Takeaways from the Stanford B-School Entrepreneurship Conference

I had the opportunity to spend last Friday at the Stanford Graduate School of Business 2010 Conference on Entrepreneurship.  In one particular session entitled What They Don't Teach in Business School About Entrepreneurship, moderated by Prof. Chuck Holloway, the entrepreneur panel threw out a few comments that I thought worth sharing.  Kudos to the organizers of this panel session!

The panelists (in last name alphabetical order):

• Ms. Nazila Alasti - Founder and CEO, Jooners (www.jooners.com)
• Mr. Mike Cassidy - Founder and CEO, Ruba (www.ruba.com)
• Mr. Will Price - CEO, Widgetbox and ClickTurn (www.widgetbox.com, www.clickturn.com)

And the comments:

• "Business schools overteach how rational things are." (Will Price) - Would that real life business issues would get wrapped up neat and tidy after a 90 minute case study session.  Unfortunately, because people are inevitably involved, business is a bubbling stew of egos, desires, foibles, aspirations, and prejudices.  While logic can tell one what should be done, it's emotion that often determines what and whether something actually gets done.
• "The probability of a business deal closing declines by 10% every day it's delayed." (Mike Cassidy) - This applies whether the deal is a customer deal, an investor deal, or an employee deal.  With respect to the last, Mike proceeded to describe how in his company, on the day of the final round robin interviews, they would extend offers to potential new hires they liked and ask them to commit that same day.  I used to do the same at my companies.  It's that emotional thing again.  Any deal negotiation generates a lot of emotional energy which in turn creates momentum. Nothing kills momentum faster than a waiting period.  As every good sales person knows, you want to strike while the iron is hot and there is momentum to steamroll over the gauntlet of mini-roadblocks that inevitably crop up during the post-deal phase.
• "Business schools are prejudiced against sales...salespeople run the world." (Will Price) - This triggered heated agreement amongst the panelists and rightfully so.  I first heard a similar comment in 1989 by Robert Metcalfe, co-inventor of Ethernet and the founder of 3Com and many more times since by a host of successful entrepreneurs.  While business schools teach marketing, until recently, few taught courses in sales or sales management. (Stanford corrected this mistake about 10 years ago.) Why?  For some reason, strategy stuff (like marketing) is considered appropriate to the education of a future top executive whereas tactical stuff (like sales) is the stuff that someone working for you will do.  (Incidentally, manufacturing management gets similar short shrift.)
• "Everyone, before they graduate from business school, should be required to sell $10 worth of stuff, anything.  Selling is underestimated." (Nazila Alasti) - For me, this comment wins the prize for being the single most practical tip one can give a budding entrepreneur.  In order to do this, you have to figure out what "stuff" is, how to position it in such a way that someone will pay you for it, and then actually convince them to pay you; product/market fit, business development, and sales in a nutshell.  I wonder how much business education would change if this became a graduation requirement for an M.B.A.? I wonder how many more startups would succeed if this were part of the founding team screening process?

Thanks to Will Price, Mike Cassidy, and Nazila Alasti for some great, real world insights.