How Should Business Schools Prepare Students for Startups? – Jeff Bussgang and Michael Seibel

TL;DR

Business schools should prepare students for startups by teaching core startup principles, emphasizing practical field experience, and helping aspiring founders move from research to building an MVP. Michael Seibel says MBA applicants often miss basic YC qualifications, while Jeff Bussgang argues these lessons matter for all entrepreneurs. Read on for their specific critiques of entrepreneurship education and MBA founders.

Transcript

hey this is Craig Cannon and you're listening to Y Combinator's podcast today's episode is a conversation about business schools and startups with Jeff bus gang a lecturer at HBS and GP at flybridge Capital Partners Jeff called in to talk with YC CEO Michael Seibel after Michael was tweeting about trends he saw in YC applications from MBAs and sinc... Read More

Key Insights

• 🔎 Michael noticed that many MBA students who applied to Y Combinator were lacking the basic qualifications for starting tech companies.
• 🗣 Jeff believes that business schools should do a better job of teaching core tenets of entrepreneurship, as these are simple rules that are often overlooked by MBA students.
• 💡 The frustration lies in the fact that business schools are expensive and these simple rules should be common knowledge for aspiring entrepreneurs.
• 🌍 Y Combinator's model for entrepreneurship is difficult to replicate, as it is hard to find entrepreneurs with real startup experience to teach the subject effectively.
• 👥 Business schools should focus on providing practical, real-world experience and connecting students with technical talent to create a more well-rounded education for future entrepreneurs.
• 🚫 There seems to be a disconnect between what business schools teach and what the startup world demands, as many MBA students lack technical proficiency and a commitment to their startup ideas.
• 💪 The key issues faced by MBA students include the lack of technical co-founders, a lack of commitment to their startup ideas, and insufficient traction or progress made with their ideas.
• 🏫 MBA programs could benefit from incorporating more technical skills and entrepreneurial experience into their curriculum to better prepare students for the startup world.

Questions & Answers

Q: How should business schools prepare students for startups?

Business schools should teach the core principles that startup programs such as Y Combinator expect founders to understand. Jeff Bussgang also urges schools to move beyond the ivory tower, provide practical experience, and stay attuned to what is happening in the startup world.

Q: Why did Michael Seibel criticize business schools' preparation of startup founders?

Seibel repeatedly encountered MBA applications that lacked basic qualifications YC considers important for starting a company. He found this especially frustrating because business schools are expensive and the missing principles are relatively simple.

Q: What problems did YC see in applications from MBA students?

YC saw MBA applicants missing basic startup tenets that affect whether an applicant gets accepted. The excerpt frames the broader problem as insufficient awareness of what startup practitioners expect from founders.

Q: Why is Y Combinator's entrepreneurship model difficult for schools to replicate?

Seibel says many schools want incubators, but the model is hard to reproduce. Schools struggle to recruit experienced entrepreneurs to lead their programs, making it difficult for students to learn startup building from people who have actually done it.

Q: Should entrepreneurship education be more practical?

Yes. Bussgang says schools should get students into the field, make entrepreneurship training more practical, and align it more closely with the realities of startup work.

Q: Why can learning entrepreneurship from inexperienced instructors be difficult?

Seibel argues that it is hard to learn how to build a startup from someone who has never built one. Because schools have difficulty recruiting experienced entrepreneurs, their entrepreneurship programs may lack direct startup expertise.

Q: Why might MBA founders spend too much time on research?

Bussgang suggests that MBA training can make founders more susceptible to spending too much time researching. By comparison, a technical founder may be more likely to begin building something immediately.

Q: Are MBA graduates capable of founding successful startups?

Yes. Bussgang rejects the idea that MBA students do not create strong startups and cites Cloudflare, Rent the Runway, and Earnest as companies founded by Harvard Business School alumni. He emphasizes that the startup lessons under discussion apply to all entrepreneurs, even if MBA founders may be more vulnerable to certain mistakes.

Summary & Key Takeaways

• Y Combinator's CEO Michael Seibel discusses the poor job business schools do in preparing students for tech startups.

• Business schools tend to overlook basic core tenets important for starting a startup, frustrating YC partners during application reviews.

• Lack of technical co-founders, commitment issues, and lack of traction are common problems faced by MBA applicants.