“They don’t like two MBA founders, so try to de-emphasize you went to business school” we were told shortly before our interview with Y-Combinator, the well-known startup accelerator that provides seed money, advice, and connections to entrepreneurs.
It’s no secret that the selective accelerator doesn’t necessarily appreciate the normal MBA mindset. “Write code and talk to customers” are two of the mantra’s of YC, and so it’s tough to see how an MBA better prepares you for either one.
That being said a lot of the normal MBA mindset doesn’t apply to starting a company either. Much of modern MBA programs focus on basic business accumen (strategy, finance, etc.) or people management. As a startup founder, you’ll have to do everything yourself initially. My co-founder and I were lucky enough to go to Stanford GSB, where we could self-select into learning a ton more about startups.
So here’s my advice to MBAs hoping to get through the Y-Combinator filter.
Focus on building one great product – and prove you’re able to build it!
You had better be able to write enough code, design enough of a website or mobile app, or make a huge amount of progress on the product yourself. This doesn’t mean you need a long-standing career at Facebook, Google, or Apple, but it means you can “hack-it” enough to viably test your hypothesis.
For Carlypso.com – our product was selling cars. To do so, we started out doing everything by hand, than learning what needed to be put into code. While Nicky had studied computer science in undergrad his main language of choice was PHP (not exactly cutting edge). Nonetheless, his PHP with some of my python was enough to get us a working website, CRM system, and a pricing model which helped us price the value of any given car, and to be able to start getting new sellers on our platform.
Recognize that an MBA in and of itself isn’t an asset to starting a company
Nothing about your MBA in and of itself will get you ahead. It’s a credential. Nonetheless, hopefully something you learned will be an asset in starting a company and that’s what you need to emphasize.
For us, we had taken away case examples on how AirBnB “growth hacked” craigslist. So before ever stepping foot in YC we tried similar tactics (unsuccessfully) so we could actually meaningfully talk about these experience rather than regurgitate some boilerplate lesson.
Get your hands dirty, and “do things that don’t scale”. Just don’t do things that “have no chance of ever scaling”.
As an MBA you’ll have a natural tendency to want to “outsource” activities that just seem below your pay grade. The problem with starting a business is that you actually have no pay grade… so everything is below it and that can sometimes take a while to come to realization.
To get something done, sometimes it means doing stupid things that you know you can solve later but are quite a royal PITA to do now. For us at Carlypso – having a clean, freshly detailed car really made the difference between a sale and another week of listing the car. In the early days, we washed cars by hand ourselves just to ensure that we could quality control the cleaning and photography of the vehicle.
Have some authenticity to what you’re building.
You can’t just be opportunistic. “I wanted to start a business” or, “I heard there was a huge opportunity” or other boiler-plate answers for WHY you started this business just won’t cut it. Furthermore, more than anything there’s got to be a level of confidence that when things get really tough – you’ll stick with it. And most of the time it means there’s some intrinsic motivation to what you’re doing beyond some opportunity or thematic idealism about entrepreneurship.
At Carlypso – I simply love cars. I had spent years working at other startup car companies, and even my dream company McLaren to know I wanted to start a car company. And being intrinsically motivated about something has different implications – it means you’ll be better at this subject matter purely because you want to be the best.
Speak like a normal person
Don’t use tell-tale signs of former consultants or bankers – “synergy”, “IRR”, “EBITDA”. None of this crap matters and no-one actually understands it in a way that makes your business better.
Chris and Nicholas are two Stanford MBAs who started Carlypso.com, a website devoted to the sale of used cars. Roughly 20% of their graduating class of about 400 MBAs said they wanted to start their own companies and 10% applied to Y-Combinator for help. Eight students, including Chris and Nicholas, were selected. Chris worked at the consulting company McKinsey & Co before returning to the automotive world at Coda Automotive and McLaren Ltd. Nicholas gained experience at Bain & Company and Merryll Lynch. He has always been an entrepreneurial thinker and for years has been intrigued by making people’s lives easier.