So You Want To Be An Entrepreneur?

I really want to start my own company. I’ve got some great ideas that I think can impact the world in a big way, and I want to make them a reality. I want to create an über cool culture where I love to work and where lots of other people do, too. We’ll work really hard, but on our own terms. Oh, and I hope to make a bazillion* dollars in the process.

*Actual numbers may vary.

Every year I speak to a number of would-be (and occasionally existing) entrepreneurs who want to pursue an MBA to ensure greater success in their post-graduate ventures. Before we go too far in our conversation, I grill them to see whether they have the DNA of an entrepreneur. If they can’t convince me, I doubt that they’re going to convince admissions committees, much less have fun (or success) starting and running companies. If they can convince me, I’ll have them weave some of their answers to the questions below into their applications:

Are you an initiator? Can you create something from nothing?
This could manifest in a number of ways. If you’ve already started a company, especially if you took it past the idea stage and got some traction, you’re in great shape. I already believe you’ve got a lot of what it takes. Take, for example, one of my clients. While in college, Jake** started an interview-preparation company that attracted two thousand customers and generated revenue. Or you might have started a business, but it failed. You’re fine as long as it wasn’t due to some really huge oversight, decisions that any person with a decent brain wouldn’t have made, or some ethical breach. 

Perhaps you’ve started a smaller-scale money-making venture. Growing up in a former Communist country in the late ‘90s/early ‘00s, Sasha had only her mother’s Soviet-era-style (read: unfashionable) hand-me-downs to wear. Determined to look chic, she deployed her sewing skills to repurpose these clothes, and soon her friends and others were clamoring for her to make them some as well. Amongst other things, this undertaking funded her eventual move to the U.S. for graduate school.

Or maybe you’ve created an organization, say a college club or a volunteer group. Even though you may not have generated revenue, you may have had to sell your idea to the powers that be to get funding, rally participants, or judiciously and creatively use limited resources to realize your vision. For example, Tony, whose parents were Chinese immigrants, founded an organization in his European birth country to increase political participation amongst the Chinese population living there.

If you’ve been working in a company, you still may have had opportunities show your entrepreneurial chops. This is often easier at tech companies that foster intrapreneurship, e.g., Google, which invites employees to spend 20% of their time on things that interest them. If something you noodle up appears to be a viable line of business and you get to head it up—voilà!  Or perhaps even while working in a more traditional type of company, you’ve been able to champion and implement a new idea, for instance, an entirely new product/service or line extension. Working for a major retail chain, Jennifer spearheaded the first-ever in-store sponsorship, collaborating with a natural-foods company on a promotion for a health-related national nonprofit.

If you haven’t done any of the above, did you grow up in a family of entrepreneurs?
Maybe you haven’t launched the Next Big Thing yet yourself, but you were steeped in the entrepreneurial lifestyle growing up. Tony helped out at his family’s teeny restaurant while growing up. His father parlayed this business success into another one, and so on, eventually running a rental-car business and overseeing real estate deals back in China. Witnessing and participating in this, Tony learned some valuable lessons about entrepreneurship. Chaya was pulled into her family’s business at age 14 after the untimely death of her father. She began doing the books and attending client meetings with her mother, ultimately helping sell the business. Both of these clients understood the uncertainty, risk tolerance, resourcefulness, and resilience required to be an entrepreneur—which leads me to my next set of questions.

What’s your risk tolerance?
If you’ve always played it safe, you probably won’t enjoy being an entrepreneur. Are there some examples from your past when you took the road less traveled? What life decisions have you made for which the outcome was really uncertain? Have you made decisions that had a potentially huge downside? These decisions may have had to do with choosing your college or major, summer opportunities, job offers, etc. A prime example of this is Brigitta, who passed up offers at established bulge-bracket investment banks to help build out her company’s brand-new media M&A group. She wanted to be in a more dynamic environment where she could help shape business practices and the organizational culture.

  • Nick Dunbar

    Great post Deborah. I agree with most everything but I would also mention that not all these skills need to reside in one person. However it is important to recognize what it takes so you can built out team. So you are right all people need to be risk takers but beyond that, I divide the qualities required into 4 personality types, very few people are of all four types. They are the organizer (management), the innovator (product), the technician (manufacturing, engineering, etc), the promoter (sales, fund raising etc). 

    Take for instance the innovator who is usually super creative but rarely has the ability to stay focused and organized. Organization and creativity do exist in one brain but sometime that is not necessary. If you can’t really be your own boss and don’t have the self control to make your self follow a schedule you will then need people in your company who can do this and who can manage you. Most people say to them selves “of course I can do this” but think about it, from day one almost all of us have always had someone there to tell us what to do. From childhood to college to our careers, to our spouses. We have been raised to be motivated by external pressures. Its what keeps us doing stuff we don’t want to do. In the early days of your startup you may have no clients, co-workers or boss to hold you accountable. Have you ever taken a year off work? Did you slowly slip into sleeping too much or watching too much TV? Most of us need someone to hold us accountable or we just break down. Don’t believe me try it. In my mind the ability to stick to the promises one makes to ones self is the most important skill amongst the many required to be an entrepreneur.  When one is going it alone that is. So even if you don’t have all the qualities mentioned in this article you can still be an entrepreneur just build a team with a complementary skill set. This is one of the reasons places like Tech Stars requires a team. The idea of the single entrepreneur who has all that is required is either very rare or a myth thats why the book the e-myth (entrepreneurial myth) is a best seller. It says that its just too much to expect all this from one person. 

  • Bt is correct. I am an entrepreneur and I was aware of these post-MBA pay issues b-schools have when I applied a few months ago. HBS and Stanford (maybe even Wharton) may not care…but then they are looking for exceptional candidates and those are usually those who are already entrepreneurial millionaires or work for blue-chip companies…but every other school wants you to graduate with a high six-figure salary in order to boost their averages (Booth, Tuck, Kellogg, etc.).

    Business schools know that entrepreneurs often have to take close to nothing, even if the find funding, in order start their own businesses. And the post-MBA entrepreneur may never be successful enough even in the future to help his or her b-school shine. $40k post-MBA and then even $1M per year 10yrs down the line is not going to factor into b-school rankings.

    Now if the rankings themselves factored in entrepreneurial activity among gradutes of b-schools and boosted the rankings of entrepreneur-friendly b-schools then we may have something.

  • bt

    More (would-be) entrepreneurs are applying but that doesn’t mean they are successful. A brief glance at the pre-MBA industry stats of schools such as HBS will show that the picture hasn’t changed that much in recent years and most admits are employees (generally of large blue-chip companies).  

    And yes, more schools are offering entrepreneurship tracks but to be a legitimate institution that teaches business, they have to.  Just like medical schools/teaching hospitals have to teach plastic surgery even though they surely don’t want high numbers of students to enter that field.  

    B-schools want people to find jobs to boost up their own numbers/reputation and cement their relationships with important and influential companies.  Also, most entrepreneurs are unsuccessful so why would a top b-school want to associated with failures when they could be associated with F500 companies? 

  • Deborah

    bt,
     
    As it turns out, more (would-be) entrepreneurs are applying to business schools and more schools are offering entrepreneurship tracks, so I would not say that adcoms do not want these candidates.
     
    Deborah

  • Basically.  I went through the same thing.  Although I had started something, at the end of the day, Adcoms want you to hit the job market and halp boost their numbers.  My bschool process taught me a lot about the BUSINESS of bschool. It’s amazing how many people are making money on this thing….

  • bt

    Are there really people out there who don’t understand that being an entrepreneur needs risk-taking with no promis of a steady paycheque?

    Also, trying to convince adcoms that you want to be an entrepreneur directly after graduation when you have no past history in that field is a really bad idea. That’s the quickest way to get your app on the top of the reject pile.  Adcoms want people who go to regular post-MBA jobs such as consulting and finance.  Most adcoms know that you’d be better off spending $150K trying to be an entrepreneur than getting an MBA so you can be an entrepreneur.