MBAs, please do more startups!
Silicon Valley should not undervalue the power of MBA.
Peter Theil (Tech veteran and author of startup bible, Zero to One) had this policy at Paypal — “No MBAs”
MBA grads from top B schools are some of the most talented people I’ve met. At Indiez, I had a chance to work with 600+ founders from all over the world. Few of them were from business schools like HBS, Michigan, Stanford, Yale, Wharton, Kelly.
Some of my best experiences of working with founders have been when they are from B-schools.
These founders taught me subtle but important things like better ways to organise thoughts, making better decisions and building relationships. I felt dumb a lot of times in front of them which pushed me to improve!
One clear example that I recall — I’ve been building a product requirement document (PRD), which explains what a product is all about, for years now. However, when I first shared my version of PRD with Michael (A young client of Indiez, HBS Grad) he re-did it — 100 times better. And, this was the first time he was writing a PRD.
However, it is really surprising that there’s a skepticism in Silicon Valley that MBAs are not great start-up founders. In fact going for an MBA is often looked down upon.
It’s ironical. Isn’t it?
The truth is there’s no difference in MBA people and technical people as startup founders. Startups are risky. The chances of failure are equal.
Some MBA grads have done extremely well in the silicon valley.
- A quarter of all the unicorns have at least one MBA founder.
- Blue Apron, Rent the Runway, Cloudfare are few rising startups where the founders are from Harvard Business School.
- MBA Unicorns are valued at $84 Billion.
- Some of the most respected people from tech industry are B school graduates like — Sheryl Sandberg.
I’m surprised that even though we have so many success stories, only a handful MBAs do startups.
It’s a genuine request to all the MBA grads to take that leap of faith. You’ll figure it out.
As a B school student, YOU have these qualities which I believe are crucial for startup founders.
Ability to think years ahead
For founders, ‘Vision’ is extremely crucial. To disrupt an industry you have to identify where an industry is going and few problems in that industry.
A lot of technical founders work on building best algorithm ever! But what will it change in the world?
You must have gone through case study preparation and hence learnt the art of seeing the larger picture of a problem. This art gives you the advantage to think years ahead and build a company that can last for decades.
A startup is about building a great business, not just products. Great product definitely helps, but building a business is crucial. Larry and Sergey of Google had to hire Eric Schmidt to run their business.
A startup is nothing but a great business. Founders build amazing products but can’t build a business. Do you remember the “Yo App”. It was a good product but no business!
99% of products that come into the market fails. Reason? they can’t sell, market, finance or build a business. As an MBA you’ll know how to sell and market. There’s a reason why global biggies rush to B school campuses to hire them and they become leaders of global organizations.
While selling, you have to sell yourself first. Then solve the problem of the customer. Then negotiate and agree on the price.
You must have presented hundreds of cases and have proven your point in a class debate. Also, given that you went through a very comprehensive application process, it is certain that you know how to market yourself. You have already nailed it!
You have been making presentations and writing case studies and hence you should definitely know how to present. How to tell a story through a document and how to make your point.
This is a very crucial skill for a founder because as a founder you have the most important job is to win users and make sure that the ship is sailing. You have to communicate to your team members clearly so that you and your team members are aligned towards the same goal, always.
MBAs have a very high chance of being very comfortable with numbers. In a startup, you have to be goal oriented. How are you growing every day? Which is the most important metrics? Where to focus?
To answer these questions you’ll have to do a deep dive into your product numbers, user members, sales numbers, traffic numbers, industry numbers and number of every other kind.
Your network is extremely valuable to a startup. Most startups fail because they can’t sell. A lot of time it is hard for them to find a connect with the company who would buy their product. Given that you already have friends working in world’s best enterprises it is easy for you to get in. Sometimes a potential customer is just a phone call away.
However, there are a few pitfalls that you should look out for and things that you’ll have to do to build a successful startup.
Take Risks, Fail.
Almost every MBA graduate is apprehensive to take risks. They would dive themselves deep into research so that they don’t fail.
Well here’s the thing- Startups are risky. You’ll have to learn to fail fast. Don’t think about failure too much, just ship that product out, learn quickly and move on!
If you are not embarrassed by the first version of your product, you’ve launched too late. — Reid Hoffman
Result Matter, nothing else.
As a founder, you’ll have to focus on results… how are we growing? how are users behaving? The number of hours in office or out of office won’t matter. As a B school student, you will have a propensity of doing too much research. Refrain from doing so. Move fast. Ship, learn and iterate.
You’ll have to get out of the ivory tower. There’s no other option. You’ll have to get into the field and talk to your clients, your users and investors.
You can’t just ‘assume’ a growth number as you do in your excel sheet. You’ll have to give practical reasons behind that. You’ll have to communicate how will you grow.
But remember, don’t do too much research. Keep it generic. Few percentage points won’t matter.
As a founder, it is your responsibility to get your entire team’s commitment towards building something legendary and it’s risky. You have to get your entire team committed to working on your startup first and foremost, as opposed to we will do this startup if we receive funding, if we get into an accelerator, if a variety of other criteria are met. You can’t just eliminate risk like this. Eliminate risks by building a brilliant product.
Now go out there. Take that plunge, take that leap of faith.
Your passion and belief to build your idea is central to everything that you are doing. Learn from the data and move on.
MBAs are changing the world everyday. MBA led unicorns are valued at $87 Billion. Perhaps, in a few years you can increase that number by many billions. It’s your turn to change the world now.