Should entrepreneurs get an MBA?
I was reading a polemic if entrepreneurs should, or not, get an MBA and I would like to put forth my idea about the matter.
We are always learning and will continue until dead. There is always something that could be improved and, to figure out, knowledge will facilitate the process.
I agree that many entrepreneurs develop their business skills with blood, sweat and tears, as I did. I co-founded two high tech start-ups and, after 25 years of “bloody times” and two companies, I decided to get my MBA.
In theory, having a couple decades of experience in running a business, I should already know almost everything about business management and development. But, actually, getting the MBA, I learned, rooted and improved a lot of processes and knowledge that I was already using, and also, I learned a lot of new things (state-of-the-art techniques, theories, new writers, new strategies, new “gurus”, and so on). I learned all that, even being a compulsive reader of everything about management, strategy, globalization and entrepreneurship, and had read hundreds of books about the matter, before deciding to return to school.
I think, that if small entrepreneurs want to go to the “next stage” a little more smoothly, they really need to have more base, more knowledge, more tools to define strategies, controls, costs, sales and marketing plans, know how to manage people and even to get better terms in a negotiation.
The MBA will not solve all the problems, inclusively maybe none, but it will give the path to go deeper in subjects that are relevant, in some moments, to the entrepreneurs.
Also, teachers’ profile and methodologies will be fundamental to the learning process of entrepreneurs. I believe (a little utopian) that it should be different the process of teaching entrepreneurs from the process to teach recent under-graduates (profiles are different, as well personal objectives and knowledge).
So, maybe the choice of the MBA, school and content, will be fundamental, but that it will add knowledge can not be questionable.
I would advise, if possible, to get an MBA.
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Originally posted on LinkedIn:
An MBA can be helpful, but it depends on the Entrepreneur.
For instance, if one had a degree in Economics, Computer Science, or any other non-business school degree, I believe it could be very helpful. There are many Entrepreneurs who didn’t go to B-School, so if they could get an MBA and learn more about business in general to help them in there ventures, then I believe it will help.
As far as a B-School grad, I believe the best experience is in the real world. But, every little bit of extra knowledge can’t hurt.
As far as an MBA graduate being too over-analytical to be a risk-taking Entrepreneur, it probably is something much deeper within that person that makes them risk-adverse, and probably not something they developed in their late-twenties or thirties in grad school.
i think there’s a cost-benefit analysis to the issue that people talk about but i wish i had considered prior to going to bschool. i was an entrepreneur prior to school, and thrived on a lot of creativity and bootstrapping to get my ideas off the ground. i was accepted into a top 3 school, and the experience was definitely mind-blowing, and it’d be hard to trade it for anything.
that said, from a very practical point of view, i’m not sure that it’s as much worth the 140k+ investment if you just want to start up a business. why?
the same education mba’s get can be the antithesis of what an entrepreneur needs to get their business off the ground.
1. mba’s tend to be trained to think and do business within huge conglomerates-strategy, implementation across teams, divisions, groups, with a helluva lot of corporate resources to throw at the problem. it becomes harder for them to think outside of their defined, highly specialized roles, and entrepreneurs need to wear many hats.
2. mba’s are actually very risk adverse, and it’s a culture of risk aversion that an entrepreneur needs to brainwash out of themselves when they leave school. their idea of taking a risk is trying to recruit for a VC, not putting all their loans on hold and betting it all to work on an idea they’re passionate about.
3. mba’s think getting vc funding/similar exit strategies are gonna be their get-rich quick scheme. i’m all for thinking big, but the reality is of thousands of pitches, only one or two get funded by a vc any year. building an actual business, while bootstrapping, that earns cashflow, is a bit too much out of the banker/consultant lifestyle.
the good things about getting a mba is that it DOES open your perspective much wider:
1. if you only ran startups before, you get to meet with and understand the thinking of people who’d influence you may someday need, or who hold the purse strings. fortune 500 execs, vc’s, international folks, political connections, you never know when that mba rolodex might come in handy.
2. you think bigger. if you were a startup person before with an ego about your own ability to conquer the world, you will come out with an even more inflated sense when you realize just how much of the world there is to conquer. building partnerships internationally and assembling global teams and trekking to developing cities in search of opportunities seem like child’s play after living in the bschool bubble.
3. you organize better. business is about implementation, how to get it done, and done right. entrepreneurship is arguably about getting it done, no matter how slapdash. after all the analytical training the beat down on you with, it will probably save you a couple of iterations, so you redo your business model 10 times instead of 50.
i wouldn’t have given it up for the world, because you do learn and it is two years of absolute hell/fun. but no, you don’t need an mba to start a business. in fact, if you follow guy kawasaki, you’ll find that having a mba gets you negative points from funders perspective. cause there’s really just not that much value-add, and a way too much inflated ego to deal with.
Hi Melissa,
Great comment! I loved it.
Absolutely right that you don’t need an MBA to start a business. Actually, I advise to take a MBA only after you have some experience in the market, as employee or as entrepreneur.
As I said, the MBA may help to facilitate the solutions of some problems or in some cases may not help, but as you said, it does open your perspectives much wider.
Hi Weston,
Thanks for your comment. As you said a little bit of extra knowledge can not hurt. We are always in continuous learning mode in all fields.
Cheers
Mario
I don’t think an MBA really makes the person as much as persistence does. Don’t get me wrong theres nothing wrong with furthering someones education, but an MBA is really not furthering as it is mostly going in front of review board to see what others think of you.
I have personally seen people drop out of the 5th grade; mind you not even finishing elementary school and still make it big in life. I can also tell you of many other high school drop outs that have gone on to bigger and better places without the use of a piece of paper.
It all boils down to persistence and attitude. Politically it may be incorrect; however realistically it happens.
An MBA or any other form of degree is always an added bonus but not a requirement as I see it. If your looking to work for someone else and make them rich then yes a degree is the way to go and it will help with your salary. There’s no degree requirement for self employed though.
Hi Ronnie,
I truly agree with you that MBA doesn’t make the person and I also agree that persistence, focus, tenacity and “cold blood” are fundamental aspects that any entrepreneurs should have. I also agree that there are many people, without study, were successful in their entrepreneurship. I know some of them, that learned only the four basic operations and that now they have an “empire” (hotels, industries, restaurants, buildings and so on).
But it was other time, other business environment and the opportunities were different. Nowadays, we are dealing with globalization with multi-cultural environments and inserted in a knowledge society (I think…). So, knowledge is no more an option, it is a basic skill to be able to have a minimum condition to have a chat with anyone and to have a clue of what is happening surrounding you.
I use the MBA more as an expression of the necessity of learning and to open new visions and to acquire new skills. Actually, by self-study you can acquire all that, and cheaper. The MBA just facilitates and gives the guidance to develop those skills quickly.
Many thanks for your comment. It is nice and important to hear others opinions. It is that way that we can evolve, making brainstorming.
Cheers,
Mario
I am an MBA and Entrepreneur. I find that the MBA background let’s me “touch all the bases” of business. Many of my colleagues without MBAs might be successful, but they can’t “touch all the bases”. They have “blind spots” which might eventually cause them terrible grief. I agree wholeheartedly with several posters to this that drive and “gumption” will carry you a long way, but won’t give you the “racer’s edge” that the MBA will!
MBA is not a requirement but a true value addition for a person not quite entrepreneurial by nature and yet wants to start a new venture. Business is not a language that one can get mastery in nine quarters. It has to be practiced and over time before one gets good at it. If you choose a route to start your business without proper knowledge and experience it would be a tough call for you to even get started.
Having said so, I believe MBA is not a necessary and sufficient condition to start your business. It adds only one dimension to the entire perspective that is on most instances a complex mix of goal, motivation, knowledge, experience, strategy and innovation. MBA provides you tools to properly weigh in these factors in your business to maximize your return.
Hi LeRoy,
Great vision the “racer’s edge”, it is exactly the point.
Hi Asish,
Perfect, comprehensive, but also concise, thought.
Cheers,
Mario
This is a great topic. An MBA degree’s value for entrepreneurs and large companies is the same. It works to introduce the individuals (MBA graduates) to a holitic view of the business environment and its many variables. While this is useful in the first couple of years of one’s work (a soft landing onto the business landscape)it delivers deminishing returns as the individual progresses within the organisation. The reason could be the ‘generalised and sampling’ approach of the MBA program. As a result specialised people known as ‘consultants’ are called in for business analysis and decision making! While an MBA is a Master’s degree, you only get to ’sample’ each component of the mix that an MBA is composed of. You do not study ‘business’ at a detail and depth that students of other Masters-level degrees like engineering, Medicine or CA do. To my mind the ulitily of the MBA degree, as it exists today, is quite limited (and over valued). Aspiring entrepreneurs can work in an industry before starting up their own work and do not necessarily need to invest in an expensive degree like the MBA to gain a deep understanding of how business is done in that industry.
Regards,
kehkashan
Hi Kehkashan,
I totally agree with your MBA concept and its holistic vision, but, if you allow me, I would like to disagree about the value for entrepreneurs and large companies.
If you have an MBA, usually, you will have a better salary, and the companies will have a quicker return on investment (theoretically).
If you haven’t, also usually, you will have the possibility, in the course of time, to evolve, inside the company, depending on your skills(and self-development), opportunities and also politics(it is the reality).
Entrepreneurs don’t have an internal environment to observe and learn, as we have in large companies, or they develop “self-learning”, or they go by attempts (right and wrong, success and failure), or they seek for guidance and knowledge, before go to risky situations, or even, after the business is running, to improve their results (there is where MBA enters, and doesn’t need to be a 50 thousand dollars MBA).
MBA is just a name that I use as synonym of advanced knowledge, it could be other post-graduation, or even extensions in related matters.
For example, you have the Babson College,Massachusetts,USA. It is not cheap but has expertise in entrepreneurship (and merge e-learning with on-campus). But if you “google” it you will find dozen of others.
I just think that entrepreneurs need to have a little more of business fundamentals, to have more chance of success. We have a huge mortality rate of new companies, that needs to be mitigated.
Cheers,
Mario
An excellent topic, Mario! I didn’t even attend college until after the failure of my first business. After I got my bachelor’s, I was so into the stream of things, that I decided to immediately pursue my master’s. One of my professors suggested to me that an MBA might better suit me, given my stated goals. In reflection, I agreed, and made that change.
Once I had received my MBA, I began to analyze what I had done wrong, or might have done better, and realized that my earlier failure was not only my fault (I had already faced that fact, long before), but had been totally avoidable. Now, I’ve retired from my own business, which I ran for ten years, and can enjoy life with my family, before my daughter even graduates from high school.
Without the insight that I gained from seeking my MBA, coupled with the prior experience that helped me assimilate what I learned in my post-grad work, I would never have achieved such success, I’m quite sure.
Hi Sheldon,
Many, many thanks for your words. I had a very similar path…
I always loved to study and read, but after I returned to school, besides new knowledge and visions, one very important thing that I saw was the perspective and ways of thinking of the new entrants, how the youth was thinking, what were their aims, values and habits. It was very important to me, to have a better understanding to where we are going (humankind) and the values that are addressing it. My experience was that the new entrants are very different from my generation (50s), better then us, when we talk about tranparency, ethics and personal values.
Cheers,
Mario
An MBA has a wealth of benefits but it’s not for everyone. The best part of my experience was the the opportunity to meet folks from all different backgrounds. But for some the time/cost does not make sense. There are also other ways to learn. I think there needs to be more discrete/modular ways to learn specific topics. The challenge with startups is that you have to wear many hats and it’s hard to have indepth knowledge in finance, accounting, strategy, marketing. So having a general overview of key buzz words/frameworks can be helpful when talking with partners or functional team members.
Ranjan
http://www.mbadaycamp.com
Should entrepreneurs get an MBA?
entrepreneurs are like diamonds. they have the basic qualities but needs to be polished in a factory to shine. In nature too they can get polished naturally through air and water and shine, but will take ages.
so, for the entrepreneurs to succeed fast so that the larger commuinity gets benefited by their efforts, needs refinement which can “possibly” be imparted by a MBA Program. Nothing to loose…
What can only be a so called “negative” point is if their ability to take risks goes down because of them being in an “orgainised” environment. entrepreneurs flourish on unorganised ideas…
Good point, Manoj. I think another thing that makes a big difference in how much benefit someone can get from their MBA program, is the selection of school and the professors that they have. I know that a good friend of mine and I both studied at about the same time, for our undergrad degrees, but in different schools. His program was essentially very structured …by the book all the way. Mine, on the other hand, was much more stylized, and I was fortunate to have a couple of very unorthodox professors, that were more interested in seeing their students THINK, than they were in simply seeing them PASS.
Hi Manoj, Hi Sheldon,
Great point, Manoj. It is similiar to the process of children getting older. They start with unlimited fantasies and possibilities and when they get older and learn about the real world, their foot get rooted on the ground.
By other side, the awareness of the real world and its limits, allow them to avoid make some mistakes.
About last comment of Sheldon (I agree 100%), the learning process is a fundamental issue. I had a “lot of problems” in the schools where I studied, because I never accepted the way “by the book”…I always was searching new approaches and new ways of solving problems, and that was not always accepted by professors “owners of the truth”…
Endorsing what Sheldon said, and also as I wrote at the end of the article above, the choice of the school and teachers’ profile will be fundamental to entrepreneurs have and create advantage in their present and future ventures, without cut their creativity and perspective of going beyound the limits, defined by conventional rules (standards).
The articles of KR Ravi, here in Tickled by Life, are a great source of Lateral Thinking, and help to break some ties of old conventional approaches of “by the book”.
Cheers,
Mario
Rather than getting an MBA degree, an entrepreneur must be able to handle a MBA and extract work, ideas, and strategies from him/her. An entrepreneur is someone who can get tasks done through others.