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Why Entrepreneurs Should Pass on an MBA

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If the spiraling scandal over a lascivious love triangle at Stanford Graduate School of Business (GSB) is any indication, an MBA from a prestigious B-School isn’t all it’s cracked up to be. And I think that’s especially true for aspiring entrepreneurs and business leaders.

Stanford University
Stanford University

The tale starts out sounding familiar enough: Two professionals get together and have two kids, their marriage hits the rocks, she moves out, he files for divorce, both start seeing other people, yada yada. But this is no ordinary couple. And their story soon turns into a massive train wreck.

James Phills and Deborah Gruenfeld were both professors at GSB. Soon after the separation, Gruenfeld starts a secret affair with her boss, who also happens to be her husband’s boss, dean Garth Saloner.

The couple’s split turns into an ugly divorce and custody battle that’s still going on, three years and half a million dollars in legal fees later.

Meanwhile Phills, who still has access to his wife’s emails, texts, and messages, tracks her not-so-clandestine communications with her lover / his boss in which the pair plot against him, or so he alleges.  

And while the dean eventually discloses the affair to Stanford provost John Etchemendy and sort of recuses himself from decisions involving his girlfriend’s husband, Phills still ends up getting fired, supposedly for taking too many leaves of absence to teach at Apple University.  

Related: 10 Mindsets of a True Winner

At that point, Phills sues his former boss and the school for wrongful termination. All sorts of dirty laundry ends up getting aired, including a 2014 complaint by 46 current and former GSB employees claiming that Saloner was a bully who ruled by “personal agendas, favoritism and fear,” according to Vanity Fair.

And when the whole sordid mess ends up getting exposed on Poets&Quants – a B-School site – Saloner finally steps down.

Wait, there’s more. Phills continues to teach at Apple. Stanford countersues, claiming that it owns his course materials, and drags Apple into the fray. Meanwhile, Gruenfeld gets a nearly million-dollar advance on a book deal for her course, “Acting With Power,” which Stanford seems to have no problem with.

You just can’t make this stuff up, folks.

While duplicity, cronyism, vindictiveness, bullying, power plays, and personal agendas may be the sort of behavior we’ve come to expect from bureaucrats and politicians, it’s certainly not what we should be teaching tomorrow's entrepreneurs, executives, and business leaders.   

That sort of dysfunctional behavior does exist in the business world, but in my experience, it’s the exception, not the rule. And when it does rear its ugly head at well-run companies, it’s usually weeded out by peer pressure from a positive culture that values meritocracy, not bureaucracy and the organizational ills that go with it.   

Besides, if you assume that up-and-comers go to business school to learn about business, management, leadership, and entrepreneurship, I would argue that you’re way better off learning all that through real world experience and from mentors who’ve accomplished what you aspire to, not a bunch of academic researchers with issues.

Related: Are You Living Your Life or Someone Else's?

Among the many great entrepreneurs of our time – Richard Branson, Larry Ellison, Steve Jobs, Bill Gates, and Mark Zuckerberg, to name a few – there’s not a degree among them, let alone a business degree.

And while Jeff Bezos (Amazon), Warren Buffett, Andy Grove (Intel), Herb Kelleher (Southwest Airlines), Jack Ma (Alibaba), Elon Musk (Tesla and SpaceX), Larry Page (Google), and Fred Smith (FedEx), and Masayoshi Son (Softbank) all have degrees, none has an MBA. Interestingly enough, the same is true of the father of modern management, Peter Drucker.

On a personal note, I took a couple of MBA classes as a young engineer, said, "Screw this," and never looked back. That turned out to be a pretty wise decision. Of course, if you’re hell bent on getting that piece of paper, I’m sure it’ll look great on LinkedIn but I doubt if it’ll do you much good. And it just might teach you some pretty nasty habits.  

After forsaking business school, I read Mark McCormack’s bestseller What They Don’t Teach You at Harvard Business School. The book had a tremendous impact on my career, helping me to become a top executive in the high-tech industry. Maybe somebody should pen What They Do Teach You at Stanford Business School … But Shouldn’t.  

Related: 10 Secrets to Great Wealth

Steve Tobak

Written By

Steve Tobak is a management consultant, columnist, former senior executive, and author of Real Leaders Don’t Follow: Being Extraordinary in the Age of the Entrepreneur (Entrepreneur Press, October 2015). Tobak runs Silicon Valley-based Invisor Consulting and blogs at, where you can contact him and learn more.