This article is the second in the series
of interviews with this year’s Harvard Business School Entrepreneurs-in-Residence. Sponsored by the HBS Arthur Rock Center for Entrepreneurship, the Entrepreneur-in-Residence program invites accomplished entrepreneurs to commit to either a semester or full academic year working with faculty and students on campus.
On Monday, October 5th, Aldrich 112 was overflowing with students anxious to listen to a panel of HBS entrepreneurs, providing perspectives on “paths to an entrepreneurial career.” Jeff Bussgang, one of this year’s HBS Entrepreneurs-in-Residence (“EIR”), sat on the panel offering advice. After the presentation, students flocked to speak to Jeff, tossing out a myriad of questions from “How do I get job as a VC?” to “Should I continue my business that I started before HBS or should I get a traditional job?”
As a General Partner at Flybridge Capital and co-founder of UPromise (acquired by Sallie Mae), Jeff’s entrepreneurial experience and investing experience have allowed him to see both sides of the venture business. Therefore, his unique perspective is ideal for students looking to vet business plans and discuss when and how to seek investors.
Students wishing to meet with Jeff or any of the other EIRs are encouraged to contact Alice Moses in the Rock Center. You can also follow Jeff on Twitter at www.twitter.com/bussgang and read Jeff’s popular blog, “Seeing Both Sides”, which can be found at www.seeingbothsides.com, which is syndicated by BusinessWeek.com, Reuters.com, PE Hub and others.
HARBUS: As General Partner at Flybridge Capital and as an entrepreneur yourself, you’ve seen both sides of the venture business, so what do you think makes a great entrepreneur? And how much of that success is inherent in your DNA so to speak as opposed built through acquired skills and experiences throughout your life?
JEFF BUSSGANG (JB): I think you can definitely acquire the skills to be a great entrepreneur. It takes passion for whatever you’re doing and a combination of huge confidence and huge paranoia. You have to be confident that you’re right even when others tell you otherwise, and paranoid and humble enough to fear that you are always at risk from being totally wrong because that drives you tremendously. Courage is another raw attribute that comes to mind.
HARBUS: What lessons have you learned as an entrepreneur that has helped you at Flybridge and vice versa? Is there anything you may have done differently or anything you would you take back to your entrepreneurial ventures going forward?
JB: I think less about what I would do differently and more about what I value in entrepreneurs that I work with. I think the thing that really distinguishes great entrepreneurs from others that I’ve noticed is that they’re able to do things that by rights, they should never be able to do or achieve. So every now and then one of my entrepreneurs will surprise me and just blow me away. I think you didn’t have the resources or means to accomplish what you did. That ability to do the miracles, to do these audacious things and actually pull it off and surprise me, that is what I really value with the entrepreneurs I work with.
HARBUS: As you look back on your experiences, you began your career out of undergrad at BCG, how did that foundation position you for entering the venture world?
JB: I think management consulting at BCG gave me a really valuable analytical background that has been really helpful for me as a VC. As an entrepreneur, many times you have to act without the analysis. Therefore, you have to unlearn some of the skills to be a great VC and entrepreneur. VCs and entrepreneurs have to make great bets and management consultants don’t make bets. They think through the strategy, but don’t necessarily act. The management consultant focuses on ideas, the entrepreneur and VC focuses on people. There are a lot of people judgment skills that you don’t get to develop as a consultant.
HARBUS: What would you advise HBS students who want to become entrepreneurs?
JB: Do not let anybody tell you that it is not possible. And do not think about your personal NPV. Think about your psychic NPV. It’s all about the intellectual and emotion interests and passion for being an entrepreneur. Not about the path that makes you the most money. To use HBS lingo, you need to take more of a balanced scorecard approach.
HARBUS: Speaking of HBS, you are a MBA ’95 grad, looking back at your time at HBS, how do things differ on campus?
JB: Entrepreneurship was not a mainstream path when I was here. At that time, the internet had just barely emerged and the entrepreneurship department was small, believe it or not there was not a required course on entrepreneurship. So, you really had to go the extra mile to be an entrepreneur. I did not have the advantage of the business plan contest or EIRs for that matter. So, I was one of the few of my classmates to pursue start-ups. Today, entrepreneurship is much more mainstream. When I was here, I went until April without a job and I turned down non-start-up offers to go for a start-up. It was a big bet then.
HARBUS: Staying on the topic of HBS, are there any particularly memorable moments or cases that have stuck with you throughout the years?
JB: I remember a cold call from Bill Sahlman in my second year entrepreneurial finance case. I was trying to think through the valuation of a business that was an acquisition target. In that situation I was able to see past the business case and really think how much it was worth to the owner in terms of the human and emotional considerations. The lesson to me was that the value a business has is not simply a theoretical exercise; it is really a human exercise. Whenever I invest, I think about what the business is really worth to the entrepreneur. I try to evaluate the human elements that they are taking into consideration when they take money from a VC.
HARBUS: Now that you are back on campus in the role of Entrepreneur-in-Residence, what are you hoping to achieve?
JB: I have to two goals. First, to be available as a mentor and advisor to students who want to be entrepreneurs either right out of business school or within ten years by either helping with business plans or talking through career paths. Secondly, I am helping write a case with Noam Wasserman for the Founders’ Dilemmas class during second semester and I’m planning on teaching one of the cases.