'To be' or 'Not to be'…an MBA…that is the question !

I think that real world experience at large companies is helpful for entrepreneurs, but I have not seen any evidence that an MBA helps entrepreneurs or is useful in small companies. My feeling is that the time and money are better spent DOING.

MBAs will help you (possibly) with getting jobs at large companies - but will typically not help with VCs or running a small business.

What evidence do you have that MBAs automatically get a strong network, funding, or VCs?

Doesn't sound like it would help, especially any degree you can get "part time." If you attend Harvard, Yale, Stanford etc., there's a network but still not much help on the rest.

Remember that MBA involves the study of management rather than entrepreneurship.

Related, but different animals

You sound like you’re well along the ‘startup path’. I don’t think you need an MBA at all – the skills you need can be built without going back to school. All the raw info you’ll ever need can be found in books, and you can internalise it by getting real world experience. A network can be built by leaving the house and proactively making connections with stakeholders in your target industry.

I’ve spent a good deal of time talking to current MBAs over the last few months and haven’t really sensed this arrogance or sense of entitlement that people regularly attribute to them. On the contrary, there is a sense of respect for those who take the risk to begin something new, and hustle to make big things happen. If I sense any arrogance, it’s often from entrepreneurs dismissing MBAs as sheep who don’t have a clue about business!

You won’t see a huge number of MBAs starting new ventures as they likely have significant debts to pay down. Faced with loan repayments, even someone with huge potential to build a company will be drawn towards a safe banking or consulting job. This is why you may want to put MBA plans on the shelf for now, unless you have a pretty significant pile of cash set aside.

In my view MBAs are overrated. If you want a career as an employee, sitting on the board etc, then an MBA from a good University will definitely help.

On the other hand, if you want to be an entrepreneur - then having an MBA (especially, from a "generic" university) is more likely to be disadvantage than any thing else. I speak from personal experience. To be an entrepreneur, you need to be fluid, think on your feet - sometimes do "embarrassing" things that no "self respecting" MBA will even contemplate doing (I'll come back to this point later). Being a successful entrepreneur means coming back time after time after your product/service has been panned, living meagerly on bare rations, chasing your dream whilst everyone else around you thinks you're possibly mad. It means going out on a limb with no assurances, taking calculated risks and making things happen on a shoestring budget - all the while, fighting against your own inner insecurities and doubt. It means believing in yourself and your product/service even when no one else believes in it. It means doing whatever it takes to get your product/service known - if even it means banging on your neighbors door in a clown suit and offering samples of your product to them. None of these things that truly matter are taught in business school (or more specifically in an MBA).

Furthermore, due to the (unwarranted - in my view) high regard that people generally tend to have for MBAs, MBA graduates tend to have a sense of "entitlement". With that comes sometimes unrealistic high expectations (as though the MBA was a magic transformational pill), as well as the sense that certain tasks are "beneath one". An entrepreneur cannot afford such attitudes and does whatever is necessary to get results - if even it means running a marathon wearing a wedding dress, with the name of his company emblazoned across the dress - ask Richard Branson. On the subject of Branson (a billionaire), he once said - "Once somebody has a degree, they have something to lose".

Take a look at some of the top CEOs (who are employees), you will find the large majority have MBAs from some world recognized university.

Take a look at the FOUNDERS and OWNERS of successful organizations across the world and you will find people who have largely graduated from the "University of life".

MBAs do have their use though, they make fantastic managers. When my business grows big enough, I intend to hire them - but as managers or custodians - nothing more. The average MBA (employee for that matter) is "addicted to the paycheck" and falls to pieces when that supply is cut off. To be an entrepreneur, you need to be able to make it out on your own. Having an MBA does not help you do this.

[Edit]

Just to clarify, I hold an MBA degree (as well as a masters in a numerate discipline) so its not as if I have anything against post graduate studies per se - its just that in my experience, it has been more of a hindrance (or in 'MBA parlance' "it was not the most efficient allocation of my resources") - as it took me a very long time to rewire my brain to learn to use both my 'left brain' and 'right brain'.

To summarize (perhaps a bit bluntly), to be a successful entrepreneur, 'street smart' is more important than 'book smart' - to be a successful career man (aka "salary man") "book smart" helps a great deal.

So the answer very much depends on what you are striving to become - a "salary man" or an entrepreneur?

Remember (to paraphrase Bruce Lee): you cant learn Kung Fu from a book any more than you can learn how to swim from reading a book. Yes you'll learn the "body movements" etc - possibly even becoming an "expert" on different styles of swimming - but once you're actually in the water - its a totally different story all together - all bets are off.

Thanks a bunch everyone for your inputs !

@Seenu - I read Steve's post. As you said, it is not a direct answer to my question (well..I think there could be no direct answer as such!), but it certainly helped me understand certain other aspects of Entrepreneurship which I had not considered. @Tim - Spot on ! 'time and money are better spent DOING.' @Jason - perhaps I was guided (or misguided ? ) by the deluge of pro-MBA information floating around. @Greg - thank you for your encouragement and for sharing your experience. It surely helps me stay put in the direction I'm traveling right now ! @Benjamin - how true...but how subtle a difference between the two animals... thanks for reminding me. @Jeff - I have heard about it. Will need to do some research... @morpheous - Amazing post...! thanks for the detailed explanation and for sharing your thoughts on this matter.

....I hope I'll be able to take a decision soon...to quote Léo Apotheker (ex-CEO of SAP) - "In most cases, a bad decision is better than no decision."

Cheers

I would like to share my experience to provide a different point of view.

I started my first business about 13 years ago. I created a fantastic product which was well received by my target market but ended up abandoning the business because I wasn't making enough from it to support myself. Now I realise I could have built that business to be quite profitable, but at the time I didn't have the skills and knowledge and I didn't realise what I didn't know.

Since then, I have completed a Masters of Entrepreneurship and Innovation at Swinburne University (Australia). There is no way I would have done a management program, but the benefit of doing ENTREPRENEURIAL studies is that now when I think about opportunities and building business I am strategic and have a whole lot of tools to help me. Of course, nothing beats experience. During my studies I worked on lots of different startups including my own in a atmosphere where I could be support and advice.

A colleague I studied with was in the process of selling his 30 store retail chain when he started studying. Now he is building another one and with the tools and strategies he has learnt he has been able to open 10 stores in 5 months. He says that the MEI put a framework around his thinking and experience which was really valuable.

So I wouldn't recommend an MBA, but if you can get some good entrepreneurial education I think it is beneficial because:

• You learn tools and strategies to help you implement smarter and faster
• You learn from great people who have been there and know what it takes
• You study with interesting people who are building their own startup. You might find a great founder during your studies.
• You get experience working with teams on interesting startup ideas.

For me, who didn't have a business background or any family in business, it was invaluable to give me a solid framework to build a successful startup.

I'm not sure if there are programs like this in the States (if that is where you are) but if there are, I think it is a much more useful option than an MBA for someone who wants to start a business.

I completed my MBA last year with a Certification in MIS. I have yet to find a job. I essentially used the MBA to provide me with leverage to get to where you currently are. I have recently been toying with the idea of starting my own company as well.

There are certain things my MBA has taught me that you may not have had formal training in...in fact, I have one of my text books out to help me in making some decisions before incorporating...but this knowledge, however, is readily available on the internet and especially in places like this. The only difference is that, while I know immediately which questions I need to ask and where I need to go to get the answers...you can still learn which questions you need to ask and where to go to get the answers, it just may take you a little bit longer. So, you may ask yourself, is the time and expense of the education worth a few less searches and a few less questions I might have to ask to get to the same place? I think not.

I can tell you for a fact that, you do not need an MBA to develop a "strong network, funding, VCs, brand name", etc. My past collegues have been my greatest resources!

My MBA did, however, give me some things that you cannot find on the internet. It gave me hands on experience in developing and creating business plans, income statements, and the opportunities to examine business law and actual business cases. These are all things that I would not have done had I not paid for the classes and someone threatening me with a grade! But, they are all things I feel better for having done. What this ultimately provided me with is the confidence I needed to pursue my endeavors. It sounds like, however, that you have that confidence already, and as long as you have someone who has experience handling the business plans, target market research, marketing, and applicable law, you can succeed.

Last, hopefully I do not offend anyone, but I looked at some unaccredited places to get my MBA as well before deciding on an AACSB accredited university, and I cannot tell you how glad I am that I made this decision.

I just graduated from business school with an MBA in Finance from a top university.

To give you a more specific recommendation, I would like to know if you already have some type of training in business related areas such as finance, marketing and accounting.

Said that, and generally speaking, I strongly believe that to be an entrepreneur it is better to be street smart than book smart. At the same time, and if you don't have a good command of accounting and finance, I strongly recommend that any of your partners do. Otherwise, you are ALWAYS gonna be at the mercy of accountants and bankers. Whatever they recommend to you, you'll have to believe and accept.

Being an entrepreneur without a good knowledge of finance and accounting is like flying blind without a radar. A little mistake can shoot you down, specially at the early stages of your adventure.

Now the network: I don't know in what area of business are you, but before you sign up in an MBA program, make sure you know exactly what type of network the school has. Talk to other MBAs and find out.

In terms of knowledge, 99% of what you learn at the Harvard MBA is exactly the same to what you will learn in the University of Phoenix MBA. It is the network that makes the difference.

In conclusion, if you want an MBA for the knowledge, any MBA will help. If you want network, then you need to do some research to find the school that offers the best network for your type of business and your geographic location.

Finally bear in mind that networking is like a part-time job. It will consume lots of time in your agenda.

Good luck.

The critique of the MBA is a bit stronger then it merits. At Carlson (Minnesota) there is several Profs who started businesses have access to fortune 500 decision makers that come into the class, as well as start ups and if you have a B2B product it could easily get you access to those with the right interests. The focus in the class is on case studies and deep dive into issues that have been well documented the situation, choices made and outcomes.
So getting access to fellow business professionals some that are Entrepreneurs but often many have a different career choice (financial, operational, marketing etc.. ). But are you selling to startups or are you selling and need access to the companies themselves? The cost is high from where I went compared to an undergrad price but I would suggest that it provided the right balance for me. Yes I’m still in the career world and haven’t made the transition but I am working on and have made sold products in the past just not at a sufficient level. Street smarts counts but the academic world puts the scientific method where it can into the business and I think the whole repeatable process of revenue capture along with techniques for right sizing your firm and the different tactics for handling various operational problems really does give you a wide repertoire to use. It is expensive to experiment when there are so many business cases that can give you a feel for how does your problem compare to the problems dealt with the firms that already exist.
Having said all that going after the education will take time and if the business your about to enter into starts moving your time will be consumed by it. I have found that splitting my time from my career, family, start-up and class makes it where I often choose to slow down on one. So make sure you accurately assess where you decide to spend time. I hear what others are saying about the MBA not being a sure bet for an Entrepreneurship and that indeed the whole risk versus reward equation has someone who gets an MBA slightly more tilted to going after a medium high sure thing rather than a possible huge thing. I also get the critiques of blindness that can come with those who are book smart versus street smart but owning a business isn’t exactly like living on the street. There is academic advantage as well.