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Friday, February 17, 2012 at 12am

The Benefits of MBA Networking for a Startup

The Benefits of MBA Networking for a Startup  main image

Networking is the second of the two main reasons for going to business school, the other being reputation. Both these points are also crucial for any startup. Since we discussed the benefits of reputation in my last post, now we come to networking.

MBA Networking

In my stream of around 80 students, there were 60 different nationalities represented and many diverse backgrounds. This provided me with invaluable knowledge and experience from around the world, helping me prepare for the challenges of launching Flat-Club to a global audience. In one coffee chat (in fact even better, a chat over a beer), I got a range of views about cultural differences and specific points to address in the business model. It saved me many hours of research into markets and this was all a result of not being afraid to share my idea with my classmates.

Don't be Afraid to Share

Many first-time-entrepreneurs worry that if they tell anyone else about their idea then someone will steal it, much like in the film The Social Network. This approach is very risky as you miss the chance of receiving feedback before you invest resources, and you have to realize that at some point your idea will be launched to the public, and lots of other people will hear about it, and try to copy it. So if you are not confident of dealing with this competition, maybe the idea is not going to go as far as you had hoped. It's important to develop differentiators and find your niche market.

Professional Mentoring

Alongside your classmates, another network you gain from business school is that of the faculty, your professors, and tutors. At top business schools, these are some of the world’s most knowledgeable and well equipped businesspeople and their free advice has been a great benefit of my MBA. This has extended to the point where our international expansion plan was developed with the LBS strategy faculty. Having such immense resources, especially access to people that have taken businesses to a global market before and know many of the pitfalls, at your disposal, is an incredible extra asset for any startup.

VC Networking

Business school also brings you into contact with VCs. As well as coming to campus for talks, your classmates will have worked with them, some of the faculty will operate as VCs and there will be alumni who have moved into that field. The best way to learn how a VC thinks is to talk to them, and such a high exposure to VCs gives you the required insight. Quick chats over coffee provided me with a vital understanding of how to pitch, how to shape the company and what the key metrics are for success. Most importantly they gave me the information about what I needed to do at that time in order to raise money in 6-12 months time. This advice paid off and I got the funding.

Business School Alumni Networks Can Also Be Angel Investor Networks

Some of the funding we raised came from angel investors, and alumni of top business schools make ideal angel investors. They want to connect to the school in order to maintain their own networks. Often they have acquired expertise in the process of gaining their own capital. Returning to my previous blog, you have an upper hand already by being part of the community, and this may help swing their decision as to whether to invest or not. Another type of investor comes in the shape of faculty members. When they have such an intimate knowledge of your business whilst helping set it up, they are in the best position possible to judge how successful they believe it will be and so can make astute decisions regarding the return from their investment. Flat-Club stands testament to this, two of our investors are faculty from LBS.

Without the networks that I gained attending LBS, Flat-Club would not be where it is today. This network has played a role in all the key stages of the business so far, from just starting out to gaining my first round of investment. The contacts, and skills to utilize them were a valuable product of my MBA. However, this is not all that I gained, in my next post I will discuss the other skills that I learned, especially some technical skills and business frameworks, and how these have contributed to the rise of Flat-Club.

 

About Nitzan Yudan

Nitzan Yudan, 33 years old, lives in London, graduated with an MBA at London Business School, and has 12 years’ experience in finance, IT, and tourism. Nitzan is the founder of Flat-Club – short term renting within social networks. Flat-Club helps alumni and students of top universities find short term accommodation (from 1 night up to 6 months) with others they trust from their existing networks Flat-Club was founded in November 2010 with 5 flats in London and within its first year grew to 2,000 rooms and apartments in 20 cities and a team of 15 from 12 nationalities as part of the London Business School Incubator.