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MBAs are not a fit for startups…unless they prove it
If you think you deserve a job because you have an MBA…
As it does every year, Spring has come and with it the MBAs who did not sign their offer letters from Goldman and McKinsey are thinking about start-ups…so those of us in the startup industry are thinking about MBAs. My friend Ed Zimmerman published a good piece in the Wall Street Journal on the topic and what follows is a deeper dive into my thoughts on the topic, but if you have not read his piece, you should.
I agree with Ed that as a population, MBAs are not a good fit for start-ups. But as a population, humans are not a good fit for start-ups either. Entrepreneurs are a special and unique group and it would be a mistake for a startup (or anyone) to hire an MBA because they have earned the degree, but it is an equally damaging mistake to NOT hire someone because they have an MBA.
As Ed mentions in his piece, some of the best entrepreneurs I work with have MBAs, Katia and Hayley, the co-founders of Birchbox and Dave and Neil of Warby Parker and Beth Ferreira, the stellar COO at Fab are all in the MBA club along with a ton of other fantastic startup operators.
That said, there are a few reasons that the general population of MBAs are particularly ill-suited to building a career in the startup industry:
Decision Making — The best operators I work with in the startup industry make decisions quickly and are comfortable operating with extremely limited information. MBA’s have chosen to take two years to figure out what they want to do with their professional lives (and proof of this mindset can be seen in the many MBAs who spend multiple years after graduation at a job that will help them take the next step in their career rather than pursuing their passions…yet.)
Appetite for Risk — Some of my favorite startup founders have maxed out credit cards and leaned on friends and family to finance a dream while MBA’s have typically spent a huge amount of money and time pursuing a degree that insures against making less than $150k per year.
Buy side v Sell side mindset — The most successful people I know in the startup industry sit firmly on the sell side of the world. They are service oriented and actively look for ways to create opportunities. MBAs tend to be most comfortable on the buy side, focused on evaluating opportunities and choosing what is “best” from the existing set of options.
Because so many MBAs are just not a fit for our industry, the best way for a startup to find great talent among the freshly minted MBAs that will graduate this Spring is to let them find you. Entrepreneurs (i.e. people with high potential to be great in the startup industry) who happen to have an MBA will take a sell-side approach to the process and create opportunities to meet you and make it clear you HAVE to hire them. They will be excited to take any job at your company rather than worrying about their title or salary and when you offer them the job, they will jump at the opportunity rather than needing to sleep on it or come back with a counter offer.
When this happens, you have not hired an MBA at your startup, you have made a great startup hire. Period.