7 Reasons to Start a Business Instead of Doing an MBA

Funny Pictures - Business Cat

People sometimes ask me if I’ve found having an MBA helpful in starting businesses.

So is it?

If you’re thinking of starting a business, here are seven reasons why you might not want to do an MBA first:

  1. MBA Costs are Potential Startup Capital: Doing an MBA is expensive. If you’ll be putting your own money towards it, you might want to use that money as capital for your business instead. Even if you lose it all, what you learn by having a go may well be an even better education.
  2. Drive is Important: If you’re itching to start a business, that’s a good sign! Entrepreneurship takes passion and energy. You may have the hunger now and less of it later.
  3. Timing is Important: A large part of successful business is good timing. If you’ve got an idea and you know the time is right for it now, waiting may not be a good move.
  4. MBA Students May Not be the Right Partners: MBA students can be smart and analytical, but they’ve often grown used to corporate environments where lots of day-to-day chores are done for them. In small businesses, you need people who’ll pitch in and get their hands dirty. That’s not always a good fit. So your prospective fellow MBA students may not necessarily be the best people to team up with. (It depends what sort of business you’re looking to build.)
  5. Learning Isn’t Doing: The stuff you learn during an MBA is interesting, but it’s always going to be more theoretical than practical. There’s nothing like doing something for real to really learn about it.
  6. Large Companies are not Small Companies: The truth is, most MBA courses are geared mainly towards producing executives for large companies, management consultancies and investment banks. Learning about complicated financial modelling and the challenges of large companies can be great fun, but it’s also a far cry from the implementation skills you need when running a small company.
  7. Employer Lock-In: If your employer is willing to fund your MBA, lucky you. Many people would envy your position. But beware: ultimately, your time is what matters the most. Think carefully before you get into a situation where you have to work for a company for a certain period of time after your MBA. You’ll be postponing your foray into entrepreneurship even further.

There are, of course, good reasons to do an MBA, too. For me personally, I think having an MBA has been useful. I’ll say more about that in a future post.

How about you? Are you thinking of doing an MBA? How are you weighing up this question?

Or have you done an MBA already? What advice would you give to someone following in your footsteps?

Leave a comment. I’d love to hear your thoughts.

Creative Commons License photo credit: mark.hogan

 

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85 Great Resources for London Startups

Time

If you’re setting up a web-based business in London, there are lots of resources that can come in handy once you know about them. I thought I’d share some of my favourites here in case there a few you don’t yet know about.

This is a selection of everything from interesting events to attend and good books to read through to tools to boost your effectiveness. Some of them will only be useful if you’re based in London or often visit here; the others are more widely applicable:

  1. BootLaw – free events where you can get your legal questions answered (and be entertained, too!)
  2. Microsoft BizSpark – startup community offering free Microsoft software
  3. DrinkTank – drink beer with startup founders and occasional investors
  4. Launch48 – meet potential co-founders and try to start a business in a weekend
  5. Startup Weekend – meet potential co-founders and try to start another business in a weekend
  6. Minibar – see entrepreneurs pitch their startups while you drink free beer
  7. London Business School Entrepreneurial Leadership Lectures – hear experienced founders talk
  8. UK Business Forums – get nuts and bolts advice from owners of small businesses
  9. SeedSummit Term Sheets – see how the investment terms you’ve been offered stack up against ‘standard’ ones.
  10. Don’t Make Me Think – learn how to make your website easier to use
  11. Visual Website Optimizer – run A/B tests easily and get more from your website
  12. Google Apps (free edition) – host up to 10 email accounts for free
  13. Ajax Whois – quickly check whether domain names are available
  14. MailChimp – send mass emails and track what happens to them (and get UI inspiration!)
  15. Viral Marketing – a nice article on the Maths behind viral marketing
  16. Super Conversion Button – create good call-to-action web buttons [no longer available]
  17. Load Impact – easily run load tests on your website
  18. Linode – get cheap, reliable hosting in UK or US data centres (but set the servers up yourself)
  19. Ultimate Guide to Google Adwords – learn how to run Adwords campaigns
  20. Influence: The Psychology of Persuasion – understand how to nudge people into doing what you want
  21. TechCrunch Europe – read the European bit of the blog that every startup person reads
  22. Fiverr – get small tasks done for $5 (try this out for fun at the very least!)
  23. Pingdom – get an alert if your website goes down while you’re at Minibar drinking beer
  24. Lean Startup – methodology to help figure out whether you’re starting the right business
  25. Mixergy – learn from interviews with successful entrepreneurs
  26. Hacker News – read what techie startup people are finding interesting at the moment
  27. Hacker News London – meet techie startup people in the flesh. Drink beer with them
  28. Business Link – find official government information about business regulations
  29. WordPress – build all sorts of websites quickly and cheaply (definitely not just for blogs)
  30. Woothemes – get a great-looking theme for your website
  31. Clicky – get realtime analytics for your website (and impress your co-founders with their very cool ‘big-screen’ display)
  32. SurveyMonkey – run surveys easily
  33. SendGrid – make sure your emails get delivered
  34. TechHub – work surrounded by fellow entrepreneurs at this startup-centric office space
  35. OpenSoho – have drinks with startup and digital media folks
  36. Facebook Developer Garage – find out the latest goings-on in the world of Facebook (update: no longer running)
  37. Mobile Monday London – find out the latest goings-on in the world of mobile
  38. LRUG -meet smart Ruby developers and learn clever coding tips and techniques
  39. Moo – order yourself some cute mini business cards
  40. TweetDeck – track lots of things at once on Twitter
  41. Magento – set up a powerful e-commerce website
  42. Bit.ly – see how many times people click on the links you share
  43. Starbucks – get fairly reliable free wifi almost anywhere in London
  44. Le Pain Quotidien – hang out in a nice cafe environment with free wifi
  45. British Library Business & IP Centre – get free access to market research reports
  46. Out-law.com – find legal information about IT and e-commerce
  47. 99designs – get a logo designed
  48. SeedSummit – find seed investors
  49. The E-myth Revisited – learn why you should create a system
  50. Seth Godin – learn why you should forget your system
  51. Getting Real – read how to build web apps faster and more easily
  52. The Ultimate Sales Machine – read ideas about how to sell more effectively
  53. Appsumo – save money on stuff for your startup
  54. Google Alerts – find out whenever someone mentions your startup online
  55. SEOMoz Search Ranking Factors – learn what’s important for appearing high up in search engine results
  56. The Four Steps to the Epiphany – read the original bible of the Lean Startup movement
  57. The Entrepreneur’s Guide to Customer Development – read the cheat-sheet version of the Lean Startup bible
  58. Ogilvy on Advertising – understand advertising better
  59. Google+ – get dabbling. It could become important for SEO
  60. Twitter – follow fellow entrepreneurs to pick up some great tips
  61. Paul Graham’s Essays – pick up entrepreneurial wisdom from the guy behind Y-Combinator
  62. Futuristic Play – learn more about online marketing
  63. A Smart Bear – absorb entrepreneurial wisdom from an experienced founder
  64. Adwords Keyword Tool – find out how many people are searching for something
  65. oDesk – hire people on the other side of the world
  66. PickyDomains – challenge people to find you a great domain name or slogan
  67. Enternships – hire entrepreneurially-minded interns
  68. Seedcamp – get money and coaching in return for a share in your business
  69. UserTesting – find out whether anyone can use your website
  70. PSD2HTML – convert that slick PSD your designer created into CSS and HTML
  71. Sedo – buy a decent domain name
  72. VirtualBox – run a virtual Windows machine so you can test old and annoying versions of IE, even if you have a new and shiny Mac
  73. Dropbox – share documents with your co-founders
  74. Google Docs – share documents with your co-founders and edit them together
  75. ProductTank – hobnob with product managers
  76. London Startup Digest – get a curated email of London’s startup-related goings-on
  77. Social Innovation Camp – do something good with your talents
  78. Toastmasters – become more confident talking in front of an audience
  79. Enterprise Finance Guarantee – get backing from the government to help you get a loan
  80. The Gary Halbert Letter – improve your copywriting
  81. PatternTap – web UI design patterns
  82. Technology Strategy Board – enter funding competitions and apply for grants
  83. The Equity Kicker – read views from Nic Brisbourne, a London VC
  84. Dragon’s Den – entertain your friends and family by pitching your business on TV
  85. OpenCoffee – attend weekly coffee meetups and mingle with budding entrepreneurs

Last, one bonus resource [something I’ve set up]:

I hope that’s helped you discover at least a few new things that will come in handy.

Did you find this useful? If so, please retweet it now:

Photo by Lillais.Burke.

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Boudoir Privé – Beauty Boxes by Subscription

Two pink boxes with the Boudoir Privé logoI’ve recently launched a new subscription e-commerce business and it turns out we’re in a hot space again (as we were with DealBunch and the daily deal phenomenon last year)…

Boudoir Privé is all about meeting the desire that a lot of women have for beauty products. Each month, we send out luxury ‘beauty boxes’ with 5 or 6 deluxe-size samples of everything from makeup to skincare. It’s a way for people to try out expensive and high-end products to figure out which ones work best for their personal needs.

Each product comes from a different brand and, for the brands we work with, it’s a great way to get their products into people’s homes and to reach a key, influential group of customers who are both passionate about beauty and active in social media.

I’m happy to say we’ve had a great uptake since our launch. Only about 12 hours after the public launch of our website, all our August boxes had already been snapped up.

If you or someone you know would like to get hold of one of our September boxes, then don’t miss out! Take this tip from me: sign up here now and we’ll let you know when the September boxes go on sale.

 

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Getting to Critical Mass: How to Start a Marketplace Business

Unreal

Are you thinking of setting up a two-sided marketplace business? It’s a tricky thing to do, so you’re going to need all the help you can get. Why not learn from how other people have managed it successfully in the past?

One challenge of creating this kind of marketplace is that you’re going to have to understand and meet the needs of two completely different communities and you’re going to have to somehow bring enough members of each community together to give your marketplace liquidity.

Why are Marketplace Businesses Attractive?

So why try to set up a marketplace anyway? After all, why not keep life simple and provide a product or service to a single community instead?

There are several reasons why marketplace businesses can be attractive:

  1. They’re a natural fit for the information-sharing potential of the web.
  2. Operationally, they can be simple: as a purely online business, there’s no inventory to look after and no service to deliver apart from the marketplace site itself.
  3. The more users you have, the more useful the marketplace is. This network effect becomes an important barrier to entry to potential competitors and goes a long way to explain the long dominance of sites such as Craigslist and eBay that, arguably, have done relatively little to innovate and improve over the years.

The Critical Mass Problem

Your marketplace will only be attractive to buyers if you have things on sale. Likewise, sellers will only be interested if you’ll be bringing them buyers. Often, to start with, you have neither. This chicken and egg problem can be a hard one to overcome!

8 Ways to Kick-Start Your Marketplace

1. Spin Out of an Existing Community

If you’re in the fortunate position of running a community that would be natural users of the marketplace, you could be in luck. SitePoint, a community for web designers, very successfully launched two related marketplace sites: Flippa (for buying and selling websites) and 99designs (a marketplace for web design). Both services originally started informally when people were posting messages advertising websites for sale and looking for web design services on the SitePoint forums.

2. Partner with an Existing Community

If you don’t own an existing community, you may be able to partner with one. You bring them new revenues; they help market the service to their members. There are various ways to do this which might involve giving them a share of the business or agreeing a revenue-sharing deal. Through white-labelling you may be able to work with multiple partners in this way.

3. Capture Contact Details to Connect Buyers and Sellers at a Later Date

A visitor to your site who doesn’t find what they’re looking for isn’t necessarily a visitor wasted. Why not give them a form to say what they’re looking for. If, at some point later, it becomes available, send them an email to bring them back to the site.

GiftCardRescue, a US gift card marketplace, does this nicely.

4. Focus on a Niche

However broad your ultimate vision for the marketplace, you might want to start by focusing on a narrow niche. For example, a marketplace for buying and selling used electronics might seem very empty with only ten listings. A marketplace for used iPads with ten relevant listings could already deliver value and appear active.

Geography is one dimension of focus that is particularly popular. Many now-successful sites (Craigslist, for example) started in a single city and only expanded once they’d reached critical mass in their initial location.

5. Advertise

This can work if you have lots of money to spend (or can raise it), but otherwise gets expensive fast (especially if the first visitors to your site see barren pages with few signs of life — they’re unlikely to participate).

6. Contact Individuals and Invite them to Join

This and the next two tactics were all used by the founders of crowdSPRING.

While researching the business, Ross and his co-founder contacted freelancers and contractors individually and asked them about their problems with existing marketplaces and what they’d like from a new one. Later, when crowdSPRING was ready, he invited these same individuals to join their new site.

7. Ask Friends and Family to Use the Site

With a healthy number of freelancers already signed up to the site, crowdSPRING then needed to address the other site of the market: jobs for those freelancers to do. One tactic they used was to ask their friends and family to post jobs.

8. Subsidise Early Use

To further encourage use of the site, crowdSPRING covered 100% of the costs of the first 50 projects that were posted. They also paid 50% towards further projects until they were satisfied that the service was working well and was ready to stand on its own.

Further Resources

  1. Brant Cooper has a post on how customer development applies to marketplace businesses. Worth a read if you’re a fan of Steve Blank and co.
  2. Mixergy has an interview in which Andrew Warner talks to Ross Kimbarovsky, founder of crowdSPRING, about how crowdSPRING got their outsourcing marketplace off the ground.

Any Other Examples?

How about you? What tactics have you seen used successfully in launching a marketplace businesses?

Please share them in the comments!

Creative Commons License photo credit: mklapper

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What’s the Future of Local Advertising?

What will local advertising look like a few years from now?

BIA/Kelsey recently released the following slides about the local ad marketplace in the US.

A few interesting points they make:

  1. It’s Big – The local ad market brings in $133 billion annually
  2. It’s Fairly Traditional – 92% of local ad spending still goes to traditional media companies (TV, radio, yellow pages, etc.)
  3. It’s Top-Heavy – 81% of the spending is by the largest 22% of companies

What are the takeaways? There is a lot of hype around ‘local’ at the moment, what with FourSquare, Facebook Places and the Google/Groupon non-deal, but for the companies that get it right there are huge real opportunities in local advertising over the next few years.

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Google Boost – Simpler Self-Service Ads for Local Businesses

cimg8845

Google today announced ‘Boost’ a new, simplified self-service ad offering. It’s in beta for the time-being and only available in a few cities in the US, but it could be an interesting step in helping small businesses get started with online advertising.

Google have, for some time now, been encouraging small, local businesses to set up Google Places profiles with various information such as address, opening hours and phone number. Boost makes use of this information to help create relevant ads for the business. The business owner still needs to write the ad copy and specify categories to advertise under, but the tool apparently sometimes provides suggestions and then figures out the mapping to actual keywords and Google maps. The ads are charged on a pay-per-click basis with the business owner setting a maximum budget.

From the screenshots in Google’s blog post, it certainly looks like setting up ads through Boost will be less intimidating for the average user than going the standard Google Adwords interface. I suspect a service like this is still asking too much for most small businesses to attempt, but it’s certainly lowering the bar they need to cross and I’m sure that’ll be enough to encourage some small business owners to give PPC advertising a try when they wouldn’t have done so before.

If Boost helps significantly more local businesses advertise online then it should, in turn, help publishers of local and hyperlocal content generate more ad revenue. Perhaps it’s time for me to have another look at Localmouth

Further Reading

Creative Commons License photo credit: Bdale Garbee

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Tips from Business of Software 2010

illumination/ventilation

Patrick over at Micro ISV on a Shoestring has a fantastic post summarising lessons learnt at the recent Business of Software 2010 Conference.

He goes through highlights of a number of talks and it’s good reading for anyone in the business of selling software. Here’s one nugget I found particularly interesting that’s potentially handy for anyone trying to increase the open rate of emails to existing customers (from Patrick’s summary of a talk by Rob Walling of Software by Rob):

Email is far superior to competing methods of repeatable contact with customers—such as Twitter, blogs, RSS feeds, or your favorite social network—because it allows “personalized broadcasts”, where you can scalably communicate with an arbitrarily high number of people while also making it feel like everyone is getting individualized attention.  (Not nearly enough people use this to its maximum potential, particularly with SaaS.  Free tip from me: note what search term sent them to your website, put a variation of it in the subject line of the email, watch your open rate go through the freaking roof.)

That last bit’s a fascinating idea. I can’t wait to try it out. Though I can see it being a more natural fit in some instances than others.

Another gem from Patrick’s summary of the same talk, is that, if you’re trying to get website visitors to give you their email addresses, offering them something they can get immediately in return, such as a white paper, can be very effective. That much I knew. But apparently you should call your white paper a “report” because that will give it higher perceived value.

Anyway, there’s lots more good, actionable stuff to browse through. Read the (very long) post here. Nice work, Patrick!

Creative Commons License photo credit: batintherain

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New PayPal Checkout Page

Old Cash Register

I was just making a payment via PayPal and discovered that PayPal have a new checkout page.

Here it is with the payment via PayPal option showing (this is the default for people who already have a PayPal account):

As before, those who don’t have a PayPal account are instead prompted for credit card details:

The pages have a slightly more up-to-date feel than the previous PayPal pages and there are now some slick javascript transition effects as you toggle between PayPal and credit card payment options and step through the rest of the checkout flow.

It’s good to see PayPal making some small steps forward with their user experience.

Let’s hope they update their back-end admin site next. (In my opinion, it’s appallingly slow and cumbersome.)

Creative Commons License photo credit: Jo Jakeman

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Realities of Small Business Websites

One Man Band Street Performer Ann Arbor Art Fair July 24, 20103

I spend a lot of time with people who know a lot about the web. They’re either building online businesses or they’re 30-something friends who live in London and who use the internet frequently in their day-to-day lives. That’s why I found it interesting recently to work with someone who’s outside of that circle, to help him put a website together, and explain to him a few of the things I’ve started to take for granted.

The guy in question is a joiner, working with wood to install doors, stairs and cupboards, repair furniture, etc. He is looking to develop his business increasingly into antique furniture restoration and uses the web, but wouldn’t claim to know about any technical details. He wanted a simple, affordable website as he knew it could help his business, but at the same time he was a little worried as he’d heard stories from other people about their bad experiences with having websites built.

Working with this small business owner was a good reality-check for me and along the way I realised three things about small business websites that I’m sure many designers of small sites will have discovered before me:

  • Getting good photos is a pain – photos from stock photography sites can feel very cheesy and may not be representative of the business. Meanwhile, amateur shots taken by the owner or a friend are likely to be relatively poor-quality. How do people normally approach this?
  • How to market their website isn’t obvious for a small business owner – a small business can get themselves listed in various local directories and perhaps ask some friends for links. Beyond that, most other techniques need a fair amount of knowledge and are likely to represent a larger investment of time and/or money than a very small business will to want to make.
  • WordPress is a good small business CMS platform but it’s hard to find a good CMS theme – in my opinion, WordPress is a wonderful platform for a small business website. It’s stable, relatively simple to set up and use, and has a fantastic range of plugins. However, the selection of CMS themes that is available is relatively poor. There are a few people providing paid-for premium themes designed for CMS use, but I can’t help thinking there’s room for more. Perhaps the majority of people still don’t realise how effective WordPress can be for this sort of thing?

Creative Commons License photo credit: stevendepolo

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