A $49,500-A-Year School for Entrepreneurs

This piece originally appeared on PoetsAndQuants.

Hale Youngblood was out of his element. The architecture graduate from the University of Texas was pounding the pavement of Sun City, an immaculate master-planned community on the outskirts of Austin, Texas, trying to sell an over-priced children’s book with mediocre Amazon (AMZN) reviews.

But the housewives weren’t buying. Maybe because Youngblood, who’s 6 feet tall, was accompanied by two male classmates, one from Georgia (the country) and another of Middle Eastern descent. “We were three intimidating guys trying to sell children’s products to stay-at-home moms,” he recalls of his visit to Sun City and nearby Onion Creek. Of course it didn’t help that buyers had to trust the book would arrive in the mail two weeks later.

Youngblood did not sell a single book. But pushing through rejection was the whole point. It was one of many such assignments he would encounter at the Acton School of Business, a novel MBA program in Austin, Texas, started in 2002 by Jeff Sandefer, an oilman turned educator.

Not your average MBA

Acton is unique even at a time when the MBA landscape is churning out new models and programs like never before. For one, it’s run like a business — professors are entrepreneurs rather than PhDs. Their pay is tied to student ratings, and those with poor ratings are not invited back the following year. For another, the school is 100% focused on entrepreneurship. The typical MBA mainstay paths of finance, consulting, and management are absent. The school attracts a highly specific type of student. In fact, 90% of their students apply only to Acton, according to Robin Bruce, the school’s CEO (Acton’s equivalent of a dean). “It’s not like comparing apples to apples. The value proposition is so dramatically different,” Bruce says.

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The campus, just off Austin’s main artery, I-35, is a redbrick building, reminiscent of a 2000-era office building. With no ivy-covered walls or stately libraries and latte bars, you’d be hard-pressed to know that it’s a business school.

That is, in part, by design. The 10-month program strips away the extras to churn out entrepreneurs with finely tuned business reflexes for a total tuition price tag of $49,500. Of course this condensed and economical MBA comes at cost: there are no career services, deep alumni networks, or summer internships. But for Acton’s biggest promoters, these subsidiary services are an extra cost and distraction from their objective: acquiring as much knowledge as possible in as little time as possible to build and run a sustainable business.

From oilman to educator

In order to understand Acton, it’s essential to understand Sandefer. After his company, Sandefer Offshore Co., turned $500 million in profits from a series of shrewd oil investments, he began looking for something more. He started teaching at the University of Texas’ McCombs School of Business, where he was, by all accounts, an exceptional instructor. He won Outstanding Teacher five times, thanks no doubt to his roll-up-your sleeves style, which focused on case studies and real-world scenarios. He brought other similar-minded adjuncts on board to help teach McCombs’ entrepreneurship program and started rattling for change. This didn’t sit well with tenured faculty and resulted in a fissure between Sandefer and the administration.

Sandefer ultimately cut ties with the university in 2002. The same year he and several other professors began offering a no-credit, off-campus course for students from any university. “I though 10 people would show up, but 120 people came,” Sandefer recalls. “We had this following we didn’t know we had,” he says. He expected students from McCombs but was surprised when others drove more than 100 miles from Baylor University in Waco and Rice University in Houston to attend.

Sandefer, along with fellow former McCombs professors Jack Long and Steve Tomlinson, parlayed that following into the Acton MBA.

The Acton MBA

Sandefer and his co-founders envisioned a program where students developed the intrinsic frameworks required to make smart business decisions on the fly. Practitioners would teach the material, and — taking a page from his own MBA experience at Harvard Business School — case studies and the Socratic method would reign supreme as the method of instruction.

Sandefer’s thinking was that if students were exposed to real-world business dilemmas over and over again, they would eventually acquire a reflexive habit of asking the questions in the right pattern to make better decisions. “The goal is to be right more than half the time,” he explains. The program would offer a lock-step curriculum with no elective options. But he couldn’t eschew convention completely and sought accreditation from Hardin-Simmons, a private Baptist University in Texas. It’s worth noting that Sander’s great grandfather, Jefferson Davis Sandefer, was a former president of Hardin-Simmons. And with that, the Acton MBA was in business.

A boot camp for entrepreneurs

John Porter (Acton MBA 2015) recalls covering some 300 cases during his time at Acton. He woke up at 4 a.m. Each day, arrived at Acton by 5 a.m. For the 6 a.m. Study group and attended class from 8 a.m. Until 12:30 p.m. After that it was case study preparation until midnight. He subsisted on five hours of sleep each night and reserved 15 minutes to catch up with his wife in the evenings. He’d take Thursday nights off, but weekends were reserved for study. “People don’t get that it’s a really hard program,” Porter says. “When you tell them I studied till midnight and got up a 4 a.m. To finish something, they don’t always understand.”

Porter is referring to Acton’s grueling second semester, where 100-hour workweeks are the norm. It’s prefaced by a five-month pre-matriculation period, which is completed online and covers courses such as Operations 1, Cash and Valuation 1, and Customers 1. Students then come to campus for the business boot camp that Porter describes.

Life of meaning

Sandefer wanted to impart more than business skills through his MBA program. He says his best and brightest students at the University of Texas often came back from top firms after five years and “hated their lives.” With Acton, he aimed to go beyond lining students up for six-figure salaries. “We’re not about finding a job at all. We’re about finding a calling, and that is really different. It’s what you’re put here on earth to do, and so it’s really about changing the way you think about yourself,” he says.

This plays out in Acton’s Life of Meaning course, which comprises 20% of the curriculum. It’s business ethics on steroids. Students are forced to make tough choices in case study scenarios with no right or wrong answers, such as whether they’d cut corners on safety regulations in a production facility or reduce employee pay to minimum wage. While the answers may seem obvious at first, new challenges are piled on until the students find themselves reversing their original stance. These individual exercises build up to larger existential questions such as: Did I do meaningful work? What gives me peace and meaning?

For Porter, this was the most important portion of the coursework. Rather than cheesy self-help scenarios, he found the cases pressed him to examine his values on a fundamental level. He could try on different moral hats without the real-world ramifications and draw moral lines in the sand before circumstances drew them for him. He also came to appreciate how these values would ultimately shape his future business. “If you found a company, your DNA is written all over it. Who you are bleeds out in your work,” he says.

Career services and cannon fodder

Acton may help students recalibrate their moral compasses, but the program does not promise a job. There is no career services department, and that’s on purpose, according to Sandefer. “We didn’t want employers coming here looking for cannon fodder for their lower ranks,” Sandefer says. “We have plenty of friends at Goldman Sachs (GS) and McKinsey — and I’m not knocking that — but it is a model where you bring in lots of very young bright people and work them very hard, and a few make it to the top. We’d rather equip people to find their calling and go directly out into working in a real business or running a real business and skip that step,” he says.

For some, this is problematic. In a program where students have little spare time to start a company during school, a stepping-stone job is often necessary after graduation. Bruce, Acton’s CEO, estimates between 60-70% of students take a job immediately after graduation, with the remainder starting their own companies. Among all alumni, 63% have founded companies, taking an average of 2 years to so do. All of this is to say that most graduates, even those who eventually start a business, need a job immediately after they leave Acton. And most find one, according to Bruce. She estimates that two-thirds are employed within three months of graduation, with most of the final third landing a job six months later and only a few failing to find a job beyond that.

When you are explaining, you are losing

But the job search can be complicated. In a field where students splash out six figures for a credential with cache, an unknown degree can be a tough sell. Evan Van Ness, a 2012 Acton MBA, wrote a blog post in which he explains that attending Acton hurt his chances of finding a job because so few people had heard of the program. “I hope you’re ready to do lots of explaining about what Acton is. And as they say in politics: when you are explaining, you are losing,” he writes. One employer assumed he couldn’t get into the University of Texas’ McCombs School of Business. But his GMAT score was 30 or 40 points higher than the average Harvard or Stanford MBA, and his grades at Rice were excellent, he explains. “I hate putting my test scores on a resume, but because I went to Acton, I feel like I have to,” he says.

Van Ness is not alone. Many Acton graduates include an explanatory note about the program on their LinkedIn profiles. Youngblood also details the double sell required to secure employment: you must first sell the degree and then sell yourself as the best candidate for the job, he says.

However, Youngblood was less concerned with the degree’s cache than the absence of a robust alumni network, an often-touted selling point for top-tier MBA programs and a source of funding for entrepreneurship students. “There is no hiding it: McCombs is pumping out several hundred students every year. Acton’s pool of graduates from all years is several hundred,” he explains. But he doesn’t fault Acton for this. “They were very up front with that throughout recruitment,” he says.

Bruce also maintains that the school is very transparent in terms of its value proposition. “I always tell students when we’re doing admission interviews, Acton as a credential is not very valuable. We are very, very honest with our incoming students about this … if they’re looking for a big brand name MBA, they should not come to Acton,” she says. “This is an entrepreneurship boot camp. We will tee you up to be an entrepreneur, but we’re not going to do a lot of extra stuff.”

She acknowledges that a handful of students have been dissatisfied with their Acton experience. “Either we weren’t clear enough on the front end, or they weren’t super clear on exactly what they were looking for coming in,” she says. Some students start out with entrepreneurial aspirations and then find that they prefer the corporate route, she explains.

Why Acton?

Abianne Miller Falla (Acton MBA 2013) already had a CPA and a master’s degree in marketing. “I don’t know that a traditional MBA would have been interesting for me,” she says. When contemplating the program, she called a former Acton professor who told her that the experience would save her 10 years of experience and mistakes. “I thought even if he’s exaggerating and it’s only half that and it’s five years, it’s still a great learning curve, and I wouldn’t be learning with investor dollars,” she says. She hung up the phone and applied to the program.

As for the Acton experience, Miller compares it with standing inside a cash machine at a carnival, where a contestant tries to snatch bills from a cash whirlwind. “That’s how I felt at Acton,” she says. “I can’t learn everything that’s being shared, so how do I prioritize the information?”

For her, the Acton experience and effort proved worthwhile. After graduating, she co-founded Cat Spring Tea, which produces yaupon tea, and she’s been running it for the last three years. “Acton really did reshape my brain and how I look at companies and at business,” she says. “There’s no question it’s been invaluable. I know I’m making mistakes with my company, but they’re different than what I would have been making without Acton. And I’m more aware of them,” she adds.

Not everyone agrees. Van Ness contends that the intense focus on case studies and the Socratic method didn’t offer enough in the way of actionable feedback. “Traditional MBAs do group projects and try to simulate leadership experience and give you lots of feedback on so-called ‘soft skills.’ Acton would claim it does that, but frankly doesn’t – it’s just all cases all the time,” he says. He emphasizes that the lack of direct faculty feedback, something other students noted, made it difficult to identify areas for improvement.

Not a replacement for a traditional MBA

Both graduates and administrators say that Acton is not a replacement for a traditional MBA. At its best, it’s an action-oriented program that compresses and accelerates the learning process for entrepreneurially minded students who want to start businesses and appreciate intense self-reflection. At its worst, it’s a grueling year that results in a little-known degree and a mediocre network.

The best advice for those considering the program? Try it out. “It’s worth people coming in and sitting in on a class to know if it’s a fit. If it’s not, it’s going to be really hard,” Falla says. Or, as in her case, it may just be the ticket to a new business.