TO MBA OR NOT TO MBA? Ryan Holmes and fel­low en­trepreneurs weigh in

Is a mas­ter of busi­ness ad­min­is­tra­tion the right move for your en­tre­pre­neur­ial fu­ture, or is real-life ex­pe­ri­ence the way to go? We asked busi­ness leaders and up­starts on both sides of the fence to share their thoughts

BC Business Magazine - - Front Page - by Dee Hon

THE CASE FOR✔

FRASER POGUE EARNED HIS MBA and jumped into risk anal­y­sis, but you won't catch him wear­ing pin­stripes to work. A power suit isn't ex­actly proper at­tire when you're heli-ski­ing in pow­der. Pogue is spend­ing the win­ter in the B.C. back­coun­try fine-tun­ing his com­pany's prod­uct: Snow­pak, a hand-held elec­tronic de­vice to as­sess avalanche haz­ards by gaug­ing the hard­ness of snow lay­ers. He's stand­ing waist-deep in snow pits along­side teams of ski guides who will be among his fu­ture cus­tomers, testing pro­to­types and get­ting feed­back for im­prove­ments. Pogue's com­pany, Fraser In­stru­ments Ltd., aims to re­place a long­stand­ing method for an­a­lyz­ing avalanche risk: prod­ding the snow pack with your hands.

POGUE, who grad­u­ated from UBC'S Sauder School of Busi­ness in 2015, cred­its his MBA ed­u­ca­tion with giv­ing him the tools to get started as an en­tre­pre­neur. He had been con­tract­ing as a soft­ware engi­neer for eight years, an ex­pe­ri­ence that nur­tured his en­tre­pre­neur­ial mind­set, but he lacked busi­ness know-how.

“Com­ing from a soft­ware back­ground, my fi­nan­cial back­ground was next to nil,” Pogue re­calls. The MBA pro­gram taught him about top­ics like fore­cast­ing and rev­enue mod­els, busi­ness in­tel­li­gence and ac­count­ing. That knowl­edge en­abled Pogue to se­cure fund­ing grants to get his com­pany off the ground and, once it launched, to keep costs down by man­ag­ing his own fi­nan­cial records.

“The ben­e­fit there, for the MBA pro­gram, in my case was over­whelm­ing,” he says.

Pogue in many ways ex­em­pli­fies the chang­ing face of MBA stu­dents in B.C. and how the prov­ince's busi­ness schools are adapting to new de­mands. There's a rel­a­tively small lo­cal job mar­ket for tra­di­tional post- MBA ca­reers in fi­nance, cor­po­rate man­age­ment and con­sult­ing. Toronto has nearly three times the num­ber of head of­fices that Van­cou­ver does and five times the num­ber of head-of­fice em­ploy­ees, ac­cord­ing to Statis­tics Canada.

So B.C. MBA pro­grams are ex­pand­ing of­fer­ings tai­lored to en­tre­pre­neur­ial and tech-fo­cused stu­dents who aim to join the prov­ince's grow­ing startup sec­tor, ei­ther as founders or em­ploy­ees. At the same time, MBA schools here and around the world are chang­ing how they teach: mov­ing to­ward more hands-on ex­pe­ri­en­tial learn­ing and away from aca­demic and the­o­ret­i­cal ap­proaches crit­i­cized as be­ing di­vorced from cur­rent busi­ness prac­tices.

Paul Cub­bon leads the en­trepreneur­ship and in­no­va­tion group at Sauder. He says pro­grams such as Sauder's pro­vide in­valu­able ex­pe­ri­ences for peo­ple like Pogue by giv­ing them a sand­box to ex­plore dif­fer­ent dis­ci­plines and fill gaps in their knowl­edge. Al­though some stu­dents start their ed­u­ca­tion with well-de­fined am­bi­tions, many ar­rive look­ing for a ca­reer switch and a place to ex­per­i­ment. “They're com­ing to a cross­roads and they're hop­ing to find their way,” Cub­bon says.

The most vo­cal crit­ics of MBA pro­grams vow that the best way to learn busi­ness skills is to dive right in—es­pe­cially when it comes to learn­ing the skills de­manded by fast-paced, high­growth, tech­nol­ogy-charged in­dus­tries. En­trepreneur­ship is the great­est source of in­no­va­tion and is best learned hands-on rather than in the class­room, they ar­gue. What's more, em­ploy­ers in in­no­va­tive fields care more about skills and ac­com­plish­ments than cre­den­tials when hir­ing and pro­mot­ing. They want em­ploy­ees who are en­tre­pre­neur­ial, even if they're not ac­tu­ally en­trepreneurs.

Busi­ness schools are adapting to the times, though. “Ev­ery sin­gle ma­jor uni­ver­sity of­fers an en­tre­pre­neur­ial path­way,” says Jonas Alt­man, an in­no­va­tion ad­viser based in Van­cou­ver and Lon­don, Eng­land, who's also an ad­junct pro­fes­sor at Sauder. “Thirty-odd years ago, there were only a hand­ful.”

MBA pro­grams have be­come more tech­nol­o­gy­fo­cused, par­tic­u­larly in B.C., with its grow­ing tech sec­tor of star­tups and out­posts of big in­ter­na­tional play­ers like Mi­crosoft Corp. and SAP SE. SFU'S Beedie School of Busi­ness has of­fered an MBA in man­age­ment of tech­nol­ogy since 2000. Uni­ver­si­ties are also mak­ing learn­ing more hands-on, self-di­rected and con­nected to in­dus­try—mir­ror­ing some of the ap­proaches of the startup ac­cel­er­a­tors, in­cu­ba­tors and men­tor­ship pro­grams that are chal­leng­ing MBA schools as de­vel­op­ment plat­forms for busi­ness leaders. Alt­man, for ex­am­ple, helps guide en­trepreneurs at star­tups and in­cu­ba­tors, and he tries to adapt ex­pe­ri­en­tial learn­ing meth­ods to his UBC MBA class­rooms. “The best way is through ex­pe­ri­ence,” he says. “How­ever, this can be in tandem with, or be sup­ported through, for­mal and in­for­mal ed­u­ca­tion,” Alt­man adds.

There were few places at all for peo­ple with en­tre­pre­neur­ial lean­ings to learn busi­ness skills when Jill Earthy got her MBA in the late 1990s. Ac­cel­er­a­tors and in­cu­ba­tors hardly ex­isted then. Earthy says she chose Uvic be­cause it was one of the few MBA schools of­fer­ing an en­trepreneur­ship spe­cial­iza­tion. She went on to found two com­pa­nies and is now chief growth of­fi­cer of Van­cou­ver-based Front­fundr, an on­line eq­uity crowd­fund­ing plat­form that con­nects in­vestors with early-stage busi­nesses.

De­spite all the new train­ing resources avail­able to en­trepreneurs, Earthy says she'd still go the MBA route if she were de­cid­ing her path to­day. In her view, MBA schools aren't what they were 20 years ago. “I think they are more in­no­va­tive,” says Earthy, a mem­ber of SFU'S board of gov­er­nors. “They are un­der­stand­ing that times are chang­ing.”

MBA pro­grams of­fer greater flex­i­bil­ity and con­nec­tions to the busi­ness world now, so peo­ple don't have to de­rail their ca­reers or ven­tures to go to school, Earthy says. “There are more op­por­tu­ni­ties not to lose momentum,” she notes.

“We make great ef­forts to con­nect stu­dents with the real world as they go through the pro­gram,” says David Dunne, a pro­fes­sor and the di­rec­tor of MBA pro­grams at Uvic's Peter B. Gus­tavson School of Busi­ness. For ex­am­ple, each se­mes­ter stu­dents in the uni­ver­sity's full-time MBA pro­gram work on an in­te­grated project that places them in con­sult­ing roles for lo­cal clients. “Given where we are, in Vic­to­ria, these clients are not big multi­na­tion­als,” Dunne says. “They're en­trepreneurs. They're peo­ple who are fac­ing real-world busi­ness problems.”

An MBA is not for ev­ery­one. The de­gree can cost be­tween $30,000 and some $58,000 at a B.C. uni­ver­sity and take one or two years to com­plete. Many peo­ple find they're not suited to an aca­demic set­ting or lack the back­ground needed for ad­mis­sion. But al­though an MBA may not be a one-size-fits-all solution, for many it re­mains a vi­tal build­ing block to a successful ca­reer.

Peo­ple shouldn't ex­pect an MBA to be a golden ticket to suc­cess, warns Shane Moore, di­rec­tor of re­cruit­ment and ad­mis­sions at Beedie. Successful ap­pli­cants need a strat­egy for build­ing around their for­mal ed­u­ca­tion through net­work­ing, fur­ther skills de­vel­op­ment and seek­ing out men­tors, he says. “It's hav­ing that 360-de­gree plan for how an MBA can be part of the next step.”

And if MBAS don't suit ev­ery­body, nei­ther do the al­ter­na­tives that many crit­ics sug­gest. Mas­sive open on­line cour­ses ( MOOCS) teach a va­ri­ety of busi­ness dis­ci­plines and are gen­er­ally lower-cost or free, but they suf­fer from high dropout rates: in a 2013 study, the Uni­ver­sity of Penn­syl­va­nia re­ported that on av­er­age, just four per cent of stu­dents com­pleted its cour­ses of­fered on the Cours­era plat­form. Cod­ing boot camps don't teach busi­ness skills. Startup ac­cel­er­a­tors are geared to en­trepreneurs, but not to what Sauder's Cub­bon calls in­trapreneurs— en­trepreneuri­ally minded peo­ple who cre­ate in­no­va­tion as em­ploy­ees and man­agers of com­pa­nies rather than as own­ers.

En­trepreneurs are in­creas­ingly en­cour­aged to fol­low the Sil­i­con Val­ley mantra “Fail fast, learn fast” and learn from the ex­pe­ri­ence of run­ning a busi­ness. But Cub­bon ar­gues that it's bet­ter to fail and learn those same lessons within the struc­ture and safe en­vi­ron­ment of an MBA pro­gram. “Fail­ing is over­rated,” he says.

Launch Academy is a co-work­ing of­fice, class­room and com­mu­nity cen­tre for en­trepreneurs. About 70 tech star­tups work out of the space, along­side soft­ware de­vel­op­ment boot camp Light­house Labs and ven­ture funds like High­line, Stan­ley Park Ven­tures and Vic­tory Square. A ros­ter of ex­pe­ri­enced en­trepreneurs hold of­fice hours to men­tor fledg­ling founders. Walia says he and his three co­founders be­gan Launch Academy in 2012 be­cause they wanted to be around like-minded fel­low tech en­trepreneurs so they could lever­age each other's net­works. “We re­al­ized that Van­cou­ver needed a nu­cleus, a tech hub that re­ally made it eas­ier to con­nect with the rest of the com­mu­nity,” he re­counts.

“Our goal is to get en­trepreneurs early, so get them while they're still work­ing out of mom and dad's garage and base­ment,” Walia adds. “Get them out of those en­vi­ron­ments and put them in an en­vi­ron­ment with fel­low en­trepreneurs. They have a far greater chance of suc­cess when they are sur­round­ing them­selves with resources, mind­sets and ex­pe­ri­ences that they can lever­age.”

Walia is among a new breed of leaders who as­sert that tra­di­tional busi­ness schools and their MBAS are grow­ing ob­so­lete. Or­ga­ni­za­tions like Launch Academy say they can of­fer a bet­ter, more stream­lined path for peo­ple look­ing to suc­ceed in busi­ness. Be­sides Launch Academy, there's a grow­ing raft of other or­ga­ni­za­tions, like startup ac­cel­er­a­tors, boot camps and on­line classes that pro­vide train­ing, men­tor­ship and net­work­ing op­por­tu­ni­ties for peo­ple to de­velop their ca­reers. Pro­po­nents of these al­ter­na­tives say MBAS cost too much, take too long and can't keep pace with the rates of change seen in the most in­no­va­tive in­dus­tries.

Ryan Holmes, founder and CEO of Van­cou­ver-head­quar­tered so­cial me­dia pow­er­house Hoot­suite Me­dia Inc., is care­ful not to pre­scribe how oth­ers should ed­u­cate them­selves. But he's been vo­cal that his choice to drop out of Uvic's busi­ness school in 1998 to run a com­pany was the best ca­reer move he could make. “We were study­ing things in the class­room that I had learned first­hand,” Holmes says. “Be­ing an ex­pe­ri­en­tial learner, I wanted to get out and just do it. The pro­gram wasn't get­ting me where I wanted to go fast enough.”

Go­ing out and do­ing things roughly sums up the leanstartup ap­proach that's come to dom­i­nate high- growth, tech­nol­ogy-in­ten­sive in­dus­tries. “Build some­thing, mea­sure the re­sults, tweak, re­peat,” is how Holmes de­scribes the method for rapid in­no­va­tion. Walia and Holmes con­tend that the same ap­proach can be ap­plied to learn­ing about busi­ness. “It re­ally comes down to how you learn and where you can

level-up the fastest,” Holmes says.

MBA schools of­fer two main ben­e­fits: ed­u­ca­tional knowl­edge and net­work­ing op­por­tu­ni­ties. How­ever, hard busi­ness skills like ac­count­ing and fi­nance are in­creas­ingly ac­ces­si­ble for free or cheap from top uni­ver­si­ties through MOOCS. MBA crit­ics say the less-con­crete skills are bet­ter de­vel­oped by do­ing and ex­per­i­ment­ing—in busi­ness rather than in a class­room. For net­work­ing op­por­tu­ni­ties and men­tor­ship, there's an ever-ex­pand­ing ar­ray of op­tions, like in­cu­ba­tors, meetup groups and on­line com­mu­ni­ties such as Slack.

“I love learn­ing, but for me, learn­ing on the fly is re­ally the best way to gain new skills,” Holmes says. “In grow­ing Hoot­suite to nearly 1,000 em­ploy­ees, I'm pretty con­fi­dent I've cov­ered the stan­dard MBA cur­ricu­lum back­ward and for­ward, from iden­ti­fy­ing busi­ness op­por­tu­ni­ties to cal­cu­lat­ing rev­enue streams, tack­ling HR and un­der­stand­ing in­vest­ment.”

Holmes and se­rial en­tre­pre­neur Mered­ith Pow­ell co-founded The Next Big Thing ( TNBT) in 2013 to pro­vide train­ing, men­tor­ship and net­work­ing op­por­tu­ni­ties to en­trepreneurs un­der age 25. Over eight months, TNBT takes young en­trepreneurs and helps them de­velop their prod­ucts, se­cure fund­ing and scale their bud­ding busi­nesses. Un­like MBA schools, TNBT doesn't re­quire a top GMAT exam score or great GPA to get in. Busi­ness suc­cess isn't de­pen­dent on aca­demic achieve­ments, as­serts man­ag­ing di­rec­tor Joanna Buczkowska-mc­cum­ber, who holds an MBA from UBC. “We come at it from a very dif­fer­ent an­gle at TNBT,” she says. “We are say­ing you can be an en­tre­pre­neur whether you have a uni­ver­sity de­gree, a high-school diploma or none of those.”

But what if you don't want to start your own busi­ness? It's fair to say that startup ac­cel­er­a­tors and hubs like Launch Academy and TNBT cater al­most ex­clu­sively to founders. For non- en­trepreneurs, in­for­mal paths to de­vel­op­ing busi­ness skills re­main more lim­ited. Still, Holmes and other B.C. tech­nol­ogy en­trepreneurs say ac­com­plish­ments speak louder than for­mal cre­den­tials. “I think an MBA still boosts your chances for employment, but it no longer of­fers the same value it once did,” Holmes says. “At Hoot­suite, cer­tain roles may call for ad­vanced de­grees. But in al­most all cases, equiv­a­lent ex­pe­ri­ence—a track record of get­ting things done—speaks just as strongly as a for­mal ac­cred­i­ta­tion.”

Jeff Booth is co-founder and CEO of Build­di­rect.com Tech­nolo­gies Inc., a Van­cou­ver-based on­line mar­ket­place for home build­ing sup­plies. He says hard busi­ness skills count, but they're not as cru­cial in the work­place of to­mor­row as a ca­pac­ity for learn­ing. “I look for the best can­di­dates, which means that some will have an MBA and some will not,” Booth ex­plains. “I ask a lot of ques­tions that probe for at­tributes that prove the per­son knows how to learn and is driven by cu­rios­ity.”

Ma­tias Mar­quez founded his dig­i­tal gift-card com­pany, Buy­atab On­line Inc., in 2008 while still an un­der­grad at SFU. He's a model tech­nol­ogy en­tre­pre­neur who made this mag­a­zine's 30 Un­der 30 list last year. COO Mar­quez doesn't have an MBA, but Van­cou­ver-head­quar­tered Buy­atab's chief ex­ec­u­tive, Jo­hann Terge­sen, earned his from Mcgill Uni­ver­sity in 1990. Both have a great deal of re­spect for for­mal ed­u­ca­tion and be­lieve an MBA can add value. Still, they think real-world ex­pe­ri­ence is critical whether you choose to get an MBA or not.

For Terge­sen, an MBA ed­u­ca­tion is far more ef­fec­tive if a stu­dent gives it con­text and mean­ing by first go­ing through some hands-on ex­pe­ri­ences and strug­gles. “I think you'd have a much greater re­spect for what it is that you're learn­ing,” he says. Mar­quez's take: “Go stub your toe on real life first.” ■

DIG­GING IT: Fraser Pogue, in­ven­tor of the Snow­pak avalanche fore­cast­ing tool, learned cru­cial busi­ness skills from his MBA, as did Jill Earthy (right) of crowd­fund­ing plat­form Front­fundr

SCHOOL OF LIFE For Launch Academy CEO Ray Walia and The Next Big Thing head Joanna Buczkowska-mc­cum­ber (right), en­tre­pre­neur­ial suc­cess doesn't hinge on aca­demic cre­den­tials

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