The Simple MBA Manifesto: Do We Really Need MBAs?
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There are certainly many different reasons for getting an MBA. Some people go just because you can demand a much high salary when you graduate. However, many others go to develop their analytical skills, expand their knowledge base, and meet highly capable individuals who have similar interests. Furthermore, most people getting MBAs have been in the workforce for 5-7 years. They are not trying to start the next Apple. They have found a niche in business they like and wish to accelerate their development.
If you have already started a successful business, then why would you get an MBA? You wouldn't, but if you don't have a large network of capable friends, what better way to meet one than by going back to school?
I love participating in this HN community, but think the amount of MBA bashing that goes on here is just ignorant. People aren't successful because they have an MBA, but getting an MBA certainly doesn't make them less likely to succeed. It's silly to generalize then marginalize a group of people because they do not take the same approach as the hackers here to making money and succeeding. Not everybody was meant to be a hacker, and while the members of this community should probably not be looking at getting MBAs, its stupid to have a disdain towards people who do.
This much is supported by the evidence, which is why it is so remarkable that MBAs typically attract orders of magnitude higher salaries than the average staffer, and having an MBA seems to be considered an advantage when applying for senior management positions in large businesses.
> but getting an MBA certainly doesn't make them less likely to succeed.
This much is not supported by any evidence I've seen so far in this discussion, so those of us who have only ever encountered MBAs who are walking stereotypes right out of this presentation find it a bit hard to believe.
Do you honestly think that MBA graduates attract high salaries for no reason? We live in a free market economy. Surely this must indicate to you that they generally provide more value than non-MBA graduates.
Do you realize that most MBA graduates have 5-7 years work experience before they even go to school? Then, after enhancing their own experiences with a framework provided by a business school and with the experiences of the other students, don't you think they are more developed for senior positions than someone without that extra educaton? It's so obvious to me why they would have an advantage to applying for senior management positions in large businesses. They are more qualified, in general!
For some reason, I feel like all the people here think that the only smart people in business are hackers that started a tech startup in their garage. This is not the only way to gain valuable experience and practical skills in business.
Maybe because you don't never observed it's rather easy to teach business to a scientist or an engineer, but it's nearly impossible to teach engineering or science to an MBA.
We need people who are skilled in business, but what we don't need is an echo chamber that encourages many of them to become arrogant, unethical, short-sighted fucks.
Saying that MBA programs nurture extreme arrogance, bad ethics and short sightedness is like saying that CS programs nurture introversion, poor social skills and an inability to communicate effectively.
There are tens of thousands of highly successful MBAs running or working in small businesses you've never heard of, not generating any noise, and contributing a great deal to society. To lump them all together as a bunch of frat boy lunatics is ignorant.
Any hacker that has a terrible experience with an MBA is going to write a blog post about how awful it was and how MBAs need to be cut out of the process. The truth is, there are plenty that provide a lot of value and insight, but no one writes about them because no one wants to read it.
I actually would say this, not about CS programs per se, but about academia.
There are tens of thousands of highly successful MBAs running or working in small businesses you've never heard of, not generating any noise, and contributing a great deal to society. To lump them all together as a bunch of frat boy lunatics is ignorant.
The same goes about PhDs and ex-academics. A lot of them are socially normal, but people tend to notice the aggregate tendencies and turn them into stereotypes. As for MBAs, I don't think the stereotype is remotely true of each individual, but it is true of a certain culture that exists in MBA programs. To be fair, I doubt it has much to do with programs themselves; the students track it in from investment banks and corporate boardrooms. So, even though the programs are designed with great intentions, a certain set of people get in and feed off each other. This is much like how prisons are supposed to reform criminals, but some of them just use the exposure to others to learn how to become better at crime.
1. There are more good Java hackers than good Lisp hackers, although the proportion of good programmers is much higher in the Lisp camp.
2. At this point, I'd put Java ahead of Perl for most purposes.
3. There are a lot of smart people who program but, for whatever reason, never become good programmers. Examples would be traders who use VB because it interfaces well with spreadsheets and scientists using Fortran. This shouldn't be terribly surprising; everyone speaks and writes but not all smart people are articulate and good writers.
In just a matter of a few months he reduced costs by 40% without reducing the capability of the company in any way by cutting back on unnecessary expenses, putting in place standards for expenditures and R&D, finding inefficiencies in our contracts and partnerships and other such things.
Could we, a bunch of engineers done all that? In theory yes, but we hadn't managed to do that in a couple years since we were so focused on tech and not spending our time learning some of the more arcane businessy things -- like renegotiating technology contracts to be more favorable. We're not yet profitable and he probably single handedly managed to extend our life out another year on the same funding, giving us a much better chance of reaching the magical 5 year mark.
> In theory yes, but we hadn't managed to do that in a couple years since we were so focused on tech and not spending our time learning some of the more arcane businessy things
Those aren't arcane things. They're SOP,
Let's look at it another way. Would you excuse a software house that didn't use source control because they wanted to spend all their time on programming?
A tech biz is still a biz, at least if it wants to be successful.
You're missing the point. Let me quote something that you wrote previously.
>> In theory yes, but we hadn't managed to do that in a couple years since we were so focused on tech and not spending our time learning some of the more arcane businessy things
A successful F1 team isn't just a bunch of techs. Someone has to drive. Someone has to make sure that the suppliers are paid, and so on.
As I wrote previously, a tech biz is still a biz. You can't all do tech.
I'm glad that you found someone to take care of this stuff for you, but if you'd done so earlier, or done some biz things earlier, you'd have more runway.
By overconcentrating on tech, you put the tech at risk....
And no, it's not that complicated. 90% is just thinking that it's worth doing. It's not at all comparable to the difference between an ordinary driver and an F1 driver.
I would say this is certainly a fair characterization of where we were after year 1. We missed quite a number of very important foundational opportunities because we made the mistake of being hyper focused on the tech and not pragmatic business decisions.
By year 2 we had many of the same problems until we had a management shakeup halfway through the year and were finally able to approach the business side of things.
We're in year 3 right now, and in the process of turning the corner. But wow, we discuss almost daily where we could have been if we had adopted the right attitude from the start. Certainly profitable, likely 2-3x the size.
I don't think MBA programs encourage immorality, and I'm surprised at the 56% figure he quotes, but they nurture extreme arrogance of a sort that leads to all kinds of unethical behaviors.
Good point, probably no more than a CS degree is necessary for somebody to be a good developer. If somebody likes businessy kinds of things as their hobby, in the way a developer codes for fun, than they could probably do a good job just the same.
I think the MBA has the same effect as a CS degree, it formalizes and focuses the person on what they should know as a foundation to what they practically need to learn.
“If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you’ll learn something important about business school. After Warren Buffett, you don’t hit another MBA till number 22, Phil Knight, the CEO of Nike. There are only 5 MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you’d do better to learn how to hack than get an MBA.” - Paul Graham
Thirdly Gates, Jobs, Ellison, Dell also all dropped out of school, it doesn't mean dropping out of school makes you more likely to succeed at business. It's a classic case of selection bias. You need to look at the whole population otherwise there might be a million technology founder businesses that fail for everyone that might succeed.
What you need to do in order to have a fair test is take the graduating classes at an MBA course versus say a CS course, look at the number of graduates who start businesses and then analyse how many of them succeed from each each group.
I think the point that's trying to be made here is that you don't need an MBA to make it in business, which I think is a very valid point. You just need the entrepreneurial spirit and drive, along with the technical expertise (if you're in software), not the MBA.
LBS run an entrepreneurship summer school which concentrates on the entrepreneurship parts of their MBA program. Over the last 9 years they've had 350 graduates, and produced 90 businesses. Of those 90, 80 are still operational, which is a fairly good success rate.
Although I completely agree with you that you don't need an MBA to be successful in business, much like you don't need a CS degree to be a good developer. But if you're weak in those areas that the degree covers then obviously there will be value in studying those areas.
Man do I regret not funding these guys.
-pg
About a company (postabon) founded by two Harvard Business School MBAs.
It's more proscriptive, I feel, to try to find people around you who you think are successful, and ask them, not the outliers in a magazine.
Short version: MBAs aren't the end-all be-all solution for any kind of business. Specifically, they probably aren't a good solution for technology start-ups. So far so good.
But the presentation also suggests that MBAs are, as a field, responsible for the Enron-crash, the sub-prime crash, and boring companies and unmotivated employees. And that everything an MBA does (there must be some positive things, after all) can be learned from a handful of business bestselling paperbacks.
Being an extraordinary business leader can't be taught. Not in an MBA course, not by reading books.
Other things I found disingenuous:
3. MBAs Cheat. 56% of all MBA students cheat at Exams. Source: study by the Academy of Management Learning and Education of 5,300 students in the U.S. and Canada
Business students are only rivaled in their cheating by engineers. Should we make a presentation about not needing them either?
"The college level cheaters act more often in science and math classes. Interestingly, the college students most likely to cheat are engineering and business majors." http://www.antonnews.com/columns/mcmillan/6872-cheating-in-h...
"Their investigation revealed that 82 percent of engineering students reported engaging in some form of cheating. Only business students, at 91 percent, reported cheating more." http://www.prism-magazine.org/mar09/feature_01.cfm
5. Can you name any successful, path-breaking, innovative company started by an MBA?
While I'm not going to spend too much time looking up a whole host of examples, but how about the company I worked with last summer? Flat World Knowledge is an open-source college text book company, co-founded by an MBA.
6. MBA Salaries Are Insane
This slide doesn't even mention MBAs. It refers to CEO salaries from 1991 when an MBA wasn't even a common degree.
Sure, there are plenty of douchebag MBAs who would add nothing to a company and are just out for themselves. But you will find these kinds of people from any walk of life and prejudicing yourself towards any group of people is going to do you more harm than good.
- Dropping out of school won't make you more successful. It just ensures you won't definitively fail. You can't work 16 hours a day, build a company, and be in school full time. You'll end up half-assing two things, instead of doing one really really well. If you do decide to stay in school, stay curious and build "projects" for fun.
- MBAs can start innovative companies, but it's an auxiliary skill. It's a nice to have skill after having other things like: a sense of technical expertise, product expertise, having built a startup before, working at a startup before, etc.
- MBAs can make good day to day operations managers when the company is growing. That's often the problem as to why a lot of startups lose their way when they grow. So make sure the MBA here is also an auxiliary skill and the skills listed above exist as well.
- I enjoyed the slides until it turned into a commercial at the end.
- Go learn how to build a great product, get some engineering skills, and fail a lot. That's been my real education over the past 4 years. It's paid off way more than my over priced useless degree in Computer Information Systems ie- Computer Science via the business school. Spend tons of time here on HN. It has been one the greatest sources of networking and knowledge for me over the past 2 years.
- If you go to a top tier MBA program like HBS, MIT, Stanford, etc. you do have the opportunity to network / meet some smart connected people. Honest truth, that's kind of bullshit. As a college "stopout", MIT Enterprise Forum added me as their CTO in Florida. I now have access to their entire alumni network without the degree. If you're in the Valley go volunteer and help out with the Stanford/MIT VLab program. People make it seem like you can't network with people from MIT or Harvard outside of the MBA program. Guess what? That's horseshit. You can meet every single one of those people. They're actually dying to meet smart people like us.
And, for those who are not technical, yes they surely need it if they want to go up the ladder. This means aiming for a managerial level position -- better pay.