I don’t have an MBA. I used to fear that this would put me at a disadvantage in starting my own company, but now I’m convinced that it may be the other way around. In some reputable surveys, as many as two-thirds of entrepreneurs felt that their entrepreneurial spirit was more ingrained than learned, so a specific education level is at least irrelevant.
For business professionals who aspire to an executive position in a large company, most people agree that an MBA is always positive. It will get you a higher starting salary, and a valuable edge in your credentials at every promotion opportunity. In fact, BusinessWeek reports that roughly 40 percent of the S&P 500 chief executives have MBAs in any given year.
On the other hand, I had trouble thinking of famous entrepreneurs with an MBA. With a little research I found a few notable names in relatively recent businesses, although each of these actually started with some big-company experience:
- Fred Smith, chairman and founder, Federal Express. Smith is a legend among MBAs because he developed the hub-and-spoke delivery concept in a business case at Harvard Business School. The company now has more than 160,000 employees and revenues of $44 billion. He built an overnight competitor to the U.S. Postal Service.
- Meg Whitman, president and CEO of Hewlett-Packard. As an entrepreneur, she grew EBay from 30 employees and $4 million in annual revenue to more than 15,000 employees and $8 billion in annual revenue, before moving on to HP. She is a graduate of Princeton University and has an MBA from the Harvard Business School.
- John Scully, former CEO of Apple. He has an MBA from the Wharton School of Business. During his ten-year tenure, Apple's sales increased from $800 million to $8 billion. Yet he was ultimately replaced a one-semester college dropout, Steve Jobs, who was the original founder. Sculley is currently doing well, despite his setback at Apple, as a partner in Sculley Brothers, a private investment firm formed in 1995.
These probably feel that their MBA was worthwhile. But I’ve found so many on the other side, like Mark Zuckerberg of Facebook and Steve Jobs, who dropped out of college to start companies, and succeeded anyway. So here's my net on how an entrepreneur should look at an MBA:
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If you are already an entrepreneur, more education, including an MBA, will only slow you down. Consider it a waste of time.
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If you plan to become an entrepreneur, and already have business experience or an undergraduate business degree, skip the two-year delay and cost of the MBA.
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If you have a technical career with no business background, and you want to start your own business, an MBA can be a blessing by giving you the basic knowledge you need to manage your business.
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If you are still in school, and contemplating an MBA before stepping into the entrepreneurial world, go for it. An MBA will extend your education more broadly into the world of business strategy, and give you more credibility with potential investors.
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If all else fails, calculate the ROI. Ignore prestige or credentials and look at the numbers by calculating the ROI of your MBA degree. Look at admissions testing and requirements, college tuition, textbooks, housing or transportation costs (none if opting for an online MBA). From there consider your pre-MBA salary and potential lifetime earnings with an MBA. What do the numbers say?
What’s different about the entrepreneurial environment? Many people argue that it has to do with the requirement for entrepreneurs to use “effectual” reasoning, compared to “causal” reasoning taught by most of the major business schools.
According to Professor Saras Sarasvathy, who teaches entrepreneurship at the Darden Graduate School of Business, causal reasoning begins with a pre-determined goal and a given means, and seeks to identify the optimal way to get there. Effectual reasoning, on the other hand, begins with a given means and allows goals to emerge based on situational dynamics.
That’s all a bit academic, so for me an MBA is not gold. But I have to admit that I feel blessed when I’m invited to guest lecture at MBA classes at one of the local universities. As in all my articles, I always hope to add a dose of reality to the theory, and make some gold for entrepreneurs and executives alike. But I’m always open to learning from you as well.
Marty Zwilling
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Just education or a degree is not enough to be successful in business. Experience is more helpful than a degree there are lots of people who are successful in this business and but they don't have masters ever bachelor degrees. So just degree is not enough, experience is more important and essential.
ReplyDeleteKool Design Maker
Even though I agree with the underpinnings of the article in examining the academic (MBA) benefits or liabilities that one carries with them if starting one's own business, I believe a much more subtle dynamic is at work. A psychological one that permeates our society to such an extent that it has quietly bled into the consciousness of many people as an assumption of how things get done. The dynamic is that of entitlement.
ReplyDeleteThe Atlantic this month led its periodical with an article on fraternities. As a high school dropout, a college dropout and a successful entrepreneur, my prism of experience is colored with those who think they should because they've paid the price for entrance. As if gaining access demands gaining advantage. Unfortunately, we seem to promote the mindset almost everywhere so thinking of it in terms of benefit or liability is nearly universally assumed. MBA's scare me, not for the knowledge or methodology gained but because of the entitlement assumed. Assumed in conversation; assumed in managerial decisions; assumed in financial acumen; assumed in thought process.
An entrepreneurial spirit is one that listens to need, defines it through the integration of experience, knowledge, collaboration and life's challenges, then by designing options that offer solutions. The key is learning to listen and deliver. These things are not equivalent to hearing and responding (the hallmarks of most academia). These keys offer the opportunity to market but do not subtly invoke one's right to be there. The belief that one has rights based on knowledge too often establish deep seated divides that keep companies at less than full strength. Entrepreneurs may be able to see through this but many times are held at bay because the "rights of passage" have been too narrowly defined by those with letters behind their names.
Too much is made of academics. Too little of understanding.
Benjamin Disraeli has a good saying on this topic: “Experience is a child of Thought, Thought is a child of Action .We cannot learn from books. So we see that education without experience costs nothing. Sure we need to study to master ` the theory but we need to do the same action again and again to become a professional. The same as we learn to write, we can know a lot about letters but until we take a pen and train a lot we can`t write an essay (you can get a professionally written essay here ) The problem is that emp1oyers want to get experienced worker while young special have no other opportunity to get it.
ReplyDeleteThe real key specify currently being one of a kind is usually studying as many works as you possibly can which are authored by students formerly. learn more with essay writing services review On the other hand, students do not need a fantastic use of past entry works.
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ReplyDeleteThank you for very important information! Cuz, to start the own business need much knowledge in such sphere. Now I am not yet ready for business but I have already ordered a research work on the economy here 99papers.com . I think, first complete the education, and to create a small IT company in the future.
ReplyDeleteYou are absolutely right about it! Experience is very important for them, much more than an MBA. Your experience are very valuable for an entrepreneurs. check for plagiarism
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ReplyDeleteGood education is good but superb experience is very important. There is nothing better than being experienced in the field you work.
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The blog post is great. The article tells that Entrepreneurs Need Experience More Than an MBA. It is clear that education is not the ultimate thing that Entrepreneurs should possess; they should have real-life experiences and many other important qualities to excel in their business enterprise. The article states that in a few reputable surveys, the majority of entrepreneurs felt that their entrepreneurial spirit was more ingrained than learned.
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