You Don’t Need the “MBA Guy”

Will an MBA help you be a better entrepreneur? Probably not.But it helped me with these two important things.

MBA / Startup

I’ve talked to a fair number of aspiring entrepreneurs who are wondering if an MBA would be helpful in their careers. In fact, I asked that same question of Farhad Mohit before enrolling at Wharton. Here is his response.

I think the best way to analyze this is to consider what a tech startup really needs.

1. You someone who has identified and understands a market need. Many times this comes from someone who has worked in an industry for a while, and understands how current products are not addressing current needs of customers. It’s important to note that identifying a potentially successful product is not enough; you need to understand how market forces will come into play once your product hits the market.
2. You need a CTO. You need someone on your team that can translate market needs into an executable technology plan. While you can be successful outsourcing the actual technology development, the fundamental approach to the product development is best done in-house.
3. You need a sales guy. Having a great product isn’t enough. You need someone that can convince customers, one at a time, that they can’t live without your product. A company with a great sales team and a mediocre product will be much more successful than one with a great product and a shitty sales team.
4. You may need someone that can raise money. Ideally you’d be able to bootstrap your way to profitability, but for a variety of reasons, this isn’t common in the tech world. While there are many traits that would make one “good at raising money”, the two most important things are a good network and an ability to tell a story. Before someone writes a check, you need to be able to get the meeting. And once you have the meeting, you need to convince the investor that your story is so compelling that there is nowhere better for their money to be than in your pocket.

Notice that none of those read “You need someone with an MBA.” Getting an MBA helped me with half of #1, and half of #4. I had identified a market need before business school, but I didn’t really understand how the product I envisioned would really fit into the market.

The biggest contribution my MBA made to my startup was the network. Investments by people connected to Wharton made up 94% of our investment dollars. Many of the business development opportunities we had were due to a company exec wanting to see this startup in their space that was launched by a Wharton MBA. In that sense, having an MBA was really helpful.

But startups don’t need the “MBA guy”. They need the market guy, the technology guy, the sales guy, and the fundraising guy. The only reason to good reason to get an MBA is if it helps you become one of those guys.