Summary: For most people and most roles in most industries, an advanced degree doesn’t make sense. It is not as useful as “mastery through doing” in the real-world. There are only a few exceptions.
So you’re not sure exactly what you want to do next professionally? Maybe you’ve thought about getting an advanced degree, maybe a masters or PhD or JD. It seems like an advanced degree will help you both figure out what’s next and develop useful new skills while you’re at it. And you either have the financial circumstances to afford it or you’re thinking it’s sufficiently worth it to take out loans. Unfortunately, this conventional wisdom on advanced degrees is false, for most people in most fields.
Myth: Figure out what’s next
Figuring out what’s next is really about making choices about how you want to contribute to society. In an earlier post, I highlighted 2 defining choices in particular. The options represent a broad swath of the opportunities to contribute to society. So the question is will an advanced degree help you choose among these options?
In a fast-changing world, understanding the options requires you to “get out of the building” … a lot. So sitting in a classroom developing generally valuable skills for a year or more or theorizing with your classmates about what matters is often less useful than 4 weeks of focused coffee meetings with professionals in the real world.
Startups and the business world in general are embracing a customer-centered approach to business strategy, about putting front and center some group of people’s “problem to be solved” rather than the company’s own ideas and widgets. You can do the same with your career strategy, looking outward at the types of problems to be solved (industries) and the ways you can contribute to solving them (functional roles) and then making a choice amongst the options.
We wanted them to focus outward on their most important consumers and very best competitors, rather than inward on their own products and innovations. – Arthur Lafley, former CEO of P&G and Roger Martin, Playing to Win: How Strategy Really Works
Myth: Develop useful new skills
The choices you make about where you want to contribute strongly influence what core capabilities and skills you need in order to be successful. Without making those choices, it’s really hard to know what skills are relevant for creating value or addressing a need. At best, in school, you can pick up some transferrable skills but in a very inefficient way. At worst, it is a waste of time.
The Hesitation Generation [is] an expanding class of talented individuals inadvertently training themselves to be indecisive. They make decisions mainly to increase their menu of choices—and run the risk of never … creating real value. – Daniel Gulati, Author of Passion and Purpose
And if you’ve actually made some hard choices about role and industries, there are only a small slice that require an advanced degree. In most roles and in most industries, an equal number of years of real world experience and outcomes is valued way more than years in school.
This is not to say that you will not need to new skills in your next job or even in landing your job. But today with the resources available online and the people accessible offline, rapid skill acquisition and demonstrated capabilities are possible in many areas in weeks, once you have a goal in mind.
In another essay, I mentioned Dev Bootcamp which can help almost anyone become a “world class beginner” web developer in 10 weeks, with a >90% placement rate in software companies. Data Insight Fellows helps PhD candidates and postdocs become data scientists in 6 weeks at software companies. And one recent grad curated his own curriculum of online courses to learn how to design, build, promote, and measure. While these are just 3 examples, they are reflective of what’s possible in a short time, once you’ve made choices and established a clear goal.
Myth: Improves future prospects with credentials
Even if an advanced degree doesn’t help you figure out what’s next or develop new skills, maybe it’s worth doing simply for the signaling value of the credential. While that may have been the case at 20 or even 10 years ago, with the growing supply of credentials — masters, PhDs, JDs, and even MBAs — their signaling value is diminishing over time. What’s valued more is demonstrated ability to achieve business-relevant outcomes.
Many of my classmates… complain that their MBA was only valuable during their first job out of school. Once they went looking for another job, no one really cared what school they went to or how well they performed at the school. It was as if their [MBA] degrees were rendered meaningless in all future jobs. – Jay Bhatti, Co-Founder, Spock.com & Wharton ’02
Most importantly, the cost of an advanced degree leaves you with less financial flexibility, the kind of flexibility that allows you to take risks and actions that may improve your prospects the most, e.g. moving to a new city or living closer to the office to shorten your commute or taking a little time off to recharge.
In most areas of contribution, i.e. most industries and functional role combinations, mastery and recognition of mastery is built primarily through experiential knowledge and demonstrated outcomes, rather than classes or credentials. However, there are a few exceptions — a few types of contributions that require unique formal knowledge as a necessary prerequisite that even today is available only through formal training and licensure. Some examples are medicine, law, parts of finance, and cutting-edge research.
With the exception of medicine, there are far more graduates each year than there are opportunities to contribute in each area of training. Moreover, many are unhappy when they enter these fields with incomplete knowledge. For example, much has been written about the miserable corporate lawyer or the unhappy PhD student and underpaid postdoc.
Many of those who embark on a PhD are the smartest in their class and will have been the best at everything they have done… [They] would be better off doing something else. – Economist, The disposable academic: Why doing a PhD is often a waste of time.
To sum up, an advanced degree only makes sense if you’re fully committed to one of these niche areas of contribution after a lot of due diligence and reflection, and not as a stepping stone to something else that is yet to be determined.
 As in other essays, I’m focusing on areas of contribution that have meaningful existing demand and willingness to pay, as reflections of societal need. There are unique circumstances in which you may perceive a societal need that maybe isn’t widely recognized, e.g. a continued appreciation for 19th century philosophy. But to commit your professional future to one of these, you either need to be independently wealthy or have unique access to wealthy benefactors with shared interests or be the absolute best in the world like the one high-school athlete who’s definitely going pro.
 If you’re familiar with the startup world, you might see the parallels with “the old way” of building startups–a waterfall-planned process for building supposedly important features (i.e. skills and knowledge), most of which become irrelevant the day they make contact with the outside world. Like the old way of building startups, conventional career planning, which comes out of the fields of psychology and counseling, seems to encourage an overly inward focus as well.
 It’s probably better for academia in long-run to be more transparent and only select for applicants whose long-term goals are aligned, despite the loss of revenue and/or short-term low-cost labor.