The CEOs of Apple, Google, Microsoft and Amazon Web Services all have MBAs. There are also lots of examples of MBA founders.
This has happened despite the fact that historically most MBAs have gone to banking and consulting. With MBA grads shifting toward tech, we should expect that many more tech CEOs and founders will have MBAs.
"CEO" and "founder" are very different job descriptions. An MBA can be very useful for a peacetime CEO [1]. It is basically useless for a wartime CEO or founder (all of whom are wartime CEOs).
An MBA basically teaches you how to apply rational analysis and best practices to the running of an existing business unit. This works great during normal times, when your company has a competitive advantage, you know what it is, you have a large and growing customer base, and you are making a profit on every transaction. It works terribly when the default outcome, if you follow all the best practices and do everything you're supposed to, is that you'll fail miserably. This is the situation most founders are in - if their market opportunity were obvious to someone with an MBA, then someone with an MBA working for a big company with lots of resources would already have done it.
That is a really strange theory. It is also demonstrably false.
Many of the founders of the top unicorns have MBAs (Grab, StitchFix, CloudFlare, etc) [1] Also, I wouldn't categorize building AWS from scratch as a "peacetime CEO" job.
Not sure how it's incompatible with your stats. If the degree is useless then you would expect MBA holders to have no advantage over non-MBA holders in founding companies. Not that MBA holders wouldn't sometimes be successful. You're missing a data point showing that MBA holders are more likely to succeed at founding startups, which I have yet to see anywhere.
Realistically, an MBA can be helpful to a startup founder if that founder lacks basic business acumen from prior education or experience (basic accounting, financial planning, marketing, etc.). It can also be a hindrance because MBA coursework tends to trivialize many of the core skills needed to be successful at starting a company in favor of the higher-level thinking and planning needed for large corporations (you won't learn how to make your first sale, for example, or how to hire your first employee, setup a billing system, etc.).
That depends on the MBA program, and on the electives each student takes. Some focus heavily on innovation and entrepreneurship. There's a lot of variation.
I think it comes a lot more to the individual person and not the academic background. A little bit like the meme that engineers make better managers of manufacturing companies. That nobody mention that with very few exception the whole VW management where engineers, Winterkorn being a professor with a eingineering PhD.
Something you might not have considered are the brand value and personal network aspects of an MBA. They're tremendously helpful to gain audiences or advice you might have a harder time accessing as an early stage entrepreneur.
You may also be surprised with the changes many MBA programs have made toward entrepreneurship. There are now incubators, cross-disciplinary product launch classes, and school affiliated venture funds.
Worth nothing that 'the type of education' is only one factor, the other being the 'the type of people' that do that kind of study, and their opportunity costs afterwards.
My Grad School peers mostly got decent jobs and it's hard to convince the wife/husband to let all of that go. Most people who make good corporate warriors may not make very good entrepreneurs at all.
But of course, so many do and add to that an MBA is definitely a signal of higher levels of motivation, education etc. which are positive signals.
Which reminds me, I went to the drugstore, a few weeks ago, to get a razor and blades; I took a look at Harry’s, I think, and, surprise-surprise, they are priced about the same as the incumbents...
I'll tell you right now, as a person that got sucked in by the look and feel of the packaging at a time I was looking to replace my razor, it is by far the worst most cumbersome razor I've ever owned. The blades rust almost immediately. From top of blade head to neck is just so long (5 blades plus lots of space) and the weird rubberized flex of the head makes following contours of face virtually impossible. Leaves patches of hair. The razor was probably designed by a woman for legs or an early 20s geek that hasn't sprouted facial hair yet. Either way, you'd be better off buying a razor from a dollar store.
That often times "disruptor" is just marketing to get people on board thinking it's novel and advantageous to the consumer. But in reality, after initial buzz, they are mostly just another player in the market offering little in the way of differentiation, including price.
I just found out today that I helped my client potentially double or triple their sales on Amazon. They went from $5k daily sales to $10k. I'm still trying to process that that could be $1-2m in revenue. They're basically for the time being now one of the top 3 products on Amazon for their category, beating other established brands.
My colleagues and I are building new brands on Amazon every day. There are other ecommerce entrepreneurs building brands on Facebook ads and social media. It is now easier than before to find customers, build that list, and retain customers. There's been a shift and I see new brands challenging dominant sleeping brands every day. The craziest thing is that all these new challengers have very very small teams. I'm working on launching a product to challenge P&G, but I already know one startup, 3 founders, backed with VC money, that are already doing $50k+/mo on Amazon on that product.
I think it might be too rapid change within the last 5 - 10 years.
Amazon and Shopify made it possible for anyone to start their own internet D2C business. Facebook ads/social media, make it easier than ever before to find and reach potential and current customers. China's manufacturing opened up and became easier than ever with Alibaba.
1. Fulfillment became easier and more accessible.
2. Marketing became easier and more accessible.
3. Manufacturing became easier and more accessible.
Quality in my experience differs a lot. I don't have that much experience but these are two examples. One electronics startup is still trying to make it work and dealing with a lot of QC issues. Their hardware and design expertise is not up to Apple's standards but they are able to work with a smaller factory. I've also worked with shoes and it seems that for some of my clients, they seem to get their shoes from the same place...
Another trend I've noticed is affordable luxury. Most of my clients have been doing well in "affordable luxury". I read an article that Dollar Tree stores are doing well. I think it's making good quality products more accessible and affordable- and this is possible by cutting out A LOT (90%+) of middle men and offshore manufacturing for better or worse.
In the past, it was a lot harder and much more people were needed to get a product from factory to customer. Now for some of my Amazon colleagues, they go straight from manufacturer to fulfillment centers. Then there are Chinese manufacturers on Amazon going straight to the customer. Or dropshippers, going straight from manufacturer to customer.
Check out the Seller Tradecraft Facebook group as well as the Amazon FBA High Rollers Facebook group. What helped me get started was going to Amazon conferences and meeting a bunch of other Amazon sellers. My first Amazon-ish conference was the free IMA (Internet Merchants Association) sessions at the ASD trade show. They do it twice a year. I am now a board member of the IMA somehow. Some other Amazon conferences include Boost with FBA (by Amazon), Rocky Mountain Reseller Conference, Prosper Show, Retail Global, etc.
Some thought leaders in the Amazon space include: Casey Gauss (CEO of Viral Launch, software for Amazon sellers), Manny Coats (CEO of Helium10, Amazon software), plus a number of 7-8+ figure sellers.
I'm happy to answer any emails or pms. I share some of my thoughts on Amazon as well as conference notes on my blog here: http://younjung.com/category/amazon/
I'm one of the partners, if you're interested, feel free to email me if you have questions fernando@sellertradecraft.com. Amazon is an awesome place to be right now!
Micah is an HBS alumnus. I'm not saying he's wrong, but he brings his own biases to the table, as we all do. I also went to business school, and while I wouldn't say it was worthless as a founder, the things that are valuable are not always what people believe are valuable.
There are three reasons to go to business school: knowledge, network and brand. People go for many reasons, such as feeling insecure, wanting insurance and taking a break from their job. These are not good reasons. Here is my evaluation of the good reasons:
- Knowledge (overall grade C-)
Yes, you will learn things if you study. Could you learn these on your own? Sure. Will you? Likely not. If you weren't an accounting/economics/finance major in undergrad you may find the academics particularly valuable. Some of the classroom experience is useful for things like negotiations, management and other "soft" skills. My experience was that the greatest intellectual advancement I found was through cross registering in the engineering and statistics departments. Go to a large research university, particularly if you went to a small liberal arts school for undergrad, and make the best use of a world class institution!
- Network (Depends mostly on the competition to get in, B+)
This is the biggest reason and often cited as the true reason people go. Academics are a joke and going for the brand seems gross, so people default to this answer, which is cronyism, but at least it's not as superficial as branding. In my experience, this was incredibly useful. I've landed three of my seven clients through business school classmates. The alumni network is good too, although not terribly strong unless you go to a smaller program, which lowers your odds that the alumni will be usefully placed for your purposes.
- Brand (depends entirely on prestige, A+)
This is vastly underrated, at least in polite conversation. Nobody like a braggart, and playing the "I went to Stanford GSB" card is an ugly move, so savvy MBAs resort to more subtle signaling. It's hard to measure the value here because it makes everything easier, from pitching and starting conversations, to being taken seriously and getting access to programs and resources.
Finally, a word on digital vertical native brands. Developing a valuable brand is low probability event (that's why people buy a brand by going to business school!). That is not to say it's difficult, or any more difficult than winning the lottery, but it is rare. Intentionally creating a brand can be hard, but I doubt there's much correlation between effort and success. Besides brand, these digitally native vertical brands have no sustainable competitive advantage, and I fully expect their profits to get competed away. The market, however, can stay irrational long enough for many people to get rich. Best of luck to anybody starting or investing in a digital brand!
Well I'll start by saying I'm a bit biased. I've worked for a media agency where it had some of the world retail behemoths accounts. I was a digital media strategist on a specific market - though some of the stuff we did was indeed by global guidelines, so we had visibility on what was being done at a global level, still my bias is towards the reality of the market I was in.
I've dealt with their management and executives (brand managers, marketing managers, etc) and even by their criteria of HR choices, and it's pretty clear what kind of people they want: they want smart, orderly people who can execute well.
Some they get them from specific business universities early - people above average - and enroll them on some internal college for some time.
They are not very creative and innovative, even if they were they will dry out because they don't have margin for it - and maybe that's part of their success: they need to have a multinational oiled machine that outputs results.
Even the product launches came either by market alignment, or simply from an internal catalog.
Most of their insights came from internal dashboards fueled by Nielsen, GFK, Kantar (amazing sources by the way), and many private studies.
The thing is, they got to where they are because they had the Mass Media(Communication) and Distribution upper hand for years. TV, the king for many years, was the most effective way to get to the masses but it was extremely expensive - yet they had the financial muscle so they just had to pump GRPs.
Same goes for Retail Distribution, they built good distribution channels/partnerships - people wanted their products, they had emotional relationships with their brands.
But times change... first it started with retailers creating their own brands (distribution brands) because they built the financial muscle to advertise them, and had the distribution channels, they just had cut down margins to win in price and win the volume game...
Now it's the internet - people who know what their doing can reach a specific audience, deliver great messages, build amazing brands, and have great distribution channels - such as Amazon.
It's a loud market, and they mumble terms, jargon's and keywords they don't fully understand. They have historial brands, with amazing value, yet they are not connecting with people like some of these brands are doing.
Maybe they are so big they don't even notice it in their market shares, but some of these numbers aren't even known in their holy reports... and it chips off, day by day. They are also too proud to assume their are not doing a good job - they rather blame agencies and create pitches instead of taking accountability.
I've quit the agency job because my goal was to learn from with their mistakes and successes - and I believe it's quite doable to out-pace them, since they are extremely slow. I'm working on that right now.
In my opinion they need to employ entrepreneur minded people and give them the opportunity to fail.
It's a weird-amazing time to be alive as a marketer :)
This has happened despite the fact that historically most MBAs have gone to banking and consulting. With MBA grads shifting toward tech, we should expect that many more tech CEOs and founders will have MBAs.
edit: added Apple.