This is definitely not the first time this question has been asked. So is getting an MBA worth the financial cost, time, and opporuntity cost? Like my old Thermal Fluids engineering professor used to answer to all our questions . . . the best answer is it “it depends.”
I’ve personally wrestled with this question over the last 5 years. I’ve swayed from being utterly convinced that the MBA route is the way to go, to being on the other side and saying to myself, “what the heck does an entrepreneur get out of an MBA”. If you’re going through a similar debate, maybe something in my rough thinking will apply to you. Currently, if someone asked me whether I’ll get an MBA eventually, either full-time, evening, or executive, I’d say there is a 75.1% chance. (the additional .1% is so I can say I’m “more than” 75% sure)
However, this will probably not happen now, nor in the next year or two, due to my personal situation – which of course we always have to consider. I was happy to find out that GMAT scores last for 5 years. Sometimes colleges will accept them for longer, on a case by case basis.
Seeing how I want to continue down the entrepreneur path and don’t see myself going back to the “dark side” of the 9-5 cubicle-ridden corporate world, what benefits do I see in an MBA?
- NETWORKING. Probably by far and away the largest benefit of getting an MBA is hobknobbing with other ambitious individuals. Even with the internet, who you know is still more important than what you know. You’ll be mingling with future investment banker executives, corporate executives, and successful entrepreneurs. So down the road if you’re trying to penetrate a market, or just need some good advice, the contacts and friends you make at Bschool will come back to help you along.
- CREDIBILITY. That piece of paper you get with an MBA is in my opinion, more valuable than the education it took to get the piece of paper. If you’re presenting to investors, bringing on partners, pitching your product, whipping out the old “union card” MBA line will definitely benefit you in some situations. The perception is that if you have an MBA, you “must” know what you’re doing! That’s a good perception for people to have about you and your company.
- STUDENT LIFE. Who doesn’t want to be a student again? Who doesn’t reminisce about their college years and want to go back? Even with internships, between Winter breaks, Spring breaks, and summer lulls, you’re looking at 4-8 weeks of vacation per year. And you don’t have to feel guilty going on vacation because all your classmates are doing it too.
- CONTINGENCY PLAN. If for whatever reason, say you start a family, company goes bust (as it happens for every long term entrepreneur), or you buy a house that’s over your budget, and you need a stable income as a fallback plan, that MBA will get you in more doors than just an undergrad degree. Those contacts you made at MBA school might even help you through some of those doors.
As an entrepreneur, those are some of the major cons of going back to get an MBA. Of course studies show that an MBA only helps you if it’s from a top school. A University of Phoenix MBA will unfortunately not help you at all. Although we know these by heart, here are what I see as the major cons of getting an MBA:
- CURRICULUM. Most MBA schools are there to teach very basic business knowledge to individuals that will go work for a corporation. There are some schools that have a very strong entrepreneurial program – Michigan, Berkley, Stanford, Carnegie Mellon – so if that’s your route, I’d consider looking into those. I personally think I’ve learned more in starting my own company than I would ever learn getting a top-notch MBA.
- COST + OPPORTUNITY COST. Not only will a good school cost you over $75,000 out of pocket, it has an even higher opportunity cost because you could have been working or building companies all that time. Total cost then exceeds $200,000 if you think about lost time. Of course taking an evening program or executive program reduces the opportunity cost significantly, but you give up your social life.
We’ll see what happens, maybe I’ll be part of the union one day, or not. Whether it’s right for you, well, it depends.