Should You Get an MBA or Start a Business?

by Abdullah Alshalabi, April 14, 2013


A few years ago, I completed my MBA at HKUST in Hong Kong, which is currently ranked 8th worldwide by the Financial Times. I’m now running my own startup (fishfishme.com) along with my friend and MBA colleague Jose Gil Zafra. As I continue to expand my startup, I tend to get this question a lot: “Should I do an MBA or build my own startup?”

Before you can answer that question, I tell my friends, you might want to try answering a broader question: What career are you seeking?

A few possible answers include:

  1. I want to start my own startup or business
  2. I think I lack some skills; I want to improve them and then work in my own startup
  3. I want to work at a startup
  4. I want to work for a big company
  5. I don’t like my current job and I want to change my career
  6. I don’t know!

If your answer is 1, 2 or 3, then you shouldn’t do an MBA. If your answer is 4,5 or 6, then an MBA might be a good choice for you. Why? First, let me explain very briefly what you will get out of doing an MBA:

  • You’ll learn a bit about everything in business (accounting, finance, marketing, strategy, management, operations)
  • You’ll learn about the organizational structure of big companies and how to manage big teams and big departments
  • You’ll learn how to present in front of people and write professional reports
  • You’ll learn how to write a business plan
  • You’ll meet a lot of people and build a great network (the best part of an MBA)

MBA programs are built to prepare students to work in big corporations. As a matter of fact the first MBA program was offered by Harvard Business School in 1908 to prepare Americans for the new era of big co-operations and the new industrialized century. Put in simple words, MBA programs are not designed for startups. Remember, as Steve Blank said, “startups are not a smaller version of large companies.” So what does a startup founder really need to learn?

  • You need to learn how to transform a new idea into a product that people are willing to pay for
  • You need to learn how to select and manage your small team
  • You need to learn how to survive with a small budget
  • You need to learn how to survive the pressure from your family, friends and the whole world that thinks you are crazy
  • You need to learn how to learn by yourself

Business schools will not teach you these things and no one can unless you learn it yourself. And you can’t learn it by reading; you need to learn it the hard way by doing it yourself, by starting your own startup.  Of course, there are some great resources that you should read before starting a business, that it would be great if they taught in an MBA:

That doesn’t mean that I didn’t learn anything from my MBA; I actually learnt a lot and I built a great network spread in all five continents. I also had a great opportunity working and living in many different cities (Hong Kong, Montevideo in Uruguay, and Granada and Barcelona in Spain). 

I also had the opportunity to do an internship with Endeavor Uruguay and start my first startup with two of my classmates; after that, I later joined Wayra, one of the top incubators in the world, in Barcelona, before returning back to Kuwait.

Yet those experiences proved more valuable than classroom learning. When I now try to assess how much of my MBA teachings I’m applying to my startup, it’s actually not much.

So in short, if you are thinking between doing an MBA and building a startup, you should probably just go ahead and build your startup.

If you need guidance, find a mentor. For getting on your feet, incubators and accelerators are a great option and are currently replacing business schools for startups. Another great way to get advice is to plug in with your local startup community (you could do so by attending one of Wamda’s a Mix n’ Mentor event).

And if you feel that your city doesn’t have any of these resources, then you should probably take the lead and start it yourself, maybe beginning with a blog, a weekly meet-up, or a monthly event, as we did here in Kuwait with StartupQ8. It started small, but we now have a startup community that helps and supports each other.

And again, if you are hoping to work in huge company then doing an MBA is not a bad idea at all.

--

Abdullah is the co-founder of fishfishme.com, and he also started a blog and a monthly event called StartupQ8 to help building a Startup Ecosystem in Kuwait. You can follow him on twitter @a_alshalabi.

 

 
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Sushma Korlepara , Thu 23.05.2013
Very useful information. For sure, most of them have the same question in their minds before working on a start-up.

I have a few questions...

Does really a single person company work?
Can it expand without having an MBA degree?
Does the low experience really help in achieving the goals?

Thanks.
 
Abdullah Alshalabi , Fri 21.06.2013
Hi Sushma,

Sorry for the later reply. To answer your questions:
1- Being a sole founder can work, but you'll have less probability to success. Also from an investor perspective it's 10 times riskier to invest on a sole founder than a team of co-founders.
2- It sure can expand without an MBA, but yeah I agree the MBA comes handy when the startup starts growing and becoming more like a big company.
3- I didn't get this question, but I guess more experience is always better.
 
 
aziz hussain , Thu 25.04.2013
Thank you so much
These informations in the article are most useful for me, cause I'm in case to take a decision about going with MBA or not.
For me I see any training course, undergraduate or graduate degree we have to look at it as a tool to help us in our career or business more than target or magic stick that should open all success's doors for us.
 
 
Kia Davis , Wed 24.04.2013
Fantastic article.

On the whole, I agree that an MBA is NOT a prerequisite for starting a startup. The secret sauce is rarely to be found in management alone, it's in innovation and delivering value. So I'd probably recommend people do MBAs a bit later in their startup career, when they have more organization-led problems to tackle. However, I think there are benefits to having an MBA that were not addressed in the article. For my part, it wasn't until I started working with startups that I really saw the value of my MBA, and was using nearly every piece of it, particularly:

*The ability to look across an entire organization to see what's going wrong
*The ability to set pricing
*The ability to forecast and track performance
*The ability to lead, motivate, and inspire people
*Financial statements
*The ability to compete effectively in the marketplace
*Market research
*The ability to negotiate with customers and suppliers

So the 'hard skills' like option pricing will be nearly useless, but the ability to look at a business (any business) as an integrated whole with a need for profit and sustainability is priceless.

Someone on the comment thread mentioned that no top-10 tech companies or F500 companies had MBA CEOs, and I'm afraid that's just not true. 30-40% of the Top 10 companies in each category have MBA CEOs, including Apple (Tim Cook).
 
Abdullah Alshalabi , Wed 08.05.2013
Hi Kia,

Thanks for the comment. I agree that it's defiantly beneficial to have an MBA in a later stage of your startup life cycle. To be honest, I still believe that many of the benefits you mentioned can be learnt by the entrepreneur from practice rather than in a class, and many things are not in need for a startup in an early stage. And the main problem as mentioned in the article is that MBA's are built for big companies and not startups. I used to ask the professors almost after each class if I can use what I learnt here for a startup or not, most of the answers came negative. Yet I agree, after having a big team and coming across many big corporate decisions, then an MBA might come very handy.
 
 
Nayef Copty , Sat 20.04.2013
MBAs are mostly useless. Take a look at top ten tech companies, or top ten Forbes 500 companies CEOS or founders. Who has MBAs out of them?