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An MBA Might Not Be as Important as You Originally Thought

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Twenty20

“So when are you going back for your MBA?”

 

After slogging through four years of undergrad, it can be hard to stomach the idea of giving up a steady job and the ability to actually afford fruits and vegetables in exchange for tests, ramen and even more student loans.

 

While every entrepreneur has their own unique path to success, the “necessity” of completing an MBA program along the way has come into question from prominent thought leaders across the startup and tech world, with Elon Musk notably sharing that, “As much as possible, avoid hiring MBAs. MBA programs don’t teach people how to create companies.” Mint founder Aaron Patzer went even further, saying, “When valuing a startup, add $500k for every engineer and subtract $250k for every MBA.”

 

These criticisms are not without merit, considering the tremendous opportunity cost of MBA programs. Top programs cost over $100k to complete, and the prospect of taking on another heavy debt burden after completing undergraduate studies can be tough to stomach. The time and energy required to complete the program sacrifice the chance to use that time to go out and get the real-world experience startups crave for new hires.

Of course, there are significant benefits to the degree as well. According to The QS World University Rankings: Global MBA Rankings 2019, the average salary for MBA students increased from $46,974 before the program to $83,186 after completion. But do these benefits carry over to startups as well? I spoke to two successful entrepreneurs in the startup world for their thoughts on the debate.

 

Zach Feldman co-founded the New York Code & Design Academy in 2013 and is currently the Vice President of Technology for Getaway, a company that helps city slickers escape the grind to tiny houses in nature. Feldman has not obtained an MBA and explained that his previous experience of going through an acquisition combined with his undergraduate business coursework has made him reluctant to go back for an MBA. He added that with many business school teachers out of the workforce for 10-20 years, it can be difficult for them to offer insight into the current startup environment and that working experience greatly trumps the classroom setting.

 

However, Feldman believes the MBA makes sense for certain cases, such as aspiring CEOs and individuals who have a strong sense of what concentration they want to focus on in their studies. He added, “I struggle between wanting to code and wanting to manage, I'm still not sure I've 100 percent decided on either and I worry an MBA or a Masters in Computer Science might actually pigeonhole me a bit into one or another!”

One case that Feldman unequivocally dissuades entrepreneurs from is going back for an MBA right after graduation.

 

“It makes no sense to get an MBA right after undergrad because you have no idea how the working world actually works. You assume you do from what you learned in school but most of those assumptions are turned upside down on your first day on the job. You won't know how teams truly work (or don't work), how work is prioritized and how sometimes people just have to figure it out as they go along!”

 

When asked for his advice to aspiring co-founders, Feldman explained, “Actually sell something to someone! Understanding how the sales cycle works, no matter what your product is. Understanding data and metrics so you're not blindsided by something that could be identified as a trend much earlier on.”

 

Feldman believes the core benefit of MBA programs is the networking opportunities it affords that aid in team-building and fundraising in the future, but that the coursework can be useful for B2B startups where “an MBA would be far more valuable than B2C where branding and creative vision counts for more, in my opinion than hard business skills.”

Moe Mernick is the founder and CEO of Winfluencers, a platform that empowers micro-influencers to monetize their passion. Mernick obtained his MBA in 2012 as a way to shift back into the business world after spending a few years traveling the world working for nonprofits. Mernick strongly agrees with getting real-world experience before going back to school due to the variety of benefits it affords.

 

“First, the business world is so dynamic, with so many tracks and opportunities. If you went on your hunch for your desired career path through your undergrad and MBA, without really giving it a shot (in the real world), you may find yourself lost and confused if it doesn't ultimately work out, without the safety net of the MBA to help facilitate your next transition. Second, if you attend a top-tier MBA program, you'll have peers from all over the world who have accomplished extraordinary things. For you to adequately participate in classroom discussion and teamwork exercises, it's super helpful to come with your unique experiences,” Mernick shared.

Mernick disagrees with the notion that MBA programs are geared solely for creating strong corporate employees, rather than entrepreneurs, adding that, “I quickly learned what track I wanted for myself (which is incredibly important for anyone getting an MBA), and I harnessed all relevant opportunities that would help me succeed in the startup world.” He listed the main benefits as pedigree, networking and having the time to strategically map out his career transition. Mernick agrees with Feldman that the coursework is not the primary benefit of MBA programs, adding, “With countless online learning opportunities, I often dissuade people from going for an MBA if they're only doing so for the course material.”

 

Mernick recognizes that an MBA is not for everyone, sharing that many of his friends have opted to skip the MBA because they felt that they simply did not need it. “They were continuously promoted within an organization or joined another in a more senior role. Without the need for pedigree, network and a career transition platform, these friends have been doing exceptionally well in their career trajectories without an MBA. So, know what's best for you, because there's an opportunity cost associated with all our decisions.”

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