#midventures

tonight i got a fish hook in my arm

This February, I was invited to speak at Wharton’s Entrepreneurship Conference and on a Chicago Booth panel on Offsite Development, on behalf of Dashfire.  My panelists were impressive: Doejo and MidVentures at Booth; and Smarter Agent and Punchh at Wharton.  The audience was engaged, and as MBAs, super bright. The panels discussed a variety of start-up topics, but the most recurrent theme was deconstructing the theory that all companies must start with a technical co-founder.

The current web and mobile start-up eco-system does not support MBA entrepreneurship. Don’t get me wrong, business schools do all that they can via business plan competitions, new venture challenges, entrepreneurship-in-residence programs, office hours with VCs, and connections to notable alums.  And MBAs are eager to explore start-ups –  just read their admission essays. However, the power players – investors (angels and VCs), lead engineers, and incubators – are often hesitant to partner with lone MBAs.  Notably,  leading accelerators such as yCombinator and TechStars prefer companies with 50% + of the team equipped with engineering experience. They are right; who wouldn’t want to have an engineer on the founding  team?  The unfortunate reality, however,  is that that there is not a one-to-one correlation between big ideas and accessible full-time engineering expertise.  I polled the  audience at Wharton to see how many in the room had  engineering expertise: only one… out of 75 people.

Does this mean that MBAs (or bankers, consultants, industry experts) should not pursue their ventures?  No.  This cohort of people is being recruited to lead Goldman Sachs, P&G, and Google.  They can identify problems and challenges, strategize solutions, and build teams. They have invaluable networks, access to capital, and while in school,  an optimal perfect demo market in their diverse set of peers.  If the only way they could build their vision were to wait to secure a  technical co-founder, the marketplace would continue to have an abundance of powerpoints and business plans but would be devoid of products and businesses.

There is not just one way to start a tech business*. If your roommate can develop a product for you, awesome, but if not, there are other options for MBAs to get started.   Design a proof-of-concept (front-end developers are easy to find).  Use WordPress. Find an offisite team to build you a product.   Just do something.   Build a product, generate feedback, acquire customers, and even earn revenue (i.e., business proof).  And then go pitch investors and assemble  the rest of your team.  A product, business proof, and an MBA create a much more attractive pitch than a few well-formatted slides.

*Check out Reid Hoffman’s (founder of LinkedIN) rules on how to build companies.  http://read.bi/f5Awjd. Rule #10 is below:

Rules of entrepreneurship are guidelines, not laws of nature. Do not pay too much attention to rules set by other people. Entrepreneurs are inventors. They are successful when they make something work for the very first time. Sometimes in order to make something work, you will drive over the guardrail of one of these rules. Entrepreneurs sometimes just make new rules.