Is an MBA necessary for entrepreneurs and inventors? And is it worth the cost and two-year time investment? Most people who apply to MBA programs do so in hopes of getting a higher paying job and to more rapidly advance their careers. Another reason people consider pursuing an MBA is that they want to start their own business.
Many famous entrepreneurs succeeded without an MBA, including Bill Gates, Mark Zuckerberg and Steve Jobs. But other entrepreneurs like Warren Buffet, Michael Bloomberg and Elon Musk all got their MBAs before achieving massive success.
While it is certainly possible to succeed as an entrepreneur without an MBA, getting one can certainly help. Here are five reasons why entrepreneurs, disruptors, and inventors might want to consider investing in an MBA degree.
1. MBA Programs Provide Useful Knowledge for Entrepreneurs
It is possible to learn everything you need to about business on your own by reading books, seeking mentorship and experimenting on your own. However, a well-structured MBA program can allow students to learn these skills much faster in a more organized environment.
In MBA schools, students learn strategy, marketing, and organizational behavior, i.e., skills you need to run a business. Professors will guide students through the material they need to learn so that they don’t have to figure out what books to read or what information is important to seek out. They will also make sure that students learn the material in a timely manner.
Most people never attempt to start a business because they become overwhelmed by everything they don’t know. They feel frustrated and stuck because they don’t even know where to start.
2. Develop Critical and Strategic Thinking Skills for Entrepreneurship
An MBA can elevate your thinking and allow you to view business from a more refined perspective. For example, someone that didn’t go to business school might approach business from a simple “buy low/sell high” perspective.
However, an educated business person will realize that business strategy often involves tradeoffs. Perhaps selling a product at break-even initially might make sense because customers will refer others to the product and buy additional products in the future.
Or an entrepreneur might decide at a certain point to forgo profitability to hire a marketing team to accelerate sales growth.
Going through various business case studies and talking to professors and other students about business can help people achieve business wisdom quickly.
3. MBA Degrees Help with Prestige and Credibility
MBA degrees are often regarded with prestige, especially from a top MBA school. Having a prestigious MBA degree can give your business credibility and open up new opportunities. A business funding firm or bank might be more willing to invest in someone’s business idea if they have an MBA versus if they have an idea but no business education or experience to back it up.
Your MBA may allow you to connect with other high-level executives, potential customers, and associates who can help you succeed.
4. Networking Leads to Real-World Entrepreneurship Opportunities
One big advantage of getting an MBA is being able to form a meaningful network of people who can help you succeed. This network includes potential business partners, business funding sources, mentors and more.
Jon Staff graduated from Harvard Business School in 2016 and is the founder of Getaway, a company that builds small houses in rural areas and rents them to people wanting to get away from city life for a while.
Many of Jon’s first paying customers were his classmates, who were patient during the bumpy early launch stages of his business. A fellow classmate also helped him with his financial plan and introduced him to a VC firm where she had just gotten a job.
The Entrepreneurship Club and Entrepreneur Center also provided mentorship and advice to help him start and grow his business.
Jon’s connections also helped him get $1.2 million in funding. He estimates that $725k (60% of the funding) was a result of meetings he would not have gotten if he had not been a Harvard student.
5. Business and Analytical MBA Knowledge Increases Odds of Success
Some universities have created MBA programs targeted specifically towards entrepreneurs. One study conducted by the University of Arizona’s college of business surveyed 2,500 graduates to learn about their entrepreneurial success.
The study found students that had an education in entrepreneurship were three times more likely to take risks and start a business (or be self-employed) than students who did not have such an education.
Businesses started by people from top MBA schools also had the potential to earn more money and expand more rapidly than typical businesses. Many MBA startups from founders who graduated from Harvard, Stanford and other prestigious schools are making millions.
Achieve Entrepreneurial Sucess with an MBA
Whether you pursue an MBA or not is up to you. You probably won’t learn everything you need to learn in business school, but you probably will learn a lot that can help you succeed.
Are you ready to produce and launch your product now? Do you already have a lot of knowledge about how to run a business? Are you well connected with people who can help you succeed?
And perhaps most importantly, are you willing to invest money and two years of your life to obtain the knowledge, network and resources you need for your future business?
These are just some of the questions you should ask yourself as you weigh the pros and cons of pursuing an MBA for entrepreneurship.
