Here's a take that won't make business school deans happy: that expensive MBA you're eyeing might be worth less than just spending two years building your own company. That's the argument from Joe Liemandt, the Stanford dropout who founded Trilogy Software and ESW Capital, in a recent appearance on the "Big Deal by Codie Sanchez" podcast.
"It is a great two-year period to build up a set of good relationships, but no, there's nothing on the business knowledge that you're going to come out of there that is a fraction of what you would get from building your own thing for that two years," Liemandt said.
He'd know something about the alternative path. Liemandt left Stanford in 1989 to launch Trilogy Software, which built enterprise software and eventually hit around $120 million in annual revenue. The company spun off pcOrder.com during the dot-com boom and even created Trilogy University, an intensive training program for new hires that caught Harvard Business Review's attention. Later, he founded ESW Capital, which specializes in acquiring and turning around struggling software companies.
The Spreadsheet Test
Liemandt sees a fundamental difference in how MBA graduates and entrepreneurs approach problems. When analyzing a business idea, he told host Codie Sanchez, MBA types look at the financials and think: "That cell doesn't work, so the spreadsheet doesn't work. So I'm not going to do this idea."
Entrepreneurs see the same broken cell differently. "An entrepreneur looks at that cell and says, 'I will change that cell. I will make that work,'" he explained. "If you're going to be a builder and an entrepreneur, you're gonna go change reality."
It's an interesting distinction. Business school teaches you to analyze what exists. Building a company forces you to create what doesn't.
The MBA Math Still Works
Of course, plenty of people still see value in that graduate business degree, and the salary data backs them up. Recent figures from Harvard Business School show a median base salary of $184,500 for graduates who accepted offers, plus a $30,000 signing bonus.
A Graduate Management Admission Council survey projected a median salary of $125,000 for MBA graduates across the U.S., roughly $25,000 above what experienced professionals hired directly from industry typically earn.
So yes, MBAs cost a fortune and take two years of your life. But they also come with a pretty reliable paycheck at the end. Whether that beats the education you'd get from building something that might fail spectacularly? That probably depends on your tolerance for uncertainty and whether you're the type who wants to change the cells in the spreadsheet or just read them correctly.
