Startup fever is at an all-time high. MBAs are turning down more traditional consulting and banking paths to pursue their startup dreams. I started my company, 10Thoughts, during my second year at Darden Business School. Prospective MBAs often ask me if business school is a good place to try and start a company. For MOST people – I believe the answer is yes, and here is why.
A safe place to try
Best practice for every entrepreneur is to define an “affordable loss” before making the plunge. What are you okay with “losing” to try to make your startup work? This can be “I will sacrifice my nights and weekends” or “I will quit working and not make a salary for 6 months” or “I will throw $10K of my savings into this effort.” Business school is a safe time to try and make a start-up work. The affordable loss is low: “I am okay with less free time my second year of business school.”
What else you can do inside qs leap ?
If your startup gains traction while you are in school, great, roll with it! If not, you learned an awesome new skill set and you go right into a post MBA job with the rest of your classmates. You may learn through the experience that starting a company is not for you. The “startup” mystique seems glamorous but when you actually plunge you soon realize the years and years of grinding you face for a small chance of “success.” This learning is valuable and business school is a great place to learn the lesson.
It feels really good when you are working on a startup in business school and any success or traction is really exciting. You are learning, you are taking a chance and your classmates are highly interested in your venture. When you are out of business school this all flips. The pressure and desperation starts to mount and the stress ramps up. You no longer “value the learning” unless it comes with meaningful results and progress. The focus shifts from celebrating cool small wins to figuring out what you need to do month to month to keep your company alive.
Benefit of Classes
At Darden, similar to most schools, there are classes where your class work is doing your startup. 10Thoughts started in a starting new ventures class at Darden and continued in a developing new products and services class. The best part is that classmates can work with you on your startup throughout the class.
Running a start-up, you really start to see how all aspects of business interact and I always found myself thinking about different class learnings in the context of 10Thoughts. The class learnings fueled the company and problems in the venture influenced how I approached different problems.
On the other hand, starting a company rounds out a skill set not taught in the traditional MBA curriculum. Business school is more geared around thinking applicable to established companies (as it obviously should be). Initially, a start-up is less about great analysis and more about grinding. Tenacity and resilience are the most important skills. No one knows your company, how do you educate them without any money? How do you catch the attention of people who are busy and ignore most requests? How do you sell? The more traction you gain, the more the thinking process mirrors your learnings from MBA classrooms. But at the start it is more of a raw skill set that can only be learned the hard way.
People Network and Resources
MBA students are excited about startups. I benefited greatly from tapping into the advice and ideas of my classmates as we developed 10Thoughts. My Darden classmates were my original users that allowed me to shape the product. They helped me connect with other business school students to grow the product.
The faculty is tremendously helpful and you find yourself tapping different members as you need to focus on different facets of the business.
This summer we worked in the Darden i.Lab where we received an office, a mentor network, funding without relinquishing equity, access to investors and free legal support. At the end of the day entrepreneurs are pretty annoying about their company, you need to be a pest to start a company (hopefully a nice pest) and the business school environment is supportive and understanding of this reality.
Implications of Student Debt
For most people a full-time MBA comes with debt. Why saddle yourself with debt if you want to start a company and know that founders start out with little to no salary? Debt puts pressure on MBAs to secure a lucrative, stable job right out of school. This feeds into a lot of the rhetoric around why it may not make sense to go to school if your goal is to start a company.
First, this assumes you are 100% sure you want to be an entrepreneur, more of that in the next section.
Second, debt is cited by many MBAs as a reason not to pursue starting a company. Entrepreneurs face an absurd amount of challenges. Debt at the end of the day is just another challenge. Yes you need to find a solution. You have two years (or 1 if you start second year) to build a viable business that either generates enough revenue or is appealing enough to attract investor funding. If this does not happen – you fall back on your MBA. MBAs are very employable.
In the stage of my company I am constantly stressed and there are many problems keeping me up at night. Debt is not one of them – I know one way or another I will be fine there.
Should you go to business school if you want to start a company?
I believe that people interested in entrepreneurship fall into two buckets. At the end of the day if you KNOW you really want to start a company one day you should just do it. You can always say that before you start you want to “gain a little more experience” or “become more educated” or “build a bigger network.” The reality is you can always take more steps to better prepare yourself, at some point you need to take the plunge. Everyone who starts a company will tell you it is a very different experience that you need to learn the hard way – this is why statistics state that most entrepreneurs will succeed on their third try. If you know you want to be an entrepreneur, if you are 100% sure, just do it and learn early – you do not need business school.
This bucket plays into the entrepreneurial mystique that heroic founders never doubt for a second that they are born to be entrepreneurs and then never doubt for a second that they will succeed. This is like never doubting for a second that you will grow up to be a professional athlete and then never doubting for a second that you will be in the hall of fame. This applies to the smallest of slivers of the population. Most of us, like me, fall into the second bucket.
The second bucket is for people who are not sure if they want to be an entrepreneur. When I entered business school entrepreneurship was a hypothesis along with other career paths. Business school is an awesome place to learn about different career opportunities. It is an awesome place to try a startup in the safest way possible. It is worth repeating that there are basically two things that can happen when you start a company in the business school cocoon 1) you get traction – great! or 2) you learn a valuable skill set and you gain an experience that will greatly increase the odds you succeed if you want to try again. Basically you put yourself in a no-lose situation. You are not quitting a lucrative job or risking the financial health of your family.
I urge anyone interested in entrepreneurship to consider business school as an option to test that hypothesis!
About the author – My name is Jack Mara. I am a ’15 Darden graduate and the founder of 10Thoughts, a service that provides article content recommended by MBA students and business professionals.