
Why you shouldn't bother with an MBA - KeepTalking
http://www.economist.com/whichmba/think-twice
======
lylanm
I have a top-5 MBA. In hindsight, I am torn.

A big part of me believes "you don't need an MBA to be successful in tech"
(etc etc etc).

However, every week I use tools & skills that I picked up during my MBA. Yes,
sometimes it has to do with modelling and such stereotypical MBA skills. Many
other times my MBA has a much larger impact - recalling the themes that were
incessantly driven into me in my Managerial Leadership class, or enforcing the
rigor that my Marketing prof required of his students when writing positioning
statements.

I believe my MBA has increased the likelihood of me being successful. That's
what matters to me. I agree that it's not for everyone.

------
c2
Article is pretty skimpy on details and plays fast and loose with facts. Apple
has hardly any MBAs, but it does have some, notably Tim Cook, who many claim
singlehandedly turned Apple around. Also telling is that the dollar figures
for salaries exclude bonuses. I know several executives who have base salaries
less then some engineers, doesn't really mean anything without the bonus
figures.

The value of an MBA will be what you yourself put into it. It was never the
case that you could just sign a check for tuition and get a high dollar figure
salary.

The fact is, that short of a start up with traction, getting an MBA is the
best way to get exposed to a wide variety of business challenges, from
operations to sales to organizational behavior, and yes, even finance for
entrepreneurs and fund raising.

MBAs aren't going anywhere, and they have been evolving with the business
climate over the past 100 years. They certainly aren't for everyone, but I
don't think this article does much to accurately paint the pros and cons to
help someone decide if it's right for them.

~~~
hugh3
_They certainly aren't for everyone, but I don't think this article does much
to accurately paint the pros and cons to help someone decide if it's right for
them._

Well, in its proper context, the article is a counterpoint to The Economist's
entire "Which MBA?" section and/or issue
(<http://www.economist.com/whichmba/>). In the context of an entire section
devoted to helping you decide which MBA you should do, this brief argument
against doing an MBA at all is a helpful piece of contrarianness.

Presented out of context on HN where "MBAs suck" is conventional wisdom rather
than contrarian iconoclasticism, though, it loses much of its effect.

(In my opinion, as someone with a PhD and 5/32nds of an MBA, the answer to
"should I do an MBA" is "Do you want to do an MBA?".)

------
wheels
_"Apple, which recently usurped Microsoft as the world’s largest technology
firm (by market capitalisation), has hardly any MBAs among its top ranks."_

Tim Cook has an MBA from Fuqua, one of the top MBA programs in the US. Was
that really that hard to fact-check?

~~~
hugh3
Well, if he's the only one then that's still "hardly any".

Is he the only one? I don't know.

~~~
wheels
Six of the 25 people listed here have MBAs, and several don't mention college
at all, so it's probably more:

<http://en.wikipedia.org/wiki/Category:Apple_Inc._executives>

It actually saddens me that this article is being voted up. It's more evidence
of the phenomena of people upvoting articles whose thesis they agree with
rather than those which enlighten an issue. The article adds virtually nothing
to an already tired discourse.

~~~
othermaciej
Most of those people aren't current Apple executives. Current execs here:
<[http://www.apple.com/pr/bios/>](http://www.apple.com/pr/bios/>);

I count 4 MBAs out of 11 current execs: Cook, Oppenheimer, Johnson, Williams.

By comparison, there's 5 with science or engineering degrees, 1 with a J.D.,
and 1 with no degree.

~~~
hugh3
Ah, thankyou, so finally we have an answer to the question "Is it true that
hardly any current Apple executives have MBAs?" and the answer is "No". Four
out of eleven is a minority, but doesn't count as "hardly any".

------
brc
You shouldn't bother with an MBA.... as long as you're spending the equivalent
amount of time learning and growing as a person.

The key here is what you do with your time. A structured education is hardly
ever going to be a waste of time. It may not bring instant promotion and
salary increases commensurate with the cost, but to call it a waste of time
would be quite incorrect.

Like the Rent vs Buy argument for property, the 'Rent' case is only better if
you invest the amount saved. The MBA vs No-MBA argument is better for the No-
MBA side if you invest time and effort into learning and growing as an
individual. MBA vs Watching TV is a no-brainer, as they say, you should always
opt for studying.

For some people, the structured learning environment and connections made
during the course are invaluable. People tend to discount or forget this when
evaluating the worth of MBA courses.

------
meterplech
This article is really devoid of substance. I expect more from the Economist
magazine normally. They provide anecdotes about companies and countries that
got by without a large number of MBAs. They don't even provide any evidence of
correlation, let alone causation.

I have generally been skeptic of increases in higher education- but this
doesn't really explain the pros and cons of an MBA.

------
kschrader
Am I reading the chart on that page correctly that the post-graduation salary
is on average 20-30% less for most MBA graduates?

I find that to be a shocking figure after the 2 years and huge amount of money
that people generally invest in getting an MBA.

~~~
WillyF
I think that they must have transposed the labels. The graph must mean that a
student who goes into Harvard leaves an $80,000 a year salary and after two
years gets a $115,000 a year salary. That doesn't tell us all that much unless
we know how much that same person would be making if he or she stayed in the
workforce for those two years.

~~~
kylelibra
The graph must have been done by someone without a MBA...

------
wizawuza
Articles like these over generalize, and I hope that anyone who reads this
article doesn't assume everything they read is gospel. I know my point of view
on MBA's isn't the popular one on HN, and that's fine.. but an MBA was just
right for my career, and it is for _some_ others as well. As for "...MBAs
brandishing spreadsheets, the latest two-by-twos and the guilt induced by some
watery ethics course." Way to read the "10 day MBA" and write an article about
it. Oh wait a minute, the author is also basically pushing his own book on
basically the same subject.

~~~
shadowsun7
From the bottom of the article: Philip Delves Broughton is the author of “What
They Teach you at Harvard Business School” and _a Harvard MBA_.

~~~
wizawuza
saw that, but I still think my point about him pushing his own book is valid.

------
spullara
I was intrigued until I saw the site and realized that they were talking about
a degree in business and not a MacBook Air.

------
jakarta
An MBA is what you make of it.

For some people, seeking to transition between industries, an MBA can be very
helpful. If you are working as a marketing person for General Mills and then
decide that you want to break into ibanking, an MBA is great. It allows you to
re-enter a very standardized recruiting process versus having to haplessly
apply to random jobs. The same goes for people who work in fields where hiring
and promoting is very standardized. At certain F500 companies/investment
banks/PE firms it is expected that after 2-4 years of working you'll go back
and get your MBA (if you want to be promoted). It's pretty dumb, but that's
the way it works. Certain star performers can sidestep that but it tends to
occur less frequently.

At the same time, for certain careers which are based more on merit (trading,
entrepreneurship) an MBA might be less helpful. At best, for a non-business
person, you will learn some basic skills and gain a good network. But it's a
pretty high cost.

------
ubernostrum
Anecdote:

I went to a decently-respected, and rather expensive, private college. Lots of
wealthy folks sent their kids there (and the high tuition allowed the school
to hand out big scholarships to kids like me, who couldn't have afforded it
any other way). One of my friends was the son of an executive, worth more
money than I or any ten people I know will ever be; once he was visiting his
son, and being introduced to his friends. Anyway, at one point he said
something that stuck with me, and given the mix of people he was talking to
I'm pretty sure he wasn't just trying to make the liberal-arts folks feel
better about themselves:

 _The thing about business degrees is this: I can hire someone who studied
history or literature or whatever, and in six months teach them what they need
to know about business. But if I hire someone who got a business degree, I can
spend all the time in the world and never be able to teach them how to_ think
_._

------
arjunnarayan
One of the key issues that I think has accompanied the downfall of the MBA is
that the pure-boardroom corporate suit no longer delivers as much value as he
used to. Sure, most big companies are run by corporate suits with MBAs,
pedigree degrees and well-oiled networks of friends in management positions
across the corporate world, but the primary metric used for rewarding
management is growth.

While in the past, most companies grew under the direction and helmsmanship of
a corporate suit A-list CEO, the return on investment is no longer there: 20
years ago, investors in a million dollar startup would get nervous and push
for an MBA to steer the ship. When Google got big, there was a lot of
clamoring from investors for "adult supervision". In contrast, while there
were a few calls for Zuck to relinquish the helm to MBA-led adult supervision,
he has resisted them while successfully growing his company to apparently a
50-billion dollar valuation. I only expect this trend to continue. The next
big tech startup will never have a corporate non-tech type at the lead until
it reaches it's current-day Microsoft-esque peak and slow decline. (One can
argue that this is already the case, given that Eric Schmidt is actually a
tech geek in corporate clothing.)

And this effect is not just at the top CEO-level: it is mirrored across the
slightly lower tier of upper-management: the very tier that most aspiring MBAs
hope to occupy at the pinnacle of their career. High performing tech
departments are no longer being as gingerly managed by MBAs --- or if they
still are, the leadership and powers are slowly being devolved more and more
to the nerds. Quant managers in investment banks are already more compensated
than the CEOs of those banks themselves. People no longer blink in horror when
a boffin (what an antiquated and obsolete word!) is made a CEO.

Of course, most _mature_ well-established companies are and will probably
continue to be run by MBAs in well-oiled corporate boardrooms. But the
compensation is not the same for someone who takes a billion dollar company
and grows it at 2% year on year as it is for someone who takes a 100 million
dollar company and turns it into a billion dollar company.

In the past, MBAs used to be handed on a silver platter these gems in the
rough by nervous investors eager to get some security (imagined or real) in
their growth assets. This is no longer the case. And therefore, MBAs no longer
have this easy source of high growth opportunities to lead to success. They
are going to have to make these gems in the rough themselves, because those
who are making the high growth companies are not relinquishing control (like
Zuck.) to them to steer and get lavishly compensated for.

And if there's anything I've learned from the tech industry, it's that MBAs
don't create value, aren't original, and don't actually start things --- and
they are finally losing their cash cow of having high growth ventures handed
to them. I wouldn't be surprised if in 10-20 years the MBA would either be
radically different (evolved into a little corporate training and social
skills for nerds seminar) or obsolete and viewed as a mature, well (but not
outrageously so) compensated professional training programme like a degree in
Accounting or Medical School. I have even bet on this being the case in
choosing CS grad school over an MBA program in the recent past.

~~~
mickt
All of your points are valid. But, for an individual who want to increase
their perceived worth, and make more money, (even it's with a boring mature
company) an MBA from a good school can't hurt, and is bound to teach some
useful management skills.

MBA's from mediocre or unknown schools aren't going to get one a highfalutin
job with some bank or the upper echelons of the S&P500, but they might teach
some useful management skills and decisions making skills that could be useful
to techie's and others who want to run their own companies.

~~~
MichaelSalib
_an MBA from a good school can't hurt, and is bound to teach some useful
management skills._

I'm not so sure. Reading Henry Mintzberg's writings, one gets the sense that
MBA programs are dangerous. They don't actually impart useful skills but they
convince their students that they do. I mean, consider Harvard Biz school's
case study methodology. You get a bunch of people who know nothing about a
company or an industry to read 20 pages of material, reduce all its problems
to a single strategic question, then pronounce a decisions and that's it --
this is like a parody for designing a process that allows ignorant people to
screw things up, all the while relishing their elite ignorance.

~~~
PakG1
Being a published co-author of a business case
([http://hbr.org/product/vidalia-onions-sweet-and-sour-
transit...](http://hbr.org/product/vidalia-onions-sweet-and-sour-
transitions/an/906M22-PDF-ENG)), I find this to be a strawman argument for
decrying business cases. I get your underlying criticism about lack of domain
expertise, but case study analysis never devolves into "single strategic
question" situations. Usually, cases are just meant to exercise brains into
trying to understand and analyze different situations and realize that the
various tensions can actually be quite complex. The methodology has its
faults, but let's (edit: not) make it out to be less than what it is. It helps
people to get into the mindset necessary to make good managerial decisions in
diverse situations. The key difference between case studies and real life is
that case studies hand all the information to you on a silver platter, while
in real life, managers need to go digging hard both inside and outside the
company for all the information necessary for good decisions. Case studies
never intend to cause managers to want to avoid listening to their employees,
especially the ones who are domain experts. Such instances reflect more on the
manager's incompetence than it does on the case study methodology's inability
to teach.

As well, there's something good to be said about being able to bring in
outside perspectives to right sinking ships, thanks to not being chained to
pervasive biases that may unknowingly be held by those who were "insiders" for
a while. IBM's perhaps one of the most extreme examples. They brought a CEO
with a non-technology background to right the ship. And he did.

"In April 1993, IBM hired Louis V. Gerstner, Jr. as its new CEO. For the first
time since 1914 IBM had recruited a leader from outside its ranks. Gerstner
had been chairman and CEO of RJR Nabisco for four years, and had previously
spent 11 years as a top executive at American Express. Gerstner brought with
him a customer-oriented sensibility and the strategic-thinking expertise that
he had honed through years as a management consultant at McKinsey & Co..
Recognizing that his first priority was to stabilize the company, he adopted a
triage mindset and took quick, dramatic action. His early decisions included
recommitting to the mainframe, selling the Federal Systems Division to Loral
in order to replenish the company's cash coffers, continuing to shrink the
workforce (reaching a low of 220,000 employees in 1994), and driving
significant cost reductions within the company. Most importantly, Gerstner
decided to reverse the move to spin off IBM business units into separate
companies. He recognized that one of IBM's enduring strengths was its ability
to provide integrated solutions for customers – someone who could represent
more than piece parts or components. Splitting the company would have
destroyed that unique IBM advantage.[25]"

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

Not that John Sculley managed to do anything remotely as good for Apple when
he was recruited by Jobs from Pepsi. ;)

------
ericmsimons
I personally don't have an MBA but I think it's important to at least pick up
a few books and become a pseudo expert. Accounting is also extremely important
to be familiar with (if you plan on becoming a business owner).

------
chrisaycock
So _The Economist_ was originally against the PhD and now they're against the
MBA. What's with the anti-postgraduate rant? I guess they'll claim physicians
don't need an MD next.

~~~
arethuza
I'm pretty sure that in the UK medics do an equivalent of an MD as an
undergraduate degree:

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

[http://en.wikipedia.org/wiki/Bachelor_of_Medicine,_Bachelor_...](http://en.wikipedia.org/wiki/Bachelor_of_Medicine,_Bachelor_of_Surgery)

The Economist is UK based.

------
ssharp
Two points, not necessarily in response to the article, but to the comments to
this item and the general attitude of HN towards the MBA.

1) There are a lot of industries outside of technology and even within
technology, the facets vary greatly. Trying to say what a startup needs vs.
what Apple needs vs. what Facebook needs is a largely useless exercise. Saying
"MBAs are a dying breed because Facebook didn't need them" is pretty
irrational, as is judging someone based on whether or not they have an MBA. If
Mark Zuckerberg dropped everything and knocked out an MBA in a year or two,
would he somehow no longer be the person he was before he did the program?

I guess what I generally don't get is the idea that the MBA brands you as an
undesirable idiot in this community. It's as ridiculous as thinking that just
having an MBA qualifies you for huge responsibilities

2) MBA programs are capable of evolving and they are. Many MBA programs are
now focusing much more time on leadership and teams and give students the
ability to exercise these areas much more than they used to.

------
mbesto
Many companies have issues finding top management talent and thus why they
resolve to accrediting individuals with MBA's as being suited for the job.
I've begun to think about a new concept for harvesting this type of talent.
What about the following idea:

As a company (or recruiting company) you essentially "poach" people who have
gotten into Booth, Wharton, Kellogg, etc. So you approach them once they have
received letters of acceptance from these schools and offer them a nice job in
your company. The individuals that actually would accept your offer (and of
course the offer would be good) would even be in the ideal talent pool of
aforementioned top MBA universities. Down the line someone may question "well
yes Mr. Smith did get into Wharton, but he never went". My answer would be
"Any person smart enough and business minded enough would realize their
investment in this offer is much more advantageous to their career than
attaining their MBA".

Who wants to create a recruiting business that does this? ;)

------
russell_h
I've been meaning to do an Ask HN on this, but since we're sort of on the
topic, whats a good way for a technical person to learn the basics of
business, especially as it pertains to startups? Is there some good central
source or book that could take me from basically getting things conceptually
to knowing all of the jargon, etc?

~~~
joshkaufman
I wrote a book that will help you:
<http://www.amazon.com/gp/product/1591843529/>

~~~
mbesto
50% through it now. Highly recommend!

Sidenote - I was surprised that the author of the Economist article didn't use
Josh's quoted research from Christian Schraga who estimated the ten-year NPV
of a top MBA program is approximately negative $53,000 [1]. If these
assumptions are correct, it would take approximately 12 years to just break
even.

[1] - [http://mbacaveatemptor.blogspot.com/2005/06/wharton-grads-
ca...](http://mbacaveatemptor.blogspot.com/2005/06/wharton-grads-caveat-
emptor-for.html)

------
PakG1
I spoke once with the MBA program manager (or something, I don't know what, he
wasn't the dean for sure) at my university. He summarized that an MBA is a
professional degree, not an academic degree. As such, the value from an MBA
depends on who your classmates are, not what your profs/textbooks say. He said
that it's often the prof actually learning from the students. They can discuss
case studies and business issues in class, and each student can add something
special to the discussion. "Well, we experienced this exact thing back in our
2004 expansion push, and these were the issues that we encountered and how we
dealt with them." "That's funny, we experienced something similar in 2005, but
it was in Japan, and dang, we had a totally different set of experiences, this
is what we had to do, but we failed at this and that in the attempt. These
were our results from the whole thing."

Joe Schmoe with no real experience can try to mumble something that he learned
back during his Marketing 303 class, but nobody will care. If the university
is worth anything, Joe Schmoe would not be accepted in the first place.

So the guy emphasized to me that the real value from an MBA is not the fancy 3
letters, nor the fancy job prospects, though those are all nice bonuses. He
emphasized that the real value was the professional network that would be
accumulated (the better the school, the better the network as a general rule),
and correspondingly, the wealth of information and future opportunities that
could be gathered from that professional network.

So it sounds very similar to a comment someone made about why they found
university to be valuable in that other thread about whether to attend
university.

On the flip side, I knew a director of marketing from when I worked in telco.
He had an MBA from Phoenix University online. His class included a hotel
clerk, for reference in terms of their student quality. But he wasn't
expecting anything out of it. He came from an engineering background and had
gradually transitioned into sales and marketing. But he found as he moved up
the chain in sales and marketing, he lacked some of the fundamental aspects of
business that many of his peers seemed to possess (simple things, like even
vocabulary; what the heck does managerial accounting mean, and how does it
differ from regular accounting?). So he enrolled into Phoenix just so that he
could talk shop properly with his peers. He's a lifer at that telco, a rising
star, so getting an MBA from Harvard wouldn't help him achieve his goals any
better than Phoenix would. His goals were just to keep growing inside the
company, not seek a high-profile exec position somewhere else; Phoenix
provided him the tools he needed to do exactly what he wanted.

So in the end, it depends on what you're looking for.

~~~
arethuza
But management isn't a profession in the same way that law, medicine,
accountancy etc. are - in those fields you have to be professionally qualified
to practice and a "real" professional qualification (i.e. a non academic one)
is revocable.

~~~
PakG1
LOL, that made me think, don't we all have experiences where we wish the
people above us could have their statuses revoked due to their incompetence?
:D

~~~
arethuza
In some way that is the mark of a "real" profession - if you are unhappy with
the way someone has performed you can go to the relevant professional body and
they will carry out an inquiry and they can be stopped from doing their job.

And yes, for people like lawyers, medical doctors etc. this _does_ happen, for
example the MMR vaccine fiasco resulted in this:

<http://news.bbc.co.uk/1/hi/health/8695267.stm>

Can you imagine that happening with MBAs?

~~~
count
Or to computer programmers? Or system administrators? Or DBAs? Something about
glasshouses and bricks seems apropos here.

------
pramit
This is an issue we have discussed here at Hacker News. Shameless plug: I for
one have tried to push the cause of No-Degree-MBA. For example, you have The
Success Manual which contains actionable summaries from 200+ greatest business
books self-improvement books of all time. <http://thesuccessmanual.bighow.com>

------
zeteo
Business school is not about the quantitative skills - those you can pick up
in a couple of weeks from a book, if you have any decent proficiency in
arithmetic and/or using a spreadsheet. It's about networking and about
learning to manage a schedule of incessant busyness.

~~~
scottshapiro
In addition to adapting to a new place and working with all types of people
who you would never have come across in your prior role.

------
larrywright
It says a lot about me that I thought that MBA meant "MacBook Air" in this
context.

------
jkahn
For me, I have to say that the high point of that article was squinting to
read the small, non-clickable graph and seeing "Queensland" (Australia) as one
of the universities mentioned.

Oh, the article? Pretty bland.

------
HilbertSpace
I discuss

(1) The Article.

(2) An MBA.

(3) Professional Education.

(4) Business.

(1) The Article.

The author seems angry about MBA programs, and he doesn't support his claims
with solid data.

(2) An MBA.

If an MBA didn't take quite a lot of time and money and, possibly,
_opportunity cost_ , then, sure, get an MBA.

If someone has a clear objective where an MBA is important, then maybe get
one.

If someone wants to be in business but really has no significant background in
business from family or experience and, say, didn't major in business as an
undergraduate, then maybe get an MBA.

Some of what is taught in some MBA programs is not easy to learn from
experience or independent study and might be useful later in business.
Examples include optimization (e.g., linear programming), statistics (random
variables, distributions, expectation, variance, independence, central limit
theorem, law of large numbers, conditioning, hypothesis tests, confidence
intervals, the general linear model), an overview of information systems
(likely not worthwhile for readers of Hacker News!), accounting, mathematics
of finance (e.g., Black-Scholes), business law, organizational behavior.

(3) Professional Education.

I never wanted to be a college prof but, due to some strange circumstances,
for a while was a prof in one of the better MBA programs. I concentrated on
optimization and computing.

Since I was in such a program, I wanted to try to do something useful. So, I
tried to offer _professional_ education to the students. But I learned that
business schools are very much against being _professional_ , say, like law or
medicine.

Instead, business schools have _physics envy_ and want the profs sitting alone
in their little offices with the door and curtains closed and thinking up some
business world version of Newton's second law F = ma or Einstein's E = mc^2.
So, they want _research_.

Of course, so far no business school prof has found anything like F = ma, but
there are journals run by B-school profs where B-school profs can get whatever
they do published. The journals do have some value as examples of make-work,
junk-think, busy-work, prof-scam!

Shockingly, the business schools very much discourage the profs from having
significant contact with real business.

If medical education were like business education, then all the med school
profs would be at best second rate experts in biochemistry doing third rate
work on imaginary cures for imaginary diseases and would never see real
patients, and no one would go to a hospital no matter how much they hurt. Law
schools? The profs there would never see clients, file a legal case, or appear
in a courtroom and would do statistical studies about whatever in legal cases
pursued by others. Gee, maybe they'd do _research_ on the ratio of nouns to
verbs in legal briefs!

Instead, in medical school, the students actually get a good start on
medicine, that is, how to take sick people and make them well, and that
utility totally blows away anything in an MBA program.

So, what happened? In WWII, the US military concluded that research in
physical science was crucial. Then the top 24 or so US research universities
got an offer they couldn't refuse: Take big bucks from the US Federal
Government as grants for research that is promising for US national security
(eventually, or medical care) or cease to be a competitive research
university.

Then the B-schools, somehow, got dragged into the same thing: The profs needed
no business accomplishments or experience, had no on-going contact with actual
business, taught _theory_ sometimes close to business but usually not, and did
_research_ that has little promise of utility in business or anything else for
at least 100 years.

In simple terms, the business school profs commonly don't know enough about
business to run a lemonade stand.

Far, far too close for comfort is the clip

<http://www.youtube.com/watch?v=YlVDGmjz7eM>

from a business school class in Dangerfield's _Back to School_. The clip is
perceptive on several points:

(A) The prof's idea is to set up a business "from the ground" up "with a
30,000 square foot facility" and an "efficient administrative and executive
structure". Uh, generally that's a lot of money spent and likely at risk
before any revenue. So, it is more common in practice to start small and, if
successful, then grow.

(B) Dangerfield asks, "What's the product?". The prof wants to say "That is
immaterial for the purposes of our discussion here". Well, maybe "immaterial"
is okay from 100,000 feet up or when just talking with the general contractor,
but anyone actually in business cares a lot about the product and would want
to discuss it. The prof makes a stab, "tape recorders" and from Dangerfield
gets a big lesson, "Are you kidding? The Japs'll kill us on the labor costs."
The lesson: It's not trivial to think of a promising product. Quite generally
the "product" is from important up to crucial. So, Dangerfield doesn't want to
discuss spending big bucks without the product clearly in mind, and here he is
correct.

(C) Dangerfield asks, "Why build? You're better off leasing at a buck and a
quarter, a buck and a half, a square foot, save your down payment". One lesson
here is that the prof is being too simplistic on the build/lease decision. For
a growing business, building is likely a monument to ignorance. Another lesson
is, Dangerfield has actual, current costs for leasing; in a real business of
that scale, the CEO knows costs in fine detail. The clip is accurate: Commonly
profs don't know real costs. E.g., I ended up leading the college in buying
some computing; from the work I'd done before being a prof I knew the current
costs in good detail, and the other profs in _information systems_ didn't. For
a student to toss out actual cost data in class can be embarrassing,
intimidating, and infuriating for a prof!

(D) Of course the high point of the exchange is where Dangerfield interrupts
and says, "Oh, you left out a bunch of stuff.", and with contempt the prof
responds, "Oh, really. Like what for instance?". So, Dangerfield rattles off
several points of costs in the _real_ world! Could be very good to know! The
clip shows a student taking notes furiously; that's accurate: Commonly the
students really do want the real stuff. Finally the line, "How about Fantasy
Land" is on target and a hoot.

It's a well done clip and parody of B-school and indicates that the movie
makers and much of the audience got the points quickly.

The profs are pursuing a scam and know it: The smarter ones see how to game
the system and do but are ashamed of all they do. The still smarter ones leave
for something else in academics or just for actual business.

Instead, for a much better model, business schools should become plainly
professional and borrow from medicine. If some problem in a real business in,
say, _supply chain optimization_ becomes important, then a B-school prof with
such a problem should contact the campus applied mathematics, civil
engineering, or operations research department much as a medical school prof
might contact someone in biochemistry or cell biology.

A business school prof is someone who teaches students how to avoid the
pitfalls in business they avoided by being business school profs.

(4) Business.

For someone who wants to start a business and make it successful, there are
various directions:

There are the businesses common on Main Street, and likely the best way to
learn such a business is to have a father who is successful in that business
and learn from the father while working in the business.

There are businesses successful due to parts of _globalization_ ; some of
these opportunities are too new to learn from a father, and how to learn is
not clear. Travel the world on a tramp steamer and spend a few days in each of
100 foreign ports?

And for readers of _Hacker News_ , sure, software.

For such possibilities, I have a tough time seeing that an MBA would be worth
the time, money, effort, or, especially, the opportunity costs.

So, instead of just cursing the darkness, what might B-schools do?

Well, as I said, borrow from medicine. Or, health care is important: Medical
school teaches students how to deliver high quality health care; to do this,
the profs need to be experts in health care and relevant parts of the human
body, disease, and how they work. This expertise was difficult to get and to
confirm, formulate, and teach but is crucial. The research, say, in
biochemistry, is important but not nearly the same thing.

Well, business is important: B-school should teach students how to do well in
business; to do this, the profs need to be experts in business and how
businesses work, the problems they encounter, and how to solve the problems
and do well. This expertise will be difficult to get, confirm, formulate, and
teach but is crucial. The research, say, in statistics is important but not
nearly the same thing.

~~~
dgallagher
_Shockingly, the business schools very much discourage the profs from having
significant contact with real business._

This was not my experience at UMass Lowell's undergraduate College of
Management program (graduated 04). One of my professors was CEO of a
manufacturing company in South Korea, teaching at the same time because he
loved to teach. Another one came directly from Gillette (now P&G) and shared
tons of personal experiences which were extremely insightful. A third
professor was a consultant to numerous companies. I can go on and on, but
virtually all of my professors had strong ties to the business world, and that
made them extremely good teachers. While I can't speak of their MBA program
specifically, many of my professors taught those courses too.

There were some academic professors, but they were the exception rather than
the rule. In fact, come to think of it, I can't name one of the top of my
head. In other departments, sure, but not in their management program.

I think it's safe to say that every college is different, and you'll get a
unique mix of backgrounds and experiences from Professors pending on where you
go. There very well may be academic-only business schools, but that's not
everywhere. Some schools are terrible, while others are great.

\--------------------

One thing that I wish I had more exposure to in college was working directly
with businesses. There were internship programs, but during my Junior/Senior
year the economy was utter crap, and opportunities were virtually non-
existant. As you pointed out this is something you see in medical and legal
education, and I wish I saw more of it in business school. I agree with you
that it's an area that needs improvement if it hasn't been universally
implemented yet.

\--------------------

 _(A) The prof's idea is to set up a business "from the ground" up "with a
30,000 square foot facility" and an "efficient administrative and executive
structure". Uh, generally that's a lot of money spent and likely at risk
before any revenue. So, it is more common in practice to start small and, if
successful, then grow._

This touches on the "level of abstraction" that some business types fall into.
It's basic South Park Underpants Gnomes logic: Phase 1: Collect Underpants.
Phase 2: ???. Phase 3: Profit! (<http://cart.mn/aYOY1h> \- maybe NSFW)

Basically, skip over the most difficult parts and focus on the easy ones. It's
"easy" to walk out with a business degree and not understand Phase 2. Real
world experience hopefully fills in that gap. Definitely another opportunity
for business school improvement.

When it comes to web-startups though, I can't say this loud enough: LEARN HOW
TO HACK! Otherwise you're nerfed because you can't do Phase 2.

~~~
HilbertSpace
Well put.

Yes, in the Dangerfield clip, it's possible to argue that the prof was being
appropriately _general and abstract_. But, then, to what end for the costs for
the plant? Is this to test ability to add some numbers? No. Is the detail
enough actually to help someone work with an architect and general contractor
to get the building constructed? No. Is it useful in business to address
business planning in such an abstract way, that is, so distant from actual
details such as Dangerfield was mentioning? No.

There is a role for some abstract work in business, but the lecture in the
clip was not an example.

E.g., long in some schools of agriculture, e.g., Iowa, a question was, say,
for growing corn, what corn variety, planted when, with what density, with
what soil chemistry, with what fertilizer would be best? Broadly the key was
the special case of the general linear model called _experimental design_
and/or _analysis of variance_. It's powerful stuff, a nice tool to have,
broadly applicable, and can be presented quite abstractly. In the end, the
corresponding software knows nothing about the real problem, from an ag
school, P&G, some ad agency, etc. Still, real examples are important.

The B-school where I was a prof had rule: No more than one day a week
_consulting_. And any outside contact with business was a black mark as in
evidence that the prof didn't really care about _research_. To the best of my
knowledge, no one on the faculty had any significant on-going contact with
business, and only a tiny fraction of the faculty had any significant business
experience at all.

I wanted the B-school to be like a research-teaching hospital where the halls
were full of people from real businesses with problems looking for solutions.
So, I wanted to look at the problems and assign them to, say, undergrads, grad
students, grad student research, faculty research, or maybe hand them off to
profs in, say, engineering. For the student projects, have faculty supervise
the work. Hopefully have the problem presented in class, maybe by the person
with the problem, and later, by the students, also the solution. The students
would make some real business contacts and get some _internship_ experience.

The usual standards for peer-reviewed research are "new, correct, and
significant". Well, if the business person is doing something new and
significant, then any "correct" solution for the business problem likely also
satisfies "new and significant"! Also, once have a solution for one real
problem, the chances that the solution applies to another real problem are
increased! If find a third problem the solution solves, then are on the way to
some progress. So, for research, starting with a real problem can be one heck
of an advantage in several ways.

Fees? Med schools have worked all that out, along with professional peer
review, ethics, etc.; so borrow that.

The work I did for the school in computing helped the school a lot, and the
deans knew that I was really interested in real business and not research in
the form of generalized abstract nonsense; I was relatively well qualified to
do such _research_ but just wanted contact with real business instead or at
least _first_ as in the recipe for rabbit stew that starts, "First catch a
rabbit.".

So, to thank me for the computing work I did, the deans passed lots of
consulting to me, and I doubled my income. Yes, lots of business people do
have problems and do contact B-schools; it's just that mostly the B-schools
tell the business people to go away.

I very much wanted to bring the consulting into the school for the students,
in classes, etc, but made only partial progress: After I did the computing
work, I gave a grad course on it. The first half of the course I lectured on
_speeds, capacities, costs, and principles of operation_ and other overview
topics in computing. The second half of the course was all presentations from
vendors! The class was well attended by grad students, faculty, and staff!
Everyone got current on a lot in computing! The final was to write a paper. A
few students got together, formed a team, went off campus, dug into some deep
stuff, and got close to some significant business opportunities!

The first lecture in the course was to pop the covers off the computing I'd
had the college buy and show people the main pieces. Students were thrilled.

Seeing what the school, profs, chairs, deans felt they wanted in _research_ ,
I, uh, did them a _favor_! We needed to do some faculty recruiting, and
resumes came across my desk. So I saw and picked one with some rare and
powerful qualifications and led the recruiting effort, and the person was
hired! They quickly wrote a lot of highly regarded papers in applied math and
became famous, not so much in B-schools but in some parts of applied math.
Their work was novel and curious applied math, actually at times close to the
question P versus NP in computer science. But the work was done with no
contact with actual business, and it will be a very long time until that work
actually impacts business. Still, just as _research_ , that person totally
knocked the socks off everyone else in the school.

The points, I'm saying, about B-school being _professional_ with good contact
with real business is no secret at all; it is widely, thoroughly understood.
The problem for the B-schools isn't understanding the points but liking them.
To like them, have to give up on _physics envy_ , etc. And with the contact
with business, have to be vulnerable to accusations, say, from elsewhere on
campus, that the school is just being used for something _crass_ that has
nothing to do with _contributions to knowledge_ for _progress_ in business.
People who so criticize contact with real business and have a child with a
really big tummy ache should take them to a research prof in biochemistry
instead of a gastroenterologist!

But just contact with business is not enough: Instead it is important to
identify important _principles_ , test and confirm them, organize the
knowledge, and teach it. So it's _research_ analogous to mapping out new
geography and finding the main features. This work is actually not easy to do;
problem is, it's important. Medicine did it, with a lot of hard work, bloody
hands, horror stories, but finally some of the best progress in civilization.
It can be done, but B-schools are not much trying to do it.

------
drstrangevibes
another reason for not doing an MBA is that it stops you from being able to
make a point concisely....;-)

------
anthonycerra
An MBA is garlic to my entrepreneurial vampire.

That being said, there are two different responses I would give to someone
considering getting an MBA. If you're looking to climb the ladder in an old
school company an MBA is par for the course. If you're using the MBA as an
excuse to put off being an entrepreneur you're shooting yourself in the foot
with a silver bullet.

