I think that's how a lot of us who are in education are thinking about how do we get a lot more people to access education?
But I think Harvard takes on the anti-marketing approach, like how luxury marketing is the anti-marketing approach to most consumers goods, which is that scarcity creates value. So by restricting thenumber of seats by becoming increasingly selective over time is able to create a halo effect, it's able to create brand value, but it's also able to create a tighter community insight and which creates more valueover time because these people actually value it. These people actually choose to access it and double down on a time effectively, they value that community and network over time because of the scarcity. they're also putting in much morec ommitment into MBA program. - Jeremy Au
Jeremy Au (00:00):
All right. Hi everyone. Just to be upfront, I'm testing a new format for myself, which is answering Q and A questions that people have had with me or things I've learned. And so I'd like to record them instead of me speaking into an empty room. At least I'm speaking to myself in front of 30 people. So we'll go from there.
I think today's topic that I found really interesting over the past day was a lot of the conversations around Harvard. And obviously a lot of the conversation has been about the Harvard MBA as an education in terms of a consumption perspective. What I personally found interesting has been something like thinking about how Harvard Business School runs as a business model in terms of what it means for education tech and the business model.
And that's useful because I think it's contrary to a lot of how people think about education and I think it's useful because there's a lot of different learnings out there. And after my monologue, I'm sure that there'll be opportunity for people who are listening in to ask me questions about it. My goal is to eventually publish this two months out on the website, but as a way to do some live taping. So again, this is a beta to see what it is.
And I think the most interesting thing that was said, obviously everybody knows is that Harvard is very prestigious. But what's interesting is that the Harvard MBA program, the business school has the most autonomy and freedom from the university's president trustees. So what's interesting is that Harvard Business School is actually the most profitable of Harvard University program itself.
And that's quite interesting because we already know that Harvard obviously has a school fees, it has one of the largest endowments in the world, plus obviously it's non-profit status that's the heaviest tax advantages. But what's interesting is why the Harvard MBA program is such a money spinner. And I think there's a couple of ways to think about it.
The flagship program of course, is the MBA program, where we all know that to attend a program is effectively a quarter million dollars in terms of school fees and living expenses as well as... not including the opportunity cost. What's interesting when we think about is of course we think to ourselves, "Oh my gosh, that's really expensive." And of course there are ways to lower the costs. I mean, they also have a very lavish student aid program that is very focused on helping people get access as long as they give you an offer.
But I think what's counter intuitive is that from the discussions I've heard with administrators, is that Harvard Business School actually loses money on the MBA program, which is really fascinating, because if we think about it, we're like, "Wow, there's a quarter million dollars to attend Harvard for a two year MBA, but why is Harvard losing money on a post graduate level when you allocate direct costs, indirect costs?" It is mind-boggling because it's so expensive on one end yet it is losing money, but yet it's somehow still making the most money and therefore has the most autonomy at Harvard University level.
I think there's a couple of reasons when you dig deeper into it, is that there's a lot into it. I think the first thing that I would think about it is, why do they choose to lose money on the MBA and the post graduate level? And the big out of it is that by spending very lavishly on the graduates of the MBA program, it helps keep the ratings high for the school itself. It's always number one and number two, it's known for good career education, it's known for great professors, great student food, lifestyle, great dorms and accommodations, lavish student aid.
All those things actually means that Harvard actually chooses to lose money but as a result generates a couple of things that are really interesting. The first thing is that it generates very high readings, which is important because that generates low acquisition costs in terms of referrals. But more importantly, it generates a stream of high referral candidates who'll go out into the workforce as referrers and testimonials.
I mean, today we had earlier had a panel on Clubhouse where Harvard MBAs and other MBA program graduates, actually on their own provision, acted as testimonials and as signals to the market for people to join, potentially. And that's important because later on helps create a pipeline for the real moneymaker on one angle is the Executive Education program. And Executive Education program, you call them Advanced Management, EMP, GMP, and Harvard has lots of different versions of that, but Executive Education programs are for middle and later stage career executives who have met MBAs, are impressed by the MBAs out there and... well, testimonials, et cetera.
And obviously these Executive Education programs are obviously cheaper than a full-time, two- year MBA. But what's interesting for that is that even though it's cheaper, it's also much, much shorter than MBA. In other words, the Executive Education program on a per day basis, or per month basis, or per week basis, is significantly priced double, triple, quadruple that of MBA program. And that's where they make the money. And a lot of these Executive Education programs also not necessarily borne by the student, but also borne by the company as a retention or as a corporate training tool.
And so it's interesting where the MBAs have chosen to be loss leaders on the MBA program to maintain number one, number two program. But as a result, it's able to make up on the profitability side on the executive education program. I think another way in terms of the revenue side as well. It is very under appreciated about this is that the Harvard MBA's are actually also used as a way to test trial a couple of key things.
One of them is actually the Harvard publishing arm. Obviously we notice the Harvard Business Review and obviously at many different universities around the world, they use Harvard case studies as part of the materials. And that's an actually interesting to set up products that the university sells as a way to generate a ton of value. Because you're generating a case study on a company that was referred to you by a student or one of your alumni, and use that to get an aperture into the business decision that needs to be made. And then you create the case study.
And of course there's a bit of a hump in terms of creating the content. Obviously it takes weeks if not months to get it right and the to and fro, but honestly it's not too much work. But more important is the marginal cost of distribution in case it's very low. And so you see Harvard cases being used in local universities and other business schools. And so they are using the publishing arm.
And so these MBAs are often traveling the new cases, helping generate new cases. And so that actually generates a nice fly wheel, again, where MBA service signals and referrals of Executive Eds programs, but also helps bring in additional case studies, which are then resold to other business programs and other corporate training programs. And so that's already two major revenue streams that's there.
I think another ting that the MBA program is used is that they're also used to help train and screen junior professors at Harvard. And so obviously we have, in the second year of the program, that obviously great world-class professors that Clayton Christensen and other thought leaders who very much are serving both the current program, but also the Executive Education program.
But what's also interesting is that the Harvard professors are very much being trained and to not just be researchers, but also great facilitators and teachers in a classroom. And so they're being groomed into thought leaders and consultants who are then screened and whether they make it into the Executive Education program. And there's a lot of money that's involved there. Obviously we look at Innosight, which was founded by Clayton Christensen's innovative disruption theory.
And obviously Clayton Christensen has not only written multiple books which again goes to the public arm. He also sells it as Executive Education classes who are there, it drives a ton of value in terms of short term courses and the consulting arm. So there's this interesting fly wheel where at the end of the day, we see that Harvard is generating... the MBA program, which is a loss leader, but making a lot of money on the publishing arm, as well as making a lot of money on the Executive Program and courses.
And I think that actually creates some interesting learnings from an education tech angle. Obviously if you're thinking about this from a consumer perspective, about whether to do MBA, this is more understanding the incentives of the overall structure. I think if you think about it from an education tech perspective, I think there's a couple of things that are interesting.
I think one interesting thing, of course, is the concept of scarcity versus allocation. What that means is that we often think about education as very much like the more access that we can give out to people, the better. And I think that's how a lot of us who are in education are thinking about how do we get a lot more people to access education?
But I think Harvard takes on the anti-marketing approach, like how luxury marketing is the anti- marketing approach to most consumers goods, which is that scarcity creates value. So by restricting the number of seats by becoming increasingly selective over time is able to create a halo effect, it's able to create brand value, but it's also able to create a tighter community insight and which creates more value over time because these people actually value it.
These people actually choose to access it and double down on a time effectively, they valued that community and network over time because of the scarcity. And so it's interesting where, because the price is so high, to some extent a little of a chicken and egg circular argument here, but because people are allocating a big sacrifice of their time and money, they're also putting in much more commitment into MBA program compared to all the other education approaches, for example.
And so this is an interesting piece where scarcity creates value. And I think Erik Torenberg actually has an interesting approach, he's creating On Deck and he writes that he wants to build the new Stanford. His claim is education institutions have... there has been no innovation over the past 100 years. And so he's looking into create the Stanford but for founding startups. And he's looking to recreate the multiple angles that are naturally bundled up in a university. So community obviously, content, access scarcity, perceived value, networking, career support, outplacement.
So he's looking to build all of that, I think it's some interesting writing about that as well. And I think he's actually building a very interesting fly wheel. And I think he's got a good shot actually of making it happen. They're already spitting out cash to grow it rapidly. And one of the things that I had a conversation with their teammates was, obviously when you want to be the virtual Stanford, when you want to be a great center at the entrepreneurship level, it's interesting because they obviously started in Silicon Valley and they're able to build a great program from there.
But I think my suspicion is that they're going to see the most growth from outside the US. Because inside the US, there's actually a lot of competition from... obviously the universities are able to lower their prices over time to compete, but also because there's so much availability of good content, virtual content, and if you are in America, you can visit and still be in person, great institutions.
But I think companies like On Deck that are trying to become the Stanford or Harvard of founders online are really going to see a lot of growth in the blue ocean of markets that can't access Harvard or Stanford, or even Berkeley or ESU or a tier three university. And so I think there's going to be interesting dynamic where they're going to see that growth on a very dramatic basis as well. So again, the first point was really about how it breaks a lot of concepts of educational tech and marketing.
I think the second part that's interesting is, obviously, we often look at education tech broken out as schools versus camps. And my friend likes to joke, he is a chief academy officer of a school chain, and then he's building a new set of schools, but he's like, "Hey, we can create a whole school, the barriers to entry high, the need for registration, et cetera, it's going to fan in earnings and helps prevent copycats. But if you create camps, the opposite. Anybody can set up a camp, it's the reason you get some earnings on short term, but it's hard to defend against."
And I think he and I were having a to and fro about this and we were saying, "Well, the difference... elementary schools and camps are the same as Harvard Business School MBA program and Executive Education program." And so there's interesting parallel where we look at them as a product that's different, like schools versus camps. But if you look at the consumers, they're actually pretty similar, which is, it's parents who are looking to allow their children to learn at one level, to self- actualize another level and thirdly, it is to be safe while the parents are away doing something else.
And so I think that's the component where people can look at themselves like, "I'm in a school sector versus at a camp sector" Actually, they're in the same business in terms of, if you actually really drill down to it, real customers are parents. Because the parents are the ones making decisions, purchasing decisions and budget decisions and choice decisions about their children's choice of time. And obviously that's a classic bifurcation of users versus customers. The parents are customers paying, but the users are the kids.
And what's interesting about that is that you move away from thinking about camps versus schools and start saying something like, "Well, this is actually an LTV dynamic, a LifeTime Value." If we are selling a school to someone and there's education, we should also be selling the camps. We should also be selling the other activities, extracurriculars, the weekend activities, because we know who the parents are, we know who the kids are, we know their requirements.
And so we shouldn't try to package ourselves as a single product or a single methodology of approach, but actually look of it as a flywheel where success in the initial wedge, call it the school or the camp, helps create the data and the preferences data to help spin off the next product. And so there's an interesting component where I think a lot of great schools are able to monetize the whole spectrum of that. So, that's the interesting piece of how the Harvard Business School approach is applicable to other education tech approaches, I think.
I think the third thing that is very interesting is that the Harvard School program is an interesting choice because they're fighting against all of the online school programs out there. And actually there was a big debate, I think, between Clayton Christensen and Michael Porter. So one handled disruption, the other person handled Porter's five forces. And they had a big debate about whether Harvard should even do online at all. And the answer was the school that both kept it's offline piece, but also has been doing the HBX online program where we see a lot of people actually taking on programs online.
I think the jury is still a little bit out because if you think about it from a distribution play, then the short answer is that Harvard will definitely be disrupted over time and unbundled and attacked from multiple angles, from all the different courses and different technology out there. So if you think about it as if Harvard is an educational institution, then it's going to get unbundled, it's going to get disrupted and it's going to get overtaken by all the people that are trying to take a slice of it.
However, if you think about it from a luxury marketing angle, then it's very different because you can't disrupt luxury. I think it doesn't follow the same rules. And so there's an interesting dynamic, I think, that Harvard Business School is still sorting out, which is, "Are we a luxury product where the ability to purchase us and access us either as an MBA or an Executive Ed or to be participating as a professor or stakeholder is a luxury signal?" Because that's not going to get disrupted anytime soon.
And in fact, the more disruption and the more commoditized the rest of the market becomes, the more powerful the luxury signal will become, obvious scarcity and this old school, traditional nurse. It's hard to disrupt Chanel or LVMH or some of the whiskey that's out there because the more entrants there are, the better the signal becomes. But I think if you look at Harvard Business School as a place of education, then the distribution of it will get disrupted over time.
So anyway, those would be my three thoughts in terms of doing a deep dive into Harvard Business School, not as an education program, but actually as a business model. Anyway, that's pretty much all I have to say. And it's my first experiment ever on saying something. And if anybody wants to raise their hand and ask me any questions about what I just asked about, feel free to raise your hand. This is recorded, but yeah, feel free to give a shot.
Hey, Jeremy. Quick intro about myself, I'm Stanley, currently gap year student at the Duke University. I'm Indonesian, I'm part of Duke's class of 2024. So I just want to ask you if you knew about Harvard's or HBS's 2+2 program where it's like a deferred MBA program where you apply in your senior year of college and then you get in and then you spend two years working or whatever, and then you come back to HBS. So I was just wondering if you knew about that and what you think of that as compared to the usual application cycle.
Jeremy Au (20:10):Yeah. Happy to share. You're talking about this from a consumer angle or from a business angle?
Stanley (20:15):I guess from a consumer angle. Yeah.
Jeremy Au (20:18):
Yeah. I think from a consumer angle, I was under the 2+2 program. So I applied in UC Berkeley after doing my B internship and was able to get an offer and I open to being and then I after that, built a social enterprise consulting platform, pushed that up to profitability, and then hit off to do my Harvard MBA after deferring one year to make it successful. So yeah, I think if you can do it, why not do it?
I think someone was sharing earlier that if you can take two shots at a target, why not? So, if you know there's not much opportunity costs to applying for it and see if you get in or not. And so you get a second shot and you get more optionality. So there's no real downside, except for the fact that you're doing a GMAT, where your GMAT is retained for five years. So it's not much of a downside. Application fee us negligible. So I don't think there's any harm in applying and there's an upside if it's relevant for your future skill.
I think what's interesting, again, like I said, I've been talking more from the business angle, is that I think the 2+2 program also use to basically look for talent that normally would not take a Harvard MBA. So obviously Harvard has interest in making a geographically diverse and industrially diverse approach. They're looking really like a portfolio, you could call it, or you could look at it as an orchestra, but they're really focused on making sure that there's enough diversity to make it a valuable experience for everybody.
So this is their way to basically target who they believe is underrepresented. So that would be for example, engineering, but also geography as well. So Southeast Asia is massively underrepresented in Harvard MBA program. As well as obviously to target gender and other diversity of requirements that they have. So I remember in my class of 90 people at Harvard, we were obviously doing a ton of American cases and but I remember that obviously I think the first macro economics case study was actually Singapore because Singapore is an easy country to study for macroeconomics because it's so small and not to complicated a story.
But I think they asked me... the question was asking about Singapore's interactions between its political choices versus economic choices versus social choices. And I think I remember being on a spot there and... obviously there's a big contrast between Singapore versus America ideals around political, social freedoms versus economic freedoms. But I think what was interesting was that... the awkward feeling was that there wasn't any other Southeast Asian folk in the room in the 90 people. And that was actually true if a multiple cases. So we were talking about Vietnam, we were talking about Cambodia and out of the 90 people, I was the only person from Southeast Asia.
The only a person was a Bulgarian lady who had worked for a few years in Bali at a startup. And so she was the only other person who had some exposure to Southeast Asia. Obviously there were people from China, there were people from Japan there were people from Korea, but in my class of 90 people, I represented... me and the Bulgarian start up lady represented Southeast Asia.
And so people would be like, "Oh, what do you think about Vietnam?" And I'm like, "Wow, I don't want to talk about Vietnam or Indonesia." Because I'm very cautious that I'm not an Indonesian citizen or a Cambodian citizen. These are very difficult topics. I don't want to be speaking about Myanmar issues. But I think in the class of 90 people where we had a Socratic method, I was the only Southeast Asian in a room to provide a neighborly point of view, I guess, on Southeast Asian topics. And so I think that's something that is a big, important part about the Harvard MBA from a consumer and from a business angle. Yes, Stanley? Go ahead.
Of course. Just very lastly, I think that's a great answer Jeremy. Is it okay if I shoot you a message over LinkedIn to talk a little bit more about how to apply to 2+2, what to prepare and whatnot because it's definitely something I'm thinking about doing?
Jeremy Au (24:41):
Yeah, I mean, feel free to add me on LinkedIn. If you go to jeremyau.com, I do have other episodes interviewing other Harvard folks and talking about the Harvard application process as well. So there's a podcast set of episodes there, and then I'm personally not doing too many one-on-one chats because there's too many, but using to hopefully record those answers here in this conversation so that I can record as a podcast and then reshare it up out to folks. Yeah. So, Stanley, why don't you hold onto your question right now and then let me just cycle through Jeremiah Povano, all right.
Jeremiah Povano (25:15):
Hi, Jeremy. Been a long time since I've been in the same room as you, ironically. So I just have, have two short questions. So first of all, I may have missed it, but you mentioned about having this concept that parents are the consumers, whereas the students are the users, but from the view point of an MBA degree, I mean, I think that concept is applicable when we were talking about bachelor degrees. I don't know whether I missed it, but when we are talking about MBAs, is it safe to say that actually when we come with MBAs it's actually... the student is both the consumer and the user in this case? I don't know whether I missed it, I just wanted to clarify.
And second of all, I really like your insight on how luxury brands, when the industry is being disrupted and being decoupled, I think that's the word that you... I forgot the word you used, but when the offerings become decoupled, luxury brands value actually increase. Is the converse also true, which is, when educational offerings or any industry, it doesn't have to be education, but when educational offerings are debundled, actually brands that are not luxurious, maybe like tier three, tier four universities, actually, they become more devalued.
And is this a general concept not just in education? I'm just trying to draw the generalization here. Is it something that is true specifically in the education field and is it something that is generalizable outside of education as well? So that's just my two question. Help me make sense, Jeremy, sorry.
Jeremy Au (26:51):
No, those are really good questions. Okay, great. You've energized me. This is my first time ever doing this format. And so I'm really excited because I started this format because I wanted to see whether a monologue with some quick thoughts will be helpful, but yes, I think this Q and A is really helpful. I think you asked two really, really good questions there. I think the first question you asked was the difference between customers and users, right? And I think you're spot on.
So I think when you talk about when at early education, elementary school, middle school, high school, even universities to a huge extent, a lot of it is actually not decided by the child in many ways, because the parents are a big decision maker about whether they can afford to send a kid to education, et cetera.
Obviously, and I think where you're right to say is obviously at some point, it becomes more of a normal choice, where the two roles go back into it together. So I think... and there's some truth to that. So for example, one way to look at it is if you look at American university students, because of the student loan program, because of financial aid, it's actually been cohered together again because children get to choose which university to go to as long as they're willing to take out the student loans. That's often the biggest financial decision to have made at that point of time, whether to take on hundreds of thousand dollars of student debt.
And also of course, a converse, we obviously we look at private education, you have a university level obviously highly subsidized by the government in many parts of the world. So again, that's roughly around the timeframe when people are making their own decision. But yeah, I think when you look at adult education, lots of people are using YouTube. Recently, I was learning how to assemble something and I went to YouTube and I learned how to assemble something. So I'm the user and the consumer, I obviously paid using my own eyeball. And I watched an ad on home improvement eds along the way.
So I think MBA is also interesting where it's true, obviously that a lot of them are paying out of pocket. So I think it's, again, mostly together, obviously anything on Skillshare is mostly people paying for themselves. So I think there's a great insight there. Yes, it does cohere together again, especially in adult education.
I think that also from my angle, I think that's what makes it a little bit interesting is that, that category is much more amenable for consumerization because then you have all these people obviously going to incubators are paying money to join On Deck, $5,000 to be part of that training course. And the consumerization of that is very appealing for that because they have the hype. They see great value, they will refer that to other people. It's just like any other product. And so there's a lot of viral mechanics that can happen.
Whereas if you provide a world-class elementary school education and your kid is mind blown, obviously the parents understand that and are happy about their kid, but then it's not a natural, organic referral piece. You know the kids can't sell the school to other kids to choose. It doesn't make sense. Instead, the kids have to sell to parents, who will sell other parents to send their kids. So there's a little bit more of a different approach there. So that's my first answer to the first thing.
The second thing that you asked was actually a really interesting part, and thanks for making me go deeper in this conversation, was, I think as educational institutions, or any product gets disrupted and you see a flood of cheaper and cheaper versions of it, luxury as a signal, as an anti-marketing rule, actually increases the value to the people doing it, as well as increases its perceived value upon using it. And it also increases the enjoyment of it while consuming it. And I think you're exactly right to say that I think we're setting seed at education institutions, especially at the MBA program.
I think we're seeing that your middle tier schools are getting really, really horribly attacked by all these online courses, online MBAs or alternatives. Because if you can go to Harvard, Stanford or to some extent, I think NCS is definitely in the top tier. But to some extent, if you look at the application rates for the second tier, third tier, so you're looking at like Kellogg or other universities that are one tier down, it's not a clear luxury signal. Then I think you see people going themselves, "Well, why am I paying a hundred grand of school fees when I can just assemble that with 50 courses? They could reassemble the whole thing. I mean, there's so much free content out there.
I was recently listening to a course by Jordan Peterson and obviously he's very controversial in terms of his side of the movement around it. But I was listening to a psychology course and I was finding that his academy course was actually very fascinating because it's about a hero's journey, et cetera. And he was literally filmed his whole university course. So I didn't need to go to university to go for that course. And he's star of the school, I guess, in that domain in psychology.
So actually, there's some interesting dynamics here, a little bit, where in some similarity, the schools are this weird, equivalent to content platforms like New York Times, or they have a stable professors, a stable teachers and you have great teachers on one hand and then you have in the middle, you have average teachers and the bottom, you have teachers who are getting trained. And I think great institution will figure out economics that are very much focused on training and having that long-term angle on their styles and their portfolio, the best professors.
So Harvard Business School is Porter's five forces. Everybody knows him because everyone in Business School, business slides use him. Also Clayton Christensen, we're just trying to acknowledge who all know about disruption. So these are the star writers. And they manage with the... they're using Harvard as an agent.
But I think when you look at your tier two tier three... and I think they're similar to New York Times. New York Times is doing really well because it's no longer just a New York newspaper. It's a global newspaper for everybody around the world. And again because of those economics and a subscription to able to hole the world's best talent. And it's just a brand and it's a luxury piece of news.
But if you look at everybody else in the middle, I think there's a bit of a barbell distribution going on where your middle folks are getting disrupted or unbundled. And so anybody who's any good in these tier two or tier three institutions might as well go to YouTube and study their own course.
I might as well go to sub stack and become a great writer. I might as well become a consultant here on, because it's run a great podcast. And I think we saw that in Jordan Peterson. He left the institution effectively and set up... his YouTube was so successful and he wrote a ton of books and he became effectively independent from the school as well.
So I think there's this interesting dynamic here where I think your tier two, tier three institutions are going to struggle because they're getting unbundled by everybody else and they don't have luxury angle.
Jeremiah Povano (33:56):
Yeah. I hope there are more studies on this whole concept. I think you introduced an excellent concept and I hope the audience really takes time with this, but I do hope that there's a very formal study on this tier two, tier three thing. By the way, thanks a lot for the time, Jeremy. I really enjoyed this room and this new method that you're trying out. Thanks, Jeremy. See you around.
Jeremy Au (34:15):Yeah. Thanks Jeremiah. Bhuvan, you have a question?
Yeah. Hi Jeremy, once again. I already had a question with you earlier today. So my question is more around HBS 2+2, so basically around building a good application for HBS 2+2. So my current profile is basically around software engineering and I'm a junior undergraduate student. And my university is also one of the top schools from India. So I'm keen to know what could be potentially a good addition to this profile before I go about applying HBS 2+2.
Yeah, so basically my profile is mostly around software engineering below but I want to apply for HBS 2+2. What things can I probably add to make it a better application?
Jeremy Au (35:09):
Yeah, I think the best place to go is a source called. It’s a magazine, online journal on MBA and I think they have a section called Rate My Odds or Rate My Chances. And so every week, I think people submit their background and they get rated by admission consultants on their chances of getting into various schools.
So, the truth is that, Bhuvan, I think you think you are a very special person. I also think you're a unique person. But obviously from the perspective of Harvard, they see thousands of applications every year and appraising millions of it over the course of multiple years. So I think from their perspective, the conversation that always tends to happen is, does the archetype that Bhuvan represent, is he the best of that archetype?
And it's really important to think about because that sometimes moves the conversation away from, "What makes you different from everybody else?" to, "Are you the best version of the archetype?" The truth is, for myself and of course 2+2, I wrote the application, I wrote my story, as in... I think there's a great book, I must have called it Secrets Of MBA Admissions. I'll put it up on jeremyau.com. We have a discussion board and I'll put in a list of all the resources, so sign up, register there and I'll share the link of the book.
But I thought that was an eye opening piece where the admission board as a group was basically saying, "Yeah, this person is a management consultant. And so we know all the weaknesses of management consultants, which is, yes, they are good at speaking, they are analytical, they're good at numbers but what they want to do in their life isn't really going to change the world." Basically, they were looking and bucketing all these people into various archetypes and then just trying to make sure that they would have a set number of slots for nonprofit leaders, for example.
And then, for them, the part they want to make sure is, does this person have a good enough GMAT on the math section? Can he be quantitative and keep up the homework? So, from their perspective, if you were a non-profit leader an you were a great nonprofit leader but you didn't have the hygiene factor of being decent at math, then you just weren't going to get in either. So, Bhuvan, I think at the end of the day, it's just... well, again, IIT grad, there's a ton of IIT grads applying for Harvard.
And so the question is, I assume the archetype for engineers would be...and I think it goes back to articles they write is, a great engineer, are you a top engineer from that angle? So you cover that base. And the second base is, do you pass the hygiene factors of being social and being able to speak and communicate properly? English fluency because you're from India, what kind of big goals that you have management, executive program-wise or you want to go back to being an engineer kind of dynamic?
Again, I think the book that I would recommend is on the discussion board and you will cover pretty much... you'll apply for the engineer persona as well as the international candidate persona.
Bhuvan (38:37):Well, actually I've been able to... what's the place where the book you mentioned is?
Jeremy Au (38:40):
Yeah, go to jeremyau.com and if you sign up for the message board, then there'll be a post with all the resources. Does anybody have any more questions? I know I spend time... it's interesting where I've done some analysis on how MBA is a school program but also getting two questions, one about the business model and one about the application process. Hi Rina.
Hi Jeremy. I just joined the room, so I'm sorry if someone already asked the same question, but my question is, how do you value going to the MBA? Because some people think that going to the MBA is a waste of their time and money, so instead of going to do MBA, just do your own business and then that's more like the value of going to the MBA. So I would like to hear your opinion like what kind of people should go to the MBA or what kind of experience is it that you get from there, especially HBS?
Jeremy Au (39:40):Great. And Rina, I see that you're from Duke. Were you an undergrad there?
No. I grew up in Japan but I went to but that was more like the one-year business program intended for the younger professionals. So it was called the master management program. It's a bit similar to the MBA but it wasn't the same exactly as MBA.
Jeremy Au (40:07):
Great. I think there are three types of folks that would benefit from a Harvard MBA. I think the first is if you try to go, and I think this is the most utilitarian way to look at it, is people who want to go for a certain career. If you know you want to be a management consultant or high banker or private equity. A bunch of... you want to get promoted in your company, a certain faucet and functions, it's often very common to have MBA. And so it's an understood requirement, cultural and symbolic and signal to go for it.
And obviously, McKinsey being BCG, there's a ton of partners who all have Harvard or Stanford MBAs or NCI MBAs. But I think that's the first group, is I think people who understand what the clarity is about what they need to do to climb and get just into roles.
I think the second, obviously for MBA program, and this is a little bit more broader than just the Harvard side is I think there's a tremendous number of people who use it to change careers, either in terms of location or industry. And it's a nice way to cleanse the pallette a little bit.
I obviously know one friend who was in India and he was working on route to management for an airline in Asia, and basically because of the Harvard MBA program, he was able to transition into a doing more of a relatively quantitative role at FinBit, which was a technology company obviously doing that out of San Francisco. So basically, he managed to do a double job... Effectively a triple job, I guess, because he changed his role as well.
So he changed his role, he changed his industry from the flight industry to technology and then third he obviously changed location from India to SF because of the visa and as well as the employer openness to hiring from these Harvard MBA pool. What's also interesting is that he actually turned out to hate that job. And then he transitioned to become a McKinsey consultant.
So anyway, it's similar maybe bucket one, but true long-way around. But I think very few people could have changed industries and locations and roles at the same time, if not for the Harvard MBA, because if you were in Singapore and you said you wanted to move to America, a lot of companies would be like, "Whoa, why would we hire you from Singapore?" The second part is like, "Whoa you are in Singapore now and we're Singaporean company, but we're in technology and you're in F&B." It's a much more difficult explanation as well.
And then the third, of course, changing role. And it was like, "Hey, we're in the strategic planning team. And now you're coming from the finance department." I think there's a bit of conversation there as well. So I think there's some retooling possible on the personal side, around industry, geography and role.
And I think third group of people that should explore the Harvard MBA and it is more broader piece, but I think if they're aware and clear that they want to build a career in business and in a leadership role. It is very fuzzy because truth is, there's lots of great programs. I mean, I was in Harvard campus, I was hanging out with other people in my social circle from Southeast Asia.
And a lot of people are doing Harvard Kennedy School because they knew that in the future, they wanted to be a public servant or they wanted to be a politician or government leader in the future. So they knew that taking a Harvard Kennedy School, Master's of Public Policy was a way better fit for them, both had interests in academics and at work.
And the truth is Harvard Kennedy School was chuck full of... It was crazy how they hauled and then you would all be the sons of presidents and prime ministers and daughters from very rich families that were just aware that they wanted to be in that domain, social political domain. And I was over hanging out with other people who grew from nothing and who were activists, also were hungry to climb the political ladder.
So, that was a very interesting dynamic where you could have gone and said I wanted to be at Harvard Kennedy school. I wanted to be at Harvard business school and both of them would be very useful tools to get you to where they want to be. But half of this could be an auto magnitude, less helpful to help you if you want to be a public servant.
And then I had other friends who were like at Harvard Divinity School and they were training to be a chaplain, which was a great place. There's theology and interdisciplinary point of view as well, interfaith work. So there's this interesting dynamic where if you know that you want to be a leader in the business world, then I think that helps a lot as well, but that third one is the most fuzzy, I would say, in terms of our approach. And I think there are many good ways to spend a quarter million dollars effectively. So I don't think you need to take an MBA to succeed in business. It's just one of the routes to do so.
Thank you. And also, how has your business school experiences helped to start your own business? Or, sorry, Did you start your business before you went to the HBS or you studied after graduated from Harvard?
Jeremy Au (46:00):
Yeah. Good as a great question. Long story short is I went to Harvard knowing that... so, I mean, chronologically, I had gone to undergrad and had wanted to be a vac... well in high school, I wanted to be a vaccine scientist and a poet on the side. And then my... I've shared this on my podcast before, but I suffered a personal loss and I pretty much crashed out of school and so I went to the army and then after there, I woke up from the grief and then figured out that I needed to get back on academics train.
And so I went to... I actually clawed my way to UC Berkeley and there initially is I wanted to be actually working on vaccine strategy as a consultant after some serendipitous activities involving the social impact consulting. But again there... and then turned out that Bridgespan Group, which is the top nonprofit consulting group in America and globally, I'll say, as well as the Gates Foundation, which we all know obviously today. But both of them really didn't really accept international students and applicants.
And so I ended up doing my third choice, which was going to be as a corporate consultant. And as a corporate consultant, I realized that I loved problem solving and the problems are there and the rigor. And actually, I really love the high-achiever culture where everybody was very hungry to learn, hungry for professional development, but I didn't really like... I think it was just overly, there's no sense of mission. That was very important for me. And also I didn't like some of the dynamics around travel and so on and so forth.
And I was on the side building on the social enterprise, which became very successful. And I realized I enjoyed the founder aspect of that role. And so I ended up building and focusing on that thing. I enjoyed the founding, the building product-markets fit from zero to one, but also one to 10, making it profitable and eventually finding my success. So I liked that part, but I realized that I didn't really like the PR social sectored ness of it. I didn't feel like the impact scale of actually the economics of how that was going to be sustainable was also a bit difficult.
And so I went into Harvard Business School thinking to myself, I said, "Okay I'm going to come and," and I shared is on a jeremyau.com podcast in a different episode. I came in, I said, "I have three rules for myself." Based on feedback I heard, the first one was I'm going to meet a new person every day. So it was an opportunity to meet lots of people. And so I said, "I want to meet a new person every day."
So I would just wake up in the morning and then hang out and meet new people along the way. And if I ended up not meeting someone yet, I would just introduce myself to someone and to say, "Hi." And I had some great compositions along the way, because everybody goes to an MBA program, who's paying quarter a million dollars, is also wanting to meet people as well. So it's a matter of who is on dance floor first to ask questions? So, that was there.
The second thing that I said I wanted to do was that I felt like I was a strong founder, but I wanted to learn what it meant to be a CEO. And so obviously I had been a consultant supporting CEOs and making tough decisions in terms of analysis, helping them write emails and things like that.
I'd also been a founder in building product-market fit, but I felt like there was something in between the scaling aspect, the one to 10, the 10 to 100 aspect that I really wanted to take the time to learn. And so I spent a lot of my courses really learning about not just a product-market fit piece, but focusing very deeply on the core decisions you need to make as a CEO... as the founder transitions to becoming the CEO.
And just yesterday, I was helping a friend and he's a part of a 10% company. And he's at an interesting inflection point now, where he's not just a founder, it's not just a small team, but is actually becoming a real rigorous company and they have to change and let go of some of the decisions they've made in order to pursue the new chapter of growth.
And of course, I think the third thing I said to myself was that I wanted to either join something that I really cared about or to build something if I couldn't find it. And so I was actually, in the first year, actually part of the healthcare club because for me, I was exploring that angle where I'll say like, "Okay I want something that does have the rigorous decision making but I also wanted a clear, social, good aspect of it." And so I think I was thinking that maybe hospital administration and I was taking a lot of classes and to understand that as a way to tie together what I learned about myself.
And so I ended up building and testing different iterations actually, like mental health care clinics in Southeast Asia with a mix of online, offline both for just digital only then ended up looking and exploring the mental health in the States, then zooming into postpartum depression because there's very identifiable clinical population within that.
And then zooming in further, finding out that there are many reasons why people had postpartum depression, but the biggest one in the States was actually the lack of childcare and the inability to go to work because they couldn't find great childcare for their infants. And so that was the birth of the first company pretty much in the summer. And so I had been sponsored at the time for my school. I had a stipend to be a Social Enterprise Summer Fellow of the Rock Center for Entrepreneurship. And that's how I got started.
After the summer, I was... so again, my first year I was exploring different ideas, but also exploring different job fairs, exploring different startups. In the summer was when I was doing a lot of testing and ended up landing on an idea that I cared about, which was our dedication using a sharing economy approach.
And then after that, from there, in the second year I actually started building the company, raising funds, hiring employees. So it was an interesting time period where in my second year of Harvard MBA, I was managing one or two employees while I was taking classes. And so I had to skip a lot of interesting... some stuff, basically, just to manage the teammates and then incubate the...
And then this is new, but the truth is I hit academic screen where basically I didn't do so well. I wasn't great in terms of attendance because I was busy building a company. And so I had to do an additional semester at Harvard to do MBA. But it was a great experience and then learned a lot from that experience. So yeah. I ended up building the company while I was there and then basically when I raised the seed round upon graduation pretty much from next few ventures, and then it was of to the races from there, building the company from Boston and expanding to New York over the next few years.
Okay. Thank you so much.
Jeremy Au (53:06):
And feel free if anybody has any questions, feel free to raise your hands. And I hope to bring you up and answer any questions that you have as well. I think one interesting thing that came up of it in terms of educational skills was, obviously I think there's a lot of information I learned about the Founders-CEO role. So obviously I learned about... I got a chance to practice building term sheets, valuation models, liquidity waterfalls. So a bunch of stuff that honestly you can get on the internet these days, so not too hard to then.
I think the second thing I learned was obviously a very strong community of other startup founders from the Harvard MBA ecosystem. So that was interesting to build out and learn from as well. And we're still good friends from today. I was just recently helping one, this person, with his transition, helping another person with his seed deck. And so it was a very interesting piece where Harvard is actually a very entrepreneurial ecosystem.
And of course the third thing that was helpful from Harvard MBA perspective was that it's a good signal. It still signals the talent, an expensive one for sure, but it's a signal and that's helpful in terms of opening up conversations with venture capitalists and other stakeholders.
Obviously I want to put a big fat caveat there, which is that there are many other better signals to start up, for example, building a successful startup already and exiting it in the same space, or building a... being part of a high growth startup or company in the same space. So there's lots of different ways to have signals, but Harvard MBA is a signal in its own right.
Awesome. That's pretty much one hour. So interesting timing and learning about this podcast approach. And I'll try this again tomorrow and then I'll do another topic that might be interesting. So tune in at the same time for tomorrow. All right. See you all. Bye-bye.