3 things Harvard taught me about running a business

Funding Societies founders Kelvin Teo (left) and Reynold Wijaya (right).

Kelvin is a TIA Star Contributor and publishes high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

Entering Harvard Business School (HBS) was my childhood dream. When I enrolled in July 2014, I was fortunate to meet Reynold Wijaya, who went on to co-found Funding Societies (otherwise known as Modalku in Indonesia) with me.

In December 2015, after weeks of conversation, Sequoia India casually asked if we would drop out of HBS and work full time. We said no. It’s not only because of family reasons, but also because of the learnings at HBS which we believed would help the business. Here are three of those lessons.

There can be more than one right

Perhaps the most well-known part of the HBS education is the “case method.” Unlike lectures, we read ~20-page write-ups on real-world problems and discuss potential solutions in class. It can be stressful, as we were graded for class participation. HBS even employed a scribe to record our attendance and comments—both their quantity and quality. No one wanted to sound naive in front of a class of (insecure) overachievers.

I found reading HBS cases time-consuming. Over time, lazy me noticed an easy way to score: disagree with others. This is because, intelligent as they were, the students’ comments were often one-sided—correct but incomplete.

Similar trends can be seen in startups, where overconfident “superstars” may have solid views but often are not free from blind spots.

Advice for startups: Actively seek out multisided arguments; don’t try to “convince” others by repeating your argument but see how you can co-create solutions.

In an SME digital financing company like Funding Societies, having a balanced view is hugely important. The sales team may say the credit team is too stringent while the latter reckons the prospective borrowers are too risky. This is common in any closely related function.

The solution is often not yes or no, but why and how. Understanding different perspectives develops empathy and helps teams figure out win-win solutions.

Strategy is the sum of parts

One classic HBS case was Benihana, a successful Teppanyaki restaurant franchise in the US. The case outlined the company’s careful system design and how it overcame some of its major hurdles. American’s mistrust of exotic food? They placed the cook in front of  the customer. Attracting customers? They made their chefs perform. Local labor constraints? They hired foreign chefs. Space constraints? They employed an unconventional kitchen.

Many founders think of business strategy or competitive advantages as doing A right or owning B strategic resource. To me, this is necessary but insufficient. We need to fit all the pieces together because in this era, there aren’t many capabilities or strategic resources that a startup can’t access if it tries hard enough.

Advice for startups: Don’t blindly copy US, Europe, or China models; structure/rethink your business model from scratch.

For example, in the US and Europe, many SME digital financing players had grown on the back of the ecommerce boom. Thinking it would be the same in Southeast Asia, we spent a year targeting ecommerce merchants in 2016. Unfortunately, results were poor. Ecommerce merchants in the region either didn’t need a loan (as a hobbyist seller) or had too short a history (risky). We were (and may still be) too early. Only after we realigned the pieces did we start scaling up.

Decisions should be made by choice, not by chance