The Simple MBA Manifesto: Do We Really Need MBAs?

http://www.slideshare.net/pramitsingh/the-success-manual-do-we-need-mbas

by pramit • 16 years ago

31 37 16 years ago

alex13• 16 years ago

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

“If you work your way down the Forbes 400 making an x next to the name of each person with an MBA, you’ll learn something important about business school. After Warren Buffett, you don’t hit another MBA till number 22, Phil Knight, the CEO of Nike. There are only 5 MBAs in the top 50. What you notice in the Forbes 400 are a lot of people with technical backgrounds. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Jeff Bezos, Gordon Moore. The rulers of the technology business tend to come from technology, not business. So if you want to invest two years in something that will help you succeed in business, the evidence suggests you’d do better to learn how to hack than get an MBA.” - Paul Graham

sachinag• 16 years ago

The Fortune 400 are generally people who found an early niche and exploited it in a way that created barriers to entry. That could be in software, but it could be in dominating natural resources in a country, government-sanctioned monopolies, or excellence in squeezing efficiencies out of economies of scale.

It's more proscriptive, I feel, to try to find people around you who you think are successful, and ask them, not the outliers in a magazine.

alex13• 16 years ago

Whether it's software, or natural resources... the path to riches begins with an idea. It begins with creating something that people want. And I don't think that's something that an MBA program teaches you.

ig12• 16 years ago

The Forbes statistics are misleading, firstly they only represent a tiny percentage of businesses and secondly most people in that list made their money before MBAs were widespread. The Forbes 400 in 40 years time is likely to be considerably different.

Thirdly Gates, Jobs, Ellison, Dell also all dropped out of school, it doesn't mean dropping out of school makes you more likely to succeed at business. It's a classic case of selection bias. You need to look at the whole population otherwise there might be a million technology founder businesses that fail for everyone that might succeed.

What you need to do in order to have a fair test is take the graduating classes at an MBA course versus say a CS course, look at the number of graduates who start businesses and then analyse how many of them succeed from each each group.

alex13• 16 years ago

I personally think there are more CS graduates that start businesses than MBAs. From what I have seen, most MBAs become consultants or executives of existing companies. I could be completely wrong here though as I am speaking based on people I have met and not actual statistics.

I think the point that's trying to be made here is that you don't need an MBA to make it in business, which I think is a very valid point. You just need the entrepreneurial spirit and drive, along with the technical expertise (if you're in software), not the MBA.

falsestprophet• 16 years ago

Warren Buffet received a BS in Economics from Nebraska and MS in Economics from Columbia. He does not hold an MBA.

dtap• 16 years ago

Also worthy of note:

Man do I regret not funding these guys.

-pg

About a company (postabon) founded by two Harvard Business School MBAs.

smanek• 16 years ago

And a lisp-hacking CS dropout! ;-)

mseebach• 16 years ago

Pretty stupid.

Short version: MBAs aren't the end-all be-all solution for any kind of business. Specifically, they probably aren't a good solution for technology start-ups. So far so good.

But the presentation also suggests that MBAs are, as a field, responsible for the Enron-crash, the sub-prime crash, and boring companies and unmotivated employees. And that everything an MBA does (there must be some positive things, after all) can be learned from a handful of business bestselling paperbacks.

Being an extraordinary business leader can't be taught. Not in an MBA course, not by reading books.

ryana• 16 years ago

Yeah, I would agree that this presentation is overly focused on the finance side of an MBA, since that's what all of the negative studies linked seem to focus on.

Other things I found disingenuous:

3. MBAs Cheat. 56% of all MBA students cheat at Exams. Source: study by the Academy of Management Learning and Education of 5,300 students in the U.S. and Canada

Business students are only rivaled in their cheating by engineers. Should we make a presentation about not needing them either?

"The college level cheaters act more often in science and math classes. Interestingly, the college students most likely to cheat are engineering and business majors." http://www.antonnews.com/columns/mcmillan/6872-cheating-in-h...

"Their investigation revealed that 82 percent of engineering students reported engaging in some form of cheating. Only business students, at 91 percent, reported cheating more." http://www.prism-magazine.org/mar09/feature_01.cfm

5. Can you name any successful, path-breaking, innovative company started by an MBA?

While I'm not going to spend too much time looking up a whole host of examples, but how about the company I worked with last summer? Flat World Knowledge is an open-source college text book company, co-founded by an MBA.

6. MBA Salaries Are Insane

This slide doesn't even mention MBAs. It refers to CEO salaries from 1991 when an MBA wasn't even a common degree.

Sure, there are plenty of douchebag MBAs who would add nothing to a company and are just out for themselves. But you will find these kinds of people from any walk of life and prejudicing yourself towards any group of people is going to do you more harm than good.

samratjp• 16 years ago

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

known• 16 years ago

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

pw0ncakes5• 16 years ago

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

jister• 16 years ago

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

And, for those who are not technical, yes they surely need it if they want to go up the ladder. This means aiming for a managerial level position -- better pay.

karl114• 16 years ago

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

There are certainly many different reasons for getting an MBA. Some people go just because you can demand a much high salary when you graduate. However, many others go to develop their analytical skills, expand their knowledge base, and meet highly capable individuals who have similar interests. Furthermore, most people getting MBAs have been in the workforce for 5-7 years. They are not trying to start the next Apple. They have found a niche in business they like and wish to accelerate their development.

If you have already started a successful business, then why would you get an MBA? You wouldn't, but if you don't have a large network of capable friends, what better way to meet one than by going back to school?

I love participating in this HN community, but think the amount of MBA bashing that goes on here is just ignorant. People aren't successful because they have an MBA, but getting an MBA certainly doesn't make them less likely to succeed. It's silly to generalize then marginalize a group of people because they do not take the same approach as the hackers here to making money and succeeding. Not everybody was meant to be a hacker, and while the members of this community should probably not be looking at getting MBAs, its stupid to have a disdain towards people who do.

pw0ncakes5• 16 years ago

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

We need people who are skilled in business, but what we don't need is an echo chamber that encourages many of them to become arrogant, unethical, short-sighted fucks.

karl114• 16 years ago

I completely disagree. This is just another selection bias. The loudest, most obnoxious MBAs are the ones you are most likely to hear about.

Saying that MBA programs nurture extreme arrogance, bad ethics and short sightedness is like saying that CS programs nurture introversion, poor social skills and an inability to communicate effectively.

There are tens of thousands of highly successful MBAs running or working in small businesses you've never heard of, not generating any noise, and contributing a great deal to society. To lump them all together as a bunch of frat boy lunatics is ignorant.

Any hacker that has a terrible experience with an MBA is going to write a blog post about how awful it was and how MBAs need to be cut out of the process. The truth is, there are plenty that provide a lot of value and insight, but no one writes about them because no one wants to read it.

balding_n_tired• 16 years ago

Is Hacker News a realm of modesty? It seems to me that there is an implicit assumption here that the world is organized in descending order by programming mastery, something like Lisp/Erland/Haskell -> Ruby -> Python -> Perl -> Java -> VB -> the entirely unwashed.

bjoernw• 16 years ago

Thanks for your post. I about to graduate college and am already in a 5th year program working on my MBA. I subscribe to the hacker lifestyle even though I don't program and I really value this community. It's sad to see educated people make logic defying statements like: I can't think of an MBA who started one of Silicon Valleys innovative companies, hence MBA's can't start innovative companies.

Silhouette2• 16 years ago

> People aren't successful because they have an MBA,

This much is supported by the evidence, which is why it is so remarkable that MBAs typically attract orders of magnitude higher salaries than the average staffer, and having an MBA seems to be considered an advantage when applying for senior management positions in large businesses.

> but getting an MBA certainly doesn't make them less likely to succeed.

This much is not supported by any evidence I've seen so far in this discussion, so those of us who have only ever encountered MBAs who are walking stereotypes right out of this presentation find it a bit hard to believe.

karl114• 16 years ago

Do you honestly think that there MBA education made them like that, or maybe in fact it was their general attitude and disposition?

Do you honestly think that MBA graduates attract high salaries for no reason? We live in a free market economy. Surely this must indicate to you that they generally provide more value than non-MBA graduates.

Do you realize that most MBA graduates have 5-7 years work experience before they even go to school? Then, after enhancing their own experiences with a framework provided by a business school and with the experiences of the other students, don't you think they are more developed for senior positions than someone without that extra educaton? It's so obvious to me why they would have an advantage to applying for senior management positions in large businesses. They are more qualified, in general!

For some reason, I feel like all the people here think that the only smart people in business are hackers that started a tech startup in their garage. This is not the only way to gain valuable experience and practical skills in business.

rbanffy• 16 years ago

> This might be the dumbest thing I've ever seen

Maybe because you don't never observed it's rather easy to teach business to a scientist or an engineer, but it's nearly impossible to teach engineering or science to an MBA.

karl114• 16 years ago

This is the second dumbest thing I've ever seen. Anybody can learn anything if they want to, whether its an MBA who wants to program software or a programmer who wants to run a business.

jasonlbaptiste• 16 years ago

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

- Dropping out of school won't make you more successful. It just ensures you won't definitively fail. You can't work 16 hours a day, build a company, and be in school full time. You'll end up half-assing two things, instead of doing one really really well. If you do decide to stay in school, stay curious and build "projects" for fun.

- MBAs can start innovative companies, but it's an auxiliary skill. It's a nice to have skill after having other things like: a sense of technical expertise, product expertise, having built a startup before, working at a startup before, etc.

- MBAs can make good day to day operations managers when the company is growing. That's often the problem as to why a lot of startups lose their way when they grow. So make sure the MBA here is also an auxiliary skill and the skills listed above exist as well.

- I enjoyed the slides until it turned into a commercial at the end.

- Go learn how to build a great product, get some engineering skills, and fail a lot. That's been my real education over the past 4 years. It's paid off way more than my over priced useless degree in Computer Information Systems ie- Computer Science via the business school. Spend tons of time here on HN. It has been one the greatest sources of networking and knowledge for me over the past 2 years.

- If you go to a top tier MBA program like HBS, MIT, Stanford, etc. you do have the opportunity to network / meet some smart connected people. Honest truth, that's kind of bullshit. As a college "stopout", MIT Enterprise Forum added me as their CTO in Florida. I now have access to their entire alumni network without the degree. If you're in the Valley go volunteer and help out with the Stanford/MIT VLab program. People make it seem like you can't network with people from MIT or Harvard outside of the MBA program. Guess what? That's horseshit. You can meet every single one of those people. They're actually dying to meet smart people like us.

elblanco4• 16 years ago

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

In just a matter of a few months he reduced costs by 40% without reducing the capability of the company in any way by cutting back on unnecessary expenses, putting in place standards for expenditures and R&D, finding inefficiencies in our contracts and partnerships and other such things.

Could we, a bunch of engineers done all that? In theory yes, but we hadn't managed to do that in a couple years since we were so focused on tech and not spending our time learning some of the more arcane businessy things -- like renegotiating technology contracts to be more favorable. We're not yet profitable and he probably single handedly managed to extend our life out another year on the same funding, giving us a much better chance of reaching the magical 5 year mark.

pw0ncakes5• 16 years ago

I don't think anyone would argue that you don't need business people, e.g. the type of people who tend to get MBAs. But are the degrees themselves necessary? I'm not sure. (Although the OP is obviously a one-sided advert for his own content.)

I don't think MBA programs encourage immorality, and I'm surprised at the 56% figure he quotes, but they nurture extreme arrogance of a sort that leads to all kinds of unethical behaviors.

elblanco4• 16 years ago

> But are the degrees themselves necessary? I'm not sure.

Good point, probably no more than a CS degree is necessary for somebody to be a good developer. If somebody likes businessy kinds of things as their hobby, in the way a developer codes for fun, than they could probably do a good job just the same.

I think the MBA has the same effect as a CS degree, it formalizes and focuses the person on what they should know as a foundation to what they practically need to learn.

daniel-cussen• 16 years ago

That's great. Maybe the question of hiring a tech guy versus hiring a business guy does not fall in favor of one side all the time, but is rather about limiting factors. A tech company that is only business guys may find its first technical hire goes an incredibly long way, just as your counterexample found the hire with an MBA produced great results.

anamax2• 16 years ago

The results that your company got from hiring someone to take care of biz issues does not imply that said employee's MBA is relevant.

> In theory yes, but we hadn't managed to do that in a couple years since we were so focused on tech and not spending our time learning some of the more arcane businessy things

Those aren't arcane things. They're SOP,

Let's look at it another way. Would you excuse a software house that didn't use source control because they wanted to spend all their time on programming?

A tech biz is still a biz, at least if it wants to be successful.

elblanco4• 16 years ago

Yes, all true. But just like I can drive a car, I couldn't compete in F1. Just because you understand that you have to do things like advertise, or negotiate a licensing contract for third party components doesn't mean you understand all of the ins and outs of how to do so.

dlevine• 16 years ago

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

The Simple MBA Manifesto: Do We Really Need MBAs?

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