Jun 21, 2017 · 34m · y-combinator
How Should Business Schools Prepare Students for Startups? – Jeff Bussgang and Michael Seibel · Y Combinator
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
Y Combinator CEO Michael Seibel and Harvard Business School Senior Lecturer Jeff Bussgang debate how effectively business schools prepare MBA students for launching technology startups. The conversation examines common application flaws, academic silos, structural reforms, and whether prospective founders should pursue an MBA or seek direct startup experience.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The partners hold 49.3% of the talking time here. How this is scored →
The partners as informed peer 7.0 Guest teaching 4.0 Guest disagreement 2.1 The partners pushing back 4.0
speaking balance: gold is the partners, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 19:59 Jeff defends business school pedagogical coddling
Jeff pushes back against VC standards, arguing that a university's purpose is academic pedagogy and providing a low-risk environment to make mistakes rather than churning out unicorns.
Hardest push from the partners ▶ 21:13 Michael rejects the introductory-only framework for entrepreneurshipMichael firmly refuses the idea that startup education must be unselective, comparing it to prerequisite-heavy 400-level physics and varsity athletic rosters.
Biggest teaching moment ▶ 12:15 Jeff provides hard HBS data on coding proficiencyJeff educates Michael on the reality inside elite business schools, revealing that only 4 to 5 out of 100 students in his advanced entrepreneurship class can write code.
The partners hold their own ▶ 18:00 Michael dismantles outsourced technical developmentMichael demonstrates deep founder intuition by explaining why hiring an overseas contractor is a counterproductive workaround that harms a team's chances rather than a genuine display of startup hustle.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The partners as informed peer | Guest teaching | Guest disagreement | The partners pushing back | Why |
|---|---|---|---|---|---|---|
| Core Misconceptions in Business School Startup Training | 7 | 2 | 1 | 3 | Michael establishes his authority by citing YC application volume (reading 500 out of 7,000 per batch) and the recurring failure of MBA applicants to grasp basic startup tenets. Jeff responds collaboratively, welcoming the scrutiny and agreeing with the need for practical startup education. | |
| MBA Founder Performance and Research vs. MVPs | 7 | 4 | 3 | 4 | Jeff offers mild pushback citing Poets & Quants data on MBA unicorns like Cloudflare and Rent the Runway. Michael sharpens his thesis, clarifying that with formal business education, MBA founders should be performing disproportionately better than untrained applicants. | |
| Red Flags in MBA Applications and Institutional Silos | 8 | 5 | 1 | 2 | Michael outlines the top three red flags in MBA applications: lack of a technical co-founder, lack of commitment, and survey research over live MVPs. Jeff builds on this by diagnosing structural root causes within business schools, including academic silos and out-of-touch faculties. | |
| Integrating Engineers and Cross-Disciplinary Training | 6 | 6 | 2 | 3 | Michael suggests radical structural fixes like admitting 30% coders or mandating 50/50 cross-registration with engineering. Jeff educates him with classroom reality, noting only 4-5% of his entrepreneurship students can code, and explains Harvard's physical co-location strategy. | |
| Hustling Outside Tech Hubs and Overcoming MVP Obstacles | 8 | 2 | 2 | 6 | Jeff shares an anecdote about a non-hub founder hustling out of Kentucky. Michael forcefully pushes back against misapplied hustle, explaining that outsourcing MVP development to agencies does not fix the foundational need for an in-house technical co-founder. | |
| Academic Learning Environment vs. High-Stakes Venture Capital | 8 | 4 | 4 | 7 | Jeff defends business school coddling as necessary for university pedagogy. Michael directly challenges this excuse, arguing universities enforce extreme selectivity in 400-level STEM courses and athletics, and should apply the same rigorous filtering to startup training. | |
| Long-Term Career ROI of an MBA vs. Early Startup Experience | 7 | 4 | 4 | 6 | Jeff argues that an MBA provides 10-to-20-year executive compounding, citing Sheryl Sandberg. Michael pushes back, asserting that startup success creates its own network and that two years at an early-stage startup yields more practical learning than an MBA. | |
| When to Attend B-School and Reading the Startup Canon | 7 | 4 | 1 | 4 | Jeff concedes that the MBA ROI holds primarily for top-five schools and advocates reading the startup canon. Michael emphatically notes that the tech industry does not view an MBA as a positive credential, advising students to extract maximum value if they attend. | |
| What VCs Look For in MBA Founders and Conclusion | 5 | 5 | 1 | 1 | Michael asks what criteria venture capitalists use when evaluating direct pitches from MBA founders. Jeff explains that VCs seek massive disruptive white-space markets rather than incremental MBA-designed business concepts, wrapping up on an agreeable note. |
Statements from this episode (14)
YC Partners Each Review 500 of Up to 7,000 Applications Per Batch
“Most people don't realize that as YC partners we have to read approximately 500 of the six to 7000 applications that come in every batch.”
Hard to Learn Startups From Non-Founders Running University Programs
“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 tends to be the case for the, a lot of people running these programs.”
Cloudflare, Rent the Runway, and Earnest Were Founded by HBS Alumni
“Whether it's a cloud flare or rent the runway. Or in earnest all three of whom were founded recently by Harvard Business School alums.”
MBAs Are Prone to Over-Researching Compared to Technical Founders
“I think it's just that MBAs, because of their nature, may be more likely to fall into the spinning too much research time mistake as compared to a tech founder who's going to be more likely to jump right in and build something.”
Y Combinator Accepts Many MBA and HBS Applicants
“And so to me, this is not a situation where I say, oh, an MBA applicant is worse than the average YC applicant. Of course not. And we accept tons of MBA applicants. We accepted a number of HBS applicants.”
Harvard Business School Launched Its First Student Coding Club in 2017
“This year, for the first time, HBS started a club called HBS Coders. There's been sales clubs, there's been marketing clubs, there's been fashion clubs for years and years and years, but there's never been a coders club until this year.”
Only 4 to 5 of 100 HBS Entrepreneurship MBAs Can Code
“In my class of a hundred students this year, and this is an entrepreneurship class for second year MBAs, the most, ah, ardent entrepreneur bound students take. Only, only four or five can write code out of a hundred.”
Inability to Build an MVP Keeps Founders Trapped in Research
“The number one reason why people stay in research is they can't build their MVP.”
University Entrepreneurship Centers Accept Non-Technical Teams That VCs Would Reject
“Over the past two weeks, I've talked to a number of, kind of, directors of entrepreneur centers, and the constant thing that I'm surprised by is that they know these things that I'm talking about, but they still accept teams that don't abide by these rules. So…”
Universities Exist for Pedagogy, Not Creating Billion-Dollar Startups
“The purpose of the university. It's not to create billion dollar startups. It's to have a pedagogical experience for their students”
Many MBAs Return to Startups at Their Pre-MBA Job Level
“In fact, I have a lot of my students who come from startup land and go back into startup land at the same level that they left after two years of spending a hundred something thousand dollars on their MBA program.”
Silicon Valley Favors Two Startup Years Over an MBA
“And I don't know many people in the Valley who would say that you learn more getting an MBA than you learn two years in the grind at an early stage startup.”