Hey Entrepreneur – Please Get an MBA

A few years ago I was working in a job I loved with a company that was doing highly sophisticated technical work (ie, not what most consumer web companies do). I loved my technical role and the challenges and freedom it afforded me but I felt that there was a whole other side of the world that I didn’t understand. 

I enrolled in a part-time MBA program in a well-ranked business school and got to working on case-studies, networking and all that good stuff on nights and weekends. My relationships became tired and strained and I literally sweat through managing both a technical career and a demanding academic curriculum. It took me some time (almost 5 years!) and I graduated with an MBA. 

If you were to listen to some startup types (or worse yet, your early-stage VC investors) you’d skip grad school, stick to ramen in your garage while trying to nail a huge viral coefficient and plastering whiteboards with agile index cards and a huge ass lean canvas. After all, the only things that matter to your business are your user acquisition techniques and the number of people on your LinkedIn that are wearing hoodies in their profile pictures.

This is why if you’re serious about being an entrepreneur, an MBA will give you an extra edge:

1. What You Actually Learn

MBA programs vary from school to school, but you can be sure that by the time you’re out you’ll be conversant in a range of topics. You’ll know enough of everything business-y to be dangerous. Need to read a financial statement? Set up a pricing plan? Motivate your employees? Understand a VCs game-plan when he offers you a term sheet? Understand why you’re bleeding your seed money like a hunted seal? An MBA will teach you the fundamental theory that lets you answer each of these questions.

You will study almost every industry on the planet. During my MBA, we covered companies from Google to Avon from a variety of perspectives. Think that Avon has nothing to teach you about statup marketing? Think about how they built the ULTIMATE affiliate program and drove millions in revenue through user-acquisition before Zuck was even born. There are lessons in these companies and industries that are begging to be applied to the web and “disruption”

Sure you could teach yourself this by reading book after book (in fact you will read a great many during your MBA) but you likely won’t be talking about them over beers with your colleagues who share a range of experiences from industries unlike your own. I’m blessed to have people from Montreal to Mumbai in my MBA network that have built web startups, ran construction firms, brought pharamceuticals to market and kept steel mills running. The kind of perspective on strategy you get when combining these disparate points of view is as humbling as it is eye opening. 

2. Tuition Costs

Tuition costs can be prohibitive for an MBA. I was lucky that in Quebec we pay the lowest costs for tuition in North America. My entire MBA cost under $10,000 (including books) through massive government subsidization (tuition for international students would be many times greater). 

To make an educated decision about whether or not the tuition is worth it MBA style, you need to figure out the ROI. Thing is, it’s hard to put a precise dollar amount on the return you’ll get from your degree in the context of your first tech startup. 

This will vary from person to person, but try to think long term and how the extra edge in terms of your career flexibility (what if this bubble bursts?) and your ability to communicate with stakeholders outside of Silicon Valley and Hacker News.

3. Time Commitment

MBA programs suck up your time. There’s no escaping it. If you want to do well, you need to work hard, attend a ton of group meetings, and write a heck of a lot of powerpoint decks. However, in a startup, you won’t have it any easier. An MBA is a great way to teach you how to find balance between your work and your personal life.

While studying I made some awful decisions that really put a damper on my interpersonal relationships. I was performing well at the office, was above average at school and failing with loved ones. I quickly learned how to balance it all and launched a startup. By the time I graduated, I had been on TechCrunch, through an accelerator, had a product in market, revenue and was interviewing my first employee. I actually didn’t attend convocation because I was prepping for an investor pitch. I also did this while caring about my family and building strong ties.

If I can do this. So can you.

4. The Wrong Network

I love YC’s model and their alumni network. I’d love even more to be plugged into it. That said, how much disruption can you really create when everyone in your circle has the same worldview?

MBA schools will lead to your network being choc-full of mid-level executives across a range of strange and traditional industries, but these people will challenge you to think about fundamentals of your business and ask you the tough questions that only an outsider could see. 

Some of the best advice I received on raising capital and managing competition has come from a guy who works in Saskatchewan modelling the financials around wheat production. He also made an introduction that led to a term sheet. 

5. Many MBA’s Choose Not to Start Businesses  (and who gives a shit)

Think about it, relatively few people start businesses.

You start a business because you’re passionate about a problem and want to resolve it your way.

MBA’s learn how to do it the traditional way: market studies and business plans (think lean startup but with a 30 page report stuck to it). Many simply don’t find the opportunity or don’t want to shoulder the risk. Web startups aren’t for everyone even if software is eating the world. 

My Suggestion:

Follow your heart. If you want to be an entrepreneur, go out and be an entrepreneur. If you want an MBA, get an MBA. These two paths are complementary, not disparate and you can do both.

Most importantly remember that education is not about top 10 lists, how to guides or viral blog posts. Real education opens your mind to the world around you and helps you really understand the *why*. Remember that blindly executing is the fastest way to run off a cliff.

 

6 thoughts on “Hey Entrepreneur – Please Get an MBA

  1. Thanks for this writeup. I pursued a similar path, technical job in a non-entrepreneurial organization, part-time MBA at a good Canadian School (read: UBC), then plunged myself into the world of entrepreneurship.

    Your points exactly echo my sentiments on the issue.

    Had I a chance to do it differently, I wouldn’t. I’ve made some great and valuable friendships through the MBA program due to a very tight-knit cohort of amazingly diverse people. People in engineering, business, finance, teaching, forestry, mining, health-care from all 6 (habited) Continents (with one who has at least visited the 7th).

    The general base knowledge I have learned has enabled me to be conversational in a vast range of topics, and the understanding of where to look when I don’t know the specifics.

    I pursued an MBA more for the learning opportunity than anything else. I value education (self and formal) and my heart (as you put it) told me to do it.

    It is singly the hardest thing I’ve done to date, trying to balance the work-school-life commitment and then the startup-school-life commitment and it stretched my relationships to their extent. But I now clearly understand my personal values, my career values, and how I can balance the two.

    Thanks again for this… it breathes a bit of fresh air into the room rather stale of anti-MBA rhetoric.

  2. While it’s certainly true that you don’t need an MBA (or any business education) to be successful in business, it certainly helps, and I agree with what you and Jonathon say. Although case studies will never capture everything about a management (or leadership) decision, they do give you greater breadth which you’re unlikely to get being focused in one industry, and that breadth can provide insight into how to deal with the challenges.

    I can see the light at the end of the tunnel in my program (Regina), and some of the relationships have also been quite valuable (both personally and professionally). In some of the discussions with my classmates, the general consensus is that the program has guven people more confidence to strike out on their own if they want since they’re now more aware of all of the issues that are involved in running a business (rather than being focused on their small speciality).

    Great post!

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