Any entrepreneur who has survived the startup experience is familiar with the shoulda-woulda-coulda phenomenon. For most, 20-20 hindsight comes too late. It brings pangs of regret and not much else. But for budding entrepreneurs who are about to take the plunge, others’ mistakes offer valuable lessons. So we’ve asked several successful MBA startup founders the question any would-be entrepreneur would pose: If you could do everything all over again, what would you do differently?
When Harvard MBA Victoria Ransom and Stanford MBA Alain Chuard were building Wildfire, their social media marketing company, they were confronted with a common challenge: How much money should be raised to fuel the company’s growth?
In the four years since the pair founded Wildfire in 2008, they raised a total of $14.1 million from a group of investors led by Summit Partners. Several of Wildfire’s competitors were far more aggressive with both seed and venture capital. Rival Buddy Media, for example, rounded up $90 million in venture money. With that larger treasure chest, Buddy Media could fund a far more aggressive marketing effort.
“In general,” says Chuard, “we were always pretty lean as a startup and we only raised as much money as we needed. They put a lot of dollars into brand awareness marketing with billboards in airports and large ads in magazines. That built awareness for their company. In terms of pure revenues and numbers, we were almost the same size, but they were perceived as the industry leader.”
Salesforce bought Buddy Media in June of 2012 for $745 million in cash. Little more than a month later, Ransom and Chuard sold Wildfire to Google for a reported $450 million, including $100 million in retention bonuses. “In retrospect, I would have raised a bit more money and put more money into marketing,” adds Chuard. “On the other hand, we were a boat riding behind another boat in the shade. They basically carved the space for social media marketing–not just for their company but for the industry in general. We indirectly benefited from a higher valuation because of it.”
RelayRides: Set expectations up front
Shelby Clark would change a decision he made when his startup was practically embryonic. While a student at Harvard Business School in 2010, he started RelayRides, which allows car owners to rent out their vehicles in a virtual marketplace.
On the company website, Clark is listed as the sole founder–but that wasn’t supposed to be the case. Two of his classmates were initially involved. Unfortunately, one dropped out after six months, and within a year, the second one followed suit, leaving Clark on his own.
Since Clark went to business school with the explicit purpose of starting a company, this turn of events caught him off guard. “Entrepreneurship is a big buzzword on business school campuses,” Clark says. “The reality is that most people are risk averse, and coming out of business school with $100,000 in loans, they’re going to take a consulting job. And that’s what happened with my co-founders.”