So if you’re just starting a company because it’s the sexy thing to do, you’re probably in the wrong industry, according to Freddy Kerrest, co-founder of Okta and an MIT Sloan MBA. “Don’t just try and start a business because it’s the hot thing because it won’t be hot forever, and you’ll still be in that business.”
3. Launch in business school
With a bevy of professors, seasoned entrepreneurs, and accelerator programs at your fingertips, there is no better place than B-school to launch a business, according to CloudFlare founders Michelle Zatlyn and Matthew Prince. The two developed their idea for a website security service as an independent study project at Harvard Business School and used the Business Plan Competition to catapult CloudFlare from an idea to a funded company.
Less obvious boons–like email addresses–can also prove helpful. “As a student you can email anybody. The .edu address is really powerful,” Zatlyn says. They got in touch with leading networking experts, top computer scientists and even an acclaimed logo designer, who crafted CloudFlare’s emblem at a steep discount.
Then, there are the more practical considerations, like taking out student loans to cover your cost of living and saving face after failure. “You can start a company without quitting your job or taking a second mortgage on your home,” Zatlyn says. “There’s a cover. If it doesn’t work out, you can still say I was at Harvard Business School or wherever.”
4. Go big or go home
“When you look for startup ideas, you can gravitate toward the ideas that are just applicable in your life and easy to grasp,” says Tuck School of Business MBA Jason Freedman of 42Floors. “And those ideas are generally pretty bad.” Travel journals, recipe swapping sites and local event calendars can be nice, but they’re unlikely to lead to a home run. “Local events just aren’t that big of a problem in this world, and so when you do that type of a startup, it goes nowhere.”
“To do truly disruptive change, to really have a shot at changing the world, there has to be some reason that everything is the way it is,” he adds. In other words, there are vested interests in the status quo–and a worthwhile startup should push these boundaries. In his case, that meant getting New York City’s network of landlords and brokers to share commercial real estate information on his website. “We met with all the brokers and all of them said no, and so there we were, nine months into the company with a beautiful website and no real estate listings on it.” Finally one caved, then another–the effect snowballed. Now the site lists more than 2,000 office spaces in the city.
Okta’s Freddie Kerrest also advises going big–in a more financial sense. Mega markets offer better odds for success. “It’s easier to get 1% of a multi-billion dollar market and build a nice $20-$100 million business than it is to think you’re going to get 50% of a $100 million market,” he explains. “So make sure you’re going for a really big market with a really big goal.”
5. When all else fails, commit and persevere
Even if you successfully heed the advice of veteran entrepreneurs, there is no guarantee that your startup will succeed. If there was, an MBA would’ve bottled it up by now and sold it for billions. But tenacity can take you a long way. Nearly every successful startup founder Poets&Quants interviewed mentioned sheer will and perseverance as crucial to surviving the dog-eat-dog world of entrepreneurship.
In fact, Borgman notes that commitment can be the key differentiator among fledgling founders. “You could do investment banking, consulting, or work for Procter & Gamble. You have all these options that are all around you and often many of them are lucrative and a lot less risky,” he says. “But you have to throw all of those to the side and say, ‘I know there are other options for me, but I’m just going to do this, and I’m going to make this successful at all costs.’”
In the end, entrepreneurship needs to be a calling, not a job, says David Klein, who co-founded student loan company CommonBond at Wharton. “You need to ask yourself two questions,” says CEO Klein: “Do you wake up every morning wanting to do nothing else? And does this thing give you a renewable source of motivation? If you can say yes to both of those questions, you’re up for what will be the hardest thing you’ll ever do.”