Here at Stratus, aspiring entrepreneurs often ask us whether they should pursue an MBA, wondering whether the investment will truly pay off. Will they be better served with the on-the-job training of launching a new company rather than taking time away from work to go back to school? There are certainly high-profile examples of successful startup founders who don’t have MBAs—and some even without undergraduate degrees. But for each one of these, there are many more examples of successful startup founders who do have MBAs. And there are also many examples of entrepreneurs whose startups failed because they unfortunately did not know how to successfully create and run a business.
If you are in the midst of starting a company, or you have an idea that is timely and may not even be relevant if you pause now to go to back to school, then by all means pursue your startup first and consider earning an MBA later, once you come up for air. If, on the other hand, you want to build a strong foundation of knowledge and relationships that will help maximize your startup’s chance of success, or you have no idea how to turn your great idea into a great company, or you have no great ideas yet but know you want to start something, an MBA may be exactly what you need.
Here are five ways in which an MBA will help prepare you for success as an entrepreneur:
1. Multidisciplinary Business Knowledge
As an entrepreneur, you will likely wear many hats, especially early on. An MBA can provide broad business knowledge across multiple disciplines to help you play various roles in strategy, marketing, finance, accounting, business development, operations, HR—really every aspect of a business. You won’t become an expert in all of these areas, but learning even just the fundamentals in each area during your MBA program will provide a critical foundation that you can leverage—to play multiple roles initially as an entrepreneur, and then later to hire the right people in each of these areas as your company grows. Furthermore, gaining these skills will help you avoid the pitfalls that come with learning as you go.
The more exposure one has to diverse people, industries, businesses, and job functions, the more likely they seem to recognize unmet needs and generate ideas for new businesses. Business school is the perfect environment to quickly gain very wide exposure, and therefore it’s an ideal opportunity for aspiring entrepreneurs hoping to generate new business ideas. By studying what works and—even more important—what doesn’t work in various companies and industries, you may uncover gaps that you can figure out how to fill or opportunities to do things better. And by meeting and working with people who are very different from you or have very diverse backgrounds and experience, you may start to see business or industry problems from new angles and discover new approaches and solutions in the process.
3. Entrepreneurship Skills and Knowledge
Nearly all business schools have courses in entrepreneurship, and many have specialized entrepreneurship majors, clubs, and/or centers of excellence. Some MBA programs offer courses that enable you to develop and test real business ideas—such as Stanford GSB’s Startup Garage and Yale SOM’s Program on Entrepreneurship, or resources to help you create an actual business, such as Harvard i-lab and UCLA Anderson’s Business Creation Option (BCO) capstone project—while in a lower-risk school environment. These programs will expose you to modules such as social entrepreneurship (a fast-growing area), design, formation of new ventures, and entrepreneurship through acquisition, to name but a few. You will also learn from classmates who became entrepreneurs before going to business school.
Take time now to research what each school has to offer. Talk to professors in entrepreneurial modules, heads of entrepreneurial centers, and members of entrepreneurship clubs at each school. This research will help you determine which MBA programs are best for you, and it will help you write more specific and compelling application essays explaining why each school is a particularly good fit for you.
4. Leadership Skills
MBA programs are in the business of developing future leaders. Although all schools look for examples of leadership experience as they assess candidates, they also recognize the need to further build their students’ leadership skills. Thus, leadership development is a key part of most business schools’ curricula. In addition to leadership classes and other leadership development opportunities, business schools also offer you the opportunity to take on leadership roles in clubs, conferences, or other initiatives in order to practice and further develop your leadership skills in a safe environment.
As an entrepreneur, you are more likely to find yourself at the very top of an organization—albeit a small one—much sooner than many of your classmates. The leadership skills you develop in business school will extend well beyond managing people. You may learn such things as how to structure your organization, how to purposefully build your company’s culture, how to communicate more effectively, how to make tough decisions, and how to handle conflict when it arises. Although all startups begin small, your good leadership skills will make your company’s success more likely, and you may find yourself on top of a very large organization someday.
Last but certainly not least, business school will provide you with tremendous opportunities to meet and connect with people who may prove instrumental in helping you and your future startups succeed. But beware—business schools shy away from applicants who seem to want an MBA simply to find funders or to help build up their own networks. Yes, you are likely to have classmates who will become venture capitalists and angel investors, and you will be joining a broader alumni network when you graduate. But as an aspiring entrepreneur, you will benefit most from developing real relationships and even friendships with people from whom you can learn—classmates and professors who may have created or worked with startups previously, or those who have complementary experience to yours. These people might become mentors for you or advisors to your startup. You may also meet those who have the same passion as you or who want to solve the same problems.
- Rankings: As you determine which MBA programs are the best fit for you, consider reviewing entrepreneurship-focused ranking lists, such as the S. News & World ReportBest Entrepreneurship MBA Programs. Although many of the top overall business schools are included in such lists, several schools, such as Babson College, consistently rank much higher on entrepreneurship-related lists than they do on overall MBA program ranking lists, and these programs are also worthy of consideration. I actually applied to Babson because I was impressed with its resources and support for entrepreneurs. In addition, some of my clients have received great support there when designing socially minded projects.
- Alternative programs: If you feel that a full-time MBA program will take too much time away from your startup but you still need the skills such a degree will provide, then consider part-time and/or online MBA programs as well. These will give you not only time to balance both your startup endeavor and educational opportunities, but also the chance to apply your classroom learning to your startup in real time.
So, do you need an MBA to become a successful entrepreneur? Not necessarily. But will an MBA improve your chance of success as an entrepreneur along multiple dimensions? Absolutely, yes! Even if you end up working for an established corporation, you will be well positioned to become an entrepreneur later. Business school will help you grow your multidisciplinary business knowledge, gain broad exposure, develop your entrepreneurship and leadership skills, and form the relationships you need to succeed.
If you would like help with you business school applications, book a free consultation with a Stratus admissions professional!