There is a tendency in the start-up community to be skeptical towards MBAs. In an industry that lauds performance metrics to constantly track progress, there’s something fluffy about a professional degree that is not a prerequisite for anything.
Unlike medical school or law school, you don’t need an MBA to go into business. Since much of the startup playbook is about learning as much as you can as quickly and cheaply as possible in order to reach some important milestone, many founders, investors, and engineers look at a $200k, two-year program as an inefficient means to an uncertain end.
My experience as a full time MBA does not necessarily contradict this outlook, but I do think there is a more nuanced conversation to be had. In a recent New York Times blog post, entrepreneur Cliff Oxford asserted that although MBA institutions are pouring resources into entrepreneurial programs, these programs still lead to classroom-centered teaching models that simply move too slowly to be relevant for start-ups, which often need to be up and running in months or even weeks. While Cliff also says that top MBA programs like those at Harvard and Stanford are worthwhile for networking, he generally argues that there is little value in the academic approach to entrepreneurship.
I agree with Cliff that some of the courses I took during my time as an MBA student haven’t yet been relevant for my career path. However, I did learn a few critical things in the classroom, and beyond that received the support and mentorship I needed to incubate not only one but two business ideas.
Would I say that all of this has been worth the sticker price of ~$200k, plus the opportunity cost? The cop-out answer is that whether or not it was worth it for me will not really help other people figure out if it will be worthwhile for them. That calculation needs to take into account personal financials, opportunity cost, and expected future salary. I’d recommend reading this article by Tim Berry for further discussion regarding whether or not an MBA is worthwhile to you. While many of the factors are highly individual, I do think it is important to point out where I found the real value so that others who are considering full or part time MBA programs can do the math for themselves.
With that in mind, here’s where I got the most out of my MBA.
1) There Are Things You Can Only Learn in a Classroom
Contrary to popular belief, I’m going to say that my classroom experience was the most valuable part of my time at school. Following the logic that venture founding teams need both builders (engineers, operations specialists) and sellers (marketing, sales, business development), I focused my coursework on marketing, and some of these classes truly blew my mind.
Data is changing the way that businesses operate, and most of the start-ups that I see achieving success are highly reliant on customer analytics. While data science is still a nascent field, knowing basic calculus and statistics and learning how they are applied to modeling and forecasting changed the way I think about customers. Since customers are the center of any business, that changed the way I think. Period. Full stop.
Not all MBA marketing classes are created equal, but if you can find intensive, quantitative courses taught by leading researchers, you’re definitely going to get your money’s worth. (It is worth noting that some of the best professors I had are beginning to offer some of their courses through Massive Open Online Courses but in my experience the real secret sauce is still being withheld and even if it were available, this stuff is not easily self-taught.)
2) They’ll Invest in Their Own
After the courses, the next most valuable thing about my time in school was access to funding. Schools want the credit for the startups that come out of their students, and while it’s hard to attribute success to a classroom, it’s much easier to follow the money. For this reason, it seems that there is an increasing number of competitions with large cash prizes, such as pitch competitions, school-sponsored hackathons, and business plan competitions. Additionally, many programs offer opportunities to obtain support funding, which can be used to get internships at start-ups which might not otherwise pay, or to enable you to pursue your own ventures.
In my time as an MBA, I applied to around 11 different entrepreneurial competitions or support programs, won five, and was awarded nearly $25k. Not bad odds if you’re considering getting an MBA. The key is just to do your homework and make sure that you are looking at a program that is actually putting money behind what you read on their website.
3) Mentorship is Priceless
As a lonely entrepreneur, it’s often hard to find mentors in the real world. Maybe it’s easier if you live in a hub like Silicon Valley, but in my experience it is nearly impossible to find people (outside of family) who are really invested in your future and the future of your company. That’s why companies have advisory boards that get compensated—you usually have to pay for that kind of support and knowledge. So, as an individual, it seems pretty reasonable to pay for time in a classroom with someone who then becomes accessible outside the classroom as well. Think of business school as lead generation with mentors and advisers: as long as you are at a place with people on the faculty whom you respect, you can get a lot of value from those relationships.
At the end of his New York Times piece, Cliff states that you should only go to an MBA program that “offers real-world experience working alongside someone who is building a business.” To do otherwise, he says, “is pretty much like having athletes studying game film but never practicing on the field.”
Here’s the thing, though: if you need your MBA program to put everything on a silver platter for you, then you’re probably not cut out for entrepreneurship anyway. If, on the other hand, you find and are admitted to a program with a rigorous marketing department, ample resources, and faculty you respect, then any good entrepreneur should be able to make good on the tuition investment.
How LivePlan makes your business more successful
If you're writing a business plan, you're in luck. Online business planning software makes it easier than ever before to put together a business plan for your business.
As you'll see in a moment, LivePlan is more than just business plan software, though. It's a knowledgable guide combined with a professional designer coupled with a financial wizard. It'll help you get over the three most common business hurdles with ease.
Let's take a look at those common hurdles, and see how producing a top-notch business plan sets your business up for success.Click to continue