Thursday, January 15, 2009

Why get along with business people?

A typical topic that comes up in the startup economy is the need for business people. (Disclaimer: yes, I am a engineer-turned-MBA) For many small businesses, including technology startups, this is the general mentality. Yet, the consequence of building a non-business-minded startup can be enormous (in a terrible way).

Case: Two computer science PhD candidates are supervised by a professor at a world-renowned university. One day, they run into a "a-ha" moment and sees a glimpse of potential commercialization opportunity. They go full force into product development to turn technology into a usable product. It's a web business, and the mantra is, "people will follow good products". They are busy coding away. An eager MBA students steps into their garage office and give a spill on sales/marketing/finance. The co-founders say they are busy, because they are building something, and the business dude will be needed later. They politely say no to the MBA student but asks if they know any investors. Yes, cash speaks in any situations.

This is just another story of very early-stage startups. Nothing unusual about this.

Few years later: The company didn't get any money from investors. It just wasn't a VC deal, and the company's market size was just too small. It sounded and smelt like a science project than a real high-growth startup. The good news: they survived! The company increased headcount, CFBE happened, and now it's profitable. Rather than what the original business plan called for, the company generated much of the revenue from consulting. Life seems good enough, but the founders feel like there's gotta be something else to be done to grow the business. Then, they pull out the business cards that they got from the MBA student years ago to talk some strategy/marketing/finance. The MBA comes in and wastes time trying to fix things that already work pretty well.

Why am I saying all this? It's too late for them to bring in a business person. The company had already grown into a specific culture with missions that are quite difficult to change when things are profitable. The market perception of company is just that - a bunch of smart consultants. Regardless of how smart the people are, the "jazziness" of business should have begun right at the inception of company.

  • "Business stuff" needs to be done at every stage of company. It can start as a simple blog (marketing/communication).
  • If you find yourself entrenched in unfavorable market perception as a small science project company, it's just too hard to change that. Stick with it, or leave.
Lastly, do you like the Lamborghini in this post? Wanna own one? Surprise: it's a replica made up with decent car parts. Remember: this is something that your business people might be able create for your company.