This week, I moderated a panel titled MBA Entrepreneurs in the Valley.
The discussion was on whether an MBA helps entrepeneurship. Most successful entrepreneurs don't have MBA's, so why bother getting one if entrepreneurship is your career choice? And, if you have one, how do you position it in the Valley? That's the topic of discussion. On the panel were some entrepreneurs who've founded some innovative companies, such as Pete Slosberg, the founder of Pete's Brewing, which went public in 1995, Gregg Brockway, co-founder of Tripit and Hotwire, which was sold to IAC for some $650 million, Jack Kloster, co-founder of Yardbarker, an ad network for sports blogs, and John-Bernard Duler, founder of Esurance.
Here's my pre-interview (party edited) with Sami Inkinen, co-founder and COO of Trulia, which raised $33 million in venture financing, led by Sequoia Capital and Accel Partners. Trulia is a place to find homes or places to rent. Listings come from real estate companies and real estate agents, who pay an average of $150 per month for preferred placements, and brand visibility. Sami started Trulia in 2004, while at Stanford Business School. He found the real estate experience frustrating and “way behind,” and thus Trulia was born out of a personal need and personal pain point. Upon graduating, Trulia was launched in September 2005. Sami graduated from Stanford Business School in 2005.
Do you need an MBA to be an entrepreneur?
Sami: It was one of the best life experiences. It was a phenomenal experience as I was surrounded with extremely capable and high-energy people. Two years of that immersion is incredible. As it relates to entrepreneurship, for someone who came from Europe, it was an absolutely necessary stepping stone to establish myself in the Silicon Valley. I was pretty experienced with the basic functional skills, such as accounting and finance, but my softer skills, management/leadership/people skills were enriched by the phenomenal experience. The No. 1 specific learning from business school was the people skills I learned.
Many great entrepreneurs don’t have MBAs, bit if you have one, how do you make it work for you?
Sami: In general, an MBA is for life and life throws in all kinds of challenges and experiences. If you micro-optimize life for starting a company only, it’s maybe not necessary, but it can greatly increase your odds at succeeding as an entrepreneur.
Why did you become an entrepreneur?
Sami: I remember dreaming about starting all kinds of businesses from selling ice cream (which I love) to software development, since I was about 10 years old. I think the first real, little thing was when I charged a subscription fee to my dial-up Bulletin Board System (BBS), when I was 14. This was pre-Internet, when people operated bulletin boards where you could access file-sharing and discussion forums. I ran one of the first ones from Finland. Fundamentally, I think the drivers were: 100% control of my own destiny as well as the excitement that comes from building a team, product/service from scratch, and having a positive impact on other people’s lives. That is something that is just super exciting to me. Being an entrepreneur is not a job, it’s a lifestyle and mission that I’m very excited about.
Is Trulia the same company you founded or have you made a lot of pivots as entrepreneurs tend to do?
Sami: My first company I started, we made 120-degree turns and most successful companies go through iterations. But it turns out our main approach to revolutionize the consumer real estate experience has stayed the same from our goal in 2005, which was to revolutionize the consumer experience to buy their dream home. That said, we did make a strategic change. Initially, we thought we’d build the Google for real estate. We assumed we’d index all real estate information. We thought within six months, we thought we’d have all real estate info indexed. Turns out, the real estate industry is quite paranoid about how their data is used. You need to form personal relationships with key companies to get these. So then, it took two years to get nationwide real estate listings, instead of six months. It was a huge change for us. Fortunately, we realized this pretty quickly after indexing the listings after we received a number of cease and desist letters. Now, everything is more iterative in nature.
How do you define risk?
Sami: Doing something most other people would say no to. The more people would doubt the bigger risk it is. As an entrepreneur, you have to take a certain amount of risk. If you do something everyone expects, there are no opportunities there. There’ll be points of time when most people disagree with you and don’t believe in what you want to do. When the risk starts going down, so does the opportunity.
Gut feel or analysis – which did you rely on more when starting your business?
Sami: 100% gut feel was my first step. Then I spent some time at McKinsey and it was 100% analysis. After the McKinsey experience, I’ve found some kind of balance that is changing all the time. In the early days, it’s more gut feel. Today, it’s a lot about numbers and stats (at Trulia).
If I want to start a business, what’s the most important step to take?
Sami: Burn the boats and get started. Most people NEVER will, despite lots of talking and planning.
What’s the most difficult thing you have had to deal with as an entrepreneur?
Sami: Everything is a chicken-and-egg problem. You need A to get to B, which is the only way to get to C. How do you break that if you don’t have A? On a more pragmatic level, I’ve certainly compromised a lot of other areas of life, which is easier to see from outside by others.
How big a role did the possibility of financial gains play in your decision to start a business?
Sami: It’s a nice to have, but certainly, not the reason or driver. Enjoy the journey, not the destination.
Give one piece of advice rooted in your experience.
Sami: If you want to start something, burn the boats and get moving. It will just get more costly (in real and soft terms) as time goes by.
See the first part of this series with Gregg Brockway of Tripit: Does MBA spell entrepreneur? Part I