I’m a member of Stanford’s Graduate School of Business Class of 1999. My name appears in the alumni directory, I receive frequent GSB fundraising solicitations and the alumni magazine shows up in my mailbox every month. With respect to the GSB, the biggest difference between me and most of my classmates is this: I left the program after the first year and never went back.
When people hear that I dropped out of Stanford their reaction serves as a kind of Rorschach test. One group – I’ll call them “traditionalists” – look surprised, then cautious (as if I’m only teasing and just about to say that, no, I actually did go back), and then (when I don’t) reappraising, in a “Well I guess you’re not as smart as I thought you were” kind of way.
Not long after school started my friends at Adjacency, the young company I’d hired to create Patagonia’s online store, told me they were moving the entire team from Madison, Wisconsin to San Francisco to be closer to their clients (and an easier sell to new hires). I didn’t realize it at the time, but my odds of completing my MBA took a nosedive the day Andrew Sather, Adjacency’s CEO, invited me up to the city to see their new offices in Potrero Hill. They dropped further when I signed on “for the summer” to help Andrew out with business development and client strategy. And at the end of the summer when I asked then-associate dean George Parker for a leave of absence and was told, in effect, “finish the program or don’t count on coming back”, it really wasn’t much of a choice at all.
It didn’t really register at the time, but I’ve since come to appreciate the irony that Michael Spence, the Dean of the GSB when I was there, won the Nobel Prize in Economics for his work on Signalling. As the Wikipedia description has it:
“…in Michael Spence’s job-market signalling model, (potential) employees send a signal about their ability level to the employer by acquiring certain education credentials. The informational value of the credential comes from the fact that the employer assumes it is positively correlated with having greater ability.”
I’m not sure Dean Spence would agree with my analysis, but in retrospect my decision to leave the GSB seems like a great example of signalling theory at work. By attending the GSB for a year I picked up a bunch of useful ideas, made some great friends (and even married one of them!) and acquired a significant market signalling benefit. And then I dropped out and began my real education as an entrepreneur.