What MBAs Can Learn From Entrepreneurs
In some startup circles, an MBA is as valuable as a janitor. Actually, many engineers would argue that a good janitor is more valuable – They certainly cost a lot less. In fact, MBAs are viewed as one-trick-ponies – better versed in talking than doing – at some Silicon Valley digs. So how can an MBA gain acceptance in the frosty tech biz?
In a recent Huffington Post column, Asu Dubey, co-founder of 12 Labs’ Applause, outlined several steps that MBAs can follow to gain greater credibility. And it starts with learning a language – a programming language, that is. “The best way to make an impact at a startup and earn the respect of engineers is learning how to code,” writes the anonymous author (who admits to holding an MBA). In doing so, MBAs can serve as a bridge between the technical parts of the job – and how they relate to the bigger picture that they learned in business school. Even more, MBAs who know code can help out in a pinch, further increasing their value.
Second, MBAs should understand their role. “An MBA doesn’t make you immediately productive at a startup,” writes the author. “Even if you are involved in marketing or business development, which are critical functions, engineering will almost always take precedent at a startup.” Even more, MBAs may need to adjust how they communicate. “…use a common language people understand. Try to not to use words like strategy, top-level, value, framework, etc. in everyday speech; there are better words available. Secondly, stay away from frameworks — nothing puts off startup employees and founders more. Even if you have a framework in mind, just break it down into its components when communicating.”
Finally, Business Collective counsels MBAs to play to their strengths. And one of those is being able to take the 30,000 foot view. “Engineers have a tendency to get bogged down in details and often miss the big picture. Time to use your business skills! A good way to demonstrate how smart you are is to intervene at the right time, such as during product review meetings.” Another is networking. “You can connect with a venture capitalist you know from your business school days or even get in touch with a contact at a top tech firm your company can partner with.”
At some business schools, aspiring MBAs learn such lessons in the classroom. Harvard Business School is one example. Here, students are required to spend a semester working in teams to build a startup. In a recent post on Wall Street Oasis column, Phil Hu, a HBS second year who has already worked for Disney, Microsoft, and McKinsey, shared his lessons from successfully launching cleverlayover, a model that helps travelers identify less expensive flights.
His biggest lesson: You need to look beyond a pain point to establish a value proposition. “A common pitfall in entrepreneurship is not focusing on solving a customer problem,” Hu writes. “Too many startups have tried to create behavior changes without addressing a pain point. In order to avoid this, Harvard took all the students through an ideating process that began with identifying a customer need. However… it doesn’t always help to start the ideation process by identifying the pain point. We came up with cleverlayover by looking at flight data and realizing that inefficiencies exist in the market. cleverlayover solves a real problem: finding cheaper flights. In fact, this is the most fundamental value proposition in travel. Finding a cheaper way to reach a destination will always be in demand, but had we started with identifying a problem, we’d never choose “finding cheaper flights.”
Second, Hu urges students to build their models around their skills sets, resources, and timelines. He notes that his team selected cleverlayover because the model lent itself to the team’s talents (as well as cutting the sales cycle and promotional costs). “Ultimately, we chose cleverlayover because the main challenge for this business model is developing the analytics. Given our team’s strengths and weaknesses, we felt most suited to address this challenge.” And one of the team’s biggest strengths was a varied skill set, which stems from HBS’ push for students form diverse teams. “[It] pays off tremendously, allowing students to form teams that include operational, marketing, financial and technical expertise. Many of the businesses were successful because they combined great operators with domain experts.”
Finally, Hu reminds students that uncertainty is natural – and not altogether bad. “…when founding a startup, no one has clear deliverables or set schedules. Often times, teams react to this uncertainty by looking for points of validation such as raising capital and adding advisors or by creating artificial deliverables that distract from the main goal of building a business. In less than six months and with limited capital, many [HBS] teams created fully functional businesses with profitable customers thanks to a focus on executing despite the lack of a structured environment. Teams should seek to add structure by creating a good operating cadence within the team, not by adding artificial deliverables or seeking capital before they are ready for it.”
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