How does a technical person evaluate an MBA-type business partner?

I've read a lot of questions asking about how an MBA can find a technical person to implement their idea, but I haven't seen the other direction.

As a technical person, I know that I can get my idea from concept to execution, and I know how to hire and evaluate other technical people to help me do it. I've read a couple places that really small startups should have only technical people at first. Is this good advice?

What does an MBA type bring to the table early on for a technology-based startup? How does this change if I think we can bring the product to market with little to no outside seed capital? How do I evaluate a potential business partner if I've already started building the technology? What sorts of person should I try to avoid? Any other advice?

People here seem to be very confused about the actual skills somebody with an MBA would have.

Though the curriculum of an MBA program may force them to take a few marketing classes or sales classes, these are not qualities I'd go out and hire an MBA for. Someone who's a real marketer will run circles around a guy with an MBA.

A lot of the better business schools these days focus MBAs on leadership and business administration.

I'd evaluate someone with an MBA on their overall business knowledge, but I'd really be looking at what they've done since they got their degree. I want to see that MBA combined with a history of entrepreneurship, leadership, and creativity.

That's someone you wanna work with.

Unless you know marketing and sales, a business person will bring that to the table.

If you can bring your product out without any additional money then are you going to stop development so you can try to get people to buy your product, or do you want to delegate that to someone?

Once you are running and start to hire people, who will oversee the day-to-day operation, make certain bills are paid, account receivables are paid, etc? If that is you, and you don't mind that you won't be developing then great. If you want someone else to do this, then you will want someone with some experience with accounting (any business grad has some experience) and concentrate on marketing and sales, if those are critical.

Basically a business type will add business-oriented skills that you either don't have or don't care to do.

I think and MBA type is pointless, but someone that has experience with skills that you most need is what you should be looking for.

How to evaluate is tough. But, you can give them a scenario and see how they answer, how do they reach out to a particular target market, and see how they think.

You may want to find someone you trust that has some business experience to help you do the screening.

I would recommend using a vesting schedule to protect yourself against hiring a deadbeat. It won't help with the evaluation, but it will protect you from handing over a big chunk of your company to someone who just walks after 6 weeks, or sits their doing nothing.

Assuming you find someone who is impressive enough that you're considering bringing them on, you can evaluate their sales skills pretty quick by having them bring in sales, even before the product is done. Tell them to start contacting potential customers and trying to make the sale. If they can start lining up potential clients, press coverage, media contacts, and all the other stuff that terrifies tech folks, then you know it's a good fit.

If six weeks go by and they've done nothing, then it'd be a good time to part ways.

Essentially, I think it will be an easy thing to evaluate them after bringing them on. If they're a good fit, you'll wonder how you ever thought you could do it without them. If not, you'll be asking yourself what the easiest way is to let them go.

In all honesty, I've never done this, and the idea of "recruiting" anyone to be a co-founder terrifies me, so best of luck.

Paul, good question, one I've seen asked before in the startup community in SoCal too. So I thought I'd answer it here for a wider audience. Background: I'm the founder and investor of a tech-finance startup (RoboCFO) and have an MS and an MBA. I'll wear my engineering hat in answering your question (hopefully) from your perspective

How to evaluate:

1. Interview them : If you had to follow just one item - this is it. Jot down the main purpose you want them to come on-board. During the interview, ask them how they would solve the issues on your list, ask them for their strategy going in and how they'd measure the effectiveness of that strategy. Make notes, audio notes, photograph the whiteboard etc. Tell them they can improve their answers over the next 7 days too. Do NOT reveal ANY sensitive IP to them, NDA or not. Frame a parallel problem similar to yours, abstracting out the IP.
2. Beware of overreaching claims : As engineers, we usually don't boast about our work even though we may speak proudly about good systems. A spade is a spade for us. However, good MBAs can easily impress you by marketing themselves slickly that you may think they are the best thing since sliced bread. Be invasive on claims that are bold/lofty during your interviews - you have every right to be (respectfully) skeptical in your thoughts. Your BS detector should be on at full strength and if something sounds like BS - it probably is (confirm with #4 below to pick this art).
3. Experience + MBA > MBA : If you're a B2C, your first "business hire" is usually a marketing person. While an MBA is great, you should favor those who've done something similar, successfully before. As a parallel, engineers may learn about processor architecture or OS design in graduate school - but if they have no real world experience in that, chances are they will NOT be hired to LEAD the effort at a Chip/OS startup just because he/she studied that at school. If you cannot afford the experienced person, try approaching the local business school to see if any MBA student is interested in a marketing internship at your startup. If you're a B2B startup, usually the first business hire is a sales person. My advice is to STRONGLY weight experience and NOT the degree. Budget wise, the sales person's compensation can be structured on their sales achievements. If part time, the compensation can be 100% sales/performance based and 0% base salary.
4. Mentor assisted interviews : If you're in the US, near major hubs, you can easily find some incubators. Usually there are many seasoned business people associated who are very willing to help the next set of entrepreneurs as they way to giving back to the community. Ask one of them to help you - observe and learn during the interview and debrief after the interview to see how they dissect the answers and claims.
5. MBA > no MBA : The counterbalance to #2 above. WAY too many engineers are skeptical of MBAs and want to dismiss them off as 'fluff'. Honestly, if you can screen them well, an MBA/MBA-type is a fantastic asset that can offer some amazing insights. The good ones will design consumer tests, talk with customers etc ensuring that you do NOT build a product that nobody wants or nobody knows about.
6. Startup chemistry : During #1, see if you can connect with them. In the common case, you shouldn't feel intimidated or confused. You should feel comfortable and empowered like "He/She really knows to think through MY business issues, has clear fact and logic based strategies, has great fall back plans. Little BS and I can see myself working with him/her. This is GREAT! ". Don't compromise.

Good luck!

Sid

I would suggest that the answer to your question - "I've read a couple places that really small startups should have only technical people at first. Is this good advice?" - is definitely not. At least not unless you have a much wider background in business or are willing to spend a lot of money on outsourcing.

Technical peeople - because they are so good at what they do - often never get involved in the other sides of running a business such as the planning, marketing, finance, human resources, administration etc., and I guess this is true of you, or you probably wouldn't be asking the question. Such things are, however, critical to running a successful business, and getting them wrong at the start can mean that you are focussing time your efforts in the wrong places and wasting your limited resources.

My advice, therefore, would be 'stick to what you are good at, and get others to help you with the business side.'

That said, why are you looking for someone with an MBA? OK, I've got one, so I'm not against them, but an academic qualification does not make you a good practical business person. Experience is what counts, and as a start up, if I had the choice between a candidate with great experience and one with an MBA, I'd go for the former every time. As you grow and have more resources available, then the deeper theoretical knowledge which the experienced MBA can bring to the table may be valuable - but it is far from essential early on.

Good luck.

James last sentence is right on. Find someone you trust that has the business experience you are looking for.

Now, to your other questions. Business people bring tremendous value to an early stage company. It's vital to get the product definition right, align the target market and sort out the business plan for investment. The sooner you get that going, the better off you will be.

Evaluating candidates should revolve around:

1. Do they know the market you are going after?
2. Have they done a startup before?
3. How do they approach product definition and customer requirements?
4. Have broad is their experience? At the early stage, you have to do a lot of different things. Some business professionals can do the strategy but rely on others for the grunt work.
5. How do they approach conflict resolution? Will they just say "It's a business thing" or do they explain their rational behind business decisions.

These are just a few of the questions that come to mind. The biggest thing to figure is whether the answers they tell you are really what they think. Dig a little deeper into "what if" type questions to see how they evolve on answers.