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Is an MBA a Plus or a Minus in the Startup World?

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Is an MBA a Plus or a Minus in the Startup World?

文章mikelee » 2010-05-22 19:13

From: http://techcrunch.com/2010/05/08/is-an- ... -container


A long time ago, I had to make a really tough choice: invest in an MBA from New York University, or make do with my bachelors. I was newly married, had a child on the way, and didn’t have much in savings. The degree would set me back tens of thousands of dollars and take years to complete—especially if I did it part time. And I couldn’t imagine doing anything but programming computers for a living. So why learn finance, marketing, and operations management, I wondered? Well, I decided to enroll because my understanding of the business world lacked depth, and I harbored a deep-rooted desire to get the best education possible. My wife and I moved into a small one-bedroom apartment in North Bergen, NJ, and we made do with what we had.

For a couple of years after getting my degree, I wondered whether I had made the right choice. Even though I scored a great job at CS First Boston in its IT department, I was just writing code and designing systems. Yes, I started to enjoy reading BusinessWeek and the Wall Street Journal; but had the financial sacrifice and time away from my family been worth it? It didn’t seem to have been.

Over time, I started rising through the ranks in IT. I went from being a programmer to becoming a project leader and then a vice president. I found that I could communicate effectively with user departments and my bosses; I could deliver projects on time; I knew how to manage and motivate employees; and I had the confidence to present business proposals to managing directors and board members. I was even able to help persuade IBM to make a $20 million investment in the technology that my team had developed. We spun off a startup called Seer Technologies, and I became chief technology officer. And that’s when my education really began to pay big dividends.

In the startup world, it’s simply survival of the fittest. You have to involve yourself with almost every aspect of the business—and use all skills. I would find myself having to develop and manage budgets; help market and sell; hire; assist in setting corporate strategy; and review legal contracts. As well, I still had to develop technology and deal with all the uncertainties and failures that come with a startup.

My MBA classes seemed to fit our business needs like the pieces of a jigsaw puzzle. Even obscure topics like corporate finance came in handy, in IPO discussions with investment bankers and later, in raising capital for my own company.

So I have no doubt that my MBA was the best investment I’ve ever made, and my education helped me achieve success. Which leads me to the reason for this post: a Twitter debate with Guy Kawasaki, Managing Director at Garage Technology Ventures. Kawasaki argues that MBAs are not needed in the startup world; in fact these provide negative value. He insisted that I was “in denial” when I challenged a piece he had written in Forbes several years ago:

What is the value of an MBA these days for young college graduates who want to start their own company?
Probably about a negative $250,000. (I have an MBA, and I was once a young college graduate.) I don’t think an MBA matters very much for starting a company. A much better educational background is an engineering degree. You can always hire MBAs, but if you don’t have the ability to conceptualize and deliver a product, you’ve got nothing.


In email exchanges, Kawasaki explained that his issue with MBAs is that they are “taught that the hard part is the analysis and coming up with the insightful solution”. In other words: implementation is easy and analysis is hard. “But this is the opposite of what happens in startups. Implementation is everything in a startup.” Kawasaki believes that MBAs aren’t a good fit for startups, and engineering graduates are.

I agree that engineering degrees are important. They provide a level of technical depth and analytical capability that is invaluable in the tech-startup world. But not everyone needs to be an engineer. You need smart people coming up with creative marketing campaigns; managing finances; and selling your products. And the CEOs and CTOs need to master all domains.

In my experience, the most successful entrepreneurs have been those with a strong technical background who have been through some sort of “finishing school”. (I am not talking about college dropouts such as Bill Gates and Steve Jobs—I consider them to be outliers). Engineering degrees can be very technical and can actually narrow one’s horizons. To innovate, you need to understand customers and markets. To build a successful product—one that actually sells and makes an impact, you need to understand distribution and finance. So even in the lower echelons of technology, a broader educational background is a plus.

Is the MBA the best degree for engineers? Maybe not. Programs such as the one I teach at Duke may be a better fit. The Duke Masters of Engineering Management program is a one-year program that teaches students marketing, finance, intellectual property and business law, and management. It’s like a mini-MBA. Engineers don’t need to learn how to price an option with the Black–Scholes Model, for example. They certainly don’t need to learn how to create new types of financial products. There are also many other degrees that can provide the needed balance to engineers. These don’t have to be tech or management oriented; even an education in diverse fields such as psychology can be a plus: anything that broadens your horizons and teaches you how to come up with “insightful solutions”. The point is that education is the best investment that one can make. Unlike stocks and bonds, education never loses value; and when you add experience, it gains even more value.
Mike Lee
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Don't let the noise of other's opinions drown out your own inner voice.And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
------ Steve Jobs
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Re: Is an MBA a Plus or a Minus in the Startup World?

文章mikelee » 2010-05-22 19:34

除了這一篇文章寫的不錯外,很多人回覆這一篇文章,不少有創業經驗的朋友回覆這一篇,也有很多MBA,工程師..etc各式各樣不一樣背景的人回覆,我大概花了一兩個禮拜把這些回覆看完,大家可要好好的看,不然就枉費我整理了,也歡迎大家多多討論,等我有空在來談談這一篇文章的看法 :grin:

我把一些精采的討論節錄如下



wgrad · 1 week ago

As the founder of a startup with only a degree from an undergrad biz program (wharton), I often wish I had a CS/engineering background. I find that my skillset would be most useful in the idea stage and in the post-launch stage. For now, in the development stage, I have to rely heavily on others for design, architecture and development. That said, the ability to understand how value is created is key in conceptualizing ideas.






@apakman · 1 week ago

IMO, need to be well-rounded & understand all aspects of business--MBA is one way of getting there, not the only way. Where an MBA can be really useful to entrepreneurs is in providing a strong network, as an MBA grad the value is not necessarily in what I learned in the classroom, but in who will pick up the phone when I call. This is only true of about 15-20 schools, I think once you leave the top tier and the clubby networks those schools provide, the degree loses much of its value.






jstulberg 1p · 1 week ago

I also agree with Guy's point that MBA programs emphasize analysis - but they are academic institutions and this is true for most academic pursuits. The onus is on the students to understand that bias given their context as a student. Not all MBA students have this view of the world and it's not MBA programs' fault if they do after graduating.
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0 replies · active 1 week ago +4 Vote up Vote down

jstulberg 1p · 1 week ago

Companies require the skills that MBA programs teach - look at the number of schools and escalating tuition, there's clearly demand. However, startups often require different additional skill sets, namely more of a focus on product development. Therefore, an MBA grad without the focus on product dev is not a good fit at that stage. However, an MBA with the product dev skills would seem the perfect fit, and further, a better fit than just an engineer who's limited purely to product development.




Martin · 1 week ago

The degree is irrelevant. You might have a great coder who has a doctors degree in computer science, and you might have an even better coder who has never had any formal education. Likewise you might have a guy who holds an MBA, but is absolutely useless when it comes to actually doing things, and you might have an MBA who's the most savvy business man you ever meet.

Good people will succeed and be beneficial in a startup, regardless of their degrees. What's on the paper is irrelevant.





Jeff Pomeroy · 1 week ago

Interesting write up. An education is never a bad thing. And, the acquisition of an MBA is something to be proud of.

But, the title is "Is an MBA a plus or minus in the startup world?" I would propose that the answer goes something like this: An MBA does not make an entrepreneur. Nor, does it guarantee success.

However, the issue I have with this piece is the following excerpt: "In my experience, the most successful entrepreneurs have been those with a strong technical background who have been through some sort of “finishing school”. (I am not talking about college dropouts such as Bill Gates and Steve Jobs—I consider them to be outliers)."

You simply cannot make this statement and be taken seriously. There are numerous other very successful business leaders that you can add to this list. It is not possible to label them as 'outliers' because they don't justify your position.

So, in closing. MBA = Good. MBA does not equal Entrepeneur.

My 3 cents (had an extra penny on me this morning)





James · 1 week ago

As an engineering/computer graduate without an MBA who has built multi-million dollar businesses, I'd agree with Guy.

"I found that I could communicate effectively with user departments and my bosses; I could deliver projects on time; I knew how to manage and motivate employees; and I had the confidence to present business proposals to managing directors and board members.."

WTF? That stuff doesnt require an MBA at all. If you need an MBA to be able to develop that skillset then you're insecure in your own abilities.

A technical mind allows you to express your creativity, and real experience, trial and error, and grit will make you successful.




Justin · 1 week ago

I have an Electrical Engineering degree, which taught me how to think. And I recently got my MBA, which taught me how to communicate (with marketing, finance, legal, employees, etc). These two degrees combined are a very powerful combination, and launched me out of a dead-end engineering position at an automotive company and into a leadership role at a health-care start-up.

Because of my MBA, I now have a large network of associates, across many industries, who I can reach out to when I need something or have questions (and vice-versa). It also allowed me to change the trajectory of my career. Now that could have been done with a master's degree in engineering, an MBA or a law degree, but going back to school is one of the only ways to accomplish that.

To Guy's point, I think an MBA can create a sense of entitlement, where things like creative and technical work are undervalued. But it's hard not to feel that way when all these banks, consulting firms and large CPG companies come to campus with their shiny free pens and other chatkes and sell you on how awesome you'll become when you continue your career with them.

It's more of the culture of business school, and less the inherent value of the degree.




Raj Sarkar 58p · 1 week ago

Firstly, The thing i fail to understand is why just demonize MBA degree. I think the same handicap applies to founders with non-engineering degrees like law, finance, economics etc. No one says if you have a law degree you decrease the valuation of a start-up...

Secondly, startup is not just defined by "hi tech startups" or "web startups". Lot of small businesses are started by MBAs. Would you say the same analogy applies to non-tech startups.

Last but not the least - people tend to forget it is just an education. I believe it has absolute no correlation with startup success. Statistically, I will bet you will find at least 1 MBA among the e-staff of hi-tech startups. If it was of no value you will not find any MBAs in the e-staff

Disclaimer: an MBA grad speaking





StartedUp · 1 week ago

Depends on the stage of the startup. If you're in angel or maybe first round, then yeah, go forth with a great idea and a few solid engineers. But pretty quickly most startups have to set their sights on growing a sustainable business to millions in revenue and tens or hundreds of millions in value. Engineers don't want to focus on this. They don't want to focus on partnerships or distribution deals. They don't want to focus on ad sales or referral contracts. MBA's can be a critical contributor to this sort of team. But they must contribute. An MBA from some fancy school hired as SVP of Marketing at a small startup with no one to manage and no value delivered on his own... now that's dead weight.





DigitalPencilPusher · 1 week ago

Most candidates with Post-Grad degrees I have interviewed - I have also hired. Most of the time the Post-grad has been related to the actual job specs but at other times it has been completely different. Post-grads in general shows dedication and attention to details. Except for candidates with MBA. Most of the time I feel that they are using Jargon without having a real sense if what it means or how to apply in a real world setting. Maybe that is good for the political part of any management job - but I prefer doers. I do agree with several of the post above that states that it is much more down to the person than the degree whether a candidate will be useful for the job.




DigitalPencilPusher · 1 week ago

Most candidates with Post-Grad degrees I have interviewed - I have also hired. Most of the time the Post-grad has been related to the actual job specs but at other times it has been completely different. Post-grads in general shows dedication and attention to details. Except for candidates with MBA. Most of the time I feel that they are using Jargon without having a real sense if what it means or how to apply in a real world setting. Maybe that is good for the political part of any management job - but I prefer doers. I do agree with several of the post above that states that it is much more down to the person than the degree whether a candidate will be useful for the job.




Shai Goldman · 1 week ago

Regardless of whether their is value or not for an MBA, there is a negative connotation. I'm based in the Bay Area and work closely with a lot of startups and VCs, mainly those in the consumer/mobile sector. In these sectors, there is a negative view on MBA, especially by those who have a more technical background. The comments that I hear frequently is the MBAs don't bring value. Founders of startups are looking for people who have real world experiences, not theoretical concepts learned in the classroom. I recently heard a presentation by a founder who has an MBA and while pitching to investors, he was making fun that he had a MBA. Although I don't have a MBA, I believe their is value, but MBA candidates/graduates need to be aware of what the perception is.




Don· 1 week ago

MBA's tend to view the technical staff as replaceable commodities that can be thrown away at will.
They don't understand the difference between manual labor and knowledge workers - my experience.
When amidst technical staff, it's quite natural for MBA folks to feel inferior and empty, the problem starts when they try to make up for this. Most of them I've met felt confronted before a geek. Yet to come across a MBA folk who's humble. But geeks have been more humble in my experience - meaning technical education is superior according to me. MBA isn't worth at least for the cost involved in getting one. Better alternative -




Steve · 1 week ago

Fair disclosure: I studied computer science as an undergrad (Cornell, 2001) and have an MBA from Wharton (2009). Are my views tainted by my own investment in an MBA? Perhaps. But it is absolutely clear to me that any time this argument pops up, people cite Bill Gates, Michael Dell, and now Mark Zuckerberg as examples. This is the very definition of selection bias, and it is a weak, ridiculous argument.

An MBA adds value. You learn, you network, and you signal to future partners/investors/acquirers/employees/etc that you mean business, whether you're an entrepreneur or an investment banker.

We tend to focus our attention on the outliers, but a "startup" is not a nebulous or abstract concept. It is a business. And it's the most absurd thing I've ever heard to suggest that, if you want to be successful in business, you shouldn't study business.

Not every startup will be sold to Google or Microsoft; in fact it's a tiny percentage that will be acquired, and even smaller which will IPO. The harsh reality is that most fail. Can you get lucky and hit on something that makes money? Sure. But once you find yourself talking to Angels or VC firms, how will you defend your valuation?

I'm 100% with the author of this article. To the few posters arguing that they've made millions without it? Congratulations! But it still doesn't prove the point. Your idiosyncratic risk/reward profile and success stories say nothing about the characteristics of successful startups in general.

Now that you're worth millions, you might benefit from an MBA core class in statistics, if for no other reason than to improve the accuracy of your comments.




Dude · 1 week ago

I have launched 5 startups in my career. 2 before my MBA and 3 after. The three after all have gone onto funding and I maintain equity stakes in them. The two before are defunct.

the MBA for me has been critical in providing the tools necessary to analyze what is a good idea and what is a bad idea and for analyzing market potential

The problem with engineers is they build solutions for problems that don't exist. They need to be balanced with someone who has real market insights.

I'd very much like to see that stats on startup failure for MBAs vs non-MBAs. I doubt very much (judging from the entrepreneurship program associated with my school, IESE) that MBAs have a disproportionate failure rate.




Shane Johnston · 1 week ago

Personally, I was at bit of an impasse with my MBA. I went into it from the perspective of a designer, thinking that to work effectively in the B environment, I should learn up on B culture and topics. I had doubts midway through as to the relevance of c-finance, marketing and legal.

As a designer though (especially one working within an intrapreneurial group at a $80b company) I've found the ambient knowledge an MBA provides indispensable, especially if one works with MBA's all day. Also, I frequently get approached by bootstrapped startups for design and development advice. When one is able to incorporate design strategy into B strategy, it's a potent combination.

How could a MBA, or any education in general, be thought of as negative. I would think that the real importance is not what you know...but how you use it. MBA's are only as dangerous as the people who have them.




Michael Gaizutis · 1 week ago

Interesting article...

Question: Is it the type of education you get (or degree) that matters most, or, what kind of person you are and how you're wired that allows you to thrive in the start up world?

I'm a firm believer that education provides a bridge for you to reach your goals, but am convinced that certain people will run successful start ups, continue to innovate and push the envelope - from Day 1. That's how they're built; how they're wired... Others will go through school (trying to figure it out) and might get lucky (like Sarah Lacy says).

I'm with Guy on this one... While an MBA is a valuable tool in your "toolbox", not sure if it is a necessity in the start up space. Why not surround yourself with MBA'ers, after implementation, and learn as you go. Seems to be the "secret sauce" for all entrepreneurs who have the passion, and innovative mindset to form great start ups - and take them to the next level.

Just food for thought...




Mike · 1 week ago

how are you going to negotiate with VC firms when you don't have an understanding of finance ? How will you handle hiring and firing with your HR director when you haven't spent any time thinking about how to set up an organization ? When your accountant challenge you on how you are booking revenue will you understand what their concerns are and will you able to address those concerns ?

An MBA program is not uniform, you pick the classes you want to study, so it's very possible to go through an MBA program and come out as a negative if you concentrate on only one area. But to say that studying finance, accounting, OB, strategy is a negative for starting a business is just silly.

Oh yeah and having contacts in accounting, finance, and consulting firms that you can call up when you run into an issue is also a big bonus.
Mike Lee
FormorsaMBA Team
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Don't let the noise of other's opinions drown out your own inner voice.And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
------ Steve Jobs
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mikelee
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Re: Is an MBA a Plus or a Minus in the Startup World?

文章mikelee » 2010-05-22 19:42

除了這一篇文章寫的不錯外,很多人回覆這一篇文章,不少有創業經驗的朋友回覆這一篇,也有很多MBA,工程師..etc各式各樣不一樣背景的人回覆,我大概花了一兩個禮拜把這些回覆看完,大家可要好好的看,不然就枉費我整理了,也歡迎大家多多討論,等我有空在來談談這一篇文章的看法 :grin:

我把一些精采的討論節錄如下


Scott Allison 16p · 1 week ago

Here is my personal perspective:

I left my last business last year, and in the absence of not having any better ideas at that time I decided to look into MBA programmes. If I was going to do it, this was going to be my chance; at 34 years old I am already above the average age.

If I was going to take two years out of my career I was only prepared to do so at the very best establishments, so I visited 4 of the top schools in the US, including 3 very close to the tech scene. I was surprised at how few of the people attending were interested in technology, entrepreneurships or start-ups. (Well under 10% intend to start something on their own after graduating). I was also surprised how little interest any of the students I met showed in my experiences as an entrepreneur. These are supposed to be the best and brightest business students in the world and here I was a real live entrepreneur, wouldn't they want to ask me something, anything?

I asked my existing network what they thought about MBAs. Friends, family and other non-entrepreneurs all thought it sounded like an excellent idea. Entrepreneurs who started their own businesses, including Tony Hsieh of Zappos, Cameron Herold, the former COO of 1-800-GOT-JUNK, and many other less well known people, hated it. "Why would you want to do that?" was the usual question, with an air of disbelief and indignance.

Having invested time and effort, I pressed ahead, studied for the GMAT, and applied to some of the top schools in the world. Surprisingly I found this to be an enjoyable and useful experience. It was during this time I decided that an MBA really wasn't for me. Yes, it would be useful, I would learn a lot, and I would be connected with a great bunch of people, but I am fundamentally an entrepreneur, someone who likes creating a business and so taking two years out to sit in a classroom didn't sit comfortably. The application process is very illuminating and I enjoyed the self-analysis. Writing lengthy answers to questions like "What matters most to you, and why?", "What are your career aspirations?" and "What are you most passionate about, and why?" forced me to really think deep down about what I want to do with my life. Having come to the conclusion it was to build a new global business that makes a positive difference to the world I set about thinking what that would involve and wanted to start straight away. Luckily in February the idea arrived and I knew that I had made the right decision for me. I can completely identify with Mark Zuckerberg who recently said in an interview with Fortune, "I don't think I'm ever going to have an idea this good again". When that comes along, you don't want to waste any time.

I'm sure if I completed an MBA I would be the better for it, but there's plenty of ways to gain that knowledge, and as long as I am aware of my shortcomings I can find the appropriate advisors to plug my own personal gaps. Any CEO should know the limits of their competence, and one of the greatest skills - which I don't think anyone can teach you - is knowing how to put together a great team. I'm sure for the business I am about to start building, an MBA grad will come in handy at some point in our growth. What I know is that it doesn't need to be me.




Edward Rhodes · 1 week ago

MBA - Masters in Business Administration.The nature of the MBA can enable the individual to specialize in one or a combination of specialist functional areas,such as Marketing,Finance,Purchasing etc.Its potency for successful Human Resource Development obviously will vary depending on the environments a person encounters during the evolution of one's professional development.To make a categorical statement as to whether it will be beneficial or not can be misleading and inaccurate.

In a high risk taking scenario the abundance of theoretical awareness may negate the acceptance of such an option.While,in a more stable environment such assets can find the landscape to flourish.

There is no one correct answer for the question posed - The more important dynamic is the tangible possession of multiples skills that can uniquely investigate opportunities,possess the flair to accept the risk and have the creative vision to configure productive assets into winning tangible action.If these talents are acquired via an MBA -So be it,If it is gained through a combination of ways - then progress would of been achieved.




Edward Rhodes · 1 week ago

MBA - Masters in Business Administration.The nature of the MBA can enable the individual to specialize in one or a combination of specialist functional areas,such as Marketing,Finance,Purchasing etc.Its potency for successful Human Resource Development obviously will vary depending on the environments a person encounters during the evolution of one's professional development.To make a categorical statement as to whether it will be beneficial or not can be misleading and inaccurate.

In a high risk taking scenario the abundance of theoretical awareness may negate the acceptance of such an option.While,in a more stable environment such assets can find the landscape to flourish.

There is no one correct answer for the question posed - The more important dynamic is the tangible possession of multiples skills that can uniquely investigate opportunities,possess the flair to accept the risk and have the creative vision to configure productive assets into winning tangible action.If these talents are acquired via an MBA -So be it,If it is gained through a combination of ways - then progress would of been achieved.





@techcrunchies · 1 week ago

I would say that an MBA is preferred though not a vital aspect to starting up. And I see why people like Guy Kawasaki disagree with the importance of an MBA for a startup - You will lose time, money and focus while doing your MBA which is better spent on building your company. The Google guys or Mark Zuckerberg never needed an MBA to get this far. However, can they manage effectively moving on. Probably an MBA will help now.

So that's the idea - an MBA (or business experience) will help you effectively run your company from 1-10,000 employees seamlessly. Otherwise, you will have to go scouting for a CEO.

Coming from the MBA crowd, I can see one another aspect where an MBA is a hindrance to a startup success - it does not let you bootstrap effectively. At least from my experience of fellow startuppers, the MBA degree brought in a level of lifestyle benchmark that you could not compromise for the frugality needed for the initial years. Also, I have seen that knowing too many things on the financial side has its effect on your strategy as well. MBA startuppers begin with a business plan in hand scouting for VCs..




PCinSF · 1 week ago

There is a subtle difference in what Vivek and Guy are saying. Guy is saying that MBAs are pretty much useless when starting your own company. Vivek is asking whether MBAs are a positive or negative in a startup world. There is a HUGE difference between being the person who starts a company and a person who joins a startup. Only people who start their own companies understand this.

MBAs tend to see technical / product talent as commodities. I agree with Guy. I think MBAs are commodities. It's not to say that MBAs aren't useful. They are useful... useful in teaching you how to understand finance, strategy and communication. But it won't teach you how to be a visionary.

If you're creating a company in an existing market with existing products, then an MBA is probably a positive because you don't have to reimagine the product. You just have to reimagine the strategy.

But if you're creating a company in a new market with no existing products (or no existing winners), then an MBA doesn't get you anywhere in that initial product build out phase. You need a visionary, a designer, an innovator. You don't get that from going to b-school.

Overall, I think MBAs have their place in business but having that business degree doesn't make you more suited to a start a company. I think they have their place in operating a company but have no better odds at starting a company. If anything, my perception is that they are worse for this because they can't distinguish between grunt work and technical all-stars.




Peter · 1 week ago

I've worked at a business school for the past 4 years. Many of our MBA and doctoral students can't manage to send a proper email, read simple instructions, or add up the number of credits they have. That being said, the courses we offer are fascinating and extremely useful. But having a degree means nothing if the person getting that degree is a complete idiot (which can be the case for any discipline). My point: Not everyone is equal. It's what you do with your knowledge, degree or no degree, that matters. It's too bad a lot of employers don't realize this.




Grant Bergman · 1 week ago

Not all MBA programs are created equal, nor are all MBA graduates. Seems silly to try making such broad generalizations. Ultimately it's about the person, the mindset and what's in your bag of tricks... which may come from anywhere, including an MBA program, an engineering degree, a liberal arts undergrad or just plain life.

I'm a Chicago MBA and my consulting partner is a Harvard MBA. I don't think either of us has "the big idea" for a serious startup - aside from our consultancy - and we both stand somewhat in awe of those who do. It helps that we have over 45 years of combined experience, but not a week goes by without one of us drawing something very specific from our educations to aid startups, entrepreneurs and others.

To me, the key is to respect, embrace and help nurture the entrepreneurial spirit of business visionaries while at the same time steering them clear of those business issues that they "don't know they don't know." Our role is not to say "You can't do that" but to say "Here are some risks you can avoid amid all the necessary risks you are taking in a startup."

Which hearkens back to a lesson I learned from my last MBA class in the last lecture: MBA students spend a lot of time learning "how to do things right;" in practice it's at least equally important to know first what is the "right thing to do." (The key lesson, BTW, from a Harvard case study on Acoustic Research speakers.)





steve · 1 week ago

CS/Engineering + MBA > CS/Engineering > MBA

As stated, the technical/business combo is a very helpful background in a start up environment although
there are plenty of pure engineers that can learn enough about business along the way if they are open to it. The pure MBA is rarely going to learn the technical side at any significant level to make a difference in that aspect of the company. I've only met one pure MBA who has bucked this trend. He graduated from Northwestern (Kellogg) then rose up the product management ranks to become a director at a well known networking giant but he was absolutely intense about learning the technical side of the business. He's the rare bird.

Most pure MBAs are just too much of generalists to add any true value to a tech start up especially at the early stages. This doesn't mean a start up should have all engineers. A few business types are needed at the early stages but only a few. As a business matures, the business types can add more value because that's when marketing, finance, business development also play larger roles in the business.

IMO, a future tech entrepreneur would best be served by studying a technical field i.e. computer science, engineering, physics. They will be much better equipped to start a tech company. That viewpoint is shared by many in the valley but it does have merit to it.
Mike Lee
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Don't let the noise of other's opinions drown out your own inner voice.And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
------ Steve Jobs
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Re: Is an MBA a Plus or a Minus in the Startup World?

文章mikelee » 2010-05-22 21:29

除了這一篇文章寫的不錯外,很多人回覆這一篇文章,不少有創業經驗的朋友回覆這一篇,也有很多MBA,工程師..etc各式各樣不一樣背景的人回覆,我大概花了一兩個禮拜把這些回覆看完,大家可要好好的看,不然就枉費我整理了,也歡迎大家多多討論,等我有空在來談談這一篇文章的看法 :grin:

我把一些精采的討論節錄如下


saravana · 1 week ago

I always think about choosing between preparing for a start-up or doing MBA. I know many people have faced this dilemma in life choosing between start-up and high studies like MBA. We have seen many people in this world who have prospered in both the ways. It's a well-known fact that success rate is all case to case bases and hence collecting statistics on success rate between the two option and arriving to a conclusion is not totally great idea. See Both the cases they have one thing in mind clearly. Win Big!. How one going to reach that point is the question. Definitely doing higher studies will delay your first step rather than diminishing your goal. In case of start-up, one need to be an all-rounder(should aware of Technical understanding to Planning to implementation to Marketing to Promoting to Legal to market needs to people psychology. As the company grows it highly difficult to handle everything by a single person ad so can hire field expert to handle them). Vivek is a very good case study, even though he temporarily dropped his start-up plan to pursue his higher studies, his ambition to start-up is always pricking his mind which led him to work on his start-up after a pause. In the mean time one would develop their confidence, get time to analyze and better understand the market,see other possibilities.Before closing my comment i would like to say that at the end it's all depends on ones mindset.





@nancyvega · 1 week ago

Overall great post. I like Vivek’s articles because they provoke debate and I enjoy reading the comments. Here are a few of my own:

Vivek says "Unlike stocks and bonds, education never loses value;" <- I guess it depends on how you measure educational value. Sir Ken Robinson makes an argument that the world is suffering from "academic inflation" which I feel is true. More and more people are getting bachelor’s degrees because a high-school education doesn't have the same value it once did. Same goes for people getting masters degrees because they feel having a bachelor’s degree doesn't have the same value it once did.

Guy Kawasaki's statement about "You can always hire MBA's" is true, but let's not forget that "you can always hire engineers" too. Just because someone can write code doesn't necessarily mean they can conceptualize and deliver a product. Same is true for MBA's.

From a personal perspective, I'm in the process of starting my own tech educational start-up and I must say the MBA is coming in quite handy. Sure I could have started my company without the MBA but overall I feel more confident now than I did pre-MBA. Some entrepreneurs can fake confidence which I really envy. I can't. I feel much more confident talking to investors now than I did pre-MBA but that’s just me. Everyone is different and everyone sees the world through their own lens.

A friend once said “There is a difference between ‘having’ an MBA and ‘being’ an MBA. Never be an MBA.” It’s very true and for all those out there who are “being MBA’s”, please stop as it’s giving the rest of us a bad rep.

What I’d like to know is how many MBA's who have gone on to start their own company feel as though their MBA has actually been a "minus"?





MichaelADeBose 47p · 1 week ago

Vivek, the program you mention as a mini-mba program seems the perfect solution to meeting in the middle between your's and Guy's viewpoint; both of which I agree with. I've recently read several similar discussions related to the venerable "management consultant". Too many schools in business disciplines have been teaching religion vs. exposing students to a range of tools.

Technology is dynamic, evolving and kinetic. There are no litmus test of belief necessarily. Ideological wars are fought all the time and very publicly and today's outsider can quickly become the toast of tomorrow. The most telling thing about the religion of Capitalism - I call it that because people look to religion for answers and solution - is that profit is the only thing that matters apparently along with the quickest road to high returns or any returns at all. Oil companies in the US don't have to invest in the remote controlled shutoffs for deep water wells that are used in Brazil and other countries and so they don't get them, our trains aren't the fastest and neither is our internet so then what exactly are US companies doing with all the glorious money we make aside from pocketing it? US corporations don't like government, but they love government money as common financial prowess begins with never spending your own. Conversely some of the best ideas in this country's history began with spending every penny available and then some along with other insane sacrifices, to the point that the only thing that mattered is the idea and nothing else. Corporate culture doesn't have this kind of belief because there are so few idea men and too many handlers. To them, we won't fix anything that's not broken, don't release anything new while they're still buying yesterday's product and the only place competition takes place is in the legal, lobbying and PR budgets. There's something wrong when the wisdom of staying on top is the opposite of what it took to get there, but this is what you tend to get from the MBAs. Successful businesses look like X and so we must set about making your concern look like X because if it doesn't then its not successful.

As you pointed out in a previous post there are corporations out there that are responsible to employees and consumers alike being both generous and responsive to both and probably in most of those instances it probably started with the owner or CEO not a hired MBA. I think you also pointed out that most of these businesses are criticized in my words, because they leave too much money on the table.

A little off topic maybe, but when I read how some of Tesla's investors were supposedly comforted by bringing someone in from, was it GM or Chrysler; it was Detroit, I was floored because I couldn't imagine how you could bring this person in, without bringing a clearly failed culture and mindset into the core of the company. MBAs can be invaluable, but what they practice isn't alchemy, ok maybe it is which is the problem. The mini-mba program you mentioned is about engineers getting the critical skills they need to discern, articulate and manage the business structure of their operation, which is separate from the product and ideally supports the product. MBAs in my experience and the management consultants they become will reverse that flow and have the product serving the business if given a chance. When this happens a corporation is no longer innovating and is now in maintenance mode.

I could be totally off my rocker, but when you look at the tech sectors struggle to find the balance between creation and business, which is cyclical I don't think I am alone. Look at Pixar's "acquisition" by Disney. They are doing everything they can to isolate and protect the soul of Pixar. Programming can be art and often is but financials and business process can be detrimental to the creative process and that's probably what programmers are sensitive to. Would an MBA quit their job, convince a few friends to join them, hole up in a basement or garage for six months to a year. Probably not because they tend to think you have to have money coming in. Yet, suddenly you've got a working model and the venture capitalist are swarming, suddenly and magically the MBA understands your product entirely. Not likely. They just understand the process of documenting a business and giving it Wall Street respectability. Oddly, the average coder might not care about either.





freddy9x 19p · 1 week ago

I worked at a tech start-up full of engineers and I was one of few people with a business background, and was also at the time in MBA school. I've worked with a few start-ups and I've seen the same results generally hold true.

It is true the MBA's are generally not a very large part of the product development, design, or technical aspects. But what the article fails to mention, and what Guy fails to understand, is that I've seen teams full of engineers with no business knowledge, that think a good product = successful business. They have no understanding of markets, prices, and the especially: SALES.

No start-up I've seen has an engineering CEO or CTO that understands how to run a sales team, among other things, which is the lifeline of the companies. An engineering team doesn't know who to hire, what the difference is between business specialties, how to incentivize sales people, they don't understand how to grow, and they don't know when to fire someone. So many start-ups create a product, hire a salesman, watch him fail, fire him, hire someone else, and over and over again it goes. So many start-ups hurt themselves by creating a product, not understanding business, and leaving the fate of their success to a sales operation that has not been properly executed. If a great product is all that is needed, why do so many good inventions never prosper? Why do things like the Snuggy strive?Think about it...

Start-ups need people who understand business, and the MBA will always be the degree of choice for people who want to understand business.




valerie · 1 week ago

I went to business school to network. I have met so many people that connected me to the right people to help me expand corporation (wholesale distribution B2B). The academic part was boring and the teachers uninspiring but my classmates were my best resources and I wouldn't have come across such a cross section if I just sat in my office trying to come with new ideas. I easily made back my 250K investment and I would say my MBA was the best two year vacation I ever took. I could have just went to some conferences to meet new people but business school is a very special and unique experience.

However, you have to make the decision if the MBA is right for you or if its easier to just hire one. An education is never a bad thing




Brad · 1 week ago

Great post. As a person with a JD / MBA, I think it too simplistic to say an MBA is a negative without looking at the people that choose to go to MBA school. In the example of the post, Vivek was already a very competent and intelligent person who had weaknesses in his skill set. The MBA helped polish his weaknesses. However, at his core, he was competent and intelligent. The problem with the MBA is that has lost any value it had compared to a Medical or Engineering Masters or a JD. Any warm blooded individual can get an MBA. I would say that of my class 80% were people fired from their jobs, had made poor career choices, etc. To me that means a group of people who were not strategic in their choices, affected by the market, or disgruntled. The other 20% were people who were competent but lacked skills in certain areas. For myself, coming from Milwaukee, WI, the tech industry is non-existent. The MBA program I received opened up doors to a network, exposed me to other people whose experience I could draw from and move forward. On many accounts, I lost 3.5 years of my life in school, a fact my ungodly loan payments remind me of every month. If I lived in San Fran growing up, went to a school out here, and went directly into a tech company, my knowledge base would have been very different. No one would have hired a timeshare salesman from Wisconsin if I moved out here direct and started talking to tech companies. Hell, to point to Guy, I had no idea even what a VC was, how would I know to ask him for a job?




cyeh · 1 week ago

i'm sorry, but an MBA in my opinion may be a negative impact without real world experience. as an engineer and also having the experience of co-founding a company as well as working in the start-up world, too much weight in my opinion has been placed in the MBA. an analogy can be placed on the theoretical physicists/engineer versus the experimental physicists/engineer. in the real world, survival is based on making the product or concept tangible and concrete. theory can be thrown all over the place, but it is purely theory. most MBA's come out with minimal real world experience at the level they are being placed in.
a person starting a restaurant has more value in how a business can be ran and successfully than the analytical/theoretical tools an MBA teaches with case studies. one of the issues with the MBA is that he person graduating with an MBA may not even have the talent to persevere and are generally complacent management with the expectations that they're analytical/theoretical model shoudl in theory work out, but reality is different.

value within the mba may be relevant at an established corporate situation, but the start-up environment requires DO'ers and not one's that delegate theories for optimization.





Michael Clouser · 1 week ago

Although I agree with Scott's comment above in that there are a small percentage of MBA students interested in technology, and entrepreneurship, for that matter, I do think that the MBA is excellent training and networking territory for entrepreneurs -- provided they take advantage and exploit this opportunity. I would broaden out the thoughts of contributor's above, to say that there is good value and return-on-investment in any of the top 100 global MBA programmes (the Financial Times has an annual list of the top 100 programmes accross the world and here they arehttp://www.rankings.ft.com/businessschoolrankings...

I do however think that in general MBA programmes could use some re-tweaking, innovation, and programme-building, perhaps in partnership with either their own universities, or with other universities, perhaps even internationally, for entrepreneurship (and along with that, let's not forget its sister, venture finance). The business schools offering MBAs need more experienced entrepreneurship educators, and more innovative, learner-centred programmes in entrepreneurship, that include a range of experiential learning opportunities. Incubators, physical and virtual, are a much under-utilized tool. Also, the MBA programmes generally could use more flexibility in their offerings and timeframes for the unique set of MBA entrepreneurs that roam their halls. Another action that should be taken is that of intertwining with other disciplines, such as science and design, to build innovative programmes that cut accross formerly rigid boundaries. Indeed, innovation in entrepreneurship education is called for accross the board in business schools. That was why I was motivated to theme this year's Stanford REE Conference that I helped organize "Innovation in Pedagogy: Design and Entrepreneurship". One of the tracks, for instance, is focused on Student-managed venture capital funds, that provide experiential learning in start-up investing, something that is lacking in both business schools and in the real world, for that matter.http://ree.stanford.edu/europe_2010/. Anyone interested should have a look at our programme this coming September 2010. It is held at the University of Edinburgh, in the School of Informatics, and is sponsored by Informatics Ventures. We'll attempt to innovate at the intersection of engineering, design, and business, and help educators develop their own programmes that will leverage the three.

--part 1 of 2---

Michael Clouser, Educator, Entrepreneur, former Venture Capitalist
Cornell University - Hotel School BS 1990, Johnson Graduate School of Management 1999
University of Edinburgh - Business School MSc 2006 (Entrepreneurship and Innovation);
PhD Candidate (Entrepreneurship and Education)
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Michael Clouser · 1 week ago

---part 2 of 2 ---

The MBA degree I sincerely believe can assist the entrepreneur in seeing the bigger picture, and also in finding more opportunities that s/he wouldn't have otherwise. More sophisticated opportunities can be discovered and comprehended. The network is also a vitally important component, especially for its value in fundraising connections down the road, and for management talent. It worked for me.

Full disclosure -- I am an MBA. And I also consider myself an undergraduate entrepreneurship student -- from the Hotel School at Cornell. Between the two of them, and the rest of the campus, there are hundreds of entrepreneurship courses available.http://entrepreneurship.cornell.edu/student/cours...
Just in the Johnson School (MBA programme) alone, the following courses are offered under the specialisation of technology and science-based entrepreneurship:

# NBA 5070 Entrepreneurship for Scientists and Engineers
# NBA 6000 Strategic Role of Information Technology
# NBA 6080 Innovation in Pharma/Biotech: The Challenge of Change
# NBA 6100 Technology Management: Bio Info and Nano
# NBA 6180 Global Innovation and Technology Commercialization
# NBA 6520 Commercializing University Science and High Technology
# NBA 6650 Management of Innovation and Technology
NBA 6750 Summer Start-up Internship in Silicon Valley

plus, all of these just in venture finance and private equity:

* NBA 3000 Entrepreneurship and Private Equities
* NBA 5170 Entrepreneurship and Private Equity Immersion
* NBA 5320 Due Diligence in Private Equity Investments
* NBA 5570 Case Studies in Venture Capital Financing
* NBA 5590 Venture Capital Industry and Private Equity Markets
* NBA 5630 The IPO Process and M&A Process
* NBA 5640 Entrepreneurship and Private Equities
* NBA 6780 Advanced Private Equity - Negotiations and Structuring

------------
Perhaps a sign of the times, I've watched the programme offerings at Cornell for entrepreneurship increase in both quality and quantity since I started by undergraduate degree there in 1986. One of the turning points, I believe, was the advent of a campus-wide entrepreneurship programme, EPE, which was founded in 1992 or so ...http://entrepreneurship.cornell.edu/about-us/quic... This allowed the university to gather resources, realize synergies and attract new faculty / develop new programmes. In turn, this benefitted MBAs as well.
------------------------------

We may see the advent of degeneralisation of MBA programmes, where some decide to invest more strategically in their entrepreneurship, innovation, and entrepreneurial finance areas, cross-polinate with other university units or international partners, etc. to build these out, while others decided to pursue another channel. In some regards, this has happened already, for instance with Babson. Perhaps some of the issue surrounds the fact that many MBA programmes have tried to be "all things to all people: and should instead focus on their comparative advantages.
---------------------------------

Bottom line --

For potential MBA readers- is the MBA offer a good return-on-investment for entrepreneurs? Yes. But do your research on programmes, stay in the top 100, and use the time wisely and innovatively. For instance, you might want to stack your classes so that you get the brunt of them over in the first 1.5 years, and use the last .5 to start your new company and leverage the contacts you are making, including your classmates.

For entrepreneurship educators and programme builders: We have a lot of work to do and need to be more innovative. The market is clearly not sold.
------------------

-Michael Clouser




J.B. · 1 week ago

I graduated from a top engineering school with a double engineering major and constantly flirted throughout my twenties with the idea of adding an MBA. I was working at a startup, and the CEO and the VP of Engineering both did all they could to talk me out of it -- and both of them *had* MBA degrees. I think it's a matter of knowing your skill set and having a vision for yourself. For me, the idea of going to work and not doing hands-on engineering implementation work would be a nightmare. The MBA might help me to move into a management/finance/marketing driven position that would absolutely drive me crazy, so it would be a total waste for somebody like me...





sam mishra · 1 week ago

Thought would reproduce the write up on MBAs from my Web 3.0 concepts portal (more such write ups athttp://software.franteractive.com ), so here it goes:
----
MBA = Master of Barely Anything

I believe a book was written on the above theme.

Now, let me digress...
When I was pursuing my MBA in MIT Sloan, the school made me sleep only 4 hrs a night on weekdays. I enjoyed the beating so much I stayed on for 3 more semesters and got my MBA. I was born in India and have never seen the Taj Mahal. One of my best friends (born somewhere here in USA) classmate made 2 trips, saw Taj Mahal the first time, and saw the Great Wall of China the second time around. I need to see both...Some other class-mates made that trip to Lebanon while bombs were falling on Beirut, albeit that trip also included visits to the pyramids in nearby Egypt.

Now let's come back from the globe-trotting... Can we look beyond the rat-race? Can we jump out of it? I have. You can check my podcasts on FRANCONOMICS . My education in Economics (consolidated while pursuing the MBA gives me the pleasure to go after the Bernanke's (and as required, the Krugmans) of the world. The fact that both these so-called giants are MIT Ph.Ds. does not stop me from critiquing them. Think outside the box.

An MBA is not just an entrepreneur. And the so-called "entrepreneurship" is not the holy grail of human existence. Village women in India who walk 12 hours a day under heavy sunlight, carrying twigs which they will sell the next day (while their husbands pull rickshaws or are sleeping home having drunk a lot of country liquor), and who frequently don't get one full meal a day (and who never have had a hot bath in their life), are also entrepreneurs. Everyone is not born with the endowment of Bill Gates or the connections of Mark "facebook" Zuckerberg. But then there is a difference between this MBA and that MBA. My "tech strategy" podcasts which the CTOs / CEOs half my age i n Boston/Bangalore/Bay Area lap up regularly from the Open Strategy Portal prove that an MBA from a good school (coupled with 20 years of experience) has some value...

So may be, just may be,
MBA = Master and Boss of Anything (one truly desires); and paying heavy tuition to a big business school is only one of the ways..
---

Peace,
Sam, MBA(Sloan)





Paresh · 6 days ago

MBA definitely adds a lot of value in of knowledge and network. Agreed that the fees are prohibitive. But then many entrepreneurs can opt for executive and part time program which are in vogue these days to save money. Here in India they are slowly picking up. If you are a start up material and face the same dilemma my advice would be to look at part time/ online program. You focus on only what is needed - knowledge without worrying about placements , grades and other such stuff which is a complete overburden for start u founder.
Mike Lee
FormorsaMBA Team
Email: mike.lee@formosamba.com

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Don't let the noise of other's opinions drown out your own inner voice.And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
------ Steve Jobs
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mikelee
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Re: Is an MBA a Plus or a Minus in the Startup World?

文章takingblue » 2010-06-10 23:11

很受用
推推!!
takingblue
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註冊時間: 2010-06-01 20:58


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