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Tech startups need/don’t need MBAs? Discuss …

Barb Darrow — Mon, 05 Nov 2012 23:08:57 +0000

Does a Masters in Business Administration make its recipient more or less attractive to tech startups? Or does it have any impact at all?

It’s a serious question. A day after Harvard Business School’s Cyberposium 18, I remain struck by the concern attendees seemed to feel about what their advanced degree will mean in a tough economy and in a tech business that elevates technical prowess above everything else. After all, college dropouts Paul Allen, Michael Dell, Bill Gates, Steve Jobs, Steve Wozniak, and Mark Zuckerberg all built hugely successful tech companies — Microsoft, Dell, Apple, Facebook — without a degree among them.

One Cyberposium panelist basically told MBA candidates interested in big data opportunities that they need not apply unless they also had technical chops. I’m simplifying here, but that was the gist.

Dropbox founder Drew Houston — who does hold a bachelor’s degree in computer science from MIT – was gentler but still not all that encouraging. Asked what he wanted in an MBA he said … um pretty much the same thing he seeks in any hire. “What we look for in any candidate is that they’re smart and passionate and not just chasing money. We look for a cultural fit,” Houston said in a Q&A session. ”The guy who runs most of the business side [at Dropbox] has a Harvard MBA but what we look for isn’t that different from what we look for in other areas,” Houston said.

The underlying theme was that business skills and teamwork are valuable and much desired. Attitude and a sense of entitlement are not.

Hunter Walk, director of product management at Google (and a Stanford MBA) must be hearing the same concerns. Yesterday, he shared a great post on the topic: “It’s fine to get an MBA, but don’t be an MBA.”

One of his points:

Getting an MBA means you shoot out of school wanting to prove yourself and see what you can contribute to others. Being an MBA means thinking the world owes you something and that your value 10x’ed just from spending two years on a campus.

Given the economic climate, it’s natural for students to worry about the worth of their degrees. And this topic crops up periodically in the sort of “builder versus spreadsheet guy” debates that get heated. Last year, auto executive Bob Lutz’ book “Car Guys vs. Bean Counters: The Battle for the Soul of American Business” stoked the debate anew. Lutz’ argument, according to the Time Magazine review was: ”To get the U.S. economy growing again, we need to fire the MBAs and let engineers run the show.” Harsh, But I would bet lots of people who watched the decline of US industry in the 70s and 80s under the tutelage of MBA CEOs would agree with that sentiment.

Still, promising business students should take heart. Every tech company needs people with business and financial management expertise. As one commenter to an earlier Cyberposium story put it:

Harvard Business School was where the concept of the spreadsheet developed. Don’t be dismayed … fellow MBAs. Your day will come… Take the Disruptive Innovation courses, and pick up some Advertising while you’re at it.

And, let’s face it, there are many times when the best technology in the world won’t win unless it’s accompanied by real business savvy.

I would love the discussion to continue, so please post your thoughts in comments below.

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Solar Stirling startup Infinia looking to raise $25M

Ucilia Wang — Mon, 29 Aug 2011 17:06:23 +0000

Infinia, a solar startup which is using Stirling engines to produce solar power, is looking to raise $25 million in funding, and has closed $6 million of that round according to a filing with the U.S. Securities and Exchange Commission.

The Utah company’s solar thermal technology uses a parabolic dish of mirrors to concentrate sunlight to heat and expand helium inside a heat exchanger to cause a piston in an engine to run back and forth. That motion then drives an alternator to produce electricity. This type of technology is generally called a Stirling engine.

Stirling engines have long been thought of as a promising technology to build solar farms, but the matchup has yet to become as popular as other types of solar thermal technologies, and at least one company has struggled to get its stirling engines built into a commercial solar project.

California regulators approved two Stirling solar projects using technology from Stirling Energy Systems totaling 1372.5 MW last year, but their developer, Tessera Solar (sister company to Stirling Energy Systems), subsequently sold them to different buyers when it couldn’t line up the financing to build them (Southern California Edison canceled its contract with one of the projects). Since then, one of the new buyers, K Road Power, has planned to use Stirling engines only for a small portion of its project while the second buyer, AES Solar Power, has said it will use solar panels instead. San Diego Gas & Electric told us it canceled the contract to buy power from the AES’s project in spring this year.

Like other solar thermal technology developers, Infinia is marketing its technology as suitable for not just solar electricity generation but also for combined heat-and-power generation. The system harvests the waste heat from electricity generation, and that heat can have a variety of uses, from heating a building to running industrial operations. Solar thermal technology developers such as Abengoa Solar and BrightSource Energy have carried out projects where the steam generated by the sun’s heat is used for cooking, showers and laundry at a federal prison and for extracting oil from wells.

Infinia raised $32 million in debt and options last year, according to another SEC filing, and another $50 million in equity before that. Investors include Equus Total Return, GLG Partners, Khosla Ventures, Bill Gross’s Idealab and Paul Allen’s Vulcan Capital.

But like Stirling Energy Systems, Infinia has seemed to also hit a few bumps in the road. Infinia began laying off employees at its previous headquarters in Washington state a few months back in order to move to Utah. The company’s CEO, Mike Ward, who came on board earlier this year, told a local newspaper, the Tri-CityHerald, that the move was to “accelerate from our R&D roots into a world-class solar generator company with geographically consolidated operations.”

However, Infinia has several installations and new customers in India. Infinia completed the first commercial installation of its technology earlier this year, reported the Tri-City Herald. The city and Infinia broke ground on a 45Kw project last year, but Infinia declined to say whether the project has been completed as planned. Infinia also has installed a 9 KW system that was built on the rooftop of Belen’s City Hall in New Mexico.

In addition, Infinia recently sold 10 MW of its engines to solar developers in India. The deal in India involves a $30 million loan from the federal Ex-Im Bank to Dalmia Solar Power. Dalmia plans to develop the project and sell the electricity to NTPC Vidyut Vyapar Nigam, a subsidiary of the National Thermal Power Corp.

Image courtesy of Inifina

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Aro Mobile Uses the Cloud to Build Smarter Smartphone

Ryan Kim — Tue, 16 Nov 2010 05:01:46 +0000

Pairing the cloud with mobile devices has been a preoccupation of ours and apparently also of Microsoft co-founder Paul Allen, whose $20 million funded project Aro Mobile gets its first public showcase today at the Web 2.0 Summit. Kiha Software, the company behind the technology, will show off how Aro’s platform helps make smartphones more intelligent and useful by tying the basic applications dynamically to the cloud.

Aro is a collection of downloadable apps: contacts, email, search, phone, browser that communicate with the cloud, where servers apply natural language processing, context awareness and data extraction to help speed information to a user and anticipate their needs. The goal is to cut down on the number of steps it takes to complete actions. Aro does this by scanning your all your information and pulling out important data that it thinks you might want to act on.

So, for instance, if a friend emails you to set a lunch date, Aro offers to schedule that right on your calendar. If you’re browsing on the web, Aro can pull out names and offer to provide additional information about it or short cuts to actions. Aro also works with your contacts and email to prioritize messages from the people you interact with most. It can also organize conversations with one person as you move between IM, email and SMS. And since Aro is context aware, it can offer different options at different times of the day or can provide reminders on when you should leave to make it in time for an appointment.

Aro is coming out of private beta on Android and will be coming to the iPhone soon, though in a less full-featured way because the iPhone doesn’t offer the same type of access that Android does. The application attempts to take the best of user interfaces like HTC’s Sense and combine it with personal assistant apps like Siri (which Apple bought), while layering in some of the relationship awareness of Gmail’s priority inbox and Facebook’s new messaging service. Kiha believes it can deploy deep into phones with the help of manufacturers but Aro can also exist as its own standalone solution.

Aro would seem to transmit a lot of data, though I was told it’s not much more than what an avid Facebook or Twitter user would experience. A bigger question would be privacy, since all of a user’s private data would flow through Aro’s servers. The company said it always asks for user data and never shares it with a third party. It’s still a question if consumers will entrust their data with an unknown entity.

One on the key promises of smartphones lie in their ability to tie into the cloud. This is an interesting take on that model but it seems to get at some real world problems shared by harried smartphone users. I still have to see how it works in person and on an ongoing basis. But if it delivers, this could be a big win for Android users. And it could show why Android’s openness is beneficial by enabling some applications to tackle some deep-rooted problems that other platforms might not fully allow.

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The Green Rich List: Wealthy Doesn't Mean Savvy

Katie Fehrenbacher — Mon, 02 Mar 2009 16:27:22 +0000

Just because you’re among the world’s wealthiest doesn’t mean you’re good at investing in clean technologies. The London Times has released a “Green Rich List,” which looks at the world’s top wealthiest people that have some sort of investment in clean technology — from alternative vehicles to solar power. The list ranks the investors by net worth, not by how much they’ve invested in cleantech. Perusing the list, you can see that despite some smart green moves, these investors, particularly in the top 10, have made more than a few missteps.

Take No. 2 Bill Gates, worth £26 billion ($36.42 billion). He is lauded for his investment in corn ethanol maker Pacific Ethanol through the private investment and holding company he controls, Cascade Investments. Well, Pacific Ethanol, like most of the corn ethanol industry, has been crippled by the downturn and high corn prices last year, and just last week announced yet another round of plant suspensions. In late 2007, Gates’ Cascade Investments announced a plan to sell its 20 percent stake in Pacific Ethanol after the stake lost a good deal of its value. In mid-2008 Cascade started to chip away at that stake, selling it off trade by trade. We’re not sure if it’s all gone by now, but it wasn’t pretty.

Then there’s No. 8, Microsoft co-founder Paul Allen, worth £11.5 billion ($16.10 billion). Allen’s Vulcan Capital invested $250,000 in Seattle biodiesel-maker Imperium Renewables. Remember Imperium? That was the company that ended up withdrawing its IPO last year and since has lost a valuable contract to supply Royal Caribbean with 18 million gallons of biodiesel annually. The company shot for the moon too fast, but it’s just not a good time in general to be a large biofuel maker that needs a lot more capital to keep scaling up.

And last but not least there are the Google co-founders — Sergey Brin and Larry Page — who share the spot at No. 10, both worth £7.5 billion ($10.50 billion). Beyond their impressive work getting Google to invest in clean energy and energy efficiency they were also early investors in electric vehicle maker Tesla. As many of us know by now, Tesla hit a capital snag last year, and was unable to raise the cash it wanted at the valuation it wanted. Now it’s betting everything on a DOE loan, and has even stooped to jacking up prices on already delayed Roadsters.

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Saving Face(book): When do you hire a pro CEO?

Carleen Hawn — Mon, 10 Mar 2008 17:48:48 +0000

When is the time right for a founder to give up the CEO post? It’s a question you will likely have to ask yourself — if your company is at all successful.

I’ve had this founders’ dilemma on the brain ever since I read last week’s Wall Street Journal feature on Mark Zuckerberg, Facebook CEO Seeks Help as Site Grows Up, following his company’s announcement, Mar. 4, that it had hired Googler Sheryl Sandberg as COO.

Facebook ‘s board obviously senses that the company needs more adult supervision, but the piece makes clear that Zuckerberg has no intention of giving up the top job yet. So I read with keenest interest this graph the WSJ piece:

Mr. Zuckerberg’s experience is emblematic of Silicon Valley’s accelerated culture, where startups change more in a few years than most companies do in decades — forcing CEO-founders to adapt quickly in order to survive in their roles. The founders of Google, Yahoo Inc. and eBay Inc. all handed the reins to outsider CEOs within three years of founding their companies.

Is Zuckerberg adapting enough? I’m not so sure. Then yesterday I read GigaOM colleague Stacey Higginbotham’s column, Zuckerberg Isn’t About the Money, published from SXSW… where Zuckerberg was interviewed by Business Week’s Sarah Lacy.

Stacey wasn’t impressed. She writes that Zuckerberg’s oration, focused on the grand “Facebook vision” rather than more practical business topics such as features-development or monetization

…[demonstrated] the kind of starry-eyed idealism that is either patently untrue or shows how much Zuckerberg still needs to learn about running a company. I’m all for staying focused on your business rather than chasing every dollar, but at the end of the day a company whose CEO is focused on communicating a message rather than figuring out how to turn a profit is delusional. Sure, sometimes the Field-of-Dreams approach works, but sometimes it just ends up like Kozmo or Webvan.

I think Stacey is right, and I’m wondering:

* Is Zuckerberg wise to think he can be one of those very rare founder-CEOs, like Bill Gates, who can run his company from the corner office for its first 25 years? Stats show that most founders cannot do this — no matter how stellar their panel of advisors is — and unlike Zuckerberg, Gates had some very highly-qualified, and older equal partners at the helm of Microsoft from the start. Even if Paul Allen didn’t stay, his influence was important early on.

* How much time does 23-yr-old Zuckerberg really have to “learn” about how to be a CEO? (At the foot of investors like Roger McNamee!)

and…

* Would it have been wiser to give Sandberg the top job now?

Tell us what you think.

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