Most aspiring entrepreneurs with no business background – I would know because I am one of them – have found themselves pondering this question. Should I invest thousands of dollars acquiring a university degree to be an effective entrepreneur?
There are people who swear by the effectiveness of an MBA degree and then there are people who quote examples of tech gurus who obtained phenomenal success with no formal MBA degrees. So MBA or no MBA? Here are a few insights that attempt to answer this question.
Understand Your Abilities & Decide Your Preference
For some people, identifying an opportunity and turning that into a viable business model comes naturally. They are usually street smart and believe in on-ground learning. A great example is the father of India’s Mukesh Ambani (business mogul and one of the world’s richest men) who pulled him out of a Stanford program to earn practical skills.
‘Years later, when Mr. Ambani enrolled in an M.B.A. program at Stanford, his father clung to the belief that real learning came in the trenches, not in academic enclaves like Palo Alto. ~ ANAND GIRIDHARADAS
Note that attitude, ambition, ability along with cultural environments, life situations and personality type play a critical role in running a business without an education. On the other hand, if you’re someone who likes having a formal degree to support your business drive and are able to afford an education, then, by all means, pursue an MBA as it will help you understand the business world. At the end of the day, you have to decide on your preference – do you like learning the street smart way or the book smart way? What will really bring out your drive and your ability to see the business through?
Do You Need the Support of an Alumni?
Networking is one of the most crucial elements to having a successful business. An MBA from a renowned university can give you the support you need to kickstart your business endeavors. Mouna Aouri shares an interesting insight:
My husband raised his first round from his INSEAD friends just like that – over a phone call 🙂 I’ve seen it happen many times! So to me MBA can be useful in that aspect but not necessarily in terms of what they ‘study’..What I learnt in running my business on the ground taught me more than an MBA would have taught me. However, founders with strong MBA alumni of highly ranked business school get better access to funding, co-founders and network support. As usually MBA alumni from those schools are generally in high leadership positions and if not for the opportunities they can be a good source of market/industry knowledge.
Being part of alumni can give you certain leverage over opportunities that might not be easily available otherwise. This is not to say that you need an MBA from a renowned university to be successful; rather, it emphasizes the fact that a strong network can help you go a long way.
As a personal experience, a degree program didn’t really help me much with support because I am also an introvert and don’t have the capacity for building a large list of supporters. But if a support network, a group of like-minded people and an alumni prestige is what you love, an MBA degree is worth the personal investment.
Learning Basic Skills vs Having Theoretical Knowledge
An MBA degree will teach you age-old theories and concepts of business that will empower you with theoretical knowledge. Consider, however, how applicable this is to you. For example, you may know the intricate details of a financial statement after you’re done with an MBA but will you really be sitting with a complex financial calculation sheet every month when you’re running your own firm or will you have an expert or an automated software get it done? Michelle Katics shares her thoughts:
I would suggest understanding basic accounting and financial reporting is a must – no MBA required to learn that.
~ Michelle Katics
If you’re not a fan of getting into nitty-gritty financial details, you can opt for short micro-courses online. There are literally thousands of online courses that teach you the bare essentials of being an entrepreneur and they are all based on current world dynamics.
Do You Have the Time & Energy to Invest in a Two to Three Year Long Academic Journey?
An MBA degree is a two to three-year journey depending on how fast and how effectively you study. It is purely an academic journey with assignments, essays, presentations, and research theses to work on. If you’re already an entrepreneur, you may lack the time and resources to pursue the degree. If you’re not an entrepreneur yet and still in your 20s, are you willing to hold on to your ideas until you have a degree to formally pursue them?
In conclusion, an MBA degree can help you with the initial understanding of the business world, provide you with network support and give you theoretical business knowledge. However, it goes uncontended that practical experience provides you with the essential skills needed to be an effective entrepreneur. With online education being easily accessible now, you can easily compensate the lack of an MBA with practical knowledge.
Now, it’s your turn:
Have anything else to share? Write it in the comments below!