It's undeniable that startup culture has dramatically changed the way we do business and approach business education today. Some of the world’s most successful CEO’s — Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey, Airbnb’s Brian Chesky — don’t tout Master’s Degrees from Ivy League Universities. In fact, more young innovators and entrepreneurs are beginning to favor the business insights and contacts gained via startup accelerators over those acquired through MBA programs.
One Forbes columnist, Sramana Mitra, goes as far as saying that B-Schools set entrepreneurs up to fail. Mitra explains,
“I have come to observe that most business school programs have an extensive emphasis on fundraising, especially from venture capitalists, and very little pragmatic understanding of what it really takes to get a venture off the ground.”
So here's a big question for budding entrepreneurs: Which route is more effective — an MBA or an Accelerator Program?
Why an MBA?
"MBA programs will never die" is a statement heard frequently within the business world. While many in the startup community might disagree, there is no denying that MBA programs have certain significant benefits.
1. Basic Knowledge: MBA programs will provide you with the business knowledge you need to get a company up and running. Owning and operating a business can be overwhelming to young entrepreneurs. Greg Coleman, founder of Nexercise, explains, “MBA [programs] will provide you with a working knowledge of business basics, including accounting, finance, management, marketing, operations, negotiation and strategy—all pivotal for successfully running a business. “
2. Connections: The network of people you meet during your time in business school can be absolutely invaluable. Coleman notes, “When pursuing an MBA you are provided access to the university’s resources, programs, talent pool, and alumni networks.” Graduating from a top MBA program instantly creates a strong bond between your classmates, your professors, and others who have attended that program as well.
3. Credibility: An MBA is a resource for life. The knowledge you gain during your schooling coupled with the degree itself help you to establish a baseline of credibility and trust with clients, customers, and investors. This validation is something many budding entrepreneurs do not have. Travis Lowry, founder and CEO at Rainbow Chronicle, equates an MBA to “a well you can visit over 20 or 40 years.” MBAs create credibility that last across decades.
Why NOT an MBA?
1. Time Constraints: In an MBA program, the majority of your time will be devoted to attending and studying for your classes — NOT on developing your business idea. On top of your 12 to 15 hours a week spent in the classroom, schools like the University of Buffalo caution students to “expect to invest a minimum of 20 hours per week studying… and to spend eight to 12 hours a week in group meetings in addition to personal study time.” Even on the low-end, this is 44 hours per week spent on ideas that aren't your own.
2. Outdated Teachings: The tactics and strategies taught in MBA programs are not always aligned with todays business world. Coleman warns, “Some teachings are no longer relevant and do not stand up to current or best practices in the early-stage world.” Certain MBA programs place a greater emphasis on the typical forms of entrepreneurship — creating a business plan and getting investors — and often ignore newer methods such as crowdfunding and bootstrapping.
Why an Accelerator?
1. Paid Practice: MBAs are expensive! Most accelerators offer you the opportunity to receive seed funding while learning the “Ins and Outs” of running your own company. Mark Birch, a tech entrepreneur and writer for Alley Watch, explains:
"Think about it, where else would you get paid to test your business concept, get introduced to a deep network of industry luminaries….It’s the ‘MBA-in-a-box’ for entrepreneurs, without the outrageous cost."
2. It's Your Business 24/7: This one is pretty self-explanatory. In the startup accelerator, your business and concept are all that matter. You are working on your business not someone else's.
3. Invaluable, Innovative Knowledge: Accelerator programs will give you hands-on experience with running your own business. You will quickly learn how to create and execute important cornerstones such as defining a market, social media marketing, branding, financial modeling, and pitching your idea, among others.
4. Network: "The alumni network is possibly the most valuable asset YC founders have," says Suhail Doshi, MixPanel founder and Y-Combinator alumni. The brilliant minds you meet within an accelerator, whether through connections, conversations or alumni, can often mean the difference between great success and massive failure. Nicholas Tommarello, Wefunder co-founder and TechStars alumni, argues:
“Co-working and accelerators are far more useful for building a network than an MBA program."
How Do I Choose?
The choice between pursuing an MBA vs. a Startup Accelerator doesn't have a simple answer. It depends on your personality, your existing skills, and your business goals. One is a long-term answer and the other is more short-term. Lauren Landry, Associate Editor at BostInno, advises,
“What it boils down to is your end goal. If you’re looking to launch a startup right away, without having to sort through case studies and participate in lectures, then skip the MBA and get involved in a co-working space or accelerator program.”
If you're highly motivated and have an idea now, go for it! Accelerators can offer you the resources and business savvy to turn your idea into reality. Flash Steinbeiser of INC.com points out,
“Last year, a Stanford Business School professor admitted that business schools can snuff the passion out of aspiring self-starters.”
Regardless of the ultimate route you take, a true entrepreneur will continuously seek to broaden both their background and their expertise while making key connections along the way.