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February 22, 2012

My Three Most Important Lessons Learned at Harvard Business School

Business school sometimes get a bad rap in the startup world.  Some of it is deserved – it’s big opportunity cost, and until fairly recently, the approach to most business schools to entrepreneurship has been more about theory than practice.

Thankfully this is changing.  But what is very positive about business school and what hasn’t changed is that they are an amazing collection of people and opportunities that can significantly shape ones education and even personal character.  Many of the founders we’ve backed at NextView are graduates of top business schools and bring many of their leanings from those two years to bear.

As I think back on my own business school experience, I often recall three very important lessons and pieces of wisdom that impact me every day.  One was academic, one was advice from a professor, and one was self discovered thanks to the entirety of the 2-year experience,

Lesson #1: What Makes a Good Market
Before Business School, I had heard of Porter’s 5 Forces and probably memorized it at one point during preparations for consulting interviews. But I really started to internalize the concept at business school and I think of it every day.  When one thinks of attractive markets, it’s easy to just think of markets that are “really big” and “growing fast”.  However, that is NOT what makes a market attractive.

A market is attractive relative to the player involved.  And its attractiveness to that player is based on how the forces in the market work to make it easier or harder for that player to create and extract value.  The forces described by Michael Porter in his framework are:
– bargaining power of suppliers
– bargaining power of Customers
– competitive rivalry
– threat of new entrants
– threat of substitutes

I don’t want to spend much longer on this point, but I’ve found this immensely helpful.  And it’s not just important for investors who are analyzing new businesses in different markets.  But it also dictates the strategy of a founder as they think about their own market and what they need to do to win.

For some additional thoughts of mine on the difference between BIG markets and ATTRACTIVE markets, see this post here:
Lesson #2: Authenticity Works
Authenticity works. It was an off-hand comment from Felda Hardymon during office hours one day when I was a student in his VC/PE class.  But it was a word of wisdom that I really try to take to heart for myself and when speaking to entrepreneurs.

It turns out I’m a pretty socially awkward person.  But much of business school (and much of business interaction) are awkward social situations.  Think about difficult conversations with employees, cocktail parties, cold calling, negotiations, selling, etc.  Those types of situations are a nightmare for someone like me.

But I’ve continuously found that when in doubt, the best thing to do is to drop any social posturing and be authentic.  Talk about what really gets you excited and what you really care about.  I remember when was interviewing for my job at Spark, one partner questioned my willingness to take risks and pound the table for what I believed.  I ended up telling him the story of how I pursued my wife – a very personal but authentic story, and it won him over.

Similar things happen when we speak to entrepreneurs at NextView.  We love founding stories that are driven by highly authentic experiences in a market or with a problem.  We also love interacting with entrepreneurs that are transparent about the things that excite them about their businesses and the things that they worry about or are really hoping go their way.  It’s a highly personal business after all, and we try to put that front and center as a core part of our firm ethos.

Lesson #3: Do the ACTIVITIES You Love

One very interesting aspect of business school is that it can be a 2-year soul searching process about who you are and what you want to do with your life.  A lot of business school students find themselves paralyzed, because it feels like there is a lot at stake in the career choice post B-school, especially with large sums of debt and 2-years of opportunity cost.

That said, I think business school is a wonderful time to step back and reflect on what you want out of life professionally and personally. The problem is, I find that when we think about careers or jobs we want, it’s easy to get caught up in a lot of different motivations – what would other people think? How can I make the living I’d like? Is this job impactful? What kind of a role is suitable for me? Etc.

But I find that business school students (and especially myself) often don’t ask what I think is the most important question. To me, that is – “what activities do you love?”.  We spend a lot of time at work, and you’d better be doing activities you enjoy, otherwise, it’s a terrible way to spend your time until you die. And activities are not jobs.  They are not roles or functions.  They are activities.

For instance, being a VC and being a doctor are very different jobs and roles.  But some of the activities are the same. Doctors and VC’s meet people 1:1 or 1 on a few all day long. They have a lot of first time meetings and hear people’s stories.  They try to solve problems based on pattern recognition. On these dimensions, doctors and VC’s do very similar activities.

But you never hear VC jobs and medical jobs compared. You do hear VC’s and entrepreneurs compared, and many job seekers out of B-school contemplate both paths.  But entrepreneurs do different activities.  They sell more (or in different ways), they meet very often with their team to solve common problems.  They may actively make design and product decisions, talk to prospective customers for feedback etc. The activities can actually be quite different.

I’m not making the point that being a doctor is more like VC than being an entrepreneur.  But my point is to look at jobs and life as a set of activities that you are doing all day long.  Do those activities map to what you are excited about doing?  Are they activities that are life-giving to you, or draining?

Or, put another way (as I’ve heard from an old boss and mentor), think of the times when you were happiest at work.  What exactly were you doing at that time?  Try to do more of it.

That’s it. Pretty simple.  Don’t overthink it or plan too far in the future.  Do something that you think is interesting and allows you to spend as much time as possible doing activities you love. I think it’s hard to go wrong if that is actually achieved.

So, those are my three biggest lessons learned from 2 years at HBS.  Worth the 2 years and $100K+ of fees? You be the judge :)

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