Entrepreneurship programs are all the rage at business schools across the country. But with the high price tag of MBA programs today, many aspiring entrepreneurs wonder if it’s worth the cost and if these programs deliver real value. An MBA is not going to make someone an entrepreneur. But business school does teach some fundamental skills necessary to run a business, generate revenue, establish partnerships, manage people and generally avoid financial or legal issues. While the investment is significant, think if it this way: An MBA can be easier and cheaper than learning lessons the hard way through a failed startup or spending years toiling in a corporate job.
My company, Grammarly, an automated proofreader, was bootstrapped. I did not have ready access to mentors, nor the ability to hire experts that typically comes with substantial outside funding. I learned the ropes by drawing from the knowledge earned getting my MBA in Marketing and Finance. I was able to help my fellow entrepreneurs understand that a corporate vision, and the ability to sell that vision, is not enough to build a successful company. True success for a small company requires very specific and defined skills — from operations, to coding, to accounting, to taxes.
Of course, it’s entirely possible to learn how to run a company by jumping in with both feet. However, an MBA can be a huge boost for entrepreneurs who start small. I credit my MBA with helping me to sell my previous company, MyDropBox. The degree bolstered my credibility with the acquiring company and gave me the tools I needed to navigate a sophisticated negotiation. While having an MBA was a key factor in my case, the truth is the business world won’t be easily sold on that credential alone. Being able to understand the valuation of the company and participate intelligently during negotiations, while also offering advice to make the subsequent integration process go smoother, were conversations that boosted my credibility.
If you are pursuing an MBA, it’s important to know what you are working towards and where you need to specialize. For example, an MBA in entrepreneurship may not be useful to someone with several years of experience working in an early stage company. Instead, that person might benefit from more traditional tracks focused on strategy, operations or marketing. Whereas someone trying to move from investment banking to a startup might benefit from an entrepreneurship program.
An MBA can also provide valuable cultural lessons for professionals from a different country. As a Ukraine native, I knew that I needed to learn how to navigate the cultural differences that play into a typical business transaction. Business school is where I received the valuable exposure to different people and work styles.
The tough decision to put your career on hold and invest in an MBA is exactly the type of decision you will encounter as an entrepreneur. An MBA from a top school is ideal, but can you afford to pursue an MBA and work without pay or at a significant lower salary to get a startup off the ground? If the answer is “no,” then it’s better to get the skills and credibility elsewhere. For example, a few trusted advisors can provide the business acumen and a broader set of knowledge.
If you do pursue an MBA, be wary of additional expenses. Many programs today encourage extensive opportunities to travel to meet with companies in different countries or network with other students. Be aware that such expenses add up quickly and could limit your options when you graduate.
Bottom line: A degree program in entrepreneurship can teach important skills — and perhaps help graduates achieve their goals more quickly through internships and networking opportunities. But the essential passion, drive, and creativity of an entrepreneur cannot be measured or taught.
Max Lytvyn is co-founder and head of product strategy for Grammarly. He earned an MBA from Vanderbilt University’s Owen Graduate School of Management in 2004.