Is an MBA Worth It for Buying a Business?

Welcome back to another episode of Bought the Biz. Today, Christi and I are going to talk all about what our MBA programs prepared us for and maybe didn't prepare us for in search and operating our businesses. Stay tuned to hear our real, honest, and candid thoughts on if you should get an MBA and how that may or may not enable you to be a great operator of an ETA business. Bought the Biz is a podcast for ETA entrepreneurs who've gone from searching for a business to actually running one. It tells the real story of what happens after the deal closes, the day-to-day operational emotional, strategic, and leadership challenges that just don't show up in the highlight reels.

The show is story-driven and practical, sharing real experiences from operators along with clear, actionable takeaways you can use in your own business today.

I'm Garth Fossano.

I'm Christi Loucks. Welcome to Bot the Biz.

All right.

Welcome to today's Bot the Biz conversation. Garth and I are unpacking the great MBA debate. Did it actually prepare us to own and run a business, or did it just give us shiny framework and pretty spreadsheets, uh, for problems that we'd end up solving down the road? So spoiler, uh, mixed reviews, mixed feelings. So Garth, I'm gonna just like hand it off to you. Can you tell us a little bit about like your education, just like get us started on your background, why you went to business school, maybe what goals you had there. Like, give us like the context.

Yeah, I did an evening MBA program here at, in Boulder at CU's program. And my intention was, you know, I was sort of getting to the point where I needed an MBA in my career. Someone had given me a lot of really good advice about getting your MBA and said, that you need to go do it before your opportunity cost of going to do it gets too high. And so, you know, there wasn't a super compelling moment when it felt like the right time for me, but something I knew I was interested in. So I went into that, and my wife actually did the full-time program at the same time. So I was in the evening program, she was in the full-time program. That was a good way to sort of get it done for both of us. And that was actually sort of an interesting approach. I think we sort of doubled our network in that process because she knew all the full-time folks, I knew all the evening folks, and we could bring those two together. So in some ways, that was a pretty good way to embed ourselves in this community here.

And you were— yeah, you were living in Boulder.

I mean, you were living in Boulder before, after. So yeah, uh, and we did consider going to, you know, a top-tier type school, um, but the appeal just wasn't really as much there for us, partially because we were like, you know, we're not going to go to iBanking, we're not going to go into consulting. That's— we're a little bit more entrepreneurial, so there's not really the need to spend a whole bunch of money on a Joke's on us, we both went into consulting directly after the MBA.

Love how that happens. What was your undergrad degree in?

My undergrad was in philosophy, politics, and economics at the University of Pennsylvania, but I did 2 years at the Naval Academy and 2 years at the University of Pennsylvania.

Okay, so then why did you go to business school? Like, what was the actual driver?

You know, that was sort of the career path I had been on. I was in, you know, go-to-market team sales, account management, and building business lines at B2B organizations as well as had a fair bit of background in consulting. And so that sort of made a lot of sense. It's just like logical to go do your MBA. Yeah.

Yeah. Just like that.

Yeah, it was the logical thing to do. It was a good move, not just because it was logical. It did help. It opened doors. So I still strongly recommend that to folks. At the time I went to CU, they did not have an ETA program. So I found out about ETA after I graduated, probably a little bit after I graduated, and sort of became a voracious reader on everything ETA. I don't think the podcast scene had really grown enough at that point for that to be a really big learning resource. Um, and, uh, I don't I think I knew enough about all the conferences at that time yet as well. So, I was just reading all the books, which really there's the Harvard one and maybe there were a couple others and some studies, the Stanford studies and things like that and sort of was pursuing it that way. And yeah, that's how I sort of landed into this. But now, I support teaching it at CU Boulder as well just because it's something I'm super passionate about.

Yeah, it's awesome to see it like come full circle for you.

Yeah. Yeah. That was pretty fun. I basically, the way that that came about was, you know, about a year into owning and operating Top Dog, now Rainmaker, I knew I wanted to give back and wanted to support the program. And I knew we didn't have a course at CU, so I just reached out to some of my contacts there and said, hey, can I just do like a lunch and learn on this ETA thing? You need to, students need to hear about this. And luckily Shannon Jones, was already working on getting the course taught at CU. And so he and I were able to work together on that to sort of find the right contacts and make it happen. And then that we've now done the course twice. It's sort of flowed into the Rocky Mountain ETA conference and it looks like there's also going to be an executive education program launching there soon too. Yeah.

Awesome. Congrats. Look at you, professor.

I don't, I think it's like, I think it's like technically adjunct, maybe not even technically that yet. And then like if you're a real professor, I think you don't really think anything of someone who has adjunct in front of them.

Yeah. Yes. Bottom of the barrel.

Yeah. If they're— if they're— if I'm even in the barrel at the bottom. Yeah. But, but I'm not doing it for any of that. It's just something that I think I want— I want more people to hear about. And I think the thing that I try to bring to the program is like, I think the personal guarantee is a really big deal. I don't think I fully understood that before I got into it. And so I think sharing the kinds of stories and the types of moments that you've gone through that are real tests are where you can really differentiate from someone who's maybe academic about ETA versus someone who's actually been in it. So, that's what I try to do. Yeah.

So, what did you— I mean, upon reflection, with the program that you did, putting aside the ETA program that you now teach, like with the program that you did at CU Boulder, what were your biggest takeaways that you that you felt were relevant to business ownership for you today? Like, are there things that you look back on and say, oh, I'm really glad I had that experience, or I took that course, or I met that person because of where I am today? Or not really? I mean, the answer can be not really.

I think it's sort of not really, and that's not a negative reflection on the program. I just think that a lot of the stuff that you're learning and an MBA program is very different than what the curriculum for most MBA programs is about. Now, that being said, like, accounting is super important, I think. So probably the most relevant coursework was around accounting because I did the books for the first year of the business and they were pretty complicated. Um, and so I think my accounting coursework helped with that. I think leader— I had a leadership course that was sort of in the standard curriculum for every student. I think that that helped, but, you know, What really helped was learning that through managing people prior to stepping into the company. And I think all of the sort of crazy things that you would never even know would come up, there's hard for any MBA program to prepare you for that, or even an ETA class. Like, you know, when the business I acquired was operating with employees in, you know, 10+ states. And so I had to open up employer accounts in these 10 states. And like, that's not something you learn in an MBA, I don't think. And so there's all these weird things that are not technically hard, you shouldn't be learning in an MBA, I would even say, but that you're gonna have to go do and go figure out. And if you haven't done that before, which I wouldn't expect you to have, like, you got to go break through some of those walls and figure that stuff out. And that's just the way it goes. So I think, you know, if I think back about like what in my educational background probably prepared me the most for ETA, I would say the Naval Academy. I mean, that's where you learn how, like, you've got a problem, you don't have a clear way on how to solve it. You learn grit, resilience, and how to get through that kind of stuff. Yeah. And I mean, that I think has been one of the most powerful educational experiences for me.

That's an interesting point because, you know, with our work at DealBuff, where we're working with searchers and entrepreneurs who want to acquire, we actually have a lot of military clients. And so I find it really interesting that even just that comment, because I think that there's so much character that seems to be built both at those institutions and in the actual military experience where people come out with, who are actually quite well equipped for business ownership. The issue, not the issue, but the challenge is you have to translate that experience from the military into like layman's business terms, right?

Yep. Yeah.

The character's there, but like when you talk about like, oh, I held this position, like I don't know what half these positions are, to be totally candid with you. Like I just don't. And I don't know what it means. And so you have to like tell me what that means. So anyway, it's just an interesting observation, a little bit of a segue, but.

There's something that is probably taught in all of boot camps. It was in Plebe Summer, which is effectively boot camp at the Naval Academy. And we had to memorize word for word the message to Garcia, which I don't remember word for word anymore. That was a long time ago. But the gist of it is, and I believe it was taught at business schools or in business, you know, sort of several decades ago, it was— we were— I think it was the Spanish-American conflict where the United States was supporting rebels in Cuba. The president had a lieutenant come in. His name was Garcia, and he's— or I forget the lieutenant's name, but the president said, you got to get this message to Garcia. And the lieutenant said, sir, yes, sir. Turned around and 3 days later delivered the message. But he didn't say, oh, Mr. President, who's Garcia? Like, how do I get to Cuba? Like, where is this person? You just go and figure it out. And so I think that that's something that's really instilled in folks with some of the military training that, like, You're not going to be spoon-fed the answers and the solutions. You got to go work this problem yourself and figure it out. And so I think that that is something that's really important in business ownership, in ETA, in startups is, you know, you're not going to have a framework, you're not going to have a process, you're not going to have these institutional cultural norms that, you know, would be very familiar to me from the big organizations that I've worked at. And so you have to be comfortable operating without that. Now, how about you? Because you went to a B-school that actually does have an ETA program.

Yes. And I didn't even do it.

Okay. How is that even possible? Like, what sparked your interest in ETA? And like, why did you sort of— do you feel like that was a missed opportunity?

Yes and no. So, INSEAD. So, I went to INSEAD. They have 3 campuses, and I went to the one in Fontainebleau. France, so just like an hour south of Paris. Um, they really only had like one course on ETA per se. They have like a whole entrepreneurial entrepreneurship center, I forget what it's called now, oops. Um, but I, at the time, I just wasn't drawn to it, to be totally honest. I like the quote electives that I chose were much more centered on my like immediate interests as opposed to, oh well, maybe someday I'll be a business owner. Like that just was never fully on my radar as like a goal or a thing that I really wanted to learn, even though I'm sure it would have been beneficial. It just, I don't know, it like it wasn't attractive to me at that point in my career. Um, I think I went to business school— sorry, I just, I was, I was, I went to business school to think, or to try to further my like corporate career. So I was working in a sales leadership role at the time thinking, oh, like I'll, you know, get this really prestigious degree from one of the top, from a top-tier business school and be able to work my way up faster, negotiate more pay, all that kind of stuff. So that was more where my head was when I went into B-School, but obviously, not there anymore.

I think what's interesting and relevant about that is sort of through my career, I always thought and sort of knew that there would be a moment when it would be appropriate for me to step out of sort of the consulting world and into my area of expertise. And I just didn't— I never really knew what that off-ramp was going to be. In consulting, it's many, many times, it's you go work at a client organization. And I never saw that click for me. And so I never knew what that off-ramp was going to be until I found ETA. And so I think the reason I think this is relevant is because, you know, if I in B-school had doubled down on ETA because there was an ETA program, I think I would have missed some of that opportunity to continue to build my expertise in that core area that did enable me to do ETA in my focus area later on. And so I don't think, you know, that's necessarily a bad thing to stay focused on your corporate track, even if ETA is something that you think you might be interested in the future.

Yeah, because I can tell you right now, I hate accounting. I took accounting. I've taken it multiple times throughout my life, actually. I started an accounting class in high school. I still hate accounting. I just don't like it. And it is something that nothing I learned from my business school course in accounting has stuck. Everything I now have to do related to it, I just have to like, you know, refigure it out with the actual experience, not, not the textbook. Yeah, I mean, maybe that's just the way my brain works, but I, I just am like, don't remember that, but I have to solve this problem, so I'm going to figure out how to solve that.

Yeah. So is there anything that you feel like you've taken from your MBA program that was specifically helpful for you on your ETA journey?

Yeah, so I think a lot of what I, what I carried forward, I think, was more about just my own confidence and character. And I do think that business school, like, helped me develop that a bit more. I was one of— I was one of the two youngest, um, in our executive MBA program. So, like, I was on the younger side of our class and my classmates going into this with far less experience. So I feel like I entered business school a little like on edge going like, oh my gosh, all these people are like, you know, have such better jobs and they're doing all these interesting things. And, and I think over the course of time, which by the way was a long time because I started the program in October of 2020. So boom, sorry, October 2019. So then boom, 2020 hit and I ended up taking like 2 and a half years to graduate a 14-month program because of COVID and delays. And it was like, it was not. So I actually, and I'm very grateful for it, but I had this very extended drawn-out MBA experience. And I think it was actually really good for me because over the course of that timeframe, I did kind of find like my place in the program with my classmates. I was one of the only sales experts in my, in my class, so everybody started coming to me for sales like opinions and, you know, wanted to know how to do this whole sales things because nobody talks about it in business school. And so I just sort of like found my, my value throughout those 2 years, and I think that that That was a lot of what I carried forward into business ownership, was to say, oh, I actually do know this stuff pretty well, and I do have a good position, and I can be confident in leading this organization, leading this team, so on and so forth, because I have a better understanding of that now. It's not like I was some, like, meek and mild person going into B-School, right? But I just felt like I came out a stronger person.

I think that's a good thing.

Yeah, and so I'm really grateful for that. And as far as like coursework though, I mean, I don't know, I took some fun classes, did some leadership stuff, you know, like the basics that everybody does in business school, but I don't really think that that—

I don't know. One of the things that is probably hard for us to realize what we took from B-School that helps us in ETA is that running an ETA business in the self-funded side that you and I are on, it's very tactical. Yeah. And, you know, I think everyone gets into these types of business and tries to work their way up to a strategic level. And while you're in the tactics, it probably doesn't feel like an MBA is that helpful. But I am sure that there are things that we're pulling on that we don't realize too.

Yeah.

And as we elevate into that strategic level, which we probably make some of those decisions without even thinking about it, uh, because of the MBA experience too.

Well, I think to your point earlier about like putting together frameworks and building from scratch in many areas of the business, I would say that going to business school helped with that because you learn— I mean, how many frameworks did we learn in business school? Like a gazillion, a ton. Porter's Five Forces and all these like things that I have never really touched, but ultimately what they did instill was You have to put guardrails, you have to put rules and discipline around what you're doing in order to make sense of it and scale a company in any fashion. So, I think that that's helpful.

Yep. All right. So, if we're advising folks thinking about ETA, thinking about an MBA, what would your hot take for them be?

I don't know. I struggle with this question because I don't want to say don't, don't go to business school. I think the answer is you should go to business school, and business ownership is entirely different. Yeah, I don't think you need to go to business school to be a business owner, clearly. Um, but I do think that in many ways it's helpful. Yeah, from a character and like just foundational level?

It is not going to hurt you, that's for sure. Is it going to prepare you for the tactical moments and the day-to-day? I don't think so. But I think if you are able to successfully acquire a business and go through that process, you probably do have a lot of what it takes.

Yeah.

And so in some ways it's sort of self-regulating in that way.

Yeah. One thing I was going to say that is we haven't really talked about yet was the network component of business school. And I, I don't know, maybe this makes me a really shallow person, but you do meet a lot of people. And if you're going to do— if you need equity, if you need investors, there are good avenues to that through business school. It's not that you can't get them elsewhere, right? But two of my closest friends from my program are investors with me. And I mean, it's, it's more of a friendship than it is like an investor relationship. But I am grateful that I met some of those people because now they're obviously financially invested, but they also like, they're cheering for me, they're rooting for me, they send me texts, they like check in, and that's actually very cool.

Yep. I think the network effect is not at all shallow. It's incredibly important. And I think that's a really powerful tool of these these institutions.

Not that you just want to go and be like, all right, where are the rich people with the money who can buy the business that I need an equity check? Yeah, yeah. But I do think that you can forge some really strong relationships and friendships that, yeah, become really important over time.

Yeah.

So, but I also think that, you know, there's a lot of talk out there right now that like you don't need to go to business school, MBAs aren't worth the six figures, like kind of trash-talking the whole concept within the ETA space. I know like some influencers are selling their like, do our quote MBA program for way less. Yeah. And I don't know how, I don't know, I don't know how I feel about that either.

I mean, I sort of was self-taught in ETA, so despite teaching it, you know, I think that that is still a very real path for the right type of person. But, you know, I do teach it because I want to help people who are interested learn more about it and learn from my mistakes. But I think it's something that you can absolutely pursue on your own with some of these lower-cost courses or without them too, like just by the book.

So what is in your ETA course?

I mean, it covers the types of searches that one might do, like self-funded, traditional. It covers due diligence, LOIs, transition, operating the business, a bunch of case studies, and some, you know, we do like a deal jam day where, you know, we give a real deal, older deal with redacted numbers to the class, and they can say whether they would buy it or not. They break off into groups. So I think it's a blend of the academic side plus real hands-on experience. And Shannon, who teaches it, was an investor in many search deals for quite a while and now is sort of what I think you'd call an independent sponsor. And then Adam Markley, who's also there, he and I, I feel like give a lot of real-world examples of being more in the operator's seat to the students. And so I think that it's a really fun blend. End where they both get the academic side as well as what it's really like running a business or being in that. And so it gets reviewed really, really well by the students because of those, those sort of real-world stories.

Has anyone acquired yet?

Has anyone acquired yet?

I know it's relatively new. You guys just—

It is relatively new, but I, I can't remember if we've had anyone acquire yet, but I know that there have been multiple LOIs from the group. And I do believe that there have been acquisitions. And I think that the typical numbers would be like, you know, 20% at the upper end would actually pursue search, and then of that, only half might go through with it. So we, you know, if you use those numbers and draw that out over a 2-year horizon from each cohort, which we would be sort of not even at yet, because they have to graduate as well, you know, we should we should probably have had like, I mean, zero acquisitions by now, probably 2, 1 to 2 by the end of next year. And then the class continues to grow. So that number would go up.

Yeah. Yeah. That'll be fun. When you say—

I know. Yeah. Yeah. We've already had LOIs for sure. And the CU Boulder MBA program prior to the course also has people pursuing ETA as well. And I know that they've had multiple LOIs out. Yeah. So it's a, it's definitely an entrepreneurial program and ETA is new to it. So I think it's a, it's a good ad.

Yeah, that's awesome. Yeah. Well, amazing. Anything else that any other words of wisdom?

Just, just, just if this is what you want to do, get into it and you don't need to wait for a program. Just there's so many resources out there. The HBR books, Searchfunder, the Stanford papers, Stanford white paper. There's just a lot of resources to go in and figure it out and Even on social media. Exactly. That's not gonna— I mean, you are gonna learn good things in a course or an MBA program, but you can do a lot of learning on your own for this too.

Awesome. Well, thanks, Garth.

Great. Let's talk soon.