Can business schools teach entrepreneurship?

I can’t help but weigh in on the “MBA – startup” meme going around. First, context on my background: I chose not get an MBA. Before my current startup, I worked for 4 VC-backed companies (founded by others) in various sales/marketing/bizdev roles, and bootstrapped and sold 1 company of my own. I did feel a need to learn finance, but figured I could get paid to do it, so worked at Broadview (now Jefferies) doing tech M&A. My only jealousy of contemporaries who got an MBA is the incredible network.

Across my colorful career, I’ve worked with plenty of sharp MBAs from top schools, and some not-so-sharp ones from those same schools. Some were incredible producers, and others just wanted to take credit for other people’s work. The only places where I’ve seen an MBA provide a real advantage are M&A/IPO i-banking (definitely not in trading) and management consulting. Even there, it’s not that much of an edge (if any) over someone who spent those extra two years doing the job.

Jon Steinberg, EIR at Polaris, kicked this off by writing that he did not feel his MBA was the best use of money and time. Rob Go, of Spark Capital, recently responded to Jon, writing:

In my view, the point of an MBA at a top tier B school is to provide students with the perspectives and pattern recognition to be a really great C-level executive. It allows a person to feel like they have “seen this movie before” in more situations and respond more decisively.

I don’t buy it, simply because I’ve never seen this come to fruition in real life. I’ve always seen MBAs learning on the job, and making calls from hands-on experience just like anyone else. I’ve also never seen an MBA graduate with superior knowledge on how to manage people — actually I’ve seen more disasters from an unhealthy brew of arrogance and naivete. Granted, Rob does imply that he thinks people are going to biz school too young and inexperienced.

Rob tries to make a few suggestions to improve MBA programs, such as doing more to teach sales and product design. I do think that MBA students can learn and practice customer development. With sales and product design, however, I just wonder how much can be taught with limited involvement.

Let’s take sales. First, let’s cross off internships at big companies since that’s a different beast than sales at a brand new venture. Second, shadowing a startup sales guy won’t teach enough — you learn sales by working a territory/account list, and building and closing a pipeline over the length of multiple sales cycles. Third, I question how many startups would want a part-time sales person for any kind of real opportunity. (tangent: some previous thoughts on hiring startup sales people)

My first job out of college (at Trilogy in ’94) included being the strategic marketing shadow to some highly experienced enterprise sales reps. All that experience didn’t mean diddly compared to being handed the western quarter of North America at Envive a few years later and told, “go get our first customers.”

True entrepreneurship is about fierce and focused execution, commitment, and teamwork in the face of huge odds, pressures and risks. How can that ever be compatible with an academic program?

Right now, I think the best, most realistic and applicable theory you can learn to jump-start entrepreneurial knowledge is out there on the lean startup blogs and a few VC blogs (I’d highlight Suster and Skok). And even all that good advice probably won’t sink in until you are in over your head fighting the good fight.

This post isn’t about whether an MBA program has value, because I think it can offer a lot of value and a lot of options to many people. This post is about entrepreneurship. I know some incredible entrepreneurs who received MBAs, but I don’t think it’s the MBA that has anything to do with their effectiveness and success.

I would argue that if you really want to start a company, but don’t feel like you are ready, an MBA should be your *fallback* position. Your first choice should be to get a job at a great startup, ideally one with some traction and some good management that can mentor you. Yes, I know that this is easier said than done because startups want people who can hit the ground running — the two links below might be helpful. As a second choice, I would also compare getting an MBA with working for a more established tech company. With the latter, the brand name on your resume certainly carries more credibility and your network of colleagues will be useful down the road.