By Edward P. Sakiewicz
Professor, School of Business at American Public University
So, you want to be an entrepreneur. What graduate degree will be most helpful?
To honestly and appropriately answer this question, we must first take a look at whether or not as an aspiring entrepreneur you even need an advanced degree. This might be a very controversial statement to many academicians who have never started a business, let alone a lemonade stand. At first glance, academic advisors might suggest the Master of Business Administration (MBA) or the very popular Executive MBA (EMBA) with some typical concentration in financial management or organizational development. Those are all very good degrees in general, but when we think about how the degree itself can be immediately applied in one’s entrepreneurial activities some major barriers and limitations are evident.
As an entrepreneur (I also call myself a “scholar-prenuer”) with more than 25 years in both corporate America and entrepreneurial America in addition to 15 years in higher education, I will tell you that there is honestly no better education for an entrepreneur than the experience of practicing entrepreneurship itself and being coached and mentored by the best-of-the-best in your field and industry.
In no way do I mean to diminish or disrespect the importance of a solid degree in business, because I am a professor of business. I understand the intrinsic value of how a degree in business can help. From my personal and professional experience, neither my master’s degree or doctoral degree in organization and management provided the silver bullet necessary to best prepare me as a successful entrepreneur, nor did they exclusively enable me to take my companies from ideation to sustained growth and profitability.
Entrepreneurship is about start-up and risk taking, and every minute spent working on your degree represents income you are giving up versus starting your business. When you have an MBA, your opportunity cost may increase because now you can command a higher salary in the marketplace. Therefore, the risk to the entrepreneur is high because timing can be critical for a start-up and waiting to start the business after you complete your degree can be disastrous (hence opportunity loss).
MBA programs have great limitations for the entrepreneur, even the ones that have a concentration in entrepreneurship. While earning a good MBA might provide you with adequate skills in communication and a network, most MBA programs do not offer classes that specialize in bootstrapping or negotiating with angel investors or venture capitalists. Nor do most of these degrees offer courses in cold-calling or learning how to build effective and appropriate sales teams, and other resourcing necessities such as strategic alliance and partnership development, company asset building and investing, and contract development and negotiations.
In the current state of the economy, more and more students are struggling to find jobs. According to a 2012 independent study by the State University of New York, College of Brockport, 2-out-of-5 students will need to work two or more jobs in order to pay for their education. According to USA Today (2010), the College Board estimates that the average amount of student loan debt a student will have upon graduating will be $31,500. According to the NY Times (2011) the US Department of Labor reports that 85 percent of students will have difficulty securing full time employment after graduating.
Here is the bottom line. If you really want to pursue a degree as an entrepreneur, first figure out whether or not your endeavor or vocation really requires a degree and if your entrepreneurial activities will benefit from a degree. Second, determine if spending $30,000 or more for a degree such as an MBA will immediately contribute at least that much or more of an equity position for you in your new company. In other words, what will be your ROI?
I am all about higher education, but I must recommend that you find a degree that focuses on building your skillset as an entrepreneur that you can immediately apply to benefit your business. Understanding how to move theory into practice is an essential skill as entrepreneur, so if you really see the benefit of getting a degree, I would suggest pursuing a business degree in entrepreneurship such as an MBA and/or MA in organization and management.
The entrepreneurial degree and program must be with a school that creates multi-dimensional opportunities such as coaching, mentoring, market exposure, and concept development. Find a school that offers a large expertise base and know-how from a diverse student-population where you can network and learn from experienced entrepreneurs (such as adult learners we find studying in many of the online schools today where the average student is 36 years old and a mid-career professional), and the teachers you are learning from are scholar-practitioners who bring in successful entrepreneurs as guest speakers into your classrooms. Make sure your school and program in entrepreneurship offers resources for business incubation where start-ups can partner with companies that partner with your university and possible internships and externships. You want to be able to test your product or service, find innovation to improve your idea, and get coached by and mentored by real-world entrepreneurs who can help you innovate your ideas.
In closing, I’d like to leave you with this quote by “The Father of Modern Management”, Peter F. Drucker:
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation. And they need to know and to apply the principles of successful innovation.”
About the Author:
Dr. Edward Sakiewicz is a professor at American Public University’s School of Business and holds both a Ph.D. and master’s in organization and management from Capella University and the University of Phoenix, respectively. He also holds a graduate certificate in entrepreneurship and has launched several successful start-ups in a myriad of different industries since 1991. Dr. Sakiewicz’s newest entrepreneurial endeavor is Triton Energy Solutions, LLC, an energy management and conservation company where he currently serves as president and managing partner. Dr. Sakiewicz truly believes that entrepreneurship is the cure for unemployment and poverty and lives his life to empower young people to become entrepreneurs who will generate true economic growth and wealth.