A Smart Investor Would Skip the M.B.A.

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Why Getting an M.B.A. Isn't Worth It - WSJ.com
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March 1, 2013, 7:10 p.m. ET
A Smart Investor Would Skip the M.B.A.
Why spend six figures on a business degree? Students would do better to train and network on their own
By DA LE STEPHENS
Imagine that you have been accepted to Harvard Business School. The ivy-covered buildings and
high-powered faculty whisper that all you need to do is listen to your teachers, get good grades
and work well with your peers. After two years, you'll emerge ready to take the business world by
storm. Once you have that degree, you'll have it made.
But don't kid yourself. What matters exponentially
more than that M.B.A. is the set of skills and
accomplishments that got you into business school in
the first place. What if those same students, instead of
spending two years and $174,400 at Harvard Business
School, took the same amount of money and invested it
in themselves? How would they compare after two
years?
If you want a business education, the odds aren't with
you, unfortunately, in business school. Professors are
rewarded for publishing journal articles, not for being
good teachers. The other students are trying to get
ahead of you. The development office is already
assessing you for future donations. Administrators care
about the metrics that will improve your school's
national ranking. None of these things actually helps
you learn about business.
Brian Stauffer
Whom would you hire: the candidate who built a
profitable business in two years, or the
candidate who sat in lectures?
Consider what you could do instead with that $174,400.
The first step should be to move to a part of the country
that supports your interests. If that's film, move to Los
Angeles. Technology, San Francisco. Oil, Houston. You
could live decently in these cities for $3,000 per month.
Over the course of two years, that still leaves you
$100,000 to invest in yourself.
To decide how to do that, start unpacking the value of an M.B.A. Good business schools deliver
two main values: educational content and a network. Acquiring the content is easy: Go online and
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take the classes using OpenCourseWare or Coursera. You'll get to watch the same lectures, but for
free.
Related Video
Soaring tuition costs, a weak labor market and a
glut of recent graduates are upending the notion
that M.B.A.s and other professional degrees are a
sure ticket to financial success. WSJ's Ruth
Simon reports on the News Hub. Photo: AP
Images.
Finding and building a network will be more valuable to
you than an M.B.A. You cannot buy a network. Your
network is built on relationships with people, founded
on trust. You also cannot buy trust—it's something built
over time. Invest in buying coffee, drinks and dinner
for people you want to get to know. This may be deeply
uncomfortable, and that's good. It means that building
relationships will be easier in the future. Ask people
how they got to their current job, what resources they
recommend, and what books they think you should
read.
Building an army of people who trust you and think
you're talented will be invaluable when you look for
jobs.
Consider investing in hard skills such as programming.
Dev Bootcamp, a 10-week training course in
programming, costs only $12,200. It takes people with
no experience and teaches them how to code. In 2012,
88% of its graduates got job offers at an average
starting salary of $79,000.
Those outcomes are far better than for students fresh
out of M.B.A. programs. According to Payscale.com, the
average starting salary for M.B.A. graduates with less
than one year of experience was $46,630 in 2012. Dev
Bootcamp offers a much better return on investment.
With total student-loan debt approaching the
trillion-dollar mark, WSJ's Jason Bellini
deconstructs how we got here and what it all
means. Image: Getty
Reuters
Harvard Business School students during 2009
graduation ceremonies.
If you aren't accepted to Harvard, the argument against
going to business school becomes even stronger. At
least with their Harvard M.B.A.s, less than 5% of the
class of 2012 was unemployed three months after
graduating. But at the University of Southern California,
23% of 2012 M.B.A. grads were still unemployed three
months after graduation. And that's at USC, a fairly
well-known school. The return on investment of going
to Harvard or another top-10 business school has
remained relatively high, but the return on going to
lesser schools is very questionable.
The prospect of forgoing business school in favor of
real-world accomplishments is scary for many new
In Review
college graduates. Youth employment is the lowest
The Tyranny of the Queen Bee
since the 1950s, and for the first time more
'Can You Hand This Phone to My Boy?'
unemployed people have college experience than not.
The Future of 'Cubazuela'
Competition for new jobs is fierce, with 50% of the
world's population under 30. When you are competing against 3.5 billion people, it pays to be
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different. But getting another university degree doesn't make you different.
Instead of relying on business school to succeed, deliberately practice the skills necessary to
become a master in your chosen field. Build a network that supports your professional aspirations.
Work on projects that show you can have an impact in the real world, dealing with practical
problems.
Most of all, put yourself in the shoes of your future boss and imagine whom you would rather hire:
the candidate who built a profitable business over the course of two years, or the candidate who
sat in lectures and reviewed case studies to get a degree?
—Mr. Stephens is the author of "Hacking Your Education," to be published by Perigee on Tuesday.
A version of this article appeared March 2, 2013, on page C3 in the U.S. edition of The Wall
Street Journal, with the headline: A Smart Investor Would Skip the M.B.A..
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