BY CHRIS EBEN | PARTNER AT THE WORKING GROUP
Should you do an MBA?
There’s a ton of debate happening in the startup space right now about the value of MBAs for entrepreneurs. So what factors should you consider if you’re thinking about taking that route?
The value of the MBA, long considered the best route to business success, is hotly contested. Investors like Dave McClure and Peter Thiel say that if you want to be an entrepreneur, you’re better off skipping school and diving straight into the startup hustle.
The foundation of their argument is built on cost. An MBA from a top school can cost up to and above $100,000. That money could be put to better use trying, and probably failing, to start a successful business. There’s a good summary of the “cons” argument on an article on the Wall Street Journal.
I have my MBA, which I obtained from Kellogg in 2006. Prior to going back to school, I had spent two years in San Francisco, living through the rise and fall of the first Internet bubble. I then spent two more years in London, helping my company set up its European operations.
I chose to do my MBA because I felt it would close some gaps I had in my knowledge and understanding of finance, marketing and strategy. Yes, these are all things you can certainly learn on the job, but I wanted to close that gap sooner, whether I was working on those competencies in real life or not. In addition, having spent the bulk of my career with one company and moving around the world, I worried that my degree in History and English wouldn’t necessarily serve me well in a competitive job market.
What I found was that my experience, coupled with an MBA from a top-tier school provided me with a lot of options. Ultimately, it led me to a role as Director of Product Management at Actuate Corporation–a job I would not have been considered for without the degree. Furthermore, this took me on a path that led me to where I am today at TWG. I’m an entrepreneur and owner of an exciting and growing software business and in a job I’m excited to come to everyday. At TWG, I get to build Internet software and invest in startups that I believe in, alongside the greatest group of friends and colleagues.
So, would I recommend an MBA to others? Maybe. It really has to be measured on a case by case basis. Everyone should manage their education and careers with a great deal of consideration and planning. Even then, it might be hard to make a judgement like this. For me, the choice came at a good time and I’d like to think that the decision worked out.
My customers are just as likely to be from enterprises as they are to be from the startup world. My past work experience, coupled with an MBA has definitely given me the ability to navigate those more traditional business environments and build trust with this set of customers. That’s been incredibly valuable. And, like Elizabeth Yin, it gave me the confidence and the skills to sell myself and my product:
“An MBA was never supposed to help you turn cute birds into a hit game. No one said it was going to help you increase sheep-throwing in your social network. It wasn’t going to help you get a $1B acquisition for a photo-sharing app. The traditional MBA that made so many old-school software entrepreneurs successful didn’t teach any of this. It taught you how to sell.” – Elizabeth Yin
Ultimately there is no “one size fits all” approach. An MBA is no longer the automatic or even the best next step for our business leaders of the future. You need to weigh up your options carefully to figure out what’s right for you. If an MBA sounds like too much to take on in terms of time and financial commitment, there are lots of further education options out there. For example, Vivek Wadhwa (who wrote ‘Why I don’t advise startups to hire M.B.As) advises students with technology backgrounds to complete a year-long masters of engineering-management programs instead.
There are many different paths to success, and there’s certainly benefits to the personal growth and experiential learning that can happen in a school environment. But it’s certainly not the only way forward. The onus is also on our education institutions to make sure that their course material is relevant for entrepreneurs. This is not something that I think business schools do today. If you’d like to go straight into the startup world then I don’t think the cost and time commitment of an MBA in today’s world will necessarily serve you well. But, if you chose a more established and traditional career path initially, then an MBA might very well help you land interesting and influential roles. This is an equally viable training ground for future entrepreneurs.
So, as there is no answer, make sure you follow your heart and pick good advisers along the way.
Photo Credit: Francois de Halleux via Flickr