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Finally, he says something I can agree with. MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.

by _jal 6y ago

jrpt 6y ago
I mean, Doordash just IPOed this week, and that come out of Stanford GSB. If you want something with an arguably more innovative product, Stitch Fix also came out of Stanford GSB, and it was a pretty unique business model at the time. Some MBAs are pretty good, although I suspect it’s mostly selection bias (the people would’ve been great even without attending b school).
- deleted 6y ago
  [deleted]
- bob33212 6y ago
  Just getting accepted to Harvard is the accomplishment. When have you ever heard someone say something along the lines of "Well this guy only got a 3.2 GPA at Harvard, I'm more impressed by the guy with a 3.9 from Michigan"
- icedistilled 6y ago
  Door dash is wildly unprofitable.
johntb86 6y ago
Even for stable firms they can be death. "Lights Out: Pride, Delusion, and the Fall of General Electric" makes the case that the MBA mindset (exemplified by Jeff Immelt) of focusing on finances and acquisitions while ignoring the actual products has been leading to the downfall of GE.
- cogman10 6y ago
  MBAs seem to just be bad for tech companies. It's like they want to turn every business into an automotive business completely missing the point that car design is practically unchanged in the last 50 years. You can see just how terrible these companies are at adopting change by their pathetic attempts at getting EVs up and running. Tech requires constant change and innovation to be successful. Companies who primarily deal in tech NEED R&D to survive. They can't just establish dominance and stick around for 100 years. (Generally. There are obvious exceptions). This is why you see these major old tech companies struggling. IBM, HP, Cray. They all got taken over by MBAs who tried to "toyota" the companies into further success.
  - jnwatson 6y ago
    I've definitely worked for medium-sized tech companies that could use an MBA or 3. Once there are more than 3 tiers of employees, managers can't hero their way to effectiveness. Organizational management is important, hard, and has decades of study behind it. Finance is also important. My former employer has never made a profit in the seven years since IPO, and clever financing means that it is still a going concern.
  - ramraj07 6y ago
    Just to play devil's advocate, Tim Cook is an MBA.
- spamizbad 6y ago
  GE was burning the furniture to heat the house - what should be seen as a red flag - but nobody cared because there was just so much furniture it didn't seem like a problem until there was nowhere left to sit.
  - fuzzfactor 6y ago
    >GE was burning the furniture to heat the house This is what happens when highly credentialed operators are brought in as decision makers, but they were not there from the beginning and have no idea how irreplaceable the specific furniture and its arrangement over the years actually is. They didn't go through the building process. They might not even be builders at all, even if given more than enough resources. And it doesn't matter to them fundamentally since their personal best oportunities will be with a different future organization anyway. Even if they stay, the organization will be different before they are done. More like the average company you could read about in business school, and more understandable for students, with much less focus on the unique things that brought that particular company as far as it had beforehand. If a company has reached a lofty place and the decision making changes that significantly for some reason, it is most likely that there will be some sinking to a significantly less lofty position. And in some unfamiliar direction downward. The best possible person to run a particular company will be using company-specific approaches and drawing on talents that very few MBAs possess. For those MBAs who do have such rare natural talent, it has been a characteristic since before university anyway so the degree is definitely not necessary.
- ta988 6y ago
  Look at firms like Danaher in the biotech, same thing. Buy sell buy sell. 0 value added and lot of wreck in the path.
x86_64Ubuntu 6y ago
Even outside of startups, they can be detrimental to brands. After seeing what's happened to TravisCI, Sencha and QlikTech, I can only assume that the private equity firms that bought them are rife with MBAs. And the story is the same, buy the company, cut engineering, murder new development, choke support and off-short what survives and then eat off of the trapped subscribers. They don't create value, they don't make a better product, all they do is stagnant the company while eating off of the lowered OpEx.
neltnerb 6y ago
I'm definitely never going to work for a startup with an MBA in charge ever ever again. They enjoy negotiating and often assume that their employees do too, so it's like pulling teeth to get the smallest issues dealt with, much less big ones like getting reasonable pay without having to raise a stink first. It was stupid and counterproductive.
- layoric 6y ago
  “They enjoy negotiating”, that explains a lot of my experience as well!
greatjack613 6y ago
Forsure, intel comes to mind when you say this. Focus on profits, milk 14nm, screw R&D for 10nm and appoint the CFO to CEO. Perfect combination for the current market where intel is dying and AMD ate their lunch. Contrast that to AMD which has an engineer with a PHD in engineering from MIT as there CEO. Look whos eating whos lunch now.

Finally, he says something I can agree with. MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.

by _jal 6y ago

Finally, he says something I can agree with. MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.

jrpt 6y ago

I mean, Doordash just IPOed this week, and that come out of Stanford GSB. If you want something with an arguably more innovative product, Stitch Fix also came out of Stanford GSB, and it was a pretty unique business model at the time. Some MBAs are pretty good, although I suspect it’s mostly selection bias (the people would’ve been great even without attending b school).

deleted 6y ago
[deleted]
bob33212 6y ago
Just getting accepted to Harvard is the accomplishment. When have you ever heard someone say something along the lines of "Well this guy only got a 3.2 GPA at Harvard, I'm more impressed by the guy with a 3.9 from Michigan"
icedistilled 6y ago
Door dash is wildly unprofitable.

johntb86 6y ago

Even for stable firms they can be death. "Lights Out: Pride, Delusion, and the Fall of General Electric" makes the case that the MBA mindset (exemplified by Jeff Immelt) of focusing on finances and acquisitions while ignoring the actual products has been leading to the downfall of GE.

cogman10 6y ago
MBAs seem to just be bad for tech companies. It's like they want to turn every business into an automotive business completely missing the point that car design is practically unchanged in the last 50 years. You can see just how terrible these companies are at adopting change by their pathetic attempts at getting EVs up and running. Tech requires constant change and innovation to be successful. Companies who primarily deal in tech NEED R&D to survive. They can't just establish dominance and stick around for 100 years. (Generally. There are obvious exceptions). This is why you see these major old tech companies struggling. IBM, HP, Cray. They all got taken over by MBAs who tried to "toyota" the companies into further success.
- jnwatson 6y ago
  I've definitely worked for medium-sized tech companies that could use an MBA or 3. Once there are more than 3 tiers of employees, managers can't hero their way to effectiveness. Organizational management is important, hard, and has decades of study behind it. Finance is also important. My former employer has never made a profit in the seven years since IPO, and clever financing means that it is still a going concern.
- ramraj07 6y ago
  Just to play devil's advocate, Tim Cook is an MBA.
spamizbad 6y ago
GE was burning the furniture to heat the house - what should be seen as a red flag - but nobody cared because there was just so much furniture it didn't seem like a problem until there was nowhere left to sit.
- fuzzfactor 6y ago
  >GE was burning the furniture to heat the house This is what happens when highly credentialed operators are brought in as decision makers, but they were not there from the beginning and have no idea how irreplaceable the specific furniture and its arrangement over the years actually is. They didn't go through the building process. They might not even be builders at all, even if given more than enough resources. And it doesn't matter to them fundamentally since their personal best oportunities will be with a different future organization anyway. Even if they stay, the organization will be different before they are done. More like the average company you could read about in business school, and more understandable for students, with much less focus on the unique things that brought that particular company as far as it had beforehand. If a company has reached a lofty place and the decision making changes that significantly for some reason, it is most likely that there will be some sinking to a significantly less lofty position. And in some unfamiliar direction downward. The best possible person to run a particular company will be using company-specific approaches and drawing on talents that very few MBAs possess. For those MBAs who do have such rare natural talent, it has been a characteristic since before university anyway so the degree is definitely not necessary.
ta988 6y ago
Look at firms like Danaher in the biotech, same thing. Buy sell buy sell. 0 value added and lot of wreck in the path.

x86_64Ubuntu 6y ago

Even outside of startups, they can be detrimental to brands. After seeing what's happened to TravisCI, Sencha and QlikTech, I can only assume that the private equity firms that bought them are rife with MBAs. And the story is the same, buy the company, cut engineering, murder new development, choke support and off-short what survives and then eat off of the trapped subscribers. They don't create value, they don't make a better product, all they do is stagnant the company while eating off of the lowered OpEx.

neltnerb 6y ago

I'm definitely never going to work for a startup with an MBA in charge ever ever again. They enjoy negotiating and often assume that their employees do too, so it's like pulling teeth to get the smallest issues dealt with, much less big ones like getting reasonable pay without having to raise a stink first. It was stupid and counterproductive.

layoric 6y ago
“They enjoy negotiating”, that explains a lot of my experience as well!

greatjack613 6y ago

Forsure, intel comes to mind when you say this. Focus on profits, milk 14nm, screw R&D for 10nm and appoint the CFO to CEO. Perfect combination for the current market where intel is dying and AMD ate their lunch. Contrast that to AMD which has an engineer with a PHD in engineering from MIT as there CEO. Look whos eating whos lunch now.