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#Out With MBA s-In With Masters In Entrepreneurship

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Back when I was in college (a 1991 graduate), an MBA was a heavily coveted degree. The best business schools were heavily demanded, and graduating students would most certainly walk out with rich offers from the leading investment banks, consulting firms and big corporations.

But, in the last decade or two, we have seen a seismic shift in demand for an alternative business education, especially with the rising costs of education. One that teaches the basics in starting your own business and being your own boss. One that is tapped into local startup ecosystems with access to venture capitalists and startup incubators. One that marries expertise in technology development, with startup business and marketing skills. A new breed of business education under the banner: a Master’s in Entrepreneurship.

Sure, the major business schools have historically offered courses or student clubs on entrepreneurship. But, it was a relatively smaller part of their overall curriculum designed to teach you the basics in economics, finance, accounting, marketing and operations, to fill one small role within a bigger organization. But, based on student demand, who have lived the dot com revolution in the last 20 years, and see how much cheaper it is to launch a business, leveraging cloud-and-crowd based solutions and freely-available open-source software, the universities have had to re-invent themselves to better serve a rapidly-growing base of aspiring entrepreneurs.

As an example, my alma mater, the University of Michigan, announced the launch of a new Master in Entrepreneurship program in 2012. It is a one year program and a joint curriculum between the business school and the engineering school, breaking down the walls between the schools to allow for better collaboration between the engineers and the business people. And, in acknowledgement of such efforts, U-M’s Zell Lurie Institute for Entrepreneurial Studies was recently ranked the #1 graduate school for entrepreneurship by the Princeton Review in their 2013 Rankings of the Top 50 Entrepreneurship Programs. Validated by the many great entrepreneurs the school has produced, like Dick Costolo (Twitter), Brad Keywell/Eric Lefkofsky (Groupon Groupon ) and Sam Zell (real estate).

But, U-M is not alone. Pioneers like Babson College have been doing this since 1967. But, it is only recently, that the other schools are entering the entrepreneurial space in a big kind of way. Of the Princeton Review list, 10 of the top 25 graduate programs listed, were first offered in the last 20 years (since the start of the dot com boom in 1993). And, schools are not only offering graduate level programs in entrepreneurship, many are offering undergraduate degrees in entrepreneurship. where 17 of the top 25 undergraduate programs listed, were first offered in the last 20 years.

It is not surprising that some of the traditional business school powerhouses, like Michigan (#1), Harvard (#3), Stanford (#6) and Chicago (#11), are leaders in this space. But, what is surprising, is the fact that other traditional business school powerhouses, like Wharton and Kellogg. are conspicuously absent from the top 25 list. They better emphasize their strengths in this area, sooner than later, or else other top ten entrepreneurship graduate schools, like Babson (#2), Rice (#4), Virginia (#5), Texas (#7), BYU (#8), North Carolina (#9) and Southern Cal (#10) will become the go to brands for entrepreneurship.

And, why is this happening? This generation of students does not want to “work for the man”; they want to “be the man”. And, who blames them. Would you rather be doing financial modeling inside a big organization as a cog in the wheel, or launching a new business of your own as CEO? Although this latter road is much riskier, it is also a lot more rewarding, challenging and fun. Not to mention, the compensation in the traditional fields like investment banking, are not what they used to be, and are not as big of a draw. And, even if you fail in your first efforts in entrepreneurship, the experience you will get in actually running a business, will be materially higher than what you will learn in a book in a typical MBA program.

It is exciting to see all these innovative changes in business curriculum at the university level, designed for a new generation of startup entrepreneurs. But, if I were a traditional corporation, I would be really nervous watching the best and brightest young business talent, the long-term foundation of any good business, opt for a career in entrepreneurship, and leaving their long term talent coffers empty. I’ll save the need for increased corporate innovation departments to solve this problem, for another day.

George Deeb is a Partner at Red Rocket Ventures and author of 101 Startup Lessons-An Entrepreneur’s Handbook. For future posts from George, please follow him here or on Twitter at @georgedeeb .