Lately, I have read numerous blog posts about how MBAs suck at starting companies. There have been many tweets pointing out the many blog posts from self-hating MBA (and VCs but that’s a separate topic). After a year of my MBA experience at Duke, I can see why MBAs would admit to being horrible at starting companies. Don’t get me wrong, I think Duke is great. It might even be the best MBA program in the world, but my opinion may be biased. 🙂 What I am trying to say is that what you learn in a typical MBA program is more geared toward management at a large company. @Jasonfreedman, co-Founder of FlightCaster, talks about this at his blog Humbled MBA.
I think back to my first year courses:
2. Financial Accounting
5. Financial Management
6. Management Communication
7. some global leadership course
8. Market Intelligence
9. Decision Models
10. Program for Entrepreneurs
… and my first reaction is, wow! I took a lot of courses, and that’s probably only a partial list. I’m sure I’ve forgotten to list 1-2. Sadly, I’ve only retained maybe 1/3 of what I learned. What’s that in dollar terms? I don’t even want to know…
But, secondly, most of those courses are for people who aspire to be executives in large companies. Think about it. If you are starting a company, why would you need Financial Accounting? You don’t need to report your earnings to the general public. Sure, you can take accounting electives like Managerial Accounting that are more internally focused, but you get my point. I don’t think FA is that relevant to someone who’s bootstrapping an Internet startup.
What about Operations? I don’t need to order raw materials, build-up inventory, and ship products to my customers if I’m launching a SaaS company. So, again, it’s mostly irrelevant although being able to calculate my wait time at a sandwich shop during lunch rush hour does help me save time and be more productive at work.
I won’t go through each course, but you get the picture. I’m not saying that I think it’s a waste of money to get an MBA. I’m not saying that at all. It’s a great experience and I really enjoy being a student at Duke. I just think one should think hard about how to use his MBA to be an entrepreneur. I’ve heard many MBAs from various programs say things like, “I’m going to get my MBA so that after 10 years I can have the financial stability to start my own company.” I know only a handful of people who had the courage to leave their high-paying jobs to go start a company. That takes more courage than starting something without any money. They don’t call boring, but high-paying jobs “golden handcuffs” for nothing. Plus, not working for two years and spending $150K for a three letter degree costs a lot of money. You could have put that small fortune toward starting your company if financial stability was your sole reason for getting an MBA.
For me, I wanted to “park” myself for two years to network full-time. I knew from experience that companies were more willing to talk to students and take risks hiring interns. No one would have understood if I told them I was leaving my full-time job at Cambridge Associates to take an internship at a start-up. Start-ups didn’t even understand when I tried to get a full-time job with them. Only once I told them that I was going back to school, were willing to take me on. That’s how I was able to work with Wiggio.com. I figured if my transition plan didn’t work, I would at least have an MBA to fall back on. I knew the MBA degree would help me get a decent middle-management job working from 9 to 6 in corporate America.
Fortunately, though, my plan is working out so far. I was lucky enough to meet Josh Felser and Dave Samuel, the co-foudners of Freestyle Capital. A big shout out to @joshmedia and @dsamuel by the way. They’re successful serial-entrepreneurs and savvy seed-stage investors. I learned just as much from working with Freestyle as I have from my classes.
Now, all this said, there are ways for MBAs to learn skills in the classroom that are applicable to real-life entrepreneurship. My advice, albeit based on very limited experience (hence, maybe not all that useful and should be taken with a grain of salt), is that you should take a bunch of marketing and communication/leadership classes. Take a class on:
1. Product Management
2. Marketing of Innovation
4. Consumer Behavior
5. Market Intelligence
(names of the courses may differ depending on the school, but you get the idea.)
If you want to take finance, consider the following:
1. Venture Financing
2. Finance for Entrepreneurs
3. Corporate Finance (because it will help you understand the companies that may want to acquire you)
I’ve been working at Get Satisfaction for the past month as a Business Development intern. My go-to tools for making decision have been… my gut and logic. I don’t know whether intuition could be taught. I think I just acquired it from my past experience in consulting and working with Freestyle. I’m not saying I’m great at all. I’m just saying that I didn’t take a class on it.
So, to all the MBAs out there who have hopes of starting a company one day-please don’t sell out. Don’t take the traditional MBA courses. Don’t spend hours at networking events hosted by companies you don’t want to work at. Don’t follow the herd! Who cares about concentrations? Who cares about GPAs? None of that matters if you can’t apply what you learned to a start-up.
Do things that get your creative juices flowing. For example:
1. Consider internship opportunities with small, entrepreneurial companies and not with companies like Bain or Goldman Sachs. They are great companies full of intelligent people (Unlike my friends did this summer, I probably couldn’t get a job with any of those companies), but I’m not convinced that they make you more entrepreneurial.
2. If you can, do a Mentored Study while you are in school. Work side-by-side with an entrepreneur and learn from her. Get used to working in unstructured environments.
3. Go do something you know very little about because that will be the reality when you start your company. Everyday you’ll be faced with challenges to which you do not know the answer.
And most of all, make new friends and have a good time before you go out into the real world and administrate business at a master’s level.
By: Jonathan Lee