Hey Entrepreneur – Please Don’t Get an MBA(naysawn.com)
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Hey Entrepreneur – Please Don’t Get an MBA
http://naysawn.com/hey-entrepreneur-please-dont-get-an-mba/
24 comments
"I'd much rather have a Harvard MBA and have access to that network than be a YC alum and have access to that network"
That is what works for you. But it could be the opposite for many including me.
That is what works for you. But it could be the opposite for many including me.
Not sure about the relative value of the networks but I do believe that understanding how businesses work is critically important for at least one person in authority at the company to possess. If you don't understand cash flow, marginal value, organizational dynamics, and financial modeling you can find it hard to evaluate things like possible pivots or accurately measure the value of partnering with a specific vendor.
Fair point the 5% stat only reflects what people do immediately upon graduation. With that said, most of the richest people in the world have very little formal education, so an MBA is clearly not a requirement.
That said, the person with an MBA earns much more, on average, than the person with very little formal education.
Certainly it's not a requirement, and spending two years getting an MBA may just slow you down and mire you in debt. On the other hand, it could be a valuable asset to fall back on if a person realizes their app isn't a real business or entrepreneurship isn't for them.
Certainly it's not a requirement, and spending two years getting an MBA may just slow you down and mire you in debt. On the other hand, it could be a valuable asset to fall back on if a person realizes their app isn't a real business or entrepreneurship isn't for them.
It's clearly not a requirement, but I don't think it's a proper characterization to say "most of the richest people in the world have very little formal education." Of the top 25 people in Forbes 400:
6 inherited or married into their wealth.
5 are college dropouts.
5 have only a BS, mostly business or finance.
3 have a BS and some grad school.
4 have an MBA or MS in business.
2 have some other graduate degree.
All but one of the college dropouts are in tech.
6 inherited or married into their wealth.
5 are college dropouts.
5 have only a BS, mostly business or finance.
3 have a BS and some grad school.
4 have an MBA or MS in business.
2 have some other graduate degree.
All but one of the college dropouts are in tech.
Really? That's not what the U.S. bureau of labor statistics says about employment or income. Are you sure that's not just inherited wealth?
http://www.bls.gov/emp/ep_chart_001.htm
http://www.bls.gov/emp/ep_chart_001.htm
sounds like you think not having an MBA qualifies you to be among the richest in the world.
After reading 95% of the books outlined in the "Personal MBA Reading List," I'd say this post is about 50% true. The first point about the knowledge you learn is wrong; an MBA curriculum has many more useful topics that an entrepreneur can use.
Learning how to develop a business plan, forecast financials, develop consistent methodologies for leading, etc., are all covered under an MBA curriculum (or, they were covered in depth in all the books I read), and all are valuable when it comes to running a company.
Starting a company up? Maybe not, but having a solid foundation to rely on once the revenue starts coming in is absolutely included in an MBA program.
That said, I mentioned the Personal MBA Reading List above; I made it a goal to read the entire list within 18 months and got pretty close. I started a company first, and went on my reading journey second, but if nothing else, the material helped validate what I was doing, and filled in a lot of gaps where I hadn't learned anything experientially.
Learning how to develop a business plan, forecast financials, develop consistent methodologies for leading, etc., are all covered under an MBA curriculum (or, they were covered in depth in all the books I read), and all are valuable when it comes to running a company.
Starting a company up? Maybe not, but having a solid foundation to rely on once the revenue starts coming in is absolutely included in an MBA program.
That said, I mentioned the Personal MBA Reading List above; I made it a goal to read the entire list within 18 months and got pretty close. I started a company first, and went on my reading journey second, but if nothing else, the material helped validate what I was doing, and filled in a lot of gaps where I hadn't learned anything experientially.
That's a great way of doing it. I found the "actual experience" just made the learning more important, if only because it is revealing the gaps, filling them, and helping me move forward.
As someone who actually has my MBA (and is finishing my MS in Computer Science), I disagree with this.
For example, in my MBA at the University of Colorado (CU), for:
#1 What you actually learn: there are a ton of startup/entrepreneurship classes: Startup Feasibility, Business Plan, Startup Execution, Entrepreneurial Projects, Entrepreneurial Finance, Entrepreneurial Marketing, just to name a few.
#2 In state tuition turns out to be around $25k/year. That's $50k total, which is 1/3 the cost stated (granted, CU is no ivy league).
#3 Making up what people actually do (agreeing to jobs for an additional +2 years) doesn't necessarily mean it's what everyone does.
#4 The right network. Boulder is the home of TechStars, The Unreasonable Institute, as well as a ton of other startups. It has a huge tech scene, outdoor industry, natural+organics, and green energy scene- all of which have a host of startups.
#5 Just because other people don't start businesses with their MBAs doesn't mean you can't.
I understand it's common for a lot of places like HN to dog on MBAs, but as an engineer who finished my MBA (but is staying an engineer), I think people underestimate some of the value of getting an MBA. Granted, it really depends on where you go, but there is such a thing as a good MBA.
For example, in my MBA at the University of Colorado (CU), for:
#1 What you actually learn: there are a ton of startup/entrepreneurship classes: Startup Feasibility, Business Plan, Startup Execution, Entrepreneurial Projects, Entrepreneurial Finance, Entrepreneurial Marketing, just to name a few.
#2 In state tuition turns out to be around $25k/year. That's $50k total, which is 1/3 the cost stated (granted, CU is no ivy league).
#3 Making up what people actually do (agreeing to jobs for an additional +2 years) doesn't necessarily mean it's what everyone does.
#4 The right network. Boulder is the home of TechStars, The Unreasonable Institute, as well as a ton of other startups. It has a huge tech scene, outdoor industry, natural+organics, and green energy scene- all of which have a host of startups.
#5 Just because other people don't start businesses with their MBAs doesn't mean you can't.
I understand it's common for a lot of places like HN to dog on MBAs, but as an engineer who finished my MBA (but is staying an engineer), I think people underestimate some of the value of getting an MBA. Granted, it really depends on where you go, but there is such a thing as a good MBA.
USF Tampa has a dual MBA/Masters of Entrepreneurship (#9 in country) and it is an excellent program. It is way way cheaper than even that price. The network effect isn't as strong, but the knowledge is solid.
I believe my total tuition costs for BA, MBA, MSE were $18k. Best 18k I will ever spend in my life. Extremely high percentage of graduates from that program go out and work at startups.
EDIT: Technically the company I was working for paid for 12k of that.
I believe my total tuition costs for BA, MBA, MSE were $18k. Best 18k I will ever spend in my life. Extremely high percentage of graduates from that program go out and work at startups.
EDIT: Technically the company I was working for paid for 12k of that.
I also have an MBA and I read hacker news.
I'm not going to tell people to get an MBA or a CS degree or take some kind of sabbatical. My MBA found me a better job even before I graduated (I went to evening classes). So I consider it to be helpful to me. I paid my tuition as I went.
Still, an MBA pushed me to start learning programming after seeing the MBA job market vs. programmer job market. Plus I was just used to learning at night after 3 years of evening classes.
If you don't want to get an MBA, maybe consider having one on your team. Don't think you can give yourself an MBA by reading HN. Most of the articles on HN relating to business are simplistic overviews of some of the basic concepts they teach MBAs. This includes anything related to finance, economics, marketing, branding, communication, leadership, critical thinking, and public speaking. It's disappointing when I go to a meetup and the speaker(s) cannot communicate their great ideas or businesses.
Other than the stress of school and work, the worst thing about getting an MBA was the blank stares when I mentioned something about Star Trek in class once (something like, "This case is just like Kobayashi Maru"). Maybe I'm different, then.
Don't have too much of a negative view about MBA people or the degree. They're closely related to computer folks. For instance, like CS, it helps to like math to be good in finance.
I'm not going to tell people to get an MBA or a CS degree or take some kind of sabbatical. My MBA found me a better job even before I graduated (I went to evening classes). So I consider it to be helpful to me. I paid my tuition as I went.
Still, an MBA pushed me to start learning programming after seeing the MBA job market vs. programmer job market. Plus I was just used to learning at night after 3 years of evening classes.
If you don't want to get an MBA, maybe consider having one on your team. Don't think you can give yourself an MBA by reading HN. Most of the articles on HN relating to business are simplistic overviews of some of the basic concepts they teach MBAs. This includes anything related to finance, economics, marketing, branding, communication, leadership, critical thinking, and public speaking. It's disappointing when I go to a meetup and the speaker(s) cannot communicate their great ideas or businesses.
Other than the stress of school and work, the worst thing about getting an MBA was the blank stares when I mentioned something about Star Trek in class once (something like, "This case is just like Kobayashi Maru"). Maybe I'm different, then.
Don't have too much of a negative view about MBA people or the degree. They're closely related to computer folks. For instance, like CS, it helps to like math to be good in finance.
This post is maybe the worst thing I've read on HN. Getting an MBA drastically shifted the way that I analyze and attack business problems. The vast array of tools it provides for decision-making has been invaluable during the process of building my company.
I worked while doing my MBA, because I had a job that I loved and the lost salary didn't make sense. To the author's credit, I went to a more traditional school and the vast majority of my peers were not interested in pursuing a career as an entrepreneur - most went the traditional route of Finance or Marketing. But I was there to learn Entrepreneurship & Business and it was irrelevant what to me what my peers focus and drivers were. I've been out 6 years and have built a nice company since graduating, but still rely heavily on the things I worked so hard to learn while getting the MBA.
The network can be beneficial, but if you are depending upon it for success as an entrepreneur, then you will be sadly disappointed. In short, more education is always good - even if you can't see the immediate and direct correlation to your current efforts.
I worked while doing my MBA, because I had a job that I loved and the lost salary didn't make sense. To the author's credit, I went to a more traditional school and the vast majority of my peers were not interested in pursuing a career as an entrepreneur - most went the traditional route of Finance or Marketing. But I was there to learn Entrepreneurship & Business and it was irrelevant what to me what my peers focus and drivers were. I've been out 6 years and have built a nice company since graduating, but still rely heavily on the things I worked so hard to learn while getting the MBA.
The network can be beneficial, but if you are depending upon it for success as an entrepreneur, then you will be sadly disappointed. In short, more education is always good - even if you can't see the immediate and direct correlation to your current efforts.
Basically, the article says that an MBA will divert you away from entrepreneurship - ok that I can agree with, but not the "don't get an MBA" title.
There might be an education bubble. There might be an anti-education bias - especially here.
But even with the best online tools and classes, what you learn with a standard curriculum is just better - that's the sad truth, and it is even truer if you are a self directed learner and don't care about the grades.
Case in point - I got interested in economics and started reading books - then followed online courses and videos from prestigious universities and so on. Purchased textbooks, etc. I worked seriously, but I soon realized that the freedom to dig on subjects I thought worth investigating was mitigated by the lack of common knowledge expected for advancing my knowledge further.
You can look at that like a multiple dependancies problem - except that you don't know about these dependancies beforehand.
With a traditional class, you acquire the same vocabulary, the same comparison basis and so on - and that's priceless. I have started taking classes, and I now realize that. I learn about topics I would have never learnt on my own and I realize 'yes, they could be quite useful'.
Please realize I'm not even taking about the network or other benefits you may find in an MBA - just the actual knowledge.
I haven't done an MBA (yet?), but I guess most of the commenters here haven't either - and haven't even tried and given up (which would then be interesting to know).
So I wonder how they can judge about its pertinence. Before this experience, I was also imbued in delusions of "online learning that made everything possible". But there's a dependency ceiling - I've touched it. Personally, if I can enroll in one, I know I will.
There might be an education bubble. There might be an anti-education bias - especially here.
But even with the best online tools and classes, what you learn with a standard curriculum is just better - that's the sad truth, and it is even truer if you are a self directed learner and don't care about the grades.
Case in point - I got interested in economics and started reading books - then followed online courses and videos from prestigious universities and so on. Purchased textbooks, etc. I worked seriously, but I soon realized that the freedom to dig on subjects I thought worth investigating was mitigated by the lack of common knowledge expected for advancing my knowledge further.
You can look at that like a multiple dependancies problem - except that you don't know about these dependancies beforehand.
With a traditional class, you acquire the same vocabulary, the same comparison basis and so on - and that's priceless. I have started taking classes, and I now realize that. I learn about topics I would have never learnt on my own and I realize 'yes, they could be quite useful'.
Please realize I'm not even taking about the network or other benefits you may find in an MBA - just the actual knowledge.
I haven't done an MBA (yet?), but I guess most of the commenters here haven't either - and haven't even tried and given up (which would then be interesting to know).
So I wonder how they can judge about its pertinence. Before this experience, I was also imbued in delusions of "online learning that made everything possible". But there's a dependency ceiling - I've touched it. Personally, if I can enroll in one, I know I will.
Coming up next: "Hey Entrepreneur - Please Get an MBA"
Love this. So true. Thinking of writing it.
I think your entire point is that you don't want an MBA and you are an entrepreneur - these two aren't related. An entrepreneur can definitely benefit from getting an MBA. Your 5% of MBA's start a business can probably be said about the same percent of the population, not many people really start their own business. Someone who plans to start their own business won't be any less likely to do so just because they got an MBA.
I'd argue that outside the snarky echo chamber of the Valley, and MBA is still considered a valuable signal. So your advice only holds true if you are dead sure you will always be an entrepreneur and never need a fallback position.
I had trouble getting past his claim that an MBA costs $100,000 per year. A quick search reveals that for HBS, tuition is $53,000 per year. Maybe he means the total cost of the degree is $100,000?
Yes, total cost. Appologies, I'll fix that (typo)
http://poetsandquants.com/2011/01/08/how-much-does-a-top-mba...
http://poetsandquants.com/2011/01/08/how-much-does-a-top-mba...
Actually that's a fair statement as living expenses are equal to tuition in places like Boston. Add to that the opportunity costs of two years of deferred salary (on average close to or above six figures) and you're talking about a $400k commitment.
The author lost me at "much of the actual content of the program focus on corporate skills and how to network to get a job." He has obviously never been near a real MBA program. After having gone through core curriculum classes in Accounting, Marketing, Finance, Entrepreneurship (yes it's part of the core!), Leadership, Ethics, Operations, etc., this year I'm taking classes such as Entrepreneurial Finance, Financial Management of Small Firms, Founders Dilemmas, Launching Technology Ventures, Strategic Marketing in Creative Industries, Competing with Social Networks, etc. along with getting school credit for working on my startup.
I chose to go back for an MBA after 8+ years of a wonderful career because I knew there were significant holes in my knowledge that I wanted to address while simultaneously using it as a platform from which I could start a company. Yes, the alumni connections are wonderful and the school name does carry some weight in certain circles, but more than anything I love learning from faculty who are some of the great entrepreneurial thought leaders of our time and passionate students who genuinely want to create businesses with lasting value.
Of course it's crazy expensive and it's not a choice you make lightly but for me personally, it was the best possible way to become an entrepreneur. (The school actually gave us some funding/grants, allowed us to incubate on site, etc. Super supportive.)
Oh and I am considering applying to Y-Combinator/TechStars when I graduate because while I'll have a solid business foundation, there is still tons I need to learn about entrepreneurship.
I chose to go back for an MBA after 8+ years of a wonderful career because I knew there were significant holes in my knowledge that I wanted to address while simultaneously using it as a platform from which I could start a company. Yes, the alumni connections are wonderful and the school name does carry some weight in certain circles, but more than anything I love learning from faculty who are some of the great entrepreneurial thought leaders of our time and passionate students who genuinely want to create businesses with lasting value.
Of course it's crazy expensive and it's not a choice you make lightly but for me personally, it was the best possible way to become an entrepreneur. (The school actually gave us some funding/grants, allowed us to incubate on site, etc. Super supportive.)
Oh and I am considering applying to Y-Combinator/TechStars when I graduate because while I'll have a solid business foundation, there is still tons I need to learn about entrepreneurship.
I went to a Stanford MBA talk here in Austin TX this summer. They noted that upwards of 40-50% of their MBA alumni pursue an entrepreneurial endeavor at some point in their career.
Stanford is an outlier as they are very entrepreneur focused. I believe the number is much smaller for other top schools.
I don't think Stanford is an outlier. I went to HBS and they also say that 50% of grads eventually do something entrepreneurial. However, the term entrepreneur is probably different from what most people on HN think--it includes starting a consultancy, hedge fund, small business, etc.
For points #1, #4, and #5, it's a statistical fallacy.
#1 - MBA programs's are not focused on entrepreneurship but it doesn't negate that they have entrepreneurship courses. There is also a huge benefit to entrepreneurs in understanding business while creating new business, and in knowing exactly where and how your business idea fits in a "corporate structure". Not every startup is a consumer targeted mobile application.
#4 - Just because the network isn't 100% entrepreneurs does not mean you can't gain value from it. Similarly, unlike an incubator you are investing 1-2 years into an MBA, and build stronger relationships and ties within that network.
#5 - 5% entrepreneur rate of a large alumni network is still most likely larger than an entire incubator's alumni network.
For points #2 and #3, it's a personal choice on whether or not to make the investment. People differ by their risk averseness and in the amount of resources they have to invest, and unlike your bootstrapped startup an MBA sticks with you for life.
TL;DR: The MBA is your own investment to make, not Naysawn Naderi's.
#1 - MBA programs's are not focused on entrepreneurship but it doesn't negate that they have entrepreneurship courses. There is also a huge benefit to entrepreneurs in understanding business while creating new business, and in knowing exactly where and how your business idea fits in a "corporate structure". Not every startup is a consumer targeted mobile application.
#4 - Just because the network isn't 100% entrepreneurs does not mean you can't gain value from it. Similarly, unlike an incubator you are investing 1-2 years into an MBA, and build stronger relationships and ties within that network.
#5 - 5% entrepreneur rate of a large alumni network is still most likely larger than an entire incubator's alumni network.
For points #2 and #3, it's a personal choice on whether or not to make the investment. People differ by their risk averseness and in the amount of resources they have to invest, and unlike your bootstrapped startup an MBA sticks with you for life.
TL;DR: The MBA is your own investment to make, not Naysawn Naderi's.
I strongly contemplated pursuing an MBA as well and was largely put off due to most of the reasons you debate. I'm not sure the start-up experience can be described numerically or other ways MBA's are; I think the journey of a start-up warrants the highest commitment, focus, and openness/ability to learn, but is ultimately more valuable than any traditional course.
Good point re: the commitment. I think it also requires an acceptance that failure will likely come along way and that one must keep trying to succeed.
Dave McClure has a great presentation about not doing a startup because you will fail: http://www.geekwire.com/2012/dave-mcclure-startup-advice/
I wonder if any amount of proper education can change the fact that we'll all probably have to fail a couple of times before creating something which really takes off.
Dave McClure has a great presentation about not doing a startup because you will fail: http://www.geekwire.com/2012/dave-mcclure-startup-advice/
I wonder if any amount of proper education can change the fact that we'll all probably have to fail a couple of times before creating something which really takes off.
Absolutely regarding acceptance of failure.. Could perhaps be the most important experience associated with a start-up. As devasting as realizing failure is, it's subtly warming when you recognize and apply what you've learned from your failures towards a new venture.
My MBA was paid for by the company I was working for. Does your calculus remain the same if someone is willing to foot the bill?
may be. Personally, I will not do an MBA even if paid for by someone. I would rather be spending my time building something. Just one perspective.
I've never wanted an MBA, but I do feel like there's also not any really good provider of the kind of useful practical information that you feel like you need to know in order to start a business, whether it has to do with business licenses or business plans or insurance or anything else related to starting a company.
I feel the same way. Currently the best solution may be online materials such as the personal MBA blog (which lists out a whole slew of books to read) and Coursera/Udacity courses.
The Steve Blank one is pretty awesome: http://www.udacity.com/overview/Course/ep245/CourseRev/1
The Steve Blank one is pretty awesome: http://www.udacity.com/overview/Course/ep245/CourseRev/1
I'm an MBA and startup founder. I wrote a response to this on my blog:
http://gozman.wordpress.com/2012/10/11/hey-entrepreneur-plea...
http://gozman.wordpress.com/2012/10/11/hey-entrepreneur-plea...
Hmmm...this post would hold more validity if it were written by someone who got an MBA. How can you comment on the value of the education and its pertinence to a startup, if you haven't gone through it and learned?
hmmm - it would be have to imagine anyone who spent over 100K on a degree would trash the institution that they got the degree from. They would burn quite a few bridges in doing so.
There are things you learn while pursuing a MBA that you will not learn anywhere else. Some of those things are highly relevant to being an entrepreneur. Maybe not at the very earliest building stages, but certainly if you make it past that point. Particularly in enterprise focused software companies. That said, there are many paths to achieving your goals - the key is to choose one and stay focused - be it a MBA or YC or any other program. We should all be grateful that any of these options are available to any of us - none of them seem bad to me.
I don't think a degree defines your success or failure in life (or business or school or anything).
I think you do. The type of person you are and how you affect yourself and others is what will lead you down the path to failure or success in your business, or any endeavor you embark on.
If it's a dream of yours to get an MBA, go get one. If you have no interest of ever going back to school, don't.
Either way, you can still achieve amazing things.
I think you do. The type of person you are and how you affect yourself and others is what will lead you down the path to failure or success in your business, or any endeavor you embark on.
If it's a dream of yours to get an MBA, go get one. If you have no interest of ever going back to school, don't.
Either way, you can still achieve amazing things.
If you're interested in a do-it-yourself approach, I pulled all the books I could find from the HBS course catalog: [redacted]
I'd say that most of the value from an MBA program is through your peers rather than from books. To complement the reading, I would recommend reaching out to other entrepreneurs.
They don't read books at HBS. Instead students go through about 600 cases over the course of two years. The cases are interesting but the bulk of the learning comes from how the professors dissect the case and facilitate the classroom in debating the various positions. Of course you could order all the cases from HBS but that's pretty pricey and you won't get the teaching notes.
To create a valuable product, though, you need to be around other people that are passionate about creating a solution to a problem. Maybe an MBA might not be good for this, but other graduate degrees might.
I know I can't be the only one who thought the title was initially referring to a Macbook Air. Apple's marketing has polluted my mind.
I also found one quote interesting because it reflects such a myopic view of entrepreneurship: "Despite everything learned about business in MBA programs only 5% of graduates go on to start a business upon graduation!" It seems that in the author's mind, the only potential entrepreneurs are fresh graduates (i.e. people who don't know anything about anything). Did it occur to the author that many people go into an industry, learn how it works and build a network, then start a business once they have a strong foundation in place? Maybe that's not how your typical web startup works, but there is a whole world of entrepreneurship beyond that niche.