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’ve had the chance to work with 600+ founders from all over the world. A few of them were from business schools like HBS, Michigan, Stanford, Yale, Wharton, and Kelly.
Some of my best experiences working with founders have actually been when they are from B-schools.
These founders taught me subtle but important things, like better ways to organize thoughts, make decisions, and build relationships. I felt dumb a lot of the time in front of them, which pushed me to improve!
Here’s one clear example that I recall. I’d been building a product requirement document (PRD), which explains what a product is all about, for years. However, when I first shared my version of PRD with Michael (A young client of Indiez and an HBS Grad) he re-did it — 100 times better. And, this was the first time he was writing a PRD.
It is really surprising that there’s 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 a little strange, isn’t it?
The truth is there’s no difference between MBA people and technical people as startup founders. Startups are risky. The chances of failure are equal for both.
Some MBA grads have done extremely well in Silicon Valley.
- A quarter of all the unicorns have at least one MBA founder.
- Blue Apron, Rent the Runway, and Cloudfare are a 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 the tech industry are B school graduates, including Sheryl Sandberg.
I’m surprised that even though we have so many success stories, only a handful MBAs take on startups.
This is a genuine request to all MBA grads out there to take that leap of faith. You’ll figure it out!
As a B school student, YOU have the qualities 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 that industry is going and a few problems it’s facing.
A lot of technical founders work on building the best algorithm ever. But what will it change in the real world?
You must have gone through case study preparation, and hence, learned 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. A great product definitely helps, but building a business is crucial. Larry and Sergey of Google had to hire Eric Schmidt to run their business.
In fact, a startup is nothing but a great business. Founders can build amazing products, but they can’t always build a business. Do you remember the “Yo App”? It was a good product, but not a business!
99% of products that come onto the market fail. 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 recent grads — they tend to become leaders of global organizations.
When selling, you have to sell yourself first, then solve the customer's problem. Then you can 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. So in my eyes, you’ve already nailed it!
You have been making presentations and writing case studies, so you definitely know how to present. You know how to tell a story through a document, and how to make your point.
This is a very crucial skill for a founder, as you have the most important job of all: Win customers and make sure the ship is sailing. You have to communicate to your team members clearly so that you are all aligned towards the same goal, always.
MBAs are typically very comfortable with numbers. In a startup, you have to be goal oriented. How are you growing every day? Which are the most important metrics? Where should you 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 numbers of every other kind.
Your network is extremely valuable to a startup. Most startups fail because they can’t sell. A lot of the time it’s hard for them to find a connection with the company who would buy their product. Given that you already have friends working in the world’s best enterprises it's 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 you’ll have to do to build a successful startup.
Take Risks, Fail.
Almost every MBA graduate is risk averse. They’d rather dive deep into research to ensure they won’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
Results 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’ll have a propensity to research too much. 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 you’ll grow.
But remember, don’t do too much research. Keep it generic. A few percentage points won’t matter.
As a founder, it's your responsibility to get your entire team’s commitment to 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 working on the startup solely on the condition of receiving funding or getting into an accelerator. 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 are 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 billions more. It’s your turn to change the world now.