How many schools should I apply to – and which ones?

One of the most frequent questions we get from our clients and those who ask us for their odds of MBA admission is “How many schools should I apply to?” School selection – both the quantity and tier – is an incredibly important part of one’s application strategy and one that all applicants should invest a good amount of time considering early in the process.

Categories of Schools

We recommend that you think of school selection like building a portfolio of personal investments. By investing your time in a number of different schools across different categories, you can decrease the esoteric risk of being denied at any individual school, pit financial aid offers against one another, and ultimately make a more informed final selection. For this reason, we recommend applying to no fewer than six schools, two from each of the following categories:

Stretch

Your stretch schools are your dream schools. These are the kinds of schools that you would drop everything and pay double price to go to if you could simply because their prestige, network, resources, and education would have an absolutely transformative effect on your career trajectory. The trouble is that these schools are normally difficult to get to for anybody and your admissions profile puts you in a rather uncompetitive camp. You should still apply to these schools! The admissions committee will still read your application. They are people too, and if you have a personal narrative that moves them or stops them cold, they may fight to make space in the class for you depending on the depth of the rest of the applicant pool.

Adding these schools to your portfolio is like buying the stock of risky tech companies. If things go well, the payoff is unbelievable. Plus, if you didn’t apply but later found out that you would have been admitted, wouldn’t you kick yourself about it? Personally, I would always rather the school say no to me, than for me to say no to myself. You can apply to these schools as a Hail Mary on your own at the end of the cycle, or if you want better odds you can engage with a consultant who has specific expertise at that school (much like how we do for HBS).

Reach

These are schools that you would be delighted to attend and where your profile is a little more competitive (e.g. two or more of the following is true: your undergraduate institution is better represented in the student body, your GPA is at or above average, your GMAT is at or above average, or your current employer is a major recruiter at the school). These are the schools that you are realistically targeting and which you will spend the majority of your time (either on your own or with a consultant) working on.

Grab

A grab school is not a safety school. It is a school where you would want to do, where your profile is competitive in most or all of the categories previously mentioned, but where your odds are still less than 50%. They are there for you to grab, if you can. Adding Grab schools to your portfolio does two things. First, if you’re sure that now is the right time to go to business school, helps give you the certainty that you will get in somewhere. Second, because you are a more desirable candidate to Grab schools, they will likely be more generous to you in financial aid. Suddenly if the cost of tuition for a grab school is 50-75% less than a Reach school, you’ll be a lot more excited about them. Also, getting money from one Grab school can help you in negotiating financial aid offers from other schools, but more on that at another time.

Run the analysis

Let’s run the numbers. If we believe that a person’s profile gives them a conservative baseline chance of admissions of 15% for Stretch schools, 25% for Reach Schools, and 40% for Grab schools (and for the sake of argument that there is negligible covariance between the applications), then the odds of being admitted to at least one school are the following:

Portfolio of 4 Schools: 1 Stretch, 2 Reach, 1 Grab – 70%

Portfolio of 6 Schools: 2 Stretch, 2 Reach, 2 Grab – 84%

Portfolio of 8 Schools: 2 Stretch, 3 Reach, 3 Grab – 93%

Conclusion

Which schools fit into each of these categories will depend on the unique admissions profile of the individual student. If you want our help in sorting, feel free to get your odds here.

The “Optionality” of Business School: How deferred admissions MBA programs can make you rich

Getting accepted into a deferred MBA admissions program frees you up to take career risks early on, knowing that you can always fall back on recruiting for a cushy management consulting or investment banking job in business school. This is a huge, liberating blessing. Taking career risks early allows for truly superior financial returns in life. Consider an analogy to a financial portfolio. Salaried labor is like a bond – it pays consistent, steady, reliable returns. At the start of your career, you have 30+ working years ahead of you: a veritable basket of bonds. In contrast, starting a business or working at an early stage start-up comes with potentially volatile and uncertain salaries, but the potential for enormous upside through equity. This profile is much more like a stock.

Because you have many working years ahead of you, working in a steady job is equivalent to investing your portfolio 100% in bonds: low-risk, but low-reward. Doing this doesn’t make sense when it comes to personal investments; most financial advisers recommend young people invest 10% in bonds and 90% in stocks. Therefore it is important that you diversity your “portfolio” by taking a lot of career risks early on. Later in life, when you only have a few years of work left before retirement, it’s advisable to shift your personal investments to 90% bonds and 10% stocks. Accordingly, you won’t want to be working at a start-up and instead should have a steady, salaried job.

A deferred admission to business school essentially allows you to take better advantage of this high-risk early strategy by limiting your downside. If you follow this advice and take a bunch of career risks right out of college and your start-up becomes a unicorn, netting you millions of dollars – awesome! Take the money, decline your business school offer and never look back. However, if your start-up flops you can just come to business school and either start again on another start-up with the validation of a brand-name school, or switch to a traditional “bond-like” job at McKinsey.

Many two-year MBA programs allow students to take a number of years off between their first year and second year (at HBS, it is 5), so many students come into school, form a start-up, and take time off to run it, safe in the knowledge that if it flops, they can always come back and get an awesome job.

When you think about it, the payout profile of business school is similar to that of a call option – it lets you sell your labor at a predictable price (~$140,000 in salary for most consulting firms). How do you increase the price of an option? Through increased volatility in the marker. And how do you get that? By taking a ton of career risks. Once you have your admissions offer in hand, taking these risks is just a prudent thing to do to increase the value of your property.

In that way an early admission to business school equips you with the tools necessary to greatly increase your earnings and potentially make you rich.