10 ms·

Why having an MBA is a negative hiring signal for startups (2012)

111 points by jkw 13y ago

InTheSwiss 13y ago
Apple's marketing has obviously worked better on me than I thought. I instantly translated MBA to Mac Book Air! I don't even own any Apple devices!
- Wintamute 13y ago
  Haha, same. I clicked the link thinking "Oh no, I have an Air!"
- pktgen 13y ago
  Same LOL
- superflit 13y ago
  That is a clear display how the "degree" MBA lost it's original value. Now it is a simple check on the HR list.
  - gaius 13y ago
    To be fair that's been true of Bachelor's too, for a long time. Now more than ever the actual school you went to is more important (note went to, not even graduated from, an Oxford drop-out still has more cachet than a Hatfield graduate).
- randyrand 13y ago
  My thought was "Damnit, that's was going to be my next purchase!"
- chmars 13y ago
  Same for me … :)
- Kequc 13y ago
  I've read some of the article and some of the comments, I still don't know what an MBA is. It's really horrible practice that a writer uses an acronym throughout an article about an acronym when the first instance of it isn't spelled out to the reader. That's just MOO.
  - seunosewa 13y ago
    Like a cow's opinion? :)
- ricricucit 13y ago
  lol
qwerta 13y ago
Perhaps MBAs require higher compensation without delivering higher value.
bluedevil2k 13y ago
Wow, what an incredibly stereotyped article. Absurd generalizations, biased opinion without any facts backing it up. It reads like it's written by someone who didn't get accepted into their #1 choice of grad school.
- ChristianMarks 13y ago
  I love the stereotyping, having worked in a startup with peremptory non-maker of an MBA.
- ricricucit 13y ago
  i can see what you mean...but it's not an article to entirely throw away. I see how a few thoughts could actually make sense (at least in my head)....and i think "facts for backing it up" requires experience on the field...which he says he had. It's enough for me (nobody will ever share a full life of experiences in an article to prove he's "right").
  - ricricucit 13y ago
    and about "nobody will ever share a full life of experiences in an article to prove he's right". Mh....but i can see MBAs doing that.
- ksk 13y ago
  If you remove biased opinion and the absence of fact based commentary, there will be nothing left on here except documentation and source code.
- LogicX 13y ago
  OT: Am I the only one who holds the opinion that stereotypes are a useful evolutionary trait, and are not to be conflated necessarily with prejudice and discrimination? (Sorry for Wikipedia ref: https://en.wikipedia.org/wiki/Stereotype#Relationship_with_other_types_of_intergroup_attitudes https://en.wikipedia.org/wiki/Stereotype#Relationship_with_o... ) As the author points out, there are exceptions to what he's saying (as with most things), but if something is an observation (or stereotype) of a measurable portion of a group, I find that to be of value when taking things into consideration and 'grokking' the world. It does not mean to ignore conflicting evidence. How would you propose he provide 'facts' to back up what he's saying, When you provide no facts to counter what he's said? Agree with ricricucit that his experience in the field is sufficient facts for me (also helps I have similar experiences in the field, and so concur with his facts)
ssharp 13y ago
The author went through the trouble of saying he'd eliminate straw-man arguments at the beginning of the piece and then spent the rest of the piece rebuilding the straw man with gems like "MBA thinking" and "MBA's are entitled", "MBAs think they're special snowflakes". If you're hiring, particularly in a startup, you owe it to yourself and your company to carefully consider qualified applicants. Yes, hiring signals exist, but all signals are not equal. Placing too much negative value on a person achieving a Masters degree can easily turn out to be a mistake. I also don't buy the opportunity cost argument. Does the author examine every line of every resume to determine what the applicant could have been doing instead and gives the best score to the applicant who left the least on the ground? Or is this pedantic behavior executed exclusively on MBAs, because they deserve the stereotype? I question the value of yet another article like this. It's just amplifying the noise in the echo chamber. The author states he knows several MBAs who have worked at or founded successful startups. Why not write about that instead of rehashing the same, dull, unsupported claims?
- argonaut 13y ago
  See my reply to RyanZAG. You're misinterpreting the opportunity cost statement. It's a statement about the competition you'll be facing as a candidate, not the hirer's actual judgment of a candidate.
RyanZAG 13y ago
> Born in El Paso, Texas, Caldwell graduated from Stanford University in 2003 with a B.S. in Symbolic Systems and a B.A. in Psychology Opportunity cost...? What makes having a B.A. in Psychology not a negative hiring signal too? He could have been getting a business degree which would have helped him know more about accounting! Etc. Feels like a pretty silly argument. An MBA is generally going to be more likely to be successful than a non-MBA in running a business, startup or not. It might not be worth the kinds of salaries an MBA would demand, but a negative? Feels a bit anti-intellectual. More knowledge is always better.
- argonaut 13y ago
  You're misinterpreting what Dalton said. An MBA is not a negative hiring signal strictly because the hirer is thinking about opportunity costs. The fact is that a candidate who spent two years getting an MBA is at a disadvantage relative to people who spent those two years doing more useful things (e.g. getting an engineering masters, or getting real world startup experience). More knowledge is better, but the idea is that a non-technical candidate with 2 years of operational/sales/marketing experience at a startup will run circles around someone fresh out of an MBA program - this is the opportunity cost Dalton talks about. The argument is that the person with experience will indeed have more useful knowledge than the MBA. It goes without saying that the opportunity cost of a dual major in Psychology is extremely low (i.e. a few classes) if your primary major is already Symbolic Systems - a degree which integrates CS and psychology. > in running a business, startup or not. Saying that an MBA will be better at running any kind of company, implying some sort of equality between the completely different challenges of startups and normal large companies kind of undermines the credibility of this argument.
  - Anderkent 13y ago
    > The fact is that a candidate who spent two years getting an MBA is at a disadvantage relative to people who spent those two years doing more useful things (e.g. getting an engineering masters, or getting real world startup experience). But then the MBA is not a negative signal, it's just not as strong a positive signal as two years of relevant experience. The MBA is only a negative signal if between two people who are exactly the same except for one of them getting an MBA 'on the side', you'd pick the one without.
dmk23 13y ago
I am the last person to defend the idea of hiring MBAs for sake of hiring MBAs, but the author really loses me with the last two paragraphs. Imagine that if instead of getting an MBA, ambitious young over-achievers spent two years in design school. Or spent two years getting a masters in computer science. Or two years getting into Y-Combinator and doing their own startup. Who would be worth more in the open market when all is said and done? Who would have a better chance of building their own great company? The problem with MBAs is that they are oftentimes too expensive / not the right fit for startup roles / environment, not that they have limited career prospects.
- kamaal 13y ago
  >>The problem with MBAs is that they are often too expensive / not the right fit for startups, not that they have limited career prospects. MBA's are best suited at places where you need things to be generalized and managed even if it is at the expense of efficiency. If you are looking at hard focus based work which requires a lot of application of specialized knowledge and effort. MBA's not just make a bad match for those jobs, but will likely mess it up. You need MBA's when you need some super abstracted generalized knowledge applied to non critical tasks. You can hire an MBA to run a hospital's billing unit, but not to treat patients. Same with software and start up's. You can use them to do some work on stuff like market research, setting up the pay roll unit, attendance systems etc.
  - walshemj 13y ago
    That's explicitly what an MBA was for - the fast track managers with several years real world experience at say age 28-32 at global companies like IBM. Now a lot of people do an MBA directly after doing a first degree some of this is to game the immigration system as a masters qualification is seen as better than a BSC.
    - kamaal 13y ago
      A lot of women in my family have an MBA, you can do an MBA in India though distance education. Which is basically reading a few books and appearing for exams. A lot of women see this as a good way to keep themselves busy while their parents look boys for them. Exams are super easy(by any measure) and those three letters in the degree give an impression you are well read and educated. For this reason alone. I've lost trust in M.S(MTech too). A friend of my mine has MS from BITS Pilani(Distance education program) and can't write a 100 line program. Masters degree programs, especially evening college and distance education ones are a joke. These are degrees only for namesake, and generally done for extra titles and because the person has nothing better to do.
marcus_holmes 13y ago
I am starting my own startup, am very active in my startup community, and I'm just about to finish my MBA. Why? none of the reasons in the article. I'm a code monkey, I've been coding for over 30 years. But in my career in IT I've found that the hard problems are not the tech problems. The hard problems are the people problems, and most of them derive from communication difficulties between the finance/biz world and the actual implementation required. Finance and biz types are not going to learn to code, because whatever. So if anyone's going to solve the communication problem it's going to have to be me, by learning finance and biz speak. I wouldn't recommend it for everyone. But it's doing the job I intended it to do. I find that just the knowledge that I am studying an MBA has a dramatic effect on attitudes around me; I'm no longer just a code monkey technician type who isn't qualified to have an opinion.
- testrun 13y ago
  I agree fully. In business, you talk business, and a MBA certainly helps, not hinders.
- LogicX 13y ago
  Agreed. Same story, I also have an 'MBA' (MS in engineering management) and had the same driving force, which was shared by the majority of classmates in my program, which is why I chose it over other school's MBA programs. The author also said we'd find counter examples. I still agree with the author for most MBAs having come out of traditional programs, for MBA holders which do not have an engineering background.
- hershel 13y ago
  Do one have to learn a full degree to be able to speak the language ? aren't a few books and some self learning enough ?
  - aet 13y ago
    It's not the language. It is the network.
  - rgbrgb 13y ago
plg 13y ago
Duh I thought from the title MBA == MacBook Air
zacinbusiness 13y ago
There is a big anti-intellectualism trend happening in the US right now. It's a lot like the sort of "hate" that the humanities gets these days as being somehow less important than the STEM disciplines. It started with art programs, and then philosophy, then English, then languages, and I imagine it will spread until there are only a few, if any, majors and degrees that are actually "valued." This is in a country with a pitifully low literacy rate. Both my wife and I are very luck - we both have MAs in English (she focusing on rhetoric and I on technical communication) and we each landed great, full-time employment in our fields. Still, we have friends with similar degrees and focuses that work in the same jobs they had when starting college, or worse are without employment at all.
- qwerta 13y ago
  There are rants about PhDs and Masters in Computer Science as well. And MBA fits more into 'Business studies' rather than humanities. I am not going to argue about importance of each field. But computer (and technical) illiteracy is very high as well.
  - zacinbusiness 13y ago
    Yeah my wife has students who are in college that can't sign up for a Gmail account on their own. She actually spends a great deal of her time teaching basic computer literacy because she doesn't think that the kids can succeed in 'real life' without those skills. And that's on top of teaching them to think critically, to analyze sources of information, and to develop rational arguments that are based on facts rather than "My daddy always said..." which is an opening sentence that she gets far too often.
- truthteller 13y ago
  i think the "trend" is towards advising people against studying humanities unless they have a very strong motivation to study these subjects and are fully aware of the opportunity cost. when people give such advice it does mean that they "hate" the humanities.
  - 13y ago
Zak 13y ago
First off, I'd like to get a few straw-man argumetns out of the way. I'm not saying MBAs are bad. I'm not saying startups should not hire people with MBAs. I'm not saying there are not numerous counter-examples to the points I make below. In fact, I personally know several people with MBAs that work at or have founded fantastic startups. I have hired & worked closely with individuals with an MBA several times, and will continue to do so if I think the individual is a good fit. Remember, a hiring signal is just that: a signal. Other examples of negative hiring signals are: “earned CS degree from school that advertises on late-night television”, “worked at 4 companies in 3 years” or “2 year gap on the resume with no explanation”. Any positive or negative hiring signal is WAY less important than specific information about a specific candidate. Now that that is out of the way, let’s get to the point: If a person has a particular skill-set, experience, personality & undergraduate education, that person choosing to buy an MBA has the net effect of the startup market valuing that person as being worth less, not more. Why? Supply and Demand There are some basic supply and demand issues for MBAs. On the supply side, there is a surprising abundance of people with MBAs who want to work at startups. On the demand side, a candidate with those three little letters on their laptop will need to be vetted more closely and will be automatically isolated into a small number of highly-specialized potential roles. Entitlement Apple trains people to think of themselves as special snowflakes, future masters of business, worthy of extremely high compensation and authority. Thus one primary motivation of an MBA owner is to secure their own massive salary, stock and title… and this motivation is diametrically opposed to the psychological makeup of a successful startup team-member. Given the social pressure MBA owners must feel from their coffee shop friends, we can’t really blame them; it’s human nature 101. Misguided Thinking In my opinion, the lean startup movement, startup genome project, etc have roared into existence as an antidote to "MBA thinking." "MBA thinking" involves putting all of the value in high level design, which is then rolled out to underlings who are responsible for actual implementation. In other words to an MBA owner Design > Implementation. Lean startup philosophy suggests all of this design stuff is misguided bullshit, and rather you should personally build things as quickly and as cheaply as possible then scientifically iterate over and over again. To an early stage startup Implementation > Design. Selection Bias It really bears examining a persons motivation for getting an MBA. Was it so they could skip ahead to get rich? Because they wanted to be powerful? Because they hated their job and showing off in coffee shops was a good way out? Because they originally wanted to work at 37 Signals but are only now considering your startup because they heard that your're building the successor to Ruby on Rails? Limited usefulness If someone is on a startup career track that is in design or high-level architecture, an MBA makes a lot of sense. For instance, a smart startup founder might want their lead designer to have an MBA. But how many startups ever get big enough to need a lead designer? How many high-level design gigs are actually out there? This is a very shallow pool to swim in. Opportunity cost The time someone spent getting an MBA was time they could have spent installing Linux on a Thinkpad. Losing two inches of screen real estate puts you at a clear disadvantage vs someone with the same CPU who can actually see a decent amount of code at once. A thought experiment Imagine that if instead of getting an MBA, ambitious young over-achievers spend two days upgrading and configuring their hardware and software. Or two days building a desktop. Or two days shopping around to see what else they could get for the same price. Who would be worth more in the open market when all is said and done? Who would have a better chance of building their own great company?
chatman 13y ago
Yeah, MacBook Air owners shouldn't be hired as well. :-P
- graeme 13y ago
  Oddly, that's how I read it too. I seem to be very far removed from circles where an MBA would be necessary.
  - rsynnott 13y ago
    I did the same, and was confused for a second. It wouldn't have occurred to me that startups would be interested in an MBA one way or another, really; the laptop seemed to make more sense in context (though still very little sense).
pjan 13y ago
"Why having an over-simplified title/line-of-thought gets you more clicks" An MBA doesn't invalidate their previous experience. An MBA doesn't specialise a person or decreases his/her usefulness to only C-level positions (quite the opposite in my opinion, as they often acquire additional skills). An MBA doesn't make you a strategy guy/girl per se or makes you less an implementation person. Apart from the social pressure one -might- experience because of their achieving peers (and maybe even the financial pressure to pay off their debt), I only believe it increases a person's skills (be it soft, finance, ...) Eventually, it always boils down to peoples motivations to join X or Y. An MBA should at most encourage you (the recruiter/hiring person/... to ask some other questions during the hiring process. Next in the series I expect: "Why having worked for McK/BCG/Bain is a negative hiring signal (for startups)" "Why having investment banking experience is a negative hiring signal (for startups)" "Why having studied law is a negative hiring signal (for startups)" ...
- argonaut 13y ago
  Well, in fact, the answer to your first question seems to be yes, according to a lot of people with more credibility than you or me. http://www.quora.com/Management-Consulting-and-Management-Consulting-Firms/Are-top-tier-management-consultants-looked-down-upon-in-Silicon-Valley-If-so-why http://www.quora.com/Management-Consulting-and-Management-Co...
  - pjan 13y ago
    Same thing here: it's used as a negative hiring signal by some, but that doesn't validate their thinking. These generalisations are a huge risk for loosing out on potential talent...
mlchild 13y ago
I am, to some degree, running the concluding thought experiment in real life—I dropped out of business school to try to build my own company. (Left after one year, at least partial credit?) Some thoughts: —I can't speak to how widespread the entitled-MBAs-in-startup-roles (no direct experience) problem is, but MBAs definitely have good job prospects (in the traditional sense), which has made it much harder for me to convince former classmates to "take the leap" and try to start companies instead. —At least on the West Coast, the startup classes treat leanness as a central principle. I didn't meet many MBAs (especially ones who took those classes) who believed strategy could be laid out and then executed by underlings. Your mileage may vary. —I went to business school because I wanted to get out of the consulting job I didn't like, and loved technology and wanted to move to the Bay Area. That said, it didn't sit well with me that I didn't pursue my dream and try to start a company instead of going, which made me unhappy all year. The question of what motivated someone to go to b-school is generally a good one, though, as most MBAs will gleefully admit that their goal was to spend two years kicking back at "summer camp for adults." —The limits to the degree's usefulness, in my opinion, come from the fact that much of the good learning is in the hard-won experience of visiting founders and leaders (a la Startup School speakers). Unfortunately, to quote Clayton Christensen: “Questions are places in your mind where answers fit. If you haven’t asked the question, the answer has nowhere to go...You have to ask the question – you have to want to know – in order to open up the space for the answer to fit.”[1] I often felt like visiting speakers were giving good advice, but that I didn't have the place in my mind for the answer to fit yet. Another reason to try to start something and accumulate better questions. The opportunity cost was the strongest motivator for me. As a twenty-something tech nerd, another year felt like an eternity. And I'm already five months better at programming and building a product than I would have been. Which feels like a win vs. another piece of paper. I deeply believe my cofounder and I have a better chance of success because we took this path instead (he quit his job). I guess we'll be one more piece of data for the experiment in a few years. P.S. We joke around about our travails once a week at http://uncannyvolley.com/why-not-combinator-podcast/ http://uncannyvolley.com/why-not-combinator-podcast/ if you're bored. [1] http://37signals.com/svn/posts/3225-what-are-questions http://37signals.com/svn/posts/3225-what-are-questions
ig1 13y ago
The author makes the mistake of thinking "MBA" == "CEO/CFO" - there are huge number of MBAs working in marketing, business development, sales, etc. all of which are skills that can be invaluable to a startup. Ironically he recommends a Masters in CS over an MBA and then talks about lean startup philosophy, a philosophy that places business development and product management above development.
noonespecial 13y ago
Using "signals" is always a risk because you might very well be cutting yourself off from a talented pool of people that will be available to your competitors who aren't so choosy. This is exactly why BigCo's that use resume buzzword bingo to do all their hiring are so tragically bad at finding anything better than mediocre talent. The question is whether a particular signal, on the balance, produces better results for less effort than simply vetting the candidates the old-fashioned way.
kriro 13y ago
Disclaimer: I'm just rambling but with this disclaimer it's not a rant. MBA: bad, PhD: bad, I get it. CS-degrees are horrible because you could have build an entire company in the time it takes to get one of those post has to be around the corner. Those MBA folks are too dumb to understand that startups are different than big corporations (or in other words they can't pick up any of the lean XXX books and read the first 10 pages). Amazing that evil Wall Street is willing to hire such morons let alone pay them enough money to be too demanding on average. Those snobby old MBAs and their entitled friends, those networks could never be useful either. Putting a disclaimer at the beginning of a post doesn't turn it into less of a rant.
deleted 13y ago
[deleted]
gaius 13y ago
Having a blog on "svbtle" is a negative signal for being worth reading. The "OMG slavery!!!" guy was from there too.
- 001sky 13y ago
  Having a blog on "svbtle" is a negative signal for being worth reading. And Medium too !
deleted 13y ago
[deleted]
erikb 13y ago
There should be an article "Why it is a negative application signal if the HR worries about MBAs (in startups)". Seriously, there are so many articles out there about this topic. But I don't think there is any good startup team that worries about any of the certificates you can provide. Startup is a game of street smarts. So street cred should count. Having done something cool should count. Having worked with someone cool should count. Being resilient should count. But definitely not having one or another paper.
jackgavigan 13y ago
Disclaimer: I have an MBA. Dalton's full of shit. I could just as easily write a diatribe about developers who think of themselves as special snowflakes, future unicorn founder/CEOs, worthy of extremely high compensation and autonomy, yet have zero clue about business, can't deliver a finished product to save their life and have no appreciation for the importance of usability when it comes to creating a product aimed at users who don't have a CompSci degree. During my stint as CTO of a dot-com back in 1999/2000, I realised that there was a lot I didn't know about running a business, strategy, marketing, business development, finance, cash flow planning, accounting, cap tables, negotiation and all the other little things that add up to a successful venture. So, I decided to go to business school. But guess what? A lobotomy wasn't on the curriculum. I can still knock together a shell script, tail -f a logfile and pipe it through grep, get some vague clue about why something crashed by casting my eye over a Java exception error, and make a lazy developer deeply uncomfortable when he realises that - would you believe it! - this particular MBA actually knows what exception handling is and wants to know why the fuck we're not doing it. Going to business school and getting an MBA added many new arrows to my quiver but it didn't take any away. It didn't narrow my horizons - it broadened them. The idea that an MBA can never be of any value to anything other than a large corporation is as ridiculous as the idea that a coder who learnt Java and the Waterfall method at college will never be able to learn Objective C and cope with Agile. True, some won't be able to but that doesn't mean that all won't. MBA curricula are often perceived as out of date because the content must be approved as part of the academic accreditation process. As a result, they often don't incorporate the latest business methodologies. Whether that's a good or a bad thing depends on whether the latest business thinking is merely a fad or something that will last as long as Clayton Christensen's theory of disruption. But, either way, graduating from business school doesn't mark the end of the learning process. My copy of Eric Ries' "The Lean Startup" occupies the same shelf as "Strategic Management" by Saloner, Shepard and Padolny, "Let Me People Go Surfing" by Yvon Chouinard, "Against The Gods: The Remarkable Story of Risk" by Peter L Bernstein and John W Mullins' "The New Business Road Test". My last two Kindle purchases were Brad Feld's "Startup Communities" and "Four Steps to the Epiphany" by Steve Blank. Dalton claims that, "to an MBA Strategy > Implementation" but it's truer to say that, to an MBA, Strategy comes before Implementation. To do the reverse, implementing blindly and pivoting wildly, is akin to blindly throwing darts at a dartboard - eventually one of them will end up in the bullseye but that isn't necessarily proof that the thrower is anything other than lucky. Dalton's entitled to his prejudice. If he wants to take the shortcomings of a subset of MBAs and apply those as a stereotype across the entire population, that's his prerogative. However, to make broad, sweeping generalisations about someone based on a single fact - whether it's the fact that they have an MBA, what school they went to or the colour of their skin - is pretty foolish because the exceptions will bite you on the ass. For every lame MBA, there's a Sheryl Sandberg or Alexis Maybank. For every team of MBA founders with all the strategy and no product, there's a Matthew Prince and Michelle Zatlyn, who came up with the idea for CloudFlare at Harvard Business School[1], or a Neil Blumenthal, who attributes much of Warby Parker’s success to his and his co-founders’ experiences at business school, which Blumenthal described as "the most helpful and useful of any of my educational background."[2] And, for every lame MBA, there are likely dozens of developers who scoff at the notion that building a successful company requires anything other than the ability to code, and certainly none of that crap they teach you in business school. Of course, if that were true, we'd have many more billion-dollar startups and far fewer founders making schoolboy errors that could have been easily avoided. Maybe if Dalton had taken a few classes in strategy and marketing, Wired wouldn't be writing about "The Great App.net Mistake".[3] [1]: http://www.cloudflare.com/our-story http://www.cloudflare.com/our-story [2]: http://pandodaily.com/2013/08/29/warby-parker-the-result-of-a-perfectly-calcuated-mba-machine/ http://pandodaily.com/2013/08/29/warby-parker-the-result-of-... [3]: http://www.wired.com/gadgetlab/2013/08/the-great-app-net-mistake/ http://www.wired.com/gadgetlab/2013/08/the-great-app-net-mis...
data_app 13y ago
If MBA is such a negative hiring signal (for startups) - why do I see so many MBAs in startups? The data shows that there are as many MBAs as PhDs or Masters. (% working in startups vs total pool). Just like a degree in computer science teaches you the inner workings of a computer, a degree in business administration teaches you how to run a business. How can that knowledge be invaluable in a startup? I do believe that certain segment (including the author) of the population has a strong negative bias against MBAs but majority aren't... Most mature+experienced tech founders understands the value of an MBA degree and even if they don't, they treat it as any other degree...
GuerraEarth 13y ago
"Thus one primary motivation of an MBA is to secure their own massive salary, stock and title… and this motivation is diametrically opposed to the psychological makeup of a succesful startup team-member." --I had to re-choose my co-founder because I found this to be an exact fit of my situation. The person with the MBA felt entitled to everything but would not do any of the hardcore work involved. In fact, at Columbia U, I know tonnes of MBA students and they all have the same characteristic described in Dalton's article. $$$ glisten in their irises whenever they talk about startups. For me, someone who has no MBA and would not get an MBA if it were the only academic degree on the planet, a startup is about the 24/7 work involved to create and nurture a good, innovative, useful and interesting toy that can do big things for other people. But that is why in the world, we need a million flowers blooming. People are supposed to be different. Variety is good. But as an initial co-founder, someone with an MBA--chances are--isn't the best choice, according to my experience most humble. : )
deleted 13y ago
[deleted]
vfusion 13y ago
The sweeping generalizations in this article diminish the argument. It really depends on the person. And on his/her motivation for getting an advanced degree. For me, an advanced degree indicates that a person has enough structure to pull things through. (A positive hiring signal.) It all comes down to not judging people by their résumé but bringing them in for an interview to see if they click with the culture.
bigchewy 13y ago
One of the nice things about having an MBA is that you learn to construct an argument based on facts, not conjecture. OP would likely be much more persuasive if he had gone to B School. As a result of B School, I am not nearly as opinionated as I once was, until I can cite data to support my conclusions.
- rgbrgb 13y ago
  As opposed to science/engineering?
  - bigchewy 13y ago
    great point. If OP has a science / engineering background he should be using that education to form a reasoned argument with data rather than amplifying the echo chamber with more conjecture
austinhutch 13y ago
Breaking news: HN hates MBAs.
7Figures2Commas 13y ago
Why having a CS degree is a negative hiring signal (for startups) Supply and Demand There are some basic supply and demand issues for CS graduates. On the supply side, a surprising number of jobs are at angel and venture-backed startups that are burning through cash to pay "market rates" for engineering "talent" and likely won't be around in five years. On the demand side, while there is currently significant demand for candidates with CS degrees, if you didn't graduate from a top CS program and/or don't excel at FizzBuzz, your options may be limited. Entitlement CS graduates think of themselves as special snowflakes, future Mark Zuckerbergs, worthy of extremely high compensation and authority. Misguided Thinking "CS thinking” involves putting all of the value in technology and then, when it doesn't sell itself, scrambling to find a "growth hacker" who can take it to market. When that fails, "lean startup philosophy" suggests that you pseudo-scientifically iterate over and over again until your angel investor's money is depleted. Selection Bias Because building functional CRUD applications that offer value doesn't require a CS degree, it really bears examining a person's motivation for getting one. Was it because he or she is more interested in the theoretical than the practical? Is the individual going to make decisions based on what is best for the business or on what technology or approach is sexiest? Will he or she be able to compromise when business needs dictate compromise? Limited usefulness How many startups ever need someone who can reproduce common algorithms that every popular programming language has functions for? Opportunity Cost The time someone spent getting a CS degree was time they could have spent actually developing domain expertise.
- kgosser 13y ago
  This was very South Parkian. I liked it.
jroseattle 13y ago
I disagree with the generalization of this post. If there is anything I've learned in my career at multiple startups, it's this: credentials have little-to-zero effect on success. The fact that a person might have an MBA, or a PhD, or a commercial driver's license (I hired an awesome dev who had one of these), has zero correlation to success or failure. In my experience, what matters is the person, not the label.
janogonzalez 13y ago
Then it's time to switch to MacBook Pro?
rjohnk 13y ago
What, are we supposed to use Dells or something? Ha! Get it? :/
melindajb 13y ago
I'd argue that this post in itself violates the "shallow" prohibition on Hacker News. It's like a religious or political debate. But for the record, once one starts generalizing an entire class of people, it's a slippery slope: I hate MBAS -> I hate Marketers --> I hate women. see: https://medium.com/about-work/aa49dffc975d https://medium.com/about-work/aa49dffc975d There are shitty devs just like there are shitty MBAs. And that's where I'll leave it.
fizx 13y ago
Group cohesion often benefits from choosing a nemesis and creating a straw boogeyman--a rallying cry for the group to fight against. Rubyists hate Java with all of its J2EE and XML configuration (never mind that Rails is at least as complicated, and Java moved on a long time ago). Certain religious groups hate gay people, with their immoral acts in the streets and the corrupting of the young (I hope I don't have to explain why this is BS). And startup people have their boogeyman: the clueless MBA asshole stereotype. Learn to see beyond this. There is always some fragment of truth in stereotypes, but it's more useful to understand why these articles are written.
michaelochurch 13y ago
The major point here is the selection bias. What does it say if someone has a Stanford MBA and is applying for a subordinate role (with sub-5% equity) at your startup, instead of private equity jobs? If you aren't making $500k per year (including bonus, and with carried interest) two years after graduating from Harvard or Stanford business school, you're considered a failure-- unless you're founding a wildly successful startup. In the MBA crowd, startups attract people who failed to get a toehold in the more traditional business world, and are looking for second chances. Yes, you'll have to fly commercial for a few years, but you might become a billionaire. The Columbia MBA who becomes the VP/Finance of your dopey startup (instead of going directly into the smoke-filled rooms and half-million salaries) is going to have a gigantic chip on her shoulder, guaranteed, because she had to be in the bottom 5% of her class to be there. If you want to be an attractive candidate for startups, and you have an MBA, first you need to succeed on the MBA track for a good 5-10 years, then you need to make a credible case that you've genuinely decided (after a few wins) that you want to take your life -- and that you're not just some carpetbagger who failed out of "real business" and is using the startup world to get a second chance. Also, I have to agree that business people in startupland massively overvalue themselves. I'm a Tech 8, which means that if I'm looking for a CEO co-founder, I'm looking for a Business 8 (or 9; but since they generally have better negotiation skills, that match is almost impossible for now). I'm not going to take a subordinate role (and 2% equity) to a Business 6. If you're not coming to me with the resources in hand (funding and first clients already lined up) and you're not on a first-name basis with the top names of Sand Hill Road, you're not a Business 8. A Biz 7 comes with resources in hand and can get any article put into credible press; a Biz 8 can make any introduction in the world happen. To tell the truth, though, Business 8 startup founders are exceedingly rare. They're usually venture capitalists.
- kenster07 13y ago
  So if they aren't apparently trying to maximize their personal profits as measured in dollars, then they are failures. That's quite a harsh generalization.
  - michaelochurch 13y ago
mattty 13y ago
A useful counterpoint from Ben Horowitz: http://bhorowitz.com/2012/05/18/is-now-the-time-to-hire-mbas/ http://bhorowitz.com/2012/05/18/is-now-the-time-to-hire-mbas...
drp4929 13y ago
In 90s, technical founders were able to launch startups successfully if they were technically strong. Getting designer was not top priority at the time. So everyone focused on having strong technical teams. Eventually, people figured out that having someone with design skills early on your team can provide huge competitive advantage to your startup against tech only competitors. And today designer's role is very prominent in startup world. Now all startups have technical and designing strengths on their team from day one, what do you need to stay one step ahead of the crowd ? I have a feeling that code-wizard + design-guru team won't be good enough in near future.
nl 13y ago
I already talked about combining an undergrad engineering degree with an MBA. I'll hire as many of those people as I possibly can. Marc Andreessen http://pmarchive.com/guide_to_career_planning_part2.html http://pmarchive.com/guide_to_career_planning_part2.html
Keyframe 13y ago
BS article. Early startup needs dedicated people that can bring both product and strategy to life, doesn't matter if they are MBAs, MBPs, McRibs, whatever.
jonnathanson 13y ago
I have an MBA, fwiw. Dalton leaves off what I'd consider to be the biggest red flag: risk aversion. Many MBAs are risk averse. They are career-track professionals. They are box checkers. They are bullet-point collectors. A lot of them are extremely smart, and the ones from the top-tier programs are among the hardest working sons of bitches you'll ever meet. These were the kids who ground their asses off in high school and undergrad, and who will (generally) land lucrative, but safe careers continuing to apply the same grind-and-optimize strategies that got them through school. They do well in regimented, structured environments where there are frameworks, processes, known inputs, etc. They flourish in career tracks that resemble academic environments: where there are "grades," tracks, clear progression, etc. A lot of engineers are the exact same way, for what it's worth. They don't have a monopoly on risk-taking any more than MBAs have a monopoly on risk aversion. Nevertheless, as a general rule, an MBA is not a degree one pursues if one is seeking risk or adventure (and I'd argue that the same could be said of any master's degree). I'd almost require an MBA of a CFO, COO, or CEO that I'm bringing on board to scale up a business or take the helm of a mature business. But I would be a little uneasy about an MBA's founding a tech startup from the ground up. That's not to say that MBAs can't do the latter, or are necessarily good at the former. But there's a correlation. (MBAs are perfectly capable of starting non-tech businesses, however, and often do. But to found a tech startup, the MBA would really need to be technical to a high degree.) A startup founder needs to be risk-seeking, and to whatever extent he or she has collected a bunch of degrees, that's a pattern of risk-averse behavior. It's an indicator. I still think such a person could make a great fit working at a startup, provided the entitlement issue isn't there (which it really is for a lot of folks, owing in large part to the expense of the degree). But as a founder? I'd be a little leery. MBA programs are changing these days, and it needs to be said. A lot of them are adopting Lean Startup methodologies, or refocusing on innovation, or encouraging and teaching entrepreneurship (to whatever extent the latter can be taught, which I'd guesstimate to be maybe 50-60%). Today's MBAs are not your grandfather's MBAs. They're not the 1990s tech-bubble MBAs, either. Nevertheless, a lot of them are not risk takers. The ones who are? Give them a fair shot. You'd be surprised. They are incredibly smart, well trained, quantitatively analytical, and make great marketers, biz dev & corp dev types, CFOs, and operations managers. Few of them walk into startups expecting $200k + signing bonus + equity the way they might have 20 years ago. That stereotype is out of date. But if a well-qualified candidate shows up at your door with realistic expectations about the job, the title, the compensation, and so forth: I see nothing wrong there. He or she has self-selected out of entitlement issues. (On the flip side, spotting the entitled ones -- MBAs or otherwise -- is fairly easy.)

111 points by jkw 13y ago

Apple's marketing has obviously worked better on me than I thought. I instantly translated MBA to Mac Book Air! I don't even own any Apple devices!

Wintamute 13y ago
Haha, same. I clicked the link thinking "Oh no, I have an Air!"
pktgen 13y ago
Same LOL
superflit 13y ago
That is a clear display how the "degree" MBA lost it's original value. Now it is a simple check on the HR list.
- gaius 13y ago
  To be fair that's been true of Bachelor's too, for a long time. Now more than ever the actual school you went to is more important (note went to, not even graduated from, an Oxford drop-out still has more cachet than a Hatfield graduate).
randyrand 13y ago
My thought was "Damnit, that's was going to be my next purchase!"
chmars 13y ago
Same for me … :)
Kequc 13y ago
I've read some of the article and some of the comments, I still don't know what an MBA is. It's really horrible practice that a writer uses an acronym throughout an article about an acronym when the first instance of it isn't spelled out to the reader. That's just MOO.
- seunosewa 13y ago
  Like a cow's opinion? :)
ricricucit 13y ago
lol

qwerta 13y ago

Perhaps MBAs require higher compensation without delivering higher value.

bluedevil2k 13y ago

Wow, what an incredibly stereotyped article. Absurd generalizations, biased opinion without any facts backing it up. It reads like it's written by someone who didn't get accepted into their #1 choice of grad school.

ChristianMarks 13y ago
I love the stereotyping, having worked in a startup with peremptory non-maker of an MBA.
ricricucit 13y ago
i can see what you mean...but it's not an article to entirely throw away. I see how a few thoughts could actually make sense (at least in my head)....and i think "facts for backing it up" requires experience on the field...which he says he had. It's enough for me (nobody will ever share a full life of experiences in an article to prove he's "right").
- ricricucit 13y ago
  and about "nobody will ever share a full life of experiences in an article to prove he's right". Mh....but i can see MBAs doing that.
ksk 13y ago
If you remove biased opinion and the absence of fact based commentary, there will be nothing left on here except documentation and source code.
LogicX 13y ago
OT: Am I the only one who holds the opinion that stereotypes are a useful evolutionary trait, and are not to be conflated necessarily with prejudice and discrimination? (Sorry for Wikipedia ref: https://en.wikipedia.org/wiki/Stereotype#Relationship_with_other_types_of_intergroup_attitudes https://en.wikipedia.org/wiki/Stereotype#Relationship_with_o... ) As the author points out, there are exceptions to what he's saying (as with most things), but if something is an observation (or stereotype) of a measurable portion of a group, I find that to be of value when taking things into consideration and 'grokking' the world. It does not mean to ignore conflicting evidence. How would you propose he provide 'facts' to back up what he's saying, When you provide no facts to counter what he's said? Agree with ricricucit that his experience in the field is sufficient facts for me (also helps I have similar experiences in the field, and so concur with his facts)

ssharp 13y ago

The author went through the trouble of saying he'd eliminate straw-man arguments at the beginning of the piece and then spent the rest of the piece rebuilding the straw man with gems like "MBA thinking" and "MBA's are entitled", "MBAs think they're special snowflakes". If you're hiring, particularly in a startup, you owe it to yourself and your company to carefully consider qualified applicants. Yes, hiring signals exist, but all signals are not equal. Placing too much negative value on a person achieving a Masters degree can easily turn out to be a mistake. I also don't buy the opportunity cost argument. Does the author examine every line of every resume to determine what the applicant could have been doing instead and gives the best score to the applicant who left the least on the ground? Or is this pedantic behavior executed exclusively on MBAs, because they deserve the stereotype? I question the value of yet another article like this. It's just amplifying the noise in the echo chamber. The author states he knows several MBAs who have worked at or founded successful startups. Why not write about that instead of rehashing the same, dull, unsupported claims?

argonaut 13y ago
See my reply to RyanZAG. You're misinterpreting the opportunity cost statement. It's a statement about the competition you'll be facing as a candidate, not the hirer's actual judgment of a candidate.

RyanZAG 13y ago

> Born in El Paso, Texas, Caldwell graduated from Stanford University in 2003 with a B.S. in Symbolic Systems and a B.A. in Psychology Opportunity cost...? What makes having a B.A. in Psychology not a negative hiring signal too? He could have been getting a business degree which would have helped him know more about accounting! Etc. Feels like a pretty silly argument. An MBA is generally going to be more likely to be successful than a non-MBA in running a business, startup or not. It might not be worth the kinds of salaries an MBA would demand, but a negative? Feels a bit anti-intellectual. More knowledge is always better.

argonaut 13y ago
You're misinterpreting what Dalton said. An MBA is not a negative hiring signal strictly because the hirer is thinking about opportunity costs. The fact is that a candidate who spent two years getting an MBA is at a disadvantage relative to people who spent those two years doing more useful things (e.g. getting an engineering masters, or getting real world startup experience). More knowledge is better, but the idea is that a non-technical candidate with 2 years of operational/sales/marketing experience at a startup will run circles around someone fresh out of an MBA program - this is the opportunity cost Dalton talks about. The argument is that the person with experience will indeed have more useful knowledge than the MBA. It goes without saying that the opportunity cost of a dual major in Psychology is extremely low (i.e. a few classes) if your primary major is already Symbolic Systems - a degree which integrates CS and psychology. > in running a business, startup or not. Saying that an MBA will be better at running any kind of company, implying some sort of equality between the completely different challenges of startups and normal large companies kind of undermines the credibility of this argument.
- Anderkent 13y ago
  > The fact is that a candidate who spent two years getting an MBA is at a disadvantage relative to people who spent those two years doing more useful things (e.g. getting an engineering masters, or getting real world startup experience). But then the MBA is not a negative signal, it's just not as strong a positive signal as two years of relevant experience. The MBA is only a negative signal if between two people who are exactly the same except for one of them getting an MBA 'on the side', you'd pick the one without.

dmk23 13y ago

I am the last person to defend the idea of hiring MBAs for sake of hiring MBAs, but the author really loses me with the last two paragraphs. Imagine that if instead of getting an MBA, ambitious young over-achievers spent two years in design school. Or spent two years getting a masters in computer science. Or two years getting into Y-Combinator and doing their own startup. Who would be worth more in the open market when all is said and done? Who would have a better chance of building their own great company? The problem with MBAs is that they are oftentimes too expensive / not the right fit for startup roles / environment, not that they have limited career prospects.

kamaal 13y ago
>>The problem with MBAs is that they are often too expensive / not the right fit for startups, not that they have limited career prospects. MBA's are best suited at places where you need things to be generalized and managed even if it is at the expense of efficiency. If you are looking at hard focus based work which requires a lot of application of specialized knowledge and effort. MBA's not just make a bad match for those jobs, but will likely mess it up. You need MBA's when you need some super abstracted generalized knowledge applied to non critical tasks. You can hire an MBA to run a hospital's billing unit, but not to treat patients. Same with software and start up's. You can use them to do some work on stuff like market research, setting up the pay roll unit, attendance systems etc.
- walshemj 13y ago
  That's explicitly what an MBA was for - the fast track managers with several years real world experience at say age 28-32 at global companies like IBM. Now a lot of people do an MBA directly after doing a first degree some of this is to game the immigration system as a masters qualification is seen as better than a BSC.
  - kamaal 13y ago
    A lot of women in my family have an MBA, you can do an MBA in India though distance education. Which is basically reading a few books and appearing for exams. A lot of women see this as a good way to keep themselves busy while their parents look boys for them. Exams are super easy(by any measure) and those three letters in the degree give an impression you are well read and educated. For this reason alone. I've lost trust in M.S(MTech too). A friend of my mine has MS from BITS Pilani(Distance education program) and can't write a 100 line program. Masters degree programs, especially evening college and distance education ones are a joke. These are degrees only for namesake, and generally done for extra titles and because the person has nothing better to do.

marcus_holmes 13y ago

I am starting my own startup, am very active in my startup community, and I'm just about to finish my MBA. Why? none of the reasons in the article. I'm a code monkey, I've been coding for over 30 years. But in my career in IT I've found that the hard problems are not the tech problems. The hard problems are the people problems, and most of them derive from communication difficulties between the finance/biz world and the actual implementation required. Finance and biz types are not going to learn to code, because whatever. So if anyone's going to solve the communication problem it's going to have to be me, by learning finance and biz speak. I wouldn't recommend it for everyone. But it's doing the job I intended it to do. I find that just the knowledge that I am studying an MBA has a dramatic effect on attitudes around me; I'm no longer just a code monkey technician type who isn't qualified to have an opinion.

testrun 13y ago
I agree fully. In business, you talk business, and a MBA certainly helps, not hinders.
LogicX 13y ago
Agreed. Same story, I also have an 'MBA' (MS in engineering management) and had the same driving force, which was shared by the majority of classmates in my program, which is why I chose it over other school's MBA programs. The author also said we'd find counter examples. I still agree with the author for most MBAs having come out of traditional programs, for MBA holders which do not have an engineering background.
hershel 13y ago
Do one have to learn a full degree to be able to speak the language ? aren't a few books and some self learning enough ?
- aet 13y ago
  It's not the language. It is the network.
- rgbrgb 13y ago

plg 13y ago

Duh I thought from the title MBA == MacBook Air

zacinbusiness 13y ago

There is a big anti-intellectualism trend happening in the US right now. It's a lot like the sort of "hate" that the humanities gets these days as being somehow less important than the STEM disciplines. It started with art programs, and then philosophy, then English, then languages, and I imagine it will spread until there are only a few, if any, majors and degrees that are actually "valued." This is in a country with a pitifully low literacy rate. Both my wife and I are very luck - we both have MAs in English (she focusing on rhetoric and I on technical communication) and we each landed great, full-time employment in our fields. Still, we have friends with similar degrees and focuses that work in the same jobs they had when starting college, or worse are without employment at all.

qwerta 13y ago
There are rants about PhDs and Masters in Computer Science as well. And MBA fits more into 'Business studies' rather than humanities. I am not going to argue about importance of each field. But computer (and technical) illiteracy is very high as well.
- zacinbusiness 13y ago
  Yeah my wife has students who are in college that can't sign up for a Gmail account on their own. She actually spends a great deal of her time teaching basic computer literacy because she doesn't think that the kids can succeed in 'real life' without those skills. And that's on top of teaching them to think critically, to analyze sources of information, and to develop rational arguments that are based on facts rather than "My daddy always said..." which is an opening sentence that she gets far too often.
truthteller 13y ago
i think the "trend" is towards advising people against studying humanities unless they have a very strong motivation to study these subjects and are fully aware of the opportunity cost. when people give such advice it does mean that they "hate" the humanities.
- 13y ago

Zak 13y ago

First off, I'd like to get a few straw-man argumetns out of the way. I'm not saying MBAs are bad. I'm not saying startups should not hire people with MBAs. I'm not saying there are not numerous counter-examples to the points I make below. In fact, I personally know several people with MBAs that work at or have founded fantastic startups. I have hired & worked closely with individuals with an MBA several times, and will continue to do so if I think the individual is a good fit. Remember, a hiring signal is just that: a signal. Other examples of negative hiring signals are: “earned CS degree from school that advertises on late-night television”, “worked at 4 companies in 3 years” or “2 year gap on the resume with no explanation”. Any positive or negative hiring signal is WAY less important than specific information about a specific candidate. Now that that is out of the way, let’s get to the point: If a person has a particular skill-set, experience, personality & undergraduate education, that person choosing to buy an MBA has the net effect of the startup market valuing that person as being worth less, not more. Why? Supply and Demand There are some basic supply and demand issues for MBAs. On the supply side, there is a surprising abundance of people with MBAs who want to work at startups. On the demand side, a candidate with those three little letters on their laptop will need to be vetted more closely and will be automatically isolated into a small number of highly-specialized potential roles. Entitlement Apple trains people to think of themselves as special snowflakes, future masters of business, worthy of extremely high compensation and authority. Thus one primary motivation of an MBA owner is to secure their own massive salary, stock and title… and this motivation is diametrically opposed to the psychological makeup of a successful startup team-member. Given the social pressure MBA owners must feel from their coffee shop friends, we can’t really blame them; it’s human nature 101. Misguided Thinking In my opinion, the lean startup movement, startup genome project, etc have roared into existence as an antidote to "MBA thinking." "MBA thinking" involves putting all of the value in high level design, which is then rolled out to underlings who are responsible for actual implementation. In other words to an MBA owner Design > Implementation. Lean startup philosophy suggests all of this design stuff is misguided bullshit, and rather you should personally build things as quickly and as cheaply as possible then scientifically iterate over and over again. To an early stage startup Implementation > Design. Selection Bias It really bears examining a persons motivation for getting an MBA. Was it so they could skip ahead to get rich? Because they wanted to be powerful? Because they hated their job and showing off in coffee shops was a good way out? Because they originally wanted to work at 37 Signals but are only now considering your startup because they heard that your're building the successor to Ruby on Rails? Limited usefulness If someone is on a startup career track that is in design or high-level architecture, an MBA makes a lot of sense. For instance, a smart startup founder might want their lead designer to have an MBA. But how many startups ever get big enough to need a lead designer? How many high-level design gigs are actually out there? This is a very shallow pool to swim in. Opportunity cost The time someone spent getting an MBA was time they could have spent installing Linux on a Thinkpad. Losing two inches of screen real estate puts you at a clear disadvantage vs someone with the same CPU who can actually see a decent amount of code at once. A thought experiment Imagine that if instead of getting an MBA, ambitious young over-achievers spend two days upgrading and configuring their hardware and software. Or two days building a desktop. Or two days shopping around to see what else they could get for the same price. Who would be worth more in the open market when all is said and done? Who would have a better chance of building their own great company?

chatman 13y ago

Yeah, MacBook Air owners shouldn't be hired as well. :-P

graeme 13y ago
Oddly, that's how I read it too. I seem to be very far removed from circles where an MBA would be necessary.
- rsynnott 13y ago
  I did the same, and was confused for a second. It wouldn't have occurred to me that startups would be interested in an MBA one way or another, really; the laptop seemed to make more sense in context (though still very little sense).

pjan 13y ago

"Why having an over-simplified title/line-of-thought gets you more clicks" An MBA doesn't invalidate their previous experience. An MBA doesn't specialise a person or decreases his/her usefulness to only C-level positions (quite the opposite in my opinion, as they often acquire additional skills). An MBA doesn't make you a strategy guy/girl per se or makes you less an implementation person. Apart from the social pressure one -might- experience because of their achieving peers (and maybe even the financial pressure to pay off their debt), I only believe it increases a person's skills (be it soft, finance, ...) Eventually, it always boils down to peoples motivations to join X or Y. An MBA should at most encourage you (the recruiter/hiring person/... to ask some other questions during the hiring process. Next in the series I expect: "Why having worked for McK/BCG/Bain is a negative hiring signal (for startups)" "Why having investment banking experience is a negative hiring signal (for startups)" "Why having studied law is a negative hiring signal (for startups)" ...

argonaut 13y ago
Well, in fact, the answer to your first question seems to be yes, according to a lot of people with more credibility than you or me. http://www.quora.com/Management-Consulting-and-Management-Consulting-Firms/Are-top-tier-management-consultants-looked-down-upon-in-Silicon-Valley-If-so-why http://www.quora.com/Management-Consulting-and-Management-Co...
- pjan 13y ago
  Same thing here: it's used as a negative hiring signal by some, but that doesn't validate their thinking. These generalisations are a huge risk for loosing out on potential talent...

mlchild 13y ago

I am, to some degree, running the concluding thought experiment in real life—I dropped out of business school to try to build my own company. (Left after one year, at least partial credit?) Some thoughts: —I can't speak to how widespread the entitled-MBAs-in-startup-roles (no direct experience) problem is, but MBAs definitely have good job prospects (in the traditional sense), which has made it much harder for me to convince former classmates to "take the leap" and try to start companies instead. —At least on the West Coast, the startup classes treat leanness as a central principle. I didn't meet many MBAs (especially ones who took those classes) who believed strategy could be laid out and then executed by underlings. Your mileage may vary. —I went to business school because I wanted to get out of the consulting job I didn't like, and loved technology and wanted to move to the Bay Area. That said, it didn't sit well with me that I didn't pursue my dream and try to start a company instead of going, which made me unhappy all year. The question of what motivated someone to go to b-school is generally a good one, though, as most MBAs will gleefully admit that their goal was to spend two years kicking back at "summer camp for adults." —The limits to the degree's usefulness, in my opinion, come from the fact that much of the good learning is in the hard-won experience of visiting founders and leaders (a la Startup School speakers). Unfortunately, to quote Clayton Christensen: “Questions are places in your mind where answers fit. If you haven’t asked the question, the answer has nowhere to go...You have to ask the question – you have to want to know – in order to open up the space for the answer to fit.”[1] I often felt like visiting speakers were giving good advice, but that I didn't have the place in my mind for the answer to fit yet. Another reason to try to start something and accumulate better questions. The opportunity cost was the strongest motivator for me. As a twenty-something tech nerd, another year felt like an eternity. And I'm already five months better at programming and building a product than I would have been. Which feels like a win vs. another piece of paper. I deeply believe my cofounder and I have a better chance of success because we took this path instead (he quit his job). I guess we'll be one more piece of data for the experiment in a few years. P.S. We joke around about our travails once a week at http://uncannyvolley.com/why-not-combinator-podcast/ http://uncannyvolley.com/why-not-combinator-podcast/ if you're bored. [1] http://37signals.com/svn/posts/3225-what-are-questions http://37signals.com/svn/posts/3225-what-are-questions

ig1 13y ago

The author makes the mistake of thinking "MBA" == "CEO/CFO" - there are huge number of MBAs working in marketing, business development, sales, etc. all of which are skills that can be invaluable to a startup. Ironically he recommends a Masters in CS over an MBA and then talks about lean startup philosophy, a philosophy that places business development and product management above development.

noonespecial 13y ago

Using "signals" is always a risk because you might very well be cutting yourself off from a talented pool of people that will be available to your competitors who aren't so choosy. This is exactly why BigCo's that use resume buzzword bingo to do all their hiring are so tragically bad at finding anything better than mediocre talent. The question is whether a particular signal, on the balance, produces better results for less effort than simply vetting the candidates the old-fashioned way.

kriro 13y ago

Disclaimer: I'm just rambling but with this disclaimer it's not a rant. MBA: bad, PhD: bad, I get it. CS-degrees are horrible because you could have build an entire company in the time it takes to get one of those post has to be around the corner. Those MBA folks are too dumb to understand that startups are different than big corporations (or in other words they can't pick up any of the lean XXX books and read the first 10 pages). Amazing that evil Wall Street is willing to hire such morons let alone pay them enough money to be too demanding on average. Those snobby old MBAs and their entitled friends, those networks could never be useful either. Putting a disclaimer at the beginning of a post doesn't turn it into less of a rant.

deleted 13y ago

[deleted]

gaius 13y ago

Having a blog on "svbtle" is a negative signal for being worth reading. The "OMG slavery!!!" guy was from there too.

001sky 13y ago
Having a blog on "svbtle" is a negative signal for being worth reading. And Medium too !

deleted 13y ago

[deleted]

erikb 13y ago

There should be an article "Why it is a negative application signal if the HR worries about MBAs (in startups)". Seriously, there are so many articles out there about this topic. But I don't think there is any good startup team that worries about any of the certificates you can provide. Startup is a game of street smarts. So street cred should count. Having done something cool should count. Having worked with someone cool should count. Being resilient should count. But definitely not having one or another paper.

jackgavigan 13y ago

Disclaimer: I have an MBA. Dalton's full of shit. I could just as easily write a diatribe about developers who think of themselves as special snowflakes, future unicorn founder/CEOs, worthy of extremely high compensation and autonomy, yet have zero clue about business, can't deliver a finished product to save their life and have no appreciation for the importance of usability when it comes to creating a product aimed at users who don't have a CompSci degree. During my stint as CTO of a dot-com back in 1999/2000, I realised that there was a lot I didn't know about running a business, strategy, marketing, business development, finance, cash flow planning, accounting, cap tables, negotiation and all the other little things that add up to a successful venture. So, I decided to go to business school. But guess what? A lobotomy wasn't on the curriculum. I can still knock together a shell script, tail -f a logfile and pipe it through grep, get some vague clue about why something crashed by casting my eye over a Java exception error, and make a lazy developer deeply uncomfortable when he realises that - would you believe it! - this particular MBA actually knows what exception handling is and wants to know why the fuck we're not doing it. Going to business school and getting an MBA added many new arrows to my quiver but it didn't take any away. It didn't narrow my horizons - it broadened them. The idea that an MBA can never be of any value to anything other than a large corporation is as ridiculous as the idea that a coder who learnt Java and the Waterfall method at college will never be able to learn Objective C and cope with Agile. True, some won't be able to but that doesn't mean that all won't. MBA curricula are often perceived as out of date because the content must be approved as part of the academic accreditation process. As a result, they often don't incorporate the latest business methodologies. Whether that's a good or a bad thing depends on whether the latest business thinking is merely a fad or something that will last as long as Clayton Christensen's theory of disruption. But, either way, graduating from business school doesn't mark the end of the learning process. My copy of Eric Ries' "The Lean Startup" occupies the same shelf as "Strategic Management" by Saloner, Shepard and Padolny, "Let Me People Go Surfing" by Yvon Chouinard, "Against The Gods: The Remarkable Story of Risk" by Peter L Bernstein and John W Mullins' "The New Business Road Test". My last two Kindle purchases were Brad Feld's "Startup Communities" and "Four Steps to the Epiphany" by Steve Blank. Dalton claims that, "to an MBA Strategy > Implementation" but it's truer to say that, to an MBA, Strategy comes before Implementation. To do the reverse, implementing blindly and pivoting wildly, is akin to blindly throwing darts at a dartboard - eventually one of them will end up in the bullseye but that isn't necessarily proof that the thrower is anything other than lucky. Dalton's entitled to his prejudice. If he wants to take the shortcomings of a subset of MBAs and apply those as a stereotype across the entire population, that's his prerogative. However, to make broad, sweeping generalisations about someone based on a single fact - whether it's the fact that they have an MBA, what school they went to or the colour of their skin - is pretty foolish because the exceptions will bite you on the ass. For every lame MBA, there's a Sheryl Sandberg or Alexis Maybank. For every team of MBA founders with all the strategy and no product, there's a Matthew Prince and Michelle Zatlyn, who came up with the idea for CloudFlare at Harvard Business School[1], or a Neil Blumenthal, who attributes much of Warby Parker’s success to his and his co-founders’ experiences at business school, which Blumenthal described as "the most helpful and useful of any of my educational background."[2] And, for every lame MBA, there are likely dozens of developers who scoff at the notion that building a successful company requires anything other than the ability to code, and certainly none of that crap they teach you in business school. Of course, if that were true, we'd have many more billion-dollar startups and far fewer founders making schoolboy errors that could have been easily avoided. Maybe if Dalton had taken a few classes in strategy and marketing, Wired wouldn't be writing about "The Great App.net Mistake".[3] [1]: http://www.cloudflare.com/our-story http://www.cloudflare.com/our-story [2]: http://pandodaily.com/2013/08/29/warby-parker-the-result-of-a-perfectly-calcuated-mba-machine/ http://pandodaily.com/2013/08/29/warby-parker-the-result-of-... [3]: http://www.wired.com/gadgetlab/2013/08/the-great-app-net-mistake/ http://www.wired.com/gadgetlab/2013/08/the-great-app-net-mis...

data_app 13y ago

If MBA is such a negative hiring signal (for startups) - why do I see so many MBAs in startups? The data shows that there are as many MBAs as PhDs or Masters. (% working in startups vs total pool). Just like a degree in computer science teaches you the inner workings of a computer, a degree in business administration teaches you how to run a business. How can that knowledge be invaluable in a startup? I do believe that certain segment (including the author) of the population has a strong negative bias against MBAs but majority aren't... Most mature+experienced tech founders understands the value of an MBA degree and even if they don't, they treat it as any other degree...

GuerraEarth 13y ago

"Thus one primary motivation of an MBA is to secure their own massive salary, stock and title… and this motivation is diametrically opposed to the psychological makeup of a succesful startup team-member." --I had to re-choose my co-founder because I found this to be an exact fit of my situation. The person with the MBA felt entitled to everything but would not do any of the hardcore work involved. In fact, at Columbia U, I know tonnes of MBA students and they all have the same characteristic described in Dalton's article. $$$ glisten in their irises whenever they talk about startups. For me, someone who has no MBA and would not get an MBA if it were the only academic degree on the planet, a startup is about the 24/7 work involved to create and nurture a good, innovative, useful and interesting toy that can do big things for other people. But that is why in the world, we need a million flowers blooming. People are supposed to be different. Variety is good. But as an initial co-founder, someone with an MBA--chances are--isn't the best choice, according to my experience most humble. : )

deleted 13y ago

[deleted]

vfusion 13y ago

The sweeping generalizations in this article diminish the argument. It really depends on the person. And on his/her motivation for getting an advanced degree. For me, an advanced degree indicates that a person has enough structure to pull things through. (A positive hiring signal.) It all comes down to not judging people by their résumé but bringing them in for an interview to see if they click with the culture.

bigchewy 13y ago

One of the nice things about having an MBA is that you learn to construct an argument based on facts, not conjecture. OP would likely be much more persuasive if he had gone to B School. As a result of B School, I am not nearly as opinionated as I once was, until I can cite data to support my conclusions.

rgbrgb 13y ago
As opposed to science/engineering?
- bigchewy 13y ago
  great point. If OP has a science / engineering background he should be using that education to form a reasoned argument with data rather than amplifying the echo chamber with more conjecture

austinhutch 13y ago

Breaking news: HN hates MBAs.

7Figures2Commas 13y ago

Why having a CS degree is a negative hiring signal (for startups) Supply and Demand There are some basic supply and demand issues for CS graduates. On the supply side, a surprising number of jobs are at angel and venture-backed startups that are burning through cash to pay "market rates" for engineering "talent" and likely won't be around in five years. On the demand side, while there is currently significant demand for candidates with CS degrees, if you didn't graduate from a top CS program and/or don't excel at FizzBuzz, your options may be limited. Entitlement CS graduates think of themselves as special snowflakes, future Mark Zuckerbergs, worthy of extremely high compensation and authority. Misguided Thinking "CS thinking” involves putting all of the value in technology and then, when it doesn't sell itself, scrambling to find a "growth hacker" who can take it to market. When that fails, "lean startup philosophy" suggests that you pseudo-scientifically iterate over and over again until your angel investor's money is depleted. Selection Bias Because building functional CRUD applications that offer value doesn't require a CS degree, it really bears examining a person's motivation for getting one. Was it because he or she is more interested in the theoretical than the practical? Is the individual going to make decisions based on what is best for the business or on what technology or approach is sexiest? Will he or she be able to compromise when business needs dictate compromise? Limited usefulness How many startups ever need someone who can reproduce common algorithms that every popular programming language has functions for? Opportunity Cost The time someone spent getting a CS degree was time they could have spent actually developing domain expertise.

kgosser 13y ago
This was very South Parkian. I liked it.

jroseattle 13y ago

I disagree with the generalization of this post. If there is anything I've learned in my career at multiple startups, it's this: credentials have little-to-zero effect on success. The fact that a person might have an MBA, or a PhD, or a commercial driver's license (I hired an awesome dev who had one of these), has zero correlation to success or failure. In my experience, what matters is the person, not the label.

janogonzalez 13y ago

Then it's time to switch to MacBook Pro?

rjohnk 13y ago

What, are we supposed to use Dells or something? Ha! Get it? :/

melindajb 13y ago

I'd argue that this post in itself violates the "shallow" prohibition on Hacker News. It's like a religious or political debate. But for the record, once one starts generalizing an entire class of people, it's a slippery slope: I hate MBAS -> I hate Marketers --> I hate women. see: https://medium.com/about-work/aa49dffc975d https://medium.com/about-work/aa49dffc975d There are shitty devs just like there are shitty MBAs. And that's where I'll leave it.

fizx 13y ago

Group cohesion often benefits from choosing a nemesis and creating a straw boogeyman--a rallying cry for the group to fight against. Rubyists hate Java with all of its J2EE and XML configuration (never mind that Rails is at least as complicated, and Java moved on a long time ago). Certain religious groups hate gay people, with their immoral acts in the streets and the corrupting of the young (I hope I don't have to explain why this is BS). And startup people have their boogeyman: the clueless MBA asshole stereotype. Learn to see beyond this. There is always some fragment of truth in stereotypes, but it's more useful to understand why these articles are written.

michaelochurch 13y ago

The major point here is the selection bias. What does it say if someone has a Stanford MBA and is applying for a subordinate role (with sub-5% equity) at your startup, instead of private equity jobs? If you aren't making $500k per year (including bonus, and with carried interest) two years after graduating from Harvard or Stanford business school, you're considered a failure-- unless you're founding a wildly successful startup. In the MBA crowd, startups attract people who failed to get a toehold in the more traditional business world, and are looking for second chances. Yes, you'll have to fly commercial for a few years, but you might become a billionaire. The Columbia MBA who becomes the VP/Finance of your dopey startup (instead of going directly into the smoke-filled rooms and half-million salaries) is going to have a gigantic chip on her shoulder, guaranteed, because she had to be in the bottom 5% of her class to be there. If you want to be an attractive candidate for startups, and you have an MBA, first you need to succeed on the MBA track for a good 5-10 years, then you need to make a credible case that you've genuinely decided (after a few wins) that you want to take your life -- and that you're not just some carpetbagger who failed out of "real business" and is using the startup world to get a second chance. Also, I have to agree that business people in startupland massively overvalue themselves. I'm a Tech 8, which means that if I'm looking for a CEO co-founder, I'm looking for a Business 8 (or 9; but since they generally have better negotiation skills, that match is almost impossible for now). I'm not going to take a subordinate role (and 2% equity) to a Business 6. If you're not coming to me with the resources in hand (funding and first clients already lined up) and you're not on a first-name basis with the top names of Sand Hill Road, you're not a Business 8. A Biz 7 comes with resources in hand and can get any article put into credible press; a Biz 8 can make any introduction in the world happen. To tell the truth, though, Business 8 startup founders are exceedingly rare. They're usually venture capitalists.

kenster07 13y ago
So if they aren't apparently trying to maximize their personal profits as measured in dollars, then they are failures. That's quite a harsh generalization.
- michaelochurch 13y ago

mattty 13y ago

A useful counterpoint from Ben Horowitz: http://bhorowitz.com/2012/05/18/is-now-the-time-to-hire-mbas/ http://bhorowitz.com/2012/05/18/is-now-the-time-to-hire-mbas...

drp4929 13y ago

In 90s, technical founders were able to launch startups successfully if they were technically strong. Getting designer was not top priority at the time. So everyone focused on having strong technical teams. Eventually, people figured out that having someone with design skills early on your team can provide huge competitive advantage to your startup against tech only competitors. And today designer's role is very prominent in startup world. Now all startups have technical and designing strengths on their team from day one, what do you need to stay one step ahead of the crowd ? I have a feeling that code-wizard + design-guru team won't be good enough in near future.

nl 13y ago

I already talked about combining an undergrad engineering degree with an MBA. I'll hire as many of those people as I possibly can. Marc Andreessen http://pmarchive.com/guide_to_career_planning_part2.html http://pmarchive.com/guide_to_career_planning_part2.html

Keyframe 13y ago

BS article. Early startup needs dedicated people that can bring both product and strategy to life, doesn't matter if they are MBAs, MBPs, McRibs, whatever.

jonnathanson 13y ago

I have an MBA, fwiw. Dalton leaves off what I'd consider to be the biggest red flag: risk aversion. Many MBAs are risk averse. They are career-track professionals. They are box checkers. They are bullet-point collectors. A lot of them are extremely smart, and the ones from the top-tier programs are among the hardest working sons of bitches you'll ever meet. These were the kids who ground their asses off in high school and undergrad, and who will (generally) land lucrative, but safe careers continuing to apply the same grind-and-optimize strategies that got them through school. They do well in regimented, structured environments where there are frameworks, processes, known inputs, etc. They flourish in career tracks that resemble academic environments: where there are "grades," tracks, clear progression, etc. A lot of engineers are the exact same way, for what it's worth. They don't have a monopoly on risk-taking any more than MBAs have a monopoly on risk aversion. Nevertheless, as a general rule, an MBA is not a degree one pursues if one is seeking risk or adventure (and I'd argue that the same could be said of any master's degree). I'd almost require an MBA of a CFO, COO, or CEO that I'm bringing on board to scale up a business or take the helm of a mature business. But I would be a little uneasy about an MBA's founding a tech startup from the ground up. That's not to say that MBAs can't do the latter, or are necessarily good at the former. But there's a correlation. (MBAs are perfectly capable of starting non-tech businesses, however, and often do. But to found a tech startup, the MBA would really need to be technical to a high degree.) A startup founder needs to be risk-seeking, and to whatever extent he or she has collected a bunch of degrees, that's a pattern of risk-averse behavior. It's an indicator. I still think such a person could make a great fit working at a startup, provided the entitlement issue isn't there (which it really is for a lot of folks, owing in large part to the expense of the degree). But as a founder? I'd be a little leery. MBA programs are changing these days, and it needs to be said. A lot of them are adopting Lean Startup methodologies, or refocusing on innovation, or encouraging and teaching entrepreneurship (to whatever extent the latter can be taught, which I'd guesstimate to be maybe 50-60%). Today's MBAs are not your grandfather's MBAs. They're not the 1990s tech-bubble MBAs, either. Nevertheless, a lot of them are not risk takers. The ones who are? Give them a fair shot. You'd be surprised. They are incredibly smart, well trained, quantitatively analytical, and make great marketers, biz dev & corp dev types, CFOs, and operations managers. Few of them walk into startups expecting $200k + signing bonus + equity the way they might have 20 years ago. That stereotype is out of date. But if a well-qualified candidate shows up at your door with realistic expectations about the job, the title, the compensation, and so forth: I see nothing wrong there. He or she has self-selected out of entitlement issues. (On the flip side, spotting the entitled ones -- MBAs or otherwise -- is fairly easy.)