Our Favorite MBA Startups Of 2017 - Poets&Quants

One of the best ways to learn about the diversity and interests of elite MBAs is to study what they create and where they spend their resources, time, and passions. Startups are a prominent way those unique passions manifest. Each year, in an effort to identify the very best, we rank the top 100 based on venture capital investments raised. Throughout the year, we also learn of interesting startups that haven’t yet caught the eyes of VC investors, but that are often equally fascinating. We’ve cultivated a list of our 10 favorites that we covered in 2017 that span both venture-backed and bootstrapped young companies.

This year the list includes a tricked-out water cooler company, a health food venture, and a bra company, among others. They come from schools spanning the United States and are made up of teams of men, women, and women and men. They’re in various stages of growth, but they all represent the growing trend of MBAs catching the entrepreneurial bug while in B-school or very soon after.

Stephen Kuhl (left) and Kabeer Chopra founded Burrow while in the full-time MBA program at Pennsylvania’s Wharton School. Courtesy photo

Burrow

Devised in Ethan Mollick’s Management 801 course at the University of Pennsylvania’s Wharton School, Burrow is the brain child of Stephen Kuhl, Kabeer Chopra, and the painstaking process of moving furniture. Both experienced annoyances moving to Philadelphia to start the full-time MBA program. And both decided to do something about it. For Kuhl, it was Ikea’s not-as-simple-as-it-looks couch setup that can often require multiple tools and people. For Chopra, it was a horribly botched West Elm order. Either way, Burrow, a direct-to-consumer startup is taking aim at the Ikeas and West Elms of the furniture world. When we published the article at the end of May, the company had already generated a quarter of a million in revenue and were having week-after-week of furniture sellouts.

Playing on the same field with the likes of Ikea and West Elm is a lofty goal. But Burrow has the entrepreneurial chops to potentially make moves in that direction. It has roots in the same course that produced direct-to-consumer giant Warby Parker. Chopra and Kuhl were accepted into the prestigious Y Combinator. And according to reports from The New York Times, millennials are carrying the booming billion dollar industry of direct-to-consumer furniture sales.

“You’ve got two years to figure out if your business is going to work. And if it doesn’t work, you’ve got this great story to tell and you can go join another startup or get a job,” Kuhl told us about launching a startup while in B-school. “The alternative is partying all the time for two years and recruiting. And you can always recruit last-minute and get a job.”

The Branch Founders. Pictured from left to right are Dmitri Gaskin, Alex Austin, Mada Seghete, and Mike Molinet. Courtesy photo

Branch Metrics

Branch — an app-linking software company — was also born while the co-founders were in business school. Like so many other software companies, this one was built and is based in Northern California’s Silicon Valley. To be sure, the team was a hit before the idea. Alex Austin, Mada Seghete, and Mike Molinet found each other in Stanford’s infamous Launchpad course, held within the Design School. Since 2009, more than 50 operating businesses have been conceived in the course. After one failed “Fitbit for dogs” startup, and struggling through another venture, the team, which includes the three GSB graduates and Dmitri Gaskin, who dropped out of Stanford University’s undergraduate program, founded Branch. Since launching in the summer of 2014, Branch has raised more than $53 million in investment-backing.

The team weathered the storm of two dropped ventures, turned down multiple internship and job offers, and persisted for one main reason. They came to business school to start something.

“Ultimately I went with the intention to start a tech company based on software,” Molinet told us at the time. “I remember thinking if I’m going to go, quit my job, spend $200,000 on an MBA, I wanted it to be at a top five institution. It (Stanford) is at the center of Silicon Valley and the center of tech. Also, I was living in Minnesota at the time, so, sunshine and warm weather were a draw.”

Jan Hoffmann-Keining and Julian Jost launched Spacebase in 2014. Courtesy photo

Spacebase

If there’s a business model to hitch your wagon to, the Airbnb model seems to be one of the most popular. Jan Hoffmann-Keining and Julian Jost launched a near carbon-copy called Spacebase in 2014, which rents out meeting spaces instead of rental rooms and homes. “Airbnb has created the blueprint of how marketplaces should look nowadays,” Jost, who graduated with an MBA from Oxford’s Saïd Business School, told us last January. At the time, the meeting rental platform was operating in more than 30 cities in a dozen countries.

For Jost, the idea came from his consulting background. “Throughout the consulting life, you experience the hardcore meeting culture,” Jost said. “Meetings everyday. Tons of meetings. And they were all pretty much the same.”

It also makes you a creative problem-solver.

“Consulting makes you very good at putting problems into boxes and working your way around or through them,” Jost said. “That also takes away a level of creativity.”

Jost said he was able to bounce ideas off his diverse classmates at Oxford, and that’s where the idea was generated.

A Bevi water dispenser developed by two MIT Sloan grads and an industrial designer. Courtesy photo

Bevi

Hustle might be one of the most annoyingly overused words when it comes to describing entrepreneurs and entrepreneurship. That or disruption. But a little bit of hustle and a lot of ingenuity is what it took to get Bevi off the ground for a team of MIT Sloan grads. Sean Grundy, Eliza Becton, and Frank Lee were in the application process to enter the Boston Techstars Accelerator program, which included a video portion. The problem? Their futuristic water bottle dispenser wasn’t dispensing water. They figured they’d have the kinks worked out by the time they got to Techstars, but first they had to be accepted. So they got crafty.

“We had Eliza hide inside the machine and then manually act out the functions of the prototype from the inside,” Lee told us at the time, noting Becton was the only one with the stature small enough to fit inside the defunct machine. “We filmed the prototype as if it was functioning properly and then submitted the application with little hope.”

It worked. By the time the team was selected for an in-person interview, the kinks were worked out and the product was working flawlessly. That was 2013. Now the team has 40 employees spread across three offices, $14 million in venture backing, and their product has infiltrated the offices of some heavyweights like Netflix, General Electric, Intel, Twitter, and Lyft, among others.

Sidharth Kakkar (left) and Alexandr Kurilin launched Front Row Education in 2013. Courtesy photo

Front Row Education

Often times, startup success comes down to some random luck. That’s what happened for Sidharth Kakkar, an MBA grad from the Kellogg School at Northwestern University. First, was an unlikely love affair with computer programming. Kakkar randomly signed up for a computer programming class at Carnegie Mellon University, which he soon adored. Four years later, he graduated with a computer science undergraduate degree from the school. Second, was a more random response to a Craigslist add asking for website creation training. After many people responding by asking for help building their websites, Kakkar found a suitable teacher. He was a homeless man looking for $10 an hour for 15 hourlong sessions.

“He had a laptop, backpack, he often slept in shelters, and he helped me at Starbucks. Because, you know, they have free Internet there. He taught me how to make a web app in PHP (hypertext preprocessor),” Kakkar recalled last January, when the article was published.

It was enough to give him the basics to feel comfortable building education software for students in kindergarten through eighth grade. The software, which focuses on math and language arts, is now in more than 41,000 classrooms in all 50 states and more than 25 countries. More than 5 million students have used the software, which currently has more than $6 million in investment backing.

Byte co-founder and Haas MBA Megan Mokri. Byte placed 67th on P&Q’s Top 100 Startups of 2017 ranking with $7.67 million in funding

Byte Foods

Simple business pivots can sometimes take businesses to a different level. That and a rebranding and renaming. That’s exactly what happened for Byte Foods. Founded in 2014 as a meal-on-demand business called 180Eats, ended up being a logistical nightmare. Even though there was rapid success — the company says they were delivering 400 to 500 meals a night — it was unsustainable for the amount of delivery drivers they had. So the wife and husband founding team of Megan and Lee Mokri pivoted to a workplace vending and delivery model for health foods. The shift worked. Since the move in 2015, the company has gone from just the Morki’s to 40 employees and nearly $8 million in venture capital backing.

Megan Mokri came up with the idea and worked through the setbacks and problems of the startup while earning her degree from the University of California-Berkeley Haas School of Business. In particular, adjust professor, William Rosenzweig, who is also dean and director of the Food Business School, helped Mokri.

“I went to business school knowing that I wanted to start a business in that environment and leverage as many resources as I could,” Mokri, now CEO of Byte, told us last January.

Jenna Kerner (left) and Jane Fisher co-founded Harper Wilde, a bra company, while earning their MBAs at Pennsylvania’s Wharton School. Courtesy photo

Harper Wilde

Call it the Warby Parker-effect. Each year Wharton professors tell googly-eyed, entrepreneurial-minded newbie MBAs about how the unicorn was founded within Wharton walls. It’s certainly spawned some fledgling ventures with big upside. Besides Burrow, mentioned above, one of our favorites this year is Harper Wilde. Jenna Kerner and Jane Fisher both came to Wharton with startups on the brain, but mainly to join one instead of starting their own. And like so many others, the idea came from a frustration. The particular frustration for Kerner and Fisher was bra shopping.

“Frankly, right now, bras are incredibly expensive,” Kerner told us last April before the company fully came to market. “We’ve been wearing bras since we were teenagers — most women have. It’s something you have to deal with every single day. But a lot of women have taken it as the status quo that you just have to pay $70 for a bra.”

According to Ibis World, the lingerie market, which includes bras, is a $13 billion industry and is growing at a clip of 3.3% a year. The main stalwart, Victoria’s Secret, is vulnerable, the duo believe.

“Why is there a man standing at the door of Victoria’s Secret — you know, the security guard — watching women shop for bras? Why is the whole industry hyper-sexualized? Why is a woman’s product marketed towards men?” Kerner said. “I mean, there are so many things that when we really started to pick it apart — and when people we speak with do the same — they’re like, ‘Wow, you’re right, it’s crazy that this has been going on for so long.’”

Perhaps not much longer.

The first all-woman-founded team on the list is Dia&Co, which tied for 21st with $20 million in VC-backing. The founders are Lydia Gilbert (left) and Nadia Boujarwah (right) of Harvard Business School. Courtesy photo

Dia&Co

It wouldn’t be a startup list without Harvard Business School. The Boston-based startup beast stakes claim to many successful ventures. Dia&Co is on deck to make that storied list. Manhattan-based Dia&Co was founded in 2014 by Lydia Gilbert and Nadia Boujarwah to do something not many other companies do: Offer highly fashionable clothing in the plus-size market. According to Boujarwah, two-thirds of U.S. women where sizes 14 or larger. Yet, only about 17% of clothing purchased is in that size range. Dia&Co only sells clothing in sizes 14 to 32.

“When the idea for Dia crystallized, it was clear that being able to dedicate myself to a customer that I cared about so deeply was incredibly energizing and I knew my job search was over,” Boujarwah, who graduated from Wharton’s undergraduate program and was an investment banker before enrolling at HBS. Gilbert, her co-founder, agreed.

Taking a Stitch Fix-esque business model, Dia&Co has vaulted into the market. They have sales in all 50 states and in 75% of the country’s zip codes. During 2016, they multiple sales by 35. And they’ve raised $20 million, led by Sequoia Capital to boot.

Guild Education cofounders Brittany Stich (left) and Rachel Carlson. Courtesy photo

Guild

When Brittany Stich and Rachel Carlson enrolled in graduate school at Stanford University, they both did so pursuing MBAs and masters in education. Both had deep roots in education. For Carlson, who grew up in Colorado, education policy was regular dinnertime conversation. Her grandfather was the governor of Colorado between 1987 and 1999. Her father was a state senator from 2006 to 2010. And Carlson herself served on the Obama campaign in 2008. Stich, meanwhile, was a first-generation college student and later served for Teach for America. She personally new the value of higher education.

“My family has worked in education reform since I can remember,” Carlson told us earlier this year. “And for Brit, she’s the first in her family to go to college. So thinking about what allowed her to navigate that path — a lot of that is what we do at Guild.”

Denver-based Guild Education is an edtech company that works with employees and employers to offer job training and degree programs for working adults. Since launch, the company has garnered more than $10 million in VC investments.

“Long-term, we want to lead this new area of education as a work benefit,” Carlson said. “We want to make sure the 64 million Americans who are working adults, who haven’t had the opportunity to earn a degree, can thrive and survive in the working world of tomorrow.”

Charles Baron, co-founder and vice president at Farmers Business Network Inc.

Farmers Business Network

Lofty goals are a theme for this year’s list of our favorite MBA startups. And Charles Baron, a graduate of Harvard Business School and co-founder of Farmers Business Network, has a doosie of a goal: To create an agricultural revolution and reinvent the entire food system. Farmers Business Network is an independent information and analytics source that currently works with more than 3,000 farmers, that collectively own more than 11 million acres of farmland — about the size of Maryland.

“We’ve had a huge amount of growth,” Baron old us earlier this year. “Last year we announced another fundraising round, which was an additional $20 million Series B from Acre Venture Partners, which is the strategic venture part of Campbell’s Soup.”

The platform essentially brings farm commerce online. By selling fertilizers, agriculture chemicals, and seed, Baron believes the company will be able to save farmers 10% to 50%.

“Basically what we’re doing is bringing farm commerce online, which it’s not, despite being a multi-tens-of-billions-of-dollars industry,” Baron said. “And we’re doing that in a way that’s transparent and fair and easily accessible for farms all across the country.”

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