Startup founders: What do you think of MBAs?

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Startups and MBA

Most times, startup founders are often faced with the choice of going for higher degrees. I am currently in this dilemma and I am currently contemplating on which program to go for that will be beneficial to my journey

Andreas Kitzing, who has an MBA in Cambridge and also the founder & CEO of Sponsoo, a sports sponsorship marketplace shares what he thinks about what startup founders and MBA programmes.

Here is how a good MBA programme can be useful for you as an entrepreneur:

  • You acquire useful business knowledge. Just some of the stuff I learned at Cambridge Judge Business School:
    • How to avoid group-think (IMHO a classic startup problem)
    • How to interpret quantitative data (Now after my MBA, I do meet so many other entrepreneurs who draw false conclusions from obviously misinterpreting data)
    • Negotiation skills (Applying some of the techniques helped us to negotiate a significantly better valuation in our first financing round)
    • How to read a term-sheet
    • How to handle startup financials, such as working capital (Discussing these issues over a dinner at a business reception – and apparently leaving a good impression – won us our lead investor for our current seed round)
    • Presentation skills
    • How to avoid typical first-time entrepreneur failures (such as “drinking your own Kool-Aid”, which ironically is something that people always accuse MBA degree holders of)
    • How to work efficiently in a small team
  • You can get inspiration for business ideas (e.g. in Cambridge a lot of my classmates teamed up with super-smart biotech and life science Cambridge students to launch startups).
  • You get an awesome network that can provide resources for your startup. For example, I’ve used the following resources from my MBA network:
    • Introductions to a lot of high-level potential clients
    • Introductions to high-level investors
    • Getting expert feedback (e.g. from business experts on your business model, or from top VCs on valuations, pitch decks, term sheets)
    • Having a 5-person MBA student team work for our startup for free for two months
    • Friends & free accommodation basically anywhere in the world
  • You’re challenged as a manager and learn how to better interact with people from totally different cultures and backgrounds.
  • You learn first-hand from experienced entrepreneurs and investors
  • If you stay in the city, many programmes offer you equity-free acceleration withmentoring, free offices and even cash grants.

It’s also a common misconception that there are no successful entrepreneurs with an MBA. I’ve personally met quite a few, for example Dirk Freise, who got an MBA from Haas School of Business at Berkeley.

He founded out of Berkeley together with fellow MBA Thorsten Rehling, turned it into the European market leader for mobile entertainment and later sold it to Bertelsmann.

So to sum up, an MBA can certainly help you become a better manager or entrepreneur. If it’s the best route to success – I leave that up to you.

After all, it’s also expensive, and if you already have an idea, you might just as well use the money to found your startup instead of paying for expensive education.

In the end, a good track record from previous startup experiences is a more valuable skill than an MBA (or any other education). I would always pick someone who has founded and sold a startup over someone with just an MBA.

However, an MBA can give you supplementary knowledge and resources that you can’t get from practical experience. In the long run, that might be more valuable than just starting one company after the other.

For comparison: I’d argue that someone with an MBA and experience from 2 startups has a more complete and diverse profile than someone without an MBA but with experience from 3 startups.

Anyway, good luck with whatever you’re planning for the future – no matter if it’s getting an MBA or a founding a startup.

What do you think of MBA or higher degrees for founders and entrepreneurs?