Are MBAs Necessary for Start-ups or VC?

Posted on Sep 8, 2009 | 138 comments


Diploma

This is part of my ongoing series called “Start-up Lessons.”

I was reading Chris Dixon’s blog tonight.  He writes with a great perspective and is well worth reading.  I came across this blog post about getting a computer science degree as the best degree for getting into venture capital or working at a VC-backed start up.

I had to laugh a bit reading it.  I just completed an exercise where I went out to hire a new associate for my VC firm, GRP Partners.  I listed on many databases – some MBA, some not.  I told people privately my perfect spec: computer science undergrad from MIT (or any other great school), 2-years at McKinsey but no more than that (I love the analytical framework that the top strategy consulting firms provide.  BCG, Bain, LEK – they’re all great), a few years at a start-up or a few years somewhere like Microsoft, Google, Amazon or Apple.  MBA fine, but not required.

We had more than 700 resumes, short-listed 65, interviewed 16 in one-hour meetings had 6 full-day interviews including a presentation by the candidate on a selected market opportunity and we did 3 finalist dinners to test cultural fit.  Almost all of the finalists were MBAs (Stanford x2, Wharton, Harvard x2, MIT, UCLA).  But in the end we selected David Lin, a superstar who did 4 years at the technology investment banking firm Montgomery & Co and 4 years as Director of Strategy at the comparison shopping site PriceGrabber where he dealt with many operational issues.  He’s a star who has a very intuitive feel for technology and … no MBA.

I’m not against MBA’s (I have one myself from University of Chicago and my lovely wife was graduated from Wharton – she loves to remind me that they usually score higher in the rankings than we do).  Many of my best friends have MBAs. But as someone who is in charge of recruiting, I feel like it adds a ton to the expectations of compensation without adding any additional value to me as an employer.  I say this as somebody who recruited several Harvard, Wharton and similar MBAs at my first company (the one where I acknowledge that I made every mistake in the book).  I paid up for the diploma but can’t say that I saw better results.

Understanding the 5 C’s to decide whether to get an MBA – after the jump.

Like Chris Dixon I grew up programing.  Not hard-core, just the stuff you’d do if you were in jr. high or high school with a PC in California in the early 80’s.  My family had the very first edition of the IBM XT computer with a 10 MB hard drive.  My friends were astonished that you didn’t have to swap disks all the time.  I programed macros to help my mom with her Lotus 1-2-3 spreadsheets for work.  I took an advanced computer course in high school where I learned to build databases in Ashton Tate’s dBase III+ and to compile my designs using a product called Clipper.

I then worked in a computer store called Software Centre in high school and college (UCSD).  I helped program my college’s recruiting office’s software system.  I took a job in corporate finance as an intern my junior year at First Interstate Bank and I did system design on the side, as my main job was corporate planning.  I installed Windows 3.1 on all the computers and established a network using Novell.  My first job after college was as a developer at Andersen Consulting.

It’s been many years since I’ve properly cut code and my former teammates love to tease me and talk about my mean days of COBOL, DB2 and CICS.  But the truth is that I believe I have a very good intuitive feel for software that can’t be replicated by reading about it.  And I feel that this skill is invaluable in both building a start-up company and in being a VC.

I tell people regularly that I only invest in companies where the DNA is software.  I don’t believe you can hire great business people who outsource the development to a hot incubator who builds you code to match your ambitions.  It’s either part of the DNA or it’s not.  And if it’s not I’m generally not that interested in funding it.

Computer intuition is hard (not impossible) to acquire.  Business experience, on the other hand, is better learned hands-on.

So back to MBAs.  They’re great for some people and necessary for some jobs.  But they’re not necessary for start-ups.  If you want to go into investment banking above a certain level you’ll need one.  The same is true for strategy consulting and often it is helpful for senior levels within large corporations.  I also know many people who never studied business as an undergrad who appreciated the knowledge that they gained as an MBA.  My close friend Brian Moran (co-founder of BuildOnline) was an architect and is now a real estate developer and adviser.  He says the MBA transformed his thinking.

THE FIVE C’S

My advice to people thinking about getting an MBA is to think about the five C’s.  Three are on one side of the equation and the other two are on the other.

What you gain:

1. Curriculum - For me this is the most overrated of the reasons to go.  Okay, so maybe you never took statistics, microeconomics or macroeconomics.  They are all great for general knowledge but not immediately applicable to your role in a start-up.  What about strategy?  Do you really think Porter’s Five Forces is going to help you figure out what feature set to launch or how to price your product?

Marketing?  You’d get a lot more experience from reading about marketing online or in books and then testing out the concepts for yourself.  Many MBAs took marketing courses but have never been on the front line of A/B testing, email campaigns or PR initiatives.

My wife just pointed out to me that learning about the time value of money or how to value a company is something that every non-business undergrad should learn how to do.  I agree.  I’m not saying that the curriculum isn’t useful or valuable – I believe it is hugely important.  But I believe much of it can be learned from reading great books, reading online and testing out the principles yourself.

If you had a non-business undergrad and want to study for a master’s in business – go for it!  I’m sure it will be fun and informative.  I’m just saying that it’s not required.

2. Certificate - Let’s face it – many people get MBA’s because they think it’s expected.  If you look at the website of any major VC you’ll see it plastered with MBAs from Stanford, Harvard or Wharton.  So the message that is inferred is that you need a certificate from a top notch MBA program to get in.  Well … you might be right on this one.

But there are plenty of partners and successful entrepreneurs who don’t have MBAs.  To list a few: Bill Gates, Steve Jobs, Larry Ellison, Marc Benioff, Larry Page, Sergey Brin, Steve Ballmer.  I know that many do have MBAs but my point is that it isn’t necessary.

3. Colleagues – For young people who ask me for advice on whether to get an MBA this is the ‘C’ that I emphasize the most.  I tell people that if you’re going to go to a top school then the people that you’ll be friends with there will be lifetime friends.  And if you go to a top school then no doubt your peer group will all end up 15 years later as senior “captains of industry.”  So for me the most compelling reason to go is the network of friendships you’ll form and the importance of this as part of your future network.

I also tell people that if they do go to make sure that they don’t spend all of their free time trying to graduate top of their class.  I tell them not to be so entrenched in working on their start-up ideas that they don’t build deep, meaningful relationships with their peer group.  Don’t forget that long after you forget the CAPM pricing model, how to do regression analysis or how to calculate NPV without a spreadsheet – your network should endure.

What you lose:

4. Cost – The biggest reason to give serious consideration to whether an MBA is necessary is the cost.  Not only will the best program set you back $100,000+++ (much more when you add in books, accommodation, travel, etc) but you also have to calculate in 2 years of lost wages.

The Economist magazine did a study in the late 90’s on the ROI of an MBA (maybe somebody can help me surface it?).  From memory I believe that their study showed only 2 MBA programs had a positive ROI (Harvard and University of Chicago).  They looked at total cost to the student and lost wages and then they plotted the incremental increases in salary that students who graduated got over the course of their careers.  The carve-outs were people who got executive MBAs (e.g. no lost wages) or whose companies sponsored them.

Again, to be redundant – I’m not saying “don’t go.”  I’m just saying be aware of the reasons you’re going (e.g. the first three C’s) be knowledgeable about the cost C and be sure in your mind it’s worth it to you for other tangible or intangible reasons.

5. Continuity – The other C factor to consider is continuity.  If you want to work in start-ups or VC – what experience could you gain in those 2 MBA years if you had stayed at your start-up?  What if you talked to your CEO and told him/her that you were considering an MBA but would prefer to work for the company.  Ask if they’d be willing to let you rotate a bit around the company to gain new experiences?  Ask if you could shadow different functions like marketing, finance or product management. Would you gain more from that than an MBA?

Closing thoughts:

Before I get shot by every professor or MBA graduate let me set the record straight.  I am a very big believer in education and especially higher education.  I think that the knowledge gained on an MBA is useful.  I do wish that more professors were forced to work in companies to gain real world experience that they could pass on to their students.  I do find it strange that the most valuable skill for any employee in any company isn’t emphasized AT ALL in my experience: sales.

Sales is the lifeblood of every organization.  It’s how we move products.  It pays for all of our great engineers.  It fuels our bonus payments, our quarterly earnings, our growth rate, our value at acquisition time.  If I were 27 again and working at a start-up and was considering getting an MBA, I think I’d go to my boss and ask if I could spend a year in sales, 6 months in product management or marketing and 6 months in finance.  I’d keep my personal balance sheet positive and my future options open.  It’s hard to start companies and take risks when you’re $150,000 in debt.

Okay, now you can shoot me.  Have at it in the comments section below.  Let’s get the arguments from the other side of the table.

  • http://bothsidesofthetable.com msuster

    Hey, Ryan. Sure, I agree with was “freaking fun.” And in my case financially it worked out OK. Plus, you went to Insead, one of the top schools in Europe (the best in Europe in my opinion) so you'll do just fine.

    But there are many people who put out hard earned money to go to a second or third tier MBA program. Some of these people do so when they already have families and big expense bases. They do so in hopes of increasing their compensation. My only point for these people is to make sure that they know why they're going and that financially it may (or may not) pay off.

    As for having freaking fun – I had as much fun in the first year of each start up as I did on my MBA program.

    p.s. good luck in Paris. I could write a whole post on the topic of entrepreneurship in France – I lived there for > 2 years. They produce wonderful technology but BOY the system is stacked up against you as an entrepreneur. Thanks for stopping by.

  • RyanHaugarth

    I completely agree… plus I'm biased as my program was a bit unique in (students living in the French countryside surrounded by chateau parties and/or in Singapore surrounded by swimming pools and tennis courts). Certainly makes the social experience different from a part-time program.

    I really enjoy your blog and will certainly be “stopping by” frequently… the insight found here combined with perspectives from other influential blogs on entrepreneurship / VC make for a much better value, content wise, than anything available on entrepreneurship in MBA programs. Really.

  • RyanHaugarth

    I actually don't think many MBAs would disagree with your points. It's no secret that the true value is in the network and not the curriculum. The dean of my program even welcomed our class by stressing that we should not overstudy at the expense of missing out on the developing strong personal connections.

    I'd like to add something to your list… I thought about it for 2 seconds but couldn't fit it into your “C” structure. The MBA is freaking fun. Your post misses this and it's the same reason I laugh every time someone tries to apply NPV or IRR to the MBA. We are humans… not cash flow statements. How may MBA's will tell you it was the best year or 2 of their lives? When else in life do you have the opportunity to surround yourself by so many like minded and interesting people. Where you have the opportunity to take this much time away from focusing on paychecks and promotions and instead focus on self improvement and figuring out who you are and what you want in life.

    Let's face it… experiencing an MBA is amazing fun. If you think of life in a purely cash flow perspective, I feel a bit sad for you… Do you also run NPV's when evaluating taking a vacation or going for a nice dinner with your wife? (I'm not directing that “you” at anyone in particular)

    Thanks for your blog, by the way. I've been inspired to write about my MBA to entrepreneurship adventures: http://thegoodentrepreneur.blogspot.com/

  • http://bothsidesofthetable.com msuster

    Hey, Ryan. Sure, I agree with was “freaking fun.” And in my case financially it worked out OK. Plus, you went to Insead, one of the top schools in Europe (the best in Europe in my opinion) so you'll do just fine.

    But there are many people who put out hard earned money to go to a second or third tier MBA program. Some of these people do so when they already have families and big expense bases. They do so in hopes of increasing their compensation. My only point for these people is to make sure that they know why they're going and that financially it may (or may not) pay off.

    As for having freaking fun – I had as much fun in the first year of each start up as I did on my MBA program.

    p.s. good luck in Paris. I could write a whole post on the topic of entrepreneurship in France – I lived there for > 2 years. They produce wonderful technology but BOY the system is stacked up against you as an entrepreneur. Thanks for stopping by.

  • RyanHaugarth

    I completely agree… plus I'm biased as my program was a bit unique in (students living in the French countryside surrounded by chateau parties and/or in Singapore surrounded by swimming pools and tennis courts). Certainly makes the social experience different from a part-time program.

    I really enjoy your blog and will certainly be “stopping by” frequently… the insight found here combined with perspectives from other influential blogs on entrepreneurship / VC make for a much better value, content wise, than anything available on entrepreneurship in MBA programs. Really.

  • hetek

    As a 2nd year MBA student @ a top 10 US school. I loved this post. I think another point that has been overlooked is the MBA provides individuals the options to pursue several options of employment. I disagree with your earlier reply that most individuals will be scared away from certain careers because of debt. In fact several of my classmates have chosen to pursue social enterprise careers simply because they have been inspired by our President – who graduated from a top-law school and became a community activist. Or they are completely dismayed with pursuing a “career” on Wall St only to be laid-off after toiling a way at a bank for a decade with nothing to show for it. Lots of my friends feel secure with the knowledge that if they are unable to change the world in a reasonable amount of time they will always have the option of finding a decent job through the reputation of our degree and or the alumni network (which may prove invaluable).
    Obviously it is too early for me to say whether an MBA is a valuable investment for me – particularly since I am interested in both social VC funds & social entrepreneurship. And despite being in-debt $150K, I am not scared to take risks (was in-debt after undergrad and things worked out). In fact I now look forward to taking more risks after being surrounded by so many like-minded individuals.

    Thanks for your posts it is really helping me gain more inside knowledge on lie of a VC. :)

  • George

    Any opinions about which ones are the best? There's ucla & usc here in SoCal, but if you had the opportunity to point to 1-2 of the best in the nation, which would you suggest?

  • hetek

    As a 2nd year MBA student @ a top 10 US school. I loved this post. I don't think it should be overlooked that an MBA provides individuals the opportunity to pursue several options of employment. I disagree with your earlier reply that most individuals will be scared away from certain careers because of debt. In fact several of my classmates have chosen to pursue social enterprise careers simply because they have been inspired by our President – who graduated from Harvard Law and immediately became a community activist. Or they are completely dismayed about pursuing a “career” on Wall St only to be laid-off after toiling a way at a bank for a decade with nothing to show for it. After this current financial crisis and Presidential election lots of my friends feel secure with the knowledge that if they are unable to change the world in a reasonable amount of time they will always have the option of finding a decent job through the reputation of our degree and or the alumni network (which may prove invaluable).
    Obviously it is too early for me to say whether my MBA will be a valuable investment – particularly since I am interested in both social VC funds & social entrepreneurship. And despite being in-debt $150K, I am not scared to take risks (was in-debt after undergrad and things worked out). In fact I now look forward to taking more risks after being surrounded by so many like-minded individuals.

    Thanks for your posts it is really helping me gain more inside knowledge on how a VC thinks. :)

  • George

    Any opinions about which ones are the best? There's ucla & usc here in SoCal, but if you had the opportunity to point to 1-2 of the best in the nation, which would you suggest?

  • JL

    I think a lot of management, hiring managers and recruiters use MBA requirement as an easy (lazy) way to filter out candidates. I can certainly understand the attraction and advantages when you get flooded with hundreds of resumes and applications, but they are shorting themselves of potentially better candidates who have more experience in the real world and probably cost less.
    I can say, as an entrepreneur who has hired many, including MBAs, that it's not the MBA or lack-of MBA that determines a person's value. In fact, I have found that many candidates think that the MBA degree is enough to qualify them for any position.
    I can also say that one of my worst hires was a Wharton grad who oversold his qualifications and experience, and way under-delivered. In fact, the VC's who we went to see were the most skeptical about the MBA hire's ability to fill the CFO position.
    Months later, we had a falling out when he demanded a $250K salary to match his counterparts at investment banks and consulting firms – all the while he was driving a brand new Porsche 911, getting married, wanting to buy a house.
    That was a harsh lesson learned.

  • JL

    I just spent 30 minutes composing a post and disqus just lost it.

  • http://bothsidesofthetable.com msuster

    Thank you. Well written.

  • http://bothsidesofthetable.com msuster

    I applaud you for your thinking. I am humbled by the career decisions of President Obama. On that front he is an inspiration to all of us and I hated that Sarah Palin tried to belittle his efforts during the campaign.

    I have to say that in my experience the debt does cause a large portion of the graduating class to take less risks. The current environment may encourage entrepreneurship because traditional jobs are dried up right now. “Necessity is the mother of all invention.”

    Good luck. Stay in touch and let me know how things progress.

  • http://bothsidesofthetable.com msuster

    Yes, the situation you highlight is a risk because there can be a sense of entitlement – especially when you see your peers doing so well financially. But Wharton does pump out many great entrepreneurs.

  • http://bothsidesofthetable.com msuster

    Crap. Sorry. I wish Disqus had a “save draft” button. Maybe I'll send in that request.

  • http://bothsidesofthetable.com msuster

    My stack ranked order for entrepreneurs are:
    1. Stanford (by a long shot)
    2. Wharton
    3. Harvard

    I also like MIT. I went to University of Chicago. I like UCLA in general but must admit that I think the school is not geared toward helping or encouraging entrepreneurship in my limited experience.

  • JL

    I think a lot of management, hiring managers and recruiters use MBA requirement as an easy (lazy) way to filter out candidates. I can certainly understand the attraction and advantages when you get flooded with hundreds of resumes and applications, but they are shorting themselves of potentially better candidates who have more experience in the real world and probably cost less.
    I can say, as an entrepreneur who has hired many, including MBAs, that it's not the MBA or lack-of MBA that determines a person's value. In fact, I have found that many candidates think that the MBA degree is enough to qualify them for any position.
    I can also say that one of my worst hires was a Wharton grad who oversold his qualifications and experience, and way under-delivered. In fact, the VC's who we went to see were the most skeptical about the MBA hire's ability to fill the CFO position.
    Months later, we had a falling out when he demanded a $250K salary to match his counterparts at investment banks and consulting firms – all the while he was driving a brand new Porsche 911, getting married, wanting to buy a house.
    That was a harsh lesson learned.

  • JL

    I just spent 30 minutes composing a post and disqus just lost it.

  • http://bothsidesofthetable.com msuster

    Thank you. Well written.

  • http://bothsidesofthetable.com msuster

    I applaud you for your thinking. I am humbled by the career decisions of President Obama. On that front he is an inspiration to all of us and I hated that Sarah Palin tried to belittle his efforts during the campaign.

    I have to say that in my experience the debt does cause a large portion of the graduating class to take less risks. The current environment may encourage entrepreneurship because traditional jobs are dried up right now. “Necessity is the mother of all invention.”

    Good luck. Stay in touch and let me know how things progress.

  • http://bothsidesofthetable.com msuster

    Yes, the situation you highlight is a risk because there can be a sense of entitlement – especially when you see your peers doing so well financially. But Wharton does pump out many great entrepreneurs.

  • http://bothsidesofthetable.com msuster

    Crap. Sorry. I wish Disqus had a “save draft” button. Maybe I'll send in that request.

  • http://bothsidesofthetable.com msuster

    My stack ranked order for entrepreneurs are:
    1. Stanford (by a long shot)
    2. Wharton
    3. Harvard

    I also like MIT. I went to University of Chicago. I like UCLA in general but must admit that I think the school is not geared toward helping or encouraging entrepreneurship in my limited experience.

  • George

    Are you referring to the fully-employed programs there?

  • George

    Are you referring to the fully-employed programs there?

  • http://bothsidesofthetable.com msuster

    Yes. Part-time or exec MBA has better ROI.

  • http://bothsidesofthetable.com msuster

    Yes. Part-time or exec MBA has better ROI.

  • http://www.GottaMentor.com/ Andrea

    It's difficult to underestimate the value of the Colleagues. 15 years out of Stanford now and those relationships have paid huge dividends, and alone were worth the costs I incurred. I talk to a lot of MBA applicants and rising 1st years and tell all of them to make sure to spend time building relationships with their classmates. They will open doors for you, provide answers to your most challenging questions, become clients & advisors throughout their careers.

  • http://www.GottaMentor.com/ Andrea

    It's difficult to underestimate the value of the Colleagues. 15 years out of Stanford now and those relationships have paid huge dividends, and alone were worth the costs I incurred. I talk to a lot of MBA applicants and rising 1st years and tell all of them to make sure to spend time building relationships with their classmates. They will open doors for you, provide answers to your most challenging questions, become clients & advisors throughout their careers.

  • http://bothsidesofthetable.com msuster

    thank you. I agree. I tell people of all the C's I value it's “colleagues.” but … you went to Stanford. I also tell people if you can go to Stanford it's worth it. Less so for the 75th best MBA. Or probably even the 28th. Thanks for your input – much appreciated.

  • http://bothsidesofthetable.com msuster

    thank you. I agree. I tell people of all the C's I value it's “colleagues.” but … you went to Stanford. I also tell people if you can go to Stanford it's worth it. Less so for the 75th best MBA. Or probably even the 28th. Thanks for your input – much appreciated.

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  • http://johngannonblog.com/ John Gannon

    Mark — this was a great post, and you outlined many of the key issues and considerations around career paths related to VC, startups, and MBAs.

    I recently left a job as a VC associate (spent a year there after MBA program) to join a venture-backed early stage startup as one of the 1st non-founding employees.

    Here's where I think the MBA helped, and where it didn't, related to both jobs:

    VC – where MBA helped
    —————————-

    1) Basic financial modeling and cap tables
    2) Gave me the time and flexibility to do projects and internships for a variety of startups (especially in sectors where I didn't have strong background) and VC firms
    3) Helped me get the job in the 1st place (alumni were very helpful in making introductions to firms, etc)
    4) Access to some dealflow through alumni network
    5) Had plenty of time to network and interview- if you're working full time, it is very hard to put in the (networking) time needed to land a VC job.

    VC – where MBA didn't help
    ———————————-

    1) Hustle – early stage VC work, particularly for junior staff, is about generating quality deal flow. You have to work hard, hustle, and be creative about how you find interesting companies. Frankly, it's a sales-like role. I would say this is even more true in later stage VC and buyout shops like Summit, TA, etc.
    2) Pattern recognition – if you are looking at alot of deals, you need to develop the ability to quickly evaluate business plans and deals. This can only be gained by experience – internships are great and will give you some initial exposure but in reality you need to be in a full time VC role to hone this skill
    3) Recruiting – most MBA programs don't have a structured recruiting process related to VC, and most VC firms don't have structured recruiting processes, either. Therefore, its totally up to you to get yourself networked into various firms.

    Startup – where MBA helped
    ———————————–

    (I'm only a few months in, but here's what sticks out so far…)

    1) Financial modeling – useful when developing projections, operating plans, etc
    2) Network – ability to reach out to alumni to get perspectives on current business challenges or for fundraising

    Startup – where MBA doesn't help
    —————————————-

    1) Hustle – Early stage startups are all about selling – selling your vision, selling to visionary early adopter customers, recruiting new employees, developing partnerships. This can be learned, but not in an MBA program.
    2) Industry expertise – Several people have mentioned this before, but I'll chime in as well. Startups need people who can hit the ground running, and if you don't have industry experience, you're not going to be able to do that.
    3) Debt – maybe you shoot for the higher paying job thats not as rewarding or aligned with your long term career goals because you have borrowed alot of money for your education

  • Brad

    this is EXACTLY the wrong way to look at things; i would much rather start a company for those 2 years, versus getting an mba, because working at a startup is fun to me.

    entrepreneurship is my life, and i love it more than anything; it's all i live/breathe/sleep, and i wouldn't have it any other way. the majority of truly successful entrepreneurs i have met would concur (i haven't quite gotten there yet).

    would never even think about getting my mba; i did go to undergrad @ princeton however.

  • http://johngannonblog.com/ John Gannon

    Mark — this was a great post, and you outlined many of the key issues and considerations around career paths related to VC, startups, and MBAs.

    I recently left a job as a VC associate (spent a year there after MBA program) to join a venture-backed early stage startup as one of the 1st non-founding employees.

    Here's where I think the MBA helped, and where it didn't, related to both jobs:

    VC – where MBA helped
    —————————-

    1) Basic financial modeling and cap tables
    2) Gave me the time and flexibility to do projects and internships for a variety of startups (especially in sectors where I didn't have strong background) and VC firms
    3) Helped me get the job in the 1st place (alumni were very helpful in making introductions to firms, etc)
    4) Access to some dealflow through alumni network
    5) Had plenty of time to network and interview- if you're working full time, it is very hard to put in the (networking) time needed to land a VC job.

    VC – where MBA didn't help
    ———————————-

    1) Hustle – early stage VC work, particularly for junior staff, is about generating quality deal flow. You have to work hard, hustle, and be creative about how you find interesting companies. Frankly, it's a sales-like role. I would say this is even more true in later stage VC and buyout shops like Summit, TA, etc.
    2) Pattern recognition – if you are looking at alot of deals, you need to develop the ability to quickly evaluate business plans and deals. This can only be gained by experience – internships are great and will give you some initial exposure but in reality you need to be in a full time VC role to hone this skill
    3) Recruiting – most MBA programs don't have a structured recruiting process related to VC, and most VC firms don't have structured recruiting processes, either. Therefore, its totally up to you to get yourself networked into various firms.

    Startup – where MBA helped
    ———————————–

    (I'm only a few months in, but here's what sticks out so far…)

    1) Financial modeling – useful when developing projections, operating plans, etc
    2) Network – ability to reach out to alumni to get perspectives on current business challenges or for fundraising

    Startup – where MBA doesn't help
    —————————————-

    1) Hustle – Early stage startups are all about selling – selling your vision, selling to visionary early adopter customers, recruiting new employees, developing partnerships. This can be learned, but not in an MBA program.
    2) Industry expertise – Several people have mentioned this before, but I'll chime in as well. Startups need people who can hit the ground running, and if you don't have industry experience, you're not going to be able to do that.
    3) Debt – maybe you shoot for the higher paying job thats not as rewarding or aligned with your long term career goals because you have borrowed alot of money for your education

  • Brad

    this is EXACTLY the wrong way to look at things; i would much rather start a company for those 2 years, versus getting an mba, because working at a startup is fun to me.

    entrepreneurship is my life, and i love it more than anything; it's all i live/breathe/sleep, and i wouldn't have it any other way. the majority of truly successful entrepreneurs i have met would concur (i haven't quite gotten there yet).

    would never even think about getting my mba; i did go to undergrad @ princeton however.

  • http://bothsidesofthetable.com msuster

    Wow. Awesome list. Love it. Only wish it were commented earlier so everyone who read the post would see it. I hope future readers of this post scroll this far down – you're comments are spot on.

  • http://bothsidesofthetable.com msuster

    Wow. Awesome list. Love it. Only wish it were commented earlier so everyone who read the post would see it. I hope future readers of this post scroll this far down – you're comments are spot on.

  • http://bothsidesofthetable.com msuster

    Wow. Awesome list. Love it. Only wish it were commented earlier so everyone who read the post would see it. I hope future readers of this post scroll this far down – you're comments are spot on.

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  • http://gottabreakfree.com Gaurav

    Loved the post. I wrote a rather short one sometime back and that was more relevant for the way MBAs chose their elective subjects (http://gottabreakfree.com/2010/11/03/5-subjects-every-mba-should-take/). Nevertheless, overall I feel an MBA is desirable but not mandatory. What matters most eventually is that the right person has a “feel” for what you are setting out to achieve as an organization.

  • http://gottabreakfree.com Gaurav

    Your post has definitely triggered some more thoughts and I hope to write them down in another post sometime soon.

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    Yep! I was agreed, I'll keep in touch to your blog. This blog is so usefully, Thanks for the posted ;)

  • Ram

    Mark, love your blog in general, but this post a struck a chord. like you, I am a current ChicagoBooth MBA, and my wife's a Wharton MBA, and we lived in San Diego and worked for a large technology company starting with Q. I am not a CS, but a EE, and work for intern at a prominent VC fund in Boston. While the MBA is truly not required, my experience is that is adds a TON of Credibility (another C that could be substituted for Certificate). I frankly don't think I am any smarter (in terms of raw intelligence) now, than I was 1 year ago, but people are willing to give me 15 minutes of their time, when I can get my foot in the door and then pitch myself. At the end of it, the reason for getting an offer is my past work experience, but the MBA adds that crucial bit of color on my potential that for better or for worse did not happen pre-Chicago.