Beware of MBAs: The business school curriculum teaches how to suck at startups

I like to think of this topic using an automotive racing analogy: Fortune 500 companies are the formula 1 cars. They need a great big team to perform efficiently, and minor tweaks applied correctly can yield significant results. The MBAs are the specialists who work the electronics and the advanced controls for the race cars. A team working on a formula 1 car could find a way to increase down force by 5%, or they could install a GPS system to analyze turns and scrape 1/100s of seconds off of lap times, and that edge could help them win.<p>Startups are cars with a very different purpose. They are project cars, and they have 1 purpose: to go. Forget GPS systems and down force. These cars need tires and a working steering wheel. It would be a mistake to think about installing spoilers on a car that doesn't have all 4 tires, just as it would be a mistake to worry about ideal liquidity ratios in a startup. Entrepreneurs are the mechanics who decide to take on these 'project cars'. Eventually, as the car project develops and grows, specialists (MBAs) can be brought on to find the minor, yet precise changes that will improve the car's results.

Research shows that business schools do not contribute to business success: <a href="http://www.aomonline.org/Publications/Articles/BSchools.asp" rel="nofollow">http://www.aomonline.org/Publications/Articles/BSchools.asp</a><p>From "The End of Business Schools?: Less Success Than Meets the Eye" by Jeffrey Pfeffer (Stanford University) and Christina T. Fong (University of Washington):<p><i>"Although business school enrollments have soared and business education has become big business, surprisingly little evaluation of the impact of business schools on either their graduates or the profession of management exists. What data there are suggest that business schools are not very effective: Neither possessing an MBA degree nor grades earned in courses correlate with career success, results that question the effectiveness of schools in preparing their students. And, there is little evidence that business school research is influential on management practice, calling into question the professional relevance of management scholarship."</i><p>Far better to skip the MBA and teach yourself. Better results, and far less debt.

I think the point missed in here is that if you go into your MBA with a consulting, banking, etc direction, then you'll get all the lessons that go with that.<p>If you did an MBA with the express purpose of concentrating on making startups work, you'd concentrate on taking away the parts of that education that focus on entrepreneurship.<p>It's fashionable to diss the MBA but they contain a non-trivial amount of learning about finance, capital markets, legal and other aspects of business that would take a long time to pick up just by going through a startup.

At some point, and it is happening already to a small degree, this problem will no longer exist. Top universities are catching onto the success of YC and will begin to offer programs of lesser magnitude, but similar intent. Once one of the big schools (Harvard, Stanford, etc) will declare victory then the rest of them will begin copying the model as well. I think places like the Stanford d school have some overtures in this direction, but they are not the final word. The bottom line is, the whole intention of an MBA is to credentialize businesspeople the way other professional degrees do (J.D.) etc. The conflict here is that startups are about near the exact opposite. Entrepreneurship is a recursive credential. You can only earn the title by doing the act itself, not some abstraction.

I notice the author mentioned "leave-behind Powerpoint decks." I had a short stint in consulting after getting my MBA, working with enterprise software clients. Within that job I've never once seen a Powerpoint deck that was useful after the fact unless you were in the room when the talk was given.<p>All it took for me to forget nearly everything I learned in business school communication classes was a seminar led by Edward Tufte, where it dawned on me that Powerpoint is no substitute for an appropriate executive summary of your content that can be passed around and referred to long after your talk is over.

I am an entrepreneur, a hacker, and an MBA. I am intelligent enough not to apply big-company processes to a start-up and vice versa.<p>An MBA is an education in business. That can't be a bad thing if you operate a business, large or small.

"MBAs will generally know how to read WalMart's annual report but will be lost in the complexities of a cap table."<p>I didn't go to a very good B school, but clearly it was a better one than Tuck.

I'm so sick of these Ivy League MBA's lumping all MBA programs together in their inability to teach entrepreneurship. At Babson we were learning about the Timmon's model and how to be 'lean' on day one. Long before anyone had heard the name Eric Reis. And in case you're unaware, Babson has been ranked the number 1 business school for Entrepreneurship by US News for the last 17 years, when they started ranking.

I'll take umbrage with one statement:<p><i>It's about selling a vision, not presenting analysis.</i><p>From my experience that's a sure way to receive a polite "no thank you" from VC's or angels. Good venture capitalists demand meaningful analysis in your pitch. Every single pitch I've been a part of has inevitably zeroed in on market, financial, and performance analysis within 5 minutes of starting. Those slides about vision and big ideas just don't play well in those rooms (again, from my experience).<p>More than anything, money-folks seem to want entrepreneurs who have an eagle eye on the performance metrics of their business.

Hey, I'm in the middle of an MBA program and think I'm doing just fine with my little start ups. Cute blanket statement though.

I am surprized. Where did the author get that MBA's are good at teaching entrepreneurship? Where does that expectation come from? I am have an MBA too and I was never told that MBAs are good at teaching entrepreneurship. Pick any blog and articles from real entrepreneurs and they'll confirm that you become one on the field, not in the books. I also disagree that MBAs make people suck up at startups. You may be talking about your personal experience, but it does not fit with mine. I am very happy to know what would have taken me 20 years to learn by myself. You don't need an MBA to become an entrepreneur, but it definitely helps...

This is only true if you go to a shitty school or don't apply yourself. There are some really good schools out there with exceptional programs in entrepreneurship.

I really enjoyed reading this. I've considered an MBA on and off for the past few years and I'm still leaning away from it. An MBA seems to serve a very specific function and I'm not sure if I want to be that person.<p>I wonder how this is at more entrepreneurial programs like Sloan.

This book relates to this post:<p><a href="http://www.amazon.com/Managers-Not-MBAs-Management-Development/dp/1576752755" rel="nofollow">http://www.amazon.com/Managers-Not-MBAs-Management-Developme...</a>

I guess a similar situation happens to programmers who learn a new design pattern or programming paradigm and apply it to every situation, including when it's overkill.

You don't need MBA, if you're rich &#38; connected. <a href="http://netmba.com" rel="nofollow">http://netmba.com</a>

Maybe the takeaway should be MBAs are better suited to startups that are post product-market fit.