Master of Business Startup — MBS vs. MBA

Master of Business Startup — MBS vs. MBA

I was one of those naive people who actually pursued an MBA degree to learn how to start a business! But then I realized that it was not the right decision. I mean it helped me in understanding different aspects of the “Business” side as opposed to the “Technical” side I learned as an electronics engineer, but it did not teach me how to create a new business model.

I watched one of the latest episodes of This Week In VC with Steve Blank . A successful serial entrepreneur, and angel investor, and a great author. He was explaining why MBA doesn’t work for entrepreneurs and he provided an alternative which I would like to call MBS, Master’s in Business Startup.

In corporations, executives execute and scale existing business models, but they don’t create new ones. The whole MBA educational system was built on this fact. The degree is called, Masters of Business Administration. So it’s about mastering the administration part of an existing business! It’s about how to administer existing companies.

There is an accumulative knowledge over the last 100 years in managing and administrating corporations in big corporation. This knowledge has become several sciences. This includes: Operations, Strategy, Finance, Accounting, Economics, Organizational Structures, etc… All of that is to help people learn more about the best practices and standard procedures to manage or operate a company. But there is no equivalent stack in how to start a company.

There is an assumption saying that there is nothing different between running an existing business and starting a new one. But in reality, there are three main stages in a company’s life cycle: “Search”, “Build” and “Scale”, and there are special skill-sets for each stage.

We have to realize that large companies or corporations “Execute” a business model to build and scale a company, while startups “Search” for a business model that is profitable, repeatable and scalable, specially in their first year.

“Business Model” here is a term that covers all the main components of a company: product, customer, customer relationships, distribution, revenue model, cost structure, etc…

In the startup world, it’s not given that we are experts and we know what to do, on the contrary, we’re searching, experimenting, pivoting, to find the best way to do it. I.e., to find that profitable, repeatable and scalable business model.

It is only when this happens, the startup becomes a company, then it can be put into the operational mode, and the role of MBA CEOs may make sense, while entrepreneurs may step down.

Starting a company needs a totally different skill set that you can’t get by an MBA degree. At the same time, running an existing company also needs a different skill set that entrepreneurs usually don’t have.

Of course entrepreneurs can become corporate CEOs, and there are great examples for this, and visa versa, but they just need to realize the differences, and then they need to learn how to do it.

To start a company you need to be able to live with uncertainty, you need to like chaotic situations and find your way to deal with them, or even find opportunities in the chaos and uncertainty, you need to work very hard to search for a new business model.

Entrepreneurs are curious people. They are just like kids who’re continuously trying to discover new things, new trends, new customer behaviors, even new problems and new out-of-the-box solutions for them. This can’t be thought in an MBA degree where you learn how to keep things going the right way or you learn the standard way of doing business.

So if you want to become a certified corporate CEO, you may attend an MBA program. But if you want to learn how to start a company, you should get an MBS, Masters in Business Startup, or Master of Business Startup.

An MBS would be learning more about how to create or find a new business model, learning more about product development and pivoting, learning more about customer development, etc…

You can get an MBS by studying the following books:

• - Uncertainty: Turning Fear and Doubt into Fuel for Brilliance
• - Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers
• - The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses
• - Nail It then Scale It: The Entrepreneur’s Guide to Creating and Managing Breakthrough Innovation
• - The Startup Owner’s Manual: The Step-by-Step Guide for Building a Great Company
• - The Four Steps to the Epiphany: Successful Strategies for Products that Win
• - Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers
• - The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup
• - Founders at Work: Stories of Startups’ Early Days
• - Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes
• - Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
• - Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms

You can also get an MBS by reading, watching or attending the following courses: (although I still recommend the books)

• - The Lean LaunchPad: How to Build a Startup
• - The Lean Startup Learn how to apply the method that is transforming how new products are built and launched
• - Raising Money for Startups 7 top founders and CEOs explain how to raise money for your startup!
• - Startup Hiring: How to Attract, Hire and Retain the Best People
• - An Entrepreneur’s Checklist Learn how to be an entrepreneur from revered serial entrepreneur Steve Blank.

You can also go to Startup Plays and follow their Startup Roadmap step by step to learn more about the needed skills and knowledge in deferent startup stages.

You can also find many many other online courses on Stanford Entrepreneurship eCorner , MIT Free Entrepreneurship Courseware , and lots of other universities.

However, I would personally recommend studying the books above first because they include all what you need to know in a comprehensive way instead or scattered bits and pieces from here and there.