Table of Contents
UCLA Anderson School of Management has a Business Creation Option (BCO) as part of its MBA program. Students can elect to take two quarters (twenty weeks) to build a business case. They have to do exhaustive market research, apply rigorous financial analysis, and show an intuitive understanding of the product they’re building. It is also their master’s thesis and 10% of their grade. The final exam is a competition where the school invites experts and investors from the industry and judge, Shark Tank style, the work. Some ideas even get funded. The program tests their individual ability and their teaming skills. What follows is, with minor edits, are recommendations I shared with the team. They are guidelines that I think would be helpful in any startup-like situation, I hope they are helpful in your quest as well.
Definition of Success
I will consider this course a success if you come away from it with high-quality, first-hand experience in building a business successfully. This is not the same as building a successful business; no one can promise that. But there is a clear way to know whether you’ve built a business successfully:
If someone gave you a dollar to invest in the business, would you 1) know where to spend it, 2) know when to expect results, and most importantly, 3) recognize when the investment is not working out?
In other words, do you have a viable capital allocation plan? As business creators, you are capital allocators first and operators second.
The Team Is Everything
The idea of “The team is everything” may be trite, but it is true. Your teammates’ support determines your success. At some point, you and your team will push each other, have mismatched expectations, and fail. The only way you’ll be able to work through such issues is to have shared, strong trust that you can draw on to have candid conversations.
To create this trust, you need to know each other now, before the first squalls test your relationships. And don’t just get to know each other in the formal structure of the classroom or business. Set a time each week as a standing meeting with no agenda for you and your team to do some kind of activity together.
No Black Boxes
When starting out, it is tempting to delegate before you understand. However, when first building a business, there is much to be determined in product, finance, operations, and R&D. In this stage of the business, you will need lots of feedback from each other to ensure everyone is on the same page. So don’t treat any one area as a black box. You are building a business, and for that, you have to understand all of it.
Start Before You’re Ready
Richard Branson is right: Don’t wait for the right moment to start. Start now. Use urgency to provide yourself focus and clarity. Don’t wait for all your interview questions to be finalized before reaching out to potential interviewees. Get on their calendars now, and then use that time to finalize your questions. Whatever your thesis, it is going to get obliterated by at least one interviewee. Get to that point quickly so you can decide how to deal with it sooner.
Meetings
We’ll have two kinds of meetings: team meetings and 1:1s.
For team meetings, I want the “bad news first.” Let’s go over what’s not going according to plan and what you’re doing about it. We’ll go over all the bad news and then triage it to decide which we should discuss first. I suspect this will fill up our time quickly.
Our 1:1s will be your individual time with me, so I expect you to set the agenda and decide what you want to talk about. I’ll be inquiring about two aspects: your progress as an individual contributor and your reflection on the team’s progress.
Meetings will be either thirty or forty-five minutes. If they need to go for longer, the level of planning in the agenda and the prework required should reflect that.
I am happy to meet in person or via Zoom as our schedules allow. You decide the format, and I’ll do my best to make myself available.
Postscript: Later, I added a third type of meeting that I’ll share below.
This Is Personal
Regardless of business outcomes, starting a business has been a life-changing experience for every entrepreneur I know. Creating businesses made them bold, wise, and conscientious. It helped their careers, regardless of the result. I hope the same for you–that each of you starts your venture and experiences what it is like to be in the cement mixer of business creation.
Finally
Writing is hard for me, so writing this email took longer than it may for many of you. But I feel it needed to be put on paper to ensure I could convey my thoughts precisely. In other words, you won’t be spammed by long group emails like this unless absolutely necessary. They are as much of an effort to write as they are to read!
Thank you for your time,
TJ
Red Team / Blue Team
There are several checkpoints built into the program. At the midpoint, it became clear that while the teams were doing good work, they were developing some blind spots that only frank feedback could clear. So I added one more meeting.
Every Wednesday, both teams would meet for about two hours and be the red team/blue team to each other. Each team would present their progress to the other team with the other team being unfiltered, at times brutal, in their feedback. This was a classic red team / blue team move. While one team was doing the work, the other team was monitoring and questioning assumptions.
The meeting format mimicked the final presentation. The team would present what they had by way of a pitch, and the other team would point out gaps in their story, product-market fit, or other issues. This was a competition, and the best way to prepare is to create a competition-like environment. It also helped me figure out who was pulling their weight, the true leaders in the team, and who needed a bit more pushing.
Finally, Finally, All Advice Is Subjective
The Anderson School provides good resources for its students. If you need help with team communications, there’s someone for that. If you need help with presentations, you get to talk to an expert whose daytime job is to help leaders with presentations. You want help with your pitch, you get to talk to some of the best investors. It is natural to then get seemingly contradictory advice.
There were times when what I told them didn’t match what the experts may have told them. I told them why I believed what I believed and made it clear that it was my job to make sure they were making progress, but the path was very much theirs to decide. In the eyes of the state of California I may be a lecturer, but to them, I’m an advisor.
For example, I strongly believe: When financial modeling, G&A is not as important as R&D and S&M spend so don’t waste time on it during your pitch; whether in retail, enterprise, or SMB, knowing who the user is and what success means to them is critical; and storytelling is a core skill of any successful entrepreneur. But that’s just me, and you’re welcome to disagree as long as you know why you’re disagreeing.
This dichotomy is in many ways the hardest part of the course for an MBA student. You chose an elective course that’s 10% of your grade in a program that you chose to attend. You are in a competition with fellow students who are just as capable and competitive as you, but the rules are not as well defined. You are graded on your individual contributions, but the class is a team sport. Like all startups, you have to give it your personal best, but if you want to go far, you can’t do it alone.