Just F***ing Do It!

The first two weeks of studying in the USA probably became one of the brightest and busiest periods of time spent at SKOLKOVO. We met successful entrepreneurs, famous scientists and defended our business projects in front of real venture investors.

SKOLKOVO Students Discover America
After the SKOLKOVO students returned from China and India, they spent two months in Moscow working on corporate projects at Russian companies. Early August a new education stage started: the entire group left for Boston for two months where we undergo training at American companies and study entrepreneurship at a b-school of the Massachusetts Institute of Technology (MIT Sloan).

In fact we live and study not in Boston, but in Cambridge. This town with a population of about 100,000 people is situated over the river from Boston and was built by descendants of the Englishmen who had gone ashore America in the 17th century. Streets of Cambridge are more like London than typical American towns: the same architecture and a similar layout of streets. What Cambridge is famous for is that two of the best-known and most prestigious educational institutions in the world are located here: the Harvard University and MIT.

While it’s needless to introduce Harvard, I will tell you in more detail about MIT, where we study. With a 150-year history this is one of the most authoritative higher educational institutions in the world and a chief engineering institution in the USA. There are a great number of prominent world scientists and engineers with 75 Nobel Prize winners among MIT graduates. A high IQ of local residents is felt in the air. “Even when I’m passing by MIT, I feel a bit more intelligent”, an officer of the American consulate in Moscow who issued our visas jokes.

They like to repeat in Boston that if one sums up business of the companies that have been created involving graduates of the Massachusetts Institute of Technology, the result will be compared with the 17th in succession economy in the world. It is the conversion of discoveries and inventions into money that MIT Sloan stakes on; we are taking a course of entrepreneurship there.

Geeks and angels
The area around Kendall Square in Cambridge where buildings of Microsoft and Google tower opposite each other among MIT blocks is famous for its unique “ecosystem”. This is a place where geeks from the university and people in ties from business meet. While every second person here is an engineer or a scientist, every third person is a venture investor or a business angel.

Sloan students are taught to help geeks transfer technologies on commercial rails. Professors joke that while physicists and chemists sweat over experiments in laboratories, business school students spend all their free time talking at local cafes where they are engaged in “networking” - this word acquires a sacral tint here. American people are convinced that ties determine everything in business.

Every year tens, if not hundreds of start-ups are born in Cambridge. A part of them die, but some of them manage to become an astounding success. I still remember meetings with founders of internet companies KAYAK (online booking of tickets and hotels) and Hubspot (promotion of web sites), each of which has attracted 30 mln USD of venture investments for 3-4 years of existence and shows an explosive growth of profits. “To interest investors, you need about ten simple slides showing business of your start-up and one page of financial expectations. Venture capitalists never read business plans”, Brian Hulligan at Hubsport, a co-author of Inbound marketing describing usefulness of social networks for modern business, gives a recipe for success.



A businessman for an hour
It is the best way of “selling” a business idea to investors that we were taught at Sloan. Each day started with meeting founders of successful start-ups. Then – lectures on key stages of commercialization of technologies read by leading professors and members of the Club of Entrepreneurs at MIT. From protection of intellectual property rights to distributing shares among business founders and investors involved. At dinner we listened to invited guests – successful entrepreneurs and famous scientists. Then we practiced defending ideas of students before real investors.

We perfected all elements of a business plan from the idea to a team structure and expected financial indicators. Every ten minutes SKOLKOVO teams spoke before venture capitalists, business angels and Sloan teachers as well as invited financial, HR and marketing experts.

They estimated not only how an idea was worked through and what its commercial prospects were, but also an ability to answer difficult questions with confidence and how much future entrepreneurs are enthusiastic about their commercial projects. If you are not sure enough about success of your business, it’s not worth expecting an investor to believe in it.

What is JFDI?
Those who resolved to start their own business face a moment sooner or later when they have to burn their boats. Bill Outlet, a President of the Entrepreneurial Club at MIT, draws an analogy to conquerors who set fire to their boats after setting foot on foreign lands. Thus they cut off their path back and rushed to the fight for an island, because they had no other choice.

With fear to fail and to risk and lose everything, a lot of young entrepreneurs delay a launch of their business till doomsday. However there is no recipe of how to secure oneself from failure. Entrepreneurship implies taking a conscious risk.

An MBA diploma from the best business school doesn’t secure you from failure either. As businessman Leonid Blavatnik, a Harvard graduate, noted at the meeting with SKOLKOVO students, if you take decisions on the basis of methodologies like “Porter’s Five Forces” which is taught at business schools, you’ll never start business. “Such analysis kills any start-up”, thinks a billionaire.

So the only advice for those who hasn’t resolved to become an entrepreneur yet can be words spoken by a Sloan student presenting us his business idea: “To start business, you should remember just four letters: JFDI. They stand for a simple but important phrase — Just Fucking Do It!

About benefits from failures
Another interesting observation made at Sloan is that a failure in business is not a cause for despair; it is such experience that increases your chances to attract investments in the future. Choosing between two similar projects, an investor will prefer investing in an entrepreneur who has experienced big failures in business.

This paradox was explained by a venture capitalist so: “I invested 5 mln USD in projects of an entrepreneur twice and both of them were a complete failure. When he came to me for the third time, I agreed to invest 20 mln USD in his new idea and earned 80 mln USD. Why should I turn down the entrepreneur, when I invested 10 mln USD in his training?”

That is not to say that the American encourage failures of future businessmen, but they take it easy unlike Europe or Russia. That helps entrepreneurs not to give up but try to build a new business from scratch until it is a success. Those who overcame a failure become stronger and inspire respect in the country with the greatest business opportunities and the toughest competition in the world.

You can find an original article http://www.forbes.ru/blogpost/50595-tsi-vashego-biznesa