What business students do not get about tech startups
Calvin Houng is an undergraduate at the National University of Singapore. He recently undertook two modules which required him to come out with a new startup idea. While the two modules have similar end goals, they are offered separately by the School of Business(MNO2009) and the School of Computing (CS3216). Having attended both modules, he shared his takeaways on the contrast between business students and engineering or computer science students.
In a Facebook note titled “Why I sometimes don’t care, seriously“, Calvin shared his opinions. e27 has decided to syndicate and share, with minor edits, the full note below.
****
The agenda was similar – Showcase an entrepreneurial idea.
Yet, the way in which it was handled by both modules, CS3216 and MNO2009, could not be more different.
Having attended sessions for both, I can safely say that there is a stark contrast in the beliefs, attitudes and perspectives of engineers and ‘business students’. The engineers are highly product driven, focusing on the technicalities on making a truly great product. On the other hand, business students tend to focus on revenue projections and money making schemes.. almost completely ignoring the product.
Business people tend to have these inane assumptions on tech startups:
1) We need a fixed business plan to deter future & existing competitors
No, you really can’t. Aside from the fact that it takes a lot of work for an incumbent to defeat you at your own game (see the Cloud Computing Space – AWS, Dropbox etc), one should not forget that businesses tend to be blindsided by emerging threats. Young and smart startups/companies have often proven to be savvy enough to topple Goliath (Google vs Yahoo), (Facebook vs Myspace), (Apple vs Sony) and so on and so forth.
Now that is something that you can’t exactly write in a business plan. How to be creative. How to be flexible. How to build smart, nimble teams to run circles around your competition whom are often big and clumsy. (Other good reads to prove this point would include Good to Great and Why the Mighty Fall by Jim Collins)
2) Throwing 100 programmers in a room solves the problem!
Quite literally.. aside from the inherent lack of insight in the statement, this kinda explains why a good majority of engineers (I interact with very many) detest business people with a passion. In fact, in the tech industry, most are treated as running jokes.
I am also pretty sure that the business people whom have this mindset have NO clue on the different types of programmers and how varying skill levels makes a damn lot of difference in the quality of their output.
100 programmers – Right. What level? Google level engineers? Or just some random joe? No difference? Erm… Okay.
In practice what happens is that the business guys choose people they think are good programmers (it says here on his resume that he’s a Microsoft Certified Developer) but who aren’t. Then they’re mystified to find that their startup lumbers along like a World War II bomber while their competitors scream past like jet fighters. This kind of startup is in the same position as a big company, but without the advantages. – Paul Graham’s “The 18 Mistakes that Kill Startups”
3) We need to validate our ideas by asking our friends and random strangers.
No, it doesn’t exactly work like that. It’s NOT so simple. I wish! Are you going to place blind faith in some random stranger? Do they have the perceptive (or cognitive) ability to put the pieces together? Do they know how you intend to execute? (viral marketing, B2C adverts, blog entries, promotional pricing etc)
Fully two thirds of people in my network thought LinkedIn was stupid idea. These are very smart people. They understood that there is zero value in a social network until you have a million users on it. But they didn’t know the secret plans that led us to believe we could pull it off. And getting to the first million users took us about 460 days. Now we grow at over two users per second. – Reid Hoffman piece in CS183, a top angel investor cum VC, whom invested (or played a role) in Facebook, Zynga, LinkedIn and Paypal.
That’s not denying the fact that your network is an invaluable asset in assessing your product/idea but one shouldn’t blindly follow the market. Chances are, they might get it wrong because they aren’t factoring in everything (most importantly, your team and how you execute).
History tends to get rewritten by big successes, so that in retrospect it seems obvious they were going to make it big. For that reason one of my most valuable memories is how lame Facebook sounded to me when I first heard about it. A site for college students to waste time? It seemed the perfect bad idea: a site (1) for a niche market (2) with no money (3) to do something that didn’t matter. One could have described Microsoft and Apple in exactly the same terms. – Paul Graham, Founder of Y combinator.
4) High revenues = High value
Nope. This is the fundamental problem with business school. Value tends to be determined by the amount of money you can bring to the table, as opposed to the intangibles like (i) creative expression, (ii) saving time or (iii) making the world a better place.
All in all, the title is pretty clear “Why I sometimes don’t care, seriously”. It is just irritating to deal with mindless assumptions/statements that are neither coherent nor logically sensible. I hate to say it.. but I am beginning to understand why stereotypes of business people come about.
****
Author’s thoughts on this note
In some ways, Calvin shares very relevant points. For most business plan processes taught in the School of Business, students are expected to map out a SWOT analysis to show that they have a business viable idea. What they are not taught is that a SWOT analysis is not god. Maybe a new word should be added into the Business curriculum – pivot. That said, it would be interesting to hear from the business students’ side.
This post was originally published on e27.sg as What business students do not get about tech startups.
About e27
Founded in 2007, e27 is a media organization focused on the Asian technology startup industry. e27 believes in building the community of technology innovators across Asia by reporting on the latest, breaking news relevant to technology startups, technology companies as well as investors on the e27 blog while connecting with their readers on Facebook and Twitter. e27 also organizes Echelon, the annual technology startup conference that attracts attendees from all over Asia.
