“Today, it is all about starting small and experimenting. Business plans get outdated rapidly and market research is no substitute for prototype and user testing. The focus on venture capital is also misguided. VCs rarely fund infant startups—it is angel investors, friends and family who provide the outside seed funding. So even when trying to teach entrepreneurship, business schools get the basics wrong,” says Vivek Wadhwa, former entrepreneur and Vice President of Academics and Innovation at Singularity University, in his recent article in Wall Street Journal Blog.
“By definition, an entrepreneur is one who takes risk. It’s an attitude and an appetite, one which may be hardwired into one’s personality. Education can influence one’s attitude toward risk: for instance, understanding the principle of diversification or the long-term returns of equities versus bonds may make an investor more willing to create a “riskier” stock portfolio. But ultimately, can you teach someone to really enjoy taking risks? I don’t think you can,” shares Stephen Greer his perspective on the value of an MBA for aspiring entrepreneurs in HBR article.
The debate continues. When it comes to entrepreneurship, the question of whether to invest in an MBA degree becomes even stickier.
Though Wadhwa himself admits his “M.B.A. from New York University’s Stern School of Business was one of the best investments” he ever made. But he no longer encourages startups to hire MBAs and discourages students who want to become entrepreneurs from doing an M.B.A.
Can those with MBAs operate effectively only within large corporations?
He says, ” There was a time, not long ago, when big companies were the keys to the nation’s economic growth and competitiveness. Big research labs produced almost all of the cutting-edge innovation. Now, the cost of developing world-changing technologies has dropped exponentially. Startups can out-innovate the big players. And as the Kauffman Foundation documented, all of the net job growth in the U.S. comes from startups. Startups invent some of today’s most innovative products, create new business models and disrupt industries. So, the people that business schools should be putting on the pedestal are the entrepreneurs, not the bankers.”
Instead of M.B.A.s, what he advise students with technology backgrounds to complete are one-year long masters of engineering-management programs like the one he teaches at Duke University.
Let’s have a look at the cases for and against earning an MBA degree for aspiring entrepreneurs.
- Why I Don’t Advise Startups to Hire M.B.A.s, Wall Street Journal Blog
- Does an Entrepreneur Need an MBA?, HBR Blog
- Is an MBA Still Necessary?, Entrepreneur