Do Entrepreneurs Need an MBA?

Summary

In this 'MBA Monday' episode, Angela Guido discusses the relevance of an MBA for aspiring entrepreneurs. She differentiates between traditional entrepreneurship and high-level 'highfalutin' entrepreneurship, noting that an MBA is more suited for the latter. Guido emphasizes that while an MBA can provide networking opportunities and credibility for venture-funded startups, it may not be as beneficial for those looking to start businesses from scratch. She advises prospective MBA students to consider their entrepreneurial goals and the type of skills they need to achieve them before deciding on an MBA.

Takeaways

• 🎓 The MBA was initially designed for middle managers, not necessarily for those looking to start businesses from scratch.
• 🚀 Entrepreneurship can be grassroots or 'highfalutin', with the latter often involving significant capital and team building, which may align more closely with MBA training.
• 🤔 If you're a 'doer' with a clear business idea, an MBA might not be necessary as the practical skills for immediate startup are different from those taught in business school.
• 💼 MBA programs are increasingly aware of the trend towards entrepreneurship among students, offering courses and resources to support this interest.
• 💡 The MBA can provide a network and credibility that may be beneficial for those seeking venture capital and partnerships to scale their business.
• 💭 It's important to consider the type of entrepreneurial path you want to pursue before deciding how an MBA might assist you.
• 📈 Many MBA graduates eventually become entrepreneurs, but this often happens later in their careers, not immediately after graduation.
• 💰 The cost of an MBA can be a barrier to starting a business immediately after graduation, influencing the decision to delay entrepreneurship.
• 🤝 The MBA's greatest asset for aspiring entrepreneurs might be the network and connections made, which can be invaluable for future business endeavors.
• 📚 For those certain about their entrepreneurial path, taking MBA courses focused on entrepreneurship can provide valuable insights and skills.

Q & A

What is the original purpose of an MBA degree?

The MBA was originally conceived to be a degree for middle managers, designed to help people who were in the middle, taking pressure from the top and managing down below, to do that job better.

Why might an MBA not be necessary for some entrepreneurs?

An MBA might not be necessary for entrepreneurs who are 'doers' and already have an idea they want to execute immediately, as the MBA teaches skills more suited for middle management rather than starting a business from scratch.

What is the difference between entrepreneurship and 'highfalutin' entrepreneurship?

Entrepreneurship refers to the act of starting a business, which can range from a small local business to a franchise. 'Highfalutin' entrepreneurship typically involves raising capital, building a team, and aiming to scale the business to a larger size, often with the intention of attracting venture funding.

How does the MBA help in the context of 'highfalutin' entrepreneurship?

The MBA can be helpful for 'highfalutin' entrepreneurship by providing a network of potential collaborators, co-founders, and investors, as well as credibility in venture circles, which can be beneficial for raising funds and building a business at a larger scale.

What kind of skills does the MBA teach that may not be useful for starting a business from the ground up?

The MBA teaches skills more suited for middle management and does not necessarily provide training for the 'guerrilla warfare' of building a business from the ground up, such as skills for immediate, grassroots entrepreneurship.

Why might an MBA be beneficial even if it doesn't teach specific entrepreneurial skills?

An MBA can provide confidence and the knowledge that one can figure out how to run a business, even if the specific skills required for starting a business from scratch are not taught.

What percentage of MBA graduates eventually become entrepreneurs?

It's suggested that a significant percentage of MBA graduates eventually become entrepreneurs, but the exact number is not provided in the script. It's mentioned that according to some articles, 80% of MBAs want to go into entrepreneurship, but this is considered a trend and not necessarily reflective of the long-term career paths of MBA graduates.

How does the MBA curriculum cater to aspiring entrepreneurs?

Many MBA programs offer courses and experiential learning opportunities focused on entrepreneurship, especially the 'highfalutin' style, which includes learning how to create pitch decks, court investors, and structure founder agreements.

What are the three core skill sets required of a successful entrepreneur according to the book 'The One Page Marketing Plan' by Alan Dibb?

The three core skill sets are ideation (the ability to envision a new reality and a problem being solved), actualization (the ability to make the business real from the idea), and managerial (the ability to use systems, people, and structures to move the business forward and serve customers).

Why is the MBA's network considered valuable for entrepreneurs?

The MBA's network, which includes friendships and professional connections, can provide potential collaborators, investors, and other individuals crucial for building a company, either immediately after the MBA or in the long term.

What advice does Angela Guido give to those considering an MBA for entrepreneurial purposes?

Angela Guido advises that one should carefully consider the type of entrepreneurship they want to pursue and whether an MBA provides the necessary skills and network for that path. She also encourages taking advantage of the MBA's resources and curriculum to learn about the challenges and skills entrepreneurs face.