First off, I'd like to get a few straw-man arguments out of the way. I am not saying MBAs are bad. I am not saying startups should not hire MBAs. I am not saying there are not numerous counter-examples to the points I make below. In fact, I personally know several MBAs that work at or have founded fantastic startups. I have hired & worked closely with individuals with an MBA several times, and will continue to do so if I think the individual is a good fit. Remember, a hiring signal is just that: a signal. Other examples of negative hiring signals are: “earned CS degree from school that advertises on late-night television”, “worked at 4 companies in 3 years” or “2 year gap on the resume with no explanation”. Any positive or negative hiring signal is WAY less important than specific information about a specific candidate.
Now that that is out of the way, let's get to the point: If a person has a particular skill-set, experience, personality & undergraduate education, that person choosing to earn an MBA has the net effect of the startup market valuing that person as being worth less, not more.
Why?
Supply and Demand
There are some basic supply and demand issues for MBAs. On the supply side, there is a surprising abundance of people with top-tier MBAs who want to work at startups. On the demand side, a candidate with those three little letters on their resume will need to be vetted more closely and will be automatically isolated into a small number of highly-specialized potential roles.
Entitlement
Business school trains people to think of themselves as special snowflakes, future masters of business, worthy of extremely high compensation and authority. Given that a high percentage of business school classes funnel into Wall Street and multinational corporations, it's also a given that any top-tier MBA has classmates are all making ridiculously high salaries and have extremely powerful jobs. The net effect is that, psychologically, an MBA has to be doing as well or better than their classmates to feel good about themselves. Thus one primary motivation of an MBA is to secure their own massive salary, stock and title… and this motivation is diametrically opposed to the psychological makeup of a succesful startup team-member. Given the social pressure MBAs must feel from their investment banker friends, we can't really blame them; it's human nature 101.
Misguided Thinking
in my opinion, the lean startup movement, startup genome project, etc have roared into existence as an antidote to “MBA thinking.” “MBA thinking” involves putting all of the value in high level strategy, which is then rolled out to underlings who are responsible for actual implementation. In other words to an MBA Strategy > Implementation.
Lean startup philosophy suggests all of this strategy stuff is misguided bullshit, and rather you should personally build things as quickly and as cheaply as possible then scientifically iterate over and over again. To an early stage startup Implementation > Strategy .
In fact, learning a bunch of case-studies in a class about startups actually makes you dangerous, because it increases your self-confidence that you actually grok entrepreneurship and innovation, with no actual increase in personal know-how.
Selection Bias
It really bears examining a persons motivation for getting an MBA. Was it so they could skip ahead to get rich? Because they wanted to be powerful? Because they hated their job and applying to business school was a good way out? Because they originally wanted to work on Wall Street but are only now considering a startup because they heard that Sand Hill Road is paved with gold?
Limited usefulness
If someone is on a startup career track that is in finance or high-level dealmaking, an MBA makes a lot of sense. For instance, a smart startup founder would likely want their CFO to have an MBA. But how many startups ever get big enough to need a CFO? How many VP, SVP, COO or CEO gigs are actually out there? This is a very shallow pool to swim in.
Opportunity Cost
The time someone spent getting an MBA was time they could have spent getting on-the-ground experience and seniority. Losing two years of in-the-trenches experience during your 20s puts you at a clear disadvantage vs someone with the same undergrad education and early career who did not go to business school.
A thought experiment
Imagine that if instead of getting an MBA, ambitious young over-achievers spent two years in design school. Or spent two years getting a masters in computer science. Or two years getting into Y-Combinator and doing their own startup.
Who would be worth more in the open market when all is said and done? Who would have a better chance of building their own great company?
It’s not as easy as it sounds. Do you know anyone who hates you? Yet every great figure who has contributed to the human race has been hated, not just by one person, but often by a great many. That hatred is so strong it has caused those great figures to be shunned, abused, murdered and in one famous instance, nailed to a cross.
One does not have to be evil to be hated. In fact, it’s often the case that one is hated precisely because one is trying to do right by one’s own convictions. It is far too easy to be liked, one merely has to be accommodating and hold no strong convictions. Then one will gravitate towards the centre and settle into the average. That cannot be your role. There are a great many bad people in the world, and if you are not offending them, you must be bad yourself. Popularity is a sure sign that you are doing something wrong.
The fear of being hated has not appeared to hold back the people I would consider heroes. On the other hand, a fear of losing face in front of other people has held back more individuals than I would care to estimate.
One of the major themes in my professional career has been to learn to ignore The Fear. Easier said than done.
There are similarities between the strategic challenges faced by the dial-up ISP industry (which for the purpose of this post i will treat as just one company: AOL) and the recorded music industry. Both industries were recently sitting on some of the most lucrative businesses the world has ever known. Both industries also happened to peak at the same time: the late 90s. At peak, AOL had 35 million subscribers, each paying a monthly fee. At peak, the music industry was grossing $20B annually from CDs. Times were good.
The usual straw man argument leveled against the music industry is that there was a systemic failure to boldly embrace radical new technology-based business models. The industry “missed the boat”.
By way of contrast, AOL has been consistently making bold moves towards a new business model. AOL management was and is fully aware that the legacy “access” business will continue to decrease every year, one day reaching zero. Agressive moves have been made. Bebo was bought. Tim Armstrong was explicitly hired to come in and use what's left of this dying cash cow to build a next generation advertising business. The Huffington Post was bought. Patch has had a great deal of money plowed into it. In the best way it knows how, AOL has been swinging for the fences.
The aforementioned bold moves seem to have inspired more criticism than praise from investors & press. Why? Because these strategic moves could easily fail. The jury is still out.
On the other hand, we can contrast AOL's moves with what the music industry has been doing to save itself. With a few exceptions, the music industry relies upon licensing relationships to participate in new business models, rather than the direct creation and marketing of products to consumers.
The implicit philosophy of music industry licensing is: every deal is wired for success. The garden variety music licensing deal is generally constructed in a way that would make a Goldman Sachs partner smile.
When you think about it, Beyond Oblivion is the case study for the most successful music licensing deal ever done. Why? Beyond Oblivion paid out a great deal of up-front money to work out licensing deals, then promptly shut down. Since the service never launched, none of the alleged non-refundable payments were related to the usage of music, so no money would then be paid out to artists. Sounds like breakage to me.
Some have said that the labels want Spotify to fail, but I personally don't agree. If the deals were constructed properly, the labels should have no real preference whether or not Spotify fails. If every deal is wired, it doesn't matter how successful any individual license-holder is. All that matters is that there are more deals to be done, and that there are constantly new licensees willing to pony up the cash.
Under this business philosophy, the music industry cares as much about which music service “wins” as ExxonMobil cares which gas station chain wins. It just doesn't matter… as long as the money continues to roll in.
To recap, the AOL strategy to save themselves from a dying legacy business has been to make longshot bets. These longshot bets keep the risk/rewards on management's shoulders. The music industry strategy has been to utilize financial engineering in order to push product & execution risk off as far away from their core business as possible.
Which strategy is better? I suppose it depends on what outcome you are optimizing for.
The WorldWideWeb application is now available as an alpha release in source and binary form from info.cern.ch.
WorldWideWeb is a hypertext browser/editor which allows one to read information from local files and remote servers. It allows hypertext links to be made and traversed, and also remote indexes to be interrogated for lists of useful documents.
This project is experimental and of course comes without any warranty whatsoever. However, it could start a revolution in information access. We are currently using WWW for user support at CERN. We would be very interested in comments from anyone trying WWW, and especially those making other data available, as part of a truly world-wide web.
Required argument is SRC=“url”.
This names a bitmap or pixmap file for the browser to attempt to pull
over the network and interpret as an image, to be embedded in the text
at the point of the tag's occurrence.
if you have
a better idea than what I'm presenting now, please let me know. I
know this is hazy wrt image format, but I don't see an alternative
than to just say “let the browser do what it can'' and wait for the
perfect solution to come along (MIME, someday, maybe). Let me know what you think………
I’m doing a (free) operating system (just a hobby, won’t be big and
professional like gnu) for 386(486) AT clones. This has been brewing
since april, and is starting to get ready. I’d like any feedback on
things people like/dislike in minix, as my OS resembles it somewhat
(same physical layout of the file-system (due to practical reasons)
among other things).
PS. Yes – it’s free of any minix code, and it has a multi-threaded fs.
It is NOT protable (uses 386 task switching etc), and it probably never
will support anything other than AT-harddisks, as that’s all I have :-(
It is surprising to me how many times I have made an idea-related connection with another human being on Twitter, formed some sort of “friendship” with them online, and only much later have the chance to meet them in person.
I can think of a dozen or so people that I would consider friends which I first got to know this way… in some cases years passed between first knowing them and meeting them.
To me, this is interesting because conventional wisdom would say one of the following is true:
Social media isolates people.
Social media helps people connect with people they already know.
Social media connects people with other weirdos that they never actually meet.
My experience is a lot of #2 and some #3. My experience of making new friends over Twitter before ever meeting them doesn't fit into any of those three buckets. I find that exciting. (Yes, I realize that this only works for me because I live in the very center of the bay area tech scene, but by god I love it.)
Now, whenever I run across someone new on Twitter that is interesting or inspiring to me, I like to think of them as just another friend that I haven't met yet.
In this day and age, the feedback loop for amateur & professional writers is incredibly tight. Anyone with a blog/twitter has realtime access to all sorts of external methods of validation through Google analytics, retweets, votes on HN, etc.
This feedback loop can drastically change the incentives for those doing the writing. Specifically, writing things that other people rapidly propagate is addicting.
I don't use the term “addicting” lightly… I actually get an adrenaline rush.
During my blogging/tweeting practice I have been surprised by the huge variability in the amount of feedback/retweets that a post generates. The content that works best for me are droll posts that manage to be both edgy and the generally accepted correct opinion.
With this in mind, it's much easier for me to see how anyone can build a following by taking strong, predictable positions on relatively safe topics. This predictability can help form a strong following that will aggressively agree with you… as long as you give them what they want.
When reflecting on what sorts of things I should blog about, my adrenaline gland has been suggesting to me that I should pander. It seems so straightforward to just start blogging about a few easy topics, ie: “*Why startups are so awesome. pt. 23*”, “*blah blah Lean blah blah Bubble blah blah Angel Funding blah blah Convertible notes*”, or the topic that people most expect to hear from me: “*Why the music industry just doesn't get it*.”
No… that is not the path towards creative fulfillment.
I am going to continue to do my best to continue doing things the hard way. Wish me luck.
