Starting Your Start-Up: Do You Need an MBA?
If you’re smart, motivated and have a good idea, then what value will an MBA really bring to you? Everyone knows that any good start-up requires a lot of trial-and-error, learning-by-doing, and sometimes learning-through-failure to actually get to the right place. Though you can’t necessarily get this from an MBA, MBA programs do provide some fast-track learning and benefits that could essentially accelerate your idea and growth potential. Below are a few considerations that we’ve heard from start-up founders coming out of business schools. If you want to hear this straight from the source, NPR’s “How I Built This” podcast profiles the founders of Warby Parker, a disruptive eyeglasses start-up that came-out of Wharton towards the end of the last recession.
So here we go—how can an MBA help you and your start-up goals?
Looking for a partner? There are a lot of people who either come to business school with the itch to “create something” or develop it after many classes focused on how to find white space in an industry or how to create value for different parts of a value chain. Your MBA classmates bring with them a diverse skill set, so when you put all of those different perspectives in one room, the ideas tend to flow. This means that if you’re looking for a partner, your classmates could provide an excellent option. And it isn’t bad to know that your co-founder will also be sitting in classes thinking through how those topics and ideas could enhance your business idea!
2. Strategic “Testers”
MBA students are critical. If you ask your fellow classmates to test out a new product you’re designing or simply opine on your business idea, they won’t just respond with raw emotion or preference. MBA students are trained to look at decisions from multiple angles. Even if they like your idea, they’ll be the first ones to try and point out potential flaws or downfall areas. Don’t be offended—this is what you want when you’re starting out!
3. People to Challenge You
You don’t want the first person who really challenges your idea to be that big, coveted customer you were hoping to secure in order to launch your new company. Professors, classmates, alumni, and speakers on campus will confidentially give you opinions that at face value may seem severe (“This is going to change the industry!” or “This will never work because … “). In the podcast I mentioned above about Warby Parker, a professor told them that the idea wouldn’t work. Then they lost Wharton’s case competition. But those big challengers, those who viewed themselves as the authority on such things, were the BEST people to challenge the entrepreneurs early-on (oh and now they are valued at $1 billion!) As they launched, I’m sure it helped that they had been so rigorously challenged and felt like they’d already “run the gauntlet,” if you will.
4. Access to Potential Supporters
Every business school wants that rock star alum who created a disruptive solution and changed the world. So they provide you with many, many outlets for finding that idea and not only creating a great business plan but also raising money. Most MBA programs offer an entrepreneurship class (or entire track) that walks you through creating a business plan for your idea. Then, many plans from those classes go on to participate in case competitions or present at different events with the prize being money to help you get going and sometimes even mentorship from successful business leaders. I judged a case competition a few weeks ago where the the grand prize was $10k in non-dilutive award money. But more than the money, seeing all of the ideas and meeting all of the people focused on the same sector provided invaluable learning for those who participated. MBA programs LOVE to run or engage their students in these types of events.
So, for those of you who are seeking to be the next Warby Parker guys, keep in mind that in order to demonstrate that you’re serious, the MBA admissions committee will want to understand not only the general direction of your ideas, but they’ll also want to understand “why” you’re focused on starting your own company and how you, in particular, could be the next big thing. You don’t have describe your business plan in full—in fact they expect that you’ll still have some work to do there—but be intentional about explaining what drives you and what you’re passionate about so that they can see the burning desire of an entrepreneur between the lines.
As always, we’re here to help if you have any questions as you get started with your MBA research!