My column in the April issue of Entrepreneur magazine:
Do Entrepreneurs need an MBA at all?
Often, I run into a spat with the MBA gang about my views on why an MBA is just the worst thing you can do to yourself if you are trying to become an entrepreneur.
On the other hand, I revere engineers and personally regret not being one. I think being an engineer would have really benefited me in my entrepreneurial journey.
So, what is the role that Education plays in Entrepreneurship? These are my views on the ‘how’, ‘when’, ‘what’ and ‘why’ of education:
How do things work? How is a factory layout planned? How are workflow and logistics organized? I guess no one can ever argue that knowing ‘how’ helps.
Take for example the subject of accounting. I believe that you have to learn accounting in a class. It’s very difficult to ‘self-learn’ how to extract a trial balance and then bifurcate that into a profit & loss statement and balance sheet.
During my I.C.S.E exams, I blundered in Accounting. That silly mistake in the ‘bank reconciliation’ sum (a method in which you reconcile bank and cash books), cost me an additional 3% in my overall results. I scored 87.2% instead of crossing into the 90% range.
I was so embittered by that mistake, that I never forgot Accounting. And I am talking about 1985 and 10th standard level accounting. Even today, I routinely teach a thing or two to chartered accountant CFOs.
Lesson –Learning ‘how’ is critical for entrepreneurs so that they can apply it as and when they have to, in their entrepreneurial journey.
I love public speaking. The bigger the audience, the larger the venue and the more controversial the topic, the more it excites me! How and where did I acquire this strange fetish? From the elocution and public speaking classes in school! The late Pearl Padamsee personally taught me. She was probably the finest teacher one could hope for and she left a very formidable impression on my young mind.
When I was in the 8th standard, I remember reciting Martin Lurther’s “I have a Dream” in school and inter-school competitions. If you are not familiar with it, please google and read. It’s one of the most inspiring and ‘goose bumpy’ speeches you can ever read.
Modulating “I have a Dream” correctly (in the 80s when there was no youtube!) taught me the secret of ‘when’. ‘When’ was I supposed to raise my voice, ‘when’ was I supposed to gesticulate and ‘when’ was I supposed to almost explode with passion was the secret of delivering this epic speech. I learnt in earnest and won most of the competitions I participated in.
Lesson – Reflect back on education and seek out the ‘when moment’. Something will teach you timing and that's a prerequisite for entrepreneurship. For me it was a speech; for you, it could be something else!
In 1989, I was studying B.Com at Sydenham College of Commerce and Economics. In India, B.Com is widely considered to be a ‘useless’ degree.
The B.Com Economics course extensively teaches Economics. Apart from the intricacies of Demand, Supply, Monopoly and Duopoly, students also get a chance to learn about the philosophies of the great economists like Schumpeter, Adam Smith, Keynes, etc.
The economist who always intrigued me (and still does) was Karl Marx. I could not fathom Marxism and what it really implied. Marx’s diktat of “From each according to his ability, to each according to his need” as well as his theory of how the ‘proletariat’ (labour workers) would eventually overthrow the ‘bourgeois’ (rich capitalists), actually annoyed me.
I could not understand ‘what’ Marx was implying or how realistic it was.
In November 1989 (my final year of graduation), I finally learnt the ‘what’ I was seeking. The Berlin Wall that divided East and West Germany came tumbling down. And with it came down everything that communism and perverted socialism stood for. The Marxist notion that the capitalists would be thrown away and a second ‘French Revolution’ would come true was rubbished. The fall of the Berlin Wall proved the reverse.
This live event taught me a lot about ‘what’. While theory is very important, great entrepreneurs should observe ‘what’ they have learnt and ‘how’ it’s being practiced and implemented.
This is my big debate against formal education. I believe that ‘why’ is zen-like and can rarely be learnt or ‘classified’ (pun intended).
Take for example the MBA method of teaching via case studies. Sure, there are some amazing companies that can be put into nice binders to be read, discussed and debated. But what is the permanence of their success?
If there was a case study of Apple’s success in the early 80s, would it be relevant to business school students to study in the 90s (when Apple went through its decline)? And if by that logic, there was no case study on Apple in the 90s because it was not doing well, would students be underprivileged not to read about it in the early 2000s when Apple resurged and peaked in performance?
The ‘why’ in business education is tricky because it presupposes many things that will change. There is no ‘why’, because consumers and their choices are very unpredictable.
Zynga is a great case study as a gaming company, but in just a few months it’s gone from hero to zero. The same can be said for most of the ‘social’ game companies that were heroes just a few months back.
I believe that entrepreneurs should learn the ‘what’, ‘how’ and ‘when’ while they are studying and apply that to ‘why’.
No one taught me ‘why’ companies used contesting postcards for consumers to submit contest entries for many years. I asked that ‘why’ myself and created a business called contests2win.com. Yeah, just by asking ‘why, why, why’!!!
2nd April 2013:
Irony of Ironies! The famous Vivek Wadhwa wrote this article in the Wall Street Journal today!!!
Read ALL my other articles published in Entrepreneur mag HERE.
In 2003 when I had shut Tekno Point and failed as an entrepreneur , I joined a weekend MBA program. I was at lowest point in my life and ready to do anything to make a new beginning. However less then a year into it , full fees paid , I quit the MBA program. It is certainly not a place for Entrepreneurs , They will doctrine you to become finest Manager of different levels. I felt if I continue to do this , I will loose something of me.
Today any formal education is merely a certificate in India and demand of society. Mr. Alok, as you said you wished that you were an engineer and it would hv helped you in your entrepreneurial journey, may be true, considering you would hv done ur engg in 80s. But today name any professional course in India, it's in a bad shape. IT industry changes everyday but syllabus of IT engg has been not updated since 2 decades almost, same goes for all branches. As far as Entrepreneurs are concerned they can learn only by having inquisitive minds, keen observation and by practice!
At the India Today Conclave, I asked Nandan Nilekani what he thought of MBA's. He was dismissive..
2007.. i asked this question of MBA or Direct jump.... just before staring my entrepreneur journey. Was lucky to have some IIT-M Seniors tell me MBA will not team me entrepreneurship rather will increase my opportunity cost.
Glad i listened to them.
Cant agree more to 'Why' of above.
But WHY investors (other than Vivek) insist on hiring MBAs ... !! And they do strongly stress on it as pre-qualifications?
You might as well not need a degree or any other type of formal education. And we will be rid of all the money making educational institutes and lots of evils in our society.
I being not a graduate, yet I say no to M.B.A. as in gujarati they have various abbreviations for it such as "Maha Bekar Aadmi " (Biggest useless Man) or "Mane Badhu Aavde" ( I know everything), these are just a few of them.
I feel education till under-graduate is sufficient to be in a successful businessman, as knowledge is good but only through experiences, as books are always written years back and you cannot implement the same in reality. So why waste 2 or 3 years on an M.B.A. and then start up, rather start up 2 years early and have the reality check of what you wish to do.
If it works you will be 2 year old company by the time you graduate from a B-School, unless you have good amount of money in your bank and just want to waste it with your time, then you may do the M.B.A.
Only few Indian product companies in IT and mobile space have been able to touch billion$ valuation.
Three of them being
1.Inmobi, CEO Naveen Tiwari
2. MakemyTrip, CEO Deep Kalra.
3. Infoedge, CEO Sanjeev Bikhchandani
All of above founders are MBAs.Anything to say about that Alok.
I believe a degree cannot make or break an individual, they are just nitroboosters which can accelerate or deaccelerate your growth.
I think it is not a binary - 0 or 1 thing. There will obviously be successful entrepreneurs who are MBA's . It will be great to know from them only if MBA helped or was it something that became an obstacle to deal with in their entrepreneurial journey. I mean to me they were wise enough to not let MBA experience create any damage.
I am an engineer by degree, not an MBA.
Speaking of Apple, Tim Cook has a MBA and Sheryl Sandberg, COO, Facebook has an MBA.
Do you believe that Steve Jobs categorised his employees as MBA and non MBA, and then handed over the reigns of his company to an MBA.
I believe MBA degree in all over the world cut balls of the student pursuing, only because it is damn expensive and this is its only limitation.
In an nutshell, entrepreneurship has do with spotting problems / opportunities and then taking consistent action towards solving it in a better way.
Some people like Mark Zuckerberg, Steve Jobs took action early in their lives.
For others, it takes time to identify what to do, with their lives.
I believe it took you 9 years before you quit your father's business and started up on your own.
How can this decision and the journey following, be categorised based on one's education.
Agree they are successful entrepreneur and MBA too but just a co-incidence! If you ever get a chance to meet them, just ask one question, 'Did case studies and theories you memorized and solved during MBA helped you to be successful?'
And when you talk about entrepreneurs why only talk about IT companies, go through other sectors too.
1. Vedanta, Mr. Anil Agarwal
2. Su-Kam, Kunwer Sachdev
3. Infosys, Narayan Murthy (IT Sector)
Degrees only play the role of cushion!