No matter how many bold and italicized words scholars cram into textbooks, nothing compares to students rolling up their sleeves and testing a theory themselves.
For years, Indiana University's Kelley School of Business has offered its Bloomington MBA candidates real-world experience through so-called "academies" focused on specific industries. Now Kelley Indianapolis' evening MBA program is set to launch a scaled-back version for its students.
This fall, it will offer three such "enterprise" programs, including one with an entrepreneurial emphasis. The others are in finance and logistics.
Students who enroll in the Discovery, Innovation and Venture Enterprise (DIVE) will work through the Indiana Venture Center to help startups with business plans, marketing strategies, operations management and market research.
Organizers hope high-potential startups will participate in the program, but none have been identified yet.
DIVE is intended to develop a relationship between students who want to apply textbook concepts to real-life situations and entrepreneurs who need to learn how to further their business, said Phil Powell, faculty chairman of Kelley's evening MBA program.
"They can't learn all they need to in a classroom," Powell said. "We want to baptize them with fire at real-life startups."
Other institutions have similar programs for business students, including University of Indianapolis' Students in Free Enterprise and Marian College's Business Creation and Development.
While the Kelley enterprises are not required for graduation, students can earn 4.5 hours of credit for the 18-month course.
Bridging the gap
Some of the greatest innovations come from entrepreneurs with backgrounds in science and engineering, said Steve Beck, president of the Indiana Ventures Center. Less than 1 percent of all U.S. patents issued are ever used because the inventors don't know how to implement business concepts and make the products a success, Beck said.
Kelley's DIVE program will attempt to bridge that gap-benefiting students and startups alike.
Most schools today teach business strategies through case studies of large companies. While the knowledge is beneficial, new ventures have different challenges, Beck said.
"The universities have made tremendous progress in their entrepreneurship programs," Beck said. "Venture creation is a learned skill and [one] that you have to learn through experience."
Students who enroll in the two-year course choose a focus at the end of their first semester and for the rest of the year attend lectures and events that educate on the industry.
During the second year, teams of students will be assigned consulting projects with local companies.
"Part of DIVE's objective is to show students starting a business is possible," said Todd Saxton, a management professor who is co-directing the program with Powell. "But they need to be realistic about what they are getting themselves into."
Saxton, who is also on the Venture Center's board of directors, said he got involved in the organization because he wanted a better understanding of the startup community.
While this is the first year for the DIVE program, Saxton has been pairing students with companies on an informal basis for three years. While working with large, established companies was a good experience, the problems often were so massive it was hard for students to address them.
The impact on startups is more meaningful because the students actually help the owners get goals accomplished, he said.
Live and learn
Like Beck, Saxton also said marketing is the biggest problem new owners have. The founders assume their product is the only one of its kind available and will basically sell itself. They ignore the fact that if they had an idea, their competitors could, too.
The MBA students' experience in the corporate world and up-to-date textbook knowledge can really help, Saxton said.
"The students bring the latest concepts from the classroom," Saxton said. "The owners are able to get very focused ideas that will help specific parts of their business."
Beck said starting a high-potential business requires three things: smart ideas, smart people and patient capital. Oftentimes, one person doesn't have it all, which is where the Venture Center comes in.
Even if they have a good education and business background, new owners soon realize they don't know as much about the industry as they think they do, Beck said.
"It's almost like, they can't see the forest for the trees," he said.
Use it or lose it
IU MBA candidate Dan Brier has had a similar learning experience while completing a fellowship at the Indiana Venture Center. Brier, who owns a flower shop in Anderson, said the exposure to different industries has taught him a lot-despite his master's degree in manufacturing management and his wife's accounting degree.
Experience in the real world is essential for someone who's either starting a business or going into management, said Brier, who ultimately wants to work in life sciences.
But the last few weeks have showed him he still has a lot to learn.
"You definitely have to apply some of the concepts from school," Brier said. "A student can go through a whole academic program, but if they don't use it, sometimes the information gets lost."
Hopefully, making connections with Indiana startups will encourage students to launch their businesses in the state, Saxton said. Large corporations are crucial, he said, but there also is a vibrant venture community operating under the radar.
"We might not have the history of a venture community like Silicon Valley, but Indy has a great support system," Saxton said. "And that-no one can copy."
Starting a business is exciting, but students have to learn there are pluses and minuses to every new venture, Saxton said.
Sure, owners cash the checks, but they also take out the trash.