On start-ups and MBAs

During past week I attended to a speech of Aaron Patzer, founder and CEO of Mint. Mint is a personal finance web application started by Aaron 3 years ago and recently sold to Intuit for $170M (!!!). The presentation however wasn't a self-celebratory speech rather than a frank peek on what means starting a company from scratch. For Aaron meant:

1. Failures - Before Mint he started 3 companies without success;
2. Experience - He worked in a tech startup to get the necessary experience;
3. Risks - He left the job to work full time on his idea, isolating for months to code the prototype;
4. Persistence - He had to pitch tens of VCs before being funded.

You know the rest of the story but what really surprised me was Aaron insight on how VCs value start-up companies in the early stage (garage level).

• +$500K for an engineer, which can produce a prototype
• -$250K for a business guy, not really needed at this stage (the founder can cover this role part time)

That's annoying. After getting into a BSchool you're tempted to think it's just a matter of choosing what job you like next. It's not really the case. In particular startups need people that can get "their hands dirty" by working concretely on the product. Conversely VCs (very hyped in this period) look for people with in depth industry knowledge, that can concretely add value beyond the finance, marketing and operations concepts, now almost commodities. On my side I'm very interested in startups and this fall I will consult one (guess what, marketing plan) as part of club activity at Sloan. Hopefully this experience will help me in developing that kind of applied knowledge necessary to bring value into a company!

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• Mint Is Yodlee's YouTube (techcrunch.com)
• Making a Mint (kevinsgreatadventure.blogspot.com)
• Intuit Buys Personal Finance Upstart (nytimes.com)