Once early stage entrepreneurs learn that I earned an MBA from Wharton, they usually ask, “Should I pursue an MBA as well?” My initial response is, “If you want to be an entrepreneur, why would you possibly want an MBA?”
In certain instances, an MBA may make sense. However, for most entrepreneurs, the time and money required to earn an MBA is better spent launching your adVenture and learning on the job.
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Listen to the Hotdog Vendor
Business schools are essentially vocational institutions for consultants and investment bankers. In general, the curriculum is geared to beat the entrepreneurial spirit out of the students. I learned more from talking to the guys running the hotdog stands outside of the Wharton Quad than I did from most of my Professors – and talking with the vendors was a lot less expensive.
Sure, there are entrepreneurial programs at most decent B-schools, but even these programs are often overly theoretical, relying on the vaunted yet specious case-study approach. Reading cases in the hopes of becoming an entrepreneur is like trying to teach someone how to hit a baseball by reading a book. It might be entertaining to read about Ted Williams’ long, graceful swing and Babe Ruth’s powerful follow-through, but there is no substitute for grabbing a bat and stepping up to the plate.
Bidnez is Bidnez
If you have a non-business undergraduate degree, then an MBA may make sense, even if your are an entrepreneur. The curriculum will expose you to business fundamentals, including accounting, finance, business law and economics. A basic understanding of these fields of study will help you immensely as an entrepreneur, even if your role in your future adVenture(s) will be primarily technical.
If you work at a BDC and an MBA is a requirement for achieving a promotion, then sign up for an online program. Do not take two-years off of work to earn an MBA and do not pay a fortune for this ‘education’. If you are simply seeking the credential to further your career at BDA, get them to pay for it.
Squash and Farsi
Entrepreneurs who have an undergraduate degree in any aspect of business should not waste their time pursuing an MBA.
Wharton requires that all first-year students take the same set of “Core” classes. Like a typical first-year dolt, I signed up for the ‘Core’. Within a week, I was bored out of my mind.
Other than getting an update of the latest business buzzwords, the material was essentially a rehash of my four years of undergrad business training. Econ is econ, finance is finance and, quite unfortunately, accounting is accounting.
When the second semester finally rolled around, I had had enough of curriculum deja vu. Despite my frustrations, I was told by everyone, Professors, Advisors and Students alike, that there was ‘no way’ I could get out of taking the remaining Core classes. Being a proud member of The Fringe, I took this as a grand challenge and approached the Dean with several well rehearsed arguments, ready to rumble.
Somewhat to my disappointment, when I told the Dean that I was not getting anything out of the Core classes, he simply asked me what courses I wanted to take. I handed him my class enrollment form. He quickly scanned it, murmured something unintelligible and signed it. As I turned away, still somewhat shocked, he stopped me and asked, “I can understand why you want to take Squash, but can I ask why you are taking Farsi?”
In addition to taking these non-traditional courses, I also ‘minored’ in poker. Unfortunately, Wharton did not offer any on-campus poker courses. As a community service to my fellow Whartonites, I graciously established a weekly poker study group that met at my house every Thursday evening. The life lessons I learned playing poker rank up there with the sage advice I received from the hotdog vendors. Some of these lessons are discussed in “Hold Em or Fold Em”.
But What About Networking?
You may be thinking, “Yea, I get it. MBA course work is irrelevant, but what about the awesome networking opportunities?”
It is true that you will meet lots of people at B-school who will eventually be successful. However, most of your classmates will accept high-paying, unfulfilling jobs with Consulting and Investment Banking firms. During their extended slog to the top of these professional services pyramids (see “Beware the Consultant”), your former classmates will be of little help to you. Even after they reach the top of their respective pyramid, their ability to help you may be limited.
Free Consulting Worth Half the Price
Besides Poker, Squash and Farsi (yes, I really signed up for Squash and Farsi), the balance of my second semester schedule was filled with second-year entrepreneurial courses.
One of these courses involved ‘consulting’ with would-be entrepreneurs who were foolish enough to sign up for free consulting from Wharton students. One of my ‘clients’ was the Bucks County Nut Company, which later morphed into the Bucks County Coffee Company. As I recall, it was a well-run company that probably had the good sense to ignore all of my group’s naïve recommendations.
The other consulting project involved two middle-age brothers who were considering whether or not to quit their middle manager day jobs and go into business preparing and selling food from a truck. If you have not spent much time in Filthydelphia, you may be sickened to learn that people in Philly will eat pretty much anything from a food truck. In a select few cases, the food is actually not too terrible.
Base jumping is a ‘sport’ which involves jumping off a high structure (bridge, building, mountain, etc,), free falling to an altitude in which the margin of a parachute malfunction approaches zero and then pulling the ripcord at the last possible moment.
Starting a company is like base jumping – without a parachute. In fact, to make matters more exciting, a startup requires you to build your parachute while you are freefalling. Once you make the jump, there is no turning back. If you are really good, you will not simply build a parachute, you will craft a hang glider that will allow you fly around, check out the scenery and then pick the time and place for your gentle landing (i.e., an exit either via an IPO or M&A sale).
If you are really good AND really lucky, you will convert your glider into a rocket that will put you into a self-sustaining orbit. If this happens, your venture will indefinitely prosper as a standalone company.
The amount of money you raise equates to the height from which you can make your base jump. More money means you have more time to freefall. More money does not mean you will defy the laws of gravity. It simply allows you to buy expensive components for your parachute/glider/rocket and more experienced teammates to help you put the parts together in mid-flight.
However, as discussed in “Frugal is as Frugal Does”, no matter how much money you raise, you will constantly struggle with the challenges of deploying your cash in the most effective manner.
If you do not successfully build your parachute, you are destined to hit the ground – hard. Thus, everything you do in the early stages of your startup must be focused on ending your freefall by putting wind under your wings.
Survival is the most important objective of every organism, including your business. You must do everything and anything that is ethical and legal to ensure your company lives to fight another day. This may mean being a dream killer and completely changing your business model. This may mean laying off valued employees and straining personal relationships. No matter what you have to do, anything is better than crashing into the ground and taking a long dirt nap.
Back to the Food Truck
The two food truck brothers grappled with the idea of making their base jump for the duration of the semester. In retrospect, it is clear to me that they were looking to me and my fellow group members to give them the nudge to propel them into freefall. None of us could do it.
It was not that we thought the food truck venture, which they planned to eventually grow into a catering service and then a restaurant, was a terrible idea. A quick look down Walnut Street was enough to validate whether the idea was feasible. Clearly it was a viable, albeit modest, endeavor that would require a tremendous amount of hard work without the promise of a large financial return. However, for the right entrepreneurs, a food truck could be a rewarding lifestyle business.
Our hesitancy came from the fear that these two brothers, who both had wives and children, might rely on our cavalier and ill-informed advice and then not be able to build their parachute and pull the ripcord in time.
I remember the look of abject fear on their faces and I wondered why they came back to campus every week to meet with us. Seeing the potential impact of a real venture through these entrepreneurs’ eyes was the best learning experience I had at Wharton (besides the awesome Squash lessons).
The food-truck brothers are not alone. One of the most difficult steps in launching any venture is the first step. As John Lusk, author of “The MouseDriver Chronicles” articulates, “…the more risk you take, the easier it is to take more risk.”
But Wharton is Such A Great School…
People also ask me, “Did your MBA help you?” Like any entrepreneur with a healthy dose of self-importance and a burning desire to believe they are utterly ‘self-made’, I would like to think that my entrepreneurial accomplishments are due to my ‘amazing’ innate abilities. However, Wharton ‘must have’ helped me in ‘some’ way. I am just not sure how.
“Well certainly your Wharton MBA helped you get a job, didn’t it?” In fact, no. When I initially met the Founder of the robotics venture which we eventually took public, he gave me a blank stare when I proudly told him I went to Wharton. He had never heard of it! Rather than being angered or offended, I actually found it very refreshing, as it reminded me how unimportant credentials are when you are living on The Fringe. Credentials may get you promoted at BDC but they do not make payroll and they do not motivate customers to part with their hard-earned dollars. Other than helping to establish your credibility with investors, your academic credentials will have little impact on your adVentures ultimate success.
As David Packard notes in his book, “The HP Way”, “Many of the things I learned in this (startup) process were invaluable and not available in business schools.” The same reality is alive and well today.
Becoming an entrepreneur is like learning to be a homerun hitter. Reading about it might be entertaining, but it is not helpful. With that said, why are you still sitting in front of your PC? Get up, get out and start hitting the ball.
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