Perry Marshall - Why Most MBAs are Psychologically Crippled

Sorry to say this, but possibly the worst preparation for business is a Masters in Business Administration. MBA's are almost universally, psychologically crippled when it comes to marketing and sales.

If you take an MBA from a prestigious university and put him in a small-business startup, it's like grabbing a cocky guy with a brown belt in Karate and sending him into a knife fight in an LA biker bar.

He'll be lucky to come out alive. And he'll be angry at the hideously unfair world in which he failed so miserably – because it didn't play according to the rules, as he understood them.

I used to have a boss with an MBA from Northwestern and a “stellar” track record at a previous, larger company. He put together a costly ad campaign for our new product, which we'd spent $2 million developing, and forgot to put our phone number on it. (Never mind a ‘widget' or ‘offer' or ‘response mechanism'!)

There was another corporate guy I used to work with who spent hours stroking me and telling me I should get an MBA. He was explaining how I could get this degree, apprentice under an executive for a few years, and really be groomed for success in Corporate America. It was going to be a magic carpet ride, he assured me.

A few months later he lost his job and he was unemployed for the next 18 months. I'm glad I didn't follow in his footsteps.

Here's the problem: An MBA is an education in “How to play by the rules.” It's a world of asking for, and receiving, permission. But entrepreneurship for street fighters. It's all about making up the rules, redefining them as you see fit. These two worlds are fundamentally incompatible.

I've consistently observed that at least half of the sharpest business people I know never went to college. After awhile it's impossible to not notice that somehow or another, the over-educated person loses his intuition, his ability to see reality as it is, and work with it. If you have an MBA and you can still think clearly and start a business successfully, give yourself a nice pat on the back.

My capable assistant Jeremy Flanagan (more about Jeremy in a little while) just graduated from college. I hired him in January and a couple months later he started talking to me about grad school. “I'm thinking of going on and getting my MBA, what do you think?”

Knowing that Jeremy is a bright, enterprising, organically educated guy with a lot of ambition, I needed to temper my reactions just a little bit. I explained some of my thinking on this, and said “There's a marketing seminar in June – why don't you go to that seminar before you make a final decision on the MBA thing.”

Well Jeremy just came back from the System seminar, and his mind was blown wide open by the possibilities that exist in a truly entrepreneurial environment. It was all the proof he needed. And he sure doesn't need another $50,000 of student loans. Which brings me to my last point:

If you've ever spent more than 13 minutes with a financial planner, you've seen his chart that shows how much money you'll have at age 65 if you start saving, say, $100 per month at age 20 vs. 25 vs. 30 or 40 or 50. The cumulative compound interest of those early years of savings is absolutely staggering.

Well most college grads are operating on the exact opposite end of the spectrum – they're paying massive interest at age 25 instead of earning it. Now if you're 25 years old and you've got $70,000 of debt, how long is it going to take before you're just up to zero? 5 years? 10 years? 15 years?

You get to start saving at age 35 or 40 instead of 20 or 25. Only takes a few million out of your retirement fund, no big deal.

Now remember, the interest payments come due as soon as you're out of school. So when you're in hock to the tune of seventy grand, are you going to take some time off to “find yourself”? Go hiking in Peru ? Biking through Europe ? Serve in the Peace Corps?

I think not. No, you're going to get thyself into a Dilbert Cube just as fast as you can. And that's good, because the humming economy needs you, now that you're an indebted, subservient, well-trained worker bee.

(This originally appeared in the Perry Marshall Monthly Marketing Newsletter and Renaissance Club, June 2004)

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