Do you need an MBA to do a successful startup?
Of course not.
But when it comes to using an MBA experience to launch a company, you wont get much of an argument from the business school graduates whose companies have landed on Poets&Quants third annual ranking of the Top 100 MBA Startups.
For the first time since the rankings were created, the top spot goes to a venture that had not already been sold. SoFi, a Stanford-founded student loan refinancing company, charged to the top of this years list with a monstrous $1.4 billion raised for operations in the past five years. Their leap up the rankings was anchored by a $1 billion Series E round announced last September. Next was GrabTaxi, the Southeastern Asia taxi booking app founded by a team from Harvard, with $680 million in venture backing. Rounding out the top three was Stanford-founded RelateIQ, which was acquired by Salesforce for $390 million and is now SalesforceIQ.
Cultural Moment or Frothy VC Market?
While SoFi and Grabtaxi certainly set the pace in the race for later series funding, they were not the only two startups to make big moves this year. Harvard-founded Oscar Insurance zoomed from $150 million and ninth place last year to $327.5 million and fourth place this year. Wharton-founded razor venture, Harrys, nudged up one spot to fifth this year, with $287 million in total funding. And PillPack, founded by an MIT Sloan School of Management team, catapulted from 70th to 13th, with total backing of $62.8 million.
Whether theyre enjoying a cultural moment or a frothy venture capital market, startup fever on business school campuses has never been hotter. Last year, 84 out of the 908 graduating MBAs from Harvard launched their own companies, with one in five entering the school having already decided to start a business. More Harvard MBAs did their own startups than headed into healthcare and consumer products combined. In fact, launching a company was the fourth most popular career path, after finance, consulting, and tech.
At Stanford, sitting in the heart of startup mania, more MBAs founded their own companies than went into consulting, a mainstay of MBA employment. Some 16% of Stanfords graduates did their own thing, eclipsing the 14% who took jobs at consulting firmsand nearly three of every ten Stanford MBA founders started their companies outside the U.S. Similarly, at UC-Berkeleys Haas School, a record 31 MBAs last year founded companies, up from a mere half dozen in 2014.
And MBA entrepreneurship is not merely a U.S. phenomena. At INSEAD, with campuses in France, Singapore, and Abi Dhabi, last year more MBAs started companies than were hired by Microsoft, Google, Apple, Deloitte and Citi combined. Some 49 INSEAD MBAs, or 6% of the class, went the startup route last year.
From Solar Energy in East Africa to Brain Diagnostics
The enterprises that found their way into the Top 100 are among the best of the bunch, disrupting incumbent rivals, changing the competitive landscape of industries, and influencing the way people live, work, and play from East Africa and Southeast Asia to the bread basket of the United States.
They include Off Grid Electric, founded by a team from the University of Oxfords Said Business School. With headquarters in San Francisco and offices in Tanzania, Off Grid Electric provides electricity to 10,000 households and an average of 50,000 people each month. And then there is UCLA Anderson School of Management-founded Neural Analytics, which is creating products and services to measure, diagnose, and track brain health. Or consider Unite Us, which was founded by military veterans at Columbia Business School to connect fellow veterans with needed resources from healthcare to mentoring to housing to fitness.
Many of these new companies boast highly sophisticated approaches to their markets. Take, for example, Stitch Fix, a tech-driven online clothes styling and sales platform founded by Harvard MBA Katrina Lake. The company employs 60 data scientists, 50 of them with PhDs. Data analysis maximizes supply chain efficiency and, crucial for a company selling ephemeral styles, offers a window into the future.
Our data science is really good at making predictions about how likely someone is to love something, says the 33-year-old CEO. Lake started the e-commerce company in 2010, during the second year of her Harvard MBA program. Her San Francisco company has now received a reported $46.75 million in equity funding, placing the company 16th on our list, and just moved into what will be five floors of new offices in downtown San Francisco.
While Lakes pre-MBA background in consulting with e-commerce and retail companies helped inform her ideas about launching a startup, it was her two-year MBA experience, she says, that provided backbone skills, including leadership knowhow and the ability to state a point of view confidently and concisely (as required by the case study method)...