Is it even worth getting an MBA now if you're a developer in silicon valley. I'm talking in terms of putting so much money out there for MBA and then is there a big difference in salary afterwards?
Yes, if you're good and that's what you want to do. I know someone who knows someone who went to UC Irvine (not one of the top 10) and got a $40,000 signing bonus, which on average wipes out a UC Irvine MBA's outstanding debt.
If his tuition costs were an additional $40,000, you would need a $120,000 (plus any gains that could be accumulated from that $120K) bonus to recoup the expenses. Not to mention that if you really are good, you probably would have made far more than minimum wage during those four years, so we could probably assume, even conservatively, $150-$200,000 for the real cost of the education.
Can a graduate expect to earn $200K more in the all important early stage of the career† over someone who is equally skilled and connected without a degree?
† Early stage being the most important time to collect due to the rules of compounding interest. An extra $200K made in the last year of your career is far less valuable.
Some things are more important than money. I enjoy learning new things as much as the next guy, so I often value education above income. However, I am not sure it is a wise choice if money is your only motivator.
Virtually all full-time MBA programs are two-year programs.
Here's an example of the math a prospective MBA student might consider:
Current cash comp (incl. bonuses) = ~$120k/year
Length of program = 2 years
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Total expected comp lost for next two years = ~$240k (figure $160k after taxes)
Tuition = ~$60k/year
Living expenses = ~20k/year
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Total two-year costs = $160k
Internship earnings est = $20k
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Total two-year net impact = ~$380k ($300k after taxes)
(Note that this doesn't factor in things like student loan interest)
I would doubt highly that there are organizations interested in paying any more for a software developer for an MBA.
In general, it is important to ask yourself what you want to do 50 hours a week and do that rather than to look at starting salaries for post MBAs.
But a manager that understands how long it takes to write software is worth more than a biz-undergrad+MBA manager in a software company.
There are different paths to take, and my experience with people getting MBAs is that they fit in to 1 of 3 groups:
1) Business person who wants to continue being a business person. (by far, they get the biggest value in salary bump on average) Their skill set before the MBA fits perfectly with their improved skills and degrees. They are highly sought after by employers and the MBA program is designed to help them get jobs.
2) Technical person (including all types of engineers, many non-programmers) that are in a technical field because they saw a good $50k-$70k entry salary out of undergrad and wanted a safe job. They saw the higher avg salary post MBA, did some quick math and determined making $120k-$160k post graduation and taking a 2 year vacation would be cool (they saw their business friends do no work in undergrad compared to them.)
3) A strange, hyper-motivated group that comes from all types of backgrounds. They want to start a company and it is in their blood. They can't shake it, they read hacker news, they study hard, they participate in class, case competitions, networking events etc.
They are the exception, but they will found something. It may not be the next google or even a tech startup at all, but it will be something.
Group 1) Gets the 2nd best offers from big and small companies, they get to do cool jobs for the most part.
Group 2) Depends somewhat on the person, but they are at a disadvantage and they thought they were smarter than the business people, but the business people know business and typically best the technical people in interviews. They do fine if they leave their comfort zone, but if they don't they are screwed.
Group 3) gets the best offers, best connections and enjoys it the most. If you believe you are in group 1 or 3, your return on an MBA is amazing. If you are in group 2, it is questionable. But, if you only did the tech job for the money, an MBA probably won't solve your problems, nor will any other degree.
--I see constant posts about MBAs, and how bad they are for people. They are bad for the wrong people, they are amazing for the right people.
I don't think you learn how to run startups in an MBA program, but top MBAs are the only way to get into top VC firms under 30, and that will help you a lot in the fundraising process. People are less likely to throw multiple liquidation preferences at people they personally know and consider "one of us".
What I will say is that it's probably not worth into pursue an MBA at a non-top school. You know law school's "top 14"? For MBA programs, there are 3 or 4. If their graduates aren't getting into top venture capital firms, don't apply.
So you need:
1- Good Skills for the business; at any time.
2- Good Connections for the business; this business and this time.
You are good to go. If you can't make 1+2 happen, then definitively pick up 1. It's the safest bet in the long run and you can get back (and stronger) to 2 at any time. I dropped 1 at one company and focused on building my technical skills. I have never regretted it, I'm actually doing it again.
Incubators like YC are far better at connecting first-time entrepreneurs to top angels and VCs. And investors are far less likely to be abusive with an entrepreneur that is backed by a good incubator because it would affect future deal flow.