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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Dear MS. An MBA is BS.

Comments (23)

I got a fun question in my inbox recently from a long time reader of this blog.  This answer is aimed at those of you who have ever thought about going to business school.

I’m an entrepreneur, software developer, and occasional angel investor, who is thinking about going to business school. I’m looking for something new to do, either in VC or in finance more generally, and want to use business school as a way to change career direction. Since I live in the Bay area, I talked to the Stanford GSB admissions office, which recommended that I apply for their Sloan Fellows program. I did so and was recently accepted, but upon further investigation I’m a little worried because, as you may know, the Sloan program is a one-year program which results in a MS in Management rather than an MBA.  My question to you is if you think that the fact you have an MS rather than an MBA has ever closed any doors to you? If so, which ones?

Before I answer the question, I want to straighten up some facts.  I don’t have an “MS in Management.”  I actually have an SM in Management Science” (I try to clear up resume fraud wherever I go.)  When I went to MIT in the mid-1980’s, they didn’t have an MBA program.  For some reason that I can’t remember (presumably to be more true to the original latin – Scientiae Baccalaureus), MIT reverses the letters on the BS and MS degrees (so they are actually SB and SM degrees.)  In addition – MIT didn’t want to be known for giving out BA degrees, so the undergraduate degree that I have is an SB in Management Science (yeah – a bachelor of science degree.)

Now that that is cleared up, let’s go on to the question.  Five years ago, I was approached by a bright young man (ok – I was young – but he was younger) looking for advice on which business school to go to.  He had a bachelors and masters degree from Stanford.  He’d recently been accepted to both Stanford GSB and Harvard Business School.  He had been working for four or five years – first as a management consultant and then as an early employee (ultimately the director of corporate development) at a recently public company.  My answer to him was “how about neither – why don’t you come work for me instead.”  Chris did, and I don’t think he’s ever looked back.

Business school certainly has value and serves a useful purpose in this world.  However, the essence of the question points at one of the fundamental problems (and possibly misconceptions) about business school.  I’m 40.  I don’t believe that the degree I have has ever had any material impact on my “career” during the last 20 years.  I can’t think of a single situation where it came up in a conversation about anything that I was considering doing.  For a while, I obsessively corrected the “MBA” and “MS” listings that would show up on web sites and in public filings – I finally gave up because I decided it simply wasn’t relevant.  While many people wear their degrees as badges of honor on their chests, I prefer to let actions speak for themselves (and – rather than look at the badges people have, I look for the actions.)

If you want a two year break from life, go to business school.  If you want to meet a bunch of new, generally smart, and always interesting people, go to business school.  If you are a techie but like the business side of things, want to get an intellectual (and functional grounding) in business stuff, want a two year break from life, and want to meet interesting people, go to business school. But please – don’t worry about whether you are getting an SM or an MS or an MBA - that’s not what you are going for.

Recognize this will cost you $100k plus two years of opportunity cost, so make sure it’s worth it to you.  There are many careers where you generally (but not always) need the MBA badge to advance to the next level.  If you are an investment banker or a management consultant, it’ll help.  If you are looking to be a VC, it might help, but it probably won’t, as the population of people being recruited into the VC business continues to be very small.  Don’t be misguided by the idea that doors will now fly open to you since you are a newly minted MBA (or MS, or SM.)

  • http://andrewbfife.blogspot.com Andrew Fife

    Brad,
    I have several friends in top B-Schools right now and they all report that getting a job venture capital out of school is nearly impossible. In my personal interactions with VCs it seems that most VCs fall into 1 of 4 categories.

    1) Former entrepreneur… usually serial and always very successful

    2) Former investment banker

    3) Former CEO of a large local organization, like for example Macy’s of California

    4) Have very wealthy and/or connected families

    My subjective experiences suggest that most VCs are from categories 1 & 2. Of these categories, the investment bankers almost always have an MBA from a top school and in many cases it was after B-School that they transitioned from banking in to VC.

    However, I suspect that using an MBA to transition into VC will be difficult for anyone that doesn’t fall into one of these categories.

    Also, Will Price wrote an interesting post on getting a job in VC here:

    http://willprice.blogspot.com/2006/03/looking-for-job-in-vc.html

    -Andrew

  • http://onstartups.com Dharmesh Shah

    As an entrepreneur, software developer and occasional angel investor myself, I found it a little coincidental to read this article.

    What made it even weirder is that I’m currently enrolled in the MIT Sloan Fellows program (the counterpart to Stanford’s similar program).

    I will be getting an M.S. in the Management of Technology (though this is purely semantics, the curriculum is nearly identical to that of the MBA). However, the fellows program is actually very different from the standard B-school offerings.

    Reasons I have enjoyed the program and believe it has been and will be of value to me:

    1. Provides some “fundamentals” around economics, finance and other things that I likely would not have acquired on my own (despite having started and run my own companies).

    2. Exposure to academic areas that I think are relevant and thought-provoking (and may be helpful). Examples include system dynamics, game theory, etc.

    3. Access to a world-class group of individuals with a diverse set of experiences and backgrounds. This is probably the biggest value as there is some ‘self-seleciton’ going on. People in the fellows program have at least 10 years of experience and a high opportunity cost. As such, if they took the leap to go back to school, they’re generally the kinds of people you’d want to meet.

    4. Time off from the day-to-day trials and tribulations of running a startup. Its given me time to think.

    I’ve started my third company while a student at MIT. This is working out quite well.

  • Brian Curtis

    I would add one more: If you want to quickly expand your network overseas, go to business school.

    After several years of engineering then entrepreneurship in CA, I decided to go get my MBA and focus on 2 things:

    1) Entrepreneurship – I got heavily invovled with the entrepreneurship programs which helped me broaden my perspective, hone my skills and put me in touch with a much wider network than I had before.

    2) China – I used the spring break and internships to gain experience and contacts in China. The result was a 2-1/2 assignment as an intrapreneur starting up a joint venture in Shenzhen. I am now working with a venture capital firm in Shanghai (the lead investor in the company with which we had a JV). The MBA program allowed me the time and contacts to kick start this effort. And, the support group that is the Shanghai MBA network has been a life saver as an expat over here. Incidentally, the overlap between the top MBA alumni in Shanghai and the rather small VC community here is not insignificant. Beyond that, I have found that Chinese businesspeople go out of their way to find out where/what you studied since that is such a big part of their “guanxi” value system.

    Lastly, since I am interested in international business, I have been very happy to have close and “natural” relationships with classmates all over the world.

  • http://chikkman.blogspot.com Michael Cichowski

    Hi Brad,
    I couldn’t agree with you more on this topic. I have plenty of friends, including my brother, who care contemplating bschool. Personally, I think it

  • Pravesh

    Brad.

    Most important reason why people pursue MBA (atleast here in India) is because either they want to change their field of work ( from Telecom to Banking for e.g) or get into the marketing/sales/finance etc of their own company.

    Thus MBA is only a way which will open the doors to companies who want people for above roles. I dont think either the students pursuing MBA or the companies recruiting them would actually care if the person learnt anything from the B-School education. The only impact the degree has is that you can apply to various different positions. For e.g I have a BS and an MS degree in computer science. But if I also have a MBA I can apply to so many more places. That is the reason in my opinion.

  • Steve Woit

    Really enjoyed the comments about the value of an MBA and the relationship of this degree to founding, running and investing in start-up companies.

    Must say that I have enjoyed meeting and working with many HBS and Stanford Business School grads.

    But, I, too, was accepted at both HBS and Stanford and never went (and have happily never looked back).

  • Vic Berggren

    Nice topic… What if you’re looking for a VC? Is it necessary to have an MS or MBA?

  • http://www.fun-i.com Todd

    The “MBA debate” is actually much more widespread. It pains me to say (quite literally) that people from all walks of life think credentials and degrees are more important that knowledge. Go figure…..

  • Matt Weiser

    If you can get into one of the top tier MBA programs it may be worth it. For the 2nd tier or below, the opportunity cost and hard dollar cost will be a risky investment, one I personally wouldn’t take. The degree alone won’t do much, and the network at the lower tier schools isn’t quite what it is at Stanford, MIT, Dartmouth, etc.

    I have an MBA from the University of Denver from back in ’92, and although I use what I learned all the time, there was zero help from career placement and the network scattered into midlevel corporate management (not much help to the serial entrepreneur). I’m assuming the audience for Brad’s blog is like myself who tends toward working for or starting smaller, VC backed companies.

    Personally, if I couldn’t get into Stanford, Wharton, MIT or Harvard, I’d take the cash and join a country club. No joke – the contacts you’d make would be better than you’d get at the 2nd tier or below schools, and you can keep working and reading to further your skills.

  • http://chrisyeh.blogspot.com Chris Yeh

    Going though a top-tier MBA program is like having kids. There is no substitute. That being said, it’s not for everyone.

    Disclosure: I went to Harvard Business School.

    In the old days, B-school was a no-brainer. People had few ways to know you, and the MBA was a critical signal.

    Now, with blogs and other ways to get to know someone, the MBA’s signaling power isn’t as essential, though it still clearly helps.

    But B-school isn’t just about a badge. It’s also about learning about the entire business world, meeting a ton of people you might otherwise never have met, and gaining access to a remarkable alumni network.

    Brad, how many times has your MIT background helped you out? You still work closely with a lot of your classmates and fellow alumni.

    There is still a kind of relationship magic to spending time together, face-to-face, sharing experiences.

    Yes, it is possible to construct such experiences on your own, but only with great difficulty. There’s a reason we let Toyota build our cars, rather than assembling them ourselves.

  • http://mountainproject.com Michael Komarnitsky

    As a soon-to-be-minted MBA (6 weeks away now), I’ll share my perspective.

    I’ve run two successful companies after an Engineering degree, I moved to the east coast for a top-25 program. For top-tier consulting/banking/marketing firms, brand names matter A LOT. Both of my companies can easily be viewed (heavy web presence) and come across as pretty respectable IMHO. That said, there’s no way that I would have gotten the interviews I have without this MBA school name on my resume.

    Even then, Entrepreneurship seems heavily discounted at that level, based upon the negative reactions I’ve gotten. One of my companies was a consulting company, which I led for 4 years. Two consulting companies this year offered me entry-level positions (not MBA-entry positions), because “you don’t have any consulting experience.”

    As Todd said above, some people care more about credentials and names on resumes than merit. My very recent experience confirms that sentiment.

  • http://gluedideas.com John Koontz

    One option not mentioned here is going through an MBA program part time. I attended a three year fully employed program and experiened the best of both worlds – an MBA education and real world experience. Not only that, but my employer paid the $65k bill.

  • http://www.ajira.com Nari Kannan

    In my opinion, Business Schools that constantly update their curriculum with what is happening in the real world and incorporate new things that have made a difference in this world in decade long increments (anything less will be meaningless as I will explain why) will be worth while!

    Many of the stuff being taught in B schools still seem to be early to mid-20th century Ford/General Electric/General Motors/Alfred Sloan developments that were suitable for mid-20th century technology, industry and state of globalization.

    They missed completely, the quality revolutions that American geniuses like Edward Deming/Dr Joseph Juran and Armand Feigenbaum preached. Their exhortations helped the Japanese adopt, adapt and improve on their management approaches and still helps companies like Toyota dominate the industries they are in. Half hearted adopters like General Motors and Ford still cannot match Toyota and falling farther behind even as we speak. If you think they are losers now, wait to see who sells the hundreds of millions of cars in India and China in the next 25 years, especially when Gas is $5 a gallon! Toyota announced today that their entire line will have hybrid versions. In highly gax taxed environments like India and China, small cars with high fuel economy will be blockbusters and once Toyota is done with skimming the premium market in the developed world, they will sell them in India and China in mind boggling large numbers! Talk about completely missing the boat with respect to foresight and being able to see where the world is going!

    B Schools also completely missed the impact of global networking infrastructure, impact of Moore’s Law and are now missing the impact of the extended enterprise! All of these have lasting impacts on how organizations need to be set up and run! Pity one has to learn about all of these things outside business school while you pay a lot of money to learn half-useful mid 20th century skills!

  • http://adamdudley.typepad.com/evolving_entrepreneur/2006/04/the_endless_deb.html The Adam Dudley Blog

    The Endless Debate

    Dear Evolving Entrepreneurs, In a previous post I reveled that I plan to begin my MBA (evening program) at the Crummer Graduate School of Business at Rollins College here in Central Florida. Ranked highly, might I ad, on the Forbes

  • http://harvardextended.blogspot.com/2006/01/when-education-trumps-experience.html Ian Lamont

    Business is not the only field that deals with the education vs. experience debate. Take journalism — many reporters, editors and publishers who doubt the value of advanced journalism or mass communications degrees. Or computer programming — a lot of great programmers and technical thinkers never finished college, or received an advanced CS degree.

  • http://adamdudley.typepad.com/evolving_entrepreneur/2006/04/the_endless_deb.html The Adam Dudley Blogletter

    The Endless Debate

    Dear Evolving Entrepreneurs, In a previous post I reveled that I plan to begin my MBA (evening program) at the Crummer Graduate School of Business at Rollins College here in Central Florida. Ranked highly, might I ad, on the Forbes

  • http://www.cybersam.org/ Samuel Chow

    I think is more than just $100k and two years of opportunity cost when deciding if an MBA is right for you. Sometimes you just have to follow your gut feeling. If you feel that doing an MBA program gives you an edge and confidence in your career development, do it. If you feel that you have a great idea and wants to start a company, what are you waiting for? Start a new enterprise – Bill Gates and Steve Jobs did and look where they are now.

  • Dmitriy Gerzon

    I agree with Chris that education brings lots of benefits to our life. The real catch 22 is that we are getting used to those benefits so much and so fast that as time passes we stop realizing that we didn’t have them before. Like the wise man said “We can not ask what we don’t know”. It’s granted that education alone will not solve anybody’s career problems. Taken alone it may not even guarantee you a better job or any job at all. But opening your mind to a new knowledge of any kind will put you into a much better position to think and what is the most important UNDERSTAND different things more clearly.

    Another thing that many people oversee when they discuss education is a simple statistics. Have you thought how many Bill Gates and Steve Jobs we have in let’s say Fortune 500 companies list? And I’m not talking about only CEO level but all the way down to a clerk in accounts payable department. Look around you and count how many people with no decent education at all achieved something you don’t. Do you see any statistical correlation? What side?

    I’m 35 years old. I have a family and two children. I have BS and MS in engineering and computer science and I’m going after MBA this year. And you know why – because I read all these books and all these articles anyway. I enjoy management, critical thinking, planning, and the most importantly – I hate inventing bicycle all the time. I had my own business and only then I realized how many things I don’t know. So I have decided to get a 360 view of the business processes since I’m doing it anyway and get a diploma along the way.

  • Margo

    I have a degree from Dartmouth and have the following comments:

    1) It was worth it. Sure, it is not a guarantee of future earnings. But you do end up with a great network (especially at Dartmouth) that has proved itself again and again through the years. I am using it now to start yet another business. Not to mention great friends and the value of an interesting experience.

    2) You challenge your mind by taking courses on subjects you might know nothing about and that are not your comfort zone. I have had a varied career in everything from corporate marketing to entrepreneurship. I am glad that I had a place to think before facing the challenges I have faced.

    3) An MBA is not 2 years off unless you have a business or job to return to. It can be super stressful if you are looking for a job while doing the work that the degree of a top school requires. I looked for a creative field to enter after b-school (not consulting or Ibanking) so it was hard to do that amount of interviewing and legwork while keeping up. Maybe not an issue if you don’t have loans – for me it was stressful. Fun at times but definitely stressful.

    I recommend the experience if you have the experience, grades and scores to get into a top school. If not, go at night or forgo it.

  • Supratim Sen

    The Sloan Fellows websitementions the program as a 1 year MBA. Do they offer the MBA or MS?

    http://mitsloan.mit.edu/fellows/index.php

    Dharmesh Shah may kindly confirm.

  • http://intensedebate.com/people/gormanwvzb gormanwvzb

    During an economic crisis, now is a great time to have an MBA! It is a great differentiator, as well as a demonstration of financial, managerial, and analytical understanding.

    I read a great article on this topic titled, "The Value of an MBA in the Economic Crisis of 2009" found at http://managerqanda.blogspot.com/2009/03/value-of

    It really highlights the value of the skills required for an MBA.

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