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Why make your own MBA: The Pros of a self study MBA

The first step in deciding whether or not to do a homemade MBA is to list the pros and cons of a homemade MBA vs. a traditional MBA. This article will outline a few of the pros in doing a homemade MBA, although there are bound to be more.

1. Costs.

The most obvious pro of doing a homemade MBA, and the top reason many of you are considering a homemade MBA is to save on costs. Almost all large MOOC courses are free. You may continue to do your job and live in your house, making the same salary as you are now, all while working on your homemade MBA. You might want to buy a few supplemental books, but for the most part, the cost is negligible.

 

Traditional MBAs are extremely expensive. Let’s just break down some of the costs of going the Traditional MBA route. There’s the cost of buying study materials and taking the GMAT. I had to travel to a different city because mine didn’t offer the GMAT, and so incurred additional costs on transit, hotel etc.

Then there is the cost of applying to many different schools. This might seem small, but a school like Harvard charges $200 just to apply. If you were to only apply to five different MBA programs, the cost would be $1,000!

The largest cost that comes to mind is tuition for two years of school, which can easily top $100,000. Many of the top schools fall right around that number, with some being even more expensive. There is also the cost of books and other school supplies.

What if you have to move in order to attend your traditional MBA program? Where will you live while finding a new home or apartment in your new city? Where will you store any furniture you’ve accumulated in the last few years? Moving always has unexpected costs associated with it, and those costs can add up quickly!

I have only listed above some of the money you would be expected to pay (or real costs) to obtain a traditional MBA.

What I haven’t mentioned yet are the opportunity costs involved with getting a traditional MBA. You will be missing out on actual income. That’s right, you just added two years worth of your salary to the total cost of a traditional MBA. For many, that opportunity cost can range from $60,000 to more than $200,000. Let’s not forget the time value of money, which is basically a way to say that the purchasing power of money can vary over time. Usually, the purchasing power of money goes down (inflation). You will also be missing out on any 401k contributions, healthcare benefits, and many investments during those two years back in school. This leads us to our second pro of getting a Homemade MBA: time.

 

2. Time.

You can work on a homemade MBA in your free time. You can do your coursework, or watch lectures whenever you’re able to within the framework of the course.  For many, a homemade MBA is an after work hobby, or something done with a few spare hours on the weekend. You can design your curriculum to fit your schedule.

 

A traditional MBA takes two years worth of 40+ hours of classes, group meetings, studying, homework, clubs etc. You are expected to treat it like your full time job.  You will put your current life on hold in order to fully immerse yourself in your new school and it’s program

 

3. It’s the same content.

For the first time everyone in the world with an internet connection has access to the exact same content that MBAs are getting in brick and mortar schools. The same professors teach the MOOC classes as teach the traditional. In many cases, the homemade MBA candidate is participating in the same class at the same time as someone who paid $100,000 to hear that content.  If you put together a thorough homemade MBA plan, you should end up with the same business knowledge as a traditional MBA.  That means you have the business knowledge to do the same quality of work as anyone with an MBA.

 

4.  It’s becoming accepted as a credential.

These days it is not odd to see people listing their homemade MBA classes on their Linked-in profiles, resumes, or bringing their knowledge up in interviews.  Employers appreciate that employees are showing initiative and working on bettering themselves outside of the office. Many highly respected schools are offering MOOCs now, which lends credibility to the classes and their content. I see this only increasing as more people become aware of MOOCs.  Coursera and Ed-X are continually adding more schools and more classes.

You can even get certificates of completion and certain distinctions if you are willing to do the work and pay a small amount (in some cases). These are credentials you could bring to any employer, which make the classes even more impressive and credible.

 

People say the two biggest reasons to get a traditional MBA are the business content (knowledge) and the business credential (diploma). With a homemade MBA you can get that same business content, and increasingly, a very useable business credential. With lower costs and time commitments, a homemade MBA is a very smart choice for many candidates.

 

What do you think are some pros of homemade MBAs? Did I leave something out? Disagree with anything I’ve said? Sound off in the comments below.

 

6 comments

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  1. XXX

    Dear Sir,

    while I can greatly understand your drive and methodology, I must disagree with your premise that a self-made MBA is a good idea.

    All the cons for the traditional routes you listed are quite valid. Nonetheless, you won’t receive the two most important take-aways from an MBA course:

    1. The (School’s) Branding
    2. The Network

    As an European law student that has been studying the law for four years so far and has more than three years of required and another 2-3 voluntary years (PhD/LL.M.) of schooling ahead of him, I can tell you that the content of an MBA degree are very superficial and won’t provide you with the solid foundation of knowing how to run or start a company. Even if they did, you couldn’t fully absorb all that much within two semesters, especially if you don’t have a strong business background where this ties directly into.
    The reason MBAs are sought after are the CV branding and the exclusive access to class mates as well as the alumni network. That is also why one should refrain from an investment if the school is not top tier.

    If you really care about upping your business game and don’t have any skills, go take real business classes at a local college. They will serve you better and provide a better value for you. Yes, they will be an investment and yes they will cost time and effort in terms of passing exams like in school. But it’s worth it, if you’re serious about improving your life via business.

    Taking these online MOOCs is fun and broadens your horizon, no doubt. I’m using some Coursera courses myself to distract myself from the sometimes very difficult jurisprudence and take some advice they give for my private start-ups.

    But pouring all your energy into a self-made MBA is an inefficient waste of resources. I do not want to offend you, but rather point you into a more fruitful direction.

    Best,
    XXX

    1. homemadeMBA

      Hello XXX,

      First of all, thank you for your very thoughtful and thorough comment. It’s nice to hear your well intentioned feedback on my Homemade MBA project. Also, I couldn’t agree more about the two main benefits of a traditional MBA as you have highlighted: the network and the Branding (which I refer to as the “credential”, but it’s the same idea).

      However, predictably, I don’t agree with your other argument that a Homemade MBA is a bad idea. Being that you are an accomplished and experienced law student, as opposed to business, I may also question your credibility as an expert on MBA course content – and would like to point out that traditional MBAs (with a few exceptions like the Sloan program offered at MIT and Stanford) are two years (which is four semesters, not two).

      I do really care about improving my business skills (as applicable in a large corporate environment, not just entrepreneurship), but I don’t understand your recommendation to take “real business classes at a local college.” You mentioned that you are taking Coursera classes, so you will know that many of the Coursera MOOCs are the exact same courses taught by the same professors that teach at brick and mortar institutions. I would like to highlight the four Wharton courses on my Homemade MBA curriculum, as you will find that these are literally the same courses first-year MBA students take at Wharton – just by video. The exams, homework, and projects are all the same (perhaps more difficult in my opinion, as we don’t have the luxury of asking classmates/TAs/Professors questions while taking these remotely on Coursera). The fact that I could take these on Coursera meant I didn’t have to fly to Pennsylvania (I was living in Europe at the time), leave my job, or pay Wharton’s hefty price tag.

      In my opinion, to say that “pouring my energy into a self-made MBA is an inefficient waste of resources” is questionable. Of the two resources required to pursue an MBA I am only consuming one (my time), and I don’t know of a more efficient way to gain knowledge than opening my laptop before/after work and reading/watching/working directly on the course content with no distraction or time wasted commuting.

      I appreciate your positive intent, but find your advice misses the mark. I wish you the best of luck with your legal studies, MOOCs, and startups, and hope you find some benefit to the explanation I provided in this comment.

  2. XXX

    Dear Sir,

    first let me thank you for both you having cleared my critique and having taken the time to formulate a well thought-out response. It’s very commendable that you do not squash alternative views even though you easily could.

    You are perfectly correct that my knowledge of MBA courses is very limited. I also realized that my wording was not clear enough. By making that comparison, I did not want to equate legal knowledge with business or MBA-educational one. What I meant was that it takes a long time to fully grasp complex concepts. While business is less theoretical and more practical than many academic disciplinces, it’s still quite complicated in certain areas.

    Thank you also for setting the record straight in terms of the length of a typical MBA course.

    After having perused your site a little more, I think I need to restract some of my prior statements. If your goal truly is to simply learn more about business, then of course self-made courses are great. I made the mistake to judge the approach by my own metrics, i.e., I am thinking about eventually taking an MBA but not because of the actual knowledge but because of its network and “credential” benefits.

    I still think that a regular business degree will award more substantial knowledge in core areas such as accounting, finance and other analytics. But I forgot that not everyone has the opportunity to pursue such courses.

    Finally, let me again constructively disagree with you on the difficulty of MOOCs vs. brick & mortar courses. You mention the alleged handicap of being all by yourself. This may vary from program to program, but I think that the course load of an institutional degree is somewhat higher, since you have to (not may) take various courses at once. I would also assume that actual tests are thoroughly harder than the ones presented at Coursera in the untimed comfort of your home. Furthermore, most MOOCs cannot provide essay questions because there is no one to grade the answers individually. That also makes it easier in my opinion. Moreover, I found the discussion boards at Coursera to be extremely helpful and full of great responses all around the clock. I doubt that asking professors or room mates offers a significant, if any, advantage over the possibilities of the Internet.
    Maybe I am a little biased, but a big portion of excelling in my regular 5h exams here is time management and unwavering focus, something that is not required if one can pace the course and the tests.

    Please don’t think I haven’t already found some benefit in your website. It is absolutely fantastic. Even if homemade MBAs were as ineffective as I painted them earlier, you still have given and continue to give people hope. That is wonderful. Your project is one of the great consequences that the arrival of MOOCs and the liberation of data has brought about.

    I do not fully agree with your opinions on everything, but I still admire and support your wonderful cause.

    Best of luck and to our success,

    XXX

  3. Jz

    I don’t agree with the Ph.D law student. I myself holds a PhD in law and 3 master degrees (all from European) universities.

    However, I pursue a DIY MBA degree. I have done all the 18 courses on Saylor academy for a major in Business Administration and done sofar around 80 courses in statistics, business analytics, strategy, operations, marketing and finance. I want to do 40 more to have at least 120 mooc courses regarding only business courses. The used platforms are coursera.org and edX.org. I just count 1 ects for 1 mooc course, altough some are at least 3 or more for example the courses on Supply Chain Design. Data analysis courses or actuarial sciences courses are in most of the cases a lot heavier than e.g. jurisprudence. I will also do some engineering courses on structural design and maybe next year some computer science courses and Calculus. I mimic a business engineer degree (in Belgium called: : handelsingenieur).

    In my humble opinion: 18 courses on saylor counts for at least 60 ects and 120 moocs for 120 ects, so if my self designed curriculum is completed I will have an equivalent of 180 ects in purely business and auxilary courses completed.

    Regarding status: I hold already a PhD and Master degrees. Network: same story since I have worked for top tier law offices. Now I am independent and just wanted to enhance my skills and learn new subjects and learn a bit more about business. I do not need a paper of HBS or the like to show I am capble to handle business situation.

    1. homemadeMBA

      Thanks for your comment, Jz.

      Wow, you have done a lot of studying – both in brick and mortar classrooms and in the MOOC world! Thanks for adding your perspective.

      I couldn’t agree more, especially with your concluding point – no piece of paper is going to prove that you are either capable or credible in a business situation. It’s your knowledge that counts, regardless of where it came from.

      Best of luck with your future studies, and thanks for visiting my site. Keep in touch if you have other MOOC recommendations for us Homemade MBA-ers out there.

  4. XXX

    Dear Jz,

    thank you indeed for your perspective. However, I do not quite see how you disagree with me.

    You are taking free business courses to improve your understanding in that field. I think that is fantastic, which is why I am doing the same thing.

    You mention that you do not need a network bonus while getting your education because you already have one through your legal practice. By mentioning this you thereby agree with me that a network is very important for entrepreneurial success. Most people doing an MBA, however, do not have the benefit of having worked as a successful attorney before, which is why I think you should at least get one through the school then.

    I must disagree on the following, though:

    1. If you received your legal education through a Bachelor’s degree, then I will grant you that your current course load might indeed be heavier than your former jurisprudence courses. This cannot be said for all your fellow EU countries, though. The ones I am familiar with, i.e., Germany and Switzerland have exceedingly rigorous and old-fashioned systems that were left untouched by the Bologna reform.
    I have looked at Saylor, Coursera and other MOOC, but they are a cake walk compared to what we do, with all due respect. I have some friends who did their Bachelor’s and PhD at Leuven and Ghent respectively and they told me in the first place that compared to other countries, the academic rigor is quite a bit less daunting. In case you did work with law firms such as Freshfields, Allen & Overy or Clifford you know how great the difference in quality is between the real world and Belgian universities is.

    2. Congratulations on your passion to learn and your impressive resume, though. Yet, as an employer I would also be a bit hesitant with someone who has at least five formal degrees and is privately working on yet another one. I would see this as not goal-oriented, but hesitant to make up one’s mind. Informal degrees on the side are great, of course, because they do not hinder your professional work or credibility. In short, continued learning is great, but amassing formal education is a rather pointless endeavor. Unless, of course, there is an inherent benefit connected to it, such as the school’s brand or an exquisite network, which seems to be my ceterum censeo here.

    Best wishes and Happy Holidays, gentlemen.

    Yours truly,

    XXX

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