Inside My Brain

Thoughts about startups, tech, marketing, and life

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Are MBAs good fits for startups?

There’s an ongoing debate about whether MBAs are good fits for startups.

Recently, Michael Seibel of Y Combinator tweeted this MBA-damning quote:

This led to an interview with Jeff Bussgang, Harvard Business School Professor and General Partner at Flybridge Capital Partners, about the impact of an MBA education on startup founders.

Famed entrepreneur and VC Guy Kawasaki said that MBAs are worth about a negative $250,000 to the valuation of a startup. And Guy has an MBA!

As a startup founder with an MBA, I have some opinions about this. But take this with a grain of salt, because I haven’t done shit in the startup world (yet). :)

With anything, there are pros and cons, and having an MBA in a startup is no different.

MBA good fit for startups

Pros of MBAs in Startups

Generalist Skill Set

I believe the skill set of an MBA fits well with what’s needed at an early stage startup.

Regardless of what specialization was chosen by the student, MBAs receive a degree in general management. Thus, they have knowledge about multiple aspects of business, including marketing, finance, accounting, strategy, and many other subjects.

I believe this fits well with what a startup needs in its early stages – a generalist who can address many parts of the business. And if that MBA has deeper expertise in marketing and growth, the candidate is even a better fit.

Yes, engineers are the most valuable members of an early-stage startup team, because they can actually build the product and get it to market. But having that marketer or business person to do everything that the engineers can’t or don’t want to do is very important as well.

Additionally, many MBAs are numbers-oriented and fluent in analytics, which is necessary to validate assumptions, measure product usage, and assess other trends.

MBAs can help the engineers concentrate on what they do best – developing the product – and add value in many other ways.

Ability to Learn

All MBAs from top-tier schools have at least a few years of work experience before heading back to get their advanced degree, so they have proven their ability to adapt to different industries and work environments.

This ability to learn and adapt is critical to startups. Steve Blank and Eric Ries preach about customer development and the Lean Startup, both of which focus on continuous, iterative learning.

MBAs have proven the ability to learn throughout their careers, whether it’s on the job or in the classroom. So why would anyone doubt that they could do the same in a startup environment?

The Network

One of the most valuable benefits of going to B-school is the network that you gain access to.

My alma mater, NYU Stern, has over 100,000 alumni in over 125 countries across the globe.

MBAs can leverage these massive networks to raise money, find great partners, and potentially help get a startup acquired (if it makes it that far).

Businesses are built on relationships, and business schools can help forge these very valuable relationships.

Cons of MBAs in Startups

MBAs Want More Money and Less Risk

Most MBA candidates went to business school to make more money. Post-MBA salaries are often in the six figures, and candidates can double or triple their pre-MBA income.

And having an MBA decreases the level of risk for the future, since it’s a very marketable degree to have if you’re searching for a job.

This does not jive in the startup world.

Startups are fraught with risk. Depending on the stats that you believe, up to 90% of startups fail, many times because they run out of money.

And because of this, early-stage startup salaries are very low and even sometimes $0.

It’s obvious that this doesn’t align well with the typical MBA’s mindset.

Over-analysis

MBAs are good at analysis, which can be a strength and a weakness.

The ability to process and analyze data is helpful for any type and stage of company. But over-analysis is a bad thing for startups.

Speed is one of the few advantages startups have over their incumbent competition, and many times quick decisions need to be made with incomplete information. MBAs tend to want to collect more data, do more surveys, and just pore over the data until a solid conclusion can be obtained.

Early-stage startups just don’t work this way.

Managing vs. Making

MBAs typically have a few years of work experience under their belts, and many of them have moved up from some lower-level analyst position to a manager role.

Once you become a manager, going back to actually doing the work can be extremely difficult.

After years of hiring people to write blog posts, would you want to do it yourself?

Do you even remember how to build that revenue model that your analysts have been creating for you when you were working at that investment bank?

YC co-founder Paul Graham wrote the seminal article about the maker’s vs. manager’s schedule.

Early-stage startups need makers, not managers. And unfortunately it’s very difficult to revert back to being a do-er after managing people for a while.

Conclusion

Michael Siebel and Guy Kawasaki obviously have their negative opinions. But there is a good amount of evidence that MBAs are good startup founders.

David Fairbank, formerly of NextView Ventures, wrote a great piece on how MBAs have been successful founders.

Entrepreneur-turned-academic Vivek Wadhwa said that his MBA from NYU Stern (yes!) was the best investment he’s ever made.

And Poets and Quants has plenty of articles about the success of MBA startups, like this one.

So what’s the verdict? Is the MBA good for startups?

Like many arguments, it depends.

Personally, I think an MBA brings a lot of good things to the startup table, but the founder needs to be really open to learning, doing things differently, and sacrificing lots of money and stability.

Is an MBA a pre-requisite to startup success? Definitely not.

But are MBA founders doomed for failure? Definitely not, too.

What are your thoughts about MBAs in startups? I’d love to hear from you.

What kind of work gets you in the zone?

I have friends who just love to write, and when they start writing, they just get into the zone and can’t be stopped.

I’ve worked with designers who get into his or her flow, and the creativity just keeps pouring out.

There are people who just love to cook, and they can spend all day in the kitchen.

Amazing things happen when someone just gets so comfortable with and loves the work they do.

Some things come very natural to people, and they’re so good at their work and enjoy it so much that it almost becomes second nature.

I think that’s a beautiful thing.

Unfortunately, after 38 years on this earth, I don’t think I’ve found the kind of work that gets me into a flow state. My resume and career tells that story pretty clearly.

I’m a people person, so part of me thinks my ideal work would be in sales and marketing of some sort, not dissimilar to what I’m doing now. I thought I had a dream job working in marketing for a sports franchise, but that job ran its course, just like all the ones prior.

I’m also pretty analytical, which is why I gravitated toward engineering for my undergrad and grad degrees. And I’m learning Python, which I’m enjoying as well (though it’s hard as shit).

I also like to build things. And I like to write sometimes.

I’m a man of many interests. And that might be holding me back from finding my ideal work.

Who knows, maybe someday I’ll find the work that gets me into the zone. When I do, I’m sure it’ll be a beautiful thing, because it always is.

What about you? What kind of work gets you into the zone? Maybe it’s a specific aspect of your job. Or it might not be work at all; it can be a hobby that you can do all day.

Whatever it is, I’d love to hear about it.

How Chess and Business are Alike

chess board

Whenever we visit Vicky’s family in NJ, my nephew-in-law always asks me to play games, and sometimes we play chess.

This brings me back to the days when I used to play chess against my Mom when I was a kid. I remember enjoying it, but not so much when lost. :/

Anyway, the more I play chess, the more interesting the game becomes, and the more I draw parallels between the game and business.

First of all, if you don’t know how to play chess, you have to learn about all of the pieces and what they can and can’t do. There’s a lot to pick up in a short amount of time.

Then you have to have a strategy that translates to tactics. What’s your opening move strategy? How will you protect your King? Do you like to attack with your Queen early and often?

Of course, you have to understand your competition. What’s his or her strategy? Are they aggressive or defensive? How might they react to your moves?

Throughout the whole process, you have to be analytical. Scan the situation, manage your risk, analyze your options, and select the best one.

Similarly, if you’ve never run a business before, you have to learn about many subjects, and quickly. Depending on the company you’re building, you may have to pick up product development, marketing, sales, customer service, accounting, recruiting, legal, and so on.

Then you have to plot your strategy, tactics, and implementation plan. How will you go to market? What channels will you use to acquire customers? How will you recruit for the skills that you need?

Knowing your competition is very important. How do you differentiate from your competition? Is this differentiation sustainable?

And it’s imperative to be analytical in business as well. Even though creativity and other soft skills are important, you have to know your numbers inside and out. How much does it cost to acquire a customer, and how does that compare to their lifetime value? What’s your profit margin and growth? How can you drive more traffic to your website and increase conversion rates?

It’s no wonder that many successful executives were competitive chess players.

I recently bought a chess board so Vicky and I can play. We’ll eventually teach Maya how to play as well. Hopefully she’ll learn how to be analytical and strategic, discover the parallels between chess and business, and then grow up to be a successful executive. No pressure, though. :)

When little things become big deals – is this a good thing?

A couple of weeks ago I wrote a post about how little things become big deals when you’re a startup founder.

One of the questions that I thought about was whether this relatively small situation having such a major impact on my psyche is a good thing for me.

On one hand, it’s obviously not good at all.

There are a lot of “small” bad things that can happen that can stress out any startup founder or early employee. You might lose touch with a potential customer, like I almost did. Maybe you typed in a wrong number that made you spend a few hundred dollars more on advertising than you planned. Or maybe you inaccurately communicated something to your team that led to confusion about what tasks needed to be done.

These things can add up and really fuck with your mind if you don’t deal with them properly. The stress may lead to poor sleep, crappy work performance, and strained relationships.

Of course, that’s not good for you in the least.

On the other hand, if you put things into perspective, this stress can actually signify a good thing.

It could mean that you truly care about the job that you’re doing. Your reaction to these situations might show that you’re really passionate about your work and the mission you’re trying to accomplish. It might mean that you understand the big impact that these seemingly little things could have.

If you were buried in a large corporation, these little problems might sting a little, but in the long run, they’ll likely be a drop in the bucket and have minimal impact to the livelihood of the company. With layers upon layers in an org chart, these small issues can easily get buried and ignored with little consequence, so you might not care about them as much.

I’m not saying that a startup founder’s job is more important than any other corporate job; I’m saying that in the early stages in a company, little things have a much larger effect on the company.

So when these little things bother you, it can be a sign that you really care about what you’re doing, and are committed to making sure everything goes well for the good of the company.

And that’s a great thing.

Ketogenic diet, coffee everyday, and meditation – new changes to my daily routine

 

I’m experimenting with some changes to my daily routine to see if they’ll impact my productivity and quality of life. I’ve changed my diet, am drinking coffee, and meditating.

Ketogenic diet

The first big change I’ve made is my diet, and I’m trying the ketogenic diet.

The ketogenic diet is a low-carb, high-fat diet that helps your body burn fat, instead of carbs, for fuel. It has shown to provide many health benefits, including weight loss, lower cholesterol, increased energy, and neurological benefits.

Vicky and I just returned from a vacation in Taiwan. Before the trip, we knew we were going to stuff our faces, so we wanted to go on a diet upon our return. One of Vicky’s friends achieved amazing results with the diet, and hell, Joe Rogan does it. So we decided to give the ketogenic diet a shot.

We’re only on Day 2 and everything seems fine. The diet actually isn’t that much of a departure from what we normally eat. We usually eat a lot of noodles (we’re Asian, after all), and we’ll certainly miss bread, pasta, and pizza. And of course, I’ll miss beer.

But we get to eat lots of cheese, which we love. And this morning we ate real bacon, and eggs cooked with the bacon grease, which was absolutely glorious!

So far, so good!

Drink coffee everyday

The next thing that I’ve changed is drinking coffee everyday.

I’ve always loved coffee but I’ve never wanted to be dependent on it to get me through my day. I’ve known people who drank five cups of coffee each day and got headaches if they didn’t. I did not want to be that person.

So I made a conscious effort a long time ago to not drink coffee.

About a year ago, Vicky got a Nespresso and I started having a coffee once a week. And I found that I really looked forward to each Sunday where I can have that cup of joe.

And recently I’ve just noticed that on the days I drink coffee, I am much more awake and alert.

For instance, I had to drive from NJ to DC after returning from our Taiwan vacation. I was jet lagged and extremely tired, so I had a cup of coffee before the drive. I had absolutely no problem staying awake for the four hour trek and was very energetic throughout the day.

So I’ve decided to drink one cup of coffee every morning to see if it increases productivity and keeps me more alert and energetic throughout my day. Hopefully I won’t turn into an addict.

Meditation

I’ve never been a fan of all of that “ohhhhm” crap. But I’ve heard great things about meditation, so I’m giving it a shot.

Life can get pretty hectic as an entrepreneur and parent.

There’s a lot of worrying when you’re trying to launch and run a business. Things go wrong all the time, and you never make as much progress as you’d like. And your business is always top of mind.

Couple that with raising a kid, and stress levels go through the roof.

So I’ve been using an app called Headspace to meditate for 10 minutes before I go to sleep.

I’ve heard it’s helpful to meditate in the morning before starting your day, so maybe I’ll give that a shot.

I look forward to those 10 minutes where I can just breathe, space out, and disconnect from the world.

I never imagined that I would meditate, but I believe it has helped me clear my mind and put things into perspective.

Over to you

What do you think about these changes to my daily habits? Have you made any changes to your routine that have been impactful? Get at me in the comments.

I hope you found this interesting! If so, please share this article with the share buttons on the left! That’d be awesome of you.

Announcing Sightpath, kinda

I didn’t blog yesterday because I was at a conference/workshop called CollabSpace Chicago: The Business of VR.

And I presented our new startup, Sightpath!

We are super early-stage but are excited about this product. Sightpath is an analytics platform for virtual reality app that allows app developers and product managers to truly understand the behavior of their users.

Virtual and augmented reality is the next computing platform and will change the way we connect with others, and we’re excited to build the underlying technology that will power user behavior insights.

I’ll fill you in soon on some things we’re working on.

The event was very interesting and valuable. It wasn’t your typical conference where you simply sat in front of speaker panels and hear people talk business.

I presented Sightpath to the crowd, we identified key challenges that we are facing, and talked through how to approach those challenges. And, of course, there was improv involved!

Most importantly, I met a lot of people in the industry and got their thoughts on how their using analytics for their virtual reality apps. Most if not all of them definitely see the need for something like Sightpath, and are excited to see our progress.

It was a great event and has gotten me very excited for our prospects. We’ll keep cranking away, and stay tuned for more information!

That’s not the way you debate! My thoughts on the Presidential debates

Old-School-Debate-Meme

Yes, I watched the presidential debate instead of watching Monday Night Football, even though I had 3 guys on my fantasy team playing in that game. My team wound up winning. :)

I’m no wonk, and I didn’t fact-check, but here are my thoughts on what went down during the debate.

Let’s start with Hillary.

She was pretty much what we all expected. Very factual, very calm, and not at all inspiring.

We know she has the experience, we know she can get the job done, but is anyone excited about her becoming president?

It might not be fair to compare her to President Obama, who did an amazing job in moving the nation during his campaign.

But does anyone believe that Hillary can energize this country? This debate didn’t change that.

Now, Trump.

As much as his supporters say that he’s a straight shooter, he did nothing of the sort last night.

He deflected and avoided every tough question that came his way. His answer to the Obama birth certificate issue was horrible, and his thoughts on race relations and “law and order” were barely thoughts. He basically admitted he has avoided taxes and doesn’t have as much money as we think he does by not answering those questions directly. He talked about not allowing companies to go overseas yet didn’t elaborate on how. He really didn’t speak his mind because he knew that he would get chastised for it.

He interrupted Hillary Clinton many times and failed to respect the time limits and debate process.

Overall, he continued to show why he isn’t fit to lead this country.

I would have loved to be able to say “That’s the way you debate!” like Will Ferrell in Old School, but unfortunately this debate didn’t warrant it.

Can we get Gary Johnson in the next debate?

What are your thoughts on the debate? Talk to me in the comments!

Why I started posting blog articles to Facebook again

Post to Facebook

I never used to post my blog articles to Facebook.

I thought that my Facebook friends wouldn’t care to read my blog posts and that I’d be clogging their news feeds with my business-y jibber jabber.

I’m sure many ignore my posts in their news feeds, and that’s to be expected. But some of the articles that I’ve posted to FB have been the source of great conversation and debate, at least compared to other distribution channels.FB alma mater blog post

And that totally makes sense.

My friends and I chat about similar topics in real life, so why not talk about these topics on FB?

Certainly some blog posts will resonate more than others. Some will be hits and others, misses.

Regardless, I’m glad I started posting to FB again. And I’ll continue to do so with hopes to have great conversations.

If you’re reading this and found this article on FB, help me out by submitting a comment there just to validate this post. :)

I hope you found this interesting! If so, please share this article with the share buttons on the left! That’d be awesome of you.

How consistent is your brand?

I’m sitting in a Whole Foods having breakfast while my car is getting an oil change, and I’m in awe of how well this company brands its supermarkets.

The Whole Foods’ brand is based on being healthy, high quality, and sustainable.

And I can’t put my finger on just one thing, but once I walk into any Whole Foods, I just feel healthier. I still feel kind of healthy even after eating scrambled eggs, a couple of sausage links, and potatoes.

Maybe it’s the green signs. Or the wood accents everywhere. It’s not just the interior design, though. This brand extends to its products and employees, too.

The product packaging of its 365 brand exudes freshness. And the company’s employees typically look very happy and healthy.

Whole-Foods-365-basket2

Whole Foods 365 Products. Photo courtesy of KCRW.

The brand is consistent throughout all aspects of its operations.

Which begs the question, how consistent are the brands that you work with, whether it’s your company or personal brand?

Let’s take your company brand to start. Are you communicating a consistent set of values? Does your company’s personality shine through in the interactions with your customers? What is your company you known for?

Similar questions can be asked about your personal brand. If you don’t think you have one, you should listen to this episode of my podcast where Chris Dessi talks about how to build a personal brand.

Google yourself. What comes up? What is the online world’s perception of you? What do your friends and family think of when they hear your name, talk with you, and see you? Is it consistent?

“Brand” is such a nebulous term. It’s the collection of appearance, personality, culture, and anything else that can impact how you are viewed by others.

How consistent is your brand?

I’d love to hear from you. Write your thoughts in the comments, tweet at me @mikewchan, or email me at mike@mikewchan.com.

I hope you found this interesting! If so, please share this article with the share buttons on the left.

Then sign up for my email list below and connect with me on Twitter for future updates. And check out my podcast at GoandGrowPodcast.com!

Waking up before the alarm goes off

alarm clock

I hate when that happens.

Sometimes I wake up an hour before the alarm goes off, and other times it’s only a few minutes.

Either way, when this happens, I feel like I start the day off on the wrong foot. It’s like I’m already derailed, and the day hasn’t even started.

An analog of this happens all the time. For one reason or another, you might get thrown off course from your task, project, or goal.

Maybe a competitor swoops in with a great product just as you’re about to launch yours. This happened with the first version of Android, where Google basically started over after the iPhone launched.

Or maybe that one day that you skipped going to the gym turns into one week, then one month. And your goal of losing 5 pounds seems unattainable.

Or maybe there are just so many distractions that you can’t seem to concentrate on the task at hand.

How you react to these situations says a lot about you.

Google redesigned Android, which turned out pretty good.

Getting your butt back in the gym will start the cycle of good habits again.

And shutting off the notifications on your phone and closing your email tool will take away those distractions.

But will you take the time to do those things? How will you rebound when you wake up before the alarm goes off and things get derailed?

I’d love to hear from you. Write your thoughts in the comments, tweet at me @mikewchan, or email me at mike@mikewchan.com.

I hope you found this interesting! If so, please share this article with the share buttons on the left. Then sign up for my email list below and connect with me on Twitter for future updates. And check out my podcast at GoandGrowPodcast.com!