Learning can easily become procrastination.
I’m not here to dunk on college again. You already know the downsides of universities and what they offer.
I want to introduce you to the answer you’ve been looking for if you’ve ever wanted to do something else with your life — but don’t know how.
Real-world experiments versus theoretical training
The creator of the term real-world MBA is Tim Ferriss.
In the early 2000s, Tim had naughty fantasies about doing an MBA at Stanford University. He sat in on a few classes to get in the zone, took the campus tour, and downloaded the application form twice.
One class he sat in got him all excited.
But all the other classes he says, got his panties in a twist. Many of them were taught by PhD theoreticians who created sexy PowerPoints, made stuff complex, and overused buzzwords like innovation. Yuck.
He recalls one teacher that used differential calculus to explain the simple idea that if you build a bad product, ain’t nobody gonna buy. Idiot.
The student guide who followed Tim to this lecture thought this teacher taught the best class. Tim threw up in his mouth a little bit.
Business school died for Tim right there.
An unlikely hero shows the way
Tim sat on his desire to learn more for a few years. He got friendly with a venture capitalist over a series of lunches.
The older man explained to Tim what angel investing was — investments of $15,000-$100,000 into startups. You put money in and gave them advice and access to any connections that could help their business.
This revolutionary concept replaced his desire to do a Stanford MBA.
Back then it cost $60,000 a year to be a pretentious Stanford student. Now it’s more than $100,000. Two years would have cost Tim $120,000, but instead, he decided to use the cash to invest in startups as an angel investor.
Deliberately lose $120,000 to learn 10x faster
The trouble with MBAs is you can base your knowledge on assumptions rather than real-world data. And the data is constantly changing, so what worked when the college textbook was written is likely outdated.
Rather than get aroused by theory, Tim invented his own practical MBA.
Instead of spending $120,000 investing in startups to make an ROI, his goal was to meet the right people and learn how business actually worked by being inches from the action.
Some investments failed. But a few did well and Tim got 5x on his $120k original investment.
Probably don’t become an angel investor
Tim says investing in startups is probably a bad idea for most. It’s easy to:
- Invest too quickly
- Invest too much money in one company
- Think every startup is going to be the next Google
Tim recommends losing $5000 at a race track first to test your response to losing a decent amount of money. Most fail the test.
My unusual real-world MBA
Early in my banking career a guy named Simon inspired me.
I wanted to be exactly like him. The way he worked and did deals was nothing short of magic. One day he said, “I’m going to be hard to reach for the next 2 years while I get my MBA.”
Many other office sheep followed in his steps and got MBA degrees to try and get promoted. It didn’t work and they hated every minute of trying to work a job, raise families, and do all the dumb MBA homework based on theory.
Instead, I read about Tim’s MBA idea and decided to give it a go.
A non-financial investment to upgrade your life
Tim’s article recommends another route for those who don’t want to invest money: invest time instead.
Give up 1 out of the 5 days a week at your job, effectively taking a 20% pay cut. That’s exactly what I did.
It took a fair bit of guts to ask my boss for the one day a week off. I had to find out what the advantages were for him. Here’s the list I wrote:
- “Let me take a day off a week or in the future I’ll probably want to leave and find a company who will.”
- “One day a week off means I’ll have to be much better with the time I am at work so my productivity will skyrocket.”
- “The extra day will help me 10x my writing career. You’ll get to be part of my success and get credit for enabling it. Who knows, you may even get a mention in the book I write for Penguin Random House one day.”
He said yes. I began to work 4 days a week. As I experimented with making money online, I slowly collected data points that proved I could do it.
Last year I went from 4 days to a full-time online business.
What the real-world MBA taught me
We’re all full of assumptions. We think we know stuff.
I learned I don’t know jack. Through the process I made small bets. Some worked and some didn’t.
I pimped myself out for networking opportunities too. I made it a deliberate practice to send DMs daily that began conversations. The key was I never asked for anything or spoke too much about myself.
“What are you working on?” is a life-changing networking sentence if used tastefully, regularly.
I put my money on the line too. I bought courses, paid for coaches, bought new software, etc. Much of the money got pissed away. Just like Tim Ferriss, I expected to lose money on my small bets.
I wanted to lose money so I would learn the uncommon lessons an MBA could never teach me.
Through the process I met my business partner. I started my fourth attempt at an online academy and succeeded. We found our MVP lightning fast.
Now we have thousands of customers — instead of a useless business plan written on a paper napkin and a few thick college books.
The short strategy to make your own real-world MBA
If all this sounds great then you too can create a real-world MBA.
- Start by making your real-world MBA a side hustle. Execute to collect data.
- Then after 6–12 months reduce your work hours. Invest the extra time in your real-world MBA.
- Allocate some startup capital that’s okay to lose and will provide the real-world lessons and networking opportunities.
- Make a series of small bets with the money. Think of it how a VC would.
- Make some rules and stick to them.
- Prioritize execution over theory.
- Work out what level of risk you’re willing to take upfront.
Bringing it all together
I often joke you can pay $200k+ to do an MBA or invest that same money in a side hustle or online business.
Now it’s not a joke anymore. I believe it. Use your MBA investment as money to invest in the best startup in the world: yourself.