At MBASchooled, we love data, especially when it tells a compelling story. Recently, Dimitri Dadiomov, a 2nd-year HBS student wanted to study if it makes sense to pursue an MBA instead of jumping right into founding a company. There are plenty of pro’s and con’s to the “does it make sense for an entrepreneur to get an MBA debate,” so I won’t rehash too much of what’s already been said. One thing that is troublesome about the debate is that many arguments rely on antidotal evidence or personal opinions, which alone do not provide significant data-driven insight. Fortunately, Dimitri used a difference approach.
To support his insights, Dimitri studied HBS graduates who went on to found companies and raise startup capital. From 2008-14, 250 founders raised a combined $2.5B in capital for 90+ companies. While Dadiomov is quick (and IMO, correct) to point out that funding does not guarantee success, it does serve as a good indication of progress. You can see the chart below.
Source: Dimitri Dadiomov, Nextview Ventures
Dadiomov shares some additional stats, such as which industries seem to be popular (eCommerce, Enterprise and Consumer Internet) along with location (NY and Bay Area.) Like any great survey, there are both pro’s and con’s to the methodology (to his credit, he fully acknowledges this) but it’s a fantastic set of insights on a debate that has mostly been sprayed with rhetoric and biased opinions. Among his list of companies that spawned from HBS graduates:
- Rent the Runway
- Cloudfare
- Wildfire (acquired by Google)
- ThredUp
- RentJuice
Some Cautions
I want to note that I think Dimitri did a great job with this analysis. Having said that, I do want to offer some cautions for evaluating this data to make a decision best for you.
First, HBS is probably a best case scenario for an MBA, and not necessarily the average. This does not mean that success is mutually exclusive to an MBA from Harvard, but due to the strength in brand name, network and access to resources HBS has an incredible advantage for budding entrepreneurs. There are many successful founders from other MBA Programs, but given HBS’ size, strength, and brand name they are probably towards the higher end of the spectrum.
Second, while this data set does a great job chronicling the successes, it leaves out the failures and misses – this is not a fault of the study or of Dadiomov – those data points would be incredibly hard to come by. However, without seeing both the successes and failures we are missing a full representative sample of the argument.
Third, as we learn in business school correlation does not equal causation. I think its fair say that getting an MBA helped these people become successful. Having said that, it’s hard to rule out the fact that some of these individuals could have been successful had they invested that money and time in their company instead of pursuing an MBA.
On the flipside , there are some great positive takeaways.
First, as the dataset shows, based off of the criteria of success, success is possible. Being an entrepreneur/founding a company is not mutually exclusive from getting an MBA as evidenced by the diverse group of founders/MBA’s that have done it. Of course, as an MBA student I might be biased in my opinion, but the amount of learning, opportunities and people that a Top MBA Program offers leads me to believe that it is a good investment for some (many) entrepreneurs.
Second, the data provides a potential roadmap for those thinking about pursuing the MBA path. It provides data and insights into helping entrepreneurs understand how these MBA graduates found ideas and turned them into action. Dig in a little deeper into Rent the Runway and you can understand how the Founders used their time at HBS to come up with the idea. Or, how the Founder at ThredUp successfully pivoted. Simply seeing a number, venture round, or exit is great but never tells the entire story. And while you may not follow the same path, learning from these helps you understand what might lie ahead.
Last but not least, this data serves as a fantastic starting point, by identifying MBA Alums who are now Founders of companies. This does not include MBA’s who work for startups, are early employees, help fund startups, or participate in some kind of way within the ecosystem.
The debate about pursuing a startup or an MBA (or both) will continue, but this data should give MBA graduates and future MBA’s who are hoping to found a company some optimism for their future.