And EMBA students are not immune to the fever, Haas’s Toby Stuart notes. “It’s glamorized the business heroes of the day,” Stuart says. “When I was young we admired Jack Welch, we admired Warren Buffet, we also admired Bill Gates but it took a long time, it took 20 years to get to that point. Today we admire the architects of the major tech companies, many of whom are very young.
“The vast majority of entrepreneurial ventures created around here now will not really go anywhere. You can just think of it as a really steep funnel and there’s a lot going into the back end of the funnel and there’s more coming out of the front end than there ever has been historically, but it’s still poor odds.”
When students approach Stuart about ventures, he advises them to carefully consider earnings trajectories, and evaluate the steady returns of a salary versus the highly uncertain income prospects of the startup life. “Most of what I get is, ‘I’ve been bitten by the bug and I want to do something, and so I’ve been brainstorming,’” Stuart says. “I make them think about opportunity-cost calculations.
“Ninety-nine point nine per cent of ideas for new companies are bad, so I personally am a tough critic. I tend to tell my students, ‘There’s one and only one reason to do this, and the reason is that you have an itch and it’s going to drive you mad if you don’t scratch it. If you’re not antsy when you go to sleep because you feel like you’ve identified an opportunity and it’s going to go away because somebody’s going to grab it if you don’t, you should be doing something else with your time.”
The minority of entrepreneurs who achieve tremendous success and wealth can reap unique rewards, Stuart says. “They’ve . . . built something that they’re very proud of. They’ve often managed to build it in a way that they maintain enough control over their destiny that they kind of have professional freedom in ways that other people don’t. If you do it and you do it well and you do it successfully, there’s no career like it.”
Comments or questions about this article? Email us.