
MBA or PhD – Picking the right degree as a University Entrepreneur - naoufelt
http://techentrepreneurship.com/2011/08/01/mba-or-phd-picking-the-right-degree-as-a-university-entrepreneur/
======
pgbovine
Although a Ph.D. is by no means a requirement for starting a profitable
company, it can allow you to develop an expertise and specialization that, if
the conditions are right, can give you a comparative advantage. You don't need
a Ph.D. to start the next Groupon or Zynga, but you might need to have some
Ph.D.-level research experience to start the next VMware, Determina, or
Coverity.

~~~
acgourley
I strongly disagree. You just might need to be the kind of person that finds a
Ph.D appealing to start those companies. I think any datapoints you're
thinking of are merely correlation.

Now, Ph.D level research is an important catalyst for certain "hard tech"
companies. But I don't think the founders need to have done the research, just
be aware of it. An undergraduate degree is sufficient formal training to
figure out and harness something specific revealed by others in advanced
research.

~~~
_dps
This sounds suspiciously close to "dot.com CEOs don't need to know about
software, they just need to hire programmers." It's a tricky idea because, in
one very technical sense, it's actually true. The larger and more important
truth it conceals is that a software company managed by someone who
understands software is a completely different beast from a software company
managed by an accountant. One of many obvious differences is that a CEO who
isn't a programmer will have a very hard time evaluating the relative merits
of potential hires (either front-line hires in a small organization, or
technical leaders in a larger one).

New technologies that are actually important as competitive advantages, and
not yet widely distributed, aren't like little packets of soup mix one can
throw into a meal. In practice you can't say "Oh, I read about nonlinear
discombobulation transducers in Wired and now I'm going to tell my engineers
to use them". By the time the knowledge is nugget-ized enough to be in a Wired
article it's already way behind current research.

The job of a CEO of a "hard tech" company is primarily to make choices about
investing in new technologies and applying them in products. Does it really
seem reasonable that someone who is merely "aware of" Professor X developing
idea Y can make optimal decisions about those investments and applications? Is
it plausible that Intel would be what it is today without Gordon Moore and
Robert Noyce's knowledge of semiconductor physics?

------
brandonb
An MBA or a PhD aren't good paths to becoming an entrepreneur. A PhD takes 5-7
years to complete, the purpose of which is to give you the skills necessary to
be a university professor or researcher. If you don't want to be a professor,
then the opportunity cost of those years is huge! What else could you be
learning in that time?

If you know you want to start a startup, the best thing to do is to START -
now. If you're not ready to start your own company, then join a small startup.
You'll learn more about entrepreneurship in the first month than you will in
any degree program.

~~~
pgbovine
_If you know you want to start a startup, the best thing to do is to START -
now._

I think people in the software world are inherently biased since it's possible
to start dazzlingly-profitable companies at age 19 ... in many other fields
(e.g., medicine, chemistry, biology, physical engineering fields), it takes
years of research experience to be able to make a breakthrough that can lead
to a profitable disruptive technology. In those worlds, you rarely see
19-year-old entrepreneurs who have just started college.

~~~
timr
_"In those worlds, you rarely see 19-year-old entrepreneurs who have just
started college."_

But let's not be confused: you rarely see 19-year-olds starting dazzlingly
profitable companies in software, either. You just hear (a lot) more about the
few that do.

I don't think a PhD is the greatest idea if your only goal is to be an
entrepreneur. But it's a lot better than trying to make a run at the goalposts
without any contacts or industry experience. If nothing else, it gives you
time to ripen into a mature adult, and learn how to deal with failure.

------
tryitnow
It depends entirely on the type of business you plan to create. Let's put
potential businesses in three categories:

1) technical innovation, e.g. Google. If you want to go this route then a PhD
program might be your best bet. 2) business model innovation, this is the most
common type of entrepreneurship (outside of HN circles), think the Inc 500
list of fastest growing companies. You probably don't need an MBA for this and
definitely don't need a PhD. 3) HN type of businesses, not necessarily
technically genius, but at least one technical founder is needed. e.g.
Facebook. Neither MBA or PhD, just do it now.

Where can an MBA be useful? If you plan to grow through business development,
i.e. deals, JV's, alliances. An MBA connects you to financiers more quickly
than a PhD would and it definitely gets you talking their language. For
example, running a search fund out of business school is definitely doable.

An MBA is also very useful if you want to get a solid reliable day job in
corporate America and eventually run or support corporate R&D or incubators.
Most F100 companies spend more on R&D than the large multi-year VC funds do
over a decade. From such a perch you can have a big impact if you've got the
patience for corporate politics. This is the route I've taken and I can get
access to top management faster than engineers who have been their for years
and definitely faster than two guys and a dog. Of course, this is definitely
trying in terms of patience.

As for MBA support for entrepreneurship. It entirely depends on the program.
That's just part of the due diligence you've got to do before applying to
business school. Most top 10 business schools will get you in front of VCs
faster than just about any other way and your competition will be nothing.

As an MBA I would recommend most people who are reading HN to not get an MBA.
It's not a bad degree, like anything it's what you make of it. But I can tell
you that if you have the intellectual curiosity and the "get it done now" and
"show me" attitude prevalent on HN, you're going to get frustrated very
quickly with your MBA classmates and your corporate co-workers. If you've got
the patience, great, but be forewarned, it's a tough road.

~~~
lightcatcher
What are some example companies that you would include in your second group
(business model innovation)? Would something like Groupon fall into this
group?

------
alain94040
Talk about a flawed way to ask the question.

Don't collect any more degrees. Instead, start something. In my book, a real
entrepreneur will invest the MBA tuition into their own venture.

The corrolary is to only start something you are passionate about.

~~~
seanos
A technical PhD will give you exceptional domain knowledge. With that you
might be able to sidestep 99% of the start-up crowd who have programming
skills alone and are stuck fighting over the 1% of business opportunities that
require no domain knowledge. Take a look at the Steve Blank article that the
author links to and read about the businesses mentioned. Those businesses
could not have been created by someone starting without domain knowledge no
matter how passionate they were…and I would call their founders real
entrepreneurs (despite what your book says).

~~~
randomdata
Businesses exist solely to solve the problems of others. Domain knowledge
required to solve and implement a solution to one of those problems is
irrelevant – it can be acquired at any point in time, including after the
problem has been identified.

That leaves us with the question: Does the domain knowledge accumulated in a
PhD program lead one to later find problems that they would have never
otherwise been determined to solve?

My hunch says it depends. Some people will find a solution and then go looking
for a problem. Others will find a problem, and then go looking for solution.
For the former group, a PhD will be quite valuable, but not so much for the
latter group – the chances of them even having studied the right domain in
advance is slim.

~~~
seanos
I agree that a PhD is not the only way to get domain knowledge. Working in
industry and private research into a problem are other ways (amongst many). No
matter how obtained, domain knowledge can be a great advantage for an
entrepreneur.

Scott Adams attributes his success as a cartoonist to his rare combination of
ability to both draw and write jokes well
([http://dilbertblog.typepad.com/the_dilbert_blog/2007/07/care...](http://dilbertblog.typepad.com/the_dilbert_blog/2007/07/career-
advice.html)). For a software entrepreneur, programming is analogous to
drawing (as the base skill) and domain knowledge analogous to writing jokes
(as the differentiator).

It’s also worth noting that technical PhD research is often based on a real
problem; gives exposure to a broad range of hard problems and solutions; and
teaches the process by which problems can be solved. Thus it can both help you
find and solve problems (particularly those in the same field), whether those
problems were the focus of your initial scholarly research or not.

------
brc
I vote neither.

I studied an MBA and thankfully what I got from that is that being an
entrepreneur is the best choice if you have the opportunity to attempt it.

I went into the course hoping to climb the greasy pole of corporate success
and came out wanting no further part of it.

I would say studying a Phd is unlikely to lead to commercial success unless
you're of a very entrepreneurial bent going into it, and have a strong desire
to create commercially useful (and exploitable) research as your focus.

The simple fact is a good entrepreneur can easily find useful research results
to commercialise if that is what they want to do.

That said, anyone who wants to be an entrepreneur could do worse than devote
some time to studying aspects of marketing, accounting and finance that an MBA
course provides. Recently I spoke to a guy who had a successful business but
had to throw it in and get a job because he amassed a tax liability beyond his
ability to handle, simply because he didn't understand how taxes worked.

------
jerrya
The MBA is a bullshit degree for an entrepreneur.

A more interesting choice is between Ph.D or J.D.

~~~
GameBoyAdvance
I have both (a PhD and an MBA) and I have also started a company before so I
can speak to that part a little as well. I am sure a JD will also be useful
but I question its utility compared to others.

Also, I am surprised that everyone is focusing on what you learn in such
programs but no one seems to care that both an MBA and a PhD are also gateways
to meet like-minded folks who are potential co-founders (or, in the case of an
MBA, potential co-founders or future investors).

The company I co-founded was with PhD buddies and, even though I didn't do it
myself with the MBA, I have seen many folks from my class working on startups
during and after the MBA. Granted, both of these degrees were from Bay Area
schools so that might have been a factor but still...

~~~
stfu
Absolutely! This is the most overlooked aspect when it comes to arguing about
things like that. Especially if you are not some naturally outgoing type these
programs provide access to similar minded people who are ambitioned and
curious about the problems of today. If you are a PhD student and find a
problem chances are good that someone with a far more advanced knowledge on
that subject and willing to share this is just a few offices away.

------
whathappenedto
Can someone comment about IP issues around doing a startup during their phd? A
few friends of mine are pursuing this route and are worried their university
will say they own the IP. My understanding is that universities own all the
research you do so any application of your research in your startup will
infect the whole company's equity.

~~~
GameBoyAdvance
IANAL abut AFAIK it depends on the school. In general, yeah, the school owns
the research. However, it might also possible to get an exclusive or non-
exclusive license from your school, again, depending on the school. It will
feel funny for a while to pay for your own research but such is life. I must
also note that, the school might be willing to grant a non-exclusive license
for a relatively small fee (a few grands; no equity) but an exclusive license
will most likely set you back a lot more (in cash or in equity).

I co-founded a company based on the research of a classmate years ago and that
is exactly what we did. We paid Stanford for a non-exclusive license. I
believe Google has done the same for PageRank but for an exclusive license.

------
phzbOx
I had the choice to: Do a MBA or a PhD. I chose to do a startup. Best decision
ever.

------
j45
It's not what your degree makes of you, but what you make of your degree.

If you are expecting your degree to set you up to succeed, it won't.

Like anything you spend time on it will give you time to hone your craft.

Having tech skills is self-learnable if you already know how. Learning
Business skills might be worth focussing on.

You don't ever stop learning. When you do, you are dead in the water. Working
on a mindset like this every day has been far more valuable for me.

------
tedkalaw
Do you think there's any sort of relevance for a Masters, not a PhD? The
timescale is more similar to an MBA, and the 6-7 years of a PhD is quite a
large commitment.

~~~
HelgeSeetzen
There is value in a Masters because it introduces a new mode of research
beyond the bachelor (self-directed investigation vs. learning by rote).

The downside of the Masters is that it is a degree without role. It doesn't
qualify you for anything more than the bachelor does (e.g. grants, faculty
positions, entry to certain "degree conscious" societies, etc.). Those things
don't matter in a lot of cases but the incremental time cost is so small that
it would seem worth it to do a PhD instead _.

_ Your PhD really shouldn't take 6-7 years. Realistically, the Masters should
cover all your course requirements so the incremental time should be 1-2
years. If that's not the case then you have a time management problem which is
a major problem for any contemplated entrepreneurial activities as well.

~~~
neilc
_Your PhD really shouldn't take 6-7 years. Realistically, the Masters should
cover all your course requirements so the incremental time should be 1-2
years._

At least for a CS PhD in the US, this is not the case: even if you enter with
a Master's, finishing in 4 years is usually typical. Of course, it depends on
the school, area of study, adviser, and the student.

------
Indepenture
JDMBA.

