The ROI of an MBA
I am currently debating the true value of an MBA – specifically an MBA from UC Berkeley’s Haas School of Business. It is perhaps a bit presumptuous of me to assume that I will get in to this program, as it is fairly prestigious, but a 4.0 gpa combined with a decade in business and almost 2 years running my own company gives me a sense that I might be able to.
So – the question now is – do I want to? My wife, who is a Psychologist, had slightly more than $200,000 in student loan debt when I met her; though she has managed to find a program through federal funding which has helped pay that down considerably. I am looking at acquiring a similar level of debt (~36,000 for completing Bachelors, then 100,000 + books for the Haas EWMBA program) without a similar program to pay that student loan off for me. Along with that, I will need to spend a minimum of 5 semesters to get my MBA – an investment of time which I consider possibly even greater than the price.
According to Haas’ Career Services Page the mean and median salary for a Haas graduate in 2006 was $100,000. While that is certainly nothing to sneeze at, the average salary for a product manager in the pacific region is already higher than that ($107,860). So, if I were a college student dreaming of a career in Product Management, this seems like a good fit. As someone who has become a Senior Product Manager – salary alone isn’t likely to see a significant increase from the MBA.
There are other benefits. There are new potential doors opened – some companies still wont look at a resume without an MBA attached to it – but I’m not certain those are companies I want to work for. The opportunity to Network is what really appeals to me most. Meeting a class of potential business owners and entrepreneurs who will already know me as a consultant who helps small businesses is a benefit that is hard to measure quantitatively. A small part of me also feels that the MBA is a security net – even if I somehow run my own business into the ground, I would have an MBA from a top 10 school.
For me, the question is – do those benefits outweigh the pretty significant costs of the program? Since I haven’t done the college thing, I dont really know for sure. Most people I know say that one of the prime benefits of a top school is networking – but most of those people didnt attend a top school. At this point, its a bit hard to say how long it will take to figure out the ROI on an MBA.