
Elite Grads In Business Flock To Tech - jkuria
http://online.wsj.com/news/articles/SB10001424052702303661404579180152676790032
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confluence
This phenemona has a name. It's called the MBA index.

It truly is one of the greatest contra-indicators I have ever had the pleasure
of observing first hand. It's a wonder to behold.

> _When expensively educated, fashionable young graduates start showing up in
> your field, you 're in a bubble._

\- Kevin Marks, [http://epeus.blogspot.com.au/2005/12/key-indicator-for-
bubbl...](http://epeus.blogspot.com.au/2005/12/key-indicator-for-bubble.html),
derived from Liar's Poker, by Michael Lewis.

> _This year, some 37% of Harvard Business School 's graduate found work on
> Wall Street, up from 30% a year ago and 26% for the Class of 2004. The trend
> suggests that Wall Street is becoming bloated and the American economy is
> ripe for a slowdown.

Mr. Soifer, who retired from Brown Brothers in 2000 and now runs his own
consulting firm, appears to be on to something. He advised his friends and
colleagues to sell back in 2000, when 30% of the HBS graduating class took
jobs on Wall Street. Before that, the last long-term sell he sent was in
1987._

Source: [http://www.nysun.com/business/equities-swing-with-harvard-
mb...](http://www.nysun.com/business/equities-swing-with-harvard-mbas/43220/)

> _Mr. Soifer notes that the Harvard M.B.A. indicator has historically been
> more prolific as a source of “sell’ signals, showing strong results in 1987,
> 2000-02, and 2005-08, than “buy” signals. In fact, the last time it reached
> the 10 percent “buy” level was in the early 1980s, when the Dow Jones
> industrial average traded below 1,000.

The all-time low was reached in 1937, when only three graduates — about 1
percent — braved the market and ventured into the securities industry._

Source: [http://dealbook.nytimes.com/2009/11/05/a-contrary-
indicator-...](http://dealbook.nytimes.com/2009/11/05/a-contrary-indicator-on-
mbas-and-stocks/?_r=0)

~~~
nilkn
Just wanted to say thanks for expanding on Kevin Marks's quote with more
sources. This is interesting stuff.

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chavesn
Bypass paywall with a google.com referrer:
[http://google.com/url?q=http://online.wsj.com/news/articles/...](http://google.com/url?q=http://online.wsj.com/news/articles/SB10001424052702303661404579180152676790032)

Note that you might have go incognito or clear your cookies if you already
tried the direct link and failed (I can't believe how far they'll go to block
everyone but search engines).

~~~
thejosh
dirty seo tactics that are ignored by search engines for bigger sites.. :/

~~~
patio11
This is called "First Click Free" and it is explicitly sanctioned (and
encouraged) by Big Daddy G:
[https://support.google.com/webmasters/answer/74536](https://support.google.com/webmasters/answer/74536)

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Brig303
"When expensively educated, fashionable young graduates start showing up in
your field, you're in a bubble." Michael Lewis

~~~
pcurve
Exactly.

"Students are asking, "Where's the place that I can drive innovation? Where's
the place that I can have the most impact?"

Sounds like those students are just rationalizing. They're going into tech
mainly because the tech field has been on fire lately, and the risk of trying
out the tech field is low. After all, they're still getting paid pretty well.

Once the tech bubble bursts, they'll be hovering around fields that pay the
most.

You are not going to be driving innovation by working for Linkedin, Facebook,
and Microsoft.

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rdtsc
I noticed a different effect happen too -- tech people from high ranking CS
schools flock to Excel-spreadsheet-on-Wall-Street positions as I call them.

They supposedly spent 4 years studying the hell out of self-balancing trees
and kernel process schedulers and then work for a Goldman Sachs like place
building excel spreadsheets and writing reports.

~~~
redschell
Seems to be a case of career osmosis. Uncomfortable with the growing
popularity of the tech sector, and noticing a distinct exodus of Wall Street-
types (who will arrive late to the tech gold rush), they swoop in to fill the
gap.

Hopefully they'll attempt to negotiate for better salaries and more reasonable
hours, but, according to all my Wall Street friends, this tends to be an
effort in futility.

The best of the best will always put in absurd hours doing the tedious work
you describe. They need to show off this way to win distinction. In theory,
hacker types could buck the system, but that system in high finance, which
awards face time and man hours like few other places, is pretty damn robust.

~~~
dasil003
Wall Street's issue is one of filtering. Because they are the easiest
perceived place to make money, they have to set up absurd barriers to maintain
staffing qualities.

The tech world is also at risk of going in this direction as well as the wider
economy collapses and startups actually start to look like a somewhat
conservative career path. The symptoms are all around us. Look at the
proliferation of accelerators and short-form bootcamp style tech programs.
Google-style hiring process starts to make a lot more sense in this kind of
environment.

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leokun
Personally I don't want people in my domain if they aren't interested in
building cool shit and making technology better. If they are, well good for
them. Hard for me to see someone who might have been interested in finance
compatible with the people I work with though. Maybe they just all want to
start startups or get into venture capital.

~~~
mathattack
With all due respect... Even a great technical CEO can use the following, even
if they're not explicitly motivated by building cool shit and making
technology better:

\- For pre-IPO firms: Someone plugged in to all the investment bankers and
investment managers, who has both an analytical and visceral feel for how tech
firms are valued.

\- For firms with Enterprise customers: Someone who has a large rolodex of
non-IT customers with P&L responsibility, who knows how to do their jobs as
good as them.

\- For medium sized firms and above: Someone who knows every last legal issue
around HR.

It would be great to find folks like this who also have CS degrees and are
passionate about technology. But folks with MBAs that fit these profiles but
don't love the technology itself can still be valuable.

~~~
nilkn
I don't think he's intending to contest those needs. I also don't think he
meant to imply that they should have CS degrees. Obviously I can't speak for
leokun, but my impression was that he simply doesn't want to see the industry
flooded with people who only want to make a quick buck without caring the
slightest bit about what they're actually doing. At the risk of generalizing
far too much, the people who used to go to Wall Street didn't exactly have a
reputation of caring about what they were contributing to the world; it's
those same people who are now flocking to the tech sector.

It's a viewpoint I can sympathize with. As someone who doesn't expect to get
rich off an IPO or acquisition and therefore will be spending most (all?) of
my working life in this industry, I'd prefer to work alongside competent
people (whether that be in development or business) who aren't _just_ trying
to get rich quick.

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001sky
I wonder how many (if any) of these MBAs had some tech experience before the
degree.

 _Tech companies, which once may have dismissed business-school graduates as
smooth talkers with PowerPoint skills, are warming to M.B.A.s who may be able
to help lead their fast-growing operations as they mature. At the same time,
Wall Street has offered fewer opportunities for ambitious young graduates._

also related> [http://www.thecrimson.com/article/2013/8/8/hbs-employment-
te...](http://www.thecrimson.com/article/2013/8/8/hbs-employment-technology-
trend/)

such public info might not portend upside to the equity, tho

~~~
hkmurakami
As a student in an okay program (with many friends in the truly elite ones), I
will say "not many". It's very rare to find someone here who lives and
breathes the entrails of technology and data rather than just the nice and
shiny and sexy parts of it.

That being said, I know some from finance and marketing tyle backgrounds who
are totally gung-ho about data and have track records of getting their hands
dirty, so I'd say that if you're intent on finding students with non-tech
backgrounds who have the cultural instincts for tech, you _can_ find them
(maybe about 3% of the class).

edit: That being said, many of my peers would be fantastic at roles like BD.

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jfasi
This seems to be as much a reflection of the finance industry's loss of luster
as technology being wonderful and whatnot.

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dzink
The most reliable indication of a bubble is when 30% of Harvard grads head
into an industry. Top university networks are the first to sniff out unfairly
strong financial returns and to take advantage.

~~~
nilkn
I think this is pretty interesting and it even makes intuitive sense, but I'm
curious if it has been validated in any way through historical analysis?

~~~
dzink
Yes, I think I red it in "Ahead of the Curve" ( [http://www.amazon.com/Ahead-
Curve-Harvard-Business-School/dp...](http://www.amazon.com/Ahead-Curve-
Harvard-Business-School/dp/014311543X) ) and the author backed it up with data
from the most recent tech and financial bubbles. The exact quote escapes me.

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ajiang
For all the good that tech does for the world, can we stop the judgment of why
people are entering the careers they choose, whether it's finance, tech, or
otherwise? Let's judge a person not by the content of their background, but by
their actions and what they accomplish. Even if someone's primary motive is to
make money, it's too hasty to judge that person without understanding their
background and why they're motivated thusly.

Personally as someone who has done both business and technical work, I'm
saddened every time this topic comes up. The less judgmental voices get down
voted and drowned out, while the posts that generalize based on anecdotal
experience prevail. I wish we could just stop having this discussion, as I
don't think it adds at all to the benefit of the tech community.

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saosebastiao
Obvious disclaimer: not all MBA's ...

I graduated with a BS in Business (Supply Chain) because I knew I wanted to be
involved in startups someday, but I've had nothing but big corporate jobs
since then. For the longest time, I've held this idea that because all of the
bigwigs got their MBAs, and they got them from top schools, that that was what
I needed to do. In other words, to become the person I wanted to be, I had to
go get an MBA.

My thoughts have tempered as I moved progressively towards more technical
roles: Business Intelligence, Ops Research, Systems Architecture, etc. In
fact, I've started to grow a disdain for the average MBA, not unlike the
disdain you hear from a lot of people with backgrounds in CS. The thing is,
I've never been anything but a business-end guy...I shouldn't feel that way
about business-guys.

My own observation on the cause has to do with the toolsets that are given to
your typical MBA. Their Root Cause Analysis tools assume that everything has a
singular root cause, but those analyses fail when the problem is of
combinatorial complexity, where you often have multiple root causes for a
problem. Business optimization tends to fall solely on LP models, which again,
fail under combinatorial complexity scenarios. Pareto analysis is fine until
you have pareto'd your entire business and all that you have left are a bunch
of bugs and quality flaws that only affect a tiny minority of orders by
themselves, but 100% of orders in aggregate. The entire MBA toolset itself
seems to be a result of pareto optimization (a set of tools to use for 80% of
the scenarios you will come across as a business leader).

Furthermore, I now feel as though the wisdom of any singular person can very
easily become overrated, and in the case of top level execs, is almost
invariably overrated. As I became involved with Business Intelligence at my
last job, I kept running into execs who always had the same mindset: just give
me the data, and I will make the decision that will save the day. The problem
is, the skillset to extract, transform, prettify, and graph out data is very
often the same skillset that can make provably optimal decisions, or at least
better-than-human decisions. Why should they spend so much of their time
satisfying executive egos by giving them a precious jewel of data that they
will just blow with a swagged decision, when they could be applying Machine
Learning or Mathematical Optimization instead?

Your average smart guy with an MBA will continue to provide value in specific
scenarios. The Technology industry (as long as "Technology" implies working
with intractably difficult problems) will rarely be one of them. And just for
good measure, I'll caveat that one more time, especially since my current
employer has a ton of exceptions: not all MBAs ...

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slaman
Paywall..

~~~
selmnoo
Search "Elite Grads In Business Flock To Tech" on Google. The first hit will
work.

~~~
medicine23
why it works from search result referral and not directly?

~~~
selmnoo
Because it's a strategy that works.

So, it's working for the tech-savvy using these little hacks, right? That
means a certain article is going to gain traction, get people talking on
social networking sites, and in turn seduce more people into wanting in on
those discussions. But the people who aren't in on these hacks are met with a
dilemma: be a part of the in-crowd, or just go away. As it turns out, this
human wanting to be in on what everyone else is talking about is very strong,
so a lot of people end up buying it. For others, it's the convenience factor
of not having to google every article and find it that way... in both cases, a
key force was the content not being totally unaccessible, but being there in
some small way as a teaser. I should point out that it's working out exceeding
well for the NYTimes. WSJ has been doing it for a long time, and the Economist
just recently started doing it too. I expect even more will soon follow. It's
an interesting and clever evolution of the freemium model in some ways.

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tedsanders
There are a few comments in here that demean the supposedly greedy MBAs who
come in with no technical enthusiasm or know-how just because the salaries are
high. However, I think it's quite possible that this trend is very positive
for the industry, and for the world. The financial and social importance of
internet companies is becoming more apparent to the mainstream citizen, and as
a result, clever people are thinking more and more about how to manage and
strategize in this space.

~~~
dasil003
Here's the problem:

There's a certain type of person whose apparent intelligence is exaggerated by
the reward system of lifetime in a Victorian-era education system that
emphasizes obedience and checklists. Such people whether created by nurture or
nature, are disproportionately represented in the MBA world. However the type
of skills developed there are all about thriving within existing systems,
whereas to build a successful startup requires a completely different kind of
thinking.

I'm not painting MBAs all with one brush either, there are many brilliant ones
I've worked with. But there are also many who think they are hot shit because
of a lifetime of being "gifted" and "elite" far out of proportion to their
actual ability to contribute to a tech startup.

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mcantelon
Looking for easy money.

