How MBA can help build startup-relevant skills? Example of MIT Sloan

Part 1 of this series focused on mentoring, acceleration, and community that MIT provides to young entrepreneurs. Part 2 is about entrepreneurial course work and it will be useful if you are:

• Prospective MBA student considering different b-schools.
• 1st year Sloan MBA deciding which classes to take.
• Someone interested if business school coursework can help in building a technology business.

In general, the most important thing which you want as a student startup founder is flexibility.

This is exactly what MIT Sloan MBA program offers — a very flexible curriculum. You can pick any classes during 3 out of 4 semesters and cross-register at other MIT schools (civil engineering, computer science, school of architecture, etc.) or other schools (HBS, HKS, HLS, etc.).

In general, flexibility gives you an opportunity to build your coursework around 4 critical areas:

• People relationships
• Relevant skills
• Time for your venture
• Building domain expertise

In this article, I describe some classes in each area and share three takeaways from each class.

People relationships

These classes help you form a circle of people interested in entrepreneurship and technology startups:

Meet classmates: 15.360 — Introduction to Technological Entrepreneurship

Content: mostly guest speakers — entrepreneurs, angel investors, and VCs — talking about founding stories, investment approach, and general experiences.

Takeaways:

1. You need a co-founder as she can help you live through the rollercoaster but you can succeed as a solo-founder too.
2. Co-founders need to have complimentary skills: it is easier for fundraising, good for preserving equity, and makes co-founder conflicts less likely.
3. Copying ideas or business models is not bad: it simply minimizes your risks in building a company.

Get to know classmates: ES.580 — Silicon Valley Study Tour

Content: 3-day trip to visit some exciting startups and VCs in SF & Bay Area.

Takeaways:

1. Understand what your end goal is before starting a company: do you want to build a billion dollar company, hundred million-dollar company or a life-style business?
2. Fundraising is like building a team: you need investors that you will be comfortable with for years to come.
3. Create a customer oriented culture early on: when the company grows to 60–100 employees, it becomes hard to bring that culture across the organization.

Learn how to avoid early mistakes: 15.394 — Dilemmas in Founding New Ventures

Content: case-based class discussions about most critical issues that founders face early on: assembling the founding team, scaling the team, and tradeoffs in scaling new ventures.

Relevant skills

I found the below classes very useful in building founder-relevant skills in:

• leading a team
• understanding technology ecosystem
• building digital products
• fundraising
• selling your products

Leading a team: 15.321 — Improvisational Leadership

Content: highly experiential course geared towards improvisation in different work and personal settings.

Takeaways:

1. Understand and learn to deal with your ‘inner critic’ — negative thoughts, insecurities, beliefs, and emotions — as it’s always the harshest person you can encounter which diminishes your confidence, freedom to take risks, and trust in your choices. Also, understanding that everyone has an ‘inner critic’ will make you better at ‘reading’ people.
2. Don’t be afraid to show vulnerability: it establishes deeper relationships and trust with your team.
3. Use position change (alternate high-low status in conversations) to resolve difficult conflicts.

Understanding technology ecosystem: 15.358 — Software and Internet Entrepreneurship

Content: mostly case-based discussions with particular focus on network effects and virality, marketplaces/multi-sided platforms, and technology platforms.

Takeaways:

1. Network effects and virality are totally different things which are often confused. They may come together but don’t have to.
2. Marketplace is the best business model provided you solve the chicken and egg problem, your business has network effects, and you can avoid disintermediation, i.e., buyers and sellers jumping off the platform to do business directly (among many other important things).
3. Many products/services can benefit from becoming (at least partial) marketplaces due to shift from producing features to enabling interactions, enhanced defensibility, and new sources of creating & extracting value.

Building digital products (1 of 2): 15.785 — Digital Product Management

Content: nice overview of product management: how to do field research and customer needs assessment, what toolbox to use, how to prototype and run user testing.

Takeaways:

1. Build a user oriented culture: everyone at the company has to communicate (at least periodically) with users, even engineers.
2. Observe users holistically — throughout the day when they have morning coffee, commute to work, etc. — to see how and where your product fits into their lives.
3. Listen to user feedback fully first before responding with objections. You won’t always be there to object, your product just needs to do the work.

Building digital products (2 of 2): 15.570 — Digital Marketing and Social Media Analytics

Content: build your digital marketing and social media analytics toolbox with case-based discussions, great class speakers, and a challenging but very useful final project (on propensity score matching).

Takeaways:

1. As a startup founder or an executive, digital marketing strategy is not someone else’s job. It is at the very core of which products you build, which customers you target, and how you want to reach them. So understanding, at least on the conceptual level, how to build your digital marketing strategy is crucial.
2. Avoid bias in different contexts because correlation is not causation: only run controlled experiments and don’t create social listening bias (e.g., customers are more likely to give a high rating if they see a high rating — ‘mmm, may be that product is not so bad in the end?’).
3. Quantifying impact of product / service features on consumer demand based on user generated content / reviews is extremely powerful.

Fundraising (1 of 2): 10.407 — Funding Strategies for Startups

Content: simulation-based class in which you prepare a term-sheet with real lawyers and negotiate a seed round terms with real VCs; lots of successful entrepreneurs and VCs as guest speakers talking about nuts and bolts of early stage fundraising.

Takeaways:

1. Be mindful about valuation caps in your pre-seed/seed terms, especially if you raise from multiple angels at different times, as you may end up significantly diluted.
2. Expect to (most likely) have your vesting schedule reset when raising your first institutional/VC money.
3. Have a clear list of what terms you are ready to give up or trade when negotiating your first VC round.

Fundraising (2 of 2): 15.431 — Entrepreneurial Finance and Venture Capital

Content: mostly case-based class focused on valuation and VC due diligence.

Selling your products: 15.387 — Entrepreneurial Sales

Content: simulation- and case-based class that will teach how to sell technological products which is arguably the most important skill for startups! My personal favorite!

Takeaways:

1. Not every sales lead is good — be mindful about which deals to chase and build a systematic process around assessing likelihood of deal close.
2. In sales meetings, let the customer talk 80% of the time and use the remaining 20% of the time to sell on the pain, not on your product.
3. Replace underperforming sales people quickly as value of individual performance plans in sales is unclear; set territory, establish quota, train and coach but don’t keep underperforming sales reps for too long.

Time for your venture

15.390 — New Enterprises

Content: project-based class where you apply a rigorous framework (Disciplined Entrepreneurship: 24 Steps to a Successful Startup) to building your venture; taught by the world-famous professor Bill Aulet.

Takeaways:

1. It is better to be a C-company (‘fail-fast’) than a B-company (‘living dead’); if you fail-fast, you will quickly learn and can apply that learning in trying to create an A-company.
2. It is not enough to have a lot of customers: they should have the same end-user persona, need the same product, and have the same sales process (a.k.a. beachhead market). Sounds obvious but so many startups fall into a trap of chasing too many opportunities at once and fail at building products that solve customer needs.
3. Find a beachhead market where TAM is between $20 to $100m. If your initial TAM is above $100m it might be better to segment the market further to improve focus. Important to note that your overall TAM should probably be bigger: as a rule of thumb, your TAM should be $1B+ to make your company venture fundable.

Bill Aulet’s 24 Steps to a Successful Startup

15.961 — Independent Study

Content: earn credits for doing a research project relevant to your startup.

15.376J — Media Ventures

Content: purely guest speaker based class with a final project (venture plan, strategic analysis or innovation roadmap); great place to meet famous technologists, entrepreneurs, and investors while investing time in building your venture.

15.392 — Scaling Entrepreneurial Ventures

Content: small class where you can spend quality time building your company with help of very experienced instructors: entrepreneurs-in-residence from the Martin Trust Center for MIT Entrepreneurship, technology executives, and startup founders.

Building domain expertise

There are so many classes — at Sloan and at many MIT schools and departments (Biology, Brain and Cognitive Science, Medical Engineering and Science, Urban Studies and Planning, etc.) — that can help you develop domain expertise relevant to your startup. Here are a few examples:

• MAS.S62 — Cryptocurrency Engineering and Design: technically challenging class but you will surely become a crypto expert.
• MAS.S65 — Society of Autonomous Vehicles: mostly guest lecturers from leading AV companies as well as AV researchers.
• 15.S09 — FinTech Ventures: focused around building your own fintech venture — most of the venture work happens outside of class but there are cool guest lecturers (fintech entrepreneurs).
• 15.777 — Healthcare Lab Introduction to Healthcare Delivery in the United States: studying the structure, system, and challenges of the U.S. healthcare industry and applying knowledge in an action learning consulting project for a healthcare industry player.

To conclude, I would reiterate a famous MIT saying that ‘studying at MIT is like drinking from a firehose’. As an MBA student, you only have 2 years which fly by incredibly fast and you want to achieve so many things — build new friendships, learn new stuff, and likely do a career switch. So it is best to say no to FOMO, diligently follow your passions but be sure to explore new stuff — MIT gives you every chance to do so.