AN UNLIKELY RISE FROM A GARAGE TO A UNICORN
Besides the resources, one of the most beneficial aspects of launching a venture from business school is meeting founders — one of the reasons schools like Wharton, UC Berkeley, Carnegie Mellon, and others have recently put millions into creating physical spaces for cross-discipline teams to meet and collaborate.
One example of that meeting and collaboration is Stanford-founded Branch, a software platform that links apps. Branch was the third idea from MBAs Mada Seghete, Alex Austin, Mike Molinet, and Stanford University engineering drop-out Dmitri Gaskin. It’s the classic Silicon Valley success story. “I always dreamed of Silicon Valley,” Molinet told me more than two years ago in the Redwood Room of their office at the time in Palo Alto. They’ve since out-grown it and moved to a massive office complex in nearby Redwood City where they now have nearly 350 employees — Molinet says about 100 of those have been added in 2019.
When Molinet, Seghete, and Austin arrived on Stanford’s Northern California campus in 2012, they all did so to find founders and launch a company. They found each other and even though they weren’t friends at first, they became friends as they worked on different startup projects. After two-failed projects — and after Molinet and Seghete both turned down summer internships that paid $11,000 a month — the trio added Gaskin and came up with the idea for Branch.
“I slept on couches for three months,” Molinet says. “That summer between first and second year, I ran out of money and slept on couches for three months just so we could work on this.”
Upon graduation, the team once again ditched the traditional path of full-time jobs, and Molinet lived in a garage for two-and-a-half years because the rent was “only $400” in the garage. “Like un-insulated, not finished, really crappy garage with bugs and mice and everything,” Molinet clarifies. “Because the rent was $400 bucks. You can’t find cheaper rent than that in Palo Alto. I preferred to live in a garage in Palo Alto and work on Branch than have a nice apartment in San Francisco working for some company. It’s just what I preferred.”
Molinet says he kept that from his parents for as long as he could, but it’s that sort of going “all-in” that is required to get a startup off the ground, Molinet maintains. “One of the things I like to recommend to folks as they are considering starting companies is to go all in,” Molinet advises. Often times, Molinet says, people will go one-foot-in, one-foot-out. Or try the side hustle while they are working a full-time position. “That can work,” Molinent continues,” but what worked best for us is we committed all the way to whatever idea it was that we were working on at the time.” That allowed them to really focus and accelerate the idea and their skill sets.
“We stopped caring about all the other things going on,” Molinet says. “We stopped going to parties and hanging out with friends. We just started working as much as we could every spare minute on this idea.”
All of it could’ve been a really bad idea, Molinet admits, but here they are six years later with more than $242 million in venture-backing, a company acquired, and a valuation estimated to be around unicorn status.
“Business schools is the lowest risk time during which you can start a company, so take advantage of it,” Molinet insists. “Because worst-case is you come out of business school with a degree and you get a job pretty much anywhere.”
SOCIAL INNOVATION GAINING GROUND AMONG MBAs
Of course, it’s not all about raising seed capital and liquidity exits. Entrepreneurship directors say that today’s generation of MBA students is increasingly interested in social entrepreneurship. “The biggest change I’ve seen here over the past 16 years is a real shift amongst students wanting to use entrepreneurship as a means to make an impact through their careers,” says John Stavig, the program director at the Holmes Center for Entrepreneurship at the University of Minnesota. “They’re a lot less interested in a paycheck from a company or the potential windfall of a startup exit. At the MBA level, we’re seeing a lot more students wanting to come back and develop mission-driven ventures or long-term projects that they’ll be able to work on long after they’re done with school.”
That’s true at Babson College as well. “I guess I would call it a social conscious or wanting to do something that has meaning and purpose,” says Candy Brush, the vice provost of Global Entrepreneurial Leadership at Babson. “They care deeply about things like water or conservation or the environment. They’re coming here to learn business skills to apply to some of those problems. It’s not just achieving an economic outcome — you have to do that in order to sustain an enterprise— but it’s also considering the social implications.”