Harvard vs. Stanford: Which Builds a Better Entrepreneur?

When you think of the world’s best business schools, you inevitably think of two great rivals: Harvard and Stanford.

For decades, Harvard has long been known as the West Point of Capitalism, the breeding ground of the corporate elite, while Stanford has smartly used its Palo Alto location to serve as a highly productive incubator for Silicon Valley.

Harvard is hoping to change that simplified view of the rivalry.

“There is a great myth about some other institutions and the degree to which they represent entrepreneurship,” says William A. Sahlman, who teaches entrepreneurial finance at Harvard. “It’s total fiction. We have a higher proportion of our faculty and a higher number teaching entrepreneurship than other schools have faculty.”

The Harvard offensive kicks into full gear today with the publication of The Intelligent Entrepreneur, a book by author Bill Murphy Jr. on three successful Harvard MBAs from the Class of 1998 who turned down safe jobs at big companies to launch their own enterprises.

Written with the cooperation of the school, The Intelligent Entrepreneur also touts Harvard’s deep commitment to the field and quotes many of the school’s professors, who writes Murphy, “see the entire discipline of entrepreneurship as necessary, life fulfilling, and at times almost spiritual. They’re not just teaching business strategies and processes; they’re inspiring students to embrace a way of life (an excerpt of the book).”

All of this has come at a time when the job market for MBAs continues to remain weak and more students have become interested in starting their own ventures. Moreover, many of the best and brightest MBA applicants, who often apply to both schools, have been choosing Stanford over Harvard when accepted by both schools, according to insiders. Generally, admits to both schools split roughly 50-50, but lately, Stanford is winning in six out of ten cases. One swing factor could be Stanford’s reputation in entrepreneurship where it always ranks higher than Harvard in U.S. News & World Report surveys of deans and MBA directors. The latest survey, for example, has Stanford in second place, behind Babson College, and Harvard in fourth, behind MIT’s Sloan School.

The vast majority of MBA students, of course, still rush head long into high-paying jobs in consulting and finance to help pay down their tuition debt. But professors at both schools say that more than half the graduates of Harvard and Stanford end up running their own companies within 10 years.

So Harvard is eager to change the notion that it not a place for people who want to become entrepreneurs. “Often, people think of Harvard as the West Point of Capitalism,” says Sahlman. “It’s the place where the leaders of the Fortune 500 get trained. And it turns out that’s absolutely right. Over 20% of the top three jobs in the Fortune 500 are held by Harvard MBAs. Sadly, it turns out there are only 500 companies in the Fortune 500 and we turn out a larger number of students than could possibly go that route and not every student wants to go that route. So while we have Jim McNerney at Boeing, Jamie Dimon at JPMorgan, Jeff Immelt at GE, and A.G. Lafley, formerly of Procter & Gamble, it turns out the rest of them had to find something to do. And it is the most remarkable set of entrepreneurial folks you have ever seen in your life partly because they don’t really want to work for somebody else.”