If Business Schools were Investors?

Often, we're asked by prospective applicants whether business school applications vary from one another. While many business schools suggest that every application must be entirely bespoke, the reality often differs. We use a metaphor to explain the strategic approach applicants should adopt when applying to business schools. 

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Most business schools act like conservative investors. 

They prefer stable investments that promise gradual growth and are averse to high volatility. Their focus is on steady income streams and moderate capital growth, essentially playing the career placement card. They aim to ensure that at least 90% of their graduates are employed within three months of graduation, and that top-tier firms are hiring their alumni. Most prominent schools like INSEAD, LBS, Columbia, Tuck, or Kellogg and Booth fit this category. For these types of business schools, I generally advise adopting a conservative approach and developing a clear, efficient career plan. While entrepreneurship is gaining traction globally - INSEAD ranks 4th worldwide in VC-backed entrepreneurship - we recommend not emphasizing this path in the application if prior exposure to entrepreneurship is limited or nonexistent. For these schools, a strong GMAT score is crucial as it is viewed as a significant indicator to reduce the school’s risk exposure.

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Other business schools behave like balanced investors. 

They seek portfolios with somewhat higher volatility and expect good long-term capital growth. While these schools are willing to take more risks, they don't favor extreme unpredictability. There are two kinds of schools in this segment. First, elite programs that have strong placement in top-tier firms that purposely move towards the venture capital threshold. Wharton and MIT Sloan are the sole representatives in this category. When applying to these schools, the approach should mirror that used for more conservative institutions. However, if an applicant has a lower GMAT score, we build an application emphasizing entrepreneurship, aiming to convince the school of the vision's potential. We have successfully placed mid-600 GMAT score applicants in schools like Wharton and MIT, but seldom in schools like INSEAD or LBS. Second, younger and less established business schools that are willing to increase their risk exposure to build their brand. Notable examples include IE Business School, Oxford, and Yale. They also primarily focus on employability, but their placement in top-tier firms might be lower. To compensate, they increase the percentage of family business owners and aspiring entrepreneurs in their classrooms. 

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The VC Funds

Stanford and Harvard, the world’s two most prestigious business schools, operate akin to VC funds. Their mission is to educate leaders who will change the world. Receiving thousands of applications annually allows them to behave like true VC funds, understanding that while many early-stage investments may fail, a single significant success - like a Oscar Health Insurance, Grab or GoJek - can offset these. They maintain a balanced portfolio but still prioritize corporate placements. Both Stanford and Harvard place many students in top-tier firms, although INSEAD places nearly 50% of its class into consulting with about 250 graduates joining MBB, while Stanford placed only 15% in consulting in 2023.

The key to applying to schools like GSB and HBS is to emphasize impact. It's crucial that these applications are unique. Even though these schools generally see high GMAT scores, they are known to make exceptions for particularly compelling candidates. In our experience, a significant number of our admits to HBS and GSB had GMAT scores that were 30 to 100 points below the class average, about 40% in fact, demonstrating that these institutions value distinctive profiles over standardized test scores alone. 

With a deeper understanding of these schools' investment behaviours, you can now craft the perfect investment pitch for your application!