The Entrepreneur's Tool Kit

When Myra M. Hart, the MBA Class of 1961 Professor of Management Practice, joined the HBS faculty in 1995, she wondered if the increased emphasis on entrepreneurship both on the broadest social level and at HBS in particular had changed the career paths of HBS alumni.

"In the early 1980s, [HBS professor] Howard Stevenson had done a survey of alumni to analyze the career directions they'd followed," Hart told New Business. "He believed that although many viewed HBS as a training ground for Fortune 500 CEOs, it was also a hotbed of entrepreneurship-that many alumni were entrepreneurs. He found that more than 30 percent of alumni called themselves 'self-employed.'" Hart's subsequent research revealed that more than 60 percent of alumni defined themselves as, more specifically, "entrepreneurs," and more than 40 percent were involved in entrepreneurial ventures at various points in their careers. "I got to thinking that it might be useful to talk to alumni who are just at the moment when they're ready to start a business, and I interviewed many of them individually," Hart says. "As I did that, I saw a need for a program that dealt specifically with 'how you do it.'"

Her ideas resonated with then-president of the School's alumni board, Ed Hajim (MBA '64), an accomplished entrepreneur, venture capitalist, and businessman. Hajim felt that such a program was so critical to the needs of alumni that he offered a unique financing option to anyone considering the program: He would provide a significant portion of the fee, and participants would only need to pay it back if they were ultimately successful in their venture. "I'm a big proponent of lifelong learning," Hajim says. "I believe that the educational process doesn't end with graduation-in many ways that's when it begins."

This was the beginning of what would become The Entrepreneur's Tool Kit, an Executive Education program designed specifically for HBS alumni. Geared toward those who have recently launched an entrepreneurial venture, or who are considering doing so in the near future, The Entrepreneur's Tool Kit is an intensive three-and-a-half-day program that provides participants with nuts-and-bolts perspectives on how to get their venture started.

Participants are matched in groups with fellow alumni who are interested in similar industries. They are encouraged to present their business concept to the group, and during formal and informal group meetings they exchange advice. "We tell them that this is their board of directors," Hart says. "They meet with these people every morning. Each person shares the issues he or she is facing, and the group spends 20 or 30 minutes addressing it." Faculty members facilitate these meetings, but they don't tell participants what to do. The strength of the program lies in this community of peers. By discussing the challenges they are trying to overcome, participants learn from each other and teach each other.

In addition to the board of director's meeting, each day's schedule includes case study discussions and information sessions presented by experts on topics such as legal issues for entrepreneurs, angel financing, and business-plan creation. "We deal with really practical stuff," Hart emphasizes. "These people are contemplating a very big commitment, and they have so many questions." Those questions tend to follow a similar pattern: What kind of legal firm do I need? Do I need a lawyer now? How do I protect my intellectual property? How do I go about bringing in partners and arranging compensation? Should I give everybody equity, should I give options? How much working capital should I think about? Should I make my projections conservative or best-guess-should I create four scenarios? "Participants build a network of resources and professional contacts," Hart says, "and they can continue to draw from this long after they complete the program." Hajim adds, "In three-and-a-half days you get the complete 'playbook' for becoming an entrepreneur."

Many of the prospective entrepreneurs have gone on to run successful ventures. Hart estimates that for every 40 individuals who take the program each year, 30 will go on to run a business. ......
"An Interview with Linda Applegate

Lynda M. Applegate, the Henry R. Byers Professor of Business Administration, took over as chair of The Entrepreneur's Tool Kit (ETK) this year. Professor Applegate spoke with New Business about some of the ways in which the program will evolve under her leadership.

New Business: What are some of the new directions in which ETK may be headed?

Professor Applegate: Through the generosity of several alumni, we've gotten funding to create an international version of ETK. We are currently exploring opportunities to create a Latin America program. This will enable us to extend our research on entrepreneurship and building new ventures in very turbulent times to other parts of the world where entrepreneurship is critical to the development of the economy. We'll also learn how entrepreneurship is progressing in various regions, and what some of the issues are that we can take back to the ETK classroom at HBS and our entrepreneurial management curriculum in the MBA Program to provide a better understanding of the diverse implications of global entrepreneurship. Additionally, we'll bring in various academics from universities in Latin America, and after the program, we'll work with them to push forward research on global entrepreneurship and the use of some of the tools that we've been developing in other parts of the world. So this will be an exciting exchange of insights

New Business: I understand ETK will also be expanding its outreach to alumni

Professor Applegate: Yes, we're developing a lifelong learning program through the Alumni Office and HBS Publishing. There's a tremendous amount of excitement about this idea from ETK participants who want to stay in touch with each other and the School.

New Business: In what form might this lifelong learning concept be offered?

Applegate: That's still under discussion. Currently, the ETK participants develop an e-mail list and use it to keep in touch. We are very interested in building on the obvious interest for continuing to share perspectives and insights.

New Business: What has been some of the recent feedback on the Tool Kit?

Applegate: It's a very popular program, and the most recent session was extremely well rated by participants. We're also in the process of surveying alumni who've taken the program, to better understand how it has helped them with their carriers."
More at:http://www.hbs.edu/entrepreneurship/newbusiness/2003fall_2.html