One day in early 2013, six classmates stepped into “the pit” at Harvard Business School. It’s an amphitheater where teams of students pitch their ideas for start-up businesses they’re required to launch as part of the MBA program. Their classmates sit before them and listen intently.
After the speeches, a mock stock market opens. Students are given shares initially valued at $100 in each of the start-up companies that were introduced to them. They’re free to trade shares among themselves for a few hours. Popular ideas rocket above $100; unpopular ideas sink.
“The stock market acts kind of like a signal on what’s the value of the idea. How well has this team been executing? It turns out the financial market is pretty brutal sometimes,” said Alan MacCormack, a professor at the school.
One group of six students experienced just how brutal it can be. The price of the team’s start-up closed the lowest in its section, at $32.30.
Buoyed by confidence, the students didn’t abandon their idea in the weeks ahead. They sharpened it and went on to launch HourlyNerd.com, which pairs MBAs with businesses in need of short-term consulting. HourlyNerd has since received two rounds of outside funding and has 10 employees. The students are juggling running the successful company along with classwork before graduating later this month.
The stock market — made possible with some significant legwork from Harvard’s IT department — offers a window into Harvard Business School’s commitment to curricular innovation. It’s in the fourth year of augmenting its core curriculum with FIELD, a three-part course that emphasizes teamwork, real-world experiences and active learning.
Student first receive workshops on communication and the exchange of feedback. Outside actors are brought in to help simulate experiences. With two-thirds of graduates entering industries and companies where work is done in small teams, emotional intelligence is stressed.
“If work is done individually, things like IQ have a strong correlation with performance. If work is done in teams, the strongest predictor of performance is not IQ,” said MacCormack, who leads the FIELD program. “It’s more the team process, the team interactions. The softer side of skills a manager needs.”
Armed with the lessons of teamwork, all 900 students are then sent overseas to work in an emerging market.
“We got flight tickets. We got visa issues. We even do the inoculations for 900 people,” MacCormack said. “It’s like a military boot camp.” Once there, students may find themselves tackling how to increase PC usage in rural China, or how to create a premium cinema experience in a Latin American nation.
“We’re really teaching about humility about what you can know and what can’t be known, and what you can do from afar and what can be experienced,” MacCormack said.
Students return to Harvard for the third phase of FIELD, in which they form small teams and are given a few thousands dollars to launch a business.
Go day — when ideas are pitched and the stock market first opens — is just the beginning of the experience, as HourlyNerd showed.
“Our initial presentation, which was several weeks into the program, had not been thoroughly rehearsed,” said Peter Maglathlin, one of the three co-founders who remains with HourlyNerd today. “And I can admit the work we put into it probably wasn’t what was required to make it stand out. We didn’t seem that passionate about it.”
The team surveyed area businesses and found the overwhelmingly majority were interested in the service. Despite no team members with a tech background, they launched a Web site, which Maglathlin called an “excruciating but rich learning process.” They found an invaluable adviser in professor Lynda M. Applegate. Weeks later at what the school calls IPO day, their stock — once $32.30 — traded for $750.
“You really have to have thick skin when pursuing entrepreneurial ideas. There are always people who aren’t going to agree with you. There will be doubters,” Maglathlin said.
Experiences like Maglathlin’s wouldn’t have happened four years ago at Harvard Business School. Now students are arguably better prepared than ever for the real world.
“It’s been tremendously meaningful. I’m on sales calls with companies. I’m learning about what it means to get to the right decision maker, and what adds value for my customers,” said Katy Lankester, a first-year student, whose team launched datafuture.com, which connects PhD graduates with companies in search of data scientists. “It’s experiential education — I’m taking what I learn in class and practicing how to actually manage all the pieces to achieve that solution I talk about in the classroom.”
MacCormack says that every year since FIELD began in 2011, students have given it higher marks in year-end evaluations.
“The learning in the classroom isn’t necessarily that painful because it’s a comfortable atmosphere,” Maglathlin said. “But when you’re making mistakes out in the real world the learning is more painful but it’s more effective. You end up taking away more tangible skills.”
The students’ experiences of building a start-up wraps up with a competition in which angel investors and venture capitalists judge the best projects. Every effort is made to make the experience true to life.
“We didn’t want it to be a business-plan competition,” MacCormack said. “At the end of the day our students are amazing with PowerPoint. If this ends up being a PowerPoint competition they’re going to pull three all-nighters at the end and turn up looking great.”