Sometimes, the third time is indeed the charm. And for a trio of Stanford Graduate School of Business MBAs and one Stanford University dropout, the third go at a startup has proven to be a $53 million venture capital-backed Charm. Branch, a software company that creates “deep app links” so users of apps may be directed to specific pages within a mobile app, came to Mada Seghete, Alex Austin, Mike Molinet, and Dmitri Gaskin on a Sunday afternoon in the spring as their time at Stanford’s GSB was rapidly waning.
The group had already struggled through one failed venture and had abandoned a relatively successful one after a year of work. Branch quickly became an entirely different story. The result has been multiple rounds of VC and angel investments, growing the staff from 40 employees to 90 in 2016 and taking over a three-story office space in downtown Palo Alto. That success has also placed them 12th on Poets&Quants’ Top MBA Startups of 2017 ranking.
Branch represents exactly what the P&Q startup ranking is designed to do: Identify founders who used the B-school experience to launch a highly successful venture. Seghete, Austin, and Molinet all converged at Stanford’s Northern California campus in the fall of 2012 from very different professional and geographical places. But they all shared one commonality. They were fed up with how their previous employers were operating. Austin, an electrical engineer turned software developer, spent five years at Silicon Valley-based solar startup, MiaSolé. Molinet left his position as a product development engineer at 3M in the Twin Cities area of Minnesota. And Seghete had previously popped around different roles in various startups and for Deloitte.
“I always dreamed of Silicon Valley,” Molinet tells Poets&Quants in the Redwood Room at the front of Branch’s headquarters. After a tour of the space, which was highlighted by pieces of furniture made by Molinet himself, both Seghete and Molinet graciously took turns answering questions. Their industry moves incredibly fast, they say multiple times–and so do they. As one took the lead in answering a question, the other immediately went back to whatever Apple screen was closest.
THE SILICON VALLEY CONVERGENCE
And fast is what Molinet sought out in a career shift that would be buoyed by an elite MBA. Applying only to Harvard Business School and Stanford’s Graduate School of Business in round 1 in 2011, Molinet had his sights set on a specific goal. “Ultimately I went with the intention to start a tech company based on software,” Molinet says, noting he read the Techcrunch blog “two to three hours” a day and was fed up with the slow pace of corporate bureaucracy. “I remember thinking if I’m going to go, quit my job, spend $200,000 on an MBA, I wanted it to be at a top five institution,” Molinet recalls. So when the GSB beckoned, the decision for Molinet was simple. “It (Stanford) is at the center of Silicon Valley and the center of tech,” Molinet says. “Also, I was living in Minnesota at the time, so, sunshine and warm weather were a draw.”
While Seghete was already in the San Francisco Bay Area, her arrival was somewhat unlikely. “I grew up in Communism. I came from Romania. I never thought I would start or own my own company,” Seghete says. “My dream, I guess, was to work in a bank someday.”
Until she was awarded a scholarship at Cornell University to study electrical and computer engineering. And when you get a scholarship to study engineering at Cornell, you go. Upon graduation, Seghete spent a year as a software engineer at Siemans until she was unable to attain a work visa to stay in the U.S. So Seghete applied and was accepted to Stanford’s management science and engineering master’s program in 2006. “That was when I was first exposed to Silicon Valley,” Seghete remembers.
It was Michael Dearing, a Stanford faculty member, who ignited the entrepreneurial fire for Seghete. “I remember the day I wanted to become an entrepreneur,” Seghete recalls. Her and Dearing were talking after a class. Seghete was explaining her desires and hesitations to being an entrepreneur. “He (Dearing) looked at me,” Seghete recalls, “and said, ‘Mada, if you are not going to build the next company, who do you think will? Do you think there are better people out there?'” Except Seghete had already accepted a position as a business analyst for Deloitte. “Worst year of my life,” she recalls. “Because I am a builder and in consulting you don’t build, you advise.”
After a year, Seghete spent four years at San Francisco-based SaaS startup, Yola.com before applying and being accepted to Stanford’s full-time MBA program.
STARTUP ATTEMPT NUMBER ONE: A ‘FITBIT FOR DOGS’
The trio met during admit weekend in the fall of 2012. While they weren’t best friends, Seghete says they all admired each other’s work and classroom presence. During the first semester, Seghete met with Austin and he told her about various projects he was working on. Molinet approached Austin separately and the same thing happened. With an idea and team in place, the three applied to Stanford’s infamous Launchpad course in the Design School. According to the course’s website (yes, the course has a super trendy website), since 2009, 90 business ideas have been tested in the course and more than 50 are still operating businesses.
“It forces you to build something, sell something, and incorporate,” Seghete says of the course. The idea the team took through the course? A dog collar that was essentially a “Fitbit for dogs.” While the idea wasn’t the unicorn they were in search of and the team pretty quickly abandoned it, they learned something about themselves and how they worked together. “It really formed us as a team,” Seghete continues. “We learned what our strengths and weaknesses were, what we were good at, how we complemented each other. And it forced us to decide if we were going to spend the summer working on something or take internship offers.”
Molinet saw it the same way. “The skill sets the three of us had going into the class were very well aligned,” Molinet concurs. “We realized in that class the market wasn’t good enough for that to be a business, but the team is really good together.”