Transcript of What They Don’t Teach in Business School about Entrepreneurship – Part of 2010 Conference on Entrepreneurship at Stanford GSB…
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Chuck Holloway – Professor, Stanford GSB
A session on what they don’t teach in business school about entrepreneurship. Having taught entrepreneurship in Stanford business school for something like 13 years, I can tell you there’s a lot. Some of it we know we don’t teach, and some of it we probably should teach if we knew a little more about the subject. So, I think it’s a very pertinent subject today. So Mike, why don’t you introduce yourself and tell us a little bit about what you did, and just remember, I’ve got a little bio here. So if you don’t include things, I can include it, and if you do include things that, that aren’t in here, I may question you on it.
Mike Cassidy: Okay. It’s like the Senate Investigation Committee.
Chuck Holloway: Exactly. Except you’re not sitting out there.
Mike Cassidy: I do have lights flashing at me. So I’ve been the CEO and co-founder of four startups. I was very lucky with the first three. One was, the first one was, I started with $500 of myself and each of my two partners putting $500 so we had $1,500. We started in my second year of business school at the Stanford of the East Coast, in Boston.
Chuck Holloway: You’re very kind.
Mike Cassidy: We never raised venture capital. It started as a company called Dial A Fish. It was where you could order groceries from home. It was insane. This was before the internet and everything. We eventually sold it for — we had to change direction because that was not going to work into a computer telephony tool. We sold it for $13 million a few years later, which was tiny for Silicon Valley standards, but, a fair New England return on the $1,500 investment.
The second company was Direct-Hit, which was an internet search engine. Nobody ever heard of Direct Hit, but we were providing search results to Microsoft, AOL, Lycos. We’re kind of a behind-the-scenes provider. And it was the right time we grew to a market value of $500 million. 500 days after we launched it, and we sold it in January of 2000.
And then the third company was Xfire which is an instant messenger for PC video gamers. It spread virally. We got to about three million users, two years after launching. We sold it for a $100 million to MTV and now there’s 15 million users, using it. And I’m now working on my fourth one, which I could end up being, I want to be four now but I could be three and one because we haven’t sort of found the formula for success on Ruba. Ruba is a travel site, so that’s sort of my background.
Chuck Holloway: And when did you graduate from Harvard?
Mike Cassidy: A long, long, time ago.
Female Panelist: We have to get into numbers.
Chuck Holloway: Oh, yeah, well, the reason why is, is sort of interesting to know the timing of your first venture, right, because, that was, you say, prior to the internet.
Mike Cassidy: Yes.
Chuck Holloway: But, so you were actually a leader in that, others came after you, also didn’t do very well. Right? You may have been the biggest winner in that whole space of ordering food from home.
Mike Cassidy: If we’d started a different time.
Chuck Holloway: Well, you sold it for $13 million. Most of the other companies I know lost money, right?
Mike Cassidy: Sure. So I decided I was going to stop aging at age 31. So, I graduated Harvard from 1991. So I must have graduated around age 11. You can figure out.
Chuck Holloway: Good. All right, thank you. Nazila?
Nazila Alasti: So I’m Nazila Alasti and I started life as an engineer. I’m Iranian originally, and in my country if you’re a good student you either become a doctor or an engineer, so there was — that was the choice and I was scared of blood so off I went into engineering school. But it was actually a really great background I thought for Silicon Valley. I didn’t know I would end up here, but I did. And I was thankful for my parents for having pushed me into engineering.
Fast forward, five years of working at a technology company at Mass Microdevices. I became a project designer, project lead, went to business school, and learned that people can actually make money selling pencils. And that it doesn’t have to be semiconductors. That was my big learning from business school. Entrepreneurial activities at the time were not as hot as they are now.
Chuck Holloway: What was it — when did you graduate?
Nazila Alasti: I graduated in ‘88. So, I also stopped aging at 30, a few years earlier than you, yeah. And I have to say that my experience at business school was really eye-opening, broadening, but I wouldn’t say that I was focused on necessarily becoming an entrepreneur. It seemed very risky at the time. However after I got out and experienced the venture capital world for a couple of years and then went on to work at Apple, which I consider really my formative years at Apple, and worked on a big failure of a project called Newton, which was the original hand-held device. I came to understand that I really needed more freedom in my life, and that the corporate structure wasn’t providing that, and I was stupid enough or naive enough to say that I could do things on my own. So I started a long line of all sorts of startups, failures as well as successes. And ended up now running Jooners, which was my first, from Powerpoint to funding, to product startup, where I’m CEO, founder and I’m growing that business. So, that’s a little bit about me.
Chuck Holloway: Nazila is also the mother of two daughters.
Nazila Alasti: Yes, I am.
Chuck Holloway: And someone who is passionate about trying to help those of you who are thinking about entrepreneurship learn more about it. So that’s why she’s here today.
Nazila Alasti: Yeah, let me add to that Chuck. Thank you for bringing it up. I also want to talk to the women in the group if you’re interested afterwards about why I believe entrepreneurship is actually a very valid choice and, compatible with being a mother. So anyone who is interested in discussing that, I’m open to doing that. The world will tell you no, it’s 24/7, etc. Unless you burn the midnight oil, you won’t be successful. I happen to have a different story. So if anyone is interested I’m happy to share that.
Chuck Holloway: Great. Thank you. So we talked to — we’ve heard from two people who actually had technical backgrounds. Will, give us your background and what you’re doing now.
Will Price: Thanks, Chuck. So I graduated in 1999 from Kellogg, and I’ve been in the Valley since then. I’ve done a combination of both startups and venture capital activity. So currently I am the CEO of Sequoia Hummer-Winblad funded company called Widgetbox. And I joined Widgetbox two years ago. And before that, I was a managing director at Hummer-Winblad and spent six years in the venture capital business. So since I got out of business school, I’ve had kind of the opportunity to see both entrepreneurs in action as a venture backer, and thinking through business models and deciding who to finance and who not to finance. And then also, having decided that to become an entrepreneur myself and it’s only recently I even considered myself one, quite honestly. But the last couple years of running a small startup that’s not profitable makes you one, I think. It’s been a very interesting time to run a company. So, now I’m definitely excited to be here today and kind of share my thoughts about what business school taught me, what it didn’t taught me, to teach me about, how to lead a company, bring products to market, sell, etc.
And Chuck’s right, like in terms of backgrounds, I went to Harvard, studied East Asian studies and finance and started my career actually in Asia. So I worked in Hong Kong, and Singapore, spoke Mandarin Chinese and thought I was going to be part of the Asian miracle, but so I’ve done — I’m not coming from an engineering background, in other words. And so part of, one of the questions today I think is, how do MBAs and finance people fit in to a culture that’s really run by engineers as opposed to business types, and kind of the MBA being a joke, as opposed to something good. So I’m happy to be here and look forward to a good discussion.
Chuck Holloway: Now one of the things, Will, if I am correct in reading this and listening to you, you formed, you joined Widgetbox after it had actually been founded.
Will Price: That’s correct. So there were three technical founders. They’d actually raised $10 million before I got there.
Chuck Holloway: Some from you.
Will Price: Some from me, I was the seed financier and then Sequoia did the A round and then Brent Jones and Tommy Vardell at Northgate did the B round. And at that point they were looking for a CEO and they did a nine month search and the last guy that we made the offer to, I told myself at the dinner if this guy doesn’t take the job, I’m doing it. He didn’t take the job.
Chuck Holloway: So, some different paths here, I mean starting their own company, going out and trying to find the idea, put the team together, versus joining a startup after it’s had the initial founders. The way we want to start this is to ask them a little bit about what led them to decide to follow an entrepreneurial path. Because many of you are in business school, or not in business school, you’re thinking about this and you’ve got a set of ideas in your head as to what it’s going to be like to be an entrepreneur. And then, what has been the biggest surprise for them as they joined the entrepreneurial world? So you got a vision, what led you to do this, and then, what’s been the biggest surprise once you jumped in? Let’s start with Nazila.
Nazila Alasti: So I think I touched on that. For me, my job was such a big part of my life that, unless I was very creative and had the freedom to do what I wanted to do, didn’t have to explain myself too much, I was unhappy. So I thought that a smaller environment, less bureaucratic environment would afford that. I wanted to be my own boss, and kind of live and die by the decisions that I made. I also like adrenaline, I like living on the edge. I like being pushed to make decisions. I felt that I had too much cushion at Apple, frankly, my decisions really didn’t make a difference. The juggernaut was going on, and I was doing my best but where was my contribution really. So those were some of the reasons that I decided to jump into the entrepreneurial pool.