How do you define entrepreneurship?
In this interview, we are joined by Eddy Zakes. Eddy is an IESE MBA graduate in 2017 and is currently working at IESE, as the director of the Entrepreneurship and Innovation Center. We discuss:
- How you can be part of the startup and entrepreneurship ecosystem, without necessarily starting your own company
- When is the best time for an MBA to start a company, and the advantages of doing it after having some experience in the corporate world.
[toc depth=”1″ title=”This Talk Content:” title_tag=”strong”]
Episode Notes
Right now you are in Barcelona. But where are you from? And how do you present yourself today?
[1:05] So I’m Eddie Zakes. I’m the director of the Entrepreneurship and Innovation Center (EIC) at IESE Business School. I’m from the United States. I came to IESE to do my MBA and I was a slightly unique MBA student that came with my wife and two children. So it was a major commitment. I was a little bit older or more experienced MBA student.
So I sold my house in the United States, I sold my cars, I sold my furniture. And, basically, moved with everything that I had left to Spain to pursue my MBA. I have essentially worked here more or less ever since graduation. I was offered this role shortly after graduation and I can talk about that if you want me to. And talk a little bit about my entrepreneurial journey and what I’ve done, if that makes sense.
Burning Ships: Moving an Entire Family from the US to Europe and no Looking Back
Why did you sell everything? Were you really committed to moving to Europe?
[2:25] Yeah, there’s a couple of reasons for this. I think here in Spain there is a famous historical figure, Hernando Cortez. When he went to Mexico, he said the famous quote: “Burn the Ships!”. He was the Explorer from I don’t know when the 1400s or something like this (1519). And I think as a family, we wanted to give ourselves the maximum flexibility so that we could pursue job opportunities anywhere in the world and being incredibly opportunistic.
We felt like if we had a home in the United States, or we had this thing to go back to, we would always feel some sort of obligation or sense of commitment there. And I think, leaving your home for two years in the United States, what was I going to do? Rent it out to someone else? Or store my cars in storage for two years or something like that? It just made more sense for our family to just sell it and be completely free.
And we actually moved to Spain with each of us using just our luggage allowance. So I think we were each allowed two bags, plus a carry-on. And that’s literally what we came here with, as they say, a bunch of suitcases. And that was more or less.
I mean, of course, we do have some family keepsake items that are stored in the United States but it isn’t too much. I think everything that we have would fit in the back of one-fourth of a car or something like that. It’s not too much stuff that we even have left the United States.
Discovering the Passion for Entrepreneurship through Venture Capital
Did you have any idea of becoming an entrepreneur before your MBA?
[3:56] Yes, I had a slightly unique profile for an MBA when I came to school. So I had kind of two pillars of background. One was that I had a lot of experience in the education sector. I had served as the VP of a large private school in Ohio. A school that at one point had about 3000 students, and was operating seven campuses.
When I left that school, I was the VP of Sales & Marketing(Director of Advancement), managing the school’s PR, marketing, communications, fundraising, Alumni Relations, and admissions. So I was running six divisions of that school, with a team of people and all the rest. And of course, yes, they saw this profile.
Those are all job functions that exist in almost any school, whether it’s a kindergarten through 12th-grade school in the United States, a business school, college or university. And so I had this unique background that perhaps put me on their radar first.
And then second, as far as entrepreneurship, while I was helping to run that school, I also had co-founded a small business in the construction industry. That is, while certainly not a huge wild runaway success or anything like that, it’s a nice small business success story that today I still have an ownership stake in and a board seat in.
I came to IESE actually wanting to move away from the education industry, get out of education and focus more on entrepreneurship. And most specifically, I really fell in love with the area of early-stage investing and Venture Capital, Angel investing accelerators, and incubators. In this sort of enablement category of entrepreneurship with people that were helping entrepreneurs be successful, identifying and maximizing the potential of entrepreneurs. And so, I focused on that quite a bit.
For people who aren’t familiar, IESE is a business school that, as of right now, does not offer a complete specialization. Some business schools have a degree where you get an MBA with a specialization in finance, or marketing or some other topic. And for us, what we do is in the first year you have a lockstep cohort where every student is taking the same courses. In the second year, you choose the electives that you want, and you essentially design the specialization that you want.
I focused very heavily on entrepreneurship and as many other classes as I could take on entrepreneurship. I did an internship with a Venture Capital(JME) fund here in Spain, and it was a very positive experience. I helped to source a series A investments that the company actually invested in.
I thought that there was a fair chance I was going to stay in Venture Capital. But IESE saw my profile in education and combined that with my experience in Venture Capital and other types. I’ve done some entrepreneur-in-residence with one of Spain’s better accelerators(SeedRocket). And, kind of combining my own entrepreneurial experience plus this early-stage investing experience.
What I do today is Education Management of the Entrepreneurial and Founding kind of category, plus early-stage investing. And this is what I do as the director of the Entrepreneurship and Innovation Center. It’s quite a unique match made in heaven, let’s say. And I have a pretty incredible job.
What does the IESE network look like today?
[7:37] Today, essentially, I do my best to coordinate the entrepreneurial network platform and resources of IESE, or entrepreneurs, innovators and their enablers around the world. So IESE has around 48,000 alumni around the world.
This is our 60th anniversary as a school and we operate five campuses, Barcelona, Madrid, Munich, New York, and Sao Paulo. I think we have about 16 and 17 sister schools around the world that we’ve, actually, in some cases helped to start. And so, yes, entrepreneurship is broad, and it’s a fantastic and very inspirational seat that I sit in to be able to interact with all these great people.
How did you end up in Venture Capital?
[8:30] I was very passionate about it in terms of how I actually secured my internship in Venture Capital. A lot of people are very interested in working in venture capital. It’s a very cool, unique, inspirational place to work. They think that there’s a very unique power dynamic that venture capitalists have. They get to see new and exciting things, helping to design and select the future that they want to live in.
Experiences in the Venture Capital Investment Competition
Did you have any experience with VC before MBA school?
[9:00] No, not at all. So for me, the company that I built in the United States was completely bootstrapped, it took no outside capital at all. When I arrived at the MBA program I knew what venture capital was, but I don’t know that I could have gone into a whole lot of detail. And what really turned me on to the area of VC was the Venture Capital Investment Competition (VCIC).
And for people who aren’t familiar with the VCIC, essentially, it’s a simulated venture capital investment, where students are essentially pretending or acting as if they are venture capitalists.
They are reviewing, typically, three real startups that are in the fundraising process right now. Reviewing their pitches and their investment opportunity, and selecting one of them to make an investment in. And their entire performance is being evaluated by actual VCs. Typically partners or more senior within the firm’s, that the judges are representing.
IESE has historically performed very well in this competition. And, one of my classmates, when I was a student, invited me to join his team. I thought: “This is really interesting. I’ll give this a try.” And turned out to be something that I was fairly good at. I really enjoyed the competition, the way that IESE structures it. This is a competition that is a global competition. I would guess maybe 60 to 80 different business schools around the world participate in this competition, in some way, over the years.
At IESE in the year that I participated in it, I believe that it was the single biggest student competition that year. And, ultimately, through maybe four or five rounds of this competition I ended up being selected out of about 160 students that were interested in the competition to represent IESE on a five-person team, that won a European Championship and then traveled to the United States to represent Europe in the global championship.
Through this experience, I really developed a unique knowledge. And also, it is a very important unique network in the venture capital space. I was able to convert that knowledge and network into a job opportunity.
So using the competition and the network and the knowledge that It gave me, I, essentially, was able to go back to all of the judges who had evaluated me in this competition and who had consistently said that I had the knowledge and skills to proceed in the competition, to offer me a job.
I went back to each of them and said: “You have seen me perform in this multi-day competition. You’ve seen me go through four or five or six legs of this competition around different places in Europe, in Barcelona and Copenhagen, the United States, and elsewhere. So you know what my skills are. Now would you consider giving me the chance to work with you?“.
And a firm in Madrid, that’s called JME Venture Capital, offered me an opportunity to work there for the summer. And it turned out to be a really fantastic learning experience, as well as a personal development experience for me.
Who was your classmate that brought you to the competition?
[12:27] His name was Shinichi Okabe, an incredibly gifted student, who was one of two students in the world to get a full-ride scholarship from Toyota Motor Corporation. Shinichi, essentially, could have had his pick of any school in the world and turned down Harvard to come to the IESE. He knew that there was a fair chance he was going to be going back to Toyota, and he’s at Toyota now. He wanted to try as many different things as he could while he was a student. And he wanted to try the VC route and encouraged me to try it with him.
IESE Resources & Opportunities for MBA in Entrepreneurship
From your experience at IESE are there other entrepreneurship-related jobs rather than being a founder?
Do you see any other jobs that are related to entrepreneurs? Are there any other types of opportunities for people that want to be in the startup scene, without being a founder for example?
[13:35] Yeah, absolutely. I think that the area of entrepreneurship is as hot as it can be. Obviously, students have always considered startups to be an option, whether founding one or joining one. But today some of the emotional interest, the coolness factor of joining a really hot startup is sky-high. And students are definitely interested in it. So, one path is to found your own company. For others, it’s joining a startup.
We at IESE host a startup career fair, and, of course, have our normal corporate career fairs, where you have investment banks and consulting firms, heavy industry, oil and gas, and all kinds of normal characters and companies come.
There’s also a Startup Career Fair where we have a nice batch of startups that have raised enough money to let’s say, de-risk or at a stage where they have some stability. They can pay an MBA, at least an acceptable post-MBA salary, or offer a really meaningful internship project opportunity or interesting role for a student. And we host this career fair to do this matchmaking.
IESE, itself, has Alumni founders of incredible companies, many of whom have hired IESE Alumni. And so we’re always about connecting them.
I think it’s important for students to recognize that there’s a pretty significant difference between joining a very early-stage project and the later-stage project.
I work with the Career Development Center here at IESE, to help coach students on understanding the difference in terms of the opportunity, the risks, the income or compensation streams, and the ability to do a career transition.
All of these things have variances, depending on whether it’s an earlier or later stage startup. And so, I think, that as far as a career target is an important consideration. Also, IESE has a fantastic reputation in the search fund space. Search funds themselves are an entrepreneurial career path, that falls outside of founding your own startup.
Additionally, sometimes entrepreneurship is quickly defined as startups, technology startups, especially. And I think, while this is definitely what gets the most attention, it isn’t the end of all of the list.
Like the company that I founded in the United States, I would say certainly is not going to make me famous or anything like that, but it is a nice entrepreneurial experience that is able to pay the wages of a nice handful of employees. But at the same time, I wouldn’t even classify it as a startup. I would say that I founded a small business, and not a startup. And so, there are many paths to entrepreneurship.
I think, maybe from my position at IESE it would even be how we define entrepreneurship at IESE. I would say that entrepreneurship is less of a noun and more of a verb. It’s an act of behavior, a way of thinking. And, as such, it’s not something that you’re born as. Just I don’t think you’re necessarily born as a leader. But anyone can learn to lead.
I don’t believe that you’re born as an entrepreneur, but anyone can learn to think and act, and behave in an entrepreneurial manner. And having this entrepreneurial thinking is a critical skill set or a critical mindset for every business leader, whether they’re running a three-person startup or a huge multinational corporation.
At our school, we want every student, regardless of whether they’re planning to go, into investment banking, or consulting, or they want to start a company or they want to do a search fund, to come in contact with this entrepreneurial mindset.
I mean, to us, this is very fundamental. And we cast a wide net, but in terms of career opportunities, I think that there are credible entrepreneurship opportunities within corporate innovation units, corporate venture capital, units. I mean, the list goes on and on. And I think while certainly there is an attraction to early-stage tech startups, that’s a pretty narrow description of entrepreneurship.
Learning entrepreneurship is like taking ownership. You are in charge of your career advancement. Regardless of your position, right?
Learning entrepreneurship is like taking ownership. And when you take ownership of the projects, you’re dealing with your advance going faster in your career. Regardless you are in your company or you started your company, right?
[18:28] I think that’s exactly right. And it’s also the description that I would say, it’s learning to work in uncertainty and with insecure resources. I mean, when you’re an entrepreneur, there is an element of uncertainty. And learning how to deal with this ambiguity is something that serves every business leader very well. Not just to the people that are founding a startup.
Why did you feel you needed an MBA? Even if you already had a successful company?
Going back to the US, you were working for this private school. You had a broad experience inside the school. You found a small company, which still gives dividends, is still alive and supporting employees, etc. Why did you think, okay, now I have to go to an MBA school? And what do you think about the idea that many people think, that you don’t need an MBA to start a company?
[19:24] I think that’s exactly correct. You don’t need an MBA to start a company. You don’t have to get an MBA to start a company. And would say, I don’t work for the admissions department, maybe they would say that everybody should get an MBA. But, I don’t think that’s true, and I also know that our MBA admissions department wouldn’t say that everybody in the world should get an MBA.
For entrepreneurs, the value of an MBA is very unique. I chose to come to IESE for a couple of reasons, I think one thing that you get when you get an MBA is that you get an extraordinary network. And this network is unique. It’s people who have a similar intellectual horsepower by going through the same school they have a similar set of values. Typically, they are similarly ambitious, etc. It is a long list of network benefits.
If you were to draw a map of my network before the MBA, you would find that almost everybody that I knew was from the United States more or less. I mean, of course, you’re gonna have a few outliers and other countries. But if you visualize my network would be dominant in the United States, and IESE is one of the most international business schools in the world. Today, I have classmates that are from 75 different countries around the world. That’s very special. And with that, comes something really unique.
So my education was in Business at my undergraduate university degree. And I’ve studied Business, and participated in Classic Business for many years in the United States. And I understand the basics of how somebody from the United States makes business decisions. But this is very different from how somebody from China or Japan, or India, or Brazil, or Germany, or some other place around the world make decisions.
And by being thrust into an international environment where you’re learning from each other you’re exposed to new ways of solving problems. For me, this is one of the biggest values and takeaways of the MBA was this exposure to new ways of thinking. There’s no question that that would shape my ability to interact with people. It would enrich my ability to build the next company.
If I were to found another one or pursue another entrepreneurial path, the takeaways are incredibly strong. And I also rounded out some skill sets in areas that I hadn’t been exposed to or hadn’t been exposed to as much. If you look at, for instance, my profile, most of my background was in sales and marketing type activity. These, it’s always been extremely customer-focused.
While I have had instincts of working in finance I would say that my analytical skills were a big reason that I wanted to come to do an MBA, was to brush up those analytical and strategic decision-making skills. Could I have been successful without coming here? I would argue, yes, probably. But is my career substantially enhanced by my experience here? Absolutely.
Cultural Differences between US-Europe from an MBA point-of-view
Did you notice differences in doing business in the US and EU?
What American companies can benefit from European employees and vice-versa? Any personal experiences?
[22:57] No, I mean, I think that where I am I have to be very careful here, culturally or whatever. Because some of these differences can be sensitive. I think that Americans, reputationally, we sometimes can be very good or are very known for our attitude towards sales. We’re very good at sales and marketing. And again, this is stereotyping, terribly. But I think that Americans can be loud and confident, and bordering on arrogant. As far as how they sell something.
And sometimes, that can be a service to European organizations that are humble and let their product do the selling. They sometimes need a mouthpiece to help promote their product. And really describe its value and be confident in the value that their product delivers.
And on the other hand, you can throw that in just the other direction. There are times where as somebody from the United States, you need to be quiet and let your product do the talking. And let your other customers be able to express the value that it’s giving. And you need to stop selling it so aggressively.
This would be one example. There were times when I was working for a VC firm where the firm was interested in presenting itself as more international. And I would go on appointments and was encouraged to present myself as being from the United States, and don’t be shy about my international profile, because it gave credibility or gave a certain appeal to something.
That has happened here at IESE, part of what we are it’s because we’re an international business school. We’re not just a Spanish Business School. I certainly represent the international flavor of the school. And we have so many employees who are from around the world that give us this uniqueness. But I think that this expression of different viewpoints, and how you would handle something differently in the United States is just maybe one example.
Different Ways to Be an Entrepreneur
What are other events that people interested in startups may benefit from?
[25:24] We have a very full slate. And that’s hard in just a brief moment since I don’t have a list in front of me right now. So a few highlights that stand out. We have a robust Startup and Entrepreneurship Club, that our students are very engaged in. They are constantly hosting events. We work with TechStars to run a Startup Weekend. We take trips with our students to Berlin and to Silicon Valley. We visit startup ecosystems. We’re planning a trip to Tel Aviv in the next year or so. We host conferences and discussions.
Right now, there’s a conference that’s going on today called Doing Good Doing Well. That is all about responsible ethical business. And we’re constantly putting great inspiring companies and people in front of our students. Hopefully inspiring them to take the next step in their entrepreneurial journey and not just be looking at things from a profit perspective, but from doing good in the world perspective.
We as a school have a venture capital fund called Finaves that’s investing from its fifth fund. We run the business angel network that is the IESE Business Angel Network that has invested over 40 million euros into startups in the last handful of years. I run the Summer Entrepreneurship Experience which is a type of accelerator program for students who, instead of getting a traditional corporate internship between their first and second year of the MBA, they would elect to work on a startup idea and push the idea forward.
Tell me how Summer Entrepreneurship Experience works?
[27:00] Students apply to the Summer Entrepreneurship Experience with an idea. We have other accommodations for projects that are later than idea-stage. This summer entrepreneurship experience is specifically for ideas stage companies. So the students pitch an idea to us and describe what they believe they would like to accomplish during the summer.
Our goal is to help students validate or invalidate their startup idea. People always ask us what companies have been launched out of the summer entrepreneurship experience? And we definitely have some very nice cases that have come from IESE or come from the summer entrepreneurship experience.
But I would also consider a success if you apply to the Summer Entrepreneurship Experience with an idea and over the course of the summer came to the realization that, with our help, your idea doesn’t have the potential that you thought. And instead of wasting your time and trying to found this company after graduation you realize it now and are able to have the time left to change course and spend your time wisely.
So, for us, this validation thing, what we’re trying to do is to teach the repeatable process of validation to students during the summer. And we guide them through this process with some mentorship from me, typically, a couple of other entrepreneurship focus professors, including one gentleman, Luis Cabiedes, who’s also one of Spain’s leading angel investors and a visiting professor here at IESE.
We work to coach, mentor and advise the students through the summer on how to validate their business idea. It’s very important to us this is not about writing a business plan. What we’re actually doing is getting those students to have an iterative lean and customer-focused process, where they start trying to sell their idea or their product, as early as possible.
Last week, one of our startups came back in the second week of the program. So the first week was really just an introduction. In the second week of the program, they came back and showed us a pile of money that they actually made selling what was an early prototype of their product.
And to us, this was incredibly exciting and showed that at least there was some potential for their business idea. And then what we try to do is accelerate that interest over the course of the rest of the summer.
When MBAs Should Start Their Own Businesses?
What do you feel is the best time to start a company?
In your interview at the Touch MBA Podcast, a phrase that got my attention was that you talked about people that go into corporate after the MBA and start their own company a couple of years later. So, what do you feel is the best time to start a company? And if you can talk about the problems that a guy in their early 20s may face, and the problems that a guy into corporate may have.
[30:00] Yeah, I think what you’re alluding to is, we have cases where students leave the MBA, they graduate, and immediately create a company. And we have other students who graduate and then go and work traditional, let’s say more corporate-type jobs for a couple of years. Then they’ll create a company in two or three years after graduation.
What happens during those two or three years changes the outcome. Some of them turn out to be some of our best entrepreneurs. Not that that’s the only way that they can go, and we have tremendous success cases that have come from founding a company right after graduation as well. But the idea of creating a company two or three years after graduation is that you don’t have to do this right away.
The benefit of waiting is that the quality of ideas, overall, that students develop while their business school students. If they have very little entrepreneurial experience, or limited professional experience, just a standard MBA, or pre-MBA experience, the quality of the ideas, the problems that they’re trying to solve, can be, let’s say kind of first-degree problems. Are not always particularly complex or very serious problems.
If you go and you work in another company for two or three years, and you advance up the ranks, you discover industry-specific problems that are substantial, big problems for the industry that they’re serving. And creating companies that solve these problems.
When you do this, first, you probably have paid-off your MBA debt. You have the financial freedom and flexibility to pursue your entrepreneurial dream. Second, you have learned to hate aspects of corporate life. And this makes you very passionate about being your own boss and really committed to this path. Three, I think you’ve built a much stronger network.
And so, the people that you know when you graduate from the MBA, are a lot of people who are just like you. Although, people come from around the World to great MBA programs, not just IESE, but other schools as well., you’re all are more or less the same age. You all are more or less from the same socio-economic brackets. And all are similarly ambitious, have the same basic profile, with huge variances in terms of the industries in what and whatnots.
But when you after two or three years in an industry job, the network that you developed, those are the people who will be angel investors in the company. Because you’re solving a problem that they understand, and are willing to commit resources to solve that problem. These people in your network will be the first people that will buy your product. They will be people that you can recruit, to help grow your company. And so I think this network richness is great.
On the other hand, there are plenty of cases where students have graduated and started a company right after graduation. And whether you do it two or three years after the MBA or immediately after graduation, one of the best things about the MBA is its resourcefulness for finding great co-founders. And so, it’s an absolutely fantastic place to find co-founders. Whether that’s two or three years into the future or right after graduation.
MBA Job Market Trends
Do you see a trend in IESE graduates? Like big tend to go solo, they found startups, they own family companies?
[33:30] I would say, honestly, I don’t have hard and fast statistics. I know that the Career Development Center here at IESE does an incredible job of helping students secure jobs after graduation. Some of those students are joining great startups. They’re developing their own startup ideas. We, of course, do have some who are coming from family businesses and will return to family businesses.
But as far as a statistical breakdown and a trend line, what I would say is anecdotal, a lot of students are very aware of topics around artificial intelligence, around space and the frontier of outer space. There are students who are very interested in big data and its applications. And they also want to go to a company where they feel like they can make a difference from day one, they’re not just part of some huge corporate machine.
And whether it’s their own startup, whether it’s an early-stage company, or whether it’s a large company that understands the value of innovation and giving people responsibility early on. Those are the jobs that I think are on trend right now that people are excited about getting. And I think that there is no shortage of talent. That’s where the best talent is going, is to those innovative high critical thinking skill sort of jobs.
What are your plans for your future? Do you see yourself here in Barcelona in a couple of years?
[35:03] You know, I honestly, I have no idea. I came to IESE because I felt like it was the best place for me to study, and get my MBA. It was incredibly opportunistic, a school that was incredibly well ranked. It has a great reputation. So I came on the merits of the reputation of the School, of the recommendations of Alumni, etc.
It wasn’t an obvious choice. I mean, the United States has incredible business schools, but I wanted to do something different. I wanted to stretch myself and my family in a unique way. And I definitely have gotten maximum impact and benefit from that, I believe.
And the opportunity to stay at IESE was also somewhat unique in terms of. I was pretty passionate about venture capital and early-stage investing. When IESE made this offer to me to stay in this job. It was somewhat unexpected. It very much matched the values that I saw in venture capital. What I love about doing it, and, yes, you can make a tremendous amount of money in venture capital and become very wealthy.
Although, the majority of people that aren’t their path. What I love about venture capital is about this identification and maximization of potential. And what I get to do at IESE today is identify great potential and then help to maximize it.
And so in some ways, I still have the job of a venture capitalist. I do it in a different way. I do it by not just giving capital, but by aligning a lot of different resources to this exceptional entrepreneur. And so, for me, my entire career has been based on this opportunism. I think it will continue to be based on that. I’m very happy here. I have no imminent plans to leave. I’m not actively entrepreneurial. So I’m always aware of startup ideas. I have a list of things I’m always thinking about and working on. At the same time, I can’t predict what the future would hold.
If you have any parting thoughts, you can drop them now.
[37:16] Yeah, I would just add if there are aspiring MBA applicants that have a question, have them feel free to reach out to me. Whether you’re an alumnus of IESE or not. If you stumble across this. And I can be a value to you, don’t hesitate to reach out. I’m always interested in helping how I can. And, I love pitching in, and rolling up my sleeves, getting my hands dirty, and doing whatever I can to help other people be successful.
What’s the best way to contact you?
[37:48] So the best way for people to get in contact with me if they’re an MBA applicant, what they should do is they should get in touch with the admissions team. Others can reach out to me via LinkedIn. I’m on Twitter. I’m a visible, accessible person so most people can find me if they want to get in touch with me.
—
This interview was very inspiring and it was very interesting as well. There are a lot of things going on in the tech food industry.
Thank you for joining me for this episode of the MBA talks, a podcast brought to you by Optness Institute. You can find all Notes of the other episode, as well as SUBSCRIBE for future episodes at optness.com/mbatalk. And if you’re enjoying the materials and have any comments, topics, or suggestions, I love you to shoot me an email. My name is Andres and you can write to me at mbatalk@optness.com. With that, thank you and we’ll see you in the next episode
