Applications to two-year full-time business schools have declined for the past three years. Yet some of today's best-known startups--Rent the Runway, Birchbox--were launched at B-school. What's an MBA good for? We spoke to Dave Gilboa, who co-founded his business with fellow students at Wharton, and Amanda Hesser, whose company has made the Inc. 5000 three times--sans a founder with an MBA.
Is what's taught in B-schools relevant for founders?
Hesser: In a class, you look at case studies, which have a survivorship bias. When you're building a business, there's so much uncertainty. Navigating that is the most important skill--and one you get only in the real world.
Gilboa: It gives you a solid understanding of core fundamentals. But the most important skills taught are softer: organizational design, giving and receiving feedback, managing people--which often aren't taught to someone coming up in their career.
Is business school a waste of time? You could be starting a company.
Hesser: We'd spent time in our industry, and knew the opportunities and flaws. I don't think we would have understood them in a deep way without that experience.
Gilboa: A lot of people use B-school the way I did, to explore ideas and see which have the best chance of succeeding. Warby Parker would not exist without B-school.
Are business schools still the best place to network?
Hesser: I built my network in the food industry--it made a lot of things much easier. An MBA gives comfort to investors, especially if you're a woman. I thought about getting one, but that would have played into prejudices that I didn't think should exist.
Gilboa: Before B-school, I sent emails to CEOs and VCs to see if we could get coffee. I didn't have a great response rate. When I was at Wharton, every person I reached out to responded.
What's more important: industry knowledge or business skills?
Hesser: To me, domain expertise is by far the most important thing you can get in the early part of your career if you want to start a business.
Gilboa: When we talked to industry experts, they'd tell us why our idea wouldn't work. If we had had jobs, it would have been easy to abandon the idea.
According to Financial Times survey data from 2017, fewer than 20 percent of 2014 business school alums in the U.S. had started a company, and the rate of entrepreneurship for grads has dropped at many top B-schools in the past year.