Thursday, November 10, 2016 at 12pm

MBA Career Risks and Startups

HBS graduate, Jaren Nichols, talks about startups and taking career risks

Potential hazards are going to come up wherever you are at in your post-MBA career. If you are currently thinking about getting an MBA, you’re probably already evaluating the upsides of accelerated growth and a steeper career trajectory against the costs of time, money, and forgone opportunities of other advancement tracks available to you.

However, make sure you also carve out some time to evaluate the career risks you’ll be exposed to once you graduate.

Employment opportunities that await an MBA graduate on the other side of business school can seem like a golden city just around the proverbial river bend, but don’t be blind to risks that are known to MBA graduates who have been seasoned by what post-MBA life has to offer.

Prior to selecting my golden city after Harvard Business School (HBS), I was very fortunate to have the opportunity to work with some great companies in the [San Francisco] Bay Area (Google, Nest and Dropcam, to ‘namedrop’ a few), so I have been able to see what it’s like to work at large companies and it can be really great, but it isn’t completely void of career risk. At bigger companies, your boss and your team play an oversized role in whether you get company-wide visibility and on a fast-tracked promotion schedule.

Working for a small company certainly has its own set of risks, but the balance of those risks shift from being primarily outside your control to inside your control. Rick Ruback, an exceptional (and very candid) HBS professor, spoke with me after one lecture and highlighted this point: MBA students overestimate the risk of building a successful small company and underestimate the risk of getting stuck in middle management. I couldn’t agree more.

Small companies, by definition, have a lower headcount so you can have a bigger impact as an individual contributor. Speaking specifically to startup life, I can tell you that I wear a lot of hats. At InsideSales.com [a tech-orientated platform for sales acceleration], I focused on one goal; now, I’m a team of one with lots of goals, like increasing revenue, modeling underwriting standards, and guiding a maturing product through a minefield of accounting compliance issues.

You are not just getting a ton more experience in the same period of time. You also have a lot more upside because the company you work for is a big factor in the trajectory of your success. At a small company, all revenue growth can be attributed to specific people and changes. Companies with significant market share don’t have room for that kind of growth - vested options have almost a 0% chance to become life-changing. Mediocrity at scale is a much grimmer fate than failing fast and taking all your education and experience to the next opportunity. In short, if you are confident that you have the skills to deliver at the highest level, the real MBA career risk is not working at a growing startup.

Assuming that you’re sold on the potential upsides of working at a startup, you are still going to need to go into the interview process with eyes wide open. Here are some points to consider as an MBA who’s trying to land a job at a promising new startup:

1. Research the team: Pay special attention to who is already on the team. What are their backgrounds and how did they end up working together? Does anyone have an MBA or understand what that education can bring to a company that is looking to become more established?

2. Don’t take yourself too seriously: Startups are going to be a little less formal than your corporate interview process so you should be ready to go with the flow. If you did your homework on the team, your small-talk game should be on point.

3. Signal an ability to get stuff done: Great startups are full of really talented people who are looking to add strong contributors in areas that no one else on the team has the time or ability to execute well. By the time you leave that first interview, it should be clear that the ‘M’ in MBA stands for ‘master’, not ‘manage'.

As someone who now interviews potential candidates at ZipBooks, a venture-backed accounting software startup, I can tell you that MBAs have a lot to offer startups. ZipBooks is about as true a startup as you get and, because of its size, each employee has an outsized impact on the success of the company. Having worked at many different large companies, I can tell you from personal experience that fixing problems early and often before capital investment and headcount start throwing up institutional barriers is pretty satisfying work. At ZipBooks, our career success is tied tight to the company’s success; we like being in control of where we’re going and knowing that each team member plays a critical role in getting us there.

So make your list, do your SWOT analysis [a method by which strengths, weaknesses, opportunities and threats can be evaluated], and pull apart the business model of your prospective target. Hunt for the obvious red flags that would put you in a situation in which your MBA career would be out of your control and then put success in your own hands. Choose a company that will highlight what you do best and where doing your best will make your company a success.

Main tag

Jaren Nichols is a Harvard MBA who supports MBA grads pursuing careers at smaller companies where they can put more of their skills to use and benefit both themselves and their companies. Jaren currently works at ZipBooks, an accounting software startup that also provides paid bookkeeping services, but his previous experience includes Nest, Inside-Sales.com, Accenture and Google, where he launched a first generation Incentive Compensation Management product.