Entrepreneurial Finishing School – Should I Get an MBA?

I usually hear the “Should I get my MBA?” question at least once a month.

If you’re an entrepreneur, the glib answer is “no.”  It’s also the wrong answer.

Should I Get My MBA?
Last week I was having coffee with an ex engineering student of mine now on his second startup (and for a change it wasn’t a Web 2.0 startup) who wanted to chat about career choices.  “I’m thinking of going back to school to get my MBA.”  It was said less as a clear declaration than a question. It was six years since he had left school and three and a half years ago he had joined an 8-person startup as a product manager. The company was now 4-years old and 70+ people, profitable and growing fast.

I didn’t say anything as he continued, “I’m now director of product management, but I think I’m missing stuff I ought to know; finance, marketing, and operations management. We’re starting to hire senior execs as VP’s and all the jobs specs have “MBA” as a requirement.  What should I do?’

The easy answer would have been, “Yes, go back and get an MBA. You fit the perfect profile; you have an engineering background, work experience in two startups and you’ll be limited in your career growth without one.”  But the answer I gave him was a bit different.

Where Do You Fit?
In between the coffee and breakfast I drew this diagram:

I explained that as startups grow, they go from the box on the left to the box on the right and the skills people need at each step of a company’s growth evolve and change. The skills required when they were an 8-person startup trying to “search for the business model” wasn’t the same set of skills needed now that they were  a 70-person company “executing the business model.”  I offered that it sounded to me as if his company was going through the transition (the box in the middle) where it was starting to put in place the processes needed to build and execute the business model.

Who Are You?
I suggested that perhaps his first question shouldn’t be whether he needed an MBA. Rather the question he should be thinking of was: in which part of a company’s lifecycle did he think he wanted to spend the rest of his career?  Did he enjoy the early chaotic stage of the startup?  Was he fondly telling stories of how much better it was when the company was smaller? After the rocketship ride of this successful startup, did he now want to be a founder of his own startup?

Or was he more comfortable now that there was more structure, repeatability and he was managing a staff? Was his goal to be a large company executive managing large groups of people?  And if a larger company was his destination, did he want to manage complex technology projects or did he see himself in more general management in sales, marketing or finance?

His vision about the trajectory of his career would answer what type of education he should get – and where he might get it.

MBA or Engineering Management?
I pointed out that if he wanted to work in a larger company he actually had two choices – go to business school for an MBA degree or go back to a graduate school of engineering for a Engineering Management degree.  (I find a disconcerting number of my MBA students with engineering backgrounds realized too late that they ought to have been in an engineering management program. They had picked the MBA route because it was trendy or they hadn’t thought through that managing engineering projects was what really excited them.)

Why Yes I Am an Entrepreneur
I could see I was having an effect when he blurted out, “You know my happiest times in these startups were when we were a small team figuring out the business model. The chaos and camaraderie gave me an adrenalin rush and incredible satisfaction. While I’m really good at managing the process, this phase of the company feels like a job. I’ve been bouncing some ideas about a company with some fellow employees who feel the same way. Maybe I do want to do startups as a career.”

Then he asked me the real hard question. “So what type of graduate school do I go to get the skills to be a great entrepreneur?”

Entrepreneurial Apprenticeship
I congratulated him.  “You already have started your apprenticeship. You have two startups under your belt as one of the first 10 employees. If you decide that you want to be a founder of a startup you’ve made a good start.”  “But where do I learn all the things a founder needs to know, not just an early employee? Team building? Creativity and innovation? Entrepreneurial finance? Agile Development? This Lean startup stuff?  Where’s the school for that?”

I said, “Welcome to the wondeful world of entreprenurial education.  It’s everywhere and nowhere.”

E-School versus B-School
Almost all business schools now have entrepreneurship programs or departments. (At U.C. Berkeley that’s exactly the program I teach in.) But you can also find entrepreneurship programs in most engineering schools. (At Stanford that’s the program I teach in as well.)

And startup “accelerators” like Y-Combinator, Techstars, etc. also offer a crash course in Darwinian education. I also pointed out, “If your passion is starting your own company, learning by doing is an equally viable choice.”

MBA? Engineering Management program? Startup accelerators? Just do it?  He had more choices than most.  But first…

Who was he?

And who did he want to be?

Lessons Learned

  • Where do you want to work: startups, mid-size or large companies?
  • If large companies, what do you want do: engineering management or corporate management?
  • If you find yourself debating the “startup versus large company” choice you’ve already chosen the big company.  Entrepreneurship isn’t a career choice it’s a passion and obsession.

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31 Responses

  1. Learn by doing, lead by leading. I’ve found–and this is completely anecdotal–that if you want to start a company, you will, and if you aren’t willing to make the leap, you simply won’t; MBA grads tend to me more measured and careful and less willing to make the leap without significant resources already lined up.

    Now I’m about to get flamed by a long list of MBA grads–someone point me to data that disproves my terrible bias :)

    • Very clever to support your hypothesis anecdotally and yet challenge people to respond with data. Neat trick! :-)

      It’s entirely appropriate to look before leaping. Most of my MBA is either not applicable or flat-out the wrong approach, but that’s just 20/20 hindsight. Where does Steve teach his classes? At Haas and Stanford. Perhaps someday there will be a physical campus for the Durant School of Entrepreneurship. Until then, please know that many entrepreneurs are hungry for knowledge and there are other places to learn besides just doing. (Like this blog, or Eric’s SLL conference as two examples.)

  2. Great post, Steve – I love the “who are you / who do you want to be” segmentation questions.

    I’ve been teaching people business fundamentals for 6 years now via reading / coaching / online video – it’s called the Personal MBA. (Your book is on my reading list: http://personalmba.com/review/four-steps-to-the-epiphany/) Most of the people I work with tend to be in the “Scalable Startup” camp – they want to start their own business, but they’re not sure where to begin. Self-education and learning through experimentation is a very good option for them. (Effective self-education approaches and lean startup principles have a lot in common.)

    For those interested in the large-company leadership path, it may also pay to look for educational alternatives – the only guarantee you get when enrolling in an MBA or Engineering Management program is a large (and often crippling) amount of student loan debt. Research shows these programs don’t have a huge impact on job success measures, and they’re mostly useful for passing the HR interview filter: http://www.aomonline.org/Publications/Articles/BSchools.asp

    Personally, I prefer the self-education / experimentation approach – without any debt, I’m free to try and work on whatever I want. That freedom is priceless.

  3. You’ve got to also think about whether the amount of debt you incur by going to business school will discourage you from starting a business afterward. I know plenty of people who thought they would start a business after their mba only to go into consulting or ibanking in order to pay off their massive debt.

  4. Great post and great talks on the company lifecycle.

    If you are a person who enjoys being “on the left” of the transition but the liquidity event(s) is (are) “on the right” and it is likely that you won’t stick around past the transition, what can you do to maximally benefit from the liquidity events? My experience is that if you don’t stick around, you are very likely to be “squished”/”screwed”, or to put it politely, your shares aren’t worth very much, even though the company succeeded…

  5. Agreed. As I discuss these ideas with people I hear a resonating agreement with the challenges of what you learn from a traditional management education. Here is an excerpt from an email I received today:

    “Not only does bschool focus on the mgmt of large firms/teams it also focuses on ‘what would you do if you were Jack Welch’ type scenarios. Which is fantastic, but given it takes the average bschooler another 10 years plus to get to a Jack status, or maybe a lifetime…what about all the mgmt challenges between here and there..say as a mere Director of Sales or even a VP?”

    This comment highlights the gap in management education, a gap which only becomes more severe when we talk about entrepreneurship education.

  6. right Nathan , and I add that the comment of your friend is more and more close to today time, internet time , where a 30- years old guy can tell to a little younger classroom, how he become M or B$ man….this was not true in the past… the Internet era is a revolution. I remember an extreme thinking of a great bio engineering professor telling to his colleagues at an opening day of an Italian University, 2 years ago “Beware friends, we are teaching to the first generation that has more knowledge than us” ( his name was Vincenzo Tagliasco)
    Thks Steve for this other great topic..

    • Paolo,

      I appreciate your comments and really agree. I think a fundamental part of the Durant School of Entrepreneurship is a shift in teaching from a model of “instructor has knowledge and imparts that knowledge” to a model of joint knowledge creation. Teaching in the Durant School is about participating in and guiding the process, not about being the “gatekeeper” of knowledge. I appreciate the reference to Vincenzo.

  7. This post reminded me of a book entitled “Do You Really Need an MBA? : the Way of an Entrepreneur” by David Campbell.

  8. Great post.
    I agree with Robert’s comment above that the diagram without including the equity stake of the person in the start-ups reduces the use of the argument. If the person joins a start-up and has no equity stake they can up and off. If they do not have any equity, should they have joined in the first place if they are entrepreneurs? As Robert says, leaving start-ups is easy if there is no equity stake. Entrepreneur = MBA + Equity.

  9. Thanks for the post, Steve.

    I am currently considering applying to BSchool (actually flying in to your neck of the woods this weekend for a class visit) and have been on the hunt for advice like this…

    Similar to your former student, I have an engineering background, 4 years of work experience (most of which is in an early stage startup that is now in the transition stage) and a yearning for the Scalable Startup / Customer Development phase once again… So I found this story particularly relevant.

    Advice from family, friends, co-workers, professors has helped steer me towards what you laid out: either start a company (w/ or w/out help of startup accelerator) and learn by doing OR go to a school that has entrepreneurial opportunities (BSchool or otherwise), network like a lunatic and build on the kind of knowledge that’ll help me when I’m wearing 500 hats.

    My mind isn’t made up – both have their advantages/disadvantages (network, education, debt being some of the main factors) – I’ve decided to make progress on both fronts until I have to select the opportunity. This is the first time I’ve seen the decision tree laid out in a way that makes the most sense. Thanks again.

  10. Hi all,

    I am in the same position. I am a web developer and I think I will do much better if I have the fundamentals in place (MBA) so I can be ready when the opportunities come to me :)

    I think when you learn *on demand* or when the need is a need you don’t learn in a deeper way. Your focus is only to get the problem solved and to move on.

    Thank you Steve.
    Slavi

  11. [...] Steve Blank explains how to answer the question “Should I get my MBA?” with answers to deeper, more personal questions for you: http://steveblank.com/2010/05/10/entrepreneurial-finishing-school/ [...]

  12. Excellent article, made a few lightbulbs click. Thank you. It never occured to think about where in the process I liked to be, rather than only what business or work I preferred.

  13. Excellent article! I have fought this demon for a long time and I finally decided not to go back for my MBA.

    Using the internet as a resource and by pushing myself hard, I am confident that I will be able to better my skill-set, learn whatever is needed to run my business and actively network. Besides, the 2 or 3 years of B school and huge debt just doesn’t justify the time & $$ ROI for me.

    All you need to be is a passionate, committed and hard working individual who is hell-bent on getting his/her business to succeed.

    Just like the 1st comment said, people who REALLY want to start a business will indeed start a business, whether they have an MBA or not.

  14. [...] another insightful blog post, entrepreneur Steve Blank says the decision to go back to school is a little more complicated. He [...]

  15. [...] of Entrepreneurship (DSE)? I suggest you take a look at Steve’s posts on Billy Durant and on entrepreneurial finishing school but here is the basic [...]

  16. [...] 150K in school instead of invest­ing in your own idea’ makes sense? Vivek Wad­hwa and Steve Blank have some sup­port­ive posts on the topic. And there’s Guy Kawasaki who has openly denounced [...]

  17. Thank you for this insightful post. I used to find myself in a similar situation as your former student. I know one day I will have my MBA, and maybe a PhD too, but in my experience with startups and how fast everything moves, I’ve been more agile and more adaptable educating myself and learning as I go. I’m in a mastermind group, I have mentors and at one time a coach, and regularly do exercises and read books that are part of syllabus for graduate school programs. I used to think I would end up at Columbia and this past fall I was invited to guest lecture a class and looking out, I could easily have been sitting in the chairs looking towards the front of the room. It was surreal, but a valuable lesson. Learn on my own now, wait until I fit into an executive level MBA and join then, hopefully in 3-5 years.

  18. [...]  Steve Blank wrote a very practical and balanced post about whether folks should get an MBA or an Engineering Management degree.  Guy Kawasaki has pegged the value of an MBA to a post-college entrepreneur at negative $250k. [...]

  19. There is a great answer to this dilemma for many – an MBA focused entirely on teaching the skill set needed for getting from the left side of the chart to the middle and beyond: the Acton MBA. I have spent time there, met their students, and use their materials in my teaching, and as a serial entrepreneur and VC, would hire someone from there way before a Stanford or Harvard MBA.

    check it out: http://www.actonmba.org/

    • I am glad to see you mentioned the Acton MBA. Two years ago I faced the dilemma described on the blog post. I had been a founder and one of the first 10 employees of two start ups, but I knew I needed to hone my skills as an entrepreneur. I did extensive research and the only program that I found was specifically designed for entrepreneurs was Acton. It is an intense one year program, but it is well worth it.

  20. Part time MBA is best for you. I can suggest you Sikkim Manipal University as it is good for Part time MBA. It provides edunxt technology to create a virtual classroom where you can interact with the faculty and students and thereby also network with other students, you can register at their website and speak to their counselor to clear all your doubts about what to choose to make a good career ahead. http://bit.ly/smude

  21. [...] Blank in this article talks a lot more elegantly about what I am saying than I have in the preceding paragraphs. [...]

  22. This is very good advice. Thank you for posting it! I am an illustrator trying to decide if I want to walk into a rank-and-file art career or continue to try and develop my freelance career. I took an entrepreneurship minor in college and I understand what you’re saying about this being a passion.

  23. Would u recommend persuing a marketing degree around product management and marketing, if you intend to be the non technical cofounder in a start up? (my work experience is in sales)

  24. Great post. Although MBA’s are the trendy choice, if you really want the best education, you have to learn by doing. I never understood what entrepreneurship studies was- how can you teach entrepreneurship- you DO it- there’s no lesson plan. The MBA schools have tried to serve entrepreneurs through the entrepreneurship studies programs- but they don’t really serve startups or technologists well. MBAs mostly serve to teach you how to be a leader of an big corporation. You can’t always take the default path.

  25. [...] “Should I get an MBA?” – Steven Blank’s brilliant post on the value of an MBA for entrepreneurs [...]

  26. [...] in a similar situation (startup or b-school?), and need some additional reading, start with these: Steve Blank – Entrepreneurial Finishing School Vivek Wadhwa – Is an MBA a Plus or a Minus in the Startup World? Charles Huang – The [...]

  27. Thanks for this great post, Steve. I think – and you point out – that it isn’t a clear binary of either a) go back to school for an extended period of time or b) start a company right away and learn on the fly.

    Like the Startup Weekend NEXT series, I think there’s a real opportunity to create a valuable education experience for new technology entrepreneurs.

    Such a program would be short (so they could get into the actual starting of a company quickly) and hands-on (simulations, team exercises, presentations). The focus would be on learning, and not on starting a company like you’d do in an incubator.

    After 2-3 months, you’re much better prepared to go off and start a company, and even though you’ll still make mistakes, you might avoid some obvious ones. You’ll also have a much better network of colleagues, mentors, and resources.

    Such a program would come in at a fraction of the cost and time of traditional bschool programs and would be taught by practicing entrepreneurs.

    That’s my dream :)

  28. In this context — and especially related to Steve’s explanation of startups “going from box to box” and the changing people’s skillset — I find the message of Greiner’s model about “Evolution and Revolution as Organizations Grow” very useful. (See HBR: http://hbr.org/1998/05/evolution-and-revolution-as-organizations-grow)

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