Laksmhi Balachandra started up straight out of college but soon realized that she enjoyed the building up stage better than the operating stage. She then headed to venture capital, post which, in 2004 she did her MBA from MIT Sloan School of Management. Lakshmi started teaching a course on improvisation to her classmates at business school (she had been an improvisational and comedy performer for fun during her career as a venture capitalist and entrepreneur). And then after she graduated, she became an adjunct professor. She also did corporate training/consulting, and soon found that teaching is what she wanted to do. And more importantly, her inclination towards researching new ideas about business and management led her to get a PhD to become a full time professor at Babson College, one of the most renowned colleges for entrepreneurship in the world.
YS: What is your current field of research? What is your motivation?
LB: My current research examines how and why people – namely investors – make decisions on entrepreneurs. I focus primarily on the pitch, but am also interested in gender differences and trust between parties. My motivation comes from my own experiences as a VC – how and why we decided to invest in one entrepreneur over another often came down to a “feeling” we had from the entrepreneur’s pitch. I want to know what composes that feeling!
YS: What are some of the underlying areas upon which an investment depends?
LB: Apart from the rather obvious ones like team, market size and the likes, there are areas that include the operational considerations. How exactly do you propose to move forward and make your venture a success? Why will you “win” so to speak over your competition? Execution is critical for investments and unless you understand your market and have the right talent and awareness of how to proceed in your market, your great idea will definitely fail. These are some of the questions an investor has in mind while making a decision.
YS: You mentioned that your research deals with the impact of gender on investment. Tell us about that.
LB: Gender is tricky in the investment world. Most of it tells us that women don’t get funding. But we are finding that the rationale behind the lower investment is a bit more nuanced. Do they not start investment “fundable” ideas? Some don’t, but many do. Do they not know how to “Pitch” their ideas for investment. Again, it depends. In my data, I have found that women are actually very strong at presenting their ideas. But, they do not participate or seek investment as often as men – is this due to interest or lack of awareness or prejudice? These are all complicated, entangled issues, that I hope to dive deeper into going forward with my research.
YS: What are the key areas of research within entrepreneurship?
LB: That is tough! Entrepreneurship has become a vast, exciting area of research. I of course, think gender is great. But there is a lot of movement in corporate entrepreneurship and social entrepreneurship areas too. Just look at a listing of any entrepreneurship conference, and the Babson College Entrepreneurship Research Conference is a good place to start, and you will see a wide list of topics that are all part of the entrepreneurship research community.
YS: How big a role does academics play in entrepreneurship?
LB: Traditionally not a big one – most entrepreneurship in business schools was taught by former operators/CEOs, entrepreneurs who discussed how they “did” it so to speak. But as entrepreneurship has grown as an academic pursuit, and the research has started in areas like mine and others, we are finding that the lessons from successful entrepreneurs can be studied and codified and taught. So that is what we as academics do, just like in other professional domains, there are certain truths, or a language that you can learn for entrepreneurship. I think that is what we teach individuals when they come to learn about entrepreneurship. It makes the entire endeavor less of a mystery and more do-able when you know (in theory!) what you are going to be doing. It may not go as you plan, but then what does?
YS: What are the key skills do you want to see percolate in a student while teaching a course?
LB: I want students to use the ideas from class in their “real” worlds so to speak. I love when students can come back to me and say, I used that! Or, learning that skill/reading that paper/thinking about that concept really changed the way they approach life in some way.