Dear all:
I agree in principle with some of the comments discussed – but I can't help but emphasize that if we stick with our own subjective perceptions, instead of research based evidence, we run the risk of considerable bias and erroneous conclusions. In medical terms, we would still be bloodletting and burning pitch to fight of miasma. We seem to go from 'hot' item to 'hot' item with little informed research, and lots of 'hunches'. Thus, classroom techniques either about what is entrepreneurship or experiential learning regarding how to do (or not to do!) entrepreneurship should be measured, tested, validated, and improved.
I was very happy to see Johan indicate that ET&P will now consider research on entrepreneurship education (it was previously discouraged – and there was a period where such articles were simply unwelcome). In the end, we should all consider what we are trying to accomplish. What may work for some people in Cleveland or Boston might not be relevant to Nebraska, Scotland, or Kampala. Does our education primarily impact students 10 years later? If so, is there something wrong with that? Or, what if it just makes people happier with the career they eventually select? Isn't that an important learning outcome as well?
Europeans have been making considerable progress on extending entrepreneurship education to include design thinking, innovation, and intrapreneurship. Are we in the 'business' of creating wealth for angel investors (a small minority of the population, including a few of us academics) or for helping our students develop a career and satisfied life?
As to the 21st century methods – kickstarter and block-chain investing both seem to be in the future – and neither of them particularly require powerpoint presentations, business plans, elevator talks, nor business plan canvases.
Benson Honig Ph.D.
Teresa Cascioli Chair in Entrepreneurial Leadership
DeGroote School of Business, McMaster University
Hamilton Ontario Canada L8S4M4
Tel: 905-525-9140 ext. 23943
Dear All
This is probably the first time I have ever responded to one of these discussions, but I found Scott's reply to be quite similar to my experiences.
Even though I am a life-long academic who has studied and taught entrepreneurship for many years, I have been an angel investor for 10 years, am invested in two different accelerator funds, serve on the board of a couple angel funded companies and have made several investments (successful and unsuccessful) in early stage companies.
I almost never see business plans any more. One of my research projects (with Linda Edelman and Tatiana Manolova) examines nearly 2000 applications to an angel group over 10 years. The applications do not require a business plans, but do ask for a pitch deck, a short 2-3 page executive summary, some sort of pro-forma financials, team biographies/information, and supporting documents, which are usually things like market studies or analysis, current sales information, results of clinical testing, recommendations, IP information, product specifications or designs, etc. Applicants have an option to include business plan, but I would estimate that less than 20% take advantage of this option, and the focus for most of the investors in my group is on documents like IP/product designs, financials, market studies, and deal structure.
Our research has found that what makes a business "ready" for funding (e.g. IP, fully formed management team, marketplace traction) is not necessarily the same criterial we apply to assessing business concept ideas of our students. But, this would make sense because a relatively small percentage of our students are actually launching businesses. I have heard that the average percentage of students actually starting a business at graduation is between 10-14% for most schools (it is slightly higher here at Babson because 100% of our students are required to take entrepreneurship courses, so the rate is closer to 17% depending on class/year. We do find that 5 years after graduation about 50% of our students are in a start-up, own a small business, or running a new venture in a family business).
So as educators, I believe our role is to help students to "practice" aspects of entrepreneurship through experiential learning, but to realize that a relatively small number of our students will actually engage in starting a new venture. To this end, we should endeavor to make the experience as relevant and realistic as we can. Here at Babson College, we took the business plan assignment out of our courses about 6 years ago. We do use the a variation of the business model canvas as a "tool" to help students in our Butler Venture Accelerator, Win Lab and our required entrepreneurship courses to better understand the connections customers, the value proposition, infrastructure and financial viability. But we focus on pitch decks as a deliverable.
Many thanks for this conversation-
Candy
Colleagues,
I rarely reply to these listserv messages, but in this case I would like to offer a few observations. People can do with these data points what they wish.
In addition to my academic activities, I am an active angel investor. I am making these observations as someone who is an LP in two micro VC funds, one accelerator fund, who has been a member of an angel group.
Another background "fact" is that among my students here at CWRU, I have 5 out of every class of 25 with "real" businesses, which I define as companies that either have working prototype, have a term sheet from an investor, have raised some actual money from people other than themselves, revenues, or a legal entity.
Of the +/- 350 efforts to raise money that I received in 2016, roughly 2 provided business plans, about 10 offered executive summaries of business plans, 10 were pitch emails by people who offered nothing else and about 325 sent "pitch decks."
Based on these numbers, it is my opinion that the ENTP Division of AOM is out of date with reality. Business plans and business plan competitions are 20th century approaches to the topic. The accelerators, angel groups, micro VCs etc... are working off of pitch decks. So my first observation would be that class activities these days should be geared around pitch decks rather than business plans.
My second observation is that there is an enormous gulf between university competitions like Rice Business Plan competition and real world competitions like that at South by Southwest. In my opinion, training students for university competitions is a bit like elementary schools teaching to the test. My students who go on to the non-student competitions point out that what was valuable from class is very different from what was valuable to them at the student competitions.
My third observation is that the business model canvas is useful for many things but its output is not something that you can use directly for funding a business. With the exception of seeking admission into an accelerator (for which it would be fine), that output does need to be turned into something like a pitch deck to raise money or to communicate with other stakeholders.
My fourth observation is that the world of fundraising today is much broader than Benson suggests. Online accredited investor platforms like Seed Invest and Circle Up, the rise of angel groups, the rise of micro VC funds, the growth in the number of angels (all of which I have documented in a variety of writings) makes the world very different than that before 2000. This will only change further with the advent of non-accredited investor crowdfunding, which has barely started in the US. A founder in Cleveland, Ohio is not restricted the way he or she once was because traditional VC is concentrated in Silicon valley. But that founder needs to have the right tools for raising money from others.
My fifth observation is that Chuck is spot on about the difference between experienced investors and non-experienced investors on this topic. The experienced investors look very differently at information than do others and that has a bearing on pedagogy. A bunch of faculty judging a competition is nothing like true angels and VCs doing it. The outcomes are likely to be very different.
My sixth observation is that faculty members should think seriously about who in their classes they are teaching to. The majority of the class will be learning about entrepreneurship, while a minority will be learning to do entrepreneurship. As educators, I think it is fine to teach to either group, but it is very hard to teach to both simultaneously. I am sure great teachers can probably pull off both, but not us mere mortals. The materials and approach needed are different. Larger schools have an advantage here because they can offer separate courses to achieve the different types of learning.
My finally observation echoes Johan's. I think there are articles on entrepreneurship education in ETP.
My apologies to all for the long email. Every so often, these messages hit a nerve.
Regards,
Scott
Benson, it is incorrect that ETP won't publish papers about entrepreneurship education. We are happy for quality submissions in any area relevant to entrepreneurship.
Johan
Sent from the iPhone of
Professor Johan Wiklund, PhD
The Al Berg Chair of Entrepreneurship
Editor, Entrepreneurship Theory & Practice
Whitman School of Management
Syracuse University
721 University Avenue
Syracuse, NY 13244
Not to upset everyone's collective apple carts, but while I've read lots of opinion, I see very little referencing of systematic evidence. Without researching how students learn best, and what they learn, under various conditions and with various models, it's all going to be very subjective, isn't it?
Oh – by the way – one of our two leading journals (ETP) will not publish anything on entrepreneurship education. Perhaps we can infer it doesn't matter much!
Regards
Benson
Benson Honig Ph.D.
Teresa Cascioli Chair in Entrepreneurial Leadership
DeGroote School of Business, McMaster University
Hamilton Ontario Canada L8S4M4
Tel: 905-525-9140 ext. 23943
Hi all,
I've been lurking until now with this conversation, but let me add a brief .02.
A b-school course is often not very much like real life from a teambuilding and operational standpoint. For example, friends and former colleagues may know each other well enough to not need to even consider a business plan or a business model canvas. We all know how important the quality of the team is, both for optimizing internal organization, as well as for selling the venture to investors. Where the team presents itself as complementary, cohesive, and commital, formalizing business plan or canvas becomes less necessary.
That said, in general, I see little reason (aside from time and deadline constraints) to not assign student teams to produce *both* business proposal and a business model (canvas).
Specifically, I find that the students learn not only when they write a 12-15 page business proposal, but also when they're asked to slice it down to a 5-page executive summary and then a 200-word gala blurb (e.g. our course's gala/kickout has a program booklet with a 200-word blurb describing each team's venture). They learn what are the crucial missions or objectives of the venture, as well as what part of the strategy deserves to remain flexible. Many students always tell me that the slicing down process is just as much of a learning experience as writing the full-fledged document. They tell me that when they boil their 12-15 "formalized" pages down to 200 words, they not only feel freedom/flexibility, they also feel confident.
Confidence mixed with freedom/flexibility. That's hard to buy with just proposal or canvas alone.
From an instructional standpoint, in my opinion, our job as entrepreneurship faculty is to give students taste. That means they should know the value of--and efforts and mindset that go into--a business proposal and a business model canvas. If you only ask for one, then ultimately your students have no taste for the other.
Regards, -chihmao.
| Regards, -chihmao -------------------------
Chihmao Hsieh
Associate Professor of Entrepreneurship
Yonsei University (UIC) website: www.chsieh.com
tel: +82 032 749 3085 |
-----------------------Original message-----------------------
From: "Winkel, Doan "<dwinkel@ILSTU.EDU>
To: ENTREP@AOMLISTS.AOM.ORG
Sent date: 2017-01-25 00:28:54 GMT +0900 (Asia/Seoul)
Title: Re: [ENTREP] Business Plan Exercises and Advice?
Hello -
I have seen many replies about this, and this relates to an ongoing discussion in our field about business plan vs. business model and all that. I personally am not a business plan proponent as I think students get less value from that exercise, and their time can be better spent learning by doing instead of learning by planning. Not to discount plans - they are necessary sometimes in some situations. But from a learning perspective, try to focus on action.
Business modeling is a "better" way to get students learning actively. But I have found over the years there are usually some issues with students (and faculty!) still not understanding the business model, how to use it, etc. One good friend explained it to me like this: giving students a business model to use is kind of like giving them all the parts of a car and expecting them to know how to build it.
What I have come to find most engaging for my students (undergrad business students at a large state university in the sort-of-central US) is getting them focused on problems and customers, and working toward finding product-market fit. A resource I've been using both with my students and in my own personal ventures (with some fantastic results) is the FOCUS Framework (https://thefocusframework.com/). If you'd like, I can make an intro to the wizard behind the curtain - he loves working with educators to customize offering to fit your curriculum or co-curricular efforts.
Doan
Dear Colleagues,
I am developing curriculum for a new venture management course and I was wondering if anyone would be willing to share some of their experiences with teaching the development and writing of business plans.
What kinds of exercises do you use? What kind of rubric do you use for grading a business plan?
Any feedback or advice would be greatly appreciated.
Best Regards,
R. Duncan M. Pelly
Assistant Professor of Management
California State University, Los Angeles
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