Monday, August 9, 2010
In an earlier post I discussed the fact that I don't think I'll finish my MBA. If I had my time again, would I have started one? What's the value that an entrepreneur can take from an MBA? This is something I've given quite a bit of thought to over the past couple of years.
Probably the best place to start when analysing this is to look at each of the reasons people do an MBA.
1. Getting a good job
When I was working at Google's Mountain View head office I went along to a session where some senior manager's were discussing whether it's worthwhile studying an MBA. Some on the panel had studied an MBA, others hadn't and they were all very open and honest with their thoughts. The basic thing they all said is that hiring people for Google in the US they essentially ignored all MBA's unless they were from one of the top 5 schools in the world - Harvard, Stanford, Wharton, Kellogg or Insead. And even then, it was more about what people had done in their previous jobs than whether they had the bit of paper that said they had an MBA. There are a lot of people working at Google Australia who have studied at the Australian Graduate School of Management, so there's no doubt that's not ignored when hiring here, but from what I saw of hiring practices it was certainly more about the person's work experience than the piece of paper with the MBA written on it.
That said, something the managers at Google said was that the networks you get from studying an MBA are all very valuable. These can be particularly useful if you're looking for a career change, particularly when changing industries. Using your MBA network to learn more about an industry, who the good employers are and who the right people are to meet can be very valuable when looking for a new job in a new industry. But unless you're looking to do that, an MBA is not going to be a big help in getting you hired, your work experience is more important.
Of course all of this is completely irrelevant to an entrepreneur as you're goal here is to employ yourself.
2. Learning about running a business
This is clearly an important point for any budding entrepreneur. If you'll be running your own business it helps to have some theory around how to do that.
As I mentioned in my earlier post, the Managing People and Organisations course I took in my AGSM MBA was very rewarding. I learnt a lot about what motivates me, what motivates other people and theories on how to create motivating, exciting work environments that inspire people to perform at their best. Had I not already completed a Commerce degree the Accounting, Finance and Marketing courses would have also be relevant in helping us start Shoes of Prey. So my MBA provided some value on this front. In a comment in the previous MBA post, Steven Noble mentioned a business simulation that he did as part of one of his final MBA subject which sounded like it covered a lot of the strategy side of starting a business.
All of that said, I think the best way to learn how to run a business is just to do it. Investing the time and money you would put into an MBA into experimenting with a startup is probably a better way to go. Tim Ferriss discusses creating your own MBA on his blog. (Thanks Libor).
3. Developing a strong business network
There's no doubt a lot of people get a lot of value from an MBA. My friends who studied at Harvard have glowing things to say about the course there. Warren Hogarth, a good friend from high school is now at arguably the top Venture Capital firm, Sequoia Capital and Scott Griffin is a co-founder of the very successful online accounting firm Etax and is now working on a couple of other entrepreneurial projects, and they both say they took a lot from the course. Harvard is one of the best places to study an MBA in the world, and Warren and Scott both say the people they met in that course, as well as the material and quality of the lecturers are outstanding.
I met a lot of great people in my MBA course at the AGSM, however as I mentioned earlier I met more people studying with a smaller group in Brisbane compared with Sydney.
What do you think? If you're planning to be an entrepreneur is it worth studying an MBA?
Posted by Michael Fox at 9:08 PM