Building a start-up without an MBA.

For the past six or so years my co-founder Ben and I have been building our startup company Bio-Optics Australia (Woven Optics) while also completing our respective PhD programs. Given that at the time we were also dedicated to seeing this company succeed, we often discussed whether or not we should be substituting our PhD program for an MBA (Masters in Business Administration). And whilst we went back and forth on what we thought was the best use of our time, we ultimately decided that rather than spend another few years carrying out an MBA program we would aim to learn about business on the job, in real-time. We chose to surround ourselves with people who had abundant business acumen that could support and mentor us. We opted for reading recommended literature* and seeking advice as each obstacle arose, as opposed to going back into study. Whether it was the right decision for us, time will tell.

*I’m happy to provide a list of recommended reading in a future article if it is of interest. Let me know on LinkedIn or X (Twitter) or leave a comment below.

We spent time learning concepts like how to write up a business plan, how read a profit-loss statement, how to set up accounts for startups and manage budgets, understand the market and learned about stakeholders and supply chains in the markets we were targeting. We accumulated and read many articles and reports to help us understand the world of wool production intimately, particularly in Australia. We spoke with wool producers, ram breeders, brokers, classers and anyone in the industry that would talk to us to help us understand the lay of the land.

In other words, we did our research to help grow our knowledge, however when looking at what made up the key fundamental skills and ideas that someone would learn when carrying out an MBA program, I quickly realized that there were gaps in my knowledge that could potentially hinder me from being able to successfully grow and scale our company way beyond our current status. To be completely honest this made me quietly nervous because there are fundamental concepts like ‘Strategic management’, ‘Data analysis and technology’, ‘Global perspectives’ as well as a few others that could make the difference between a successfully scaled company and one that suffers due to a lack of understanding and experience of large-scale business. This is where building the right team is critical to overcome these potential shortcomings.

However, more to the point of this article is the following question,

Is it possible to build a startup without an MBA?

My answer would be, yes it is, with some considerations.

In my opinion, the steps required to build a startup include;

• having an idea,

• understanding how to solve a particular problem,

• finding out if it is an actual problem for the people you would expect to benefit from your product (I think this point is paramount in understanding whether or not your solution has business potential, or just a good idea),

• determining if it's feasible to build your solution in a way that it is affordable for those who are purchasing it and

• working out the size of your market.

Further to this, some important questions include;

• do you have money to build your product or can you raise it and

• can you build the product yourself or do you require external support.

In the case of Woven Optics, we understood how we would go about building the solution even if we weren’t the ones that were technically skilled in the engineering disciplines required to carry it out beyond the laboratory. However, this did not stop us from starting the business once we understood that it was a problem worth solving. We saw this as an opportunity to see if whether or not we could adapt our PhD skills (see previous article about transferring skills) towards starting and managing a business. So we decided at this point in the journey we did not need an MBA to create the business. However, I believe that the larger the company the more important an MBA (or equivalent training) would be and it would probably be at that point that I would ever consider formal training or stepping into a non-executive role*. Especially if I find myself being in way above my head in terms of running a large scale business. *Please note, that is just my personal view.

I found by talking to investors that when they carry out ‘due diligence’ they will try to identify if founders or team members, including directors, have the combined skill sets required to contribute significantly to the outcomes of the company either from a technical or business standpoint. Understandably, people are not going to risk investing thousands or millions of dollars into a company that doesn't have the right people in the team. Therefore, if as a technical founder or company founder in general you do not have an MBA, then I advise that you consider bringing in business advisors to the team in order to plug those holes.

As a matter of interest I searched to find what key skills and ideas were taught to someone who undertook an MBA program. These principals are outlined in Table 1 below. 

I thought it may be helpful to look at each principal and tell you a little about how we managed to either develop or outsource that skill at this stage of our company’s journey.

Business fundamentals were being learned every time we had to put together a white paper or business plan for an investment pitch or grant.

Leadership and management at the moment means working quite cohesively with a small team we do not have a large number of employees to manage (yet). My co-founder has also participated in a leadership program.

Entrepreneurship is a way of thinking that I feel comes more naturally now after spending some time being innovative and solving problems both in research and business.

Data analysis and technology, well it goes without saying that as researchers, data analysis is something that we have done in abundance, however not in the context of business. We are learning along the way and have also engaged external support such as industry specific consultants.

For Technology, we have both hired and outsourced the required engineers for the project.

Global perspective has come from reading many Ibis reports about the industry that we are targeting to have a clear understanding of how they function and how they are segmented.

Corporate strategy has been minimal but we have tried to future proof our company by setting up a corporate structure that we think will be in our best interest upon the success of the company (words are powerful and manifesting is a thing! :)

Finance and accounting we have predominantly outsourced to book-keepers and accountants.

Negotiation and conflict resolution we have engaged corporate lawyers, business advisors and mentors to help us negotiate any contracts to ensure that we're getting the best possible deal at that time.

Communication skills is something that I think my co-founder and I have in spades due to our years of research where communication is practised often and in different forms.

For Legal and regulatory knowledge we have engaged lawyers and consultants to help us gain a better understanding of industry regulations.

Supply chain management is an interesting one because I didn't appreciate in the market that we are in how diverse the supply chain can be depending on, 1) what kind of farm you're dealing with, 2) what else the farmers are producing on their land and 3) what volume of wool they produce. These and many other aspects will influence the decisions made and the workflow on each of those farms, including how farmers handle their animals and their fleece production.

Marketing strategy is something that we are doing in partnership with our distributor and are working closely with them to ensure that we can lower the barriers to the uptake of our solution.

Innovation and creativity we are already thinking about creating second and third generation devices that will include additional features which will benefit both the existing industry and help us expand to other sectors.

Human resource management is currently managed by the co-founders along with the accountants due to the small team.

Strategic decision making is something that my co-founder and I focus on together with the assistance of advisors and mentors.

Therefore, I do believe it is possible to create a startup without an MBA provided that you build a team around you that can support and guide you to make up for any skill gaps.

Stay curious :)

Vicky 

Table 1: An MBA (Master of Business Administration) program covers a wide range of skills and concepts, aimed at preparing individuals for leadership and management roles in business. Here's a summary of some key skills and ideas typically learned in an MBA program:

***Please note, these articles are based on my own experiences and opinions stated are my own and do not represent the opinion of any other individual, institution or group mentioned in the article.***

PS. If you are a PhD candidate, or have completed your PhD and are thinking of stepping outside of academia and have a particular topic you wish for me to cover in the realm of business transition, please leave a question in the comment section below.