#12 - How Should Business Schools Prepare Students for Startups? - Jeff Bussgang and Michael Seibel

**Craig Cannon** (0:00)
Hey, this is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is a conversation about business schools and startups with Jeff Bussgang, a lecturer at HBS and GP at Flybridge Capital Partners. Jeff called in to talk with YC CEO Michael Seibel after Michael was tweeting about trends he saw in YC applications from MBAs. And since we recorded this interview, HBS has actually announced a joint degree that combines their MBA with an MS degree. I'll link that up in the show notes where you can also read the transcript. Okay, here we go.
Okay, so on April 10th of this year, Michael tweeted, reading YC applications and observing that business schools are doing a criminally poor job of prepping students to start tech companies.

**Michael Seibel** (0:39)
Yes.

**Craig Cannon** (0:40)
And Jeff then replied, what did you say, Jeff?

**Jeff Bussgang** (0:43)
Well, I said as a professor at HBS, I was particularly intrigued by that tweet because a lot of my students are applying to YC and I know we take a lot of pride in Harvard of trying to prepare our students to be great founders and to be effective in the startup land.

**Craig Cannon** (1:02)
Cool, so I wanted to break apart a little bit like why you actually thought that and if the opinions of Silicon Valley and the MBA world actually match each other in terms of when you look at the data.

**Michael Seibel** (1:14)
So I think the thing that kind of triggered the frustration is that most people don't realize that as YC partners, we have to read approximately 500 of the 6,000 to 7,000 applications that come in every batch. And so this usually involves two weeks of extremely intensive application reading.
And the piece that kind of triggered it was after some countless number of applications from MBA students that were clearly missing kind of basic core tenets of what YC would consider a qualification for doing a startup.
And I think what clicked in my head wasn't so much the idea that whether business schools are good or bad at teaching entrepreneurship in terms of, in a classroom setting, but just more that business schools tend to be expensive, and these are extremely simple rules that either these students didn't know or didn't realize were important. And that was extremely frustrating because it's one thing to teach someone accounting or case studies about previous companies, so on and so forth. But there are probably three to five kind of core YC tenants that if you don't know or you don't do, you don't get into YC. And so I think that's what really triggered the outreach. And it was great because, to be honest, a number of business schools reached out, and it started a dialogue, and I started realizing a little bit more kind of what I'm facing here.

**Craig Cannon** (2:53)
In what way? What are the things you're facing?

**Michael Seibel** (2:56)
I think that it's extremely...
One, I think, unfortunately, YC has created this model for entrepreneurship that people are trying to replicate, and it's extremely hard to replicate. Everybody wants to have an incubator.
But man, like, it's a hard model. And I think, too, very specifically, it's extremely hard for the people who are leading entrepreneurship efforts in a school. It's hard for schools to recruit entrepreneurs to do this work. And so it's really hard to learn how to do a startup from someone who's never done a startup before. And that seems to be the case for a lot of people running these programs.

**Jeff Bussgang** (3:41)
Can I throw in something here?

**Michael Seibel** (3:44)
Please.

**Jeff Bussgang** (3:44)
Yeah, so first, I love Michael's tweet, and I love our back and forth, because I think it does put the spotlight on this question of how do you prepare students to get out into the field and be great entrepreneurs? And that's something that we think about a lot.
And what YC's framework represents is pretty general for all of startup land. I don't think there's anything, I mean, there's a lot that's unique about YC, but I think the tenants that we'll get into in a minute are tenants that we're trying to teach in general to all budding aspiring entrepreneurs. So I think putting the spotlight on encouraging students of all kinds to take a step back and get out of the ivory tower and get into the field and be more practical and be more attuned to what's happening in startup land I think is spectacular.

**Craig Cannon** (4:39)
I agree with you. And what do you think historically people have been doing wrong that has led to this preconceived notion that MBA students are not ones to create startups?