
The MBAs are fleeing, should SF be worried? - kallesverige
http://techcrunch.com/2014/11/09/the-mbas-are-fleeing-should-sf-be-worried/
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dkrich
Lazy reporting.

The logic underpinning this article is flimsy at best. He is using the
following to infer that fewer MBA's are going to SF:

 _About 24% of MBA graduates in the class of 2014 headed to tech jobs, down
from 32% in 2013 and equal with the proportion back in 2012. Of course, those
profiteering graduates are returning right back to where they belong in
finance and consumer products, which each saw notable upticks in employment._

There are several things that are wrong with this. First, he is only looking
at Stanford GSB and assuming because it is in the Bay area that it is a
reliable representation of MBA's everywhere, because surely it's proximity to
SV means it must graduate more students who are likely to be employed there
than elsewhere. But Haas is in the Bay area too. He's also assuming that
students who graduated in years past aren't now moving to SV in increased
numbers which, if true, could more than offset a decline in graduating
students. However the most glaring hole in the logic is that "tech jobs" = San
Francisco. As a fairly recent MBA grad myself, I can tell you that most of the
people in my class who went into tech did not go to SV. Most went to places
like Intel, Amazon, and Microsoft, none of which are based in California, let
alone SV.

If you don't have a firm understanding of a topic, why write about the topic?
It just makes the author sound stupid.

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dkasper
Intel is based in SV.

~~~
dkrich
You're right that it's headquartered there, but it's largest workforce is in
Portland, Oregon, and that is where my classmates went to work post-MBA.

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arjie
From the same report. Finance has median 150k base pay, median 40k signing
bonus, median 100k other guaranteed income. Tech has 125k, 20k, and 20k.
Sounds less likely that they're making some informed decision on the future of
Tech, and more likely that they're going where the money is at the moment.
Those numbers are very different.

Actually, that hasn't changed in the last year. A more significant fact is
that in 2012 24% of MBAs went to tech, in 2013, 32%, and now in 2014 it's back
down. There weren't any huge shifts in the industry in the last two years, so
the data seems inherently noisy, determined by the acts of 20 people who go
either to one or the other.

Poor article. Looking for a story.

~~~
freyr
Yes, excluding outliers, finance has always paid better. I'd guess the brief
migration from finance to tech was simply because finance became very
unfashionable for a little while. Meanwhile, headline-grabbing IPOs were
making it seem like everyone in Silicon Valley was making easy money.

As an equation it would look like:

finance_pay - judgement_of_society > tech_pay + lottery*Pr[winning_lottery]

where judgement_of_society has rapidly declined, and people are realizing that
the true value of Pr[winning_lottery] is smaller than their estimate.

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hkmurakami
So the entire premise of the article is based on the recent Stanford GSB
recruitment report:

>That’s according to newly released employment data from Stanford’s Graduate
School of Business, which is a particular bellwether of the state of startups
given the school’s proximity to Silicon Valley. About 24% of MBA graduates in
the class of 2014 headed to tech jobs, down from 32% in 2013 and equal with
the proportion back in 2012. Of course, those profiteering graduates are
returning right back to where they belong in finance and consumer products,
which each saw notable upticks in employment.

Apparently we can now make statements about entire industry sub cycles from
the whims of 350 students.

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spamizbad
A dose of reality + MBA Friends making way more outside of tech = "I've made a
mistake"

Startups are hard. Very hard. Startup life is not glamorous. And failure hurts
twice as much when you've lived a cultivated, high-achievement life. Building
a company may have gotten cheaper, but it hasn't gotten any easier. If you
imagine your life being an uninterrupted string of success by following a
relatively conservative game plan you may find it difficult to adjust. Leaving
is perfectly reasonable.

~~~
curiousDog
As someone who has been coding for a while, I must say I'm jealous of my MBA
friends. Some of them were programmers but their careers just shot up after
those 2 years. The older I get, the more it feels like programming is really
an entry level job. Sure, you'll have rock star architects/distinguished
engineers who get to have great careers (mostly due to right timing) but
that's a very small percentage.

~~~
kyro
This is a reality that most do not want to accept. Is it just? Probably not.

I've often viewed this as Thinkers vs. Workers. Society places a high value on
Thinkers, those who make decisions, strategize, make connections, build
relationships, etc. Those who fall in this camp are doctors, lawyers,
consultants, CEOs, etc. The Workers -- programmers, engineers, designers --
are often fungible. They are in a competitive market of manual laborers that
has driven down the price of labor to levels that, for many, increase the
opportunity cost of learning the tech yourself. Over time, Thinkers accumulate
social capital that can be leveraged to gain benefits, both related and
unrelated to their profession -- e.g. a doctor being given preferential
treatment by a restaurant host. Workers accumulate labor capital; they're more
efficient at their work, can develop more creative solutions. But put a 50yr
old coder up against a 50yr old lawyer/doctor/banker and the latter will be
given more praise, more money, more influence 9 times out of 10.

Even Workers eventually outsource their labor once they're in a position to
become a Thinker. Few successful startup CEOs and execs are actually coding
themselves. Their roles shift to strategy, operations, so on and and so forth,
for that's where they're valued and will be rewarded the most.

And getting a graduate degree is often the ticket to be considered a Thinker,
whether MD, MBA, JD, PhD.

That's the game, whether you like it or not, and it certainly won't be
changing anytime soon. If money is a priority, becoming a Thinker might be in
your best interest.

~~~
analog31
>>>> Their roles shift to strategy, operations, so on and and so forth, for
that's where they're valued and will be rewarded the most.

Those are the roles where you can't trust anybody to do them for you without
fleecing you. Even MBA's are loath to fully entrust those roles to other
MBA's. The top management of our company has an elaborate review process for
strategy and operations, and no high level review process for coding.

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johnloeber
Maybe they're fleeing as a consequence of culture? Virtually every story I've
heard about MBAs in SF can be summed up as "we didn't hire them because of
their MBA, but rather, in spite of it." I don't know how well-regarded MBAs in
SF _actually_ are, but the cultural grapevine suggests there isn't a very high
demand for them.

~~~
codeonfire
There is a culture of groupthink in hiring that mainly benefits people that
are doing the hiring. MBA's are bad. Devs that are not social are bad. People
with degrees of any kind are bad. Anyone who wouldn't make a good drinking
buddy is bad. If you stop and think about who they're optimizing for, it's
very dumb yes-man bro friends that don't challenge their decisions or
thinking.

~~~
analog31
While I upvoted you, on the flip side, I've noticed that MBAs tend to be hired
by other MBAs. This is certainly the pattern at the company where I work. If
you highlight the MBAs on the org chart, they will tend to be clustered. Folks
also decide to pursue an MBA when they see that the entire ladder above them
is populated by MBAs.

It could be that MBAs have something that the rest of us don't know we need,
or that we don't know how to hire and manage an MBA.

~~~
datashovel
I've always seen MBAs as filling positions that make it possible to grow your
organization. A sort of organizational glue. My perspective is by the nature
of their roles they aren't meant to play a pivotal role.

So perhaps for the time being fewer MBAs means less growth in the sector.
However, I envision a future where the positions MBAs fill will be some of the
first ones automated. My perspective is that MBAs are a dying breed, and over
time it will only become more evident.

~~~
analog31
I don't want to sound too cynical here, but just the right amount of cynical:
I work in a large organization that has layer upon layer of hierarchy. To me,
middle management seems like an information processing task: Gathering,
organizing, analyzing, and reporting up and down the ladder.

The language of management is a COmmon, Business-Oriented Language. ;-)

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mbesto
So literally one school (Stanford, mind you) saw a one year shift for it's
~800 students and conclusion is "MBAs are leaving tech!". If just 8 students
decide to do finance over tech, it represents a 1% shift. 80 students means
10%...

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foobarqux
I believe GSB has 400 students per year.

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PublicEnemy111
So the "Great MBA Bubble of 2013" was followed with banks offering greater
compensation and possibly the opportunity to work with tech companies without
the risk of belonging to one. I would imagine VC is a very attractive career
for the graduates, and banks can offer a clear path to it.

This is, of course, pure speculation; I'm just trying to illustrate that
correlation != causation. I understand everyone is concerned with the tech
bubble, but this article is really stretch.

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hyperliner
I don't understand why MBAs seem to think of developer as lowly worker bees,
and developers seem to think of MBAs as overpaid snobs.

But two things I have noticed: 1) many of these opinions come from people who
are one or the other, but not both

2) people who have both skills are lethal and awesome people to work with.

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datashovel
I wonder what the stats are regarding success stories with MBA founders vs
technical founders. Perhaps SF is catching on to some as yet established
reality that an MBA doesn't bring to the table what a technical founder can
for an early stage startup.

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jamesaguilar
So, there were lots of MBAs in 2013, but not so much in 2014? Even if you
grant that MBAs are a good indicator of startup success, two data points
doesn't make a trend line. And I don't think many people on here would be
inclined to grant that.

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jwatte
Isn't there a gigantic influx of bankers who want to be close to Asia? Seems
to compensate just fine...

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oimaz
Maybe the valley understand that the MBAs don't add any really value compared
to programmers who can really build. As a result, recent MBA graduate can no
longer command high salaries and are now looking for greener pastures

~~~
ryandrake
What about an MBA who can also program? Do you think they can add value, or is
the degree itself some kind of mystical tattoo that forever bestows
unworthiness upon the graduate?

HN-ers like to laugh and think the MBA and techie sets are disjoint. A quick
google search shows numbers from 25-40% of MBA students have engineering
backgrounds (for example [1], [2]).

1\. [http://spectrum.ieee.org/at-work/education/engineers-and-
bus...](http://spectrum.ieee.org/at-work/education/engineers-and-business-
schoola-match-made-in-heaven) 2\. [http://www.science-
engineering.net/engineering/united-kingdo...](http://www.science-
engineering.net/engineering/united-kingdom/mba-and-engineering)

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teacup50
> _What about an MBA who can also program?_

Then they're mediocre at both, at best.

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mesozoic
Or excellent at both but you can't deal with that possibility because it could
make you question your own capabilities.

