The key challenge that healthcare enterprise leaders face is determining how to drive innovation while addressing problems of affordability, inefficiency and gaps in quality. This task is now complicated by strong economic headwinds that limit the resources available to attack these problems. Industry executives are also dealing with new sets of competitive and regulatory pressures on their efforts to drive business growth.

At Columbia Business School’s 5th Annual Healthcare Conference held in New York City on November 21, over 500 students, alumni and other professionals heard more than 40 speakers and panelists discuss these issues.

The featured healthcare leaders said they are embracing change to develop creative solutions to the industry’s growing problems and to provide attractive investment opportunities on a global basis. A career strategies panel of executive and corporate recruiters also presented their views on the skills and talents necessary for healthcare professionals to succeed in this dynamic environment. This was followed by a concluding career fair and networking reception with the conference’s 17 corporate sponsors.

Ed Ludwig ’75, chairman and CEO of BD (Becton, Dickinson), gave the opening keynote address. Ludwig said that a successful global healthcare company must use technology, scale, global reach and operational excellence to offer value-added products. These products should reduce costs, enhance the quality of patient care and generate sustainable earnings growth.

Following his remarks, four concurrent panels took place in the morning session on the topics of pharma and biotech, medical devices, diagnostics and payor/provider issues.

The pharma and biotech panel discussed the trend among companies to narrow their therapeutic priorities, focus on biologics, pursue licensing and target acquisitions and seek enhanced productivity and cost savings. Numerous early-stage biotechnology companies are turning to larger pharma and biotechnology firms to survive as they are unable to secure capital from the public market. Global medical device companies are seeking to introduce innovative and cost-effective products in a challenging regulatory and pricing/reimbursement environment and pursuing acquisitions and new markets to meet growth objectives. The consensus of the payor/ provider panel was that any healthcare reform in 2009 would likely be incremental due largely to economic and political headwinds, and that a key focus would be on information technology and expanding access to those without insurance coverage.

Robert Essner, former Chairman and CEO of Wyeth Pharmaceuticals and now executive-in-residence at Columbia Business School, provided the lunchtime keynote speech. He suggested that although the pharma industry faces significant challenges, the combination of new drugs, biologics and vaccines in key areas of unmet need (e.g. Alzheimer’s, cancer, congestive heart failure) and the massive influx of informed baby boomers, who are demanding health solutions, provides favorable long-term growth prospects for innovative global pharmaceutical companies.

Three afternoon panels covered M&A, life science investments and emerging markets. It is anticipated that healthcare M&A will remain active across all sectors and that consolidation among Big Pharma companies appears inevitable. Early-stage life science companies and investors face a capital squeeze, which is threatening the viability of existing companies with lower levels of funds available for new investment. Emerging markets are an increasing focus for global pharmaceutical and medical device companies that are seeking new markets for their products.

The final panel of the day focused on the changing talent acquisition and development strategies of major healthcare enterprises. Panelists commented that successful leaders will need to have global and cross-functional experiences; that employees should be open to lateral moves that broaden their skills and experiences; and that healthcare companies considering new hires are seeking a broader “toolkit” of skills that reach beyond the traditional focus on healthcare backgrounds.

For more information about the conference and sponsors visit www.cbshealthcareconference.com.

	Judges and prize winners from the 2010 A. Lorne Weil Outrageous Business Plan Competition.

Nick Friend ’11 and his mates, Chris Beardsley and Russell Greenberg, had a dilemma: How to create the perfect, portable cocktail for tailgating? After tinkering with a design (they share a background in architecture and design at Yale), they came up with the Sidecar. It is a liquid-filled disposable sleeve (with room for advertising) that fits over a soda can. Every sip from the enhanced can produces the perfect blend of can and sleeve contents. Think a portable Jack-and-Coke in less than three seconds. Their idea came in first place — with an award of $7,000 — at the Entrepreneurship Program’s A. Lorne Weil Outrageous Business Plan Competition, which took place on April 16, 2010.

More than a dozen teams of first- and second-year students and their business partners participated in the competition. The second-place cash prize of $4,500 went to Ben Appenzeller ’10 and his plan for a virtual gift card distributor called Gift Helix. Julia Levy ’11 received $1,500 for her third-place winning plan to create a private-public partnership with New York City to encourage people to drink more tap water and reduce the consumption of plastic water bottles.

Honorable mentions went to Jeremy Miller ’10 and his plan for FSA-Store.com, an online commerce site offering products eligible under Flexible Spending Account programs, and Srikanth Nimmagadda ’11 for a mobile app called Cougar Hunter, a GPS-based application to help interested men and women find each other on-the-go.

The competition included an elevator pitch segment, in which students were asked to give their best short-form pitch. Watch select segments from other participants in the competition:

A guest lecturer in my Venture Capital class — a female partner at a large venture fund — told my students that she wouldn’t chase a contested deal if the management team and board lacked women. In her experience, she (a) wouldn’t win the deal so why waste cycles on it, (b) might have difficulty with “fit” even if she did get the deal, and (c) would rather use her time more efficiently on deals where she had an edge. A New York Times article on April 18, 2010, detailed this problem from the entrepreneurial side: Women are not starting as many companies as men, are having trouble getting them funded and are running into sexism in Silicon Valley’s well-known venture funds.

Perhaps even more distressing is the recent post by The Funded, a popular VC blog that provides Zagat-like reviews of venture investors. It came out with its list of the best VCs, ranked by the extent to which CEOs like working with them. Of the 84 VCs and super-angels who topped the list (from their database of more than 17,000 individual investors) only one woman made the grade: Maria Cirino at .406 Ventures in Boston. Clearly women constitute more than 1/84th of the current pool of venture investors.

How do we break this cycle if we are in fact experiencing a redlining of women in the venture capital ranks?

The success of the Gilt Groupe has made it clear that there is tremendous value in understanding how consumers approach purchasing and demonstrates a competitive advantage for women executives going after consumer Internet ventures. But right now it is an outlier. According to recent research by Professor Ann Bartel and the Women’s Executive Circle of New York, less than 11 percent of executive officers in New York are female. In the Fortune 500, that number is around 16 percent. In a study of Stanford’s MBA graduates, only 10 percent of the executives at start-up ventures are women. Yet nearly 40 percent of MBA graduates are women.

So how do we go from almost 40 percent of MBA graduates to only 10 percent of the execs at start-ups? How are start-ups, which are supposed to be at the cutting edge (and which are generally run by a younger set than the Fortune 500), worse on this issue than the Fortune 500? What can repeat players in the VC market do to equalize the representation of women in senior management at VC-backed startups?

Another guest lecturer (a male CEO of a VC-backed company in which I am an investor) showed a slide with his 12-person management team, all of whom were male. When a student (appropriately) queried why there were no females in management, he descended from the podium, handed her his business card and said “apply.” Two years later, that company has grown tremendously and has some extraordinarily talented women, but none are in the boardroom or have made it to the top echelon of management (yet).

What are entrepreneurs doing, and what role can VCs play, to bring more women into the world of start-ups and venture capital? Is there a tipping point or critical mass? In companies where there are two senior female executives or board members, is there a higher percentage of females company-wide? Some research indicates that having a higher percentage of women in senior management positions equates to better firm performance. If mixed-gender teams are likely more effective, should start-ups go out of their way to achieve critical mass?

Ed Zimmerman is an adjunct professor in the Finance and Economics Division and teaches the Venture Capital class. He is chair of the tech group at the law firm Lowenstein Sandler and angel invests through Grape Arbor VC.

Photo credit: Flickr/rogue3w

Management professor Rita McGrath says experimentation must be an integral part of a company’s strategy in order to remain competitive in the future.

“The level of uncertainty and speed of change are touching sectors that used to be buffered from that,” McGrath says. “When you don’t know what’s going to happen, you don’t have much choice except to experiment.”

McGrath offers three rules for results-driven experimentation:

1. Keep it cheap in the beginning: When some of your experiments fail — which they will — you don’t want to have all your eggs in the same basket. Limit the resources dedicated to any given experiment and focus on variety instead.
2. Don’t sacrifice variety for efficiency: You want to have enough variety to cope with whatever comes your way. McGrath cautions that too many companies lose variety as they become overly focused on efficiency. “A typical company sets up a team with one person in charge, so in effect that’s one experiment,” she says. “If you have 10 little projects with each person looking at a slightly different angle, you’re much more likely to find success.”
3. Design experiments as true experiments, not projects: Companies miss many of the insights that they can gain in experimentation because they are focused on completing a project, McGrath says. To learn, they must design each task as a true experiment.

Read more about Professor McGrath’s insights on the business model concept, published as “Business Models: A Discovery Driven Approach” in Long Range Planning: International Journal of Strategic Management (March 2010).

Photo credit: Flickr/Horia Varlan

Two weeks ago, the Technology Business Group and the Green Business Club organized and led Columbia Business School's annual Silicon Valley Trip. This was the School’s 13th year heading west to explore career opportunities. We had more than 40 students on the trip and we visited 15 companies in three days. This year’s lineup was fantastic and included the following companies: Adobe, Apple, Autodesk, Bloom Energy, Blue Skye, eBay, Facebook, Google, IDEO, Khosla Ventures, Meebo, Tesla Motors, VMWare, Yahoo and Zynga.

The goal of our trip was to provide a chance for students to explore opportunities at technology and clean tech firms in the Bay Area. The company visits typically consisted of a campus tour, a talk with recruiters and either an executive speaker or a panel of employees. At many of the companies, we also had a chance to meet and speak with Columbia alumni who work there. For first-year students looking for summer internships and second-year students pursuing full-time jobs, the trip was refreshing, as it was clear that most of the companies we visited were in the process of ramping up recruitment efforts.

One interesting question that came up during our company visits, over meals, and in the car driving around the Bay Area is whether it’s better to head to a small start-up after graduation or join a larger and more established firm.

	What are your thoughts on this topic? Please leave a comment.

In our first meeting at Zynga, a fast growing gaming company, their board member, Bing Gordon from Kleiner Perkins, suggested taking risks earlier in our careers to do something new and exciting. He felt that with an MBA from Columbia, you can always fall back to a job with a large established firm if the start-up doesn’t pan out. But in a meeting later that day at Adobe, CFO Mark Garrett provided an alternative perspective: He suggested going to a large company after graduation to gain industry expertise, since start-ups would always welcome someone with industry knowledge and an MBA from a great school.

After debating this question with classmates who spent time at both start-ups and large tech firms, one thing became clear: Either route can work. You should follow that path that you feel more passionate about.

We are grateful to these companies for hosting us and we thank all of our alumni who helped with planning. We also thank the Career Management Center for arranging an insightful VC panel and for partnering with our Bay Area Alumni Relations group to cohost a fun alumni reception at the Autodesk Gallery in San Francisco.

Read more about the trip on Christian’s blog, Philtered. Photo credit Bruno Orsini ’11.

Creative models for buying and selling goods allow consumers to act philanthropically through charity tie-ins with product purchases. But are they profitable?

New research from Professor Ray Fisman, Dan Elfenbein of Olin Business School, Washington University in St. Louis, and Brian McManus of University of North Carolina, Chapel Hill, shows that linking a product with a charity donation is an effective way to boost sales — but not quite enough to make up for the cost in the bottom line.

In the study, Fisman and his academic collaborators worked with Steve Hartman ’07 (EMBA) to assemble data from eBay’s GivingWorks program, where sellers can offer a portion of their auction proceeds to a charity. They found that on average, an item advertised with a 10 percent donation is 20 percent more likely to sell than its non-charity counterpart, and for a price that’s on average 2 percent higher. But these benefits aren’t enough to make up for the cost of the 10 percent donation itself.

The study also showed that inexperienced sellers who lacked a selling track record benefitted from a charity tie-in more than experienced sellers. Fisman suggests that buyers see the charity tie-in as a signal of trustworthiness, which is particularly valuable to a seller that has yet to establish a reputation for reliability. The study also found that following Hurricane Katrina, the impact of charitable giving on sales and price nearly doubled; at a time of national need, benevolence actually became profitable. Fisman also cautions that immediate financial profit is often only part of the overall goal of companies’ giving programs. Good corporate citizens also may bolster their brands over the long-term, and also may contribute to the social good because it’s the right thing to do, whether or not it adds to the bottom line.

This research certainly doesn’t prove that you can’t do well by doing good, or that charity is a “waste” of shareholder dollars. Rather, it highlights the complicated relationship between corporate social responsibility and profits. As business school students and future business practitioners, it’s worth asking how companies can effectively integrate philanthropy and other aspects of CSR into their business models.

Photo courtesy of the Social Enterprise Program

One issue where progress could be made in Copenhagen is with the adoption of a deforestation policy or Reduced Emission from Deforestation and Degradation (REDD). Heal says that stopping deforestation by providing incentives for forest-rich countries can reduce 20 percent of greenhouse-gas emissions. He adds that it is relatively easy to accomplish because no new technology is needed.

The other step is to de-carbonize electricity supplies, which account for 30 percent of emissions says Heal. This can be accomplished through the use of renewable and nuclear energy, a better grid and carbon-storage technology. “Between deforestation and decarbonization of the electricity supply, you can basically remove enough CO2 emissions to stop the problem,” he says.

Chris Mayer, Senior Vice Dean, moderated a panel discussion on environmental policy and climate change on November 19. Speakers included Professors Geoff Heal, Elke Weber and Bruce Usher as well as Kevin Parker, Head of Asset Management, Deutsche Bank.

Last summer, more than 55 MBA students in the Social Enterprise Program participated in the Summer Fellowship Program. Their internships took place at a variety of organizations, from NGOs to venture capital firms. The fellows helped the organizations develop strategic planning, financial analysis and operational improvements. Students decamped to locations near and far — from Washington, D.C. to Cambodia — for 10 weeks and along the way kept journals about their experiences, which can be found online. Here are excerpts:

Jesus Rodriguez ’10
Entrepreneurship, Social Venture
Where Connect Us, a social start-up that is a pioneer in the use of cell-phone technology to improve healthcare for low-income people
What: To learn everything possible, from the inside, about a social venture start-up in order to start one myself in the future. As part of a team of three, with CEO Marc Lara ’04, I was able to do a little of everything: work on technical specifications, create selling presentations, review operations and conduct focus groups.
The takeaway: I was involved in the company’s negotiations for a $1.5 million contract with a pharmaceutical company. In the end, it did not come together, but I learned a lot of negotiation strategy. It also taught me that working in social venture is all about emotions and risks!

Jake Goldberg ’10
International Development, NGO
Where: PEPY, an NGO organization in the United States and Cambodia focused on improving standards of living in rural areas and education
What: To find distribution channels for the Hipster, a money belt constructed from khroma, traditional Cambodian scarves, and manufactured by women who are former sex workers; develop an e-commerce site and create a sales fulfillment plan for exports to the United States.
The takeaway: It was very powerful to be able to help these women market and sell their product on an international scale and help them start to find a way out of poverty. I also learned valuable lessons in pricing, exporting and distribution.

Melissa Cheong ’09
Investment, Business Development
Where: Enterprise Solutions to Poverty; Innosight Ventures
What: Research and deliver a list of industry contacts that have a high probability of evolving into valuable strategic or financial relationships for Innosight to make investments in the social venture space.
The takeaway: We had originally thought that targeting individual social angel investors would be most successful, but it became apparent we had more to gain targeting organizations and institutional investors. This meant we had to change our financing model. I learned that even though a lot of the early work we did on our plan wouldn’t be used, the experience was invaluable.

Learn more about the Summer Fellows Program and read more journal entries from the 2009 fellows.

Photos courtesy of the Social Enterprise Program

As the vitriolic debate on healthcare reform dominates the news, healthcare industry leaders continue to focus on several issues: innovation to drive growth and promote cost efficiencies; new offerings to generate higher value for each healthcare dollar invested; and the emergence of attractive new global markets and technologies. They recognize that continued economic weakness and new sets of competitive and regulatory pressures create a more challenging environment to drive business growth. At the same time, they see tremendous opportunities to develop cost-effective products and services that can dramatically improve patient care on a global basis.

At Columbia Business School’s 6th Annual Healthcare Conference held on November 6, nearly 500 students, alumni and other professionals heard more than 35 speakers and experts discuss these issues. The attendees benefited from panels on an array of healthcare topics including biopharmaceuticals, medical devices and diagnostics, healthcare services and information technology, venture capital/private equity, mergers and acquisitions and emerging markets. The day concluded with a networking reception and career fair where attendees met with the event’s 20 corporate sponsors.

Fred Hassan, chairman and CEO of Schering-Plough, gave the opening address. Despite economic, competitive and regulatory pressures facing the pharmaceutical industry, he was confident that new therapies and vaccines would be developed to address large areas of unmet needs, most notably Alzheimer’s disease, which represents a devastating social and economic threat to society.

Following his remarks, three concurrent panels took place in the morning. They focused on information technology solutions, growth strategies of Big Pharma and small-cap biotechnology companies, venture capital and private equity investment strategies in healthcare, and the impact of proposed healthcare reform initiatives on payors and providers.

Mike Barber, vice president and head of Healthymagination for GE, reviewed GE’s new $6 billion global commitment to develop new technologies and services to reduce costs, improve quality and expand access for millions of people around the world. Among other objectives, this initiative will accelerate healthcare information technology, support consumer-driven healthcare, create new wellness and healthy worksite programs and facilitate access to cost-effective healthcare in rural and underserved areas.

Three concurrent afternoon panels covered healthcare mergers and aquisitions, medical devices and diagnostics, and challenges and opportunities for healthcare companies in the emerging markets. Alex Gorsky, worldwide chairman for medical devices and diagnostics at Johnson & Johnson, discussed emerging opportunities to develop new therapies to extend and improve a patient’s quality of life, as well as new cost-effective and less invasive medical devices and procedures. He also commented on the changes underway in global healthcare companies and how employees need to expand their skills and experiences, such as seeking new functional roles and positions in new geographic regions to broaden their understanding of different healthcare systems and customers.

Photo courtesy of the Healthcare Conference

Last Thursday, Warren Buffett, MS ’51, and Bill Gates visited Columbia Business School. During the event, Gates identified energy — including renewable sources, like solar — healthcare and IT as the three sectors he sees as having the most opportunity for transformative growth in the foreseeable future. Buffett highlighted the high energy-efficiency and low environmental impact of rail transport as one of the key drivers of Berkshire Hathaway’s recently announced purchase of Burlington Northern Santa Fe Railroad. More MBAs than ever are looking for career opportunities in developing and investing in renewable energy. Where can they be found?

This past weekend, 50 Columbia Business School students were among the 2,400 attendees at the 2009 Net Impact conference at Cornell University. Net Impact is an organization for MBA students who share an interest in using business to make an environmental or social impact. Among the many panelists were leading investors in clean energy from Blackstone, Kleiner Perkins, JPMorgan Chase and Sequoia who spoke about what technologies and business models they believe have the greatest growth potential.

The investors focused on technologies that could, in the long run, be competitive without any subsidies or government support. To this end, they identified specific niches within energy-efficiency and waste-to-energy, as well as solar power.

Solar energy is viewed as an area with tremendous growth potential, with the U.S. market projected to grow 20-fold by 2020. Traditionally, solar energy has been extremely expensive and reliant on erratic government subsidies; however innovative leasing models, falling silicon prices and technological breakthroughs have reduced costs dramatically. Continued cost reductions along with carbon prices could make solar cost competitive with coal and natural gas.

Within solar energy, there are many technologies, and each has its own value proposition. Photovoltaic panels can be installed on rooftops for residential, commercial and industrial applications, or standalone, for us in utility-scale plants. Thin-film PV technology is very low cost but less efficient, making it the optimal solution for sites with plenty of space. Concentrating Solar Power (CSP) plants use mirrors to concentrate sunlight, which generates steam that spins a turbine to allow a much larger scale operation. All these technologies also have their downside — distributed PV generation does not permit economies of scale. Desert sites like those in the Southwest are most attractive for CSP, but CSP also requires a lot of water for cooling, as well as a challenging permitting and transmission environment.

In addition to solar, there is tremendous growth in wind, geothermal, combined heat and power, waste-to-energy and efficient energy. Nuclear energy is also slated for resurgent popularity. Repowering the world will provide tremendous opportunities for MBAs to generate value as investors, developers and operators of clean energy companies. Famed VC investor Vinod Khosla has invested in dozens of clean energy startups in the belief that the space will generate many $10 billion+ companies.

Photo credit: greenlagirl

Last week, Craig Newmark, the founder of Craigslist, spoke with Columbia Business School students about his experience as an entrepreneur and in social enterprise. He recalled the moment he realized that he wasn’t cut out for management early in the firm’s history (today he calls himself a customer service representative) and selected Jim Buckmaster to run the company as CEO in 2001. “The decision made me wince because I had to relegate control,” Newmark said. “But it worked. You need to know when to get out of the way and stop talking.”

So how does a start-up founder know when to get out of the way? We asked Brendan Burns, adjunct associate professor in the entrepreneurship program and who teaches the course Launching New Ventures, for his insight. This is what he told us:

In general, company founders fall into two simple categories: (a) first-time founders, and (b) repeat or “serial” entrepreneurs. In both cases founders tend to be special individuals whose idea(s) are spawned from a unique customer insight (often from a sales background), technical innovation (technology background) or a perception of a future opportunity (futurist/evangelist type). Company founders are not usually people who excel in process, building of an administrative infrastructure, compliance with various regulations, etc. That is not to say they are cavalier about it, it is just not at the top of their mind or specifically germane to building a company.

Since companies typically grow in phases, or between inflection points that call for different levels of infrastructure, a lack of process refinement usually helps, not hurts, in the earlier stages. Creativity, flexibility and openness are crucial to success in these stages. As you add more people (employees and partnerships), customers and the overall number of transactions, process and discipline become hugely important parts of “scalable growth.”

For every company, reaching that inflection point where things start to fall through the cracks is a true test of long-term viability. The exact metrics are different for every company, but the ability to anticipate these issues, add professional management to negotiate them and put ego aside in the pursuit of supporting the right outcome determines success or failure.

Not surprisingly, first-time founders fail more often than serial entrepreneurs at navigating these growth pains. Serial entrepreneurs more often have the self awareness to step aside or recruit executives with complementary strengths to support scale. Also, serial entrepreneurs more often go out and attract advisers who help hold them accountable to making these changes.

Photo credit: JD Lasica

Should we really be encouraging students to start businesses early in their careers?

I must admit that while my instinct has always told me yes, there have been moments when I wondered if I was right. While our success rate is similar to that of the venture capital industry as a whole, not all of the students we have encouraged to found businesses have been successful.

So in the spring of 2006, some colleagues of mine and I decided to collect some data. We wanted to learn about the entrepreneurial careers of Columbia Business School graduates so that we could know how to serve them better during their time as students.

After analyzing the survey results, we found that the answer to the question of when best to start your own business is not straightforward.

For our survey respondents, starting a first business two to five years after completion of business school led to the creation of the most successful businesses in terms of revenue. However, starting earlier than that was strongly correlated with starting multiple ventures — which was an even more important predictor of success.

The thousands of unique stories that lie beneath these results, all reveal that learning by experience is hard but unavoidable. We’ve found that students learn best when they are working on real projects, and that combining academic and practical experience while in business school can minimize the pain and maximize the gain of entrepreneurial endeavors. We seek to combine the best of academic and practical experience.

Becoming an entrepreneur is a very personal decision, and the right time to start a business is when it’s right for you. On average, 90 percent of the entrepreneurs we surveyed felt it was a good professional decision to start their business when they did; only 10 percent regretted their decision.

But regardless of what the timing may be, there is ultimately nothing more satisfying than running your own company and being master of your own destiny.

Next Week: What to Consider When Starting a Business

About half way through my MBA I began to realize that I was not only learning new skills, but also a new way of thinking. The change in perspective was a bit unexpected. I knew I would learn analytic skills, leadership and marketing techniques at Columbia Business School, but I did not anticipate evaluating opportunities differently or gaining insight into why some business prosper while others fail. That perspective would have served me well in a number of situations. It is something I should have and could have learned in high school or even earlier.

About a year ago I decided to use this summer to try and teach kids about how to be entrepreneurial in business, in life and in their academic careers. A friend of mine runs a NGO in Mexico called PEACE Mexico. The organization hosts summer camps for children and she agreed to let me offer a program focused on entrepreneurship to middle school and high school kids. We opened the camp to public school kids in some of the smaller towns surrounding Puerto Vallarta.

At first, it was a bit of a hard sell — when you are 14 spending your summer learning how to run a business is not the most exciting proposition. But we created a fun and interactive curriculum that teaches entrepreneurship through English language classes, art workshops, games and outdoor activities. We hired most of our camp counselors locally and we also have six volunteer English teachers from the U.S., including Lauren Wall ’09.

On the first day of camp the students heard from a roundtable of local business people who spoke about their experiences as entrepreneurs. The business people spoke about the hard work, challenges and failures they have experienced as entrepreneurs in addition to talking about all the great parts of owning a business. One of the guest entrepreneurs distributes ice cream to local restaurants. Each flavor of ice cream is packaged in the skin of the fruit that it comes from (coconut, orange, etc.). The campers loved hearing about that business because ice cream is always a popular topic, but also because the business idea was launched almost a decade ago in a similar student business plan competition. The ice cream is now sold throughout all of Mexico.

	In addition to learning about entrepreneurship we also did all the things you are supposed to do at summer camp — go to the beach, play soccer, have water balloon fights. Both campers and counselors have had a great time.

We are now wrapping up the fourth and final week of camp. Our 60 campers have learned about famous entrepreneurs, considered their career plans and thought about how they can make a difference in their communities. They have also learned the four Ps of marketing (product, price, place and promotion) and discussed operating and financing businesses. Each group has created a plan for a business that they would like to launch and they will be pitching their ideas in a business fair to local entrepreneurs in hopes of finding funding.

Our students have come up with a range of business ideas. All are easy to start and appropriate for young entrepreneurs to run. One group of kids will take photos in their communities and use those photos to hold photo exhibits and to make calendars. With the money they collect from the calendars they will make improvements to their school (a new science lab is the first project they hope to fund). A second group is going to start a dance school and will teach dances to kids in their community for quincenas (a Mexican tradition much like a debutante ball or Sweet Sixteen celebration). A third group plans to open an after school program for primary school children where they will offer help with homework and extra curricular activities.

All of the business ideas are unique. And like all ideas, some will succeed and others will fail. However, our hope is that the lessons learned can be applied later in life when the students are faced with supporting themselves and their families. For many of the students who are attending the summer camp, life’s prospects are challenging. They come from low-income families and the chances are high that many will not complete high school. Even for those who do make it through high school and college, salaries can still be very low. In Mexico, business ownership is often the key to achieving a solid middle-class lifestyle.

Although I won’t have three months off next year to run the summer camp, the groundwork has been laid. The camp is self-sustainable and the curriculum can be reused. This year we charged kids 10 pesos a day to attend (about $0.80 USD). But not to worry, I haven’t given away all the secrets of business school — some of the kids can probably still benefit from getting an MBA later in life.

Melissa Floca ’09 received the 2009 Nathan Gantcher Prize for Social Enterprise.

Photos courtesy of Melissa Floca ’09

Columbia Business School’s Social Enterprise Program is poised to reach a milestone this fall when Professor Ray Fisman begins as faculty director, succeeding Ray Horton who stepped down as director of the program in the spring.

In the new issue of Hermes, the cover story tracks the development of the program under Horton’s guidance over the past 25 years. He attributes the proliferation of student interest in social enterprise to corporate scandals and a changing attitude toward the value of contributing to society. Last March, speaking at a social enterprise conference hosted by the Korea Development Institute and Columbia Business School, he elaborated on the meaning, scope and potential of social enterprise. (Complete video of his presentation above.)

Broadly defined, the field of social enterprise is the application of business skills and methods to social problems, Horton said. That can take place in many forms, from socially responsible investing and corporate responsibility to nonprofit management and social entrepreneurship. Horton says that one of the biggest challenges entrepreneurs in the social sector face is how to sustain growth.

	How does an entrepreneurial organization approach the challenge of scalability? Please leave a comment.

“The factor more than any other that clouds the potential of social entrepreneurs is the difficulty of bringing the organizations they found to scale, to sustainable scale,” he said. “The inability to attract sufficient resources converts many would-be social entrepreneurs into salaried employees of larger organizations...Fortunately, there are new developments and new institutions and new ways of using the market that will bring financial and human resources.”

NOTE: In a school-wide effort to conserve materials and reduce costs, Hermes magazine will no longer be mailed to alumni unless they confirm they would like to continue receiving it. If you are an alumni of the School, please log in and confirm your preference.

Cover photo credit: Simon Harvey

	McHugh was recently featured on MSNBC’s “Your Business” (watch the video).

Emily McHugh ’99 is the CEO and co-founder of Casauri, a manufacturer of designer laptop cases and accessories. This post is re-published from McHugh’s Casauri blog.

When I applied to Columbia Business School I was not exactly sure what I was going to do once I received my MBA. My hope was that I would “figure” it all out in business school and ultimately end up with a job that was better than the one I had before business school. Business school gives one the opportunity to be exposed to various opportunities from a unique vantage point. It is like being offered a smörgasbord of career paths from which to choose. However, in order to choose, it is important to ask yourself whether you are able to muster the passion necessary to be truly happy and fulfilled in a particular career. Being passionate means that you love something so much that you are willing to suffer and endure whatever it takes to be successful.

I came to the realization of my passion during the last semester of business school when I took an entrepreneurship course. It was in that class that I finally “figured” out what I was going to do with my MBA — go into business for myself. After all, I would be able to put everything I ever learned into practice and become a true-blue businessperson.

Having an MBA is not a prerequisite to becoming an entrepreneur, neither does having an MBA guarantee or improve your chances for success. However, the MBA teaches key business principles. The MBA helps to remove some of the uncertainty in the business landscape by teaching the vocabulary and components of business.

The entrepreneur can expect that having an MBA will: 1) add credibility to a potentially incredible endeavor, 2) develop confidence to overcome the impossible, and 3) build stamina and endurance to persist in the face of uncertainty. Having an MBA will not: 1) make starting a business easy, 2) save the entrepreneur from struggles and hardships, and 3) teach you everything you need to know about starting and running a business.

It is probably safe to say that with or without an MBA, most entrepreneurs have to start their businesses from scratch without the benefit of a defined and predictable path. Most entrepreneurial skills have to be learned on the job or during the course of the entrepreneurial journey. Moreover, despite the commonalities that entrepreneurs share, each entrepreneur’s experience is unique and highly dependent on the type of business venture being pursued.

The two most valuable lessons I learned in business school that helped to prepare me for entrepreneurship were valuation and negotiation. One does not become an expert in these areas just by taking a class, however, one becomes aware of the tools needed to be effective in assessing value (valuation) and persuading someone to give you what you want (negotiation). Ultimately, communication unifies the above two skills. Being able to express or “sell” yourself expedites entrepreneurial success, since most of your time is spent trying to convince people to believe in you.

	What has been the most valuable lesson from business school in your experience? Please leave a comment.

In business school, valuation is mainly taught from a financial perspective in terms of valuing companies or pricing securities. However, valuation principles are applicable to any situation where determining worth is in question. Since most of the decisions entrepreneurs make involve applying limited resources to limitless needs, being able to intelligently allocate resources is essential. As entrepreneurs, we have to constantly determine value — of products, employees, customers, and services. This skill requires extensive practice, since it is not an exact science.

Negotiation is another nebulous area, as it involves many independent factors to be effective. Negotiation is the ultimate team sport. It is like a dance where you try to avoid stepping on the other person’s toes. To negotiate requires research and as thorough an understanding of the given situation as possible. We negotiate at every level of our lives, starting from infancy to adulthood. Entrepreneurship requires endless negotiation, the ability to overcome obstacles, inspire others to action, and risk losing what you actually may want to obtain.

The MBA provides the tools that improve one’s ability to valuate and negotiate. Beyond these skills, the MBA provides access to an incredible network of contacts that can help propel your business forward. It is a personal choice whether the business school experience will be appropriate for each entrepreneur. I would not recommend to someone contemplating entrepreneurship to wait, go to business school, and then start a business as a fixed formula. However, I would recommend seizing opportunities as they present themselves. In my case, I am very glad the opportunities included an MBA.