Recently someone asked me a really good question: should I get an MBA or try to launch a startup? My question back to him, and anyone thinking about starting their own company, is the following: if you had $100,000, two years of time, and a passion for something that can make you wake up early in the morning and grind it hard, what would you do? A startup or an MBA program?
The answer to this question depends entirely on you and your life goals. Of course, most of us just don't have $100,000 lying around, but what if you had this opportunity?
Now if you're passionate about learning more to grow your career, it depends on the type of education you want to receive. Some people think getting an MBA is worthless and will tout other ways to learn what an MBA will teach you at a fraction of the cost.
On the flip side, there are so many things you'll learn at a place like Harvard Business School that you can't learn anywhere else in the world. Just ask any Harvard grad. An MBA will teach you about concepts like managing your operating cash flow (OCF) and other essential terms that you better understand, especially at meetings with your investors.
An MBA can be valuable when launching your business and meeting with investors. Having an MBA or advanced degree in your pocket can help arm you with the knowledge to make more informed decisions. What an MBA gives you is a way to solve ambiguous business problems. MBA training equips you with the tools you need to make smart decisions for your company.
You're learning how to analyze a market and ask questions like, "Is it worthwhile to build a product? Is there a product-market fit?" Knowing what questions to ask, what potential issues to be aware of, and so on comes with an MBA. Without that education, you may have to learn the hard way.
If you go for an MBA, be very clear about your goals. An MBA isn't made for people who want to found their own companies. And while there are exceptions, like Stanford, most MBA programs are not necessarily geared at entrepreneurs.
If you want to make a lot of money, then go get your MBA and get a job in investment banking, become a consultant, or work for an enterprise company that can pay you a six-figure-plus salary. The return on investment for that $100,000 can be seen in the short-term. However, if you don't go into a high-paying job, then the ROI is harder to attain from an MBA.
Another perk of getting an MBA is getting access to a network. The people you meet, the companies you'll visit or do projects for, your fellow alumni from your program--all these people can help jumpstart your career growth.
Whether to do an MBA or launch a startup is based on your willingness to take a risk in your career. If you're early in your career, get as much experience as possible. An MBA without experience is pretty much meaningless because of its real world application.
Which brings us back to the original question: get an MBA or launch a startup?
It all comes down to asking yourself, "Why?" If the "why" is you want to make a lot of money, then the answer is clearer. Contrary to what you may watch on Shark Tank, entrepreneurship is not a good way to go about making a lot of money.
Still, there are no hard and fast rules for starting a business. You can get your MBA, work in investment banking for a while and become a successful entrepreneur by selling mushrooms! You could drop out of college, start a company, and become the richest man in the world! Sure, it's unlikely, but hey-- Bill Gates and Steve Jobs both did it!
If you never want to write a resume and you dream of being your own boss, then you should absolutely go for it and launch a startup.
As someone who has his master's degree, has worked for a couple of early-stage tech companies, and even co-founded my own successful startup, Terminus, I can tell you firsthand that there are things I've learned that I could never have gotten out of an MBA.
It's a whole different ball game when you're in the real world and managing venture capital from one of your board members. There's only one way to learn how to run a company, and that's by actually doing it.