Why So Many B-School Grads Suck At Starting Companies

Stuart Wall
I began working on Postabon, a bootstrapped start-up, after I graduated from Harvard Business School last June. For eight months my co-founders and I slept on lots of couches, worked from coffee shops, and invested in a minimum viable product. Last month we closed our Series A round with a Boston-based VC.

It’s been an awesome experience. The past eight months changed my view of entrepreneurship, the value of a degree, and a few mistakes that recent grads (myself included) seem make. Here are a few observations from the left-most section of the start-up learning curve.

Execution – VCs don’t give a sh*t about your PowerPoint deck

Execution - VCs don’t give a sh*t about your PowerPoint deck Image: tobiastoft via Flickr

MBAs tend to prioritize funding over execution. In May of 2009 Postabon was a 30 page PowerPoint presentation full of research and ThinkCell graphics on why local would be the next big thing. No one bought it.It’s not 2002. Tech trends like cloud computing, coding frameworks and better browsers means most consumer facing start-ups (without inventory) are really cheap to start. With three months and ~$10K, we created a bare-minimum website and iPhone app that allowed us to iterate daily based on consumer feedback. No amount of time in Baker Library would have substituted.

Building a product will allow you to identify a viable strategy, iterate, and prove your team can win. Research, formatting and nicely worded emails are a prerequisite but by no means a differentiator.

Group Think – Figure out what’s popular, then do the opposite

Group Think – Figure out what’s popular, then do the oppositeImage: foxypar4 via Flickr

MBAs idealize jobs and ideas that used to offer outstanding returns. Private Equity and Hedge Funds offered outstanding salaries to HBS students from 06-08 and thus attracted “top” HBS students. As more talented students pursued these options it became conventional wisdom that everyone should be doing the same.It turns out we’re good at picking sectors to avoid. The Harvard MBA Index has rightly predicted shorting the stock market when over 30% of HBS students go into finance. In 2008 the index hit an all-time high of 41%. Students aren’t the only ones showing up late to parties – in June of 2000 HBS initiated an ill-fated Silicon Valley Campus.

Howard Aiken has a great quote: “Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.” Have the courage to take a path that may not be obvious to your peers.

Team – The person sitting next to you is a bad partner

Team – The person sitting next to you is a bad partner

MBAs are told we’re diverse. We have a great mix of students from lots of countries and previous careers. We tend to discount unrepresented functions like tech and marketing.A turning point for Postabon was finding a CTO who quit his job and dropped out of Harvard to become a co-founder. Without him we wouldn’t have a website or hired the right programmers and designers. He wakes up at 2AM when the site goes down, thinks of things like database replication and recommends books I hadn’t heard of like Getting Real and The Mythical Man Month.

Your best partner is the antithesis of you. As Donald Rumsfeld might say, this person will help you identify your unknown unknowns.

Entitlement – Your 100K diploma won’t make cold calls

Entitlement – Your 100K diploma won’t make cold calls

Getting an MBA is expensive. We spent months studying for the GMAT, writing essays and preparing for interviews so we could quit well paying jobs and incur$80K in debt. Most MBAs justify the expense with the expectation that it will vault them to a kick-ass high paying career. By the time we’re thinking about career decisions, many have a “what will you do for me” attitude.Compare this with (one of many) factories for your soon-to-be competitors: seed incubators. Incubators generally foster humility [e.g. lots of rice and beans] and a singular focus on execution. Graduating teams often have a prototype, customers and – most importantly – passion for their idea.

Entrepreneurship is the truest form of meritocracy where “credentialing” counts for nothing. Be humble and cognizant of your weaknesses, and put your passion for idea show (as opposed to your $$ aspirations).

Risk Aversion – IBanking won’t pave the way to (tech) entrepreneurship

Risk Aversion – IBanking won’t pave the way to (tech)  entrepreneurshipImage: donald judge via Flickr

Assuming a 5 year payback, you’ll need to make $35K a year pre-tax to break even on your student debt. Seed stage start-ups will add to the pain as you inject personal and family money into your business. If you do close on institutional capital, you’ll take a below-market salary that, when added to your debt, will mean a poorer lifestyle than the interns you just hired.You soon start to think about joining an investment bank for the next 2-3 years so you can continue to learn and save up before you make the leap of faith. There are two problems with this theory: 1) most investment bankers hate their jobs 2) the corporate life is another bubble with similar pitfalls to MBA programs.

The seed experience had frequent “character building” periods that I suspect are more difficult on the tail end of a high paying post-MBA job. More importantly – from my brief experience – no lifestyle improvement would compensate for working on something you’re not passionate about.

Read more: http://www.businessinsider.com/why-so-many-b-school-grads-suck-at-starting-companies-2010-4#ixzz0npAJDT6t

Reblog this post [with Zemanta]

Lo importante es el camino que recorremos, las metas son apenas el resultado de ese recorrido. Llegar generalmente significa, volver a empezar!

Tagged with: , , , , , , , , , ,
Publicado en Businessinsider.com
3 comments on “Why So Many B-School Grads Suck At Starting Companies
  1. Beaver Falls Bob dice:

    Change in Financial Reform Law: Hedge Trimmers, Not Hedge Funds to be Regulated – story by SPN Headlines at:


    Keep smiling! :-)

    Me gusta

  2. Información Bitacoras.com…

    Valora en Bitacoras.com: MBAs tend to prioritize funding over execution. In May of 2009 Postabon was a 30 page PowerPoint presentation full of research and ThinkCell graphics on why local would be the next big thing. No one bought it. It’s not 2002. …..

    Me gusta

  3. […] This post was mentioned on Twitter by Gabriel Catalano. Gabriel Catalano said: Why So Many B-School Grads Suck At Starting Companies: http://wp.me/pxR2I-Zn […]

    Me gusta

Los comentarios están cerrados.

10:00 am to 05:00 pm | Mon-Fri
+5411 4954.0022 / +54 911 6259.7231
Gabriel Catalano

May 2010
« abr   jun »

Enter your email address to follow this blog and receive notifications of new posts by email.

Únete a otros 6.181 seguidores

Being Your Brand

Branding and Strategy for Business and Life

Cruces, Sol y La Imaginación

Cuando la imaginación y la creatividad suman infinito


el mundo del marketing se activa para ti


fanzine bejarano de historietas hecho en los 80

A Stairway To Fashion

contact: ralucastoica23@gmail.com

Vinod833's Blog

This WordPress.com site is the bee's knees

Apasionada de las Redes Sociales

Compartir conocimientos 2.0 y Marketing Online

Zona de Promesas

Blog de Tecnología en Español - Internet - Redes Sociales - Entrepreneurship - Innovación

Top Master | Blog


La realidad alterna

Poesías, relatos, diario de sueños


Startup and Technology News

Unencumbered by Facts

Taking unsubstantiation to new levels

Carlos Cordero

Blog de tecnología

PsicoEmocions Blog

Un Pont entre la Psique i les Emocions



Comunicación & Marketing

De Lilian Lanzieri


Dirección estratégica para la vida

Silvia Altamirano

Writing, English to Spanish

StellarHIRE Partners

Founding Partner, StellarHire Partners - Executive Search Consultants. Recent engagements include Eloqua, SFDC, Tibco and Veeam.

ivanbrunpr's Blog

4 out of 5 dentists recommend this WordPress.com site

Matt on Not-WordPress

Stuff and things.


Noticias de Tecnologia.

T a l e n t o  en  E x p a n s i ó n

Gestión de personas para las organizaciones líderes de la Era del Conocimiento

Two Leaves Tea SPAIN

Great Organic Tea! ✫✫✫✫✫ Te Organico en Piramides

Escuela de Dinero

El mejor Sitio en Español sobre lo básico para entender el Dinero y sus matemáticas relacionadas.

Intentando dejar huella...

...en cada uno de los visitantes

Ideas Para la Clase.com

Portafolio de experiencias en la clase de español para Middle School.

Little Grey Box

Travel & Intuitive Living

déborah rueda

Un sitio más pero diferente sobre marketing digital

No solo los 80's

La mejor música de la historia

Molly Balloon's Blog

Identity + Dressing + Colour

El OJO PUBLICO. / Глаз общественности

Ver para contar & contar para ver. / Чтобы рассказать

Think Creative Idea

Marketing, publicidad, web, stat ups, emprendedores

Social Media y más

Social Media, Redes Sociales, Marketing, SEO

The Coaching Alliance

El camino hacia el éxito

Luces y sombras de las marcas

Social Media, Marketing y Comunicación


Ultimas Noticias de Estados Unidos, Latinoamérica y el Mundo, Opinión y Videos

Javier GM Photography - México y más.

“Un fotógrafo tiene que ser auténtico y en su obra, debe expresar emociones, provocar reacciones y despertar pasiones.” ~ Javier García-Moreno E.

Natalia Gómez del Pozuelo

Experta en comunicación y oratoria


Alimentación, ocio y negocios, ALOYN, es un Grupo dirigido a Directivos y Propietarios de empresas, interesados en el mundo de la industria de alimentación y bebidas. Tanto por la parte de la industria productora como por la parte de la industria consumidora y/o distribuidora (Distribución Comercial, Horeca, Vending, Venta Directa, etc). También nos interesan las actividades ligadas al agroturismo y el enoturismo como magníficas actividades de promoción y difusión de la cultura gastronómica.

Blog de Jack Moreno

Un blog de Joaquín Moreno sobre recursos, literatura y ciencia ficción


Ensalada de Manjares


Recibe cada nueva publicación en tu buzón de correo electrónico.

Únete a otros 6.181 seguidores

A %d blogueros les gusta esto: