Ahead of the Curve (26 page)

Now we had to write a business plan to go with our audio presentation. Once again, Bo swung into action, and overnight he had compiled twenty elegant PowerPoint slides describing us and our plan. Rodger’s only advice was that we put our biographies up front, as this was the single most important slide. Cash flow forecasts were necessary to show you had actually thought about the business model, but otherwise meaningless. What mattered was us. Could we make this happen? And happen big?

“Most ideas are good ideas,” said Rodger. “The differentiator is how they get implemented. And that’s about you. You’ll be great. They’ll love you.”

Bo forwarded me notes he had taken on a speech by two Boston venture capitalists. When pitching to a VC, it was vital to “get them juiced in the first five minutes. Get them captured and fully engaged quickly.” I envisaged a spoiled, hyperactive five-year-old deciding our fate. “Make them see the business pain of the customer, then move into why your team is good and so on,” the e-mail continued. “Do not start with Macro conditions . . . tell them a story . . . make them understand . . . then move into the opportunity. Customer interviews are great . . . how many customers have you talked to? Is there a real problem . . . how many said they will pay? What is your sales channel . . . direct or indirect . . . how do you get to the end user? . . . Use the HBS platform while you have it . . . aim high, solicit big players for input and advice . . . Sell with personal passion . . . have to make the personal connection.” I got the point. Sell yourself. Know your customer. Know what you’re going to do with the money. And don’t let yourself get screwed.

Word of our endeavor quickly spread. One lunchtime, I fell into a conversation with another classmate, Jon, a phlegmatic New Yorker who before HBS had set up a software applications company and sold it to a large California firm, which appointed him to a senior strategy position. Jon said he had come to business school because he was sick of being patronized by MBAs. He wanted to learn how to patronize them right back by imposing some discipline on the great swath of hunches, instincts, and skills that made up the business intelligence that had carried him this far. Jon told me that meetings with VCs, in his experience, followed a very predictable pattern. During the first few minutes, everyone was excited. He traced a line moving upward. Then the VC started to tire of your presentation. The line began to move down. Eventually you were back at neutral. At that point, the questioning began. How big can this thing be? Rather like Hollywood executives who could envisage new films only as derivatives of others—“It’s
Star Wars
meets
Pirates of the Caribbean
!”—VCs liked to feel reassured that the project they were looking at could be the next version of whatever was hot at the moment. “It’s kind of a MySpace crossed with Skype.”

“This is the moment to strike,” Jon said. “Just as the VC is talking about the hot businesses of the moment, you should look off into a corner of the room and smile. Perhaps shake your head. You’re trying to tell the VC you’ve heard all this before and he is no better than the herd. You are disappointed in his lack of imagination. This totally freaks them out.” He demonstrated his faraway gaze and the gently exasperated laugh.

As venture capital has become institutionalized, the people in it have become less and less venturesome. Those who visited campus were overwhelmingly male and either white or Asian. Some had worked at a real company before becoming capital providers, but that was no longer necessary. Most had degrees in science, engineering, or business. They liked to think of themselves as renegades and rule-breakers, and yet they struck me as a hardened monoculture. When one of them took up bicycling on the weekend, they all did. If one had pale blond wood in the conference room, they all did.

In the HBS classroom, the future VCs all affected a similar manner, speaking in a measured monotone, keeping their notes in a leather portfolio, wearing chinos, tucked-in dress shirts, and baseball caps. The comments they made were never surprising, sticking close to the frameworks we were taught. Whereas the bankers were often argumentative and difficult, the VCs liked to affect calm under pressure. They loved to poke holes in business plans by saying things like “I’d like to see more customer data” or “I question the founder’s motivation.” They enjoyed sitting in judgment and looking terribly pleased with themselves, to the point where all you wanted to do was slap them to life and demand they
do something.

Our meetings bore this out. The rhythm of each was the same. Niceties, excitement, drift, reinvigoration, the promise to stay in touch. Each VC gave the same advice: pick a vertical. “Don’t try to accumulate content from all over the place,” said one. “The audience for it is too hard to find. Pick something like medical content, focus on getting top surgeons to talk and market it to doctors. It’s easier to gain traction and get good at what you’re doing if you’re focused on a single area from top to bottom. Vertically.”

We could not brush off their questions with a TBD, the way Rodger had suggested. They just came back with more. They all asked about video. Why weren’t we going into video? Surely it was superior to audio? Bigger market. Cooler. More money. One of them looked askance at me when I said I didn’t own a PSP, Sony’s new gaming device. Fortunately Bo did, but I had already hurt our cause. The VC looked at me and said, “I don’t trust anyone coming into my office to talk about consumer technology who doesn’t own a PSP.” Luckily, I didn’t have a chance to lay out my vision of an office without a computer.

Once it was clear no VC was going to give us a huge amount of undeserved money, we decided to press on regardless. We created a series of podcasts for our section, in which fellow students talked about their lives and ambitions. Every day, we tracked the evolution of podcasting. A team of ex-Google technologists in San Francisco were developing a software product to allow anyone to record and post podcasts online. A group of wine lovers had achieved some success with a podcast called Grapetalk. And a hyperactive DJ based in London, calling himself the Podfather, was garnering a lot of attention. Working each night in front of ESPN, Bo built us a functioning website. He taught me how to make recordings on my computer and post them. My friends on Fleet Street came through like troopers, allowing me to interview them about goings-on in Britain for an American audience. We began mixing music into our recordings, and each day our archive grew.

Then one day we went to talk to Felix, our strategy professor. Unlike Gompers, he was generous with his time and he asked us a question to which we did not have an answer: “How much value are you going to capture doing this?” The barriers to entry were low. People had shown they were reluctant to pay for online content. We would never have a technology advantage, so our only hope would be to build a brand and style of content that people could find nowhere else. He did not say all of this, but once he had asked the question in those terms, we began to figure it out. When we discovered that Kleiner Perkins was investing over $8.85 million in the Podfather and asked ourselves why, we could not figure it out. It was not a good sign for our own business. We had been thinking of spending the summer working on the company, but as the cracks in our model became ever more apparent, Bo stepped up his search for a biotech/venture capital job in Boston and found a great one.

Plenty of businesses started and stopped at HBS. There was no shame in that. I was dreading telling Rodger that we were terminating our efforts, but he said, “No problem. Keep me posted on what you do next.” He was an instinctive believer in creative destruction, the constant churn of ideas, some of which worked, others which didn’t. The most important thing for him was not sitting on the sidelines.

Approaching the summer without a job was daunting. On the one hand, I knew that the companies that came for hell week did not come to HBS looking for people like me. In their eyes I was an oddity. But it was still depressing to be made to feel like that. One job I interviewed for and thought I had a chance of getting was with
The Washington Post.
But my interviewer, a woman, barely let me say a word as she rattled off the history of the newspaper and descriptions of the kinds of people who succeeded there. When I was not offered a second interview, an alumnus at the company told me that ex-journalists were not thought to make effective executives. The divide between the journalism and business operations was too wide to jump. Now if I had been a banker before HBS . . . This was maddening. But I was not alone in struggling to change my career. Luis, the Franco-Argentine, complained to me that many people felt HBS failed in its promise to give people a new start.

“They say this is your chance to change industry, but very few are succeeding. You see, the problem is that the path of least resistance is to do banking or consulting. Now, if you wanted to do either of those, you probably could. But if you wanted to get out of them, you really have to fight,” he said, driving a fist into his palm. “If you don’t have experience in an industry, they don’t want you, so you end up going back to the industries you do have experience in.”

My own solution to the problem was to do something I had been trying to do for years. I retrieved a boxful of notes and books that I had kept in France and set to work on a novel. Each day I would go to the Boston Public Library and work, and as Margret moved into the final months of her pregnancy, I was around to amuse Augie. By the end of the summer, I had completed a first draft of the book. It was entrepreneurship, of sorts. After spending so much of the past year struggling with the work and feeling incompetent, it felt wonderful to be doing something on my own terms again and reconnecting with life before business school.

As I reflected on that first year, I came across a description of the HBS learning model written in 1954 by Malcolm McNair, a former professor at the school. It was in an essay called “Tough-Mindedness and the Case Method”:

This captured much of what I had learned. Despite my frustration at being so far behind my classmates technically and in my basic knowledge of business functions, I knew that my intellectual apparatus had toughened. I saw things in the world that I had not seen before. I looked at facts and numbers in a different way. I recalled Dave Hawkins, my first accounting professor, reading out a piece from the front page of
The Wall Street Journal
and thinking to myself, if I can find that as interesting as he seems to, then I will have learned something. Now, for the first time in my life, I turned eagerly to the financial pages of the newspaper. Business was no longer a parade of dry facts and personalities, but a soap opera. The podcasting adventure, despite its failure, had proved to me how much I had learned. I got a geeky thrill from sitting with venture capitalists and hearing them talk about IRRs and thinking to myself, well, sure, but are you more interested in the internal rate of return or the ROE, the return on equity?

The routine of the section had eventually palled. After so many classes, everyone had his role. We knew who would say what when, who would make the controversial remark, who would have the numbers, who would crack the joke. It had gone from comfortable to dull, and I was looking forward to interacting with different students in every class during the second year. As the winter gave way to spring, we resented the windowless room and the routine of cases and cold calls. We had even given up on the classroom games. The best of it, though, was the easy familiarity with ninety new people from so many backgrounds and walks of life. It was great in the context of a life to have this opportunity to expand one’s social circle so dramatically at a moment when most of my friends were feeling their circles contract.

My summer job search had been a shambles. I knew I had not given it my all, and I was angry with myself for that. But I was also aware that my indifference to the work most of my peers would be doing told me something. I knew I would have hated “the stool.” My pride could not have taken it. And I knew I did not want to spend the summer away from Margret and Augie, even though many of my married classmates would be separated from their families for ten weeks. Still, standing on the bank of the HBS river as the rest of my class sailed off was uncomfortable. The questions spun in my mind. If I was not going to follow the HBS formula, why was I here? What right did I have to dismiss the stool, or the ten-week placement in corporate marketing? What would be the consequences? Clearly one did not come to HBS just for the education. But was I a fool to think I could take the education and pursue a business career on my own terms, not as yet another corporate MBA?

The final section event of the year was the auction. Each section organized its own auction to raise money for charities of their choosing. Students and professors donated items, and we all dressed up and went to a venue in Boston. We had booked a room above the
Cheers
bar on Boston Common. Marnie, whom I had sat next to during the second semester, organized the event and had asked me to be the auctioneer. Her irrefutable argument was that “all the auctioneers you see on television are English.” The items for sale ranged from dinner cooked by our professors to an all-expenses-paid trip to the annual Berkshire Hathaway shareholder conference in Omaha, Nebraska. After nearly two hours of banging away with my gavel, we had raised over $50,000. Then a voice from the back shouted, “I’ll pay twenty dollars for Philip to take off his shirt.” Several voices joined in until we had a five-hundred-dollar bid. I removed my jacket, tie, and shirt. Then another voice shouted: “I’ll give two hundred dollars if Stuart takes off his shirt and is handcuffed to Philip for the rest of the bidding.” Stuart was the Wall Street trader known in the section for his mathematical genius and massive physique. He spent every lunchtime pumping weights in the gym. So the idea of me, pale and English, chained to this bronzed Nevadan Adonis quickly sent the bidding up to $2,000. Which was how my first year at the Harvard Business School ended. Bare-chested and handcuffed to a muscular bond trader, surrounded by my braying peers.