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Published 07 September 2012 12:51, Updated 13 September 2012 11:51
Listen to the advice of Harvard Business School, MIT and even Sydney University and you’ll be told that a Master of Business Administration is an essential weapon in the aspiring entrepreneur’s war chest.
But if you listen to the entrepreneurs themselves, you’re likely to hear a different story.
“Everyone told me not to do it,” says Rebekah Campbell, founder of online marketing hub Posse. “I asked a lot of people – investors, shareholders, board members – and they said I didn’t need to do it because I was getting so much experience living as an entrepreneur.”
Resolved to get the qualification regardless, Campbell went ahead and enrolled in a Veritas Prep course to get the credits she needed to apply for an MBA program. She planned to study part-time while running her business.
“It was such a push just to complete the prep course that I knew that I could never do the whole thing,” she says.
Two years into her second fully formed business venture, Posse, Campbell is now certain she has acquired all the skills she would have gained from an MBA. But she is not wholly convinced she’s better off without it.
“I’ve probably made more mistakes than I would’ve made if I had done the MBA, but it’s taken the same amount of time and money to get to the same place,” she says.
Michael Fox, co-founder of retailer and designer Shoes of Prey, got halfway through an MBA before deciding he could do without it. “In my first semester I was ridiculously excited by the prospect of doing some more study,” he wrote in his blog at the time. “One of those subjects, Managing People and Organisations, is without a doubt the best subject I have taken in any educational course. Since then, the MBA has been a bit of a let-down.”
Fox had covered many of the compulsory subjects such as finance, accounting and economics in his Bachelor of Commerce degree. It frustrated him that he wasn’t given credit for having studied these subjects previously, because they were apparently “taught at a higher level” in the MBA program. He doesn’t believe this to be the case.
After three semesters he decided to take a break. He now knows he’ll never go back.
“I feel like I’m all business-booked out, I’m over the theory and instead I’m enjoying the practical side of running a business.”
So where does the MBA sit in an entrepreneur’s skill set?
One Big Switch co-founder Lachlan Harris believes that the qualification makes a huge difference to the entrepreneur who has the time and discipline to devote two years to an MBA.
“My business partner has an MBA from Harvard and you’ll sit in meetings and you can tell the difference,” he says. “It’s that data-driven decision making and this passion for process, and I really want [to have those skills] because by nature, I’m the opposite.”
“Would it make me better at my job? Definitely.”
For Harris, the MBA is “something I’d love to do” but for now he finds other business opportunities “just too enticing”.
RecruitLoop founder and owner Michael Overell also found the prospect of running his own business had much stronger appeal than that of heading back to the classroom.
“It was the opportunity cost,” he says. “I figured that I had limited years while I was under 30 without too many financial commitments, and I should do [the start-up thing] while I could.”
His mentors in Australia and the US are supportive of the decision.
“Some have gone through MBAs and some are real advocates for it, but they also see it’s a fair trade-off between pursuing a start-up and an MBA, and they say just because I’ve done this instead, it’s not something I really have to do.”
To be sure, it’s not just the entrepreneurs themselves who question the value of an MBA.
Stanford University graduate school of business faculty members Jeffrey Pfeffer and Christine Wong found in 2002 that an MBA qualification was often not likely to have an effect on a starting salary after an MBA or salary progression in the next three to four years.
Silicon Valley to this day is famed for its antipathy towards MBAs.
However, there was one element of the experience that all entrepreneurs interviewed for the article coveted. “The biggest thing I’d get is the network of young, smart interesting people from around the world,” Overell says. “But then again, if you do it properly, the start-up communities give you that anyway.”