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Just Do It!

Rashmi Bansal answers an interesting query by Aadesh Jain – the much needed gyan for the entrepreneur in you

“I am a final year Bachelor of Management Studies student from Mumbai. I am taking the CAT’ 06 in November and had a few questions. I would be really glad if you could answer them.

I found out that the average salary of an IIM-A gradutate is around 8 lacs. I do not have any work experience but I still feel that I could earn a lot more than that in a few years after completing BMS by starting my own business or joining my dad’s business depending on where my passion lies.

There are MBAs who are successful as entrepreneurs but it is a fact that the vast number of highly successful entrepreneurs are not MBAs.

Don’t you think one can make more money by starting their own business where they have full control and freedom inspite of the risks involved?

I would love to have financial security which a job would provide but a pay of Rs 8 lakhs per annum is nothing great in my mind and considering the background I come from, I don’t think a pay of that kind would offer me much financial security I know you are not a education or career counsellor but I thought you would be the perfect person to answer this because you have studied in IIM-A and now you have your own business.

Ultimately, even i want to start my own business. Can you tell me how an IIM experience will help me in doing that?”

That’s a refreshing email from Aadesh Jain in Mumbai. The question he’s raised is extremely pertinent. Does it really make sense to go for an MBA if one has entrepreneurial ambitions?

The answer differs from person to person. There are MBAs who are successful as entrepreneurs but it is a fact that the vast number of highly successful entrepeneurs are not MBAs.

Coming from a background like Aadesh, where the family already owns a business, it is often easier to visualise a career as an entrepreneur without an MBA. Whereas those who do make it to IIMs and other top b schools generally come from middle class backgrounds. Through a mix of intellect and intensive effort they make it to these institutes, and to them the concept of a job paying Rs 8 lakhs (or more, if lucky!) is very attractive.

Yes, at these institutes there are courses and seminars on entrepreneurship. There are even business plan competitions. But, let’s face it. The MBA best prepares students to operate within existing frameworks. The most obvious fit is as an expensive cog in a designer corporate wheel.

Secondly, placement is the default option. The reason most aspire for an MBA in the first place. NOT taking placement requires action. It means taking a risk. And that upsets parents and well wishers. But again, those who are truly convinced go ahead and follow their dreams.

From IIM A’s class of 2004, Vardan Kabra spurned a Rs 7 lakh pre placement offer from P & G to pursue his dream of setting up an innovative school under the brand name ‘Fountainhead‘. The school is now functional in Surat, and will grow in size and scale with time.

In 2006, 6 students of IIM Lucknow opted out of placement, to start IndigoEdge, a company, which will exploit medical tourism opportunities in the country. Another two plan to start a commercially viable football club.

Lack of family support and more importantly, lack of capital are hurdles. But those with spirit and self-belief over come these hurdles.

Similarly, at this year IIM A 6 students bowed out of the job race to become entrepreneurs. One of them had a pre placement offer with a leading investment bank – a job that paid over $100,000 a year. But Mansur Nazimuddin, whose dream is to start a gaming company, has bigger plans.

Says Mansur, “IIMA trains us to be business leaders. By starting a company of my own, I hope to put to good use some of what I have learned over the past two years. The challenge of running a company of my own is what drives me most towards doing this. What I learned at IIMA will hopefully stand me in good stead in my efforts. I believe we should follow our hearts and not worry about the results. If I do my job well, the results will follow.”

Sarath Babu’s is another inspiring story. This IIM a grad turned down a job offer of Rs 8.5 lakh from an IT firm to set up his own catering company. Sarath helped his mother sell ‘idlis’ in his childhood to meet education expenses and support his family.

Even today, Sarath’s family makes around Rs 2,000 per month. Sarath studied at BITS Pilani on a Tamil Nadu government scholarship. IIM A too gave him a scholarship. And yet, he would rather trade security of a job for his own venture.

So the answer is – MBAs become entrepreneurs despite the temptation to ‘play safe’ and stick to jobs. Lack of family support and more importantly, lack of capital are hurdles. But those with spirit and self-belief overcome these hurdles.

In case of Aadesh, I think he should work with his family business for some time and then, if he feels the need to upgrade his knowledge or skill set, or gain additional exposure so that he can expand his outlook or way of doing business he could opt for:

a) An MBA from IIMs: There is never a guarantee that you would get in, given that competition is stiff. But no harm trying. The IIM experience is what you make of it. You can gain a great deal of knowledge, an excellent network and of course the ‘chhaapa’. All these could help in launching your own business.

b) A Family Business MBA: Several institutes offer MBAs specifically oriented to students who wish to continue in their family business. These include SP Jain, NMIMS and Nirma Institute of Management. FMB programs do not offer placements.

c) ISB Hyderabad : Around 8 students who are part of ISB’s class of 2007 are entrepreneurs. ISB offers a 1 year program which makes more sense for the entrepreneurially minded person.

d) An MBA abroad: Great experience and exposure. If you have the money, and can make it to a top 20 US b school or INSEAD go for it. The idea is to be able to grow one’s vision, as often a family concern is stuck in the old pattern of doing things. The perspective one gets at a b school can provide new direction and an impetus to move forward.

But ultimately, it’s the individual who matters – MBA or no MBA! So go ahead, Aadesh. As Phil Knight of Nike once said- “Just Do It“.

Kicking off Entrepreneurship
1)In 2002, IIM Bangalore set up the Nadathur S. Raghavan Centre for Entrepreneurial Learning (NSRCEL), founded after a generous grant from N. S. Raghavan, one of the co-founders of Infosys Technologies Ltd.In addition to supporting teaching and research, NSRCEL has a state-of-the-art incubator to help entrepreneurs launch their business plans into commercially viable products and services. However, none of the incubatee companies have IIM students on board.2) ISB is home to the Wadhwani Centre for Entrepreneurship Development. The institute recently hosted TiE-ISB Connect 2006, India’s largest networking event for entrepreneurs and investors.

Read other articles on Entrepreneurship by Rashmi Bansal

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