
Stanford MBAs Shift Away from Tech - ekm2
http://poetsandquants.com/2014/10/29/stanford-mbas-shift-away-from-tech/
======
GuiA
Stanford MBAs in tech are fucking weird. I worked with a few, and had one for
a CEO for 2 years. The gist of it is that they all sucked at tech but thought
they didn't (trying to manage engineering teams in ridiculous micromanagy self
important ways), were all very self centered, and all came from very wealthy
families, being able to raise a few hundred thousands from "friends and
family" (!?) and spending 4 day weekends in Tahoe and LA even though "we're
bootstrapping so I'm only taking $30k a year right now".

I know, I know, anecdote != data. Having talked about it with friends, I know
I'm not alone. I even see it mentioned in HN comments every once in a while
(eg
[https://news.ycombinator.com/item?id=7083219](https://news.ycombinator.com/item?id=7083219)).

~~~
joshu
as an angel investor, mba founders is a big warning sign. so there's that.

~~~
pptr1
On that note, why does YC let so many MBA founders in?

~~~
Iftheshoefits
YC lets them in because the people making that decision believe said founders
have some (unspecificied, but non-trivially non-zero) chance at building a
company they can sell (to other investors or "the public" in an IPO) for far
more than they invest in it.

It seems people are making a category error with respect to YC. YC's purpose
is not to foster a cradle of technical innovation with an engineer focus; it's
to maximize returns on high-risk investments in what happen to be technology
companies. Engineers in the startup world are like engineers everywhere else
in technology work: second-class workers who exist to expend their life in the
form of labor for (relatively) token compensation in return, with lots of ego
stroking to help deflect attention from that.

~~~
rdtsc
> Engineers in the startup world are like engineers everywhere else in
> technology work: second-class workers who exist to expend their life in the
> form of labor for (relatively) token compensation in return

Be careful, that breaks the marketing veil too much ;-)

The problem is that to attract and keep engineers busy and happy it is
important to tell them stories about changing the world, "breakthrough
technologies", paradigm shifts. Also it is important to explain inability of
many engineers to discern how equity gets allocated, how options and stock
work and so on. "oh look you get 10000 shares!" type tricks.

Now, granted, those are not mutually exclusive, some do work on breakthrough
technologies.

------
Animats
Away from tech, back into finance. It's not like they're going into
manufacturing or something useful.

"Finance was able to reclaim its No. 1 position at Stanford because of some
extraordinary pay packages it dangled in front of the newly minted MBAs.
Graduates who accepted jobs in private equity—12% of the entire class—pulled
down median base starting salaries of $170,000, 36% higher than the $125,000
median base for the entire class and $20,000 higher than last year’s $150,000
median in private equity.

The PE crowd also grabbed some of the highest signing bonuses and guaranteed
other compensation. The average sign-on bonus in private equity was $46,250,
highest of any sector..."

~~~
7Figures2Commas
Yeah, it's not like those useless folks on Wall Street have ever helped
manufacturers or tech companies. Oh wait[1][2].

[1] [http://www.goldmansachs.com/our-
firm/progress/titan/](http://www.goldmansachs.com/our-firm/progress/titan/)

[2] [http://fortune.com/2014/10/08/wellington-management-gets-
int...](http://fortune.com/2014/10/08/wellington-management-gets-into-pre-ipo-
game-with-new-fund/)

~~~
yen223
Help me out here, because I have a very tough time imagining a world where
society is worse off because financial companies didn't exist. Is it really
the case that if Goldman Sachs didn't exist, Titan International somehow can't
exist either?

~~~
Meekro
Companies don't exist to improve society, but to provide something of value to
their customers in exchange for money. If society benefits along the way,
that's a happy coincidence.

A plumber will fix your leaky sink, and that benefits you personally --
whether it benefits society or not is really beside the point. Similarly,
investment firms and hedge funds will benefit their clients by investing their
money and (hopefully) getting them a good return.

~~~
kriro
By definition, profit benefits society. Customers voluntarily buy products
which companies sell voluntarily (at least in the typical case there are
corner cases of course). Both parties profit which is evident by the exchange
taking place.

Society is made up of individuals, if individuals profit so does society.

Companies exist because there's opportunities for profit. So I'd argue they do
indeed exist to improve society. On a larger scale one might say they improve
society by allocating factors of production to the places where they are most
useful.

~~~
jjoonathan
> By definition, profit benefits society.

No.

[http://3.bp.blogspot.com/-v4zI8gKuFug/T-vpFAjdXeI/AAAAAAAAB-...](http://3.bp.blogspot.com/-v4zI8gKuFug/T-vpFAjdXeI/AAAAAAAAB-c/un8iws6A1tI/s1600/Revelations_008.jpg)

More formally, Nash equilibria != global optima. It is not uncommon for
companies to spend money destroying value for their customer -- and to profit
from doing so! See: keurig DRM, speed grading in the semiconductor industry,
Goldman Sachs cornering the Aluminum market, Enron shutting off power to
create the infamous rolling blackouts. There are recordings of Enron traders
literally giggling as they call plant managers to order them offline at times
of peak load.

Profit is about leverage, but value creation is only one of many ways to
obtain leverage, and it's often not a very reliable or effective way (just ask
Bengali sweatshop workers). Other methods for obtaining leverage are generally
"evil" and most certainly do NOT benefit society, but they are _very_
effective, especially in industries where best-practices have long since
solidified and the only way to gain a competitive advantage is a sprinkling of
"black magic". The most obvious dark patterns are illegal, but the lethargic
whack-a-mole from our legislative and judicial branches is nowhere near
sufficient to stem the tide.

~~~
conjecTech
You've shown profit is not necessarily optimally beneficial for customers. You
haven't show that it isn't still beneficial.

~~~
jjoonathan
It's not impossible that redistributing piles of cash from California citizens
to Enron shareholders, employees, and execs in return for intentionally
cutting off electricity was a net benefit for society.

But I doubt it. And so should you. Focusing on the fact that we can't finish
the proof without an assumption along the lines of "financially incentivizing
companies to treat customers poorly is bad for society" is very much in the
same vein as arguing that we can't prove one way or another if there will be
an alien invasion in the next year => let's assume there's a 50/50 chance.

------
nt591
There's a weird attack on MBAs for not being good at creating value in tech.
But the biggest, most successful new tech companies over the last few years
are hardly valuable in the grand scheme of things. Social networks are just
new advertising platforms. Sure, there are companies like SpaceX, but I'd
imagine the vast majority of people here on HN are not building anything so
significant.

So why the outrage? Live and let live.

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palosanto
Well, shit. How are any of us toiling away in tech going to create value now?

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grabcocque
I guess the primary function of private equity is to run companies into the
ground for a quick tax writeoff. And destroying viable companies efficiently
is something to which MBAs are uniquely suited.

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pinaceae
at best, an MBA signals that a person does not know what job they like and are
in for a career change.

it can augment existing, core skills. haven't gotten/seen a candidate where an
MBA was the core of his/her skillset.

if you get an MBA at very expensive institutions, you also get access to a
network of likely-minded, rather rich people.

personnally, if you're already in tech and love it, getting an MBA seems like
a giant waste of time.

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maephet
With any group of people, you always have a spectrum of talent and usefulness.
I've worked with Stanford CS grads who would shock you with the inability to
produce anything useful without handholding and worked with Stanford MBAs that
I was surprised could even get their pants on in the morning. The problem is
that the admissions process for most of these programs is less about the
numbers and more about your ability to network or tell a compelling life
story. If you can tell a story that impresses the admission folks, you're
likely to get in. Sometimes this is reflective of actual talent, sometimes its
a reflection of great story telling.

That being said, there a few incredibly talented and intelligent people in
each class that will continue to allow these types of institutions hold the
prestige that they do.

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refurb
What on earth is a guaranteed bonus? If it's guaranteed, then it's not a
bonus.

I've seen numbers like this before for PE. They make some assumptions about
the fund's returns to come up with the $300K in "guaranteed bonus".

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reledi
An 8% decrease from one year to the next isn't very newsworthy IMO. This trend
may not continue next year for all we know.

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badname
Good riddance

