7 Reasons why MBA’s suck for entrepreneurs

Two years ago I became an MBA graduate from Durham University. It was without doubt the best year of my life – I learned, grew, worked hard, bonded, made great fiends, fell in love.

Despite all these things – if you’re an aspiring entrepreneur and have plans of taking over the world, I recommend you forget about doing an MBA.

Why? put down your GMAT test book and I’ll tell you…

Before I do so I want to thank Jason Freedman and his blog: The Humbled MBA– this post was inspired by one he did recently. I agreed on almost every point and it felt better to think I’m not the only one out there that thinks MBA’s (or most university in general – but I’ll save that rant for another time) are useless for MBA’s.

But I digress – quickly, to the 7 reasons why you MBA’s suck for entrepreneurs

Maybe I’m just hyper sensitive because I feel strongly about this – but I just cringe when people introduce themselves by saying

I’m so and so, my startup is xyz, and I have an MBA from University of crap

Like wow, what do you want – a medal?

Most MBA’s work hard to get into and out of business school. Respect to that – I went through it too. And, although having an MBA proves you’re pretty smart – it doesn’t say shit about how good an entrepreneur you can be. And if you were an experienced entrepreneur, you’d know that.

Unfortunately most MBA’s (especially the recently graduated ones) don’t get that you’re just as likely to fail with your startup after graduating from business school as before you went in. They think that success is just a formality after they can put an MBA on their business card

I know because I was that guy.

Theoretical models. Like really, what is the point?

Before I get burned at the academic stake, I say this purely for startups.

Someone should do a survey of how many times entrepreneurs use theoretical models in their business. Sure, they look good on business plans (more on them later) but other than a few basic ones (4 p’s, Porters etc) who uses them when running a startup?

Isn’t a startup about trying things, iterating and trying it again till it works?

The core methodology I’d like to see in an MBA is theLean Startup Methodology. How many times do you think this was mentioned during my MBA?

Not once.

This needs to change.

I don’t mean to sound harsh. Most professors are great at their jobs (academia), but unless they’ve set up a successful business I don’t see them qualified to teach people about entrepreneurship.

I learned ‘nice’ theories in the entrepreneurship module about ‘the strength of weak ties’ among others. I didn’t learn one thing that would make me more successful setting up a business tomorrow.

Add this to an ostrich like (head in the sand) professor who wouldn’t let students research on Wikipedia because she doesn’t believe in it accurate (despite the Nature study that proves otherwise). Sounds a lot like the record label owner who won’t release mp3’s because they believe them too low quality i.e. out of date and should retire

This needs to change.

For a new theoretical paper or case study to be accepted, it needs to pass through a rigorous peer to peer process that involves academics reading and giving feedback, sometimes numourous times, before it is accepted. This can take months, commonly years!

This means by the time a theoretical paper or case study is accepted and published, it’s already too late.

This needs to change.

Coming from someone who won four startup business competitions in 3 different universities as a student, I see myself reasonably skilled in doing well in student startup competitions.

Problem is, they’re pointless. Well almost*.

Every student startup competition I’ve ever encountered has been one format:

• Submit a business plan. It’s good enough you get to
• Pitch to panel of judges

Problem with this is that business plans are pretty useless for a startup business (unless you’re looking for a loan). You’d be must better off spending that time talking to prospects, putting together a really rough prototype/web page and asking people if they’d buy it. If not, why not and iterate.

Being able to write a great business plan and being able to start a profitable business are two very separate things.

A student startup competition would be much more effective if they were judged mainly on how many orders they received. Real life orders. Not theoretical financials.

This needs to change

*they do have a little value: you get $$$, something for your CV and your professors & parents will think you’re great. Which all has a bit of merit – just don’t get the illusion that all you need to do is launch it to have it succeed.

During my MBA we studied Harvard Business School case studies based on the most interesting strategic lessons from the 90’s and early 2000’s.

The 90’s and early 00’s – that’s up to 20 years old!

How many disruptive, innovative startups are based on principles from 20 years ago? Hmmmm – let me think about that one.

This needs to change.

You’ll learn lots about Nash equilibrium, HR theory and Feud’s influence on Marketing. All interesting stuff.

But you won’t leave the classroom more prepared to starting a world conquering startup business.

Stuff they should tell you (but don’t – well, at least not in my experience)

• What sectors are tipped to grow large over the coming years
• Different business models, which to use when, and how to deploy them
• What business types have the largest opportunity for growth
• How Angel investors and VC’s operate and choose their investments

This needs to change.

Caveat: Not all business schools appear to suck at entrepreneurship, some in fact appear to be amazing (Stanford, Said & co) – the majority unfortunately conform to the above.

• Make it mandatory that Entrepreneurship lecturers have launched at least 1 very successful business. Preferably multiple.
• Entrepreneurship is about Just in Time (JIT) learning – not abstract learning, meaning you learn it as you need it. Students should have to participate in real life startup case studies and learn the skills/relevant knowledge as they are putting into practice!
• If you are going to do an MBA – choose your school wisely. I’d recommend looking for a large portion of the course dedicated to technology/innovation – this is the stuff you’ll use for your world changing startup
• Startup competitions should only be partly about the business plan – the real test should be about the prototype/web page and how many people are interested in buying it – or better still HAVE bought it!