Sunday 4 August 2013

Should Entrepreneurs Get an MBA? An Inside Perspective From an MBA Entrepreneur




What do all of these successful companies have in common? They were all started by MBAs from top business schools.

About a year ago, my first startup was acquired. I knew I was going to be starting another company soon, but I was also considering getting an MBA. I looked around at the majority of successful entrepreneurs and investors that I admired and one thing held equal: most of them had an MBA.
This is a hot topic in the startup world right now for a variety of historical reasons: some say hiring expensive MBAs helped cause the tech bust a decade ago, and some say that MBAs have too much swagger to make it in the hustle of startup life.Just yesterday Vivek Wadhwa advised startups not to hire MBAs in an op-ed in the Wall Street Journal. While many points of this debate resonate on both sides, I want to give a first person perspective from someone in a top MBA program while concurrently launching a startup. Yes, I decided to go for the MBA at the University of Chicago Booth School of Business. While it’s still too early to tell whether this was the best use of time and money, and this decision is intensely personal and should be based on an individual’s experience and goals, here’s what I’ve learned so far about this debate:
1) MBA Programs Attract Top Talent- Just about every one of my classmates at Booth astounds me with his/her background. Many have already started successful companies, have spent years abroad doing non-profit work, have travelled the world both for professional and personal reasons, and yes, there are those with finance heavy backgrounds. MBA programs are intensely competitive, with top 10 programs having anacceptance rate of less than 10%. This means that by taking part in a program, you’ll be exposed to people with experiences that will blow your mind. These people have the potential of becoming your future business partners, engaging you in intellectual debates that will open your mind, and becoming your future go-to network. While many arguments currently center around why you should or should not hire an MBA, MBAs are ignoring the debate and going out and starting their own companies due to their fierce ambition. This may be difficult considering the hefty cost of school, but certainly possible and probable with planning. In fact, Stanford reported a record 16% of its MBA graduates launching startups last year.
2) Doing an MBA Can Be a Sandbox for Starting a Company-Close your eyes and imagine: You have two years to be surrounded by the smartest and most ambitious people in the world, in an environment where there is little downside to failure (you can always recruit for a job) and everyone is rooting for you to succeed. You have access to research and top professors to gain feedback and help you plan and execute on your ideas. Now open your eyes: that’s business school. Making mistakes during an MBA program has a much lower opportunity cost than making startup mistakes in the real world. As students, there is much more wiggle room to recover quickly than when you have constraints from the real world.
3) MBA Programs Provide Structured Support-More and more top MBA programs have strong entrepreneurship focuses. While the educational portion of these programs can be bashed for merit, everyone can agree that the structured mentorship and access to resources that programs provide is a great boon. At Booth, professors and staff from the Polsky Center for Entrepreneurship go out of their way to help students by providing programming, access to mentors, and individualized recommendations based on an entrepreneur’s goals. Successful entrepreneurs and investors from the Chicago startup community are pulled in to help students who would otherwise not have access to these busy individuals. While the startup world is very open to mentorship, it takes years to build the network that an entrepreneurship center can provide (trust me, I did it the hard way).
So ditch the popular view that MBAs are worthless and look at the data.  Often the haters have gone through these programs themselves and suffer from hindsight bias. The decision of whether to pursue an MBA is intensely personal, so the best first step is to talk to people who you admire on both sides of the fence, analyze the alternatives, and look at your long term goals.
Source: Forbes.com

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