Is it OK to get an MBA from your alma mater?

Note: Originally published on LinkedIn in 2015

When I decided to start down the path of pursuing an MBA, there were many considerations, one of the most significant being where to go. For most people, the prospective student’s alma mater often falls into the consideration set – assuming the university offers a program. But does it make sense to double-down with one school?

This is one of the questions I considered. To get a sense of what the professional community thought of this, I sought out opinions from LinkedIn connections, former professors, and colleagues among others. Is it bad to get two degrees from one school?

Most of the feedback I received was that this was not ideal. Why not?

  • Doubling-down could be seen as lazy
  • Makes it seem like you’re unwilling to get out of your comfort zone
  • Minimizes an opportunity to grow your network

Are there any exceptions to this not-so-hard-and-fast rule? Of course: If you went to a super-awesome university that has a strong MBA program (think Ivy League, Public Ivy, etc), you’re probably in the clear.

For most people, it makes sense to branch out. Earning an advanced degree from a second institution builds your network, opens up additional opportunities, shows you’re willing and able to get out of your comfort zone, and affords you a different experience and perspective. And, of course, with so many universities offering their degree programs online, you’re not limited to enrolling in an MBA program in your backyard.

Basic Finance

My finance professor repeatedly made the point that when evaluating an investment option, you must compare it to “something of similar risk.” He mentioned this in almost every class. 

Basic return formula: profit / investment. Two rules: Invest in positive NPV projects; Invest in projects offering return in excess of opportunity cost of capital. 

Example: Invest $1000 now, receive certain $1300 after 1 year
Assume investors can obtain 15% safe return
Decision: invest because 30% project return exceeds 15% opportunity cost; invest because present value of $1300 next year exceeds $1000 now. 
Present value = 1300/1.15 = 1130
Net present value = 1130-1000=+130

Perpetuity = constant payment forever; payment/rate
Example: you want to endow a chair at your old university. The aim is to provide $100k a year forever. The interest rate is 10%. 
Present value = $100,000 / .10 = $1,000,000. Therefore, a donation of $1MM provides $100K/year forever. 

Probably the most interesting and helpful thing to learn was how to use a financial calculator to figure out future and present values. I use a TI BA II Plus. Here’s an example: Say you’re planning to buy a new appliance in one year that you estimate will cost $3000, you’d want to know how much you need to set aside today to have $3K in one year. The interest rate is 8%. On my financial calculator, I enter the following sequence: 3000 FV > 8 I/Y > 1 N > 0 PMT > CPT PV. This results in the present value of $2777.78. The number is negative on the calculator because that’s the amount you have to invest today. 

Another calculator example, this one to figure out a monthly payment. You want to buy a new car for $35,000. The interest rate is 4% per year (which would be .33% per month). You plan to pay the car off in 5 years (60 months). What is your monthly payment? On calculator: 35000 PV > .33 I/Y > 60 N > CPT PMT. Payment is $689.82 per month. 

A house example. If you are buying a house for $103,000 on a 30 year note at 5% interest: 103000 PV > 5 I/Y > 30 N > CPT PMT. Gives a payment of $500 month towards the principle. 

Sports Marketing

I’m currently taking a sports marketing class, so this post will be updated occasionally throughout the next several weeks. Some of the information below is really more of general marketing, but the content below has been mentioned and noted for this class and topic specifically.

Update – 11/14/13

Greg Hill, former NFL running back

Greg Hill, former NFL running back

Today’s class featured two guest speakers: Steve Riddle of Nike and Greg Hill, former NFL running back. Steve worked as an NBA agent, and his primary message was that relationships, trust, and integrity are the most important things for an agent to have. “Relationships are paramount.” He said that there isn’t much to getting certified as an agent. You have to fill out an “extensive application and background check” and you have to already have a player to represent.

Greg Hill was very interesting. Great speaker. He said he’d only lost 5 games in his whole football career before entering the NFL. He’d been playing football since he was 8 years old. He said he has “24 hour headaches” and every part of his body hurts. He has to sleep sitting up. He’s had 17 concussions. He stops at stop signs and waits for them to turn green. He has temporarily forgotten his son’s name, which is the same as his own. He doesn’t let his son play football.

Hill said there is hazing in the NFL and had several stories about that, including having to buy the offensive line’s meals as a rookie on a team trip to Japan. If he had to choose between Richie Incognito and Johnathan Martin as a teammate, he chooses Incognito. “You want the guy with one foot in jail already. The guy half-stabbing someone. Someone who can go down a dark alley with you,” he said somewhat jokingly.

Reading highlights:

Phil Knight of Nike

Phil Knight of Nike

  • “A brand is something that has a clear-cut identity among consumers, which a company creates by sending out a clear, consistent message over a period of years until it achieves a critical mass of marketing. The thing is, once you hit the critical mass, you can’t push it much further, and before long, the brand is on the way out.” – 1992 Harvard Business Review interview with Nike founder, Phil Knight.
  • Segment for success. Nike had the running shoe market, but sales were slumping, so they created the Air Jordan to get the basketball market. Then created two other styles for players who had a different style of play than MJ.
  • Sports marketers have to address the needs of sports participants, encourage their passion
  • On sponsorships: “Part of the problem is that some clients and agencies think that the sport they align with will do the marketing job by itself. In reality, to be effective at sports marketing requires the same attention to detail as any other discipline.”
  • For the Visa Olympic sponsorship: To get the most out of the sponsorship, they have to spend between $300-$400 on marketing for every dollar spent on the sponsorship. NOT including the media buy! However, the “golden rule” for sponsorship support is $2 of advertising for every $1 of sponsorship.

Vision and Mission:

A vision should be a long-term road map for the company. It should answer/address four key questions:

  • Where does the organization to plan to go from here?
  • What business do we want to be in?
  • What customer need do we want to satisfy?
  • What capabilities are required for the future?

A mission statement should address a group of slightly different questions:

  • What business are we in now?
  • Who are our current customers?
  • What is the scope of our market?
  • How are we currently meeting the needs of our customers?

Example Mission Statement from New Balance:

To be the world’s leading manufacturer of high performance athletic and active lifestyle products while operating in a socially responsible manner.

Digital Marketing

I’m going to start with Digital Marketing because I just finished this class, and it’s fresh on my mind. Of course, digital marketing is my area of expertise, so it was mostly refreshers, but below are some notes nonetheless.

Secret's Draft and Win Strategy

Draft & win strategy – This strategy is basically to copy a competitor that is doing well. An example is Secret deodorant. When Dove started making a strong push, Secret (the market leader with the most shelf space in store) designed a product line that looked very similar to Dove’s line. The point is to confuse the customer into thinking they are buying the competitor’s product. The comparison image on the right shows the similarities in colors, the word “fresh”, and the cucumber and leaf design.

Branding & position – Purpose exists from the beginning. Position is for gaining market share, can be more campaign-oriented. The “why” doesn’t change over the years, but the “what” will. Who the company is doesn’t change as often as the tactics. There is a Ted Talk on this topic that our guest speaker referenced.

Digital strategy phases:

  • Discovery – What is the business imperative? Define and detail customer experience. Market analysis.
  • Visioning – Where do we want to go in the future? Create a roadmap.
  • Planning – How to translate the roadmap. Make sure each tactic or project fits with overall strategy.

Ad agenecy CEO on employees:

  • Customers, prospects, employees – all are equal
  • There is a real cost to having disengaged employees
  • It is “disastrous” to lose an “A” employee
  • Estimated cost of losing a good employee: 3x employee’s salary

Random tidbits:

  • In 2012, roughly 35% of Secret’s marketing budget was digital.
  • It takes roughly 7 marketing “touches” to make someone remember your company.
  • Test creative – change one element in each ad version. Have a control version.
  • Before analyzing data, ask yourself, “What do we want to know? What are we going to do with the data? How are we going to improve our marketing strategy with the data?”
  • When there is a land grab to get market share, spend up to 80% of revenue on marketing.
  • Telligent is a Microsoft social networking system that allows white labeling
  • Tagboard collects social/tagged photos into one place
  • Linking to or being linked to from .edu/education sites, builds SEO

Introduction

TCU MBA Offer Letter

This is how it all started – my TCU offer packet

This blog is intended to be a way for me to keep track of 2.5 years of MBA stuff. I wanted a way to document important and meaningful information. Things I want to be able to come back to later.

I started the the PMBA program at TCU in August 2011. I will complete the program in December 2013. This is the first semester I’ve had time to create a blog and start adding content. I’m taking only one class right now, which makes life more manageable. A typical semester is a standard 40+ hour work week and then two evening classes per week. Classes are generally on Mondays and Wednesdays or Tuesdays and Thursdays. Classes start at 6:30 pm and end just after 9 pm during Fall and Spring. Summer classes are longer, ending as late as 10 pm. But we do have the best professors in the world, according to The Economist.

The PMBA program is done as a cohort. Students more or less move with the same group of 50-55 people that they started the program with. Of course, not everyone finishes the program, but most do. Upon entering the first semester, students are grouped into teams of 5. That team stays together for at least the first semester. Many groups stick together, though some do not. Teams are assembled based on diversity of skill sets so that students can lean on each others’ strengths and each person can contribute to the team.

I plan to have notes from a variety of classes, including strategy, finance, business law, marketing, and international trips.

My work experience is journalism and marketing, though I haven’t participated in journalism in years. Marketing is my career now.