Starting Salaries for Entrepreneurship Majors

When you google something and end up at my blog, google analytics records your search request and shows it to me.  (Somewhere George Orwell is nodding and thinking “I told you so, but what government agency is named google?”)  Anyway, the other day there was an entry for “starting salaries for entrepreneurship majors”.  I started laughing and shaking my head.  My first thought was: “Wow, this is really stupid, they want to be paid to risk other people’s money!?”  Then I remembered that this is what fund managers get paid to do.

Entrepreneurship is hot. Lots of business schools are investing lots of money in developing entrepreneurship programs. There are many reasons for this:  entrepreneurship is important to economic diversification and national competitiveness; it is important to university efforts to commercialize research, many new jobs are in small start-ups not large companies and many entrepreneurs who have money like to give it to schools to create more people like themselves, etc. etc.  Taking entrepreneurship courses and developing entrepreneurial skills is important.  Every student should understand the business development process: be able to identify a market opportunity, put together a credible business plan and know what it takes to get the business adequately funded and positioned for success.

Yet, I fear that entrepreneurship is in danger of becoming the new general business degree.  It is what students decide to get when they don’t know what else to get, aren’t really that comfortable with numbers, and want something sexier than a GBS.  Admit it: you would rather date an aspiring business owner than a general business major–it suggests way more initiative and prospects for a wealthy lifestyle.

Dating prospects aside, if you don’t want to start your own business soon, don’t be an entrepreneurship major.  Many employers are leery of hiring entrepreneurship majors because they think they won’t stay with the company long.  Or worse yet, that they will take what they learn from the company and go into competition against them.  Also the best entrepreneurship programs help students develop a network of people who can help them launch their business.  These networks are important to success. If you are not serious about starting a business shortly after graduation, your network will dissipate quickly and will be impossible to reconstruct later on.

 If you want to work for a few years and then consider starting a business, you are better off thinking about getting a graduate degree in entrepreneurship when the time is right.  If the promise of a big starting salary is what is motivating your current business school experience google accounting, finance, MIS  or economics.

Getting the Most Out of A Visit with your Advisor

This is dangerous territory for me.  My wife is an experienced advisor.  Like me, she is opinionated. If I get this wrong, Suzanne is likely to write a rebuttal and post it on this site.  I admit to more than a little fear but I have decided to cowboy-up and write on this subject because LBS is hiring a couple of new advisors. While interviewing the candidates I have been reflecting on the challenges and rewards of academic advising and what qualities I am looking for when hiring advisors.

Most students think of their advisor far too narrowly.  They see him or her as the person who is going to ensure that they fulfill all of their degree requirements in an efficient and timely manner so that they can graduate on time.   Those students who are a little more bold will also ask their advisor about the relative reputations of the different faculty who teach the same course they need in an effort to get the best one.

If you can’t figure out how to complete a plan of study, I question our decision to admit you into LBS.  If you do need help, there are computer programs that perform progress toward degree audits. And if aIl I needed advisors to do is perform this function, I would realize that I can pay a computer program a lot less than advisors to do it.  As for advice on which professor to take, if you need help with this sort of information, befriend some fellow LBS students.  They are much more likely to provide candid assessments of faculty teaching efficacy than advisors.  Advisors need to have good relationships with faculty to be effective.  Telling students that professor A is better than professor B is hazardous to their professional future.

Your advisor should be an expert on how you can best use the resources of the university to get the most out of your education and personal development.   This requires that an advisor know something about you: your aspirations, strengths, and weaknesses.  It also requires that the advisor be knowledgeable about the entire university and its many resources so that he or she can help you access them (e.g., tutoring, counseling, technology, libraries, career services, internships, study-abroad opportunities, community service experiences, leadership opportunities, student organizations etc. etc.).  If they know both of these things, they than can help you reach  your goals, providie you with an unbiased assessment of how well you are doing in executing your plan and provide options for mid-course corrections if necessary.

Understand that your advisor is responsible for about 600 students each at LBS and most students want to see them at exactly the same time: registration.  So if you plan on  meeting your advisor during registration, realize that this is when you are going to get the least amount of time with them.  Also recognize that it is hard to get to know anyone in 15 minutes.  If this is the only time you can meet your advisor, be very prepared and use that time as efficiently as possible.  The better strategy is to plan to meet with your advisor a couple of times each semester, at least once or twice at times other than registration.  Get to know them and help them to get to know you so that you can create your professional development plan together and meaningfully assess your progress.

If you do this, your advisor can turn out to be one of the most important people you meet while in school.  Suzanne has former students who write to her, follow her on Facebook, and invite her to lunch years after they graduate from school.  Developing those kinds of professional relationships with students is what I want from my advisors. Computer programs don’t do this.

Cutting Our Way to Greatness

Last week I challenged David Levy’s Washington Post column that argued that faculty should teach more as a way of reducing the costs of higher education.  The crux of my argument was the importance of providing faculty with the time to engage in discovery so that they had interesting things to say in class, insights that would change students’ perspectives and help differentiate them in the marketplace and life.

People have questioned the value of scholarly work since at least Plato’s time, but Mr. Levy’s column is part of a wider narrative that argues that higher education costs too much, that costs have been rising uncontrollably, reducing student access and forcing people to mortgage their futures in pursuit of degrees that no longer guarantee financial success in life.  This narrative is simply wrong.  It is wrong on every count. I fear that if it is not debunked, it will lead students and policy-makers to make very poor decisions that will limit all of our futures.

Most news stories on the costs of sending a son or daughter to college report the highest private school tuition rate they can find (currently more than $45,000 per year or $180,000 for four years).  Yet, the national average in-state tuition for four years of college is $33,300—the cost of a Toyota Avalon.  This is less than a year’s tuition at the most expensive schools and just 18% of the cost of getting a diploma from the priciest institutions.

Tuition is rising sharply at most institutions, but the cost of providing higher education is not. People confuse the two because tuition is the share of higher education costs that students pay.  But students are paying more largely because state support for higher education is falling. At UNLV, we have seen a decline in state support of more than 40% in four years.  Rising tuition has not fully compensated for this revenue loss—spending is down.  The same is true across U.S.: average total cost per student is less now in real terms than in 1980, but students are paying a much higher share of the total (36% now; 22% in 1982).

And while students are paying more, CNN reports that from 2008 to 2010, enrollment went up by 4 million students—an increase of more than 20 percent.  There are both more students and more student loans, but student loan debt as a percent of total household debt remains below 10%.  There is no student loan crisis. Some students have made bad loan choices, but not all student debt is bad debt—you are purchasing an asset that will on average generate much higher income for you over your lifetime.  There are no guarantees in life, but the numbers clearly show that expecting a financial return on your college education is still a very good bet, especially if you obtain a professional degree.  Oh and Peter Theil, the guy who claimed there was an education bubble and wanted to pay students to skip college and start a business? He is now teaching a course at Stanford. LOL Maybe he will pay students to drop his course.

So why does this false narrative persist?  Because it benefits those who have a financial stake in selling solutions to some part of the “higher education problem” (many of these same people, by the way, have fancy degrees from expensive schools). I consider myself a reformer and believe higher education needs to innovate to remain a source of competitive advantage for the country. It is by no means problem-free or immune to criticism.  But this false narrative suggests that we are over-investing in higher education. That a decline in our societal commitment to higher education will fuel economic prosperity; that we can cut our way to greatness by divesting in higher education and providing cheaper alternatives to college.  Really?

 I could cite studies by reputable sources (not pseudo-science), that show links between higher education and regional prosperity, personal income and job performance, but this is a blog post not a scholarly article. So, instead let me ask you a few simple questions: Do you really want your heart surgeon, bridge builder or accountant to get their education by just watching YouTube videos on their iPad?; Which states do you think have better prospects for future economic prosperity: Mississippi, Arkansas and West Virginia (states with the lowest percent of college graduates) or Massachusetts, Colorado and Connecticut (states with the highest rates of college graduates)?  And, which state or country has made it a goal to reduce the number of people with a college education as part of their economic development strategy?  Yep, I thought so.

Do College Professors Work Hard Enough?

This was the title of a guest opinion piece that appeared in the March 25th issue of the Washington Post.  It was written by David Levy, a former university administrator and current president of Cambridge Information Group.  Jeff Selingo, editor at the Chronicle of Higher Education, tweeted that the column drew 150 comments in its first hour.  Two days later, it had drawn 1205 written comments.

Mr. Levy clearly struck a chord. He argues that faculty at teaching-based institutions don’t work hard enough for the salaries that they earn and that the budget crisis at many institutions could be solved by having professors teach more classes.  While Mr. Levy was careful to point out that faculty at research intensive universities have much different demands on their time than the group he targeted in his column, I strongly suspect that many people think all professors not just ones at teaching-oriented institutions, should teach more as a means of cutting the costs of higher education. I couldn’t disagree more.  Views like Mr. Levy’s make me so upset that I am going to write two blog posts about it: Today, from a business strategy perspective and next Monday from an economic competitiveness perspective.

Strategy 101: You can compete either by being the low-cost provider (think Walmart), or through product differentiation.  Product differentiation strategies usually focus around innovation (think Apple), or quality (think Lexus) and where successfully executed are rewarded with brand equity that supports higher prices and bigger margins.  In contrast, being the low-cost provider makes a commoditizer.  Life as a commoditizer is hard.  You must constantly try to squeeze out more cost savings to remain price competitive while maintaining your narrow margins.

Strategy 102: You need to match your human resource strategy to your competitive strategy. After the student, the single most important determinant of the value of an educational experience is the person in front of the classroom.  This is true at all levels of education.   If you want to become a leader in your field, a person who thrives rather than survives, establishes rules rather than merely follows them and has interesting things to say and do, the best way to achieve your goal is to learn from someone who possesses these traits.  So if I am an administrator who wants to follow a differentiation strategy (and I am), I want to attract and cultivate faculty who have something interesting to say; people who provide insights and perspective to students with ambition and intellect who will pay for such an experience. Such cultivation requires that I give faculty time to explore new ideas, to test those ideas, refine them, debate them with other professionals (these first four are called research), help students see how to implement these ideas in practice, give students developmental feedback and have students repeat these experiences so they can become proficient in the use of these new skills.  None of this is cheap and the vast majority of it occurs outside the classroom, but such professional development is critical maintaining a product differentiation strategy and building the reputation of my institution and its graduates.  It would be much cheaper to hire faculty who draw largely from the textbook and simply convey information, but then I am turning students’ education into a commodity.  This leads to thinking like Mr. Levy’s.

 Do I expect faculty to work hard both in and out of class?  You bet I do. But I rarely have to enforce hours of work standards.  We recruit professors who are attracted to this type of challenging environment.  They know that by engaging in the activities I described above, they are differentiating themselves and ensuring that they are not seen as a commodity. (What works for institutions, works for individuals too).  If they don’t see this, we don’t hire them.  If one slips through or doesn’t develop a national reputation in an important area, their colleagues will not vote to tenure them and I will tell them they are out of a job.  In the end, it’s not so much about how many hours professors are in the front of a class, but what they have to say when they are there and the difference this makes in the lives of students.  If you want an education that will help differentiate you and put you in the best position to achieve your goals, you want it that way.

A Sense of Urgency

It is Spring Break and I am enjoying Cactus League baseball with Tyler and Suzanne this week.   Tyler and I have been known to see eight games in five days. We would see more, they just don’t schedule enough games at different times throughout the day. Today it is Cubs vs. D-Backs from Salt River Fields at Talking Stick (what a great name).  We have strict rules: no cell phones. internet access, ipods, or tweets. No talk of work, school or any part of the world that exists outside the contours of the stadium. (No I didn’t write this blog post today–it would violate these rules and frankly you are not important enough to distract me from this experience.  I wrote this post ten days ago. I also planned ahead to get tickets to this game–I got the tickets first and then found the time to squeeze you in.)

I am the Jimmy Fallon character in “Fever Pitch” (if you don’t believe me, come to my office).  Suzanne is a much more cute version of Drew Barrymore.  Like Drew, Suz enjoys the sunshine, beer and an occasional hot dog, but struggles to understand my spring training addiction.  My favorite scene in the movie is when Jimmy declines an invitation from Drew to travel with her to meet her parents.  He explains that her trip conflicts with his annual spring training pilgrimage to see the Red Sox.  Drew questions the importance of spring training by pointing out that the games “don’t count”.  Jimmy explains that the trip is really about evaluating the Red Sox’s talent for the upcoming season: debating who should make the team, who should start and who should stay in the minors.  An impressed Drew responds “And the Red Sox value your opinion?  They listen to what you have to say?”  Jimmy, sheepishly responds…”Well no, but….”

Tyler and I know where Jimmy is coming from. We try to see as many teams as possible and to chat with their diehard fans.  Inevitably, we are told about a hot prospect, a young player with great potential.  My first question to the admiring fan is always the same:  How long has the prospect been in the team’s player development system (well usually I just say “the minors”)?  The answer better be less than five years. Ideally the answer should be less than three years. By year five, if a prospect hasn’t turned “potential” into results–the only reason the team still calls him a “prospect” is because they have a shortage of talent and need to keep their fans focused on the future. The devoted fan is blinded by the hope of soon-to-be realized potential to help his struggling team.  If the team is the Cubs, management probably already gave the under-achiever a five year, twenty million dollar guaranteed contract.  But well-run teams (see the Tampa Rays) wont be this stupid. They will have retained the flexibility to trade their former prospect to the Cubs (or the Mets before they ran out of money).  If that doesn’t work, they will just cut their losses and give the player his unconditional release.

Like it or not, the world is impatient.  Increasingly so.  Today, many prospects are paid big money and are expected to show almost immediate results.  This is just as true for assistant professors, MBAs and CEOs as it is for baseball players. If you want to make it to the top, it is important to have a sense of urgency.  The time to prove your value is short and the next crop of “prospects” are just a year behind you.

By the way, Drew was wrong…if you are a prospect trying to turn potential into results, all the games count.