In our “What I Learned at…” series, MBAs discuss the tools and skills their business school provided as they launched their career.
Sarah Rumbaugh is the CEO and founder of RelishMBA, the marketplace for MBA hiring, which connects MBA candidates and the companies that hire them through the recruiting process. Sarah founded RelishMBA while completing her MBA at the Darden School of Business and continued to work full-time on the venture after graduation. In Part 3 of this three-part series, Sarah discusses how Darden helped her grow her venture to a point where she could pursue it full-time after graduation.
I wouldn’t say we (my cofounder Zach and I) set the best metrics to evaluate whether we were “successful” at the end of the ten-week accelerator in the i.Lab at UVA Incubator, but we definitely gathered the data that we felt indicated we should keep pursing the business. The idea of setting key metrics, milestones, and/or key performance indicators is another thing I learned the importance of at Darden. How else can you measure your venture’s success? The problem is that it’s really hard to determine what the best metrics are and to determine a benchmark for “success”—especially if you’re setting these standards when you’re at zero and you may still not know what the best solution is for the problem you’re trying to solve. The i.Lab helped us work through all this. Among the other valuable resources that helped us get from point A to point B were the mentors, workshops, other start-ups, and the entire UVA-Darden ecosystem (not to mention the free food).
Going into Darden my second year, I had a cofounder, a tested MVP [minimum viable product], our first revenue, a significant number of users on our software platform (we defined this as the majority of Darden students), and a decision—a decision to continue pursuing the business. I loaded up my academic schedule with entrepreneurial classes and divided my time 50-50: 50% in the i.Lab, working on the business, and 50% on academics. However, as many entrepreneurs will tell you, the business quickly took over my life, and you could really call it 100% focus on the business.
In our second year, Zach and I wanted to rebuild our software (based on lessons from the MVP), raise capital (to fund the software, marketing, and sales), and form the biggest sales pipeline possible (of MBA recruiter customers). Darden classes were helpful for all three. One important note, though—I don’t believe learning in the classroom can teach you how to be an entrepreneur. You learn by doing it, by actually starting a business and iterating on your experiences. No two ventures are the same. Markets and processes change, and people (their skills and the way they operate) are different, so there’s no exact template for how to be an entrepreneur. So my Darden classes were most helpful in learning how to start a business because I was actually in the process of starting a business at the same time I was learning the disciplines in the classroom. I took a class on software development (not one on how to code, but on the process and how to go about it), several classes on financial statements and raising capital, and one on B2B [business-to-business] sales. And the biggest benefit was taking the disciplines and implementing them in real time.
Raising capital was hard. People told me it would take twice as long as I anticipated, and they were mostly right. In retrospect, it makes sense that it took longer than I had hoped. When you first start trying to raise investment—in particular with angel investors (who invest their own money, unlike venture capitalists, who invest on behalf of a fund)—you’ll meet possible investors, and before long, you’ll ask them, “So, are you going to invest?” If you’re still around a few months later and you’ve accomplished a lot in that time, that makes the decision much easier for the investor. You have to create a sense of urgency for them. For example, if you have a few investors on the edge of a decision, set a deadline so there’s a sense of “missing out” if they don’t commit by that time, or set investment tranches; these are milestones you have to meet to get more money. It generally works like this: the investor invests a small amount, and if you meet an agreed-upon milestone, you get more money; if you don’t meet it, the investor gets more equity. RelishMBA doesn’t currently have any tranches in place, but we’d consider them for the right deal. The Batten Institute staff and lawyers (whose services we won through a business competition) helped us structure terms with investors.
We were working around the clock during our second year, pushing RelishMBA forward and being full-time MBA students. Sometimes it feels like it’s easier to get things done when you’re crazy busy because there’s absolutely no time to procrastinate—so you don’t. This is what my Darden second year felt like. I thought that if I was going to pursue the venture full-time (and I had already decided to) and pass up a high salary, then I was going to do as much as possible to grow the business while I was still in school. For me, this meant ramping up the sales pipeline by having initial calls and conducting Web demos with Fortune 500 recruiters. For Zach, it meant finishing up our newly developed Web platform (we mostly outsourced our Web development, and Zach was/still is the day-to-day product manager). A couple classes we took our last quarter featured entrepreneurial speakers talking about their struggles to get to where they are now. These discussions kept us going through those last few months. Takeaways like “you’ll regret it if you let it go” made us realize there was no way we were quitting.
Now it’s been half a year since graduation. We’re in the i.Lab for a second year (you can be in it for up to three years, but you don’t get the same financial benefits as you do in the first year). We’ve grown our user base (MBA candidates) to 45 schools with seven times user growth, signed up a bunch more customers (MBA recruiters) with recurring revenue, hired more people for our team, and been working our butts off trying to scale RelishMBA to be a mainstream factor in the MBA recruiting process.
Darden’s entrepreneurial ecosystem has been invaluable to our success (both personally and related to the venture), so much so that we continue to rely on its support and resources today. I’m not sure how we would have started RelishMBA without the resources and support that Darden offers.