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.
I had the same debate with myself, and I decided to go to the school of technological entrepreneurship at Northeastern University. From their website: “The nation’s first stand-alone school providing real-world experience to ensure today’s aspiring entrepreneur is driving tomorrow’s technological innovation.” Check it out at http://www.northeastern.edu/ste/welcome.html. Get a masters degree in what you want to learn about, entrepreneurship, build your business while there.
Good question, I would have to say in this job market, it is only good for Online Universities convincing people to go back to school because what else are you going to do? As far as an Entrepreneur needing or wanting an MBA, no because risk takers don’t need titles and I’m not too sure there are many examples of those risk takers who pimped their advanced degree because it got them somewhere.
Great points. But if you were presenting to investors, you’d have to admit that waving around your MBA would give you a better chance of them believing in you. In my opinion, online degrees are worthless because the two best benefits of getting an MBA is the networking and the value of the piece of paper you get at the end (worthless if it’s online). Seems like the better route would be an evening MBA. Thanks for chiming in guys.
I am wrestling with similar thoughts as you guys. I graduated almost 3 years ago with a B.S. in Business Marketing, I have had a few useful internships along the way but I have worked with my family entrepreneurial business since I graduated. I have learned a fair amount of info in real estate development, managing people, construction, international business, wind development, marketing, some finance and some stocks etc, more so then I would have EVER learned if I had worked at a corporation right out of college or for someone else. This is because I simply have access, and make decisions that it in a corportaion it would require an MBA degree and about 5 years more working experience than I currently have. Looking through a “vacuum” so to speak my life is set. BUT.. I haven’t done much investing on my own yet, and Im still wondering if getting an MBA is worth it for me. I think the networking would be outstanding, I love learning and I hope to learn more and broaden myself more within the “business context”… But is that worth the opportunity cost??? What do you guys think?? I’d really appreciate your input!
i have got a family business,right now maintained by my father.i am a bit confused whether to take part in any family business mba programmes or not.i just wanted to know whether it is worth to join some or get involved in my father’s business right after the graduation.i got a valuable information from u.
I had exactly the same concern about 2 years ago. I already had started 3 companies before and I was sure I didn’t want an MBA as a way to get a job, but I did want to learn some valuable things to run my business better. I also wanted to be surrounded by other entrepreneurial minded people, so the networking would be more valuable for me. I kept being frustrated by many programs that promised entrepreneurial education but where mostly academics teaching theory about Entrepreneurship. I was almost convinced that an MBA was not for me until I found out about The Acton MBA http://www.actonmba.org.
After I did some research on it, I was fascinated by both the Curriculum and the Teachers. The Curriculum is totally designed around the entrepreneurial cycles and the tools you need in each of them. The Teachers are all incredibly successful entrepreneurs.
I went to Austin to do the full year program and I finished last May. I can tell you I don’t regret any second of it. It was a very intense year (100 hour weeks), but I did get all I wanted from it.
Since it is only one year, the opportunity cost is lower than most other MBAs. And the other great thing about it, is that it has a fellowship that if you get it, you pay back the tuition with 10% of your future earnings until you have paid the full tuition. This is very convenient for an entrepreneur since you are not bound to a fixed payment but rather a result based payment. It is also a great demonstration of how Acton trust their education will lead you to success.
I have now started a new company with two of my Acton classmates. I highly recommend Acton for people who are serious about entrepreneurship.
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I’m in the middle of getting my MBA now. First, let me say that its not true that only a top school’s degree is valuable. I’m attending a state college and in my view, am getting a very good deal for the dollar. True, my school is not as well known as HBS, Wharton, etc. and when it comes to on campus recruitment I don’t have the same benefit as my colleagues at those schools. But the quality of education that I’m getting is fantastic, and I have met quite a few interesting people that has already been a big benefit to me.
That said, I don’t think you should get an MBA unless you are really sure it adds value to what you want to do. It is a pretty serious commitment, and if you do it you want to invest yourself fully into it. If you don’t have a business background, like myself, its probably a good idea if you want to start a business. You gain some very healthy perspective. Also, the analytical skills you get from a program that focuses on case study, as well as the people skills you get from working with teams (and learning from their work experience) can also be a very big benefit. You can read books on your own of course, but the context of a classroom experience can add a lot. This is why I think getting an online MBA is likely a big waste – you miss one of the key benefits to the brick and mortar experience. Besides, there’s this misconception that just because an MBA is online its less work and lets you be at home. You are certainly able to be at home, but you’re very busy at the same time reading and doing assignments, so you’re not really available.
Stick to an AACSB accredited school, select a program that does case study and forces you to work in groups, select the best teachers you can get, and it can work out quite nicely.
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