
Study Finds Engineers Far More Likely than MBAs to Build and Run Companies - ilamont
http://blog.identified.com/2012/01/new-identified-research-reveals-engineers-far-more-likely-than-mbas-to-build-and-run-companies.html
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jacques_chester
I think most MBAs are looking to work for a large company, climb the ladder
and so on. The training focuses on that -- it's not called a Masters in
Business _Administration_ for the heck of it.

~~~
ssharp
Exactly. MBA programs (traditionally, things are changing slowly) aren't
really designed to create entrepreneurs, either.

~~~
jacques_chester
That's not necessarily a bad thing. Large companies need at least some
specialist management types.

~~~
wisty
Right, you really need people who can say "OK, no more bullshit on these
status reports, just say what happened so we can tell how things are going".

Also, good quantitative skills, and a good understanding of scaling and system
behavior are important.

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gleb
Their data doesn't support that conclusion. Actually, you can't make any
conclusion without knowing total number of MSinE vs MBAs.

Update: <http://www.cgsnet.org/portals/0/pdf/R_ED2008.pdf> (p.16) suggests
there are a lot more business masters vs engineers masters (23.4% vs 7%). So
at a first glance it does look like the conclusion is right.

~~~
speleding
MBAs and engineers are not mutually exclusive groups. I have an MBA+MSc myself
and quite a few people in my MBA class had at least an undergraduate degree in
engineering.

In my experience an engineer with 10 years of work experience + 2 years of MBA
is much more rounded than an engineer with 12 years of work experience. Given
the choice between an engineer or an MBA without an engineering background,
I'd pick the engineer though.

~~~
geori
I agree. I've got a BS in Computer Science and an MBA, which is very common. A
third of the class had undergrad engineering degrees.

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mathattack
I'm not sure they're doing good stats...

A better first question is, "What % of advanced degree engineers become
founders?" and "What % of MBAs become founders?"

From there you can go on to questions of size and success.

As listed, the answer tells us nothing. For all we know there are 30x as many
engineers as MBAs. Or vice versa. The conclusion could be the same as stated
too.

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Synthetase
I compiled the statistics for this whitepaper. We do not attempt to quantify
success or company size. We aware that our data set is biased toward smaller
companies, namely start-ups.

We simply examined CEOs at a certain time period and their degree composition.

~~~
mathattack
Before complaining about success and size, it is important to know what % of
college grads have each of these majors. Without knowing this, the conclusion
of "Engineers with advanced degrees are more likely to become CEOs than MBAs"
is suspect.

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johnx123-up
I like quoting pg here:

    
    
      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. 
    

\-- <http://www.paulgraham.com/start.html>

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benjaminRRR
I've heard this a number of times anecdotally. I remember once going to the
head of my university's business school as an alumni and he said you're one of
the few that came out of this school that actually started a company. To which
I replied I didn't, I came out of the school for Electrical Engineering. He
laughed and said well that makes sense.

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dfc
I think that selection bias does a lot to discredit any conclusions drawn from
the data. The data is drawn from facebook profiles. The founder of the
plumbing fittings factory down the street from me is a lot less likely to have
a facebook account than a web startup founder. Moreover just because I say I
am a founder/CEO or that I have a phd/mba/xyz in my profile does not mean it
is true...

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kthyqn
This is definitely food for thought. However, I'm not sure it tells the whole
story. I'm interested in the size/valuation of the companies in addition to a
count. I'd argue that it's a lot easier to found a tech startup and call
yourself founder/CEO than it is with more traditional MBA-geared companies.
Also, the survey sample is probably pretty skewed since it uses Identified and
Facebook.

~~~
Synthetase
Hey kthyqn, I put to together the statistics for the white paper. Our data is
necessarily skewed and is not a perfect reflection of reality. Our data is
comes with several caveats, namely we probably somewhat over represents
startups and under represents large companies.

Nevertheless, it is largely a reflection of reality. A study from Harvard
Business School was recently released that came to the same conclusion.

[http://online.wsj.com/article/SB1000142405297020336350457718...](http://online.wsj.com/article/SB10001424052970203363504577187243985486970.html)

*Looking for correct link, please stand by

EDIT: Linked to the wrong HBS study xD, corrected

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refurb
I find it odd that the data was mutually exclusive. They didn't find a single
CEO with both an MBA and engineering degree?

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vinayan3
I think they cast anyone with a MBA into the MBA category. I know of one CEO
who has both an engineer degree and MBA. The CEO of Adobe.

<http://en.wikipedia.org/wiki/Shantanu_Narayen>

~~~
ssharp
It's pretty common for engineers to enter an MBA program in effort to
accelerate their careers into management.

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krschultz
The title and the article do not match. The study looks at 'Founder/CEO' and
the title says 'Build & Run'.

Being a founder is very different than coming into a company several years
later and being a CEO. They are different phases in the businesses life.

I'm an engineer. I plan on getting an MBA someday. My dad is not an engineer,
but does have an MBA. He has been the CEO of 3 companies in his career. The
first company was 100+ years old. The 2nd company was 200 years old. The 3rd
(and current) company is 2 years old and he just joined it as CEO this week.
In the first two cases he grew the business substantially. But he will never
put 'founder' on his resume because that would make no sense. So by this study
he wouldn't count on the MBA tally.

In the beginning, a startup is mostly about making a product and finding
product/market fit. But later on once you have an established product it comes
down a whole lot more to sales, marketing, operations, partnerships, etc. My
dad has a psych/business undergrad & a marketing MBA. All of his work is on
improving the sales force, making new ad campaigns, opening new distribution
channels, etc etc etc. Things that as engineers we probably don't really want
to deal with, but are the difference between being #3 in an established market
and #1 in an established market. And that's ultimately what an MBA is aimed at
helping you do - growing larger businesses.

So this data doesn't really suprise me.

As an interesting data point - my dad largely runs company in the 100-150
person range and has been in the chemical industry for a while. He noted that
almost all of those kind of companies would prefer someone with an engineering
undergrad and an MBA because ultimately you oversee sales, marketing,
engineering, manufacturing, finance, etc. So if you are blind to the factory
you will not be an effective CEO.

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RandallBrown
This isn't too surprising to me. An MBA doesn't teach you how to build
anything, an Engineering degree does. The things that are important early on
in most startups are the engineering things, not the business things.

~~~
dasil003
I wouldn't say that exactly. "Business things" are incredibly important,
particularly sales. But the very word Administration in the title MBA
indicates that MBA is about shepherding a successful business, not
bootstrapping one from scratch. In this light, an MBA could be the most
important person because if they are good they could take a company from 10m
to 20m just based on improving efficiency, but that's of little use if your
revenue is only 10k.

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known
Here is the difference:

    
    
        Engineers = Build First, Sell Later.
        MBAs = Sell First, Build Later.

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senthilnayagam
Engineers use instincts, gut feelings and optimism when they find a
opportunity and jump in often to be a entrepreneur. MBA's on the other hand
evaluate risk and unknowns.

Engineers often create the companies and MBA's help them grow it to their
potentials

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rcavezza
Coming from a business background, it's very difficult to create a product if
you don't have engineering skills. It's the reason I learned how to code.
Knowing how to sell isn't a useful skill if you don't have a product to sell!

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greenEggsNHam
This is not an independent study or a "white paper". This is marketing for
Identified. The study may be right or it may be wrong. But one thing is for
sure: Identified has a vested interest to attract hackers to become members of
Identified. So they publish headlines like this to make their way on to places
like HN in the hopes it gets attention, and results in a membership bump. And
by the 180+ upvotes I see as I type this, it's working.

You can trust that had the study resulted in MBAs being more likely to build
and run companies, that this study would never have seen the light of day on
its blog.

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fellars
I think the key word is "build". As someone with both a Master in CS and MBA
and have previously been a CEO where I was hired to run the company (not a
founder), and now starting my own business, I can attest that its the
engineering side of me that pushes me to be a founder and build something from
the ground up.

Although, I will say that some MBA schools are promoting entrepreneurship as a
viable path more now than before. My alma mater (BYU) now has an
Entrepreneurship major I believe.

~~~
travem
Entrepreneurship is still a minor in the MBA program but can be majored in by
undergraduates. The Business Plan Competition <bpc.byu.edu> and Business Model
Competition <bmc.byu.edu> are pretty cool from an entrepreneurial perspective
as well.

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elchief
People that are trained to build things are more likely to start companies
that build things, than those that are trained to _administer_ businesses?

Also, did you know that the majority of mba students are engineers?

I am not sure why they needed a study for this. I was told this fact in
engineering school in 1994.

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anonhacker
Makes sense to me, MBAs would be looking for companies to run, engineers build
things and find themselves running companies.

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Unosolo
I'm an engineer and have studied several MBA courses as part of my engineering
management degree. MBA courses are heavily corporation oriented and have
limited value for founders of organically grown start-ups.

Majority of the management techniques taught are economic only when applied at
corporate scale.

