I recently met two very close friends from my hometown (Chandigarh) who had come to visit me here in Bombay. After dinner, while traveling towards Girgaum to have Bachelorr’s ka chocolate shake, we were talking about what are the plans ahead in life. One of them, announced – “I am preparing for GMAT and I want to do an MBA from that college in Hyderabad.
“WHY??” I asked him. So just to give you all a little background, this guy is a doctor. Doing an MBA wasn’t something he had ever talked about.
“Because I want to start a business” he said.
On asking him what business he was planning to get into, it was surprising that he had the business plan for a medical business ready, the costs figured out, the secondary research data in place. He had spent the last few months working on the plan. “But why MBA then?” was my concern.
“Because being an MBA is necessary these days. It teaches you how to manage a larger business. It makes people take you seriously. It makes getting an investment easier.” was his response.
There are many people around us who think having an MBA is going to make your road to entrepreneurship easy. But does it? Here is my response to my friend:
“If I am an interviewer at this B-School you want to get into and I ask you the reason why you want to do an MBA, and you give me the above answer, I will be baffled. Did you actually start a business that you found out that you needed an MBA to make it successful? How are you worried about managing a larger business when you haven’t even started up? You won’t be directly starting a large business right. You will begin small. An MBA is not going to teach you how to be an entrepreneur. All it can teach you is a little bit of finance and a little bit of marketing. You will learn more than that in that one year if you actually startup instead.”
I did get him thinking. Gladly, he agreed later on. He decided he will do an MBA only when he actually needs it. He will not take it as a ticket to success. He has decided to go ahead and startup.
Now, my point is not to undermine the benefit of a certain educational course. But what I will do is give pointers both in favor of and against doing an MBA. You can select which points among those are important to you, weigh both sides and take an informed call.
Benefits of doing an MBA
1) Networking – The single biggest advantage, according to me, of doing an MBA from a good institute is the access to the alumni network. Also possibly the only real advantage.
2) A little bit knowledge of different functions like Finance, Marketing, Operations, HR.
3) A chance to learn from a peer group from different age, backgrounds and sectors. Everyone brings something new to the table. Good learning experience.
4) Adds that extra line on your CV.
5) Teaches you a lot of jargon which makes you sound wiser.
Why MBA can be avoided for wannabe entrepreneurs
1) 2 years for a full-time course can be a huge opportunity cost. What if you could start a business right now and by the end of 2 years you would actually be wiser, experienced, and making money.
2) For networking, there are enormous number of conferences, events, communities (like Rodinhoods) etc. You can meet great people/partners/investors without having to spend 2 years in classroom learning nothing.
3) There is nothing better than experiential learning. Starting up and learning on the way. A B-School might give you a very protected and theoretical environment for 2 years.
| 4) Teaches theories like PESTEL, SWOT, BCG Matrix which will |  |
help you in real situations |
5) THE BIGGEST THREAT – Shows you a comfortable life and greener pastures. I have seen many people let their entrepreneurial dream go when they see the placement season approach and they see a comfortable, stable life as an option. I knew a guy who wanted to start a unique music event in India but ended up being a banker. He lives in one of those cells in an excel spreadsheet now.
6) MBA comes with an A-certification. A stands for arrogance. Makes you delusional that you are better than others. Usually a condition hard to cure.
Think of that B-school as the Emperor saying “Welcome to the dark side”
And envision Yoda say “Careful, you must be. Falter, you must not”
Find me on Twitter at: @MrSarcastobeat
asha chaudhry
wow! we have another yoda fan in the house!!!
loved point #5 in the benefits 🙂
you might want to read all the other articles on this subject. if you use the search engine you will find them all.
this one is by alok
https://www.therodinhoods.com/forum/topics/do-entrepreneurs-need-an-mba-at-all
Do Entrepreneurs need an MBA at all?
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:
Learning ‘How’
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 10thstandard 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.
Learning ‘When’
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!
Learning ‘What’
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.
Learning ‘Why’
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’!!!
Rishi
lol @ the “bell” in #4
Chetan Rane
I think there is one more benefit of Having “MBA”:
People ( Clients / Suppliers / Customers / Banks / Investors / Supporters / Relatives and may be mentors ) takes you more seriously when you have an MBA degree than a bachelor graduate degree. Which leads to the confidence.
Kunal Bhusare
Hi Puneet,
Consider me that friend whom who tried to convince, but he did not hear your advise, went ahead to do MBA and still became an Entrepreneur.
Let me brief you about my story:
2010 – I quit my job at Patni computers to prepare for MBA Entrance
Start of 2011 – Decided not to take placements after MBA and start my own venture
Mid 2011 – Got admitted to Sydenham Institute of Management, Mumbai
Mid 2012 – Started his venture with a fulltime partner during Summer Internship
Mid 2013 – Did not take any placement and joined the startup full time without Regrets 😉
Mid 2014 – 2 years in business, we have reached break even, built a strong foundation for the company, learning and growing daily. And still without Regrets 😉
You’ll ask: What was the Benefit of MBA to my venture ?
I say: Immense (and my partner agrees !). More than the benefits you have listed, i believe it is the business oriented OUTLOOK that you get from the entire MBA experience. And that is something that 1-2 years in business may/may not bring you.
So, i would not refrain any to-be-Entrepreneur from doing an MBA, but it certainly needs to be done from a really good B-School that provides the right Value addition.
Thanks.
Arun Kumar Waghchoure
Reading Josh Kaufman’s recommended 100 books, is equivalent of learning all the study of 3 years of MBA https://personalmba.com/business-book-recommender/