Stu Wall's Tumblr Blog: Why MBAs Fail at Entrepreneurship
Must-read post if you’re building a company or thinking about getting an MBA.
5 pitfalls for recent grads starting a company
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 Spark Capital.
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.
All five points are solid but I particularly like Stu’s theory here on Risk Aversion:
Risk Aversion – IBanking won’t pave the way to (tech) entrepreneurship
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.
YES!
what motivates the work that you do?
are you chasing money or do you aspire to do something that’s meaningful to you and the world?
if you aspire to do something meaningful, are you doing it? if no, why not?
life’s too short to do work that means nothing to you.
“In the early days at Google we joked about not having a plan, we would say that “we have a 6 month roadmap and a 15 year vision - everything in between is somewhat blurry”. That is what I want founders to think about. I always get great answers for the 6-month roadmap. It’s easy. But what is the VISION for 15 years out?”
What’s the vision? - StartupTalk
the plan will change. the vision provides meaning and keeps everything moving forward. through challenges and failures, a vision reminds you why what you’re doing matters.
what’s your vision?
creating awesome from scratch
what do successful programming, art and entrepreneurship have in common?
the desire to create awesome from scratch + the ability to market that awesome well…
- the desire to create: a genuine interest in creating something from scratch (that creates value and is bigger than yourself)
- the ability to market: knowing how to tell your authentic story and inspire action around your product (aka strategy to monetize, scale & having a strong leader)
on the note of having a strong leader with true interests, last week i went to lunch with mark. mark is a genuine, insightful and curious person who balances probing questions with focused listening. you can always tell a lot about a person by how they interact with their phone during a meal or while grabbing a drink. mark’s the type who gives you his undivided attention (a talent that i think is becoming rare in our society). i’d guess mark owns an iPhone but I really have no idea because he didn’t use it once during our entire conversation. (this was very refreshing.)
mark made plancast - a site that helps you manage and share your upcoming plans with friends. if you haven’t checked it out you should. it’s awesome.
in our lunch we talked about start-ups, technology, engineering-led businesses verses marketing-led businesses and the relationship between the engineer and the marketer… we discussed life philosophies, theories on failure, the psychology behind motivations and the like. i was completely entranced in the conversation from start to finish.
our convo really got me thinking…
mark is a developer who creates web technology.
i am a writer who uses web technology to communicate.
mark’s language is code. my language is words. i combine words to create meaning. mark combines code to create technology that enables meaning to occur. “assisted serendipity” is how mark refers to what he does. his goal is to make it easy for people to come together in real life. “inspiring action” is my goal. i want to share stories that make it easy for people to act on their ambitions. the key themes here are creating, inspiring, connecting, taking action…
mark and i also discussed the notion of being an entrepreneur. an entrepreneur is simply someone who takes on great financial risk to organize and operate a company. similarly, an artist is someone who takes on great risk (mainly time + energy aka personal capital) to create something from scratch.
programming is an art that becomes a business when its value is effectively communicated and demand for that product is high. the same goes for writing (and any other art). in essence, who we are and what we do is a product that we create and build. everything is a work of art.
like fred wilson, it was always ingrained in my head that someone is or is not born an entrepreneur. but perhaps it’s whether or not we have the desire and perseverance to create from scratch. is it that we either want to get our hands dirty and create things or we don’t?
i strongly believe that the business / marketing mind should be involved in the very beginning of the development process (and i’m specifically thinking of consumer technologies). we must study and master the needs of the consumer early on, and factor those into development. we must understand the people behind the product and the relationship those people have with the brands and companies who will help monetize the product (through value creation). i also think having a leader who knows how to see, articulate and sell a vision combined with the ability to prioritize and establish success criteria is critical to a company’s success.
what do you think? i’m still ruminating on all this so please feel free to chime in…
sex, art & entrepreneurship
artists create things from scratch.
entrepreneurs make things happen (from scratch).
art means nothing (in the eye of the consumer) when it’s incomplete.
entrepreneurship fails when the product and market never fit.
someone once told me the parallels of art and design to sex. another person told me entrepreneurship is a lonely path. i can see both sides.
art is selfish, like masturbation. entrepreneurship takes teamwork and communication, like sex. mastery of one potentially improves (or enhances) the other. but one without the other is a very lonely path.
—
photo via @gapingvoid
“Are you cobbling together a start-up in New York City and looking for cash? Good news: A lot of wealthy and wired people want to write you a check.
Meet the newest batch: Lerer Media Ventures, a new fund run by Huffington Post co-founder Ken Lerer and his son, Thrillist co-founder Ben Lerer. The two men say they’re closing the fund’s first round in the next few days. When they’re done, they will have around $7 million to put into angel/early-stage investments–primarily in New York tech/media companies, though they intend to play on the West Coast too.”
Lerer Media Ventures Joins Angel Investment Scene in New York
go NYC, go!
“Since early 2008, at least several dozen web-based startups have made New York a hub of web innovation. Startups like Boxee, Bit.ly, Foursquare, Daylife and numerous others have established New York City’s prominence as a nurturing environment for early-stage activity. Some seek to solve problems that are unique to an urban environment (Foursquare), or provide solutions that accelerate the disruption of incumbent New York media, including ad optimization (Quattro, Quantcast, Tremor Media. Others are participating in general startup trends, such as location-based activity (Outside.in, HotList), while still others are exploring entirely new forms of content and navigation (Boxee, Worldwide Biggies, Next New Networks, Someecards).
Why is the renewed activity in New York different from the last boom, of 2000-02? Several things have converged to suggest that New York is becoming a larger — and more permanent — center of web innovation and entrepreneurship. The talent pool of software engineers, designers, and programmers has expanded significantly in Lower Manhattan and Brooklyn, a clustering of human capital that provides a pool of employees to staff startups. Meanwhile, opportunities for innovation in New York have surged as well. Disruption in the cable, television, newspaper, book, advertising, magazine, ad agency, ad network, music and finance industries accelerated during the 2008-09 economic collapse. And web entrepreneurs are building products and services that provide consumers with better, faster, more convenient solutions than existing one, notably those provided by declining traditional media.”
Media-related Venture Activity Is in Bloom in NYC – GigaOM
that’s what I’m talking about…
“So, I made plans to go to lunch with Fred. And then the day before, the morning of, Fred canceled on me. And it was the reason that he canceled that made me realize that he was the partner for me. He canceled because he had forgotten it was his daughter’s graduation from kindergarten. His daughter, by the way, is now at Wesleyan. And what moved me was, this is a guy whose values are in the same place as me. He was going to cancel a business lunch with a potential partner so that he could go to his daughter’s kindergarten graduation, and that’s the moment when I knew he was my partner.”
yet another reason to heart @fredwilson
“I believe that entrepreneurship is more than just starting a company; it’s a lifestyle that forces you to take charge of your own actions and is the fastest way to grow and develop as a person.”
Scale Well: funding traction in scalable businesses
“$1000 for your company. No strings attached.”
chitown buddy and ex-coworker Andy Angelos just launched this project.
ScaleWell is designed to provide entrepreneurs and startups with capital to reach milestones and gain traction. sounds awesome.
How it works: $1000 and coworking space for you company
Applications are now open and will close on January 31st 2010.
awesome. also dig the simplicity and straightforwardness of the site. way to go Andy!
