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Business degree, is it worth it?

Does it make sense to pursue a business degree (MBA) for a startup CEO?
As a CEO, how did you benefit from it, what did you learn that is applicable for startups?

Personally, I have an engineering background, but I've learned business side by doing it. I wonder if there is any benefit of getting a formal business education to become a better CEO.

11 Replies

Julia Lam
6
0
Julia Lam Entrepreneur
Co-founder and CEO at Bucket (LikeBucket.com)
I don't have a business school degree, but I'm a strong believer that you learn by doing. I can definitely see how B-school helps give you a good foundation and network to build on, but that's two years of your life, $100,000 in debt, and a lot of time where you're not working on your company. Unless you feel like there's no way to build a network otherwise, I think your time is better spent building your company and learning the skills you need by yourself.
Bill Blankemeier
1
0
Bill Blankemeier Entrepreneur
Director of FP&A at NurturMe
Hi Nikolay,

I think devoting the time to earning an MBA is all about what you want out of it. Some schools offer a great network, some offer great marketing programs, general management, finance etc. I chose to earn my MBA at Babson College for its focus on small business and start ups.

I think an MBA is extremely valuable for people with backgrounds outside of business (primarily engineering). You'll build a great business foundation you can use to grown on, and use your technical background to push you even further. With that said, pick your program wisely, and don't forget to take the cost/benefit into account.

If you have any specific questions - feel free to drop me a note. I'd be glad to help and share any experiences I can.

Best Regards,

Bill
Jonathan Barronville
3
0
Jonathan Barronville Entrepreneur
Software Engineer at npm, Inc.
Hi, Nikolay.

I have a strong opinion (through observation) that doing an MBA doesn't make you *become* (keyword here) a better CEO. In the startup world, I have friends on both sides (some with an MBA and some without it) and I also meet people all the time on both sides, and I've observed and learned that you become a better CEO simply by being a CEO and becoming better at it over time. My observations have shown me that doing an MBA is similar to reading a theory-heavy computer science paper ... sure, by the time you're done reading it, you might understand the theory and mathematical proofs behind the clever data structure, but the tricky part is now implementing it. For example, unless someone can prove otherwise to me, you can only learn how to properly manage a team by managing a team, you can only learn how to raise money from investors by raising money from investors, you can only learn how to hire people by hiring people, you can only learn how to sell your product by selling your product, et cetera.

Now, please understand that I'm NOT saying that doing an MBA is not worth it. Frankly, IDK if it is or not, but I do know (again, from observation) that the act of doing an MBA alone doesn't automatically make you better at the crazy job of being a CEO.

- Jonathan
Xenia Apena
0
0
Xenia Apena Entrepreneur • Advisor
Head of Product, Buzzmove
Hi Nikolay,
It very much depends on why you want out of it, i agree with Bill. it also depends on where you get it from. A good business school will expand your horizons in terms of connections as well.
The basis of n MBA is on learning through case studies - so that you apply what you have learned to solving a business problem. It does teach you to think as a problem solver, not as an academic. However, if your ambition is to be your own boss, as opposed to a a C-level executive in a corporation, you can definitely skip the usual route and sail your own journey. You can learn by reading business literature on your own and doing what you do for your business. An MBA does not give you any guarantees that your first enterprise won't fail, that's for sure. But it does give you a credential that corporations look for in employees.
Good luck!
X
Eric Burleson
1
0
Eric Burleson Entrepreneur
Product Manager-Program Services at Invodo
There is enormous value in getting formal education in business, particularly if you get it from a well-reputed school. For one thing, you'll learn many more techniques for identifying and solving common problems, as well as avoiding those same kinds of problems in the first place. Additionally, it will give you more credibility to any potential investors.
Shira Schindel
0
0
Shira Schindel Entrepreneur
Director, Business Development & Author Engagement at Litographs
I have not done an MBA, and I ask the same question of friends and mentors often! Given your background if you do take the MBA route, you might want to consider this Tech MBA from Cornell which is to be hosted on their new Roosevelt Island campus in NYC. Good luck!

http://tech.cornell.edu/admissions/johnson-mba/
Grant Sernick
2
0
Grant Sernick Entrepreneur
Co-Founder at LoyolyPRO
Hi Nikolay,

I am both a founder and an MBA grad, so perhaps I can add a little value to the conversation. Bill had a good point that it depends on what you want out of it. I would add that not all MBAs are created equally, so it is all the more important to know what you want.

Some people just want 3 letters after their name. In that case, do the cheapest/easiest MBA you can find. There are lots of online courses/schools that will confer those letters on you.

I will assume, for the pursposes of this response, that you are looking at doing an MBA because you feel that it will make you a better entrepreneur or business proprietor. If so, then I think the answer is it depends.

There are two aspects that I think an MBA couldhelp you with. The first is a strong foundation in business. Many people are very strong in a couple of business disciplines (like Marketing or Strategy) but not particularly strong in others (perhaps Operations or Finance). An MBA will give you the foundation that is required to become knowledgable in these disciplines. This is important, because as an entrepreneur, you NEED to be functional in ALL disciplines. Could you pick up these things as you go? Sure...but you will make mistakes as you go, and certain mistakes might be fatal, and you might have avoided them had you been more knowledgable.

The other thing that might be of interest to you is the network of alumni that a particular school has. Stanford has an incredible list of alumni that I believe is really engaged in the school. There are many other schools that are similar.

What an MBA will not teach you is EVERYTHING else that is required to make a go of a startup. Specifically, I would suggest the following things (this is not exhaustive) that are not taught: tenacity, real-world problem solving, getting into the weeds, staying above the clouds, gumption, real-world networking, being a generalist (when needed), being a specialist (when needed), managing people, hiring people, firing people, raising money, building relationships, compromise, being humble, defining what you really want, ...

One other point that is perhaps important to consider too. My experience when it comes to MBAs (especially at the elite schools) is that they are attended by A-type personalities. Everyones dream is to be the CEO of the largest company in the universe. (I am generalizing...but I've only got broad brushes right now.)

I would suggest that being the CEO of a small highly profitable company where you don't have debt or investors would be a much preferable option. You aren't beholden to anyone...you would be your own man.

Regardless, an MBA might help you on your way.
Brandon White
3
0
Brandon White Advisor
CEO of Zeuss, Inc.
My background so you can put my comments in context:

* I started my first "real" company when I was 26. I was studying for my Masters in Psych. I bought a business plan book, read it, wrote a plan and grew the company to a very large social networking site that I later sold and made a lot of money.

* I dropped out of my Masters in Psychology to do my first real company.

* I finished my Masters in Psych at a later date.

* I later got my MBA from a top 20 school.

* I've started, what I will call, four real companies over my life. I have a ton of MVP's over that span that did not pursue; I do not count these as real companies because they never passed the MVP threshold tests for me to spend significant time.

* I've worked in management at a Fortune 500 company.

* I was a venture capitalist at two successful firms ("successful" defined as their funds have top quartile returns for their cohort. In other words, they made money for their investors. Important to qualify in the VC world.)

A few thoughts for you having started companies on both sides of a MBA:

1) A MBA gives you a framework to think about things that sometimes you do not get time to see or study on your own.

2) A MBA gives you another network of people to have access. It has been helpful to me, but so has my connections from other companies I have worked and groups I belong.

3) A MBA will help you better recognize the ability to "know what you do not know" and give you a framework to solve that challenge when you are faced with it. Can you learn this somewhere else, yes. Does an MBA help, yes.

4) A MBA will expose you to other areas of business you might otherwise not have been exposed. Can you learn this on your own running your own company or working for a large company, yes. Will an MBA speed your learning process up on these things, probably (think two years of deep immersion). I learned a lot about running business models in business school, but I also learned probably as much if not more from working in a Marketing Analysis division of a large internet company and from having to learn it when I started my first company.

5) A MBA can help in your quest to raise money, but it's not an absolute. We can argue this point all day, however putting my Psych degree to work, if you are pitching money people who do not know you well or you have not already cashed out and made tens of millions or hundreds of millions of dollars for investors you are going to get measured on your idea and your ability to execute. An MBA checks off your arguably at least have some grasps on concepts.

Additionally, people who have MBA's will sometimes, and even subconsciously, look for someone to have an MBA because they have been through the process and know the person has at least been exposed to concepts around business. I think this happens more often then people will admit. It's a natural human tendency for people to look at others to see if they fit into groups or experiences he/she has been a part.

In other words, a MBA at a minimum lowers some barriers of entry on fund raising.

6) A MBA can give you two years to start a company and use that company as a project for a lot of your assignments. Think of getting free feedback not just from colleagues but from your professors who get paid a lot of money in the consulting world.

So is a MBA needed to be successful, I would answer no. One of my close mentors sold his first company when he was in his twenties, he made real money, think $10m+. He then started another one, took it public, sold it to Warren Buffet and for many years sat on the BOD of that company with Warren. He has no MBA. I know another guy who is probably worth over a billion, no MBA. I know another guy who has FU money, no MBA. At the same time I also know some people with FU money who do have a MBA and some others with other advanced degrees.

Last thoughts:

If I had it to do over again would I get my MBA. Yes, I loved the whole experience. The people I met, the things I learned and the places I went as part of the international component of my program.

Ironically the company I sold that paid off my $90k in school loans I started before I had any advanced degree. Go figure.

I think at the end of the day there is no blanket answer that is right or wrong. You have to look at where you are in your life and what you want to get out of an MBA experience. It's analogous to building a software product, you figure out what problem you are going to solve, you build a business plan around solving that problem to assure the math and outcome will work and then you design the Ui/UX experience to give yourself/business the best chance to achieve the milestones that will define the product/business as a success.

Brandon

Brett Fox
4
0
Brett Fox Advisor
Respected, Results-Oriented CEO, Entrepreneur, Author, and Coach
Nikolay,

I have an engineering degree, an MBA, and I have been a CEO and Founder.

I feel there's a career sweet spot for getting an MBA about 3-5 years into your career. Getting an MBA too early in your career does you no good as you have no context for what you are learning. You probably have learned much of what you already will getting an MBA if you wait too long.

I agree with alumni benefits, but you have weigh this versus giving up two years of your career.

The best thing you can do as CEO is surround yourself with people that are smarter then you, and add in a good mentor for yourself. I'd recommend the mentor be independent from your board and investors.

Good luck.
Owen Rubel
0
0
Owen Rubel Advisor
Creator of API Chaining, IO State, API I/O Abstraction and modern API Automation
Do you know how many pioneers have been autodidacts?

https://www.linkedin.com/today/post/article/20140723222511-3242558-the-argument-for-appreticeships?trk=mp-reader-card
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