Engineers and Business School - A Match Made in Heaven
Want to Start a Business? Forget the MBA. Just Do It.
Strategy consultant Sramana Mitra has founded three companies and consulted for 80 others. She writes a weekly column for Forbes and runs free online roundtables to help entrepreneurs develop their business ideas. Her four-book series, Entrepreneur Journeys, gives budding tech entrepreneurs an in-depth look at how to build a flourishing business. IEEE Spectrum contributing editor Prachi Patel asked her advice for entrepreneurial engineers.
IEEE Spectrum: Many engineers might not have business acumen. Should they get a business degree first?
Sramana Mitra: I don't recommend going to business school. Let's say search-engine marketing may be part of your strategy to acquire customers. Take a class or read a book on search-engine marketing for dummies. Engineers are better off starting companies rather than spending two years in business school and accumulating debt.
What advice do you give to engineers who are toying with a business idea?
S.M.: There's this misconception that everybody needs to be able to raise venture capital to be a successful entrepreneur. That's fundamentally wrong. My message to engineers is, You can do a lot of things on your own. Try to validate an idea, get to some sort of proof of concept, and even potentially get some customers. And that's the time to raise money, if at all.
What does it take to bootstrap a business?
S.M.: Bootstrapping is getting a business off the ground without external financing and with as little money as possible. It does not entail hiring 15 people off the bat and raising a ton of venture capital. It involves identifying what problem you're trying to solve, identifying the customers that would help you solve that problem, and really focusing on a solution for what these customers need.
But doing all of that takes time and money.
S.M.: It will take time. But engineers could keep their day jobs and tinker on nights and weekends. When they have their first few customers, they could quit their jobs and do this full-time. Or if people have lost their jobs, I tell them, Why wait six or nine months sitting in the house waiting for something to happen? Figure out what problem you can solve and go solve it with a company.
It still takes money to get a business off the ground. How does an engineer do that without venture capital?
S.M.: I know one fellow who wanted to quit his job and start a business. He took US $400 000 dollars' worth of credit card debt and financed his business that way. He started two companies in a row that were sold for over $150 million. Another guy stayed with his future in-laws so he could put rent money into his business. There are incredible human stories of courage and creative resourcefulness.