

MBA vs Startup: Which should I choose? - joubee
http://www.apeofsteel.com/336/mba-vs-startup-which-should-i-choose

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The only thing I'd add is that an MBA is to prove you've been taught certain
things. Just because you don't go to school to learn them doesn't mean you
can't go out and acquire the knowledge pretty cheaply (A good starting point
is here: [http://www.amazon.com/Ten-Day-MBA-Step-step-
Mastering/dp/068...](http://www.amazon.com/Ten-Day-MBA-Step-step-
Mastering/dp/0688137881/ref=sr_1_3?ie=UTF8&s=books&qid=1254877872&sr=8-3)).

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

------
alain94040
Slightly tongue in cheek, but I wrote
[http://blog.fairsoftware.net/2009/08/12/the-cheapest-mba-
pro...](http://blog.fairsoftware.net/2009/08/12/the-cheapest-mba-program-for-
cs-students-costs-99-and-its-called-the-app-store/) and I mean it.

if(target==bigCo) MBA = true;

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

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

------
karl11
I don't necessarily agree that you should only get an MBA if you want to work
at a large company. Getting an MBA from a solid business school allows you to
interact with a lot of smart people with similar interests that you can both
learn from in school and call on in the future. Furthermore, most small
companies value MBA educations and will pay you more if you have one.

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

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

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

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

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

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

~~~
Derrek
Yep, please see <http://en.wikipedia.org/wiki/Analysis_paralysis>

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

------
johnnybgoode
Hahahaha, good one!

Oh wait, this was a serious question?

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

* cost

* opportunity cost

* actual knowledge learned during program is easily obtained elsewhere

* possible unwarranted ego boost ;)

------
chrischen
[http://www.inc.com/ss/start-secrets-tips-americas-coolest-
yo...](http://www.inc.com/ss/start-secrets-tips-americas-coolest-young-
entrepreneurs#2)

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

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

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

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

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

