The MBAs are fleeing, should SF be worried?
techcrunch.com
techcrunch.com
The logic underpinning this article is flimsy at best. He is using the following to infer that fewer MBA's are going to SF:
About 24% of MBA graduates in the class of 2014 headed to tech jobs, down from 32% in 2013 and equal with the proportion back in 2012. Of course, those profiteering graduates are returning right back to where they belong in finance and consumer products, which each saw notable upticks in employment.
There are several things that are wrong with this. First, he is only looking at Stanford GSB and assuming because it is in the Bay area that it is a reliable representation of MBA's everywhere, because surely it's proximity to SV means it must graduate more students who are likely to be employed there than elsewhere. But Haas is in the Bay area too. He's also assuming that students who graduated in years past aren't now moving to SV in increased numbers which, if true, could more than offset a decline in graduating students. However the most glaring hole in the logic is that "tech jobs" = San Francisco. As a fairly recent MBA grad myself, I can tell you that most of the people in my class who went into tech did not go to SV. Most went to places like Intel, Amazon, and Microsoft, none of which are based in California, let alone SV.
If you don't have a firm understanding of a topic, why write about the topic? It just makes the author sound stupid.
Actually, that hasn't changed in the last year. A more significant fact is that in 2012 24% of MBAs went to tech, in 2013, 32%, and now in 2014 it's back down. There weren't any huge shifts in the industry in the last two years, so the data seems inherently noisy, determined by the acts of 20 people who go either to one or the other.
Poor article. Looking for a story.
As an equation it would look like:
finance_pay - judgement_of_society > tech_pay + lottery*Pr[winning_lottery]
where judgement_of_society has rapidly declined, and people are realizing that the true value of Pr[winning_lottery] is smaller than their estimate.
Also, I can't shake the suspicion that the output results from the program are affected significantly by the inputs (the students accepted by admissions), and the effect of the relative cyclical attractiveness of the industries must thus be attenuated significantly.
>That’s according to newly released employment data from Stanford’s Graduate School of Business, which is a particular bellwether of the state of startups given the school’s proximity to Silicon Valley. About 24% of MBA graduates in the class of 2014 headed to tech jobs, down from 32% in 2013 and equal with the proportion back in 2012. Of course, those profiteering graduates are returning right back to where they belong in finance and consumer products, which each saw notable upticks in employment.
Apparently we can now make statements about entire industry sub cycles from the whims of 350 students.
Startups are hard. Very hard. Startup life is not glamorous. And failure hurts twice as much when you've lived a cultivated, high-achievement life. Building a company may have gotten cheaper, but it hasn't gotten any easier. If you imagine your life being an uninterrupted string of success by following a relatively conservative game plan you may find it difficult to adjust. Leaving is perfectly reasonable.
:)
Well, if it helps, that really applies to just about any profession.
Or maybe "10X" is true, but it isn't realized due to whatever non-technical reasons (political, etc.)?
10x is arguable. But the 1000x programmer (who is as good as a team of 1000) definitely doesn't exist. IMO.
The other aspect is that just being good and fast doesn't make you money. You have to be good and fast at solving the right problem in the right way and then convince people to give you lots of money for that solution. If you can't do those last bits, you'll always end up working for someone earning more than you, no matter how good you are.
But isn't it more measurable than what an MBA in a senior/executive position does? If being part of writing a large software system is complex and hard to get right, and hard to measure progress on (technical debt v.s. features, for example), I can't imagine that running or managing a system of people - which are much less predictable than system components - is less complex, and in turn easier to measure when you factor in all external factors and things that an executive can't really do anything about (even though he might be responsible for it on paper).
But I don't really know anything about the management world.
OTOH, I'm no better at filling out random paperwork than they are, maybe even less effective, since they will readily gamble that a sketchy answer in a form won't bounce back for clarification.
So, if there is a lot of low level busy work, you might as well hire entry level workers. Just don't let them build stuff that perpetuates more busy-work, or it can become a tough pit to climb out of ... and now I'm off on a tangent.
I've often viewed this as Thinkers vs. Workers. Society places a high value on Thinkers, those who make decisions, strategize, make connections, build relationships, etc. Those who fall in this camp are doctors, lawyers, consultants, CEOs, etc. The Workers -- programmers, engineers, designers -- are often fungible. They are in a competitive market of manual laborers that has driven down the price of labor to levels that, for many, increase the opportunity cost of learning the tech yourself. Over time, Thinkers accumulate social capital that can be leveraged to gain benefits, both related and unrelated to their profession -- e.g. a doctor being given preferential treatment by a restaurant host. Workers accumulate labor capital; they're more efficient at their work, can develop more creative solutions. But put a 50yr old coder up against a 50yr old lawyer/doctor/banker and the latter will be given more praise, more money, more influence 9 times out of 10.
Even Workers eventually outsource their labor once they're in a position to become a Thinker. Few successful startup CEOs and execs are actually coding themselves. Their roles shift to strategy, operations, so on and and so forth, for that's where they're valued and will be rewarded the most.
And getting a graduate degree is often the ticket to be considered a Thinker, whether MD, MBA, JD, PhD.
That's the game, whether you like it or not, and it certainly won't be changing anytime soon. If money is a priority, becoming a Thinker might be in your best interest.
Those are the roles where you can't trust anybody to do them for you without fleecing you. Even MBA's are loath to fully entrust those roles to other MBA's. The top management of our company has an elaborate review process for strategy and operations, and no high level review process for coding.
If you'd rather work as a Roman galley slave, maybe not.
No money is worth doing a job that you hate.
If you don't actually enjoy writing code, no amount of money is worth it.
Also, the median total compensation is $181,500 USD for an MBA graduate of arguably the best business school in the country. They have a median of four years of work; Assuming they started at 22, and the MBA took two years, they're 28 when receiving this compensation. Unless they have corporate sponsorship, they've also paid around $185,000 for that degree, most likely in loans which will increase the cost. I wonder if a software engineer of similar caliber (smart, dedicated and possessing competent social skills to get into GSB) could pull off a similar compensation at 28 and how his life time earnings would compare. I'd be willing to wager the difference isn't that drastic; if it isn't, it's probably better to just pick the path where the work suits you better.
I think a good grasp of programming combined with being business-savvy and being able to communicate confidently with people can get you pretty far monetarily if you seize the right opportunities; its a useful skill that has the potential to create significant revenue/cut losses for businesses. It seems like some people manage to become well off by becoming consultants and doing just that, but I'm just speaking from second-hand information.
But having worked with / for many startups in my career, my intuition tells me that competent / grounded MBAs bring little to the table when compared to competent / grounded technical folks.
It could be that MBAs have something that the rest of us don't know we need, or that we don't know how to hire and manage an MBA.
So perhaps for the time being fewer MBAs means less growth in the sector. However, I envision a future where the positions MBAs fill will be some of the first ones automated. My perspective is that MBAs are a dying breed, and over time it will only become more evident.
The language of management is a COmmon, Business-Oriented Language. ;-)
Publicly observable facts say otherwise. Go look at BizOps at the major tech companies, including YC alumni like Dropbox and Stripe: They are filled with MBAs and former consultants and bankers ("MBA-types"). They are usually paid better than the working slobs, have better working conditions and have better career trajectories.
This is, of course, pure speculation; I'm just trying to illustrate that correlation != causation. I understand everyone is concerned with the tech bubble, but this article is really stretch.
But two things I have noticed: 1) many of these opinions come from people who are one or the other, but not both
2) people who have both skills are lethal and awesome people to work with.
HN-ers like to laugh and think the MBA and techie sets are disjoint. A quick google search shows numbers from 25-40% of MBA students have engineering backgrounds (for example [1], [2]).
1. http://spectrum.ieee.org/at-work/education/engineers-and-bus... 2. http://www.science-engineering.net/engineering/united-kingdo...
Then they're mediocre at both, at best.