Thursday, May 26, 2016 at 1pm

How an MBA Benefits Careers in Entrepreneurship: One Year after HBS

HBS alumnus on entrepreneurship

I was nervous as I held the phone up to my ear and heard it start ringing on the other end. I hoped, just a little, that he wouldn’t answer so I could put off the decision a few hours longer. No such luck.  

“Hello, this is Ben.” (Fictional name of the non-fictional Google recruiter I was talking to.)  

I launched right into my speech: I couldn’t be more grateful, it was a really hard decision, I was going to launch a startup, I’d never dream of working anywhere else unless it was my own thing…and I was declining the offer. The last few words were forced – was I really turning down the company that I considered the best in the world?

After I stopped talking, there was a brief moment of silence – I got the feeling the recruiter didn’t have a talk like this very often. He told me he understood and wished me the best. We exchanged closing pleasantries and I hung up the phone.

Time to get to work.

Almost exactly two years earlier, I’d faced another difficult decision: Whether to pursue my MBA after being admitted to Harvard Business School (HBS), or to stick with my existing life in entrepreneurship and continue growing a software development agency I’d founded, one which had started doing quite well. One of my company’s clients adamantly discouraged me from heading to Boston. “Why do you want to do it?” he’d asked. “You’re doing what you want to do right now. If it’s just to get the name on your résumé, then you’re making a big mistake.”  

But what he didn’t know was that I wasn’t doing what I wanted to do – my real goal was to create a company that was scalable, meaningful and impactful. I didn’t believe the service business I’d created had that kind of potential. I also thought that an MBA at a top business school would position me to be much better prepared to build the type of business I wanted to build.

What I didn’t know was that my business school experience would open up other opportunities – a product management offer at Google chief among them – that would make me question whether to dive back into entrepreneurship. Looking back, ironically, it was that same business school experience that gave me the confidence to turn Google down and pursue my startup dream. Three things I gained at business school really stand out:

1. Education

Spend any time in startup social media these days, and you’ll immediately run into some version of the following sentiment: “Don’t even think about getting an MBA and you may not even want to go to/finish college. You’d be way better off just diving straight into a startup, which is the only way you’ll really learn in any case.”  

I worry that this is becoming conventional wisdom when we speak of entrepreneurship, because this was not my experience at all. MBAs are unique degrees in that they require, in most cases, a few years of work experience before the program starts. To me, this was an ideal setup. As I sat in class each day at HBS, the things I learned were much more than just theoretical – they allowed me to reflect on mistakes I’d made, apply new knowledge to situations I’d experienced, and form plans for action when I reentered the ‘real world’.

Let’s not downplay the importance of a practical business education to entrepreneurs, either. Can’t do a DCF?  Unfamiliar with how private equity works as an ecosystem? Not sure if ‘disruption’ is just a buzzword or a real-life theory you can apply to your business? Wonder why small businesses get valued at four times their EBITDA (earnings before interest, taxes, depreciation and amortization), but SaaS (software as a service) startups at 10 times their revenues? These aren’t easy insights to come by and, trust me; they can and do matter for your business, and business school is a great place to learn them.

2. Credibility

When I was debating whether to go to HBS or not and how the degree might affect my ability to raise money, recruit great team members, or create strong partnerships, a Wharton alum and mentor told me, “the degree can open the door, but you still have to walk through it.” I think that’s right on the money. Having a degree from a top MBA program implies that you’ve gone through a certain amount of vetting and that you are probably worth talking to. In other words, you can ‘get the meeting’.

But, the second part is equally true – while you can get the meeting, that doesn’t mean you get the deal. That’s on you – your presentation, your track record, your positioning, your EQ (emotional quotient/intelligence). However, it’s sure nice to be there in the first place.

3. Network

Top MBA programs have alumni networks that can be really powerful and influential. Even in 2016, ‘business’ is fundamentally a people business. As I mentioned above, the degree can help you get the meeting, but your network can help introduce you to the people you need to have that meeting with and give you a nice recommendation in the process!

I’ve had a couple of friends from business school, in particular, who have been incredibly helpful in introducing me to those I needed to know as I’ve worked on my startup, ZipBooks. Their helpfulness has inspired me, in turn, to do the best I can to help fellow alumni when they get in touch with me. It’s a self-reinforcing cycle and something that can be very powerful when you deeply integrate yourself with it.

So, would I do it again?

Absolutely – I haven’t regretted my time at HBS for a second! Not only did my MBA experience help me gain important skills and friendships that are so important to my work in the entrepreneurship sphere every day, but those things actually had the second-order effect of giving me the confidence I needed to turn down a ‘sure thing’ in Google and forge my own path. The business school experience doesn’t have to be diametrically opposed to founding a startup. It can, in fact, be the perfect complement for entrepreneurs who value the education, credibility and network that a top MBA can provide.

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Tim Chaves graduated with distinction from Harvard Business School in 2015. He is the founder and CEO of ZipBooks, which provides free accounting software helping small businesses to get the capital they need. You can find him on Twitter and LinkedIn.

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