Is an MBA valuable inside a startup? You’ll see variants of this question, such as ‘should a founder have an MBA’ – in any case, there are three common responses to the query: yes, NO, and it couldn’t hurt, right?

So which is it? Is an MBA important? Does it matter? Could it hurt?

Now, given that I have an MBA, it should be obvious that I would generally fall into the non-enthusiastic yes, it’s important, category. Having a founder or an early hire who has an MBA is only going to help your startup. But that non-enthusiastic yes comes with major caveats.

For starters, there are plenty of idiots walking around with MBAs. Of course, I don’t think that getting an MBA would make someone an idiot; rather, I mean that getting an MBA won’t stop you from being an idiot (and it will at least sometimes make you sound like one). Now, for sure, anyone with an MBA is probably a reasonably intelligent person. But that doesn’t mean they are going to be fun to work with. It also doesn’t mean they’re going to know how to extract value from the theory they learned that will be able to help you grow or prosper as a startup.

Perhaps it is better to put this in opposition, and consider what is better than an MBA in a startup. Here are a few traits that I think trump the degree:

• Empathy
• Curiosity
• Tenacity
• Humility
• Charisma

Now, if you have those things, and you have an MBA, then I think you’re going to be great inside a startup. Because you will need all those traits much more than you need specialized business knowledge. You need to be able to listen well and to consider alternative perspectives, you need to be driven to know things and to discover facts (particularly when they seem inscrutable), you need to hold no grudge when your brilliant ideas fall on deaf ears, you need to be able to walk away from mistakes and miscues, and you need to be the kind of person that you would love to end up getting stuck in an airport with for several days, because often enough, that is what it is like inside a startup.

But what about the technical or business skills an MBA brings to the table? I’m sure if you wanted a laundry list of things in an MBA curriculum, then you could probably go and look that up and you would know as many business nouns as many of the graduates do. Some of those things will be practical to your startup, most of them will not. For example, almost all MBAs know what a Monte Carlo simulation is, and many of those will be able to run one. But is that really important in a startup? I can imagine a couple of scenarios, but in general, it’s not going to be important. Of course, most MBAs are Excel wizards, and that can be useful for understanding and tracking certain metrics (but you needn’t have an MBA in order to be an Excel wizard). We also learn how to write creative briefs. Yes, a brief will help if you need an ad agency to design a campaign for you, and you could maybe argue that it will help you define an advertising strategy, but again, we’re talking generally further along from the startup stage.

But an MBA does tend to change the way you look at the world, and it does make you ask certain questions which can be valuable in a startup. It’s hard for me to describe this in a general way, so I’ll try to use a recent example. I tend to think about incentives a lot, and the behaviours those incentives imply, and what that means to, say, a potential contest we might run. So when we start talking about getting users to do certain things, we discuss what we think is likely to be true, and then what I want, and what most MBAs will want, is some kind of data to base the final decision on. So we tend to be great at framing a discussion, getting a concensus on what is important in that scenario, and then figuring out how to get data in order to make a decision.

Another area where I know I bring value is in applying game theory. Of course, taking an MBA doesn’t make you an expert in game theory – at best, it whets your appetite to learn more. But in a startup, it can help you figure out which projects to pursue, or what and how to negotiate with rivals or potential partners. Moreover, I like to think and talk about our competition. Not just because I care about what they are doing, but because I like to consider the long term implications of operating in a nascent and profitable industry sector. I like to consider what that means to larger and smaller players, and what kind of attention we are likely to attract, and what kinds of moves we should consider.

So. That’s how I see the value of an MBA inside a startup. But I’m sure I missed some things. If you have an MBA, let me know in the comments what special value you bring to a startup (or an early stage company). If you work with someone who has an MBA, give us your perspective – does he or she add value that is unique?

In the past week, I’ve been doing a bit of research into the spa industry in an effort to better understand the needs of an important segment of our users. What I’ve found, particularly if you’re a spa owner or manager who has not yet embraced online marketing, should be jaw-dropping. I’ll include the sources at the conclusion of the post below.

First, consider this table, taken from a 2009 survey of American Spa Magazine’s readers. You’ll notice spa owners were asked to consider the effectiveness of retaining customers through a number of different means. What I find striking is that email/internet ranked highest in terms of overall effectiveness (34% finding it somewhat effective, and 54% finding it highly effective).

So, if you’re not using email to keep customers in the loop and aware of any changes or specials, it might be time to create that marketing material and craft a message.

Moving along in the survey, we find another gem:

What I find surprising here is not the amount of success that spas are finding by embracing the digital tools available to them, but the large percentages in the ‘not in use’ category, particularly for Spa and Client Management systems, and then the lower (but still shocking) numbers for Spa Website and Email Communications. The idea that as many as 22% of all spa owners that are readers of American Spa Magazine are not online is outrageous.

Last, this set of results is intriguing for online appointment scheduling providers such as ourselves. There are two things that stand out here: first, a whopping 44% of all respondents track appointments manually alone, and this is coming from an industry that has been ahead of the curve in adopting technology to satisfy business needs. You can make the argument that pen and paper could supplement online client management and appointment tracking, but once you implement a system like OpenCal, the time savings you gain will make it impossible to return to pen and paper alone.

Secondly, you’ll notice that 39% of respondents use Spa Software while only 3% use an online appointment system to track client appointments. We really love this statistic, since we believe that the future is the cloud and software that requires updating (even auto-downloading) is going to disappear in the medium term. Online applications mean that you are always running the most up-to-date version and that you can access your data from really almost anywhere.

Throughout the process of founding, bootstrapping, and building OpenCal, we’ve learned something about what it means to take an idea and turn it into a sellable product. We feel some of the lessons we’ve learned may help others who are building or are thinking of beginning internet startups of their own. So we’ve decided to kick off a series of posts that we’re calling the Boostrapper’s Guide to Internet Startups.

Bootstrapping: Getting the proverbial ball rolling through a combination of self-funding and using cash from sales to grow the business in place of seeking outside funding.

Bootstrapping to us meant quitting our full-time jobs, doing part-time design work, and plunking down some savings while we built something that we could show to people. Here are five lessons we gleaned from the founding of OpenCal.

1. Start with what you know

Our founders are skilled designers, so we knew whatever we chose, it would have to be in an industry where design skills could make a difference. Online appointment scheduling was an area we cared about and believed that fundamental design improvements would create a more intuitive online booking experience and deliver greater value to businesses and customers alike. This is a key to success because as a bootstrapped startup you simply won’t be able to afford a big team, which means the skills you bring to the table have to be integral to the project. Everything else you will probably have to outsource or do without until you have some sales.

If you already know what you’re passionate about, that’s awesome – you’ve got a great starting point to begin generating ideas. This doesn’t mean you shouldn’t explore industries you know nothing about, but it does mean if you choose to startup in, say, waterless urinals (as James Krug did; read more in this Wired article), make sure you know why you’re choosing that industry and what skills you bring to bear. In James’ case, he was passionate about making a difference to the planet, so creating a water-free alternative to the standard urinal made sense. His skill set was in business development and sales, and you can imagine how important that skill would be when you’re trying to sell a counterintuitive idea to an entrenched industry standard. Of course, selling is no good without a product to sell, and since James did not have a background in engineering, he had to look for a complementary skill set, which brings us to the next point.

2. Choosing the right founder(s).

If you’re going to have a co-founder (or multiple founders), make sure you choose someone who you have worked well with in the past. Just because someone is your best friend doesn’t mean you’ll work well together (that was a spoiler for The Social Network movie right there). The team is the most important ingredient in any startup. That means choosing founders that have complementary skill sets, a common vision or purpose, and a shared passion for the important elements of your product or industry. Beyond matching engineering with business development, or design with marketing, there are a number of other traits that are generally quite valuable in a bootstrapped startup, such as intellectual horsepower, low ego, strong work ethic, a can-do attitude, and the ability to ride out a bumpy road (and it will be bumpy).

We set out with two founders here at OpenCal and it felt like the optimal number to us (and this rough analysis on the msdn blog shows there might be some statistical merit to that claim.) With two founders, you get to share the startup rollercoaster ride with all its ups and downs. You (hopefully) have more money to start off with. You get two brains to tackle the problems, decisions, and challenges you’ll face, but just as importantly, you won’t get too many brains tackling the same issues, which often results in endless arguments and compromises.

3. Murder your darlings.

You’re going to come up with all kinds of ideas for your startup. You’ll need to throw all but one of them away. But don’t let that discourage you – the only way to find good ideas is to come up with lots of ideas, do lots of research, ask lots of questions, and in the end, cross out each one (if you have trouble coming up with ideas, there are methods you can use to trigger that creative spark). Sometimes, you’ll come across a good idea that passes most of the basic tests (does it solve a problem, why someone would value that solution, that someone exists) and you’ll pursue it for a while – just remember that until someone pays for or uses it, it’s still just an idea, and it’s always better to start with a new idea than to blindly follow one just because you’ve already sunk time into it.

There are two opposite but related myths that come up a lot in reference to this lesson:

• All the good ideas are taken.
• My idea is so good I need you to sign an NDA just so I can tell you.

To dispel the first myth, all you need to do is look around you. What’s the latest new product or business you heard about? If you have access to the internet (and if you’re reading this, you do), check out Springwise.com – they post a new business every day, and almost all of them feature completely new ideas.

Now, let’s say your good idea is already ‘taken’. Does this mean you shouldn’t pursue it? Hell no. In some ways, an alternate execution of your idea should provide you with some validation – it means someone else saw the same thing as you did and went for it. You can either try to vary your offering in some way from theirs, or if it’s a nascent market, go head-to-head (assuming it’s not Google or some other 800-lb gorilla). Often times being second or third to market can be a huge advantage – you can learn from your competitors mistakes. Speaking of which, you didn’t think Google was the the first search engine to crawl the internet, did you?

The notion that ideas have actual monetary value is a bit more persistent. But consider this: how often have you, or someone you know, come up with a ‘great idea’ (according to whoever)? And what are you doing about those accumulated ideas right now? Probably nothing. That’s because ideas are cheap. It takes almost nothing to come up with one and spit it out. Here, watch: a specialized babysitting service for exotic plants. Is it a good idea? Who knows. Could I sell it? I sincerely hope not. So it’s worthless then. It will remain worthless unless I do the research, find out there’s a market for it with motivated customers, and then execute that idea and make money. In fact, execution of an idea is magical, because you’re taking something that is worthless (the idea) and making it worth something. Execution is tough, and that’s where the value lies.

4. Focus on the solution, not the outcome.

So often we hear about a new startup that wants to replicate Facebook or mentions that their plan it is to exit via a Google acquisition for $20 million. Not only is such thinking foolhardy, it almost guarantees you will not achieve even a modicum of success. Remember this ironclad law: if you’re not delivering value to someone else, you’re not building something valuable, and it will (probably) never amount to anything. Instead of thinking about some pie-in-the-sky outcome, keep your head out of the clouds and focus on the problem you are solving, who you are solving it for and why that is valuable. Build a solution that meets those objectives and iterate.

Secondly, talk with your users or potential users. They’ll give you lots of insight into their problems and needs. You’ll still have to make tough choices and trade-offs (it will be impossible to build every feature for every user), but you’re less likely to end up with a product that pleases no one.

5. Don’t worry about peripheral stuff.

Do I need to incorporate and get a lawyer to set up a share structure? What about my name – should I trademark that? Do you need a Facebook page? Should you build a Twitter following first? The answers to these, and many similar queries, is no. That’s not to say those activities are not valuable – only that they do not come first. For example, we put off incorporation as long as we could. We began building a Twitter and Facebook presence only after we had something to show people.

Here’s a test you can take which will tell you if it is time to work on these problems:

• Have you showed a potential customer your solution to their problem?
• Has a customer forked over cash for your solution?*

If you answered ‘no’ to either of those, keep your head down and focus on your solution. You can tell the world about it later.

* You don’t have to charge money for something to be valuable – but if you’ve shown your solution to a potential customer AND they’re not interested in using it even for free, you have a problem, Houston.

Our next post in this series will cover the execution of ideas and why details matter.

Think we got it wrong? Want to add a lesson? Argue with us in the comments below.

“Well, organizations that are founded to solve problems end up committed to the preservation of the problems. So Trentway-Wagar, an Ontario-based bus company, sues PickupPal, an online ride-sharing service, because T-W isn’t committed to solving transportation problems. It’s committed to solving transportation problems with buses. In the media world, Britannica is now committed to making reference works that can’t easily be referred to, and the music industry is now distributing music that can’t easily be shared because new ways of distributing music undermine the old business model.”- Clay Shirky, in conversation with Dan Pink in the June 2010 issue of Wired Magazine.

At OpenCal, we talk about solving the frustrations of online booking. But in truth, we want to go beyond appointment scheduling. We don’t want to get stuck in the preservation of a specific problem. We want to help entrepreneurs and small businesses grow and thrive by creating online tools that solve actual problems they face everyday. We are not focused on the preservation of the problem – we are focused on the outcomes that entrepreneurs and businesses want, which, in general can be translated to more time and/or more money. We know that OpenCal helps you grow revenue and saves time, but undoubtedly there are other problems that need solving which have the same outcome of more time and money. While we will always strive to maintain the best online booking experience, we are not defined by it – when booking appointments online is the normal way of doing things, we will be focused on delivering value to entrepreneurs in other ways.

So tell me, dear readers, what are you? How does what you do define you (or not)?

As you might have heard, we launched OpenCal last week. I was reflecting over the weekend on what it took to pull this off. A lot of hard work, obviously, and if we hadn’t known anything about building web apps we probably wouldn’t have gotten very far. But another key ingredient was also required in order to build an elegant and cohesive online appointment booking system (as opposed to a jumble of features jammed together), and that’s creativity.

Creative thinking is something some people are just inherently good at, but it’s also something you can promote within yourself and get better at. The always-amazing John Cleese offers an easy path to creative thinking in the video below.

Every week, each of us at OpenCal makes a point to take a couple of hours where we do nothing but think. We might start with a specific problem we’d like to solve, or sometimes we just let our minds wander freely, but the point is to truly reserve that block of time for thoughts with no distractions. Many of our best ideas come from those sessions.

Do you have a special technique that gets your creative juices flowing? Hit us up in the comments. We’d love to know.