Why you shouldn't bother with an MBA

I have a top-5 MBA. In hindsight, I am torn.<p>A big part of me believes "you don't need an MBA to be successful in tech" (etc etc etc).<p>However, every week I use tools &#38; 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.<p>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.

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.<p>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.<p>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.<p>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.

<i>"Apple, which recently usurped Microsoft as the world’s largest technology firm (by market capitalisation), has hardly any MBAs among its top ranks."</i><p>Tim Cook has an MBA from Fuqua, one of the top MBA programs in the US. Was that really that hard to fact-check?

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

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

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

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 <i>some</i> 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.

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

An MBA is what you make of it.<p>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.<p>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.

Anecdote:<p>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:<p><i>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</i> think<i>.</i>

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.<p>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.)<p>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.<p>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.<p>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.<p>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.

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).

So <i>The Economist</i> 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.

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.<p>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?<p>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<p>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.

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:<p>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".<p>Who wants to create a recruiting business that does this? ;)

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?

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."<p>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.<p>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.<p>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.<p>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.<p>So in the end, it depends on what you're looking for.

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. <a href="http://thesuccessmanual.bighow.com" rel="nofollow">http://thesuccessmanual.bighow.com</a>

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.

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

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.<p>Oh, the article? Pretty bland.

I discuss<p>(1) The Article.<p>(2) An MBA.<p>(3) Professional Education.<p>(4) Business.<p>(1) The Article.<p>The author seems angry about MBA programs, and he doesn't support his claims with solid data.<p>(2) An MBA.<p>If an MBA didn't take quite a lot of time and money and, possibly, <i>opportunity cost</i>, then, sure, get an MBA.<p>If someone has a clear objective where an MBA is important, then maybe get one.<p>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.<p>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.<p>(3) Professional Education.<p>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.<p>Since I was in such a program, I wanted to try to do something useful. So, I tried to offer <i>professional</i> education to the students. But I learned that business schools are very much against being <i>professional</i>, say, like law or medicine.<p>Instead, business schools have <i>physics envy</i> 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 <i>research</i>.<p>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!<p>Shockingly, the business schools very much discourage the profs from having significant contact with real business.<p>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 <i>research</i> on the ratio of nouns to verbs in legal briefs!<p>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.<p>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.<p>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 <i>theory</i> sometimes close to business but usually not, and did <i>research</i> that has little promise of utility in business or anything else for at least 100 years.<p>In simple terms, the business school profs commonly don't know enough about business to run a lemonade stand.<p>Far, far too close for comfort is the clip<p><a href="http://www.youtube.com/watch?v=YlVDGmjz7eM" rel="nofollow">http://www.youtube.com/watch?v=YlVDGmjz7eM</a><p>from a business school class in Dangerfield's <i>Back to School</i>. The clip is perceptive on several points:<p>(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.<p>(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.<p>(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 <i>information systems</i> didn't. For a student to toss out actual cost data in class can be embarrassing, intimidating, and infuriating for a prof!<p>(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 <i>real</i> 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.<p>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.<p>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.<p>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, <i>supply chain optimization</i> 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.<p>A business school prof is someone who teaches students how to avoid the pitfalls in business they avoided by being business school profs.<p>(4) Business.<p>For someone who wants to start a business and make it successful, there are various directions:<p>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.<p>There are businesses successful due to parts of <i>globalization</i>; 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?<p>And for readers of <i>Hacker News</i>, sure, software.<p>For such possibilities, I have a tough time seeing that an MBA would be worth the time, money, effort, or, especially, the opportunity costs.<p>So, instead of just cursing the darkness, what might B-schools do?<p>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.<p>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.

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

An MBA is garlic to my entrepreneurial vampire.<p>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.