The signal to noise...

I’m a movie guy.  In one of my favorite movies, The Matrix, there is a famous scene as many know where Keenu Reeves’ character Neo is offered a choice between a blue pill and a red pill by Laurence Fishburne’s character Morpheus.   Morpheus explains that the world Neo presently lives in is not real.  But by taking the blue pill he can have an easy out, since he will wake-up in his bed and can choose to remember whatever he wishes to.  However, electing the red pill will allow Neo to remain in “Wonderland” with Morpheus and explore the true world and perhaps break free.  Neo ponders the tough decision for a bit but ultimately elects the red pill (rightly or wrongly), and so ensures the story goes on with the Matrix Reloaded and The Matrix Revolutions (rightly or wrongly). 

Over the past few months, I’ve encountered quite a few people who are struggling with another tough decision - start-up life or business school (full time).  Some of these folks I’ve known for years personally and have asked for my advice.  So I wanted to share some quick thoughts for those of you presently in the same quandry or those that are considering business school in the near future.  In addition, I was spurred to quickly finish this post given my friend and HBS sectionmate Alex Taussig’s recent blog post about the choice of MBAs to pursue careers in the tech sector and whether it’s a good thing for start-ups and companies (which yes, I did weigh in on).  

Four disclaimers, three quick and one a bit longer.  The first is that yes - I went to b-school.  The second is that this blue or red pill decision is ultimately a personal decision and context and timing are key considerations that individuals must weigh for themselves (and their family and significant others).  No two individuals’ situations are anything alike and even for the same individual, the decision dynamics can differ radically as time and context changes.  Third, it’s often hard for young people (myself included) to think about their career in medium/longer term views versus short-term (1-2 years).  I think because many start-up and business school folks are type-A, they want success as quick as they can get it.  But if you are young in life, you must think of your career in 5 to 10 year chunks, not 1 to 2 year windows.  It drastically alters your perspective.  Paying for a full-time MBA certainly isn’t cheap. But if you look at your career as a 25-30 year opportunity to work and make money, 2 years isn’t so bad.  

Fourth (this is the longer one) - it is possible to do both, so it’s not necessarily a blue or red pill question.  It simply is hard to do many things really well, and perhaps it is better to focus on doing a few things very well (i.e. dedicate yourself 110% to your start-up or to school).  But regarding this particular disclaimer - I know personally it can be done, having worked at Generation Health during my last year of grad school for ~30-35 hours a week.  Another example is Fashionstake which was founded by Vivian Weng and Daniel Gulati. They started during the fall of first year of business school, progressed rapidly and raised a seed round of capital from Battery Ventures by the late spring of first year.  They headed to NYC to establish HQs, launched in the fall of 2nd year of business school, and have grown the business in NYC while finishing up and graduating on time this past May from HBS in Boston.  Don’t forget - there is a ton of value b-school can provide FOR a start-up, so it’s not a bad place to launch a start-up or work on one while getting your MBA. Think about access to resources like meeting spaces and conference rooms, research materials, fellow students and professors to brainstorm with, and a gold card to cold call anyone for the purposes of conducting research for a student project!  Anyway, for those of you crazies considering this quasi-nuclear option, a few pieces of advice:

• Know yourself.  If you answer yes to any of the following, then trying both as Bush #41 has eloquently said, wouldn’t be prudent (go to 4:49 of this video). Q1: Do you need a lot of sleep, and need it regularly? Q2: Do you struggle to prioritize and multitask? Q3: Do you get stressed out easily or don’t handle moderate to severe stress well?
• Be prepared to sacrifice your social calendar. This is a big part of the overall b-school experience (some might say it is the most valuable experience), so you will miss out on some of the bonding that happens with your fellow classmates in/outside of class (and your other friends and family for that matter).  Related to this - be prepared to sacrifice your holidays.  A lot of folks in business school use holiday breaks to take fun trips internationally with classmates.  You will be working (and hopefully travelling).  I traveled to Brazil during winter break of my last MBA year.  But because I didn’t bring my laptop, I struggled mightily to download data for a priority Generation Health prospective client and do analysis in Portuguese Excel by borrowing my Brazilian friend’s laptop (familiar short cuts in English Excel aren’t the same in Portuguese!). 

So back to the task at hand - blue pill or red pill: start-up life or an MBA?  There are many things to consider, and it’s impossible to cover them all, but here is a high level framework to help tease out an answer for yourself as an individual. 

MACROFACTORS (i.e. the big picture)

• Sector - You must understand the market: what sector is the start-up playing in and how mature is it?  An established, mature market with giant players and proven business models is very different than a new and emerging sector with many small entrants and unclear winners and unproven business models.  For instance - the tech industry is very frothy right now, maybe too hot with lots of money being tossed around at pretty high valuations… but it’s a great time (for now) to be an entrepreneur in this sector. Which leads me to…
• Time horizon - Is there a sense of the time it takes to build and scale a meaningful business in this sector?  Is it a slow, hierarchical sector or more fluid and dynamic?  If it’s slow moving, then you can take two years for your MBA and still come back and try and innovate in the sector.  If it’s rapidly changing, and you have a window of opportunity to do something meaningful with a great team and it’s very hot with high valuations - have a go at it, who knows how long the window will be open!?!
• The start-up itself - While the a sector is important to consider, it’s also necessary to analyze the start-up opportunity itself across four main and interrelated dimensions: team, stage, funding, and role.  The importance of a top notch team can’t be stressed enough.  If it’s early days, there is some capital, and you could play a key role in a small but dynamite team that is growing and going after a big opportunity, it could be worth it to take this risky proposition.  If the company is already well established, there’s no meaningful equity, and you’d be employee #501, then perhaps the case for your MBA is a bit stronger. 

MICROFACTORS (i.e. the personal stuff) 

• Skills - What competencies and knowledge have you developed to date either through formal education, self-study, or work experience?  Do you have the skills you want and need to succeed and execute on your career goals, whether that means being part of a start-up in a product development role or in business development?  If not, what are the gaps in skills you have?  
• Network - Businesses typically require many people for success, and it’s rare for any single person to have all the skills and knowledge to grow a start-up from idea to a big meaningful business.  Do you have a strong and large network of people who you can call on to help you?  If not - a lot of value of an MBA is the strong network you’ll establish if you do some moderate networking, with not just your cohort but alumni. 
• Time horizon - just as time is important in a macro-sense as articulated above, it’s important here as it relates to your age and where you are in life.  Most full time MBA students begin their first year of grad school after 5 or 6 years of work experience and are at an inflection point within their careers, so the average age is 27-28 although there are some schools where this mean is trending down.  Of course this figure is just an average, and while you might not want to be that 40 year old in your MBA class, it’s been done before.  It goes without saying, that the age thing is important to consider as well if/when you plan to get married, have a family, buy a house, etc.  Start-ups are risky - the odds typically aren’t in your favor as only about 30% are alive after 10 years.  Most people need to be with a few start-ups before they see success.  And better to swing for the fences when you’re young so you have opportunities to fail.   

So those are my thoughts.  As always, welcome any comments and if you want to talk through your decision, whether immediate (should I go to or drop out of b-school this fall) or in the future, just drop me a line - I’m always happy to chat.

-cch