11 ms·

For business school graduates, investment banking is out and consulting is in

86 points by sebgr 12y ago

pptr1 12y ago
On a contrarian point of view it is probably a good time to be on wall street and it is probably a bad time to be in tech.
- rjtavares 12y ago
  Applying the same contrarian point of view, it's probably a good time to work for a record label or a physical bookstore. I don't think IB is on the same level of obsolescence as those industries (it's not obsolete at all, although banking as a whole has surely changed since 2008), just pointing out the flaw in that reasoning.
  - cylinder 12y ago
    Either way they're just looking to be middlemen. Industry doesn't matter.
- ramayac 12y ago
  Interesting, I'm a Programmer (Systems Engineer) with an MBA, and right now, I don't know where to go.
  - throwaway1979 12y ago
    Did you do a full time MBA or part time? What was your motivation for doing your degree?
    - ramayac 12y ago
      Full time, took two years. Well the main one was just learning, know more people and I thought I would learn how to start or make my own company. Look, the best part was knowing a LOT more people, learning from them, and just getting all that business stuff/crap/insights... But the single best and most important advice I could give some one that doesn't want to take a full MBA, it's: 1. Learn finances, OMG, just do it. Loan payments, ballon payments, how interest works, credit lines, bonds, leisures, etc. Just LEARN IT, its really usefull, no matter how, just learn it and really well! It's one of the single most important things you could learn as an adult. 2. Learn Marketing. Not just the social media crap, but the "Emotional Branding" stuff. OMG, GO GO GO. Learn to creat "experiences" with the senses, to manipulate prices, learn the marketing lingo and feel the bliss of learning how to sell your producs. DO. IT. NOW. Anyway, I'm getting my degree in about two weeks. It was hard. It was fun, and actually cheap (third world country yey!). Any more questions? ask away.
Eric_WVGG 12y ago
Anecdotally, I work in tech in New York City, and holy shit do I see a lot of this.
alimoeeny 12y ago
I think it is not just MBAs.
bluedevil2k 12y ago
MBAs follow the money, and right now that's in tech and consulting and not as much in finance.
Someone1234 12y ago
That's unfortunate. MBAs are toxic to businesses. They're the classic middle-manager, the random internal goal creators, the inefficiency masters, and so on. They also, as this article makes clear, only care about short term profitability over long term growth or stability (as they won't be there in five years anyway!). You can look at tons of formally successful businesses that took in too many MBA types and lost their edge (e.g. IBM, Microsoft, HP, Cisco, et al). Google is also starting to go in that direction. Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy). I'd happily hire an accountant, a lawyer, or even an economist. They're all specialists who bring different knowledge and perspectives to the table. I'd avoid hiring an MBA as they're largely useless people who just want to gum up the works with bullshit. Engineers for engineering managers aren't perfect, but at least they aren't so far removed as MBAs are. At least once in their lives they knew what it took to deliver, and I'd prefer to train up an engineer into a decent manager than take in a pre-trained MBA.
- soundlab 12y ago
  This kind of seething diatribe is what's wrong with HN.
  - VLM 12y ago
    Because it provides rational experience based opposition to saccharine one sided propaganda? In an ideal world we'd need neither, but in a world exclusively made of extremes...
    - bduerst 12y ago
      Because it's hyperbolic generalizations about a group of people without statistics or data to back it up.
      - VLM 12y ago
        But the meta question "is that bad". For example if you want to learn geography, jus. the basic map in your head, you could do worse than "OK the rockies are the high point, and death valley is the low point and everything is in between". In isolation, a very one sided story about DV that doesn't even point out its an extreme rather than a norm would provoke some really weird ideas. So its of value to point out thats an extreme and here's the other extreme and have fun exploring the middle on your own.
baq 12y ago
the headline is another way of saying 'tech is officially in bubble mode'
hammock 12y ago
Peter Thiel, last week, on MBAs getting jobs: The conceit of the MBA is that you don’t need to have any substance at all. It’s just this management science, and you can apply that equally well in [any company]. At the end of [their MBA program], a large number of people go into whatever was the last trendy thing to do. They’ve done studies at Harvard Business School where they’ve found that the largest cohort always went into the wrong field. So in 1989, they all went to work for Michael Milken, a year or two before he went to jail. They were never interested in Silicon Valley except for 1999, 2000. The last decade their interest was housing and private equity. http://www.washingtonpost.com/blogs/on-leadership/wp/2014/10/10/peter-thiel-on-what-works-at-work/ http://www.washingtonpost.com/blogs/on-leadership/wp/2014/10...
- enraged_camel 12y ago
  "... They were never interested in Silicon Valley except for 1999, 2000..." I wonder if this means that MBAs starting to flock to the tech sector again is an indicator that another crash is coming. :-)
  - JonnieCache 12y ago
    The phrase "dumb money" springs to mind. Maybe MBAs are the new cab drivers, or dentists, or however the phrase goes.
  - TeMPOraL 12y ago
    Maybe causation goes the other way around; maybe it's the influx of MBAs that crashes the sector... ;).
  - justaman 12y ago
    Not a crash... more a decentralization.
  - pessimizer 12y ago
    Scary day; two convincing signs of a looming techpocolypse: this and https://news.ycombinator.com/item?id=8447971 https://news.ycombinator.com/item?id=8447971
vparikh 12y ago
Thats when you know you have a bubble.
vparikh 12y ago
That is when you know tech is in a bubble
sshah1983 12y ago
I don't think it's ever fair to generalize and hate on people just because they have a specific degree. Sometimes grad school is a good place to reboot your career and I'm of the belief that education is never a bad move. There's plenty of insanely smart people I know who have an MBA and can get their hands dirty and hustle (versus the stereotype that they can just build a powerpoint on execution but can't actually deliver). It's just a matter of finding the right people.
jordanpg 12y ago
To me, "business" in any generic sense just seems incredibly boring. It always has, it always will. I could care less about what the trends are or where I perceive the money is. In contrast, "technical challenges", have and will always be of interest to me, even if they are pointless, like the Euler Project or going to ground on some obscure syntax question. It seems likely that sharp graduates coming into tech because they perceive they can make a lot of money there or because they perceive it is a good launching pad into an executive lifestyle is not going to be a net benefit to the technical community in the long run. This group of people, as a whole, will never share in the ESR-style hacker ethos.
- gaius 12y ago
  A meaningful system, one that gets stuff done in the real world, comprises people, processes and technology. All are hackable.
  - sutterbomb 12y ago
    This is very true and too many people overlook it. Many "generic" challenges faced by "business" are similar in nature to technical challenges. For example, a common business challenge is organizational design. How do we create an organizational structure that serves the needs of the business and the people who work there? Well to start, what are the basic inputs and outputs of the business? What is needed to transform those inputs to the outputs in a manner that is efficient, adaptable, safe etc. Are there common groups of people that tend to work on common inputs and create common outputs ? Within those groups, are there specific people needed to do specific tasks? Imagine person A, in group A, needs an output from person B in group B. Does person A need to know exactly how the output was created? If you've got this far, hopefully you realize the parallels I'm drawing. Same types of thought experiments can be applied to all kinds of operational and financial aspects of running a business- most are clear optimization problems. It's unfortunate that too many "hackers" hear the word business and assume it's about boozy dinners with other business people, or boring powerpoints that tell us nothing. There's plenty of interesting challenges in business, and strong MBA-types are often better prepared to address them because they understand the various design patterns available to them.
applecore 12y ago
For those in the know, the prospects for an investment banking career just haven't been the same since 2008—2009, so it's not surprising to see graduates go elsewhere.
greenpinguin 12y ago
not sure if this is the correct headline. finance overall is less popular but in 2008/9 most investment banks where either bought by "normal" banks or where simply allowed to convert their bank type from investment to "normal": Goldman Sachs and Morgan Stanley "abandon their status as investment banks" by converting themselves into "traditional bank holding companies", thereby making themselves eligible to receive billions of dollars each in emergency taxpayer-funded assistance. http://en.wikipedia.org/wiki/History_of_investment_banking_in_the_United_States http://en.wikipedia.org/wiki/History_of_investment_banking_i...
suprgeek 12y ago
There are two serious problems with this: - Many "Managerial" people flocking to Tech only and solely because they see it as a shortcut to making a quick buck. When a field becomes inundated with people who are not core to the field but still wield power - guess what is going to happen - Many MBAs are convinced that there is some mystical science of "Business Administration" that applies equally well in any company irrespective of size, type of business, types of customers etc. This has led to some spectacularly BAD decisions and programs that could be ruinous in the medium to long term but look good on the shorter timescales. A crash in the "Tech Sector" has now become a real possibility in the next 1-2 years
- gaius 12y ago
  Just for arguments sake: aren't we convinced there is a mystical science of "systems administration" that applies equally well in any company...?
leroy_masochist 12y ago
I figured this would be a lively comments section. MBA-hatred might be the most common blind spot in the Valley, and it bums me out. Within the historical context, the animosity makes sense; during the 99-00 bubble, fast-growing companies that were founded and led by engineers realized that they couldn't grow managers organically and maintain their growth rate -- so, they recruited MBAs from the top schools, especially HBS and Stanford. In so doing, they made a categorical error -- they inferred that all Harvard MBAs are, at a minimum, competent managers in the same way that all Stanford CS master's degree holders are, at a minimum, competent programmers. Many people got burned for making this assumption. Anecdotal evidence suggests that the MBAs who "answered the call" and/or beat down the doors of hot startups in the bubble years exemplified the worst of the MBA stereotype: arrogant, entitled pricks whose life plan from high school was get the right grades, do the right extracurricular activities, go to the right college, get the right grades, get the right internship, get the right job, kiss everyone's ass and get good evaluations, get the right GMAT score, get into HBS, and then be anointed as the elite, highly-paid business person that they were born to be. They were process-oriented people who didn't care about creating value, they just wanted their slice of the pie. I'll be honest, I knew a few people like this in business school, but they were a small minority. It's unfortunate that people who meet this stereotype have punched above their weight when it comes to making an impression on popular opinion in the Valley. In my case I got a lot out of going to business school. It was a great transition from military service: I got a comprehensive crash course on a lot of relevant topics, got a recruiting platform from which I got a good job where I subsequently learned a lot, and got a broad and deep network of a lot of people (most of them not douchebags) across a wide set of industries. On the topic of the article itself....I think the author is trying to squeeze the data too hard. The story here is not "i-banking no longer cool for trend-following MBAs", it's "i-banks are cutting costs and realizing that it's cheaper to hire more people out of college and try to keep them around longer".
- Balgair 12y ago
  Thank you for the viewpoint. MBAs, as used to segregate people in a bureaucracy, are a good idea. Your company has a pretty good idea that you have heard of accounting and it's theory, marketing as a profession, and the business and it's place in law and society having done an MBA. Yes, to many people, this is 'common sense' but with thousands of people working for you 'common' is very hard to come by. MBA degrees fill a function, to get everyone the same vocab, ideas, and implementations of those things. It leads to group think by design, it has to. You simply cannot have 500 people working together with different definitions or fuzzy ideas of what accounting actually does. It would be chaos. MBAs are a symptom of bureaucracy, not a cause of it. Group Think as well, you have to have standard definitions, processes, and procedures. The issue is when you loose sight of that need and create orthodoxy.
bsg75 12y ago
The article seems to imply MBAs are consulting right out of business school, in other words without experience? The education is valuable, but unless consulting is very different in the "business" side of things, this sounds dangerous.
- mikeyouse 12y ago
  Most MBA programs only accept students with several years of work experience. There are always a few straight from undergrad, but the vast majority aren't. Typically , fresh MBA grads that are 'consulting' are just juniors on the projects. They are basically just excel monkeys for a few years until they gain more specific experience.
- omalleyt 12y ago
  The bulk of people in the consulting industry are undergrads right out of college. Source: in consulting
mathattack 12y ago
The subject (due to length constraints) unfortunately left out technology too. For all the knock that MBAs get, it's worth noting that to make money and survive, businesses must do two things: 1 - Create Value 2 - Capture Value Many of the people here excel at #1, but there are plenty of CS majors who don't create any value. Good MBAs help in capturing value. This can come from turning the business into a monopoly (a goal of Peter Thiel) or from figuring out how to incentivize a sales force. These are things generally not well understood by great programmers. That said, MBAs also tend to be a tailing indicator. Which tells me that it's probably time to be a banker, and look for cash over equity for the next few years. :-)

86 points by sebgr 12y ago

pptr1 12y ago

On a contrarian point of view it is probably a good time to be on wall street and it is probably a bad time to be in tech.

rjtavares 12y ago
Applying the same contrarian point of view, it's probably a good time to work for a record label or a physical bookstore. I don't think IB is on the same level of obsolescence as those industries (it's not obsolete at all, although banking as a whole has surely changed since 2008), just pointing out the flaw in that reasoning.
- cylinder 12y ago
  Either way they're just looking to be middlemen. Industry doesn't matter.
ramayac 12y ago
Interesting, I'm a Programmer (Systems Engineer) with an MBA, and right now, I don't know where to go.
- throwaway1979 12y ago
  Did you do a full time MBA or part time? What was your motivation for doing your degree?
  - ramayac 12y ago
    Full time, took two years. Well the main one was just learning, know more people and I thought I would learn how to start or make my own company. Look, the best part was knowing a LOT more people, learning from them, and just getting all that business stuff/crap/insights... But the single best and most important advice I could give some one that doesn't want to take a full MBA, it's: 1. Learn finances, OMG, just do it. Loan payments, ballon payments, how interest works, credit lines, bonds, leisures, etc. Just LEARN IT, its really usefull, no matter how, just learn it and really well! It's one of the single most important things you could learn as an adult. 2. Learn Marketing. Not just the social media crap, but the "Emotional Branding" stuff. OMG, GO GO GO. Learn to creat "experiences" with the senses, to manipulate prices, learn the marketing lingo and feel the bliss of learning how to sell your producs. DO. IT. NOW. Anyway, I'm getting my degree in about two weeks. It was hard. It was fun, and actually cheap (third world country yey!). Any more questions? ask away.

Eric_WVGG 12y ago

Anecdotally, I work in tech in New York City, and holy shit do I see a lot of this.

alimoeeny 12y ago

I think it is not just MBAs.

bluedevil2k 12y ago

MBAs follow the money, and right now that's in tech and consulting and not as much in finance.

Someone1234 12y ago

That's unfortunate. MBAs are toxic to businesses. They're the classic middle-manager, the random internal goal creators, the inefficiency masters, and so on. They also, as this article makes clear, only care about short term profitability over long term growth or stability (as they won't be there in five years anyway!). You can look at tons of formally successful businesses that took in too many MBA types and lost their edge (e.g. IBM, Microsoft, HP, Cisco, et al). Google is also starting to go in that direction. Amazon has actually been fairly successful in avoiding that culture (partly due to their own internal culture being almost anti-MBA philosophy). I'd happily hire an accountant, a lawyer, or even an economist. They're all specialists who bring different knowledge and perspectives to the table. I'd avoid hiring an MBA as they're largely useless people who just want to gum up the works with bullshit. Engineers for engineering managers aren't perfect, but at least they aren't so far removed as MBAs are. At least once in their lives they knew what it took to deliver, and I'd prefer to train up an engineer into a decent manager than take in a pre-trained MBA.

soundlab 12y ago
This kind of seething diatribe is what's wrong with HN.
- VLM 12y ago
  Because it provides rational experience based opposition to saccharine one sided propaganda? In an ideal world we'd need neither, but in a world exclusively made of extremes...
  - bduerst 12y ago
    Because it's hyperbolic generalizations about a group of people without statistics or data to back it up.
    - VLM 12y ago
      But the meta question "is that bad". For example if you want to learn geography, jus. the basic map in your head, you could do worse than "OK the rockies are the high point, and death valley is the low point and everything is in between". In isolation, a very one sided story about DV that doesn't even point out its an extreme rather than a norm would provoke some really weird ideas. So its of value to point out thats an extreme and here's the other extreme and have fun exploring the middle on your own.

baq 12y ago

the headline is another way of saying 'tech is officially in bubble mode'

hammock 12y ago

Peter Thiel, last week, on MBAs getting jobs: The conceit of the MBA is that you don’t need to have any substance at all. It’s just this management science, and you can apply that equally well in [any company]. At the end of [their MBA program], a large number of people go into whatever was the last trendy thing to do. They’ve done studies at Harvard Business School where they’ve found that the largest cohort always went into the wrong field. So in 1989, they all went to work for Michael Milken, a year or two before he went to jail. They were never interested in Silicon Valley except for 1999, 2000. The last decade their interest was housing and private equity. http://www.washingtonpost.com/blogs/on-leadership/wp/2014/10/10/peter-thiel-on-what-works-at-work/ http://www.washingtonpost.com/blogs/on-leadership/wp/2014/10...

enraged_camel 12y ago
"... They were never interested in Silicon Valley except for 1999, 2000..." I wonder if this means that MBAs starting to flock to the tech sector again is an indicator that another crash is coming. :-)
- JonnieCache 12y ago
  The phrase "dumb money" springs to mind. Maybe MBAs are the new cab drivers, or dentists, or however the phrase goes.
- TeMPOraL 12y ago
  Maybe causation goes the other way around; maybe it's the influx of MBAs that crashes the sector... ;).
- justaman 12y ago
  Not a crash... more a decentralization.
- pessimizer 12y ago
  Scary day; two convincing signs of a looming techpocolypse: this and https://news.ycombinator.com/item?id=8447971 https://news.ycombinator.com/item?id=8447971

vparikh 12y ago

Thats when you know you have a bubble.

vparikh 12y ago

That is when you know tech is in a bubble

sshah1983 12y ago

I don't think it's ever fair to generalize and hate on people just because they have a specific degree. Sometimes grad school is a good place to reboot your career and I'm of the belief that education is never a bad move. There's plenty of insanely smart people I know who have an MBA and can get their hands dirty and hustle (versus the stereotype that they can just build a powerpoint on execution but can't actually deliver). It's just a matter of finding the right people.

jordanpg 12y ago

To me, "business" in any generic sense just seems incredibly boring. It always has, it always will. I could care less about what the trends are or where I perceive the money is. In contrast, "technical challenges", have and will always be of interest to me, even if they are pointless, like the Euler Project or going to ground on some obscure syntax question. It seems likely that sharp graduates coming into tech because they perceive they can make a lot of money there or because they perceive it is a good launching pad into an executive lifestyle is not going to be a net benefit to the technical community in the long run. This group of people, as a whole, will never share in the ESR-style hacker ethos.

gaius 12y ago
A meaningful system, one that gets stuff done in the real world, comprises people, processes and technology. All are hackable.
- sutterbomb 12y ago
  This is very true and too many people overlook it. Many "generic" challenges faced by "business" are similar in nature to technical challenges. For example, a common business challenge is organizational design. How do we create an organizational structure that serves the needs of the business and the people who work there? Well to start, what are the basic inputs and outputs of the business? What is needed to transform those inputs to the outputs in a manner that is efficient, adaptable, safe etc. Are there common groups of people that tend to work on common inputs and create common outputs ? Within those groups, are there specific people needed to do specific tasks? Imagine person A, in group A, needs an output from person B in group B. Does person A need to know exactly how the output was created? If you've got this far, hopefully you realize the parallels I'm drawing. Same types of thought experiments can be applied to all kinds of operational and financial aspects of running a business- most are clear optimization problems. It's unfortunate that too many "hackers" hear the word business and assume it's about boozy dinners with other business people, or boring powerpoints that tell us nothing. There's plenty of interesting challenges in business, and strong MBA-types are often better prepared to address them because they understand the various design patterns available to them.

applecore 12y ago

For those in the know, the prospects for an investment banking career just haven't been the same since 2008—2009, so it's not surprising to see graduates go elsewhere.

greenpinguin 12y ago

not sure if this is the correct headline. finance overall is less popular but in 2008/9 most investment banks where either bought by "normal" banks or where simply allowed to convert their bank type from investment to "normal": Goldman Sachs and Morgan Stanley "abandon their status as investment banks" by converting themselves into "traditional bank holding companies", thereby making themselves eligible to receive billions of dollars each in emergency taxpayer-funded assistance. http://en.wikipedia.org/wiki/History_of_investment_banking_in_the_United_States http://en.wikipedia.org/wiki/History_of_investment_banking_i...

suprgeek 12y ago

There are two serious problems with this: - Many "Managerial" people flocking to Tech only and solely because they see it as a shortcut to making a quick buck. When a field becomes inundated with people who are not core to the field but still wield power - guess what is going to happen - Many MBAs are convinced that there is some mystical science of "Business Administration" that applies equally well in any company irrespective of size, type of business, types of customers etc. This has led to some spectacularly BAD decisions and programs that could be ruinous in the medium to long term but look good on the shorter timescales. A crash in the "Tech Sector" has now become a real possibility in the next 1-2 years

gaius 12y ago
Just for arguments sake: aren't we convinced there is a mystical science of "systems administration" that applies equally well in any company...?

leroy_masochist 12y ago

I figured this would be a lively comments section. MBA-hatred might be the most common blind spot in the Valley, and it bums me out. Within the historical context, the animosity makes sense; during the 99-00 bubble, fast-growing companies that were founded and led by engineers realized that they couldn't grow managers organically and maintain their growth rate -- so, they recruited MBAs from the top schools, especially HBS and Stanford. In so doing, they made a categorical error -- they inferred that all Harvard MBAs are, at a minimum, competent managers in the same way that all Stanford CS master's degree holders are, at a minimum, competent programmers. Many people got burned for making this assumption. Anecdotal evidence suggests that the MBAs who "answered the call" and/or beat down the doors of hot startups in the bubble years exemplified the worst of the MBA stereotype: arrogant, entitled pricks whose life plan from high school was get the right grades, do the right extracurricular activities, go to the right college, get the right grades, get the right internship, get the right job, kiss everyone's ass and get good evaluations, get the right GMAT score, get into HBS, and then be anointed as the elite, highly-paid business person that they were born to be. They were process-oriented people who didn't care about creating value, they just wanted their slice of the pie. I'll be honest, I knew a few people like this in business school, but they were a small minority. It's unfortunate that people who meet this stereotype have punched above their weight when it comes to making an impression on popular opinion in the Valley. In my case I got a lot out of going to business school. It was a great transition from military service: I got a comprehensive crash course on a lot of relevant topics, got a recruiting platform from which I got a good job where I subsequently learned a lot, and got a broad and deep network of a lot of people (most of them not douchebags) across a wide set of industries. On the topic of the article itself....I think the author is trying to squeeze the data too hard. The story here is not "i-banking no longer cool for trend-following MBAs", it's "i-banks are cutting costs and realizing that it's cheaper to hire more people out of college and try to keep them around longer".

Balgair 12y ago
Thank you for the viewpoint. MBAs, as used to segregate people in a bureaucracy, are a good idea. Your company has a pretty good idea that you have heard of accounting and it's theory, marketing as a profession, and the business and it's place in law and society having done an MBA. Yes, to many people, this is 'common sense' but with thousands of people working for you 'common' is very hard to come by. MBA degrees fill a function, to get everyone the same vocab, ideas, and implementations of those things. It leads to group think by design, it has to. You simply cannot have 500 people working together with different definitions or fuzzy ideas of what accounting actually does. It would be chaos. MBAs are a symptom of bureaucracy, not a cause of it. Group Think as well, you have to have standard definitions, processes, and procedures. The issue is when you loose sight of that need and create orthodoxy.

bsg75 12y ago

The article seems to imply MBAs are consulting right out of business school, in other words without experience? The education is valuable, but unless consulting is very different in the "business" side of things, this sounds dangerous.

mikeyouse 12y ago
Most MBA programs only accept students with several years of work experience. There are always a few straight from undergrad, but the vast majority aren't. Typically , fresh MBA grads that are 'consulting' are just juniors on the projects. They are basically just excel monkeys for a few years until they gain more specific experience.
omalleyt 12y ago
The bulk of people in the consulting industry are undergrads right out of college. Source: in consulting

mathattack 12y ago

The subject (due to length constraints) unfortunately left out technology too. For all the knock that MBAs get, it's worth noting that to make money and survive, businesses must do two things: 1 - Create Value 2 - Capture Value Many of the people here excel at #1, but there are plenty of CS majors who don't create any value. Good MBAs help in capturing value. This can come from turning the business into a monopoly (a goal of Peter Thiel) or from figuring out how to incentivize a sales force. These are things generally not well understood by great programmers. That said, MBAs also tend to be a tailing indicator. Which tells me that it's probably time to be a banker, and look for cash over equity for the next few years. :-)