Do you use Quora? You should. It’s a pretty awesome repository for truly educated answers to a whole variety of questions. Think of it as the content quality of Wikipedia, but in very focused Q&A form.
Entrepreneurs love Quora, so there’s a lot of interesting content available on the topic there. And one particular question caught our attention:
“Does getting an MBA make someone a better entrepreneur?”
Oh yes, it’s back. This topic never gets old, perhaps because there are probably as many MBA students looking to get into entrepreneurship as there are entrepreneurs who think an MBA is pretty much worthless. So, in the interest of helping you decide where you lie along that spectrum, here are a few choice quotes distilled from the Quora thread, with just a splash of our own wisdom and perspective on the side.
“An MBA provides a fair amount of knowledge about historical business case studies, finance, and other topics — all of which can be useful. It is in no way a substitute for real management experience and that’s where it can be harmful — when the holder of the MBA thinks they know how to manage, because they have an MBA.”
This one is a valuable morsel of truth. And it’s as subtle as it is crucial. Unlike other disciplines like computer science or chemistry, the study of business is very different from the actual practice of business. As a computer science student, you learn to write code and you build programs that do things and solve problems, much as you would as a professional programmer. As a chemistry student you go to lab and work with equipment, you make assumptions and test hypotheses, much as you would as a chemist.
In business school, it’s not really like that at all. You go to class and learn about hypothetical (or real but historical) business situations; you discuss them with team mates, and you think about how you would address them. You might even go to so far as building a model and crafting a PowerPoint presentation to describe in detail what you would do if this were a real life problem. But you do not actually execute on that plan, you don’t have to negotiate real organizational politics to get things done, you don’t have to put real money on the line and be responsible for the outcome of your decisions.
That’s a key difference. Business in theory is not business in practice, and the two should not be mistaken.
Does this mean that an MBA is not helpful for entrepreneurs? No. These thought experiments can actually be extremely useful for entrepreneurs, because they provide frameworks with which to navigate difficult business decisions. But as the Quora answer suggests, the knowledge imparted by an MBA is most useful when accompanied by the understanding that it is an aide not a substitute for true business experience.
“You have to keep in mind the causal relationship here: a lot of (but not all) people who go do an MBA are not true entrepreneurs, it’s not that an MBA makes them more or less likely to succeed as an entrepreneur. I know successful entrepreneurs who have MBAs and don’t have MBAs, and I know unsuccessful entrepreneurs who likewise have MBAs and don’t have MBAs – and I can’t see any direct correlation.”
Yeah maybe… We read a study once that suggested that the only true common characteristic shared by entrepreneur is a desire not to work for other people. That’s it. Not risk-aversion, not creativity, not programming skills or a childhood propensity for making money. Granted, since MBA programs are in large part job placement machines for large corporations, we would have to agree that business schools are likely not filled with people anxious to strike out on their own. But that doesn’t necessarily answer the original question either…
The same poster continues:
“So to answer the question: if you have the fire in the belly and want to start a company, don’t go to b-school thinking that it will make you better equipped to start a company. Find a good partner who complements your skill set and go for it!”
We’re going to disagree here for one reason: the two are not mutually exclusive. In fact, business school is a great place to find a partner and start a business together within a safe environment that offers exceptional resources in terms of networks, knowhow and support. Every year, dozens of start-ups are born out of MBA programs and business school business plan competitions. These are real companies, like Zynga and Bump Technologies, that receive real institutional funding and go on create real value — not just business plans on paper.
That said, the poster is probably right in saying that if you already have a co-founder, an idea, and a desire to make it happen, then definitely do not postpone that to go to business school thinking that you will be a better entrepreneur on the way out. The right time to start your business is always now.
“If you’ve been in a startup before in a broad role (e.g. you didn’t just sit in a cubicle and write code, but were an early guy who did whatever was needed) then I agree with some of the more popular answers above that you’re better off spending 2 years being an entrepreneur to become a better entrepreneur (vs. 2 years of b-school).”
This is interesting… Is being an entrepreneur a better lesson in entrepreneurship than business school? Probably. At the same time, if you have worked at a start-up and don’t feel ready to start your own company right away, there’s a lot of insight to be gleaned by taking a step back and re-evaluating your experiences to date from a more detached standpoint. For that an MBA is very useful, and might indeed make you a better entrepreneur in the long term.
But in closing, it’s worth remembering this last gem:
“…life isn’t just about becoming a better entrepreneur. I had a great time at b-school and met some of my very best friends there.”