Is An MBA Graduation The Key To Building A Unicorn?

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This article focuses on the relationship between top startup companies (unicorns) and the MBA degree. It highlights the key presence of MBA graduates in billion-dollar startups, and explains the trends around this phenomenon.

Last year, London business and finance newspaper City AM reported that approximately 100 million businesses are launched every year, translating to an extraordinary three per second. Of these, Forbes estimates that 90% will fail.

If almost everyone, it seems, wishes to start their own business, few manage to successfully enter and remain in their niche. Yet among these neglected, quixotic, or untimely ventures, there exist some that beat the odds. Among this subset, there are even fewer that do not just beat the odds: they completely transcend them, managing to acquire a billion-dollar valuation or more while still retaining startup status. These preternatural companies have come to be known as unicorns – a name that highlights their standout status in this crowded environment.

Creating Unicorns

Recognizing the existence of unicorn companies – of which there are, according to estimates by Harvard Business School student David Fairbank, 157 – creates an immediate question to which all entrepreneurs will want to know the answer: what can turn a startup into a unicorn? Research by Mr. Fairbank, published in a report on higher education and business school analyst website, provides two answers to this question:

  1. have an MBA among the founders, and
  2. get that MBA graduate to help you create an innovative startup in a technology-focused sector.

Mr. Fairbank studied 157 billion-dollar startups – defined as companies that (a) had not yet partaken in an Initial Public Offering (IPO) and (b) had not yet been acquired by a larger company. He found that 38 had at least one MBA-degree holder as a founder, amounting to a quarter of all unicorns. Of these 157, 63 MBA holders were among them. If one wanted to create the perfect formula for a company that can create very large waves very quickly, having an MBA graduate would surely be a part of that formula.

Are MBAs Really The Answer? And If So, Where Can They Be Found?

Yet many institutions offer an MBA; one might well think that simply having an MBA graduate isn’t enough to help a new company become a unicorn. This instinct is borne out by Fairbank’s research. He analyzed the 38 MBA unicorn companies and 63 MBA unicorn founders sorted by their alma mater, and found that Harvard featured most frequently, with 18 of the 63 graduating from HBS (for a student of Harvard Business School, his research no doubt proved comforting). Among the 63 MBA founders studied, moreover, over half came from three MBA heavyweights: Harvard, the Wharton School of the University of Pennsylvania, and Stanford. If one is looking to find an MBA graduate to help their business make it big, these three places would no doubt be the best to start. Furthermore, if one is looking to enter the entrepreneurial environment, seeking to take an MBA at one of these places would be an excellent step towards achieving their ambitions.

There is plenty of life, and there are plenty of options, outside of this triumvirate, however. INSEAD, with campuses around the world, provided five MBA founders of billion-dollar startups, while the MBA programs of Chicago Booth, MIT Sloan, Berkeley-Haas, Columbia, and Washington University all provided two such founders. Some of the companies Fairbank audited featured multiple graduates of one MBA program – examples include BlaBlaCar, launched by multiple INSEAD graduates, and Oscar, the health insurance firm started by HBS graduates. Conversely, some unicorn companies combined the wisdom of multiple disparate MBA programs, with Global Fashion Group (GFG) containing alumni from schools across three continents.

Fairbank also found that three-quarters of the most lucrative MBA entrepreneurs operate in software, consumer internet, or e-commerce. Those reading this article with entrepreneurial ambitions would be wise, it seems, to start thinking about the ways in which they can find space for innovations in these three industries. This 75% figure roughly mirrors the proportion of companies operating in these sectors among all 157 studied companies. However, Fairbank found that the best healthcare startups were far more likely to feature an MBA-degree holder among their startups than not – more strongly testifying to the value an MBA graduate can bring to an organization.

US, Asia, India?

You’re also slightly more likely to find an MBA unicorn based in the US – three-quarters of their number call the North American country their home as opposed to 63% of the full 157. The difference comes largely at the expense of those based in India – while 18% of all unicorn companies are based in India it’s only 3% among those with MBA founders. Interestingly, the reverse is true in the rest of Asia; 7% of all 157 companies are said to be based in Asia, but this proportion rises to 13% among the 38 MBA unicorns. One example from Asia is Dianping, described as a mixture between Yelp and Groupon and cofounded by Wharton MBA, Zhang Tao in 2003.

Still, it’s possible that the tilt towards the US as a base of operations will change as today’s new startup companies evolve into the unicorns of tomorrow. Stanford’s latest MBA employment report, for instance, pointed out that its class proportion of entrepreneur graduates was higher among its international students than its domestic participants and indeed, 28% of entrepreneurs in the class of 2015 said they would be setting up shop outside the US. Either way, it’s clear from the figures in this analysis that the MBA demographic is extremely relevant to any discussion about how best to develop business ideas and succeed in the startup space.


So what might be the best steps for the future innovator reading this article, and inspired to increase their chances of partaking in the unicorns of tomorrow? The evidence seems to show that taking an MBA at a top university is an excellent place to start. If this is the case, it is because the skills and networks acquired when one takes a top MBA course give one the professional nexuses and academic nous to find market niches, and exploit it successfully.

Those interested in starting their journey towards the most lucrative, innovative and dynamic startups of tomorrow can meet the top schools mentioned above – MIT Sloan, Harvard, et al., – for discussions with expert admissions tutors from these schools, advice on passing the relevant exams, and much more at worldwide MBA fairs such as the QS World MBA Tour. Running 205 events worldwide in 97 cities across five continents each year, QS put over 90,000 aspiring students in contact with the schools that help create the next generation of unicorn founders last year. They also aim to increase access to top MBA programs by giving all attendees the opportunity to win one of a number of scholarships totaling US$1.7 million. Events will be taking place across the entirety of Europe over the upcoming months, with events in London, Rome, Istanbul, Vienna, Frankfurt, Paris, Baku, Geneva, and Copenhagen (among others), and one can register for free at here.

Here are some impressions of the last events:


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This article contains content and research originally shared at TopMBA.

Photo credit: drewsaunders via / CC BY-SA