Does an entrepreneur need an MBA? – From HBR

A balanced point of view – finally! Fantastic article!

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I started my career as an entrepreneur at twenty-four years old, right out of college. I ultimately built and sold a $250 million global scrap metal company, an experience I wrote about in my book Starting from Scrap. HBR wrote about my experiences in the December issue.

After my book came out, I visited several U.S. business schools and met with MBA students to talk about my experiences launching a company in emerging markets. Many of the students who came to hear me speak were aspiring entrepreneurs in the process of getting MBAs. Many of them asked similar questions: “You didn’t get an MBA, nor did many other successful entrepreneurs, so if I want to start my own company, is business school a worthwhile experience? Is it worth paying all this tuition — or will my degree just be a resume-builder?”

I once had a conversation about this topic with Dr. John Yang, the dean of the Beijing International MBA program at Beijing University. Here’s what he had to say: “In my opinion, entrepreneurship is a matter of the heart, and education is a matter of the brain. It is difficult to teach a heart.”

I share his perspective. By definition, an entrepreneur is one who takes risk. It’s an attitude and an appetite, one which may be hardwired into one’s personality. Education can influence one’s attitude toward risk: for instance, understanding the principle of diversification or the long-term returns of equities versus bonds may make an investor more willing to create a “riskier” stock portfolio. But ultimately, can you teach someone to really enjoy taking risks? I don’t think you can.

When I think about the value of an MBA for aspiring entrepreneurs, I see a parallel with the military. Countries spend billions of dollars training soldiers so they’ll be ready for combat — they’re taught to fire rifles and operate in simulated high-pressure situations. But that training only goes so far. A Marine colonel once told me that he never knows how a soldier will respond — whether he’ll hide in his foxhole, run in the other direction, or stand and fight as he’s been trained #8212; until the bullets start flying. How someone reacts in times of great stress relies largely in instincts and the makeup of his or her personality — and training only takes you so far.

The same is true with entrepreneurship. Understanding strategy, finance and marketing can be very helpful. But it’s also important to possess self-confidence, a need for independence, energy and passion, curiosity, and an ability to communicate ideas. If you don’t have these natural assets, you’ll struggle as an entrepreneur.

I’m lucky, because those are personal attributes that I have. I don’t have an MBA, but I’ve picked up many of the business skills I needed during more than 15 years running a company. (My grandfather referred to me as having an MBA from the School of Hard Knocks, whose official colors are black and blue — an expensive education that makes Harvard Business School appear inexpensive by comparison). Many of the lessons I learned from those tough and painful experiences I might have learned in an MBA program — and if I’d learned them earlier, my company might have been even more successful.

As the HBR article makes clear, if I’d understood the use and importance of financial and inventory controls, I could have prevented millions of dollars in fraud. Perhaps studying cases about companies that had grown too fast and lost control of both their finances and the quality of their products would have encouraged me to expand at a more sober pace. We wasted years trying to re-organize after over-expanding and perhaps missed countless opportunities in the process. I could have saved or made a lot more money had I taken some courses in business law or venture capital financing. (We ended up getting strong armed by our investors, and they got away with it due to our early-stage naiveté.) I also would have benefited if I’d known more about human resources and the need for well-designed compensation and incentive systems. These are just a few of the tools you can get in business school — and they’re all tools I wished I’d had.

So I believe MBA programs do give future entrepreneurs valuable tools to help them mitigate risk and increase the probabilities of success. But even with those tools, only you know whether or not you have the heart to execute on the opportunities we all recognize to launch a compelling new business. That is when the real bullets start flying.

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Stephen Greer is a senior advisor at Oaktree Capital and author of Starting from Scrap.

The problem with ‘ideal’ diets

I read an article about ‘Ideal Diets’ on Lifehacker that got me thinking.

It was around 2 years ago when I’d been diagnosed with Gastritis and the Doctor I consulted in university gave me an ‘ideal’ diet. In short, the ‘ideal’ diet ruled out ALL Indian food. This, to me, was rather hilarious as my question back at her was – ‘What would an Indian in India do if he was diagnosed with Gastritis?’

That question didn’t go down too well with her judging by her response, which was something like ‘Well, you don’t listen to me means you will get an ulcer first, then a hole in your stomach, and then you’ll die’.
Anyway, my regular doctor laughed it off and suggested I conducted a physician I trusted back in India as he wisely understood that every diet had it’s share of positives and negatives, and it was important to eat in moderation.

And that brings me back to ‘Ideal Diets’ – This is a very cultural thing. What may be ideal to someone in North America would not be ideal to someone in Singapore and so on. This is primarily because some regions are rice eaters, while others are wheat eaters and so on, and it would be harsh to condemn one and praise the other. Just something to realize and not angst about is my limited experience on the matter.

I like the quote – ‘Be wary of reading health books. You may die of a misprint’

Mediterranean Diet Pyramid

‘Hunter Gatherer’ pop quiz

I have come across a whole bunch of interesting learnings from ‘Guns, Germs and Steel’, a book that traces man’s progress through time to understand why the world is the way it is.

First up, the 3 questions –

1) Would you know why kids of early ‘hunter gatherers’ were spaced at 4 year intervals?
2) Did societies always exist? In tribes of early ‘hunter gatherers’, were their politicians, armies etc? If not, why? And when did they come to exist?
3) Out of the many 1000s of species of animals, only 14 of them have been domesticated. Can you think of 3 criteria for an animal to be domesticated?

Any guesses yet? Yes, go ahead, scratch that head.. :-)

Answers:

1. Children were spaced at 4 year intervals because the 2nd kid could only be born once the 1st could walk. As hunter gatherers had to constantly keep moving and hadn’t domesticated animals till they settled down to farm, quick movement was critical!

2. It was only once humans transitioned to farming as a way of life did societies arise. Once the food problem had been solved, humans stopped living life fighting everyday fires, and could then afford ‘luxuries’ like politicians, armies etc!

3. There are 4 criteria in total – a) Large size (so they can pull heavy loads/do heavy work) b) Good temperament c) Fast growth rate and d) Green diets (carnivores are very expensive).
Essentially, the ideal candidate is a large, docile herbivore, weighing over 100 pounds and content to be part of a herd under human control. Of the fourteen, only 5 animals are common in all parts of the world. These are the goat, the sheep, the pig, the horse and our champion – the cow.

I enjoyed unraveling these little mysteries. Hope you did too.

When did you last glance through a travel agency’s brochure?

You know, the one with many many deals like that 2 weeks trip to Canada, that 5 Days and 6 nights trip to Iceland etc etc.

I found one on a colleague’s desk and as I was waiting for a file from him, I spent some time looking through it, and boy, was it wonderful. I was filled with images of many amazing places that I wanted to go.

I was filled with a desire to make enough to travel around in comfort, filled with a desire to spend some time to see the world.

A travel agency’s brochure filled me with so many dreams and inspired me to do my best. It just reminded me that inspiration is all around us. We just have to choose to see it.