MBA vs Startup: Which should I choose?

http://www.apeofsteel.com/336/mba-vs-startup-which-should-i-choose

by joubee • 17 years ago

16 20 17 years ago

roder• 17 years ago

awesome post, good quotes from smart people. I particularly liked Guy Kawasaki's response. Short, sweet, included some alltop links :)

TomOfTTB• 17 years ago

Most are saying roughly the same thing (which I agree with)...If you're interested in working at startups, you'll learn more through your own startup. If you're interested in working at a big company, an MBA is worth more.

The only thing I'd add is that an MBA is to prove you've been taught certain things. Just because you don't go to school to learn them doesn't mean you can't go out and acquire the knowledge pretty cheaply (A good starting point is here: http://www.amazon.com/Ten-Day-MBA-Step-step-Mastering/dp/068...).

Between books and the wealth of business advice from proven successful people on the internet I'd think you could do better than an MBA if you try

karl11• 17 years ago

I don't necessarily agree that you should only get an MBA if you want to work at a large company. Getting an MBA from a solid business school allows you to interact with a lot of smart people with similar interests that you can both learn from in school and call on in the future. Furthermore, most small companies value MBA educations and will pay you more if you have one.

Finally, there's a lot to learn about business that you might not want to learn in the middle of starting one... areas where mistakes can really cost you like accounting, finance, and negotiations. Business school might help you avoid many of those mistakes or teach you how to deal with them appropriately if they do occur.

joubee3• 17 years ago

Really nice comment Tom. I agree formal education can get your foot in the door of a big company. I also think that a lot of people underestimate the role that a big company can have in helping you fine tune your skills with a safety net of sorts. They can also give you opportunities and exposure you might not get otherwise. Saying that working for a start up can be exciting and you can learn so much from just doing. Also I see you work for a not for profit. I also work for a child focussed charity dealing with children that live in extreme poverty. I'd really like to hear your thoughts on making software/ web... in your part of the woods

alain94040• 17 years ago

Slightly tongue in cheek, but I wrote http://blog.fairsoftware.net/2009/08/12/the-cheapest-mba-pro... and I mean it.

if(target==bigCo) MBA = true;

joubee3• 17 years ago

I read your article when it was posted and that prompted me to post these questions today :) It also raises the question as to whether the money to pay for an MBA is worth it. Could you start 10 small companies with potential for success for the 150k. But then again if you did the MBA or PhD maybe you'd only need to start one company to accomplish your goals. Doing the same thing and expecting a different result and all that.

dsplittgerber2• 17 years ago

"But then again if you did the MBA or PhD maybe you'd only need to start one company to accomplish your goals." I wouldn't think so. It helps to have some sense of business skills or insights into most business topics, but it's more of a jack-of-all-trades thing than a deep insight into a specific field. The latter of which you probably need for a startup to succeed.

ShabbyDoo• 17 years ago

A friend of mine is about three years out from a Harvard MBA. Although many of his professors were famous for their business research/theories/whatever (example: http://www.claytonchristensen.com/), he doesn't believe the actual classroom experience justified the price tag (in terms of tuition and lost wages). Are you that much better off having listened to Clay talk about disruptive technologies than having read his books and discussed them online with some interesting people?

Two outcomes were notable: First, he has a pedigree that gives him lots of options in life. He's a biz guy with a biotech company now, but his credential could probably convince a manufacturing executive that he could provide value (right or wrong, it's a likely scenario). Secondly, he has a huge network of fellow alumni who are doing interesting/powerful/lucrative/whatever things that he can call upon without seeming like a leech.

The average Harvard MBA student is making over $100K upon admission. So, two years @ $100K == $200K in lost earnings - $25K in summer internship compensation == $175K. Tack on another $100K in tuition and absurd housing costs, and it's nearly a $300K pedigree.

I have an MBA from a "lesser" program. I enjoyed it and think I learned a lot. But, the degree isn't worth nearly as much as my friend's Harvard MBA when used as a signaling mechanism or club membership card (literally in most major cities!).

Edit: I realized I didn't actually bother to answer the OP's question. I guess I don't have a good answer.

jedc• 17 years ago

As someone who has recently completed an MBA, all of these answers could be correct. It really comes down to who you are and what you try to get out of it.

I have classmates that did the MBA to get a job at an investment bank or consulting firm; generally they're getting those jobs. An MBA is essentially a required degree for those kind of jobs, and about 25-75% of grads go to those jobs, depending on the school.

I have classmates that did the MBA to switch careers. One classmate was a doctor (orthopedic surgeon to be exact) that didn't want to be doing hip replacements his entire life. This was my case... I fell into consulting after I left the Navy and hated it; the MBA got me out of consulting.

I also have classmates that did the MBA to up-skill themselves. This was also a big reason for me; I had a lot to learn on the finance/accounting side of things, and picked up a number of skills across a bunch of business topics. Sometimes this is to break through in a career ladder; I had a friend that had been CFO of a small subsidiary of a large corporate who is now the CFO of a small but rapidly growing VC-funded startup. The MBA was a big "tick in the box" for them when hiring, since he has the skills to stay CFO for a long time.

Coming out of the MBA, my job opportunities included a startup, doing some work for a VC, and working for a well-known web-tech BigCo. However, I also came out of the MBA with student loans, which affect those options.

Fundamentally, you make your MBA what you want it to be. If you want to do a startup while studying for an MBA, there will be a ton of people to support you and there will be opportunities to work on your company for class. (A number of my classmates have done exactly that.) I focused on startups and entrepreneurship and I came out with opportunities in those areas.

Sure you can read and study your way to up-skilling yourself, but an MBA does it quickly and combines it with proof (the degree, a signaling device) and opportunities.

An MBA is a) a set of skills, b) a network of people, c) a concentrated set of opportunities for development, and d) a big cost (real and opportunity).

Does the OP have the "fire in the belly" to do a startup, and a startup with a big enough long-term future? If not, then the MBA might be a good option. (And the fact that he's asking around instead of starting a company seems to indicate that this might be the case.)

I realize now this is a little long... I hope it's useful.

jhancock• 17 years ago

You should only create a startup if you've identified a good market to target. I know, its the people that matter, the idea will change. Well, yes, but that's only part of the story. Entrepreneurial endeavors should target a problem you know well and have a passion for doing. This blog post doesn't sound like this guy has any ideas or life experience to build against. Maybe he does and simply left that part out.

johnnybgoode• 17 years ago

Hahahaha, good one!

Oh wait, this was a serious question?

Sorry...in all seriousness, what others have said makes sense to me. If you really think it's worth the cost to have that credential, because you really want to get that kind of job or network, then maybe you'll want to get an MBA. But these are all reasons not to do it:

* cost

* opportunity cost

* actual knowledge learned during program is easily obtained elsewhere

* possible unwarranted ego boost ;)

jwesley• 17 years ago

MBA is probably not worth it unless you can get into a top 10 program and want to be an investment banker or biz dev guy whose only real asset is a rolodex (which is really a significant asset). The fact this guy needed to write a blog post and email a dozen people about what he should do makes me think he should go for the MBA.

rocketman• 17 years ago

So I'm an undergrad junior right now studying computer science and my career path has recently been on my mind. Simply said, I feel an MBA preps you too much for corporate life. If that appeals to the writer, then I'm confused as to why startups are also into the equation. They're two different hings. WORST case, make MBA your backup. Use a passion to change the world in leaps, and if that fails and you need money to live and have a stable life.. only then go for the MBA. :)

fredBuddemeyer• 17 years ago

no contest it's the startup. i've done both and note that the most useful experience from my dartmouth mba was when tom peters spoke. his message: start a business now.

chrischen• 17 years ago

http://www.inc.com/ss/start-secrets-tips-americas-coolest-yo...

Go for startup. According to that guy, not having an MBA as backup will pressure you more to make your startup succeed, and if it absolutely can't, then go for your MBA later (or try the startup again).

edb• 17 years ago

This is like asking on reddit if reddit.com or nytimes.com is a better source of news.

joubee3• 17 years ago

Ok so. Some people will benefit from Bschool and some will do better with a start up. Are entrepreneurs born or made. If made then it becomes really important what training and experience they get. Which is best then? I guess it depends on what your goals are. If you want to start something from your garage then a big corporate probably isn't the best fit and alternatively if you want to launch an aerospace company its probably better that you are an ex-CEO of a fortune 500. If entrepreneurs are born then do they need to focus on different things other aspects that they don't have an affinity i.e. a technical entrepreneur has different strengths than a sales based entrepreneur?

dsplittgerber2• 17 years ago

You have done enough thinking by far :) Over-analyzing isn't going to help you any more, it seems. You have done your research, not get out of your fear-induced stasis and go one way or the other :)

Derrek• 17 years ago

Yep, please see http://en.wikipedia.org/wiki/Analysis_paralysis

BearOfNH• 17 years ago

I think it's a mistake to go for the startup with the idea that the MBA is some sort of "backup plan". When the going gets rough -- and PG assures us it will -- that "backup plan" suddenly starts to look attractive and you end up in the worst possible situation, torn between two paths.

MBA vs Startup: Which should I choose?

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