Founders can benefit from an MBA – it’s a cheat sheet for companies
The Silicon Valley college dropout is a well-known trope – but while it’s great in the movies, it’s not always how it works on the big screen.
A Fortune 100 CEO Study found that 54% had a graduate degree, of which 59% were masters of business administration (MBA) degrees. On top of that, many famous founders, including Micheal Bloomberg, have college degrees.
“This myth that you have to be a dropout to become a successful entrepreneur is simply not true, ”says Dries Faems, president of entrepreneurship at German business school WHU – Otto Beisheim School of Management. “Rather, these are the exceptions that get a lot of media attention, but in reality, people who have a higher education or obtained an MBA are more likely to have a successful startup. ”
Still, some people still haven’t warmed up for MBAs, and there is still some negativity about their price, elitist and too “establishment”.
We spoke with those responsible for the WHU program and a founder of high school dropouts to find out what the real benefits are.
Build a network
Having a support network around you is essential when starting a business.
A report from last year find that a quarter of UK students are now running or considering starting a business while still at university. Now, many schools have incubators, accelerators and other programs to encourage and support tech startups.
For Sebastian Thunman, co-founder and COO of Swedish Fintech Team Together, this does not come from a network of alumni. He and his co-founders met in high school while working on a project together. After learning to code, they gave up to found the company, a decision he doesn’t regret.
“This myth that you have to be a dropout to become a successful entrepreneur is simply not true.
But, he says, a key part of his founding journey was that he was so young and that he always had a support network around him: “Especially when you’re young you can have the support of your friends. and your family to try to spread your wings. So I think being young gives a certain advantage, and you also have less responsibility.
For Sabine Noe, Director of Recruitment and Admissions for the MBA program at WHU, one of the most valuable things a future entrepreneur can get from graduate school is to be able to tap into a network of supporting founders, long after graduation.
“Study with inspiring, diverse, but like-minded people,” she says. “These relationships are priceless and this is one of the main reasons people should pursue higher education if they are interested in starting a business.”
According to Noe, more than 700 startups were founded by students or alumni of the WHU. This includes 15 unicorns, like delivery startups Flink and JOKR, as well as the start of the meal kit Hello fresh and fashion company Zalando.
“Study with people who are inspiring, diverse, but like-minded. These relationships are priceless and this is one of the main reasons why people should pursue higher education if they are interested in starting a business ”
Faems says these alumni networks add hands-on support in the form of guest lectures, acting as a resource for advice, and even investing in each other’s businesses.
You can develop a range of skills… quickly
Many argue that choosing work experience over school can provide a real-world work experience that cannot be simulated in a classroom, including skills specific to startups such as marketing, operations, and product management.
But one of the perks of a graduate degree, especially an MBA, is that you can quickly acquire a holistic set of skills that could directly help start a business. Think of it as a cheat sheet.
“It’s a very compact degree, ”Noe explains. “You can figure it out yourself when you start a business, but it would take a lot longer and it’s a good format to get everything you need in a year or two. ”
Faems says founders need a strong set of generic and foundational skills that, of course, you can watch Youtube videos on, but a business school will be able to provide quality assurance.
You can make mistakes
Thurnman says that one of the most important skills of an entrepreneur is to accept failure: “If you are not prepared to make mistakes. Either way, it won’t work.
Around 90% of startups fail, and while founders like Thurnman often learn this through work experience, a graduate program creates a space where students can fail and get feedback before they have to act on an idea.
“If you’re not ready to go out and make mistakes. It just won’t work anyway “
“It’s very valuable, because usually in business, when you try something, you don’t get a second chance, ”says Noe. “They can really get honest feedback, not only from their fellow students, but also from professors and company representatives. “
The experience of failure is important, and higher education can save you precious time while you understand it.
WHU’s Masters of Entrepreneurship program, for example, provides training for many opportunities, whether you want to be an entrepreneur, founder, consultant, venture capitalist, or tech expert. According to WHU, 36% of its 2020 class became the founders.
It’s expensive – but there is help available
One of the biggest hurdles to getting a degree is cost, and the bill for an MBA can be over $ 140,000. There is also a common argument that expensive degrees are elitist – a UK accounting software company find 172 of the 498 entrepreneurs who founded or co-founded the 250 best unicorns in the world have graduated from the top 10 universities.
The experience of failure is important, and higher education can save you precious time while you discover it
“An MBA or graduate degree from a good school is a big investment, ”says Noe. “For the full-time MBA program, people have to quit their jobs and therefore don’t have a salary for a whole year. “
To combat this, schools like the WHU offer a range of partial scholarships that reduce tuition fees by a certain amount. And since there is still a huge lack of diversity in European technology, several of them are specifically aimed at women and minority groups to diversify the student body – and the ecosystems of alumni and startups in general.
“One of the biggest problems remains the lack of diversity, therefore the involvement of women, the involvement of minorities”, explains Faems. “If 50% of your population is female, you want a representative part of them to be engaged in startups and if not, I think it is an obligation of policy makers that we are trying to stimulate that as much as possible. ”
WHU is the leading German business school for degree programs.