An MBA is a great option for many and is the key to success in many industries. In our modern economy, an MBA is like a high school diploma, and without one, you can’t even play the game. For entrepreneurs, an MBA in entrepreneurship is optional and likely unnecessary.
When choosing your own path in life, it’s not helpful to do things that everyone else is doing. If becoming an entrepreneur, developing a product, and scaling your business as big as it can get is something you’re interested in, you should expand your options and look in other places.
Should You Do an MBA or Start Your Own Business?
Entrepreneurship is the dream. Working when you want, where you want, and answering only to yourself is the definition of freedom. You can execute your vision exactly the way that you see it and the way that you want. However, being a business owner is always the more difficult path.
So if you’re looking for something stable that has been done before, entrepreneurship isn’t for you. Particularly in the world of vertical startups, where you first find your audience and then develop your product. In this scenario, the course you take has never been plotted before.
No one can tell you whether you should do an MBA or start your own business. Being an entrepreneur is often something innate that you want, and if you don’t feel the pull, it might not be right for you.
You’re going to have to be a trailblazer and think for yourself.
The Crowd’s Advice
One of the most popular pieces of advice for anybody in business is to continue on past a bachelor’s degree and do an MBA. A master’s in Business Administration can prepare you for administering and running a business, including finance, the hiring, and firing of employees, project management, and beyond.
However, if you get an MBA, particularly in entrepreneurship, you may be missing out on some of the finer points that experience alone can teach you. Jumping into a vertical startup can be stressful, but it also means a faster learning curve and specific experience-based knowledge about your own business and market. If you really feel the need to learn more first, take a foundation course that will give you the fundamentals without emptying your bank account.
It’s Not Always the Case
You will learn a lot of things in an MBA program. Some programs will teach you more than others because of the differences between business schools. The one thing you won’t learn is how to be an entrepreneur. Being an entrepreneur is not about technique, technical prowess, or the ability to follow orders.
You are the one giving the orders. You have to create them from scratch, from your own vision, and not from someone else’s. An MBA will teach you how to start a business and administer it, but it can never teach you the creativity and vision required for true success.
Creativity and vision are required skills to be an entrepreneur and ultimately running a business, so it’s better to start there.
…But an MBA Can Be Helpful for Other Goals
If you’re looking to be an entrepreneur, that vision needs to be somewhat innate. Particularly when starting a vertical startup, you need to be able to see the path forward without having a map. An MBA isn’t going to get you there.
You can do a lot of things with an MBA. You can work for a Fortune 500 company. You can get a job position in the upper ranks of the c-suite. Your pay will almost always be higher versus someone with a bachelor’s degree. These things can have a significant effect on your life.
However, that pay and that position come with someone else’s terms. It is dependent on your employment in another company, and it means that if you ever want to do something differently, you might not be able to.
If you want to execute your own vision, it becomes a lot more difficult. Additionally, the school may not have taught you the necessary skills to make it as an entrepreneur.
The MBA as an Obstacle
An MBA is pitched as a key that opens doors to the business world. In the exclusive and highly competitive arenas of finance, government, and consulting, it absolutely is. Unfortunately, as an entrepreneur, an MBA often presents more obstacles than open doors.
MBAs are beyond expensive. They can cost $25,000 for a two-year program, and that doesn’t include the cost of books or other things like housing and travel. They cost the same amount as a bachelor’s degree in half the time. The value of an MBA is the ROI you get in the increased salary for future job prospects. The problem is that you would need years to recover that cost and see a return on your investment. The cheapest option is to do an online MBA, which would save you money. This is a great option if you need a lower price point and more flexibility. It’s still a significant investment, though.
One could argue that education and information are priceless, so we shouldn’t quantify the ROI of an MBA. Our opinion is that money is very real, and we have to decide where to spend our money to get the most value. It seems the pricing makes that decision very hard for many people, and it is prohibitive in many cases.
An MBA is often only valuable if you attain one from one of the top business schools. Most of the top business schools are in Canada, The United States, and the United Kingdom. If you don’t live near one, relocation may be necessary, costing even more.
That need for the best reputation is prohibitive as well because although the top-rated schools will give you an ideal amount of high-quality knowledge, they’re going to cost you a lot of money. It could also upend your life if you need to relocate.
Can an MBA Make You Rich?
Investing in your education is never a mistake. You can never know too much, and in a world where things are valued far too high, a good education is priceless. As an entrepreneur, you love to learn, but you also want to have a vertical startup.
If you decide to invest in your education, you need to think about the opportunity cost as well. That money could be used to start your business and get a headstart on the capital-intensive parts of the startup process.
If that MBA doesn’t deliver all of the value it promised, you will be disappointed and will have paid the price of the opportunity to start your business. An MBA is not guaranteed to make you rich, and this should be taken into consideration before investing the time and money.
The Black Hole of Time
You don’t want the pursuit of an MBA to get in the middle of your dream of being an entrepreneur. Starting a vertical startup where you are designing products or services centered around your target audience takes a lot of time and focus.
If that focus is being drawn away by a school program that may not add as much value as they say it does, you should consider that carefully. You only have so much time on this planet, and if you want to make the most of it, you need to prioritize your time budget.
What Can You Do With an Entrepreneurship MBA?
While an MBA is extremely valuable, it does not guarantee that you will be a great startup founder. MBAs are designed to make great employees who excel at the game set out in front of them. You want to design a whole new game.
MBAs allow graduates to win every single game they play and they do crush the competition. However, if you’re following your own path or making your own game, there is no playbook or rule book to guide you through the process. You need to make it up as you go.
Rule-following isn’t always the best route for an entrepreneur to follow. You need to have the freedom to do whatever you want, whenever you want, and that means having the license to be creative — even when other people don’t want you to be creative and likely don’t expect you to be creative.
You can’t go outside of your comfort zone or create a new zone of creativity if you’re following the rules and playbook of a game that you were taught in an MBA program. Building things, especially a vertical startup, requires a high level of creativity. An MBA program will not teach you the skills needed to be successful in this area.
Love What You Do
Being a startup founder should mean loving what you do. It is important to your life. In fact, it’s important for your overall happiness. If you don’t like what you do, you’re not going to like your daily grind, and you’re not going to like getting up in the morning to start working.
If you don’t like your customers and you work for somebody else, there’s nothing you can do about it. Your boss gives you an assignment, you do the assignment, and that’s the end of it. Your MBA has trained you perfectly to execute your boss’s vision.
If you don’t like your customers when running your startup, you’re not going to like your business. A vertical startup might be perfect for you because you get to choose your customers first, and then you can move on to choosing a product that suits their needs.
By choosing your customers and what you sell to them, you will be a happier and better founder. As an entrepreneur, you get to choose who you sell to, who you work with, and who you collaborate with. If you want to be an entrepreneur and achieve that happiness, an MBA will not get you there.
Which MBA is Best For Entrepreneurs?
If you do decide to get an MBA, there are many MBA programs in entrepreneurship to choose from. Choose one that focuses on creativity and independence because that’s what entrepreneurship is all about. Which MBA is best for entrepreneurs? Whichever one has the word “entrepreneurship” in the name.
How Does an MBA Help in Entrepreneurship?
Talent is the key that separates the good from the best. An MBA will highlight a certain set of skills — after all, it’s not an easy thing to get an MBA — however, there are more people with MBAs than those who have the skills to be a startup founder. Your talent isn’t going to shine through by getting another degree.
Just by the sheer number of people that get MBAs, if you get one, you’re not even going to stand out. It’s great if you can put together a good resume and some impressive work experience. The problem is that when you go into job interviews, and you’re competing for clients, you will all look the same.
What Will I Learn in an MBA in Entrepreneurship Program?
Business school professors are the experts, right? Well, sometimes they are experts because they have a breadth of knowledge and a deep understanding of that knowledge. They also know how to deliver that knowledge to other people, which is their own unique skill set.
The skillset you want to learn is that of an entrepreneur. Do they have that experience where startups are concerned? Business school professors often have illustrious careers and are the smartest business minds out there. They have the accomplishments to back up their talent. Still, what you are looking for is your own path, not to copy someone else’s path.
You may not learn exactly what you need to be an entrepreneur in an MBA in entrepreneurship. Check the course syllabus to be sure, and if you like what they’re teaching, get more details before jumping in. Professors should be experts in entrepreneurship and not just business in general.
Teaching Versus Doing
They have the degrees, they might even be doctors, but the experience of being a startup founder is unique to each founder. An MBA program is taught by someone who doesn’t have that experience, at least often doesn’t. If they do have the experience, you must ask, “Why are they teaching other people instead of executing their own vision in the business world?”
The Right Kind of Experience
While they are experienced, business school professors are often not experienced in a way that helps you as an aspiring entrepreneur. You want to learn from examples and the information of other entrepreneurs so that you can get valuable knowledge specific to your area. This can’t be learned in a classroom.
Where to Learn From Examples
Finding a mentor or some other vertical startup founders would be a great way to get your foot in the door and get the first-hand experience from people who are doing the same thing. They don’t have the same startup, and their audience will be different, but you’ll have some insight into what you can expect.
They can help you discover best practices and possible directions in which to take your own startup.
Which MBA Specialization Is Best for Entrepreneurs?
An MBA in entrepreneurship is by far the best MBA concentration for entrepreneurs because the content will focus on startups and how to start your own company. Then it should move on to how to manage that company. Check the curriculum, and do some deep research about the professors and the program in general. Another great option is an MBA in strategic management that will also give you the skills to run a company.
Whether an MBA sounds like it isn’t the right track for you, or you do get one, you’re ready for the next step. We have a few ideas that center around vertical startups. By starting your own company, and in particular, a vertical startup, you can throw your hat in the ring in the global business environment.
You get to make your dream of being an entrepreneur come true while making sure that you’re selling something that people actually want, reducing risk, increasing profit, expanding your reach, and building flexible skills along the way.
A Vertical Startup
A vertical startup is the best way to maximize both profitability and happiness. A vertical startup finds its audience first by building the customer list of people that you want to serve and then testing the product in the market before you fully develop it using mockups.
You can lower costs for development. Any problems that arise can be fixed in the mockup stage. Once the solutions are implemented and the product is viable, you can scale up and sell the product to a narrow niche of customers.
A vertical startup refers to the market being vertical in that it does not cross various market segments. Instead, it is hyper-focused, so you can create products that are specifically targeting that niche. The best way to launch a vertical startup is using the GPDS framework:
- Grow a customer list.
- Pre-sell a minimum viable mockup.
- Develop a solution.
- Scale your solution.
1. Customer List
You first have to understand the broad market and filter it down until you come to a specific niche. The more specific, the better because you can create the exact product that speaks directly to that market niche.
Choosing a market that is best aligned with your core identity is usually the best way to do this.
2. Presell a Minimum Viable Mockup
Once you have your market, you can move on to making a minimum viable mockup. This is the pre-sale phase where you present the marketing materials for your solution. You can start selling pre-orders that will allow customers to get in on the ground floor.
They might be allowed to buy the product at a lower price or get some other benefits of your choosing. Kickstarter has good case examples of this system.
Once people get the product in their hands, you can move forward by receiving feedback.
3. Develop a Solution
That first run of products will never be perfect right away. The good news is that you can ask your customers what should be done to improve them and use their feedback to develop solutions. By implementing those solutions, you are crowdsourcing your product development and developing solutions of your own at the same time.
You can develop a final product that most closely resembles what solves the problem for this specific market niche.
When you know that the market is available and customers are willing to buy, you need to sell as much as possible. The benefit of your vertical startup is that you have already identified the market, so there is no doubt you can scale up when you are ready.
When you are, it’s time to scale up production and manufacturing to meet the full demand of the market niche you identified in step one. Make sure everything is up to par on the administration side and get your product to market. Your sales will hinge on your effectiveness as a social entrepreneur, so harnessing new technologies and being connected are more important than usual.
The vertical market strategy is all about selling first. The purpose of a vertical startup and the focus of a vertical startup is to sell products, like any other business. Once you’ve sold the product, you can develop it later. This keeps costs low, and your company can remain nimble. As an entrepreneur, you need to be able to shift gears very quickly.
If you want the most freedom in your business, you shouldn’t bring on venture capital, and you don’t need it either. The capital you raised by pre-selling the product will finance the production and startup costs for your vertical startup company.
Don’t give up any equity, and make sure that you are the only boss. They’re not going to teach you this in an MBA program, but if you decide to become an entrepreneur, this is one of the keys to success.
Enjoy being an entrepreneur, and take control. Being your own boss means you set your own hours, targets, and objectives, and it’s up to you to make sure that you’re achieving them. While being an entrepreneur can be extremely fun, it can also be challenging, stressful, tiring, and often confusing.
Balancing work and life is an important part of that process. You need to make time for yourself, especially in a vertical startup where growth is very much accelerated. You need to take care of yourself and step on the brakes every once in a while.
Throw Away Convention
If you’re thinking of starting a business and particularly a vertical startup, you are not the norm. That’s why you shouldn’t take normal paths or conventional advice. Unconventional people don’t do well with conventional advice.
Yes, an MBA will help you get from Step A to B to C, but you don’t want that. You want to jump from Step A to L and then back to H. An MBA will have value if you want to take a linear and conventional path, but unconventional and special people don’t do well in conventional settings.
Eliminate the Redundant
An MBA is designed for people to gain the skills to start a company. Being an entrepreneur requires other skills. Of course, enrolling in an MBA program will give you the business administration skills to be an entrepreneur.
But then you need to get experience and learn from that experience. If you jump into entrepreneurship, you don’t need to wait to learn. You can start learning from your experience on day one and accelerate the learning process.
If you start a company, you’ll jump into it and learn on the go. Learning from experience is often more effective because you know how to do it and you weren’t just taught those lessons in theoretical circumstances.
What About the Professors?
Again, we have to address the issue of business professors’ experience. They often have valuable and incredibly impressive business experience, but translating that to your life often doesn’t work.
The great experience, knowledge, and insights into administrating business may never apply to you. They may also be able to explain those things in theory, but unlike other jobs in which you can train on the job with someone else, in a business school, you don’t get that opportunity.
You can use case studies, lessons, assignments, and a whole course load of essays, but they won’t be able to show you.
We believe it’s important that you get the right kind of education, not just any education available. While an MBA is a great option, it’s not the right fit for someone that wants to be an entrepreneur.
What Entrepreneurs Do Instead
To start, get experience. If you’re not already working in the industry you want to be in, make sure you switch over. You want to be in a position to jump into entrepreneurship and not have to stumble and fumble your way into it accidentally.
Start Planning Now
Don’t waste time thinking and dreaming about your business. Entrepreneurs start by taking concrete action. Take steps to set up your LLC or corporation, and make sure that you have a niche market to go after when you start developing your product.
Start running surveys to figure out what people like and don’t like about very specific products like the ones you would develop for them.
Pricing and Competitors
Keeping your niche market in mind, figure out your pricing and your competitors. What are your competitors doing? What is it that they think they’re doing right but that you know could be done better?
There are a lot of obvious mistakes businesses make that you notice as soon as you start paying attention. One example could be a restaurant that doesn’t have the right design. It hasn’t been changed, and the owners look at it every day, but nobody ever thinks to change it because they can’t see that something is wrong.
If you’re going to start a business, start by making changes.
You’re already changing the way that you start the business by starting with your market and then developing a product. So why not start with changing the way you think about and develop the product as well?
Reach out to any contact you have that also has experience. Firsthand accounts are the key to making sure you’re getting the right information. That MBA program that might look good on a resume isn’t going to give you the life experience of chatting with someone who runs a company with 50 employees.
Of particular value to you would be someone who runs a company that started with a product for a very specific niche, built a product to fill that niche’s need, and then scaled up production very quickly to meet it.
Find founders and other aspiring entrepreneurs like yourself to form a group and chat. Form a mentor and mentee relationship and check-in weekly on your progress and goals. Having someone hold you accountable for your own progress is an important thing when you’re running your own business.
Being your own boss means nobody’s watching over your shoulder or checking your deliverables. You need to make sure you’re holding yourself accountable and having someone else to talk about it with will keep you on track.
Connecting with the right network is also important because meeting the right people could mean the difference between good and great advice. Not everyone can live in silicon valley, the area known to generate significant innovation. Find the right area for your business to thrive, and you’ll find many of the frictions of entrepreneurship melt away.
Make sure that what you’re saying is going to happen is feasible. If your market is millions of customers, but you can only serve a couple hundred thousand at first, do that. You can scale up more when you are selling more and have the capital available to do it.
Don’t Give Up, Don’t Give In
Don’t ever give up on the dream. Keep the business going even when it seems impossible, and it will almost always feel that way. Being an entrepreneur is always going to be a challenge, and pushing through to the next step is critical to making sure it doesn’t fail.
Don’t Give Up Any Equity
Create your business in a way that nobody else needs to invest in the company. You’re selling those mockups and prototypes so that customers can get a taste of the product before you give them the real thing.
Once you deliver the mockup and decide to start manufacturing, you can use the money from pre-sales to make it all happen.
Move Fast and Break Things
This is a famous motto from Facebook that applies to many startups. It applies well to vertical startups. Moving fast is critical because, in a market where the customers are specific and changing, you need to move fast to fill that market need.
If the market changes, the customer changes, or digital transformation shakes things up. You don’t want to be left holding the bag when you need to produce 10,000 prototypes of first-run products. If they already paid for them, but you moved slowly, and they don’t want them anymore, you have a problem on your hands.
Don’t Be Afraid To Fail
If you haven’t failed, you’re not trying hard enough. Everybody fails on a micro and macro level at some point in their lives. It’s even possible that this first startup is not going to make it all the way. Don’t let that get you down. Keep pushing into another project immediately. Remember, it only takes one success to make up for all of the losses.
The Time Is Now
The time to hone your entrepreneurial skills is here, and creating your own vertical startup is the best way to do that. Conventional advice has told you to get an MBA in entrepreneurship and that it will teach you to be an entrepreneur, but it will never be as effective as doing it yourself.
Being an entrepreneur means breaking barriers — your own and those in the business world. It takes creativity, focus, and an unrelenting desire to be the best at what you do. If you can commit to all of that, you’ve already taken the first step, and we’re excited to work alongside you to make it happen.