This is the fifth interview in my "Does an entrepreneur need an MBA?" series.
Tom Patterson recently sold his company Wize, a shopping recommendation engine, to NexTag. Prior to Wize, Tom was an EIR (enterpreneur in residence) at Mayfield, a top-notch Silicon Valley VC firm that invested in Tom's startup. Tom, who now works as an executive at NexTag, went to Harvard Business School.
How does having your MBA helped you as an entrepreneur?
Tom: My MBA experience provided me with friends and contacts that invested in Wize, advised wize, help us hire at Wize and even help introduce Wize to acquiring companies. The education was great too. It certainly was not the only way to get an education but it was definitely helpful.
What did you learn about entrepreneurship that you wish business school taught you?
Tom: No business school program could ever capture all the real-time experiences you get in real life entrepreneurism. There is too much range of what can happen. What business school can do is give you a framework of logic on how to make decisions. It helps you remember what to think about at a high level.. Real hands on experience is the only true test of understanding your character and how you deal with the unknown and a stressful situation. One area that I think business school could help with is on how you understand yourself, your perception and how you relate to people. I think there is a bit of entitlement and bravado that is positive in one way for a lot of business school grads but also in another way alienating to people. If we could develop a way to help students understand that their bravado actually comes from fear, there may be a way to transform this energy to create greater connection and I believe greater success on the people/human side of business.
Would you advise someone to get one if they wanted to be an entrepreneur?
Tom: I don’ t think an MBA is mandatory however, I believe my experiences and friends from HBS are a majority of my best friends in life.. I can’t run the experiment again and tell you my life would be the same without it so I would have to say that the right school will fill you with experiences and friends that makes anything you do whether entrepreneurism or something else a much more fulfilling life.
Why did you become an entrepreneur?
Tom: My life is based on challenges to discover myself. I guess in terms of what was next, this seemed to be the next greatest challenge and by far one of the most fun things someone could do is to be responsible for almost all decisions of an entity is a truly enriching experience. It’s maturing and humbling and at the same time a blast. I learned so much about myself through this experience.
What are some lessons you learned as an entrepreneur?
Tom: I could go on and on about what I learned but I’d say that the first thing I learned is that you must become comfortable with the unknown and know how to take action to discover the truth.. what I mean by this, is that it’s a constant endless process of developing a hypothesis and going out to make that hypothesis fail or succeed as fast as possible.. the second lesson is that the human element and leadership is the most important thing to focus on over the long run. The quality and character of the people you choose is so important.. we did not lose one person at Wize in 4 years that we wanted to keep in the fold, and that’s because we chose employees with character. If you lose someone important in a startup its tough to recover.
What's your biggest failure as an entrepreneur (be explicit)?
Tom: Failures. Well I’ll be honest when we first started Wize, we tried to integrate two separate offices together. I thought this would be easier than it was but it wound up setting us back a year to deal with the lack of relationships, processes and time zones. If you do this in a small company you really have to build time into the plan for achieving this.. Another failure might have been that we ultimately came up with a great and working business model but we should probably have switched sooner. Sometimes the writing is on the wall and you know the decision you have to make. Delaying that only perils you more when cash and time are so limited.
Are business plans worth spending time on? How close were you to your original plan when you were sold?
Tom: Business Plans are only important because they help you get your thoughts out on paper and it helps you think and communicate. It’s got to be dynamic… We were close in some ways far in others when we sold from our original business plan.. the speed of changes on the internet is too dramatic. Reacting is not optional. It’s mandatory.
Have you made any pivots at Wize?
Tom: If you mean by pivots, did we have to change the model, then the answer is, Yes. I think I even filmed a VATOR VIDEO when I was running on the prior business model. We are still a lead gen business but current wize is so much broader and deeper and we are excited about the next step with Nextag. It’s going to be a great next stage for all of us at Wize.
(See previous interviews below)