Who says MBAs can’t start companies?

15 Oct

We don't just have jargon. We have frameworks baby. Yeah!

In the startup community there is this “MBAs can’t do startups” opinion, which is often quite strongly expressed. People do seem to love bashing MBAs! In fact, I was on the entrepreneurship panel for the incoming MBA class at Oxford the other day and one of the new class made a similar comment, asking for the panel’s opinion. I won’t speculate here on why this opinion is so popular, but I do suggest you read this post by the Humbled MBA.

In response to the never-ending “MBAs can’t do entrepreneurship” quips I thought I’d do a couple of blog posts about MBA entrepreneurs – one highlighting companies that had been started by MBAs and gone on to some success, and later a post about up-and-coming MBA startups, maybe with an Oxford focus. Luckily, I found that most of the work looking for successful MBA companies had been done by another blogger(*1) and in this Quora post, so I’m going to use them and highlight a few of the companies.

So here, in no particular order, are some successful companies started by MBAs(*2):

Zynga – founded by Mark Pincus (Harvard MBA 1993). Zynga was recently valued at $11.15 Billion. Zoiks!

Geocities – founded by David Bohnett (University of Michigan Ross School of Business 1980). Sorry, GeoCities has closed. 😦

Sun Microsystems – founded by Vinod Khosla and Scott McNealy (Stanford MBA 1980). That worked out quite well.

Nike – founded by Philip Knight (Stanford MBA 1962). Nike make shoes and seem to have been fairly successful. According to Forbes, he’s worth $12.7 Billion now. Not bad. He does sound like a bit of a git though.

Victoria’s Secret was started by Roy Raymond (Stanford MBA 1977?), but there’s quite a sad story to him. In his honour I interrupt this flow of MBA startups for a picture of a Victoria’s Secret model.

Adriana Lima wearing Victoria's Secret bikini. Nice finishing.

If that last company has made you feel amorous but you have no-one to be amorous with, then check out Match.com founded by Gary Kremen (Stanford MBA 1989).

If you visited the previous company, but decided that hot girls probably prefer guys with loads of money, why not make lots of money on the stockmarket with E-Trade*(3)? The company was founded by William A. Porter, who got his MBA from the MIT Sloan School of Management in 1967.

Both ProFounder and Kiva.org  were founded by  Jessica Jackley (Stanford MBA 2007). They’re both relatively young companies, but Kiva in particular seems to have got quite wide adoption in the US with its microfinance model for entrepreneurs in developing regions. I visited their offices earlier this year and was very impressed by the company. Since being founded in 2005, the company has apparently raised $249 Million in loans for the entrepreneurs it helps.

US biotech giant Genentech (now part of Roche) was founded by Robert Swanson, a VC with a MBA from MIT Sloan School of Management (1970). But it wasn’t MBAs that made Genentech big – it was the mAbs. Geddit?! If you get that I want you to know my Twitter handle is Major_Grooves and you should get that too.

Tony Hawkins is a voice artist with over 15 years of experience. He sounds a bit like a robot*(4). He does not, however, have an MBA. Trip Hawkins does though! He got his MBA in 1978 from Stanford and founded computer games company Electronic Arts.

All these companies have been US companies founded by US MBA graduates. Mostly from Stanford. So here’s a token Brit! Lonely Planet was founded by Tony Wheeler (London Business School MBA 1972) but he doesn’t mention his MBA on his profile page*(5). He probably doesn’t think it’s very cool.

I was going to start this post with Fedex as I’d heard that the Fedex “hub and spoke” model was based on the founder’s poorly rated MBA project. However founder Frederick Smith doesn’t appear to have done an MBA. Quite how he managed to start a company without an MBA is really beyond me. Despite their company founder not having an MBA, Fedex does value its MBA employees:

So next time someone tells you that “MBAs can’t do startups”, quote a few of the above companies or send them this blog post.

*(1) I think this list maybe has some mistakes, and some MBA founders that I don’t quite consider “pure” founders – i.e. they they bought in to a company or similar (like Mitt Romney and Staples). Also I’ve not mentioned any of the finance firms here because they are boring.

*(2)Note I’m only highlighting the MBA founders here. Many(most?) of these companies had non-MBA co-founders who were instrumental in the companies’ success. The point here is just to show that MBAs can be involved in successful entrepreneurship as company founders.

*(3) This WannabeVC does not give investment advice. Don’t do shares kids. If you want to try trading, you should see that startup I write about in the follow-up to this post.

*(4) Seriously, he really sounds like a robot. Is it his voice used for those instant animation movies with voice over that people have been posting on YouTube recently? What I mean is… maybe it’s the robots that sounds like him!

*(5) Back then, in the olden days, it wasn’t called an MBA – it was actually a MSc in Management that Tony received. Still doesn’t sound cool.

3 Responses to “Who says MBAs can’t start companies?”

  1. Eric Morey October 16, 2011 at 12:27 am #

    You forgot Michael Bloomberg and more just from Harvard Business School:

    http://www.hbs.edu/news/releases/mvpfund122010.html
    Among the many HBS graduates who have founded successful business ventures are Marla Malcolm Beck (MBA 1998), founder of bluemercury; Michael Bloomberg (MBA 1963), founder of Bloomberg L.P.; Marc C. Cenedella (MBA 1998), founder, president, and CEO of TheLadders.com; Scott Cook (MBA 1976), chairman and cofounder of Intuit; Rajil Kapoor (MBA 1996), cofounder and former chairman and CEO of Snapfish; Alexis Maybank and Alexandra Wilson (both MBA 2004), cofounders of Gilt Groupe; Christopher Michel (MBA 1998), founder of Military.com; Tom Stemberg (MBA 1973), founder of Staples; and Jeremy Stoppelman (MBA 2005), CEO and cofounder of Yelp.

    • Steven October 16, 2011 at 12:32 am #

      Well, I didn’t really forget them, I just chose not to mention them. 😉

  2. Eric Morey October 16, 2011 at 12:34 am #

    Perhaps an opportunity for a recurring topic…

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