The $1,531.90 Wharton MBA
A good friend of mine runs a small engineering firm. As a “technical person”, he’s interested in improving his knowledge of business fundamentals in hopes of growing his business. Let’s call this guy Phil.
Knowing that I’m a graduate of Wharton’s MBA program, Phil asked me for advice about pursing an MBA. Here is my advice to Phil: Don’t.
There are only two good reasons to pursue an MBA.
- You want your boss’s job, and having that job requires that you have “MBA” on your resume.
- You got accepted to a top-5 business school, have $200k laying around, and believe that having access to that school’s network will help you achieve your goals.
That’s it. Those are the only good reasons.
I was in the #2 camp. (Except the $200k part.) I am a technical person that was working on a software startup, and I believed that having access to Wharton’s network would help me grow that business in a way I couldn’t without the network. (I was right.) (Whether or not an MBA is good for entrepreneurs is a separate topic, covered well by Farhad Mohit Here.)
Top-tier MBA programs have excellent networks. They open doors. And having gotten into a selective MBA program is a great signal for future employers. But if you want to get an MBA simply to learn about business, there are much more cost effective ways of getting that knowledge.
Here is an outline of the topics I found really useful at Wharton, and some recommended links / books / resources that can probably deliver that material 95% as well as sitting in the classroom.
Microeconomics
Topics to learn: Supply / demand curves, elasticity
Principles of Microeconomics (Coursera)
Macroeconomics
Topics to learn: Employment, inflation, interest rates, monetary policy, WTF is the “Fed”
“Stocks For The Long Run”, Siegel ($25.62)
@HowardLindzon’s blog is an entertaining way to learn about how a successful hedgefund manager thinks about Macro topics. Not an economics blog per se, but interesting none the less.
Statistics
Everything in business is stochastic. You need to understand basic concepts in statistics.
Topics to learn: normal distributions, standard deviation, mean, max, min, average, variance, confidence intervals
“Statistics in Plain English”, Urban ($35.71)
Operations Management
I found the topic of supply chain management fascinating. It’s important to understand how to look at processes in your business and detect inefficiencies.
Topics: Supply chain mathematics, bottlenecks, lean manufacturing
“Matching Supply With Demand”, Terweisch ($79.16, Kindle)
“Innovation Tournaments: Creating and Selecting Exceptional Opportunities”, Terweisch ($25.22)
Marketing
Even after completing an MBA, I still don’t fully understand what marketing is. But it was interesting to see how marketing professionals use quantitative tools in an area that lends itself to subjectivity.
Topics to learn: Positioning statements, customer segmentation, targeting
“Smart Pricing”, Raju ($27.68)
Game Theory
Much of Game Theory assumes you are operating in a market of “rational actors”. While this isn’t always true, it’s helpful to develop systems of thinking about what your competitors will do in response to your actions.
“The Art of Strategy”, Nalebuff ($12.02)
“The Art of War”, Sun Tau ($3.99)
Sales
Every business person is in sales, even if you don’t know it. You’re always selling something; products, ideas, yourself. Learn to sell.
“How to Become A Rainmaker”, Fox ($9.99, Kindle)
“Get Them on Your Side”, Bacharach ($11.42)
“How To Win Friends And Influence People”, Carnegie ($9.52)
Financial Accounting
It’s important to understand how companies report their profits and losses. Learn to detect shenanigans.
Topics to learn: Read a balance sheet, cash flow statement, basic public equity pricing
“Financial Statements”, Ittelson ($10.43)
Entrepreneurship
All good business people think entrepreneurially. There is a wealth of free resources to learn basic concepts online. Here are my favorite.
Stanford Entrepreneurial Thought Leaders Podcast
“Hard Thing About Hard Things”, Horowitz ($20.77)
“Lean Startup”, Reis ($15.26)
“Zero to One”, Theil ($16.20)
Soft Skills
Negotiations
The negotiations course I took in business school was by far the single most useful course I have ever taken. Poor negotiators try to win while their “opponent” loses. Great negotiatiors find ways to both parties to win. “Getting More” in a must read. I also recommend trying to take one of Diamond’s in-person courses.
“Getting More”, Diamond ($10.13)
Ethics
Topics to learn: Don’t be an asshole.
“The No Asshole Rule”, Sutton ($11.95)
“Ethics 101”, Maxwell ($8.99)
Public Speaking
Public speaking is one of the most important skills for a successful business person. People judge you by how well you communicate, and public speaking allows you to communicate with lots of people simultaneously.
The only way to get good at public speaking (I’m told) is practice. Join your local Toastmasters group. The organization in my area is $98 per six months.
Networking
While this is one of the hardest aspects of a formal MBA program to replicate, there are networking practices that will help you build a useful network of professionals in your area.
- Join a local professional organization. I belong to the San Diego Venture Group. The membership fee is $350 per year, and it gives me the ability to meet monthly with people who have similar professional interests. And they serve breakfast.
- Work one day a week from a Coworking space. Many cities have active coworking facilities where entrepreneurial people get together to share ideas. The coworking space in my area charges roughly $25 a day for a desk. Monthly rates are around $500.
- Set a goal to have 50 coffee meetings a year. I regularly look through LinkedIn and other online resources to find interesting people in my area working on projects I find interesting. I’ll find their email address and send them a short email inviting them to coffee. I’d say I have a 75% response rate. I’ve met some of my closest business colleagues this way. I’d budget $10 a week for these meetings.
Conclusion
If you’re looking for an elite network, and a nice stamp on your resume, a formal MBA program is a great way to go. But if you’re a business person that solely wants to improve your core business skills, you can learn a whole lot with some self-directed reading. Certain skills, like negotiations and public speaking, are best learned with others. Look for seminars in these areas, coupled with some good old book learnin’.
