
MBA - good or bad for a tech start-up? - comatose_kid
https://medium.com/i-m-h-o/db6576f89fd9
======
u2328
I really think that MBAs ruin good companies, especially when they hold all
the top executive positions and the engineers are relegated to the lower
ranks. You get big and all those people smell the money, as push those who
built it below them. It's a really struggle to keep them in check. You can
look to Wall St. for a very clear example to see what happens when they run
everything.

That being said, many engineers tend to alienate customers and make bad
business decisions. I know quite a few, and the idea of them interacting with
our clients scares the crap out of me.

The key is balance, I think. Here's a tell: if your CTO can't code and only
has a educational background in business, be worried.

~~~
biggerboy
There are so many generalizations here I wouldn't know where to start. I know
plenty of folks that don't have MBAs that "smell the money" and "ruin good
companies."

Also, might help to understand that MBAs come in all shapes and sizes. It's
like saying you have an EE degree. Is that computer architecture? digital or
analog communications? solid state?

Not all engineers are the same, so why do you seem to put all MBAs in the same
bucket?

~~~
u2328
Of course it's a generalization. I wrote a three paragraph post, not a thesis.
You want to argue the point or be argumentative-internet-guy because you found
a way to deconstruct the intricacies of my three-paragraph post?

My point is, is that companies with top-heavy business-grad management tend to
be crappier companies as opposed to companies with a balance between business
and technology. Don't try to change my argument into, _"Hey! My cousin Larry
has an MBA and he's a great guy!"_

~~~
biggerboy
"top-heavy business-grad management tend to be crappier companies as opposed
to companies with a balance between business and technology"

I'm challenging the basis of your analysis, which uses a flawed example (look
at Wall Street!) and seemingly anecdotal evidence to come to your conclusion.

I'm clearly not changing your argument. I'm challenging your analysis.

~~~
u2328
Yes, it's anecdotal evidence. Yes, it's a generalization. It's clear I was
stating opinion. That's why I used pre-qualifying words like _"I think"_ and
_"I know some"_. It's based on experience, not data. Congratulations for
pointing out the obvious. So stop trying to deconstruct everything I said like
it's some sort of thesis on the tech industry.

Sure, not every round peg fits into a square hole, and you can always find
exceptions. But there's still a general consensus that can be built through
common experience, and I think the truth of that is shown in all the votes my
original comment is getting. Agree with it or don't, but please don't
internet-argument-guy because someone on the Internet shared an opinion.

~~~
biggerboy
There's no truth in internet voting. I suppose that means you believe all the
polls on MSNBC or something like that.

I also find it funny that you want to voice such a negative opinion of a group
of people and not expect it to be picked apart from the obvious flaws in
logic.

------
mikeyouse
It's amusing how quickly the HN sentiment can completely contradict itself.

Anytime there's an MBA article posted, the overwhelming number of comments are
about how terrible MBA managers are and how many organizations suffer from
their money-grubbing ways.

Then you get stories like the Ecomom debacle where the comments basically
repeated the "Founders need to understand business and financials." platitude
about 200 times.

Many commenters don't seem to realize that a huge number of MBAs (especially
from good schools) have technical backgrounds and are doing the MBA to gain
better organizational and financial knowledge. Granted it's less common in
software, but most companies in the sciences and physical engineering domains
have tons of engineer-MBAs.

As for startups, would an EE/MBA not be a huge asset for a newly formed
company? Even forget the EE for a second, would a former sales guy with an MBA
not be valuable? A good MBA teaches accounting, finance, marketing /
advertising, market-research, supply chain / logistics, as well as the more
recognized organizational structure, management, and conflict resolution
pieces. Obviously, after only two years, students won't be experts in those
fields, but they'll be much better off from anyone trying to learn accounting
on wikipedia.

~~~
walshemj
That depends originally MBA's where for high flyers in blue chip companies who
did their MBA after a number of years experience.

Now you seen people getting an MBA with no or little real word experience not
sure this sort of MBA is much use to a start up - though I am sure the big 4
consultancy can rent then out at a huge day rate to tell you the time using
your watch.

And having worked on the campus at CIT the Business school was not regarded by
at least a proportion of the students as being quiet as good as a proper MSC
/PHD

------
davekinkead
The real value of an MBA is the signalling it provides future employers - that
you are sufficiently smart, diligent & focused to get into a B school, and
prepared to do long & arduous hours for the company in order to get ahead.

The content is beneficial but inconsequential - not much more than a broad
survey of intro/mid level undergrad stuff - and certainly nothing that a
mildly dedicated auto-didactic couldn't learn with a local library card.

The tech world is one in which there are many ways to signal competence, and
I'd argue that an MBA is a highly inefficient way of doing that. And even if
you do find a tech company that does value MBAs, do you really want to work
for one that values inefficient mechanisms or academic pedigree highly over
say, competent contribution to open source?

That said, I don't regret doing an MBA - it was the seed that lead me to where
I am now - doing a PhD in Philosophy

------
hga
There's the issue of path: this guy is intrinsically interesting because he
got significant experience in the real world and _then_ went for a MBA. These
individuals are likely to have significantly benefited from it, vs. a direct
path from undergraduate to an MBA program and then "hello, real world."

I'll bet he also has a good idea if the ROI is going to be worth all the
costs.

~~~
Iterated
Any MBA program worth it's salt doesn't let people in unless they have work
experience.

~~~
throwaway1979
That said, you may want to check out the average age at entry in the top-10
MBA programs. I was surprised how low it was.

~~~
hkmurakami
For those wondering, average age is usually around 26-28, iirc. 4 years of
experience is the average, with about 50% of the student body having 3'ish
years of experience in a finance or consulting firm.

~~~
eigenvector
Yes, and you can bet that most of the 26-28 year olds have been on the track
to an MBA since their undergrad, pausing only to gain just enough experience
to make it into a top B-school.

~~~
hga
And it's questionable if that satisfies my "significant experience" criteria.

They _will_ have a grounding in the real world; whether they have enough of
one will of course depend on the individual.

For that matter, if they grew up helping run the family business(es) as I sort
of did, they could potentially go straight to B school with little to no harm.

------
ajiang
I wouldn't phrase it as a question of Good vs. Bad, but rather Necessary vs.
Unnecessary.

For me, it's a return-on-investment question, whether the 2 years and $100k+
in tuition would advance my ambitions more than 2 years of building and $100k
that could go towards self-funding.

~~~
up_and_up
> $100k that could go towards self-funding

This is not really accurate. The 100K for the MBA will likely come from
financial aid which can be paid over time, maybe 6-10 years. Thus it is
generally not paid with cash on hand.

At the same time there is no $100k financial aid to start a company. Sometimes
you can find family money or smaller personal loans, but 100K for a biz is
much harder to come by and not the same as 100K of Gov backed financial aid.

This is apples and oranges here...

That being said, your main point re ROI stands..

~~~
tptacek
The $100k of personal debt you take on to obtain an MBA is worse than startup
funding: aside from the fact that most startup funding is based on equity and
is never repaid, that "government backed financial aid" isn't dischargeable in
bankruptcy; you are more or less going to have to pay it back no matter what.

~~~
mesozoic
That is true the terms are worse. If you can get seed funding go for it. The
other thing an MBA gives you though is a pretty soft landing pad if your
startup fails.

~~~
tptacek
Disagree! Lots of people have MBAs. It's not an effective differentiator. A
smart, ambitious engineer can do most of the jobs an MBA normally qualifies
for, so MBAs have that source of competition too. Meanwhile: your landing
includes $100k of non-disposable debt.

A couple years ago, I worked for a UMich MBA in a product marketing role. I
remember hearing about how MBA's weren't worth getting unless you got one from
a top school. But that was years ago. In 2013, even if you can pick one up
from Wharton, you're still probably going to end up worse-off unless you
manage to parlay the degree into a role in finance.

Don't get an MBA.

------
kyllo
It depends on which type of MBA they are.

-"I got an MBA at night school so I could be a more effective manager" vs.

-"I got an MBA as a ticket to the upper middle class"

Obviously you may want to hire the former, but not the latter.

I once got accepted to an MBA program but declined to attend because I
realized I was the latter of the two types and it would be a waste of money if
I didn't use it for social climbing purposes. So I decided to focus on my
career and skills rather than my educational pedigree.

------
_8ks0
If you are wondering if you should pursue an MBA:

"In the consumer Internet world, [an MBA] is a major disadvantage because of
the opportunity cost of 2 years during the prime of your career." –Keith
Rabois

Shameless plug: [redacted]

~~~
elements
I would agree with this completely. I was in an MBA program from the ages of
23-25. A year later, the company I was working for started to run out of
money. I had a lot of time on my hands throughout the day, so I started going
through programming tutorials thinking it might be good mental exercise.

I started really getting into it, and now I've spent a ton of time over the
intervening year learning and practicing. I think back and wonder where I
might be now if I had started at 23 instead of going back to school.

It's not that what I learned wasn't worthwhile; it's that it took an amount of
time and money disproportionate to its value.

On top of that, while I only (ha) paid about $58k for mine, having that amount
of debt really hinders one's flexibility.

~~~
biggerboy
At 23, how much work experience did you have? Going into an MBA without
adequate work (and life) experience is indeed a waste.

~~~
elements
That might be true for certain classes or certain programs, but it didn't
matter a bit for 90% of what I did.

Life experience doesn't help you project free cash flow, consider the
complexities of pricing strategy, understand accounting rules, or really, do
anything else we did over the course of those two years.

Maybe it helps with management classes, but the only management class I took
was a complete throwaway.

Edit- Got hung up on the life experience bit and didn't address work
experience, but in many cases, much of the same applies. There was nothing
conceptually difficult about any of the classes I took. At times, my work
experience was relevant, but the only benefit was needing less time than some
of my classmates to internalize some of the ideas.

Now, I realize that I can't just jump in to a position where someone with 10
years of experience in X + an MBA would be, but that was never my expectation.
My expectation was to get good foundational knowledge in a variety of areas.
And I got that, just not to the extent I expected. I was just disappointed in
how easy a lot of it was.

~~~
biggerboy
What's important about the experience is being able to put the information
you're receiving in context and understanding how great the opportunity is to
build long-lasting relationships with a group of people that will have a high
percentage of successful members.

Getting an MBA is not just about the mechanical absorption of how to do a free
cash flow or doing a paper on organizational behavior.

Frankly, more insight and knowledge was gained from classmates than from the
textbooks and case studies we had.

------
nugget
If you realize an MBA has little to no value in a real world tech startup,
then it's probably neutral. If you think it has value ( = derive false
confidence from it), then it hurts you.

With rare exceptions, I wouldn't hire any recent MBA who references their
degree more than once in an interview.

------
Andrew_Opala
good - (BSc Toronto, MBA Ivey) Having more exposure to tools, and an important
network at your level makes an engineer with ideas far more valuable as a
business leader in a smaller company or start-up. It doesn't help much in
larger companies, or when everyone has an MBA.

------
radiusq
The only good thing i've seen obtained from an MBA is connections. If you
don't go to a school that can provide a wealth of that (really just the ivy-
league MBA programs from what i've seen) then its a waste of your time and
money.

Get real-world experience, it counts for more. Especially when i'm the one
doing the hiring.

~~~
rvn1045
I think you might be underestimating the knowledge/skills gained from an MBA.
A lot of non-MBA folk don't move up very fast in organizations (in business
roles I suppose), one reason I think is because they don't completely
understand how to manage people, I suppose you could learn it on the job, but
it would be a lot easier and more structured if done through an MBA program.
Now that doesn't mean everyone should go get one, but I do think it helps to a
certain degree. I'm not just talking about it from a startup perspective, but
just a company/managing people perspective. A lot of the bigger tech companies
Microsoft/Google/Amazon etc do tend to hire a lot of MBA's each year though.

