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

    I tend to agree with this for reasons I highlighted. For a startup to hire newly minted MBAs means people with big debt and likely more risk averse. I think it would be better to focus on experience at another start-up. That said, I wouldn't rule out an MBA – there are many very talented MBAs and a whole lot of them are looking for alternative careers right now.

  • http://bothsidesofthetable.com msuster

    Thanks, Wil. Funnily enough – the only life lesson I got from my MBA courses was about investing. My professor showed data that people tend to buy stocks when the market is peaking and sell when it crashes. It's the exact opposite of what one should do. As a result I sold much of my stock in the Summer of 2008 and I bought again in February 2009 (although I sold this for an early gain). But the lesson also applies to VC for me. It is why GRP has been so active in 2009 as an investor.

    But aside from that lesson my most valuable lessons have been learned by doing.

  • http://bothsidesofthetable.com msuster

    hmmm. I wrote a response but it doesn't seem to appear. Will try again.

    Jason, I think you make a great point. While I don't recommend MBAs to start-up people I also have zero regrets about mine so maybe that should say something? Although I did have 50% of mine paid for by my employers.

    Thanks for the input – definitely something people should consider when they make their decision.

  • RajatS

    Mark I totally agree with Will's point, but I want to take it a step further. This subject really gets under my skin as a 24 year old who just finished 20 years of schooling this year.

    The question in my head is whether post-secondary education (ie after high school) is worth anything at all, except for cultural and 'groupthink' reasons . With the internet having all the resources it does, why does anyone need to go to school at all except to please recruiters, make friends and satisfy family expectations?

    This view didn't used to be controversial before, where CS guys would teach themselves how to code and get great jobs or startup companies. Nowadays though, it's almost expected that you'll go to college for a set amount of time , get a degree, maybe meet a spouse and find a secure company job right afterwards. It's like a factory that specializes in producing risk-averse, standardized people instead of the creative, resourceful individuals we need for a dynamic economy.

    I did chemical engineering and economics at Waterloo (one of the top schools in Canada), worked at 6 different companies in the co-op program there and started my first company (a non-profit) in junior year. Guess which parts of that 4.5 years are more valuable to me now? Everyone assumes I got a degree, but the 6 different internships and nonprofit are experiences I can actually base decisions on.

    I then went to MIT for a joint PhD/MBA in engineering, but after a year I subsequently dropped out to start my third company. I taught myself how to code from online tutorials, and developed our prototype from scratch with another hacker which got us angel funded.

    Almost nothing I've learned in my curriculum I've actually applied except for first year courses like Econ 101 and 102, or learning basic physics. I spend a tonne of time on wikipedia and the internet educating myself on things I actually need to run companies (like your 'startup warstories' series).

    My basic point is that – why bother with a standardized course like in college after which you won't need 80% of the material, since you're going to have to learn new things yourself for your career later anyways?

    So what do I propose? Cut PSE down to 2 years. The first year can be intro classes in your field, the summer is for a 4 mo internship, and the second year is all project based learning with an advisor. Just the basics. Because everything else you'll have to figure out on the way anyways.

    I know this post wasn't about PSE but an MBA. Of course if I think PSE is mostly useless, I think an MBA is doubly useless. As a startup CEO I have to network with a tonne of people anyways, I don't need to spend $100K and 2 years of my life to 'build my networks' and not actually achieve anything in the meantime….

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  • http://lmframework.com/blog/about David Semeria

    Thanks Mark (and fancy meeting you here, you sloozy)

    I think what Mark (Suster) is getting at is the equivalent of the Minimum Viable Toolset. If a tech guy can't implement factorial(n) in two lines of (recursive) code then he ain't a tech guy; if you can't work out whether you need to do an MBA, then you do.

    As for the Mckinsey link, I dunno. I know a few McKinsey people – they're as sharp as razors – but their sharpness extends to making sure that they're always dealing with other people's risks and other people's money.

    It takes a certain level of irrationaility to take the entrepenurial route (on a risk adjusted basis, it's a non-starter) which is a possible explanation of why the hyper-rational types either don't get involved, or don't succeed.

    It's like being a successful author: if they could teach it in school, then all the English Lit grads from every major school would be millionaires. But it doesn't work like that, does it?

  • andrewlockhart

    As someone who is simultaneously shopping around a demo/business plan and working on business school applications, another C that I think would be worth adding is Choice. While I am passionate about start-ups and the idea of building something from the ground up, there are times when I wonder whether or not I would be able to have greater impact working in another sector such as non-profit or international development. I may not go that route, but an MBA from a top school will provide me with an easier transition between sectors should I choose to. Having that freedom is what is weighing heavily with me and I am sure will continue to up until I make a decision.

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  • Roman

    This blog is so refreshing. Too many VC's have never started a company, but have an MBA and think they are an authority on start ups.

    They say the best angel investors are ones who can empathize with entrepreneurs. That's why good angel investors make quick decisions on investments… they can just tell whether the entrepreneur “got it” or not.

    I think too many VC don's have this type of sense, and get terrible returns because of this. I think that too many VC's evaluate teams on “paper.” i.e. what accomplishments a person can reference on their resume. A lot of times what looks good on paper has very little substance.

    For example 1) someone with an MBA, who couldn't sell food to a homeless person, but knows a lot about “business” and which sectors are “hot” and “growing billions next year.”

    2) someone who calls himself a serial entrepreneur who sold his last two companies but still lives in a $300k condo and you can't find how much his companies were acquired for anywhere…. a little later you find out this successful entrepreneur sold his companies for pennies bc they were poorly run and ran out of money.

    Fellow entrepreneurs see through this type of stuff from a mile a away. Yet I know so many of these types who continue raising money from multiple times, failure after failure. I'm convinced that's because those VCs have never started their own company. They're not able to relate and see through the bullshit as easily.

    Coming back full circle, its refreshing to finally hear from a VC who actually sounds really smart. I wish there was a database of you guys I could look up when we go to raise our next round :)

  • http://giffconstable.com giffc

    I *hugely* agree with you about sales. Few things were more formative to me than moving beyond marketing/BD work, and doing my first stint in direct sales. If you are a coder and want to learn sales, but are nervous about jumping in whole hog, find a pre-sales opportunity where you can be the tech expert paired up with an experienced account exec to learn from.

    I decided against an MBA and instead have done multiple startups and time at an M&A ibank (figured I would have someone pay me to learn finance rather than the other way around). At every company, the MBAs needed just as much on-the-job training as the non-MBAs.

    As I see it, my primary loss is the alumni network. That can be amazingly useful in countless ways over the years — after all, business is about relationships. I can understand why folks consider the alumni network worth the money.

    If you aren't sure yet whether you prefer working for big brand companies or doing the startup thing, the MBA and that alumni network can make for an excellent safety net to return to Bigco.

    I think an MBA is particularly useful to a scientist/engineer who wants to broaden to the business side and would prefer the safety of an academic environment (a good intermediate step if the business side feels totally foreign). You won't learn with the same intensity or “practicality”, but you might get exposure to more ideas and angles by studying at the “forest level” as opposed to working in the “trees”, and that can be useful.

  • http://mironlulic.com/ Miron Lulic

    I agree with Mark’s basic thoughts on the issue but would also identify another skill set that cannot truly be learned in an MBA school – implementation abilities. The ability to implement a strategy is equally important to the strategy itself. I have no doubt that MBA graduates from America’s top business schools are great strategic thinkers, but the ability to transition an idea from concept to a marketable product is not something that is easily learned – especially in the tech industry.

    The best place to pick up this skill set is to work for start ups and FAIL. I’m sure that anyone who was worked for a grass roots start up and rode the roller coaster to failure will know what I’m talking about. The inherent speed of innovation that occurs in these small teams teaches you far more in a matter of months, than you’d learn in a two year MBA program. I’ve heard some say that one year of start-up experience is equal to five years at a large corporation. That’s because at a start-up you’re forced to wear many hats and learn what it takes to make things happen everyday.

    MBA’s do provide great networking opportunities. This is probably the big value add for would-be entrepreneurs. That said, I’d argue experience at a start-up provides a far greater networking opportunity. Don’t believe me? Just check my LinkedIn. Through my years at various start-ups I’ve had the opportunity to work with strategic level management at many Fortune 500 companies such as RIM, Bell, Motorola, ESPN, eBay, the list goes on…

    If you’re considering an MBA for a career in corporate finance, then it’s definitely a good choice and to some degree a requirement. However, if you’re considering getting your MBA specifically to learn how to be an entrepreneur or get VC money one day, I say save your money and get involved in a start-up in your specific field of interest. You’ll rapidly learn how to build and market a successful product – and at the same time probably learn even more valuable skills in the category of ‘what not to do’.

  • http://bothsidesofthetable.com msuster

    Rajat,

    Regarding undergrad – I feel it's essential. 18-22 years old is a critical age for people and for many of us it's the first time living away from home. It's a time where many people discover their true independence, learn a broad set of knowledge that develops us as human beings and teaches us way more than the standard classroom lessons. The truth is that I learned more about entrepreneurship as the president of my fraternity than I did in my classes. But it is all part of the “experience” that is college. Not just the classroom but the whole experience.

    With your background – it's a shame you don't live in LA ;-)

  • http://bothsidesofthetable.com msuster

    A much more succinct version of my post! Yes, I agree completely on all points.

  • http://bothsidesofthetable.com msuster

    Ironically I think an MBA takes many “choices” off the table. Take non profit, for example. If you want to do non-profit work right now then go try it! If you get an MBA I'd like to see you try non-profit work when you're $150k in debt. It's similar to lawyers – once they get the JD they almost have no choice but to practice law to pay off debts. Same for MDs and being doctors. A strong personal balance sheet is very liberating for choice.

  • http://mironlulic.com/ Miron Lulic

    Great article. I published my thoughts at http://mironlulic.com/wordpress/index.php/2009/

  • http://thinkinginteractive.com Andrew Lockhart

    As someone who is simultaneously shopping around a demo/business plan and working on business school applications, another C that I think would be worth adding is Choice. While I am passionate about start-ups and the idea of building something from the ground up, there are times when I wonder whether or not I would be able to have greater impact working in another sector such as non-profit or international development. I may not go that route, but an MBA from a top school will provide me with an easier transition between sectors should I choose to. Having that freedom is what is weighing heavily with me and I am sure will continue to up until I make a decision.

  • http://www.sceneclips.com John Dugan

    Nice piece Mark.

    I agree with RajatS, and Roman alluded to my thoughts with his empathy statement. The educational system in general is plain stupid. Standardized education measures one’s aptitude to assess standard problems… wtf are you going to do when you come up against a unique problem?

    What our educational institutions best teach is complacency. What our educational institutions fail to teach is the capacity to learn and emotional intelligence. The capacity to learn being just that. Emotional intelligence being the ability to put yourself in someone else’s shoes to develop a better opinion, direction or solution.

    Perhaps this is why you like sales. Emotional intelligence is inherent in sales – qualifying and understanding the customers’ needs, cultivating trust and loyalty, building marketing assets, etc.

    Regarding MBA’s specifically – I have quite a few smart friends with MBA’s, but that is not the reason they’re smart.

    BTW, Dave is honest guy and a cool dude. Your line of work needs more people like Dave that care.

  • Roman Giverts

    This blog is so refreshing. Too many VC's have never started a company, but have an MBA and think they are an authority on start ups.

    They say the best angel investors are ones who can empathize with entrepreneurs. That's why good angel investors make quick decisions on investments… they can just tell whether the entrepreneur “got it” or not.

    I think too many VC don's have this type of sense, and get terrible returns because of this. I think that too many VC's evaluate teams on “paper.” i.e. what accomplishments a person can reference on their resume. A lot of times what looks good on paper has very little substance.

    For example 1) someone with an MBA, who couldn't sell food to a homeless person, but knows a lot about “business” and which sectors are “hot” and “growing billions next year.”

    2) someone who calls himself a serial entrepreneur who sold his last two companies but still lives in a $300k condo and you can't find how much his companies were acquired for anywhere…. a little later you find out this successful entrepreneur sold his companies for pennies bc they were poorly run and ran out of money.

    Fellow entrepreneurs see through this type of stuff from a mile a away. Yet I know so many of these types who continue raising money from multiple times, failure after failure. I'm convinced that's because those VCs have never started their own company. They're not able to relate and see through the bullshit as easily.

    Coming back full circle, its refreshing to finally hear from a VC who actually sounds really smart. I wish there was a database of you guys I could look up when we go to raise our next round :)

  • http://mironlulic.com/ Miron Lulic

    I agree with Mark’s basic thoughts on the issue but would also identify another skill set that cannot truly be learned in an MBA school – implementation abilities. The ability to implement a strategy is equally important to the strategy itself. I have no doubt that MBA graduates from America’s top business schools are great strategic thinkers, but the ability to transition an idea from concept to a marketable product is not something that is easily learned – especially in the tech industry.

    The best place to pick up this skill set is to work for start ups and FAIL. I’m sure that anyone who was worked for a grass roots start up and rode the roller coaster to failure will know what I’m talking about. The inherent speed of innovation that occurs in these small teams teaches you far more in a matter of months, than you’d learn in a two year MBA program. I’ve heard some say that one year of start-up experience is equal to five years at a large corporation. That’s because at a start-up you’re forced to wear many hats and learn what it takes to make things happen everyday.

    MBA’s do provide great networking opportunities. This is probably the big value add for would-be entrepreneurs. That said, I’d argue experience at a start-up provides a far greater networking opportunity. Don’t believe me? Just check my LinkedIn. Through my years at various start-ups I’ve had the opportunity to work with strategic level management at many Fortune 500 companies such as RIM, Bell, Motorola, ESPN, eBay, the list goes on…

    If you’re considering an MBA for a career in corporate finance, then it’s definitely a good choice and to some degree a requirement. However, if you’re considering getting your MBA specifically to learn how to be an entrepreneur or get VC money one day, I say save your money and get involved in a start-up in your specific field of interest. You’ll rapidly learn how to build and market a successful product – and at the same time probably learn even more valuable skills in the category of ‘what not to do’.

  • http://bothsidesofthetable.com msuster

    Rajat,

    Regarding undergrad – I feel it's essential. 18-22 years old is a critical age for people and for many of us it's the first time living away from home. It's a time where many people discover their true independence, learn a broad set of knowledge that develops us as human beings and teaches us way more than the standard classroom lessons. The truth is that I learned more about entrepreneurship as the president of my fraternity than I did in my classes. But it is all part of the “experience” that is college. Not just the classroom but the whole experience.

    With your background – it's a shame you don't live in LA ;-)

  • http://bothsidesofthetable.com msuster

    A much more succinct version of my post! Yes, I agree completely on all points.

  • http://bothsidesofthetable.com msuster

    Ironically I think an MBA takes many “choices” off the table. Take non profit, for example. If you want to do non-profit work right now then go try it! If you get an MBA I'd like to see you try non-profit work when you're $150k in debt. It's similar to lawyers – once they get the JD they almost have no choice but to practice law to pay off debts. Same for MDs and being doctors. A strong personal balance sheet is very liberating for choice.

  • http://www.sceneclips.com John Dugan

    Nice piece Mark.

    I agree with RajatS, and Roman alluded to my thoughts with his empathy statement. The educational system in general is plain stupid. Standardized education measures one’s aptitude to assess standard problems… wtf are you going to do when you come up against a unique problem?

    What our educational institutions best teach is complacency. What our educational institutions fail to teach is the capacity to learn and emotional intelligence. The capacity to learn being just that. Emotional intelligence being the ability to put yourself in someone else’s shoes to develop a better opinion, direction or solution.

    Perhaps this is why you like sales. Emotional intelligence is inherent in sales – qualifying and understanding the customers’ needs, cultivating trust and loyalty, building marketing assets, etc.

    Regarding MBA’s specifically – I have quite a few smart friends with MBA’s, but that is not the reason they’re smart.

    BTW, Dave is honest guy and a cool dude. Your line of work needs more people like Dave that care.

  • http://bothsidesofthetable.com msuster

    Thanks, Roman. Appreciate the feedback.

  • http://bothsidesofthetable.com msuster

    Thanks for your input. Re: Failure – I agree. Funnily enough, Fred Wilson just blogged about this today here: http://www.avc.com/a_vc/2009/09/failure.html and I recently wrote a blog post with a similar theme of learning from losses: http://www.bothsidesofthetable.com/2009/08/15/e

  • http://bothsidesofthetable.com msuster

    By Dave I presume you mean Dave Lin? If yes, I agree 100%, which is why we hired him!

  • http://jerryji.com/ jerryji

    Disclaimer: Shameless self-plug

    I've blogged on your post and around the topic — http://jerryji.com/2009/09/08/mba-rise-of-geek/

  • Cflexman

    Rajat,

    Enjoyed your comment, as I'm a bit like you in that I'm trying to move from getting a business undergrad to a more savvy technical background. I've been teaching myself some of the basics in coding via MIT opencourseware and a few other places around the web but would appreciate any other online tutorials that you might have found.

    Thanks,

    Chaz

  • http://leftovertakeout.com gbattle

    As a CS undergrad/MBA, I love this topic. There was a phrase at Wharton that went like this:

    “The top third of the class works for the middle third of the class at companies started by the bottom third of the class.”

    I have found this to be true, and it probably holds true in every MBA program and beyond. There is genius across the entire curve, it just needs to be discovered and cultivated. The best companies follow this also, with the biggest dreamers starting companies, being irreverent and contrarian, obsessively envisioning a plan toward an as yet invisible future. The middle executive management are social, politically adept, competent, comfortable being among the crowd and have the ability to both manage upward expectations and monitor downward execution . The top performers shun being managers, they are mental athletes with deep expertise and big brains better served at executing the kind of daily blocking and tackling and attention to detail necessary to make the organization tick.

    So, being a visionary thinker, a rock-solid manager, or a brilliant talent really has a lot to do with your personality, risk appetite and relative irrationality, but pieces of paper signifying your ability to jump through pre-made hoops with alacrity can give clues. What problem space are you more insatiably curious about, what type of complexity inspires you; the unknown, the interpersonal, or perfection? Know that they can all be leaders, and the best companies have a balance of all of them.

    Now for the humble advice. If you know you want to be an entrepreneur or work at a startup, be honest with yourself about the opportunity cost of an MBA which is well beyond lost wages and tuition. It the time and energy involved in managing persistent uncertainty. What people have ignored in the above comments is that an MBA allows dreamers time and a high density of the other two types of people necessary for valuable feedback to develop your idea. Ignore your school's recruiting game for the most part as you are blazing your own path and need to focus. Use that time to craft your idea. If anything, any degree is an insurance policy allowing you to swing for the fences a little longer than you might have been able to otherwise, but remember: the better the school, the longer you have at bat (generally).

  • http://leftovertakeout.com gbattle

    As a CS undergrad/MBA, I love this topic. There was a phrase at Wharton that went like this:

    “The top third of the class works for the middle third of the class at companies started by the bottom third of the class.”

    I have found this to be true, and it probably holds true in every MBA program and beyond. There is genius across the entire curve, it just needs to be discovered and cultivated. The best companies follow this also, with the biggest dreamers starting companies, being irreverent and contrarian, obsessively envisioning a plan toward an as yet invisible future. The middle executive management are social, politically adept, competent, comfortable being among the crowd and have the ability to both manage upward expectations and monitor downward execution . The top performers shun being managers, they are mental athletes with deep expertise and big brains better served at executing the kind of daily blocking and tackling and attention to detail necessary to make the organization tick.

    So, being a visionary thinker, a rock-solid manager, or a brilliant talent really has a lot to do with your personality, risk appetite and relative irrationality, but pieces of paper signifying your ability to jump through pre-made hoops with alacrity can give clues. What problem space are you more insatiably curious about, what type of complexity inspires you; the unknown, the interpersonal, or perfection? Know that they can all be leaders, and the best companies have a balance of all of them.

    Now for the humble advice. If you know you want to be an entrepreneur or work at a startup, be honest with yourself about the opportunity cost of an MBA which is well beyond lost wages and tuition. It the time and energy involved in managing persistent uncertainty. What people have ignored in the above comments is that an MBA allows dreamers time and a high density of the other two types of people necessary for valuable feedback to develop your idea. Ignore your school's recruiting game for the most part as you are blazing your own path and need to focus. Use that time to craft your idea. If anything, any degree is an insurance policy allowing you to swing for the fences a little longer than you might have been able to otherwise, but remember: the better the school, the longer you have at bat (generally).

  • http://bothsidesofthetable.com msuster

    Thanks, Roman. Appreciate the feedback.

  • http://bothsidesofthetable.com msuster

    Thanks for your input. Re: Failure – I agree. Funnily enough, Fred Wilson just blogged about this today here: http://www.avc.com/a_vc/2009/09/failure.html and I recently wrote a blog post with a similar theme of learning from losses: http://www.bothsidesofthetable.com/2009/08/15/e

  • http://bothsidesofthetable.com msuster

    By Dave I presume you mean Dave Lin? If yes, I agree 100%, which is why we hired him!

  • Shane

    +1

  • Shane

    +1

  • http://twitter.com/Cflexman Cflexman

    Rajat,

    Enjoyed your comment, as I'm a bit like you in that I'm trying to move from getting a business undergrad to a more savvy technical background. I've been teaching myself some of the basics in coding via MIT opencourseware and a few other places around the web but would appreciate any other online tutorials that you might have found.

    Thanks,

    Chaz

  • http://leftovertakeout.com gbattle

    As a CS undergrad/MBA, I love this topic. There was a phrase at Wharton that went like this:

    “The top third of the class works for the middle third of the class at companies started by the bottom third of the class.”

    I have found this to be true, and it probably holds true in every MBA program and beyond. There is genius across the entire curve, it just needs to be discovered and cultivated. The best companies follow this also, with the biggest dreamers starting companies, being irreverent and contrarian, obsessively envisioning a plan toward an as yet invisible future. The middle executive management are social, politically adept, competent, comfortable being among the crowd and have the ability to both manage upward expectations and monitor downward execution . The top performers shun being managers, they are mental athletes with deep expertise and big brains better served at executing the kind of daily blocking and tackling and attention to detail necessary to make the organization tick.

    So, being a visionary thinker, a rock-solid manager, or a brilliant talent really has a lot to do with your personality, risk appetite and relative irrationality, but pieces of paper signifying your ability to jump through pre-made hoops with alacrity can give clues. What problem space are you more insatiably curious about, what type of complexity inspires you; the unknown, the interpersonal, or perfection? Know that they can all be leaders, and the best companies have a balance of all of them.

    Now for the humble advice. If you know you want to be an entrepreneur or work at a startup, be honest with yourself about the opportunity cost of an MBA which is well beyond lost wages and tuition. It the time and energy involved in managing persistent uncertainty. What people have ignored in the above comments is that an MBA allows dreamers time and a high density of the other two types of people necessary for valuable feedback to develop your idea. Ignore your school's recruiting game for the most part as you are blazing your own path and need to focus. Use that time to craft your idea. If anything, any degree is an insurance policy allowing you to swing for the fences a little longer than you might have been able to otherwise, but remember: the better the school, the longer you have at bat (generally).

  • http://www.cubiccompass.com/blogs/main Mike Leach

    My biggest recruiting mistake ever was hiring a $120K MBA to do a $50K job.

    If an MBA is willing to form their own legal entity and work for a start-up as a consultant with tangible deliverables, then let that relationship evolve over time to become an executive.

    But the paper certificate alone doesn't get you in the door.

  • Shane

    +1

  • http://www.twitter.com/biggiesu Mike Su

    To me, MBA's are a great step in the progression for certain career types. It's a safe bet that you'll land a decent job with a long, bright career. If you're extremely talented, then there's a chance that the MBA will propel you to the top tier of a major corporation.

    However, start-ups, by nature, do not follow any sort of pattern or career path. While there is a decent career path to follow to figure out how to make a career at P&G, there is no recipe for success for a startup, otherwise more people would be doing it and more people would be a lot richer from doing it.

  • http://www.cubiccompass.com/blogs/main Mike Leach

    My biggest recruiting mistake ever was hiring a $120K MBA to do a $50K job.

    If an MBA is willing to form their own legal entity and work for a start-up as a consultant with tangible deliverables, then let that relationship evolve over time to become an executive.

    But the paper certificate alone doesn't get you in the door.

  • http://www.twitter.com/biggiesu Mike Su

    To me, MBA's are a great step in the progression for certain career types. It's a safe bet that you'll land a decent job with a long, bright career. If you're extremely talented, then there's a chance that the MBA will propel you to the top tier of a major corporation.

    However, start-ups, by nature, do not follow any sort of pattern or career path. While there is a decent career path to follow to figure out how to make a career at P&G, there is no recipe for success for a startup, otherwise more people would be doing it and more people would be a lot richer from doing it.

  • http://leftovertakeout.com gbattle

    In short, you should always date before you get married.

  • http://leftovertakeout.com gbattle

    In short, you should always date before you get married.

  • robert445

    Great article. What do you think of the fully-employed MBA programs? And what about a scenario where the current employer picks up 50-100% of the cost as well as provides the rotational experience that you mentioned above. Seems like this would provide the best-possible learning experience for the lowest cost.

  • robert445

    Great article. What do you think of the fully-employed MBA programs? And what about a scenario where the current employer picks up 50-100% of the cost as well as provides the rotational experience that you mentioned above. Seems like this would provide the best-possible learning experience for the lowest cost.

  • http://bothsidesofthetable.com msuster

    I'm a supporter. It's what I did.

  • George

    Great article. What do you think of the fully-employed MBA programs? And what about a scenario where the current employer picks up 50-100% of the cost as well as provides the rotational experience that you mentioned above. Seems like this would provide the best-possible learning experience for the lowest cost.

  • http://bothsidesofthetable.com msuster

    I'm a supporter. It's what I did.

  • 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/