

Is Now the Time to Hire MBAs? - eande
http://bhorowitz.com/2012/05/18/is-now-the-time-to-hire-mbas/

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dkrich
This is just fraught with assumptions, generalizations, and misinformation.

I have an MBA and degrees in Computer Science and have worked as a programmer
so I know both sides, and this is what it boils down to: how much an MBA can
help you really depends upon what kind of business you are in, and of course,
the value of the potential hire.

If you are running an internet startup there is probably not a whole lot an
MBA can do for you that you can't do yourself.

However if you are running a more conventional business that requires
sourcing, operations, marketing, statistical analysis, etc., an MBA can
absolutely be the difference between success and failure. There is a reason
Tim Cook is the CEO of Apple- he is an operations expert, and Apple is largely
a business built on outstanding operations and sourcing. Companies like Wal-
Mart aren't as widely discussed as the Facebook's of the world, but the
reality is that the Wal-Mart's do a whole lot more to improve our daily lives,
and are far more difficult to run. Then again, Sheryl Sandburg and Mark Pincus
are both Harvard MBA's, so maybe there is some value there as well.

So I would advise people to never bucket a group of people on something as
vague as "he has an MBA, he brings no value." I think a lot of the comments
Peter Thiel makes about education are cavalier and show a general bubble
mentality that shows that he doesn't seem to realize that there is an entire
economy outside the valley that makes our lives better without the recognition
or star power. I get it, he's extremely smart and has made a boatload of cash
through savvy investments. That alone does not make him authority on every
subject though, so it irks me a bit when people quote him as if his word is
law without much examination.

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lancewiggs
Ex MBA, consultant take: Hire people - not MBAs or PhDs or whatever. Most MBAs
have a lot more going for them than their last degree. Don't expect to find
the best from the bottom of the class at any school or consulting company.
Keep the overall number of any group of non-core employee down. Too many
MBAs/consultants ruined eBay. And, the saying goes, short any industry where
the majority of HBS graduates are being hired in to.

~~~
geophile
I started twitching when I read that last line. Malcolm Gladwell's post-mortem
on Enron (in which HBS grads figured prominently) has stuck with me.
Especially because I read it while working at a company that had a large HBS
contingent. What a bunch of arrogant, ignorant, self-satisfied, know-nothing
blowhards. Loved to hear themselves talk. And talk and talk and talk, saying
exactly nothing. Many of them had a consulting background and they loved to
bring in their clones to do their job for them. But the clones didn't do their
jobs very well, so they would bring in another batch of clones who would start
from scratch and also not do their jobs very well. This resulted in a web-
based service that was a year late, and way, way over budget.

This was theoretically a startup, and this was the cream of the HBS crop, but
they made every mistake a startup absolutely should not make: Spending money
extravagantly (and this was post-dotcom blowup); not going live until the
website was perfect "because you only have one chance to make a first
impression"; feature bloat; no follow-through on anything (that was for their
less glamorous underlings).

There, that feels better, I've stopped twitching now.

------
jaylevitt
"When I began my career in the late 80s and early 90s, MBAs ran most of the
best new technology companies."

Not exactly. By 1993, MBAs were already starting to turn AOL into the "how
much can we milk you before you'll walk away?" behemoth it became. They'd
tried to weasel out of our promise of a "lifetime 20% discount" for charter
members, they'd rounded up in some directions and down in others, and they'd
literally removed the "Sign Off" button from the toolbar because we billed by
the hour, and --

Well, I'll let the MBA tell you.

"We needed to drop one icon because of space/look and feel and it made sense
to us out of all the other functionality to drop exit. In addition, some folks
were uncomfortable with how visible the ability to get out of the service was
--all in keeping with our philosophy to keep them online for that one
additional minute :)"

~~~
dkrich
You think that is unique to AOL or MBA's? Try deleting your Facebook account
sometime if you'd like a real good mindfucking. Then tell me MBA's are the
one's behind it.

~~~
Estragon

      > Try deleting your Facebook account sometime if you'd like 
      > a real good mindfucking
    

What happens? (I deleted mine in 2008. I get plaintive emails from them to
sign up again, but that's about it.)

~~~
dkrich
You can only set your profile to not appear publicly in searches, and even
that is non-trivial. If you want your profile permanently deleted, you have to
email them with a form that I could only find through a Google search that led
to their Q&A forum. Even then I'm not sure how "permanent" that permanent
deletion is.

Point is that the OP was suggesting that AOL MBA's fucked up the company by
making the sign out process overly complicated to maximize revenue. That's not
unique to MBA's or AOL, but for some reason that's the perception I suppose
because AOL isn't as cool as Facebook.

~~~
jaylevitt
No, but (to me at least) it's MBA thinking. Technologists were thinking "How
can we build something cool?" (An interactive mouse-driven sketchpad - over
dialup in 1989.) Product folks were thinking "How can we build something
great?" (What if we connected the whole world via e-mail and IM?)

MBA's were thinking "How can we maximize short-term revenue?" Modal popup ads!

------
kapilkale
It may be possible that MBAs as a whole are undervalued for their price tag,
but there's another set of candidates that are even cheaper and even more
undervalued.

You can pick up kids that have 3/4 of the qualities on Horowitz's list for a
lower price tag by recruiting candidates out of top tier consulting firms,
banks, etc. E.g. the kids that would have gotten into a top MBA program if
they actually wanted.

The degree itself just makes MBA candidates more expensive.

------
ojbyrne
"Broad categorizations usually tend to be a bad idea when it comes to people
and in this case, the trends that led to the negative characterization have
reversed."

And yet MBAs from places other than top schools need not apply.

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alain94040
For once I find Ben's arguments unnecessarily misleading. It's pretty clear to
me that MBAs are best suited for mid to large corporations. They have already
proven that they like to follow conventional wisdom. They have extensive
knowledge in many ways a normal business operates.

Early startup life? Not their forte. Improvising, moving quickly, taking high
risks with no data?

Ben's argument that large tech companies of the time were run by MBAs doesn't
prove anything. They are large companies!

~~~
bjoernw
I have an MBA with a BA in Economics but I work for a boutique investment bank
startup where I taught myself quantitative finance, SQL, and now C#. The MBA
provided a great framework. I did not get the MBA because I like to follow
conventional wisdom. I thought of it more like an intro to a set of tools. At
least in my MBA program they made us question everything. Case studies can be
approached from many different angles and my professors were never looking for
the right "conventional" answer.

Why is early startup life not my forte? Would you say that engineers shouldn't
go to bars because they are socially awkward?

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wensheng
(Aaron Patzer, founder of Mint, expressed the sentiment well when he said:
“When valuing a startup, add $500k for every engineer, and subtract $250k for
every MBA.” )

I think it should be attribute to Guy Kawasaki. [1] I heard him saying those
lines in a talk a few years ago.

[1][http://www.forbes.com/2004/03/17/cx_gk_0317artofthestart.htm...](http://www.forbes.com/2004/03/17/cx_gk_0317artofthestart.html)

------
zeteo
No.

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

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kylelibra
The moment MBAs become the new developer or designer, you can no longer argue
we aren't in a bubble.

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rbanffy
It's never the time to hire a degree. Hire people who can help you. And that
depends a lot on what you want to do.

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derstang
In general, I think people put too much weight on the degree. You should hire
people because of their skills, background, promise and personality. If they
have an MBA is a credential not a reason to/not to hire. I also know a bunch
of devs with JDs, but that's not important to whether they can code!

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penetrator
i sat on an mba class for a week or so, and they taught y=ax+b and talked,
talked, talked about this simple linear model the whole week. you guys
remember 'beta' ? -- they emphasize as if that variable can explain
everything.

i dropped out of that course the next day. i felt mba classes are just too
easy and would dull me. it might be better these days, but i doubt it beats
the math stats courses i took.

couple years later i talked with a friend who took mba because he was not
confident. he said the mba math is joke and does not compare to ee courses he
took.

i wonder if the mba uses simple tools to solve hard problems. if that's the
case, it's like a bodybuilder try mining with spoon. a lanky guy with pick
will produce more.

~~~
gawker
Hard problems are not necessarily solved by complicated tools. Sometimes
solutions can be found from simplicity.

~~~
infinitesimal
Why aren't we teaching our scientists and engineers in a similar fashion then?

~~~
gawker
Maybe we because we don't know better. Or we're happy to think that complexity
makes us feel as if we're smart.

But these days, scientists and engineers are looking at mother nature for
examples: [http://www.popsci.com/technology/article/2011-08/13-year-
old...](http://www.popsci.com/technology/article/2011-08/13-year-old-designs-
breakthrough-solar-array-based-fibonacci-sequence)

While there's rebuttal about why the solution above won't work:
[http://www.smartplanet.com/blog/thinking-tech/why-13-year-
ol...](http://www.smartplanet.com/blog/thinking-tech/why-13-year-olds-solar-
power-8216breakthrough-wont-work/8261)

It's still gives us some perspective and thought of how nature restructures
things in a certain way. We could possibly build on that.

Ant traffic is handled by several simple rules. Maybe there's something we can
learn from them too? We're already considering the removal of traffic lights -
initially thought to help manage traffic flow. Do we necessarily need to
manage them? Maybe.. maybe not.

------
sparknlaunch12
MBA holders really get a hard time. There are so many different types of MBAs.
Hard to pigeon hole all of them.

Sure you cannot teach someone to be an entrepreneur, however there are many
important disciplines you can gain from studying a business degree. Most
executives hold an MBA - although this may be simply to speak-the-speak with
others at that level.

Sheryl K. Sandberg (COO of Facebook) holds a MBA. Zuckerberg went to a world
renown business school (albeit he dropped out).

Maybe you only need an MBA hire when you have gone public/IPO?

~~~
neilkelty
Mark Zuckerberg has never been enrolled in a business school, let alone a
"world renowned business school."

~~~
sparknlaunch12
Okay, maybe not in the business school, but he was certainly within an
organisation known locally and internationally for their business school.

He enrolled at Harvard in September 2002. He dropped out in 2004. He studied
psychology and computer science. Harvard Business School is ranked 5th top MBA
Uni by The Economist.

<http://en.wikipedia.org/wiki/Mark_Zuckerberg#Harvard_years>

<http://www.economist.com/whichmba/full-time-mba-ranking>

~~~
Locke1689
Did you go to a university with a business school? There's no crossover. One's
an undergraduate college and the other's a postgraduate college. Absolutely
nothing in common.

~~~
NonEUCitizen
A friend of mine likes to say: "Don't confuse Sloan with MIT."

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csel
I think based on what is happening with Facebook, YES, it is time to hire
MBA's and put more emphasis on monetization. Having 900 million users is
pointless if you don't know how to monetize them.

~~~
SkyMarshal
Assumption: when you need to increase monetization you should hire MBAs.

Is that because MBAs are uniquely good at monetization, or because we lack a
better certification for someone's monetization ability and creativity?

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geophile
This is like asking if it's time to start taking heroin. Not a perfect analogy
since that is reported to feel good the first time around.

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rpwilcox
Seems like there was a talent crunch for MBAs back in the day. In fact,
substituting "developer" for "MBA" and the MBA history lesson still rings
mostly true...

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38f0ia
Sadly, this is the true value of an MBA, not to mention certain other
professional degrees. People just think it means something, on its own, that
it doesn't. This benefits the person with the MBA more than anyone else. Like
someone else said, you hire people not their academic degrees.

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ILIKEPONIES
A response from a recent MBA graduate:
[http://joshgoldstein.me/post/23607867900/mbas-are-not-all-
wo...](http://joshgoldstein.me/post/23607867900/mbas-are-not-all-worthless)

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ls6
Well, even if Ben is right the title should be amended with "... from Harvard
or Stanford". The other problem (even bigger) with MBA is one can get it from
really obscure universities.

~~~
ckluis
Speaking as someone with an MBA from a non-Ivy League, I got a second Masters
to help differentiate myself from the 10s of 1,000s of MBAs with no tanigble
skills or benefits to offer companies.

I think I also learned more in the Masters in Entrepreneurship in Applied
Technologies than in the MBA. The teachers in that program were far more
versed having worked or started several startups each.

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klbarry
I'm curious - what does H.N. think about a Masters of Science in a business
field (Marketing, Statistics, Accounting, etc.) as opposed to an MBA?

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1234the1234
eh... the problem is the cost with the degree. Engineers are really expensive.
If I could grab an MBA for 55k, sure, in a heartbeat. But for 120k I'm going
to grab another engineer and a humanities major for 35k who might turn into an
MBA type.

~~~
melindajb
Except that the humanities major who has no experience buying ads will waste
another $100k before they learn what they are doing wrong.

I like to say that I'm an MBA who is dubious about MBAs. I needed one (a
humanities undergrad--ahem!--) to demonstrate my math skills on a resume.
Without it I never got calls back for jobs, even though I had turned around
two different divisions of a company by the time I was 28. Yes, that wasn't in
tech and yes, it was a different time, but still....

Meanwhile I was raised by a tinkerer, and I respect builders and makers. The
science says diversity makes for better companies. once you are starting to
scale, having built a product people want, people like me with a decade of
experience add a lot of value and keep you from making costly mistakes. A lot
of us are out here in startups, making it work, every day, and while there are
lots of jerk MBAs, it's no more fair to lump me in with them, than it is to
lump you in with the guy who sits in his mom's basement and watches old
episodes of star trek 4 hours every day.

