Subscribe

Subscribe to Blog



When I’m at a party or meeting new people and they hear I work at a startup and got a master’s degree in finance, one question comes up more than any other:

Should I join a startup or get an MBA?

I decompose the two options a little differently than I’ve seen thus far on LinkedIn, so I figured I’d share my advice more publicly than at my rare appearances at parties. In my mind, the difference comes down to your comfort at selling your experiences.

But, before I get too far ahead of myself, lets breakdown the two different approaches.

First let’s start with some differences between an MBA and a startup:

  • MBA costs money, while a startup pays;
  • MBA gives you a diploma which certifies largely what you have learned, while a startup gives you real-world experience;
  • MBA students are professionals mainly looking for new opportunities or career paths, while a startup is a mix of experienced leaders, professionals like those in an MBA program, and fresh out of school talent;
  • A great MBA can be extremely hard to get into, while a startup has more negotiating points (like title, role, compensation package);
  • MBA offers a foundation for long-term financial stability, while a startup gives you equity that could make you massively rich (I put this one last while most think of it first).

The similarities are pretty numerous:

  • New relationships form with motivated professionals;
  • Quality of the relationships will dictate the value of the experience;
  • Leaning into the opportunity will determine the value of the endeavor;
  • For most, the opportunity itself is more of a tunnel to something else than the end-all-be-all.

With this lens, my recommendation is to join the option with the best relationships available to you. If you can get into HBS or Wharton where you know you’ll be interacting with the best-of-the-best, then that is a different scenario than staying local at some out of market second tier school.

Implicit in what I am saying is that the MBA itself isn’t all that valuable. For some career paths, it is mandatory just to get in – in which case it’d be extremely valuable. If you know you want to become a management consultant, then the MBA might be the only option, but most management consultants I know aren’t actually in love with that space. It is just a profession with the least risky way to linearly achieve a comparatively high compensation package. The same could be said for becoming a doctor or a lawyer.

If you are a risk averse person, then getting an MBA will be much more comfortable. No one can debate the MBA. Yet, if you join a tech startup, the tech startup doesn’t become the next Facebook, and you’ll be left crafting a story to ensure you can effectively take credit for your experience. Whereas with that MBA you earned, you can “lock-in” progress, but normally have a capped upside potential to the experience. To a large extent, with an MBA, you don’t have to do too much trail blazing either, people will come to you and show you a career path.Scott & Chris

Most startups don’t have solid career paths. If you join and expect to get promoted to VP of Strategy just because you got hired early, you’ll likely be disappointed. However, if you get into that startup early, build relationships, sell your ideas internally then the sky is the limit.

In summary, at the dinner party scenario, I’ll normally try to gauge two things before answering the age old “Startup vs MBA” question.

  1. Do you know the team at a particular startup that you’d love to work with?
  2. Do you want steady incremental success in a career or do you want to swing for the fences?

If the answer to question (1) is already YES, then I recommend the startup. If it is NO, then I recommend only joining a startup because you love the team which is something you can’t force. You may look into a bunch of startups and never find that founding team that you want to jump onboard with. So, therefore, if you want to make a decision no later than a specific time and answered NO to question (1), then start applying to the best MBA programs you can get into.

More from this author

Scott Hutchins

Technical Co-founder

Scott Hutchins
Scott Hutchins

Scott Hutchins

Technical Co-founder

More from this author

Watch Highlight Reels

Find out how Truthlab can shed light on the customer experience with the truth quotient.

Customer Experience Update