage of the thousands of B-schools and 750 individual districts of the country where the next big idea could come from. Indore, Nagpur, Bhopal, Mysuru, Ahmedabad, Pune, Chandigarh, Jammu, Guwahati and many other smaller cities and towns are emerging as vibrant emerging hubs, sometimes taking advantage of good educational institutes around them. IvyCap’s Gupta says that the presence of these institutes is generating interest among the owners’ networks to at least meet the entrepreneurs and understand what they are doing. But founders’ minds are constrained as to how much they can take on the business. They need to be trained to think more,” he says. IAN’s Ruparel adds that entrepreneurs should be more ambitious. “Their problems and solutions can be useful in other parts of the country and the world as well,” she says. Experts say B schools Well positioned to engage with the industry around them, collaborate with sister institutions in smaller towns, hold investor and mentorship events, and leverage technology to understand gaps in the product value chain.Approvingly, Dean Great Lakes Ramanathan said they could act as an advisor to all incubated startups in the surrounding areas By offering guidance and expertise through products for market research, financial planning, human resource planning, etc. If India aspires to become a $25 trillion economy in 25 years, most of that growth will come from startups and will have to come from all levels of cities and towns.” The greatest responsibility of these institutions should be to provide the appropriate infrastructure for training and mentoring to entrepreneurs in the area in which they operate. And that’s what we’re missing today.”

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