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The Simple MBA Manifesto: Do We Really Need MBAs?

31 points by pramit 17y ago

alex1 17y ago
It's not possible to teach someone the true entrepreneur spirit. Most MBAs go on to become cookie cutter consultants... This quote by YC's very own PG comes to mind: “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
- sachinag 17y ago
  The Fortune 400 are generally people who found an early niche and exploited it in a way that created barriers to entry. That could be in software, but it could be in dominating natural resources in a country, government-sanctioned monopolies, or excellence in squeezing efficiencies out of economies of scale. 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.
  - alex1 17y ago
    Whether it's software, or natural resources... the path to riches begins with an idea. It begins with creating something that people want. And I don't think that's something that an MBA program teaches you.
- ig1 17y ago
  The Forbes statistics are misleading, firstly they only represent a tiny percentage of businesses and secondly most people in that list made their money before MBAs were widespread. The Forbes 400 in 40 years time is likely to be considerably different. 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.
  - alex1 17y ago
    I personally think there are more CS graduates that start businesses than MBAs. From what I have seen, most MBAs become consultants or executives of existing companies. I could be completely wrong here though as I am speaking based on people I have met and not actual statistics. 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.
    - ig1 17y ago
      About 10% of Oxford's Said Business School graduates start businesses, I'm guessing that's quite a bit higher than most CS degrees. 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.
- falsestprophet 17y ago
  Warren Buffet received a BS in Economics from Nebraska and MS in Economics from Columbia. He does not hold an MBA.
- dtap 17y ago
  Also worthy of note: Man do I regret not funding these guys. -pg About a company (postabon) founded by two Harvard Business School MBAs.
  - smanek 17y ago
    And a lisp-hacking CS dropout! ;-)
mseebach 17y ago
Pretty stupid. 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.
- ryana 17y ago
  Yeah, I would agree that this presentation is overly focused on the finance side of an MBA, since that's what all of the negative studies linked seem to focus on. 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-high-schools-and-colleges.html 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 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.
samratjp 17y ago
If that link went here http://www.ypermutator.com/index.html http://www.ypermutator.com/index.html I probably would've thought they were the same :p
known 17y ago
I think we need MBA if we are not rich & connected.
- pw0ncakes 17y ago
  People over-state here the ease of getting funding as a first-time entrepreneur. If you're an average 22-year-old, it's not happening.
jister 17y ago
For the geeks and alike, it's a matter of choice. 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.
karl11 17y ago
This might be the dumbest thing I've ever seen. Getting an MBA does not mean someone will be boring, unmotivated and unethical. If a predominate number of business leaders and executives have MBAs then certainly a majority of the mistakes in business will be made by people with MBAs. 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.
- pw0ncakes 17y ago
  The top MBA programs nurture extreme arrogance in a way that is really bad for the country. They create a set of "high priests" that often believe themselves superior to the rest of us. This is why, for example, entrepreneurs pay legal fees in VC deals; because the "business people" are just so great that you should pay them for existing. 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.
  - deleted 17y ago
    [deleted]
    - deleted 17y ago
jasonlbaptiste 17y ago
Here's my general thoughts on the subject and the slides: - 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.
elblanco 17y ago
We're very fortunate to have a young and motivated MBA in my company. We're full of engineers, scientists and tech nerds. Our CEO is an experienced engineer with a decades long background in software. But for many of the basic business processes, the grease in the cogs of the machine, our MBA keeps things moving along very nicely. 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.
- pw0ncakes 17y ago
  I don't think anyone would argue that you don't need business people, e.g. the type of people who tend to get MBAs. But are the degrees themselves necessary? I'm not sure. (Although the OP is obviously a one-sided advert for his own content.) 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.
  - elblanco 17y ago
    > But are the degrees themselves necessary? I'm not sure. 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.
- daniel-cussen 17y ago
  That's great. Maybe the question of hiring a tech guy versus hiring a business guy does not fall in favor of one side all the time, but is rather about limiting factors. A tech company that is only business guys may find its first technical hire goes an incredibly long way, just as your counterexample found the hire with an MBA produced great results.
dlevine 17y ago
This is based on a lot of "facts" that probably aren't true.

31 points by pramit 17y ago

alex1 17y ago

It's not possible to teach someone the true entrepreneur spirit. Most MBAs go on to become cookie cutter consultants... This quote by YC's very own PG comes to mind: “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

sachinag 17y ago
The Fortune 400 are generally people who found an early niche and exploited it in a way that created barriers to entry. That could be in software, but it could be in dominating natural resources in a country, government-sanctioned monopolies, or excellence in squeezing efficiencies out of economies of scale. 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.
- alex1 17y ago
  Whether it's software, or natural resources... the path to riches begins with an idea. It begins with creating something that people want. And I don't think that's something that an MBA program teaches you.
ig1 17y ago
The Forbes statistics are misleading, firstly they only represent a tiny percentage of businesses and secondly most people in that list made their money before MBAs were widespread. The Forbes 400 in 40 years time is likely to be considerably different. 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.
- alex1 17y ago
  I personally think there are more CS graduates that start businesses than MBAs. From what I have seen, most MBAs become consultants or executives of existing companies. I could be completely wrong here though as I am speaking based on people I have met and not actual statistics. 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.
  - ig1 17y ago
    About 10% of Oxford's Said Business School graduates start businesses, I'm guessing that's quite a bit higher than most CS degrees. 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.
falsestprophet 17y ago
Warren Buffet received a BS in Economics from Nebraska and MS in Economics from Columbia. He does not hold an MBA.
dtap 17y ago
Also worthy of note: Man do I regret not funding these guys. -pg About a company (postabon) founded by two Harvard Business School MBAs.
- smanek 17y ago
  And a lisp-hacking CS dropout! ;-)

mseebach 17y ago

Pretty stupid. 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.

ryana 17y ago
Yeah, I would agree that this presentation is overly focused on the finance side of an MBA, since that's what all of the negative studies linked seem to focus on. 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-high-schools-and-colleges.html 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 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.

samratjp 17y ago

If that link went here http://www.ypermutator.com/index.html http://www.ypermutator.com/index.html I probably would've thought they were the same :p

known 17y ago

I think we need MBA if we are not rich & connected.

pw0ncakes 17y ago
People over-state here the ease of getting funding as a first-time entrepreneur. If you're an average 22-year-old, it's not happening.

jister 17y ago

For the geeks and alike, it's a matter of choice. 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.

karl11 17y ago

This might be the dumbest thing I've ever seen. Getting an MBA does not mean someone will be boring, unmotivated and unethical. If a predominate number of business leaders and executives have MBAs then certainly a majority of the mistakes in business will be made by people with MBAs. 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.

pw0ncakes 17y ago
The top MBA programs nurture extreme arrogance in a way that is really bad for the country. They create a set of "high priests" that often believe themselves superior to the rest of us. This is why, for example, entrepreneurs pay legal fees in VC deals; because the "business people" are just so great that you should pay them for existing. 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.
- deleted 17y ago
  [deleted]
  - deleted 17y ago

jasonlbaptiste 17y ago

Here's my general thoughts on the subject and the slides: - 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.

elblanco 17y ago

We're very fortunate to have a young and motivated MBA in my company. We're full of engineers, scientists and tech nerds. Our CEO is an experienced engineer with a decades long background in software. But for many of the basic business processes, the grease in the cogs of the machine, our MBA keeps things moving along very nicely. 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.

pw0ncakes 17y ago
I don't think anyone would argue that you don't need business people, e.g. the type of people who tend to get MBAs. But are the degrees themselves necessary? I'm not sure. (Although the OP is obviously a one-sided advert for his own content.) 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.
- elblanco 17y ago
  > But are the degrees themselves necessary? I'm not sure. 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.
daniel-cussen 17y ago
That's great. Maybe the question of hiring a tech guy versus hiring a business guy does not fall in favor of one side all the time, but is rather about limiting factors. A tech company that is only business guys may find its first technical hire goes an incredibly long way, just as your counterexample found the hire with an MBA produced great results.

dlevine 17y ago

This is based on a lot of "facts" that probably aren't true.