Why You Shouldn't Start a Company With a B-School Buddy
There are plenty of inspiring success stories of entrepreneurs who met in business school and go on to build some of the most innovative start-ups. Warby Parker's founders met at MIT. Reddit's founders met in college.
It might seem like a good idea to look to your business school colleagues, who are likely to be like-minded people--but it's not necessarily the best way to filter for stellar co-founders.
Michael Fertik, Inc.com columnist and founder of Reputation.com, says it's a bad idea to start a company with business school buddies. He calls it "Cool Kids Start Companies" syndrome--and warns that it's dangerous.
"For every Warby Parker or Rent the Runway, there are hundreds more that quietly combust in the background without fanfare or notice," he writes in the Harvard Business Review. "It's certainly tempting to imagine that your Batman-and-Robin duo might be the team to beat the odds but it's just not going to happen."
Read on for three reasons why Fertik says starting a company with a fellow MBA has inherent downsides.
You're both blind.
Fertik says the first issue is that MBAs can share the same "blinders." Students at the same business school can have similar personalities and perspectives, and this is a major handicap when it comes to building a strong, diverse founding team. "Seeing the world through the same lens means you can't anticipate critical questions, factors, and influences that should be considered as you think about the market, the product or service you'll offer, and how to pivot intelligently as your company faces new or unexpected pressures," he writes.
You have the same strengths.
Sharing the same strengths is as risky to a start-up's success as is sharing the same weaknesses. The key to a solid founding team is to have different specialties and backgrounds, Fertik writes. He says that the majority of MBA students come from the finance world--56 percent of Wharton's 2015 incoming MBA program have worked in investment banking, private equity, financial services, and consulting. "But a successful start-up requires a technologist--someone with the intelligence and technical skill to, you know, actually build a worthwhile, sellable product--and a product person, one with accurate perspective and a solid handle on penetrating the market you’re hoping to capture," he writes.
You just don't know them.
Business school is a nice, safe environment which caters to learning and is filled with theories and tests. The business world, on the other hand, is risky and cutthroat--entrepreneurs go through hell just to survive. The people you meet may be real friends, and smart, but they are untested relationships existing in a bubble. This means you don't truly "know" your fellow students. "Business school relationships are forged in a highly artificial environment--where socialization with others is notoriously cocktail party superficial," he writes. "You can't be confident that these people are capable of stepping up to the plate outside the carefully constructed constraints of a hyper-achieving educational environment."
He compares starting a business with a business school buddy to marrying someone you met on vacation. "Someone who copes just fine with a professor's deadline or creating a mock business plan could crumble under the pressure of your first pitch to a VC," he writes.