Finish HBS or Launch a Business?

Given HBS’s strong culture of entrepreneurship and the current market environment, many first-year students are facing the decision around leaving to launch a business. Below are thoughts and reflections from two recent HBS students who left after their RC year to launch consumer-internet startups.

Jeremy Stoppelman (HBS ’05), CEO/Co-Founder of Yelp replica watches

What did you do pre-HBS?
“Out of college, I was a software engineer and joined a startup during the boom called with a charismatic founder named Elon Musk. Soon after joining we merged with Pay-pal, I eventually became an engineering manager, ultimately rising to the VP level.”

Why did you originally decide to attend HBS and did it live up to expectations? //
“PayPal was bought by eBay, so I had already been through one acquisition and knew I didn’t want to deal with the politics. There wasn’t a lot going on in the startup scene at the time, so I figured business school would be a nice change of pace. I was also fairly burned out from an intense three-year ride. Looking back, I really enjoyed my RC year, made some great friends and learned a lot. No regrets, my time at HBS helped in a number of ways.”

How did you come up with your business idea?
“I spent a few months in an incubator kicking around consumer Internet ideas with a handful of other smart folks (including my old boss and PayPal co-founder Max Levchin who put the whole incubator thing together). I had been looking at the Yellow Pages space, it was clear what was happening to newspapers was going to hit that industry too, so the question was what would replace that thick Yellow book? Out of a lunch conversation with Yelp’s other co-founder Russ we hit on an idea that got us started, the initial concept wasn’t perfect, but it got the ball rolling.”

When did you finally decide to leave?
“When I realized I had an incredibly talented co-founder CTO, $1 million in financing, and the opportunity to go back to HBS if it all blew up, it seemed like a no-brainer if I was ever going to try my hand at this whole startup thing.”

How did your year at HBS inform/help/hurt this?
“HBS grads have historically had a lot of fantastic career options, and I too felt the seduction of joining the investment side of the startup world (VC). However if I had actually turned down this startup opportunity, I’d probably have kicked myself for the rest of my life. Certain HBS cases have actually helped – I still remember the “Noodles and Company” case from The Entrepreneurial Manager. It deals with franchise expansion and whether to go big fast or figure things out in a single market. That case influenced my thinking and helped us pick the right strategy during a critical time in Yelp’s life. You won’t believe me, and everyone who comes back to HBS always says this, but LEAD stuff is the most important. Unfortunately, it’s really hard to learn the finer points of managerial soft-skills in a classroom.”

Could you really not wait one more year?
“No way – that summer was my shot. A year later who knows, maybe I would have taken a VC job?ÿ If things line up for you and it’s your dream, you’ve got to go for it. Life is short, don’t forget you might be dead tomorrow (sorry to be so grim, but you really can’t take a backseat to life).”

How did sectionmates/faculty and friends/family respond?
HBS’s administration office was fantastic, and they made the process of deferring really easy. My sectionmates were supportive, curious, and probably a little worried for me. My family was very supportive.”

Would you recommend others to pursue this path?
“I don’t recommend entrepreneurship lightly, as it’s a very hard road. You’re signing up for a manic lifestyle. Some days you’re on top of the world, and other days you want to bury your head in the sand. Think about your dependents, such a pursuit is not only going to affect you. Future entrepreneurs will ignore my warning because they feel they have to pursue their dream and don’t care what I have to say about it.”

What light do you think your experience shed on the normal HBS path?
“Find and follow your passions. Whether that takes you towards entrepreneurship or not, if you love what you do, you won’t care what they call it…”

Rishi Garg (HBS ’08), Co-Founder/VP of Business Development of FanSnap

“FanSnap is the search engine for fans, creating the world’s fastest, easiest, most comprehensive and reliable way to find tickets to the events you love”

What did you do pre-HBS?
“At Stanford, where I did my B.A. in Econ and M.S. in Management Science and Engineering, I was steeped in the creativity, energy, and imagination of the Silicon Valley. After school I worked in the Morgan Stanley Technology Group in corporate finance, focusing on digital media and software. Then I focused on those same sectors as a VC at Highland Capital Partners in Boston. I moved on to the NYC media world, first as COO at a film production company called Washington Square Films, then at MTV Networks as Director of Strategy and Business Development, and finally at Google for a summer, where I helped launch their new Print Ads business.”

Why did you originally decide to attend HBS?
“Professionally, I knew I wanted to build a company and with the strategic and operating experience I had, so I felt the time was ripe. HBS would allow me to incubate my ideas in an intellectually dynamic environment, surrounded by a VC and entrepreneurial community I knew well. Personally, I knew it would be a blast, and I figured I shouldn’t wait any longer.”

How did you come up with your business idea?
“I began working as a part-time EIR at General Catalyst Partners, a VC firm in Harvard Square, during Spring of RC year. We knew each other well from my time at MTV, and I had great respect for their digital media prowess and entrepreneur-friendly approach. A few weeks in, they asked me if I would help start a vertical search business based on the lessons from, which they helped to launch. We looked closely at the live events and tickets space, and after a lot of diligence we felt there was a great business opportunity here. As we got deeper into our space, the business acquired a great deal of momentum, and I went with it.”

When did you finally decide to leave?
“I’d always been willing to forego my second year if I found a great opportunity, but the final decision happened in August 2007. We had a solid strategy, closed a great first biz dev deal, hired a CEO with domain experience, and secured funding. I remembered boarding a plane to Thailand with a bunch of HBS friends when I received final word on my blackberry that everything had come together. At that point I truly committed.”

How did your year at HBS inform/help/hurt this?
“First, HBS has a very fair leave policy, which is one of the reasons I chose to go here. Second, Noam Wasserman, my TEM professor, provided thoughtful feedback that helped me feel confident about the decision. Third, I felt that the intensity of the first year experience allowed me to get so much out of HBS that I could leave knowing the relationships and lessons would endure. Still, because HBS is such a special place, it was nonetheless a very difficult decision.”

How did sectionmates/faculty and friends/family respond?
“Friends and family were generally very supportive (including my parents, which surprises many people) and trusted my decision, especially once I explained it to them. I noticed with surprise that many of my friends felt as though I was taking a massive risk, and viewed my decision with some degree of awe; it struck me only then how so many of my classmates valued the brand and experience of HBS and felt lucky to be there, and wouldn’t think of leaving without a degree.”

What did you take away from HBS? What do you use today from your RC year?
“Starting a business puts you in the position of having to use many of the lessons of HBS, more so than more traditional pathways. I find myself reflecting on various parts of the RC year all the time, especially LEAD and LCA. The friendships have been enormously nourishing since I left, which is the most valuable thing for me, but I’ve also found that the network has been valuable professionally.”

What light do you think your experience shed on the normal HBS path?
“It highlighted for me even further that relationships with classmates comprises the real long term value of HBS. I’m very thankful for how HBS allowed me to pursue a new idea with low risk. While as a student I often felt that HBS seems to try to progress or regress all its students into a single behavioral paradigm, their leave policy shows a respect for differing pathways to success.

It also highlighted some of the shortcomings of the academic experience. Most starkly, I now believe that three critical skills are grossly undertaught at HBS in the first year: Sales, Negotiations, and Managing Conflict. I wish I’d practiced them every day in the context of whatever content we were learning-I think those skills are among the key determinants of long-term success as a leader and manager in any field, and better training along those lines would positively impact the reputations and effectiveness of HBS grads.”