But don’t kid yourself. What matters exponentially more than that M.B.A. is the set of skills and accomplishments that got you into business school in the first place. What if those same students, instead of spending two years and $174,400 at Harvard Business School, took the same amount of money and invested it in themselves? How would they compare after two years?
If you want a business education, the odds aren’t with you, unfortunately, in business school. Professors are rewarded for publishing journal articles, not for being good teachers. The other students are trying to get ahead of you. The development office is already assessing you for future donations. Administrators care about the metrics that will improve your school’s national ranking. None of these things actually helps you learn about business.
Consider what you could do instead with that $174,400. The first step should be to move to a part of the country that supports your interests. If that’s film, move to Los Angeles. Technology, San Francisco. Oil, Houston. You could live decently in these cities for $3,000 per month. Over the course of two years, that still leaves you $100,000 to invest in yourself.
To decide how to do that, start unpacking the value of an M.B.A. Good business schools deliver two main values: educational content and a network. Acquiring the content is easy: Go online and take the classes using OpenCourseWare or Coursera. You’ll get to watch the same lectures, but for free.
Finding and building a network will be more valuable to you than an M.B.A. You cannot buy a network. Your network is built on relationships with people, founded on trust. You also cannot buy trust—it’s something built over time. Invest in buying coffee, drinks and dinner for people you want to get to know. This may be deeply uncomfortable, and that’s good. It means that building relationships will be easier in the future. Ask people how they got to their current job, what resources they recommend, and what books they think you should read.
Building an army of people who trust you and think you’re talented will be invaluable when you look for jobs.
Consider investing in hard skills such as programming. Dev Bootcamp, a 10-week training course in programming, costs only $12,200. It takes people with no experience and teaches them how to code. In 2012, 88% of its graduates got job offers at an average starting salary of $79,000.
Those outcomes are far better than for students fresh out of M.B.A. programs. According to Payscale.com, the average starting salary for M.B.A. graduates with less than one year of experience was $46,630 in 2012. Dev Bootcamp offers a much better return on investment.
If you aren’t accepted to Harvard, the argument against going to business school becomes even stronger. At least with their Harvard M.B.A.s, less than 5% of the class of 2012 was unemployed three months after graduating. But at the University of Southern California, 23% of 2012 M.B.A. grads were still unemployed three months after graduation. And that’s at USC, a fairly well-known school. The return on investment of going to Harvard or another top-10 business school has remained relatively high, but the return on going to lesser schools is very questionable.
The prospect of forgoing business school in favor of real-world accomplishments is scary for many new college graduates. Youth employment is the lowest since the 1950s, and for the first time more unemployed people have college experience than not. Competition for new jobs is fierce, with 50% of the world’s population under 30. When you are competing against 3.5 billion people, it pays to be different. But getting another university degree doesn’t make you different.
Instead of relying on business school to succeed, deliberately practice the skills necessary to become a master in your chosen field. Build a network that supports your professional aspirations. Work on projects that show you can have an impact in the real world, dealing with practical problems.
Most of all, put yourself in the shoes of your future boss and imagine whom you would rather hire: the candidate who built a profitable business over the course of two years, or the candidate who sat in lectures and reviewed case studies to get a degree?
—Mr. Stephens is the author of “Hacking Your Education,” to be published by Perigee on Tuesday.
A version of this article appeared March 2, 2013, on page C3 in the U.S. edition of The Wall Street Journal, with the headline: A Smart Investor Would Skip the M.B.A..