Keith Cowing

Keith Cowing

Product guy. Entrepreneur.
Career advisor. Read bio

Will an MBA Kill Your Chance to Become a Great Tech Entrepreneur?

July 25, 2010

There is a lot of debate about the value of an MBA, particularly for entrepreneurs and technology executives. So I looked at some top people in the industry and their educational backgrounds. Below are 17 entrepreneurs and technology executives who have run successful, disruptive businesses. The selection process was not conclusive or scientific, but created a list to generate a sample and start a discussion.

(Link to full spreadsheet)

There are a few things you’ll notice (none of which should be surprising): lots of technical degrees, a bunch of dropouts, and 3 MBA’s.

First of all, I am an entrepreneur and I have an MBA so I clearly don’t believe that the answer to the question I posed is yes. Second of all, I don’t want to place too much emphasis on resume credentials, which can be overrated. However, there are some natural points of contention between the spirit of an entrepreneur and the spirit of an MBA program that are worth pointing out. If you’re an entrepreneur at heart and are currently in business school or are considering business school, here are some points to keep in mind.

Short-term vs. Long-term Thinking Entrepreneurs are long-term focused. This can be at odds with the mindset of many MBA programs. MBA rankings are important to business schools and the long-term success of its graduates is hard to measure. What’s easy to measure is the starting salary and signing bonus of recent graduates. Starting salary is a horrible measure of what you get out of business school. But this is what MBA programs will be measured on, so remember that. It’s easy to let somebody talk you into taking a “good job” even if it doesn’t fit your true goals. Entrepreneurs forgo short-term salaries and prestige for the long-term opportunity to build something great. Just like public companies face pressure from Wall Street to focus on short-term profits, many MBA programs are driven to focus on their graduates’ initial paychecks instead of long-term career happiness. Make sure you go to a business school that thinks long-term and don’t compromise your personal goals for a signing bonus and an impressive business card if that’s not your top priority.

Managing Companies vs. Creating Disruptive Businesses MBA programs are good at teaching students to manage companies, but not to create truly disruptive business models that stare in the face of history. MBA programs are focused on case studies. They teach people to follow frameworks, use known approaches, and walk down the career paths of those before them. The best innovators, however, are the ones that do not follow the rules of the past and have the spark to develop their own ideas. FedEx was originally a business plan that Fred Smith wrote at Yale. He got a C and was told that a national overnight delivery service made no sense. It’s a good thing he didn’t listen to his teachers. I’m not saying business school courses are useless, quite the opposite. What I am saying is that following a formula will help you get a good job and do well in your career. But if you want to pursue greatness (enter the entrepreneurs) you are by definition going to have to take risks and ignore some of the things that people try to teach you. None of the great innovators and entrepreneurs have gotten where they are by following a path that somebody else showed them.

Analysis vs. Action In the real world of running a startup, the strategy and “analysis” is 10% of the work (some will argue that it’s 1%) and execution takes up the other 90% or more. It’s the action that counts at the end of the day. MBA programs have real business experiences tossed throughout them, but each class is ultimately a case in analysis. You look at business problems, think about how to solve them, identify key factors, and present your thoughts. You put together a presentation, a document, or a spreadsheet. But you never actually solve the issue. You simply discuss it and write about it. Proposing a strategic initiative is drastically different from operating that business day and night until the initiative has been fully implemented 18 months later. To be an entrepreneur you need to be a builder. You need to create something out of nothing and get others to join you in the adventurous task. So if you want to practice entrepreneurship, don’t go through business training passively. Find projects where you can take real action, create real products, and sell them to real people. Get out of your building, talk to customers, talk to people in the industry, identify business opportunities, and go after them. Entrepreneurship is an iterative practice. Building a great business is about thousands of baby steps all added up. But you’ll never get to the end if you don’t take those first 3 steps. So don’t just practice the analysis, practice the action.

Entrepreneurship, in my mind, is the best business school out there. You learn by doing as job experiences and lessons fly at you from every direction. So if you’re an entrepreneur or an aspiring entrepreneur considering business school, I’d urge you to take a look at the things I noted. Make sure you choose the right program and keep in mind that entrepreneurs have a different focus than bankers, consultants, and brand managers. Going through the business school experience is great. But blaze your own path and don’t follow somebody else’s.


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