Why B-Schools Reject MBA Applicants

Don’t Start A Company With Your Business School Pals

‘We’ve become such good friends over the past year. We even finish each other’s thoughts. And we work so well together on projects. Just imagine what we could do if we started our own company!’

Oh boy, here it comes…

You’ve probably heard the cliché, “The road to hell is paved with the best intentions.” Well, so is the path to bankruptcy. In your spare time, you’re probably toying with the next big idea. And that impulse only grows stronger with each model or strategy you absorb in business school. Even the harsh lessons from your case studies don’t deter you. ‘We know all the pitfalls,’ you think. ‘That’ll never happen to us. We’ll beat the odds and make this work!’

You may have mastered the abstract principles, but one factor is always certain to surprise you: Human nature. While your study buddy may seem like a perfect match, you never really know people until you work with them every day and see how they react to adversity or (worse) responsibility.

That’s the basic point of a recent Harvard Business Review post by Michael Fertik, a serial entrepreneur. He labels this instinct, “The cool kids start companies” syndrome.” And he warns that you and your classmate will probably not turn out to be “Batman-and-Robin” (Actually, the dynamic duo is an apt metaphor, as Bruce Wayne and Dick Grayson have split up and can barely stand each other).

So why is your partnership more likely to end up on a court docket than Fast Company? Fertik shared a few insights:

Too Similar: According to Fertik, business school students often share “the same blinders,” meaning they may not be able to anticipate the “questions, factors, and influences” that someone outside of their background might foresee. In Fertik’s opinion, “Sharing the same strengths is just as risky as sharing the same weaknesses.” To succeed, Fertik believes a start-up must have founders with vastly different skill sets, such as technical aptitude and marketing.

Different Values: Ever been married? Bet you were surprised when your partner wasn’t as neat (or sane) as you thought from dating. And those issues you swept under the rug – finances, religion, child-rearing – sure spark conflict once you go all in. The same is true of any partnership. In Fertik’s experience, “unless you’re asking each other very tough, pointed questions, the way you each perceive and live your values is shrouded in mystery.  But rest assured: you’ll almost certainly see reality at precisely the worst possible moment for you and the company.”

Different Risk Tolerance: Want to learn the true character of any business leader? Just watch how they react to missing payroll. You may have grown up with thought leaders jabbering about the joy of risk…but just put your condo up as collateral! It’s a whole different game then. According to Fertik, business partners “can have stratospherically different levels of tolerance for risk.  Your co-founder may go home, look at her bank account or see his kids’ faces, and succumb to perceived financial pressure to look for a so-called “real job.”  We may intellectually understand what’s required of us as co-founders but it may feel very different when we’re in the blood-and-guts of daily decision-making.”

Finally, Fertik notes that business school isn’t conducive to establishing real relationships, calling it a “highly artificial environment – where socialization with others is notoriously cocktail party superficial.” He adds, “The harsh light of everyday life often reveals a completely different person.  Someone who copes just fine with a professor’s deadline or creating a mock business plan could crumble under the pressure of your first pitch to a VC.”

So what’s the verdict? Choosing a business partner can shape your life as much as marrying a spouse. If you’re going to take that leap of faith, do your homework and ask some hard questions, Even if you believe you’ve met your match, you should still follow Ronald Reagan’s famous axiom: “Trust, but verify.”

Source: Harvard Business Review