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

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

#31

Post by mvp »

endtime wrote: post #27
glen wrote: post #24

Earlier quoted context omitted.

IIT - most selective school on the planet. Much more competitive than Harvard.

Your comment inspired me to do some research, and the first page I found was this one: http://www.kamalsinha.com/iit/acceptance-rate.html Given your comparison to Harvard, I thought you might be interested in this paragraph: >While it seems true that admission rate at IITs is less than even the most selective US school like the CalTech, it does not mean IIT recruits students of higher caliber. In a country like the U…

glen is probably referring to the ratio of the number of successful applicants to the total number of applicants - which is about 1% ( about a decade and half ago, maybe even less now).

I don't know whether it makes any sense to compare the calibre of students coming from colleges in different countries with vastly different cultures in the absence of results from common tests.

However, these people are definitely among the best from a populous country where education has a status closer to religion and is also a ticket to earn legal income disproportionate to efforts expended.

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

#32

Post by tullius »

sachinag wrote: post #14

I'm a non-technical founder who's founded one startup, joined another, and am now an Advisor at TechStars - before I go back to B school to get an MBA. And that's after I did a business degree in undergrad. To me, getting an MBA is all about option value. If I want to go to a big company, it's a prerequisite. If I want to do startups, it's not. If I want to jump back and forth, then it's a prerequisite again. I'm wil…

Exactly the kind of the logic that people use to justify going into the corporate world instead of a startup. For people serious about building a successful startup the possibility of going back to a cushy corporate job if things don't work out should be the last thing on their mind.

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

#33

Post by jlees »

deltapoint wrote: post #29
pg wrote: post #23

Earlier quoted context omitted.

The cause of the apparent paradox is that "business" spans a huge range. MBAs train you to be junior officers in the armies of managerial capitalism. But there is almost zero overlap between that sort of work and what startups do.

Do you think there could be an MBA program that teaches relevant things to what start ups do? and what would it teach? I feel in some ways part of what Y Combinator does is like an extremely condensed business school that is relevant to start ups. YC "spend[s] much more time teaching founders how to pitch their startups, and how to close a deal once they've generated interest." YC also invites speakers to share their…

Something like http://www.founderinstitute.com/ seems useful to me - that plus a degree in computer science and design plus a term in Y Combinator.

(there are alternatives to Founder Institute that don't seem quite so MBA-ey, too)

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

#34

Post by neilc »

pg wrote: post #28
neilc wrote: post #25

Earlier quoted context omitted.

MBAs train you to be junior officers in the armies of managerial capitalism. Some MBA programs do -- most, even. But more and more programs are focusing on entrepreneurship. I think it is pretty obvious that having an MBA is useful if you're going to do a startup. Is getting an MBA more useful than spending the time/money on something else? Perhaps, perhaps not -- depending on the person involved, the skills of their…

Actually I would say it's a slight net minus to have an MBA when doing a startup. You learn nothing of use to you, but investors discriminate against you slightly. Almost all investors are looking for founders who match past stars. So what they're looking for at this point is hackers. I have to say I agree with them. I can't imagine Bill Gates or Larry & Sergey enduring B School.

You learn nothing of use to you

For a small percentage of startups, that might be true, but I think it is far from true for most startups. Consider the 1-year "mini-MBA" at Duke that Wadhwa mentions, which covers "marketing, finance, intellectual property and business law, and management." You would really suggest that this training offers nothing of value?

Again, there might be more efficient ways to spend your time/money, but for the vast majority of startups, that is a very useful skillset to have, particularly if it complements technical knowledge.

Maybe that knowledge isn't useful if the founder is content to handle only technical stuff, the startup remains small, and the company doesn't have any paying customers. Seems like a pretty big limitation to me though.

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

#35

Post by profgubler »

pg wrote: post #28
neilc wrote: post #25

Earlier quoted context omitted.

MBAs train you to be junior officers in the armies of managerial capitalism. Some MBA programs do -- most, even. But more and more programs are focusing on entrepreneurship. I think it is pretty obvious that having an MBA is useful if you're going to do a startup. Is getting an MBA more useful than spending the time/money on something else? Perhaps, perhaps not -- depending on the person involved, the skills of their…

Actually I would say it's a slight net minus to have an MBA when doing a startup. You learn nothing of use to you, but investors discriminate against you slightly. Almost all investors are looking for founders who match past stars. So what they're looking for at this point is hackers. I have to say I agree with them. I can't imagine Bill Gates or Larry & Sergey enduring B School.

Do you think that every investment you make is in the next Google or Microsoft? How about other investors? It seems like if you were specifically looking for the next Google or Microsoft that would be a great thing, but what if your not.

Do you think that the majority of investments you make (which likely aren't going to be the next microsoft or google) could be better done with an MBA on the team? Has this really been even tried in the startup world since the dotcom bust? I am not saying the way you in vest in founders is wrong by any means, but could VC's be missing out do to a bias of trying to find the next microsoft when in reality they know the company they are looking at is likely only acquisition bait?

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

#36

Post by vishaldpatel »

Being in a start up is a game. We have an idea and we are playing the game to make that idea as successful as possible. We need tools in this game - engineers, lawyers, accountants etc.. are all tools. Some tools are more useful in the beginning than others. Some tools become more important as our startup matures.

Now MBA is this awesome general degree that teaches you a bit of everything - accounting, sales, some business law. This makes you a versatile tool! :D. The question is, do you know how to best serve a startup? What can you do? What do you want to do? How will you make up for your lack of experience in a certain area - can you learn quickly? Adapt?

Many startups these days start out with the core team being engineers - they're looking to build something, so it makes sense. That said, some startups may do well with a gritty MBA who can go out there and talk to tons of people to generate / prove ideas and report back to the engineering team; take care of accounting; HR stuff if need be; etc... basically it means being the CEO from day one without worrying about the title.

Is that what you're looking for or do you just want a cusy desk job as a junior manager? ;)

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

#37

Post by ericlavigne »

NyxWulf wrote: post #13
davidw wrote: post #10

I don't think this debate will really be settled until we have actual data to deal with, which isn't likely to happen any time soon, because you'd have to observe the same people with, and without MBA's.

We actually do have some data, but a little thing like facts never hinders an uninformed opinion. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1127248

That's an interesting read. Some conclusions about US-born tech startup founders include: (1) they tend to be 30+ years old, (2) they tend to have advanced degrees, especially from ivy-league schools, and (3) those with advanced degrees tend to create bigger companies, especially if they went to ivy-league schools.

I didn't see any commentary on whether someone who is older or has a degree is more likely to succeed in their venture at all. This study couldn't address that question because the survey sample was composed entirely of people who had already reached a certain threshold of success. I find the study interesting mainly because it hints at the answer to this related question, and would love to see some data that addresses this issue more directly.

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

#39

Post by pg »

profgubler wrote: post #35
pg wrote: post #28

Earlier quoted context omitted.

Actually I would say it's a slight net minus to have an MBA when doing a startup. You learn nothing of use to you, but investors discriminate against you slightly. Almost all investors are looking for founders who match past stars. So what they're looking for at this point is hackers. I have to say I agree with them. I can't imagine Bill Gates or Larry & Sergey enduring B School.

Do you think that every investment you make is in the next Google or Microsoft? How about other investors? It seems like if you were specifically looking for the next Google or Microsoft that would be a great thing, but what if your not. Do you think that the majority of investments you make (which likely aren't going to be the next microsoft or google) could be better done with an MBA on the team? Has this really be…

We hope every investment we make is the next Google or Microsoft, in the sense of growing very big. Remember that when Microsoft started, it was two undergrads making Basic interpreters for what were then called "hobbyists."

I don't think the majority of companies we fund would be better off if some of the founders had MBAs, no. It would at best not be harmful. What makes startups succeed, at our stage, is building products users like, and I have seen no evidence that an MBA gives you any advantage there. In fact I've probably seen evidence to the contrary.

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

#40

Post by pg »

neilc wrote: post #34
pg wrote: post #28

Earlier quoted context omitted.

Actually I would say it's a slight net minus to have an MBA when doing a startup. You learn nothing of use to you, but investors discriminate against you slightly. Almost all investors are looking for founders who match past stars. So what they're looking for at this point is hackers. I have to say I agree with them. I can't imagine Bill Gates or Larry & Sergey enduring B School.

You learn nothing of use to you For a small percentage of startups, that might be true, but I think it is far from true for most startups. Consider the 1-year "mini-MBA" at Duke that Wadhwa mentions, which covers "marketing, finance, intellectual property and business law, and management." You would really suggest that this training offers nothing of value? Again, there might be more efficient ways to spend your time…

You would really suggest that this training offers nothing of value?

Pretty much. Early stage startups don't need to know anything about finance, business law, and management. All they need to know about IP I can tell them in 5 minutes. As for marketing, it depends what the schools teach, but startup marketing is so unusual and varies so much depending on the product that I would be very surprised if a B school class had anything useful to say about it.

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