The Value of an MBA to an Entrepreneur
I have worked at, invested in, started, or consulted 10 startup companies. It has been 12 years since I received a pay check from a company that I did not own a part of. By most objective standards I am considered an entrepreneur. Or at least entrepreneurial. And I have a confession to make. I have an MBA.
I went to Duke’s Fuqua School of Business. As one of the deans at the time described it, Duke is one of 15 to 20 schools that has a legit claim to be a top 10 business school. When I attended, Duke offered a class on entrepreneurialism. I did not take that class and think the idea is silly. But I did take several classes that have been very useful in my day-to-day work.
I found the accounting classes very helpful in terms of understanding the big picture of how to read financial statements. Many entrepreneurs understand the basics of a balance sheet and income statement, but some of the more advanced concepts will cause their eyes to glaze over. I feel very confident now when I work with my accountants that I can communicate effectively and understand decisions that need to be made.
My finance courses also helped me understand the theory behind borrowing money versus raising equity, and I learned tactical technical skills around valuation. I found the advanced accounting classes that tie in accounting and finance to drive valuations very relevant in many scenarios, especially when raising or investing money or helping a customer understand the ROI of a project or program.
My marketing and strategy courses were also very interesting because they exposed me to some of the human psychology behind the behaviors that are so critical to the success of companies and teams of all sizes. Furthermore I learned there were frameworks for thinking about looking at markets and defining how a product fits into that market that I also find helpful on most days. There are a lucky few that intuitively think this way, but I found having someone teach me these techniques to be a real catalyst (Sister Act 2 not withstanding, Sundberg).
My MBA program gave me an appreciation for numbers. Most decisions require much more than fancy spreadsheet models, but as one of my marketing professors said, “if you’re trying to convince a client or investor of something, you’d always rather have the numbers support you than not.” I am now more likely to numerically model any significant decision. There were so many tools that we learned in stats courses, decision support classes, finance, accounting, and marketing. And applying these tools often helps me to better wrap my head around the real decision being made. These apply equally to working with customers, suppliers, and to board members.
The other value I got from my MBA was efficient time management. There is way more reading and writing involved in an MBA than most admission programs will admit, and the sheer volume forces the student to squeeze every bit of productivity out of each activity in a way that few other things I’ve done have.
I believe the networking aspects that many tout for MBA programs are overrated, but the friendships are very real, and if you pick the right school, you will find that you end up with friends in helpful places. Just don’t use this as the primary reason to go to business school because there are more productive ways to grow your network if you’ve got two years and six figures to spend.
If you can choose to either work day-to-day in a startup, or get an MBA, choose the startup ten times out of ten. There have been weeks of my life when I learned more from very talented mentors than I did in 20 months working with very talented professors. But I would also encourage most people to do both if they have the opportunity. An MBA isn’t necessary to being a successful entrepreneur, but in my experience it has complemented my real world experience and been an integral party of my professional success.