Even if you don’t go on to found a firm, it’s a safe place to experiment.
You dont's need an MBA to set up a business, but it could well help. Harvard Business School analysis of “unicorn” businesses (US-based software firms founded between 2003 and 2013, with valuations of over $1bn) found that 33 per cent were founded by MBA alumni, while 82 per cent had at least one on the board.
But studying for an MBA isn’t cheap. Courses can cost around £50,000 a year, a sum that would have any boostrapping entrepreneur’s eyes watering. At the same time, however, going down the MBA route is an increasingly popular option for budding entrepreneurs. And this means that increasing numbers of business schools are cashing in on the trend, tailoring programmes to ensure they cover the skills you need to start your own business. This year, Stanford Graduate School of Business is launching Stanford Ignite-London, a business programme for innovative individuals who don’t already have graduate-level business degrees, to capitalise on what assistant dean Bethany Coates calls the “strong ecosystem for entrepreneurs” that London provides.
And although there’s no guarantee that you’ll have a light bulb moment while sitting in a lecture hall, Conrad Chua of Cambridge’s Judge Business School stresses that the MBA will give those that want to start a business “the time to develop and refine a business plan”. One of the aims of Cambridge’s course is to get the entrepreneurs among the students trading by the end of a one-year course.
THE TAUGHT POLYMATH
First and foremost, says Coates, “an MBA enables students to think through complex challenges in a comprehensive way”. As Nick Badman of Cass points out, “almost anyone can [set up a small business] – no qualifications are required, in the same way that no qualifications are required to conceive children”. But building a sustainable business that can scale requires “real skill and application,” he says – something that is rarely innate, but that an MBA can help you achieve.
For those setting up a company, in the early days, it’s unlikely that you’ll only be able to focus on certain parts of it. Anyone involved in the early stages is “going to need a full suite of skills – to be a polymath who can handle the finance, human resources, strategy, marketing and operations side of things,” says Mansoor Iqbal of TopMBA.com.
These, he continues, are exactly the wide-ranging skills that the MBA is designed to develop – and that’s not even including the specific modules and courses focused exclusively on entrepreneurship. London Business School (LBS), for instance, has a portfolio of eight different courses that take students through the whole life-cycle of a startup. At Stanford, students are co-taught by the faculty and leading Silicon Valley executives.
INVALUABLE SAFETY NET
And before you launch as an entrepreneur, fighting for success without the corporate safety net, an MBA can provide an “accelerated experience” in a low-risk climate, so you can understand what has worked and hasn’t worked before, says Badman. Chua adds: “Any MBA is a year of experimentation – a chance to try ideas in the safety of a supportive environment.”
In addition to practical knowledge and application, MBAs can also help with mindset. Andy Locket of Warwick Business School says courses “offer an opportunity for critical reflection for entrepreneurs,” who may, despite enthusiasm for their business plan, be fearful about “taking the final jump into a new phase of their career”. Warwick’s New Venture Creation module is designed specifically for people with that dilemma, helping them to develop a more entrepreneurial mindset.
Courses can also provide what may become a much-needed sense of community – “the life of an entrepreneur can be a lonely one,” says Chua. The community that you’ll be part of while studying, and the networks you’ll create, can provide practical and emotional support. Iqbal points out that your network won’t just be limited to your own cohort, but to a school’s entire alumni network. Cass, for example, has over 60 nationalities across its MBA programmes, and a network of more than 35,000 former students. Those you meet will be the “people who can advise, support, partner with you or invest in your team,” says Chua.
A FUNDING TREE
While investment may not be as readily available for UK graduates when compared to their US counterparts (see table), business schools are working hard to maximise opportunities for students. Like others, Warwick has a startup incubator and in-house business angel professor. Incubators “help provide structured support in the search for funding,” says Iqbal. Meanwhile, Cass’s Centre for Entrepreneurship offers alumni access to a venture fund.
Iqbal adds that the MBA will give you access to startup competitions that “afford an opportunity to test your mettle against others” – and all in a safe environment, where failure is okay. And similarly, even if you don’t go on to found something, he says, the number of MBA alumni on boards shows that “they’re very quickly brought in to provide the business acumen that is essential for any startup to really become a household name”.
VENTURE CAPITAL RAISED BY ALUMNI (FROM 2009 TO 2014)
|School||Entrepreneur count||Capital raised ($m)|
|University of Pennsylvania||194||2,156|
|University of London||50||241|
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