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Why Startups Need & Hire More MBAs: 6 Elemental Reasons

Last updated:
7th Oct, 2019
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Why Startups Need & Hire More MBAs: 6 Elemental Reasons

Once PayPal co-founder Peter Thiel stated:

 “Never hire an MBA. They will ruin your company.”

Strong as this statement was, in the fast-paced world that is changing as we speak, this couldn’t be farther from the truth. If you don’t believe us, ask startup founders who are now growing more and more fond of MBAs, particularly those in the tech scene.

Today, the MBA curriculum has transformed immensely to keep pace with the changing times. Most MBA courses now put increasing stress on hard skills like Data Science, Business Analytics, and Coding. According to Sangeet Chowfla, the President and Chief Executive of GMAC, startups are now imitating large corporations and MNCs, and rightly so. He states:

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“In this hypercompetitive environment, rapidly scaling a business requires world-class management intellect and skills, attributes associated with MBA graduates.”

Also, since startups allow MBAs to realize their potential and witness the impact of their skills in the startup biz, it becomes a win-win for both sides (startups and MBAs). With the startup culture thriving across the globe (in the US alone, there are nearly 200 unicorns – private companies valued at +$1B), employment opportunities for MBAs are rapidly emerging for roles in Business Development, Product Management, and Operations. MBA courses are on the rise to help students fulfill their dream.


As for hiring MBAs, the trend seems to be considerably higher in late-stage startups. This is mainly because startups that are at the later stage are more growth-oriented and focused on boosting profitability. So, it makes sense that late-stage startups have the biggest need for MBA talent.

Most MBA graduates are hired to fulfill the “traditional” functions, or more precisely, Business Development and Product Management. Business Development is neither highly sales-specific nor strategy-specific, but a mix of both, and it takes the crown for post-MBA job roles. Product management, too, has gained massive traction in tech, thereby making MBAs with technical backgrounds perfect for strategic positions in this domain.

Why are startups hiring MBAs?

With their fancy degree, extensive field knowledge, and versatile management, business and analytical skills, MBAs are helping transform startups for the better. Today, more startups are joining the MBA recruitment bandwagon because:

  1. They need MBAs for Marketing.

Marketing is not merely promoting or advertising your products/services. It is a complex science that involves detailed market analysis, customer segmentation and targeting, pricing, and much more. And since MBAs are trained explicitly for marketing and management, no one can promote your brand better than an MBA. 

MBAs are trained professionals with expertise in the ‘what, when, and how’ to design and manage marketing campaigns. They know how to market your products/services in ways that can maximize both customer satisfaction and increase ROI. 

  1. They need MBAs for growth and expansion.

Every startup, no matter the industry domain, must eventually mature and evolve into a well-structured and fully-functional organization. To achieve this goal, it is essential to design strategic business processes, define best practices, and create communication channels for transparency within the company. This is where MBAs can bring a competitive advantage.

Since MBAs are trained to understand and are well-versed with organizational hierarchies, they know the importance of well-defined strategies, policies, and procedures for a growing company. By brainstorming with the startup founders, MBAs can conjure up plans and policies that are not only scalable but also financially feasible for a startup. 

  1. They need MBAs for Networking.

While most startup founders are highly creative experts in their niche domains, they often lack two essential ingredients of marketing – networking and connections. And since good marketing demands good contacts and networking, MBAs come to the scene again. 

Since MBAs meet up with industry experts, mentors, and thought-leaders in various fields during their study course, they usually have strong professional connections with many people. In fact, networking is one of the core focus of MBA programs. Thus, MBAs can help you build a solid network of influential connections for expanding your business. 

  1. They need MBAs for Market Research

Market research is a crucial aspect of growth for businesses of every size. Thanks to the vast choice of market research and business analytics tools, startups can now conduct market research to get an in-depth idea of the market, their competitors, latest trends, product prices, and so much more. However, it requires a level of expertise and analytical knowledge to be able to use these tools efficiently – a quality that MBAs possess. They are experts in analyzing and interpreting data to uncover valuable business insights that can further encourage data-driven decision-making.

  1. They need MBAs for Human Resource Management.

Even though it is hard to believe, it is a fact that startups may lag behind in the race due to poor Human Resource Management skills. Startup founders often find it challenging to understand the needs of their employees, manage them, and communicate effectively with them. As a result, the business infrastructure starts to fall apart. This can be avoided with MBAs in the scene. MBAs have excellent communication and management skills that help them to manage the Human Resources of a company to keep it running like a well-oiled machine. Also, with the pressure of Human Resource Management off their shoulders, startup founders can focus on other pivotal avenues (for instance, acquiring funding). 

  1. They need MBAs for better financial planning and management.

As startups grow and evolve into more prominent entities with time, there remains a possibility of making faulty assumptions and spending funds on the wrong lines. This is why financial planning and management are as crucial for startups as for large corporations. 

Fortunately enough, financial planning and management are one of the many aspects of the MBA curriculum. Hence, MBAs can help startups to allocate their funds wisely and on those avenues that can bring maximum profits, without hampering the company growth and work culture. 

Getting into a startup right after getting an MBA degree can be highly beneficial for MBAs as well. This is because even though the pay may be less in startups, they hold immense potential and scope for professional growth and development. In startup culture, MBAs can get maximum exposure and run the show for a large part (in acquiring clients, making valuable business connections, expanding business ventures, etc.), that is highly unlikely in a large corporation, at least in the starting years. 

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So, if you start receiving offers from startups after completion of your MBA, give it a shot – who knows, maybe it will open doors of new possibilities for your professional career! Or if you are thinking about doing MBA but doing a full-time course won’t be feasible for you, check out our Executive MBA course.

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Kamal Jacob

Blog Author
Kamal is an experienced Online marketing consultant with a high degree of expertise in SEO, Web Analytics, Content/Technical planning and marketing.

Frequently Asked Questions (FAQs)

1 What are start-ups?

Start-ups are budding companies that are founded to develop and market a product or service. Start-ups are typically rooted in innovation and they are likely to address deficiencies of an existing system. Start-ups create new categories of goods and services. They work like any other company. However, in a start-up, some employees work together to launch a product or service. This is thought of, created, and launched fairly fast. A start-up can be managed by a single person too. Start-ups aim at building on ideas very quickly. At times, start-ups may begin with a basic skeleton of a product until it’s ready to go to market.

2How does an MBA help a start-up?

An MBA can be highly beneficial for a start-up. Marketing is more than promoting and advertising your product or service. MBA in marketing teaches you how to do a detailed market analysis, customer segmentation, product pricing, etc. MBAs are trained in managing marketing campaigns. Every start-up, irrespective of its industry domain, aims at maturing in a well-structured and fully-functional organization. If you want to achieve this goal, it is imperative to make strategic business processes, define legal practices, create a robust financial channel, smooth HR functions, ensure transparency with departments, etc. MBA training can help you conjure up plans and policies for your start-up’s benefit.

3What are the benefits I can expect?

MBA training offers many benefits. They offer the skill-sets that are required to ensure the fundamentals like finance, HR, marketing, and sales. MBA will teach you analytical skills, communication skills, decision-making skills, amongst many others. An MBA can help you come up with effective strategies in order to thrive. MBA includes the golden benefit of extensive networking that can last you a lifetime. The value-add of MBA cannot be understated. You might be lucky enough to find some angel investors in your MBA alumni network. In short, you will be closer to your goal with an MBA in hand.

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