In action learning labs, students bring know-how to global startups

While students and faculty often praise the educational value and personal growth students experience during action learning projects—working on site in companies—the benefits don’t end there. At a Jan. 7 conference in Santiago, Chile hosted by MIT Sloan’s Latin America office together with Pontificia Universidad Católica de Chile and Universidad Adolfo Ibáñez about the action learning approach, entrepreneurs who had hosted student teams said their companies had reaped significant rewards.

Sally Buberman, co-founder and CEO of Wormhole, an Argentina-based online learning company, spoke on a panel at the conference about her experience hosting a team of MIT Sloan students from the school’s Global Entrepreneurship Lab. When she asked the students to validate Wormhole’s plans to expand into the Brazilian market, the results surprised her. Rather than agreeing that the company should set up a small operation in Brazil and begin to develop its own local relationships, the team proposed that partnerships with Brazilian companies would work better. The students provided a list of possible partners who were operating similar businesses in different verticals—companies who would likely view Wormhole’s offering as complementary rather than competitive.

Buberman said she took some convincing, but ultimately adopted the team’s strategy and is in the process of pursuing some of the partners on the list, many of whom the students had reached or researched through the MIT alumni network. “When you’re building a company with almost no resources, the sooner you know you’re going in the wrong direction, the better,” she said. “As entrepreneurs, we cannot invest in consulting fees. We got consulting advice from the MBA team.”

An added benefit, Buberman said, was the fact that Wormhole’s employees, many of whom are young and have not traveled outside Argentina, met MIT Sloan students from the U.S., Thailand, and Germany and enjoyed forming international friendships and learning about other cultures and business practices.

Wormhole, which has increased its revenue by nearly 45 percent in the past year, is hosting a second team this year and has tasked them with studying market entry strategies for Mexico, Colombia, and Chile.

Joe Chien, co-founder of Fashion’s Park, a fashion retailer based in Chile, also spoke on the panel. He received similarly surprising news from the MIT Sloan team he hosted last year. While investigating strategies for expansion into Peru, the team found that a new anti-dumping law made the market significantly less attractive and would make it challenging for Fashion’s Park to turn a profit there. The students recommended against expansion. While the project team and some of the employees of Fashion’s Park were disappointed, said Chien, he was “thrilled” to have avoided a potentially costly mistake.