Entrepreneurship in America is fast becoming a pissing contest, regulated by B-school academics. The professors of the pseudo-science of business since Peter Drucker are now in bed with their alumni financiers in Wall Street firms to battle for all ideas, of their own ilk and of others which do not belong to the clique, the politicians and their political appointees in tow eagerly awaiting the revolving door, especially if they are Clinton Democrats.
‘You gotta go to B-school boy,’ the younger Bush was told when he failed at the business of getting oil out of the ground his father had succeeded at in West Texas without a graduate degree after Andover and Yale. After 2 years at HBS (Harvard Business School), W was ready with $600,00 of mostly borrowed money in hand with a team of investors to purchase the Texas Rangers baseball team in 1989 for an amount about 12 times Bush investment to eventually sell it for $250 million in 1998, for his total share of about $15 million in profit, with the stock hiccuping between the time he first sold his shares in the franchise before becoming Governor of Texas and 1998.
From 1989 to now, the trend in business financing has been to lockup investment capital with potential for large returns mostly among the top-10 business school graduates, with the professors serving on their students’ corporate boards or serving as external advisors or paid consultants.
The academics, in version 2, began firming their grip on tuitions from B-school attendance to make Masters degree in Business Administration (MBA) programs the only de facto channel for access to private financing, World Economic Forum in Davos, Switzerland being the salient example where financial capital for business and ideas – their own and from others outside their network but without the foreign ideator-owners – congregate in utter disrespect for intellectual property in what is emerging as a post-modern feudalist global society in a brazen display of meritocratic entitlement to the global economy. Stanford economist and Nobel Laureate calls this phenomenon “network effects” in a Finance and Economics Discussion Series (FEDS) paper with his former student who is now an economist in Washington with the Board of Governors of the Federal Reserve System.
Now, version 3 of this trend is coalescing into place: entrepreneurship competitions for access to finance, akin to Donald Trump’s (or the Freemasons?) Apprentice, in the name of fairness and equal opportunity, but only through the US News and World Report American meritocracy. You are out of luck for the rest of your life, in the backwaters of the bottom 93% of American society, no matter the quality of your ideas, if your Graduate Management Aptitude Test (GMAT) score is not good enough for the top-10 B-Schools Davos likes.
When I sought financing in Silicon Valley in 2009, I was told to first obtain an MBA from Stanford University if my business plans are to be funded. So, I kept the whole thing to myself, from abstraction to realization, from the drawing board to the market. By a former Securities and Exchange Commission (SEC) lawyer in California, my corporation has recently been appraised at $500 million.
I will buy the ketchup bottle a group of Massachusetts Institute of Technology (MIT) researchers created to solve the sticky ketchup problem if the Food and Drug Administration (FDA) approves it even though it did not win MIT’s entrepreneurship competition. Can somebody fund its manufacture before it turns into a Ford intermittent windshield wiper?
The tycoons – from Cornelius Vanderbilt to Rockefeller, Edison, Henry Ford, Bill Gates and Steve Jobs – were smart guys for hanging on to their ideas until money came to them rather than yield to business competitions of the British lords and royalty akin to the competition which yielded George Stephenson’s Rocket in 1829 in the United Kingdom, subverting economic liberty in America with the noveau riche classes through Harvard and the Empire State bribing their American allegiance with royal titles.