Many sceptics question the value that an MBA grad brings to the table of an early stage tech startup. I personally know some MBAs who did not graduate in computer science and now sadly hesitate to be a part of a tech startup and consider it as a hostile territory. This concern is further aggravated as we see so many successful tech startups founded by engineers. So is MBA really losing value at a technology world?
Well, I don’t think so. Obviously engineers are important to build the startup ship but MBAs are essential to sail it in the right direction. Many early stage startups might bear the misconception that ‘A good working product, satisfying all the customer use cases’ is enough for their growth. But does it hold true for every single startup? So here are some of the many reasons why a tech startup needs an MBA and why one should not hesitate but consider it as an important hop in their career ladder.
Managing the product
Engineers are good at solving the problems, they try their best to solve it and most of the times they succeed. They are taught to look at the problems objectively, but when it comes to user experience they are not as good. Here MBA’s hypothesis driven development method comes into picture. In which they look at the requirements of the customer, solution that the product provides, customer behavior and then take the decision. This would definitely avoid building a product that nobody wants. MBAs are skilled in monitoring the metrics (such as CTR, Abandonment Rate, Conversion Rate that helps to understand the customer’s behavior across the product usage funnel. Their consistent market research help startup to keep their product relevant to the dynamic market conditions and the changing customer requirements.
Company’s growth and expansion
It is easy to manage people and their tasks when head count is low; but as it scales up, things tend to go a little out of hand. This is when the manager saves the day with his expertise in organisational management where he induces hierarchies, task management tools like Kanban, software development methodologies like Agile, Lean, Spiral and helps startups to build sound policies and procedures that will suit their innovative and creative culture.
Marketing of the product
With the advancement of technology, various ways of product marketing has emerged. MBAs, being an expert in analyzing competitors’ strategy, customer behavior, segmentation, targeting and market research, identify the right mix of marketing channels to maximise their reach. They help startups with product pricing and positioning the product on its value map correctly.
Selling the product
Selling a technical product = selling any other + X-factor.
Why so? Because software products can be tailored and thus the person selling these products should have the competency to understand client’s requirements and see how the product fits to fulfill their requirements.
Handling Customer Service
In today’s competitive market, it is difficult to acquire new customer but it even more harder to retain one for long term. Making customers unhappy will not only reduce Customer Lifetime Value (CLV) but also push them away to the competitors. This makes after sales support, the most important thing for all the firms. Thus, to keep customer happy and satisfied, all the queries, complaints, feedbacks, and suggestions should be handled promptly and properly. MBA’s are taught to be customer obsessed, they prioritize it, give structure to the processes that handles it, and ensures smooth functioning of the complete system and hence they are the better choice to handle this position.
Managing Finances
Startups are usually short in cash and thus want to use this limited resource very carefully. Generating profit is important for their growth, but while doing so, they may fall in trap where they might end up spending on something which does not add to profit. Here MBAs, being experts in financial planning, show the profit and cost centers to the owner and help them to maximise gains and minimise costs.
Managing Human Resources
To manage people, company needs someone who can identify employee’s needs, motivates them and helps them grow with the company. Studies have shown that majority of the founders of startups are generally introvert, hence they may find it difficult to manage the human task force. Again our hero, an MBA guy, comes to the rescue.
Summing it up
In order to grow in all aspects, startups need people who can handle their finances, do product promotion, understand customer needs, retain them, network with industry experts, manage people and keep them motivated. MBAs are the ones with expertise in all these areas and thus they turn out to be very important asset for any tech startup.