Elite MBAs are no Longer Relevant
Their relevancy is decreasing for the following reasons:
(1) They are far too generalized in a world of specialists and in the case of the 'many hat' entrepreneur, most of these skills are learned from experience.
(2) Hiring is increasingly based on unique profiles of candidates based on their experience and tangible contributions, this is particularly true with younger more agile companies that give its workforce a greater ability establish a colorful track record of performance.
(3) They are inefficient in a mature digital learning environment, where one can pick and choose which courses they take or curriculum they follow based on their specific agenda and take this course at their own pace.
(4) The hiring of an elite MBA over (2) encourages an elitism that disadvantages minorities and hinders social equality that socially aware tech companies seek to combat.
(5) The 'network' of an elite MBA is diminished with democratized access to capital and executives (I.e. LinkedIn, Hunter/Snov.io, and Crunchbase)
Notes: - I'm not arguing that an elite MBA is not 'worth it' for everyone, but rather than its relevancy is/has been declining and will continue to be negatively correlated with technological advancement.
- There are some focused arguments where one is making a career shift (E.g. Ex-Military), but even this is debatable considering (3)
- An argument can be made that those in top management positions have elite MBAs. My counter-argument to this is a post hoc fallacy in that elite MBAs recruit the most competitive, intelligent, and high performing people and these characteristics are drivers for their success rather than the elite MBA itself.
- I opted not to address the obvious monetary cost in this analysis as to isolate an analysis of its diminishing value rather than the more common argument against its cost.
81 comments
[ 3.7 ms ] story [ 145 ms ] thread(Pay isn’t always a great proxy for relevance, but it is for MBAs and employers.)
An MBA can be a massive leg up in certain circumstances. In other it’s a box you need to check.
Managers and especially managers of managers+ are far more likely to have an MBA in my experience, but again that is heavily biased toward people who got that credential after or more likely while working in big tech.
Now my sample is biased toward former SWEs and the Pacific Northwest, but I think an MBA is more a career accelerator along the people management track inside a company then necessary for product management or an enabler for people to enter the FAANG realm.
This is a feature of the system, not a bug. Elite MBA's serve as a class signifier, and not much more.
The reason why elite MBAs make sure to ensure the success of each other is to make sure they're also given the leg up when looking for opportunities.
If a Oxbridge MBA judges a compatriot solely on merits and doesn't extend an opportunity then it cheapens their own value.
Perpetuating the privilege is the point. It's the only reason why I would do an MBA - for the blatant, proud and culturally accepted nepotistic advantage.
Agreed.
And it's not just MBA programs either. People hire who they're familiar with, and who's in their general proximity. SV companies hire heavily from elite California based scools, because often that's where the founders and other top execs went.
Based on what? Cynicism?
They should be judged on how they perform in the job interview.
Yes, it's somewhat like "flipping the initial assumption upside down", but really it's just accounting for there being the opposite boost in the first place.
Candidates aren't solely judged on interview performance. Again, if things are extremely close, you'll have to include other data like career or education history to make the most informed choice.
But from your numbers, what's the split in child acceptance rate between "former student" vs "former student who donates"?
And now I'm even more curious, what's an average rough donation amount to hold onto this "reserved spot"?
That’s where you see the difference. Not necessarily “better”, but certain schools will get you into certain roles.
There are plenty of Ivey league MBAs who never get very high on the ladder. Plenty.
Having top companies come to campus to recruit new hires is a level of connection that is simply not available elsewhere for the vast majority of people. HN is seemingly full of people needing to beat back LinkedIn recruiters with a stick, but that is not a typical situation for a mid-career professional.
For me, I just couldn't stomach the idea of six-figure debt and making no money (summer internship aside) for 2 years. That would weigh on my mind too much, and likely affect my performance and enjoyment of the program.
These sorts of posts are much more convincing when the OP has an admissions letter in hand.
So sour grapes might be on the side of the degree holder at realizing some of the OP is partially true.
1. Network with the rich kids and who is who.
2. Mindset - minimum acceptable job title might be something you and me might aspire to achieve by the time we retire.
These two might get you to 90%, the other 10% is doing the right thing at the right time.
ps: I can neither afford nor put up with the grind of an MBA.
This is breathtakingly naïve.
Your chances of success are orders of magnitude higher from in person networking through a top program, vs cold-emailing someone you found on linkedin. That’s just the reality of it.
The reality is a lot of people do not know how to use the "democratized access" they get.
Being able to log in and send anybody a message is far, far from being able to make meaningful connections with real people.
With respect to the other points:
(1) Most '20 year old aspiring tech founders' can hardly be thought of as either a specialist nor experienced, but that doesn't make it any less a valuable experience.
(2) Hiring is an extremely difficult process, and most startups can take risks on experience and tangible contributions primarily because they can fire more easily (and the applicant pool is self-selecting) when it doesn't work out. At a large company signals are proportionally more important because you can't rely on interviewers, etc. to have high accuracy in judging candidates (I recognize this should be improved, but it's not currently).
(3) This is generalizable to all schooling except for e.g. chemistry labs or other things requiring expensive equipment and not specifically to MBAs.
(4) I would argue that more African-Americans have demonstrated "leadership qualities" and "emotional IQ in social settings" than have excelled at algorithms, and their representation as VPs or SVPs of a generic corporate function is higher than their representation as quants.
1. MBAs are useless, and should be ignored
2. MBAs are useless, and are ignored
On the first point, I don't think MBAs are useless, and in many fields, as the field becomes technical, the MBA becomes more useful. Marketing is more technical, operations are more technical, finance is more technical, and the MBA provides a sort of intro like getting a general medical degree before specializing.
It is true that a candidate should be judged on their merits and a non-credentialed candidate in any field may be superior to a credentialed candidate. That is a more general point about credentials. The counter-point is, how do you find such a candidate? If I interviewed 5000 people, perhaps the best one would not have a particular credential, but if being human I can only interview 20 then my chances of finding a good candidate are higher if I focus on the 100 or so credentialed candidates in the batch. In short, the credential provides some signal.
Finally, even if were useless, it doesn't appear that they are being ignored. Hiring is still strong, and salaries are only going up.
I just wouldn't discount the experience at an M7. Though I guess a startling number of those friends do seem to generally either regret or are overall neutral on the experience, given the cost.
As someone who has spent a substantial amount of time with friends who graduated from Stanford GSB, I can tell you, an elite MBA may not guarantee anything but it opens many, many doors for you (it's up to you to also close it once you're in the door). I'm talking about regular lunches with VC's and billionaires, getting a soft landing when your startup fails, and leading big teams at FAANG's a couple years after graduation.
That's just the perks you get in Silicon Valley. Wall Street is another level entirely. They only hire elite MBAs. A great book to read on this is Liquidated by Karen Ho, which details the many privileges elite graduates get on Wall Street.
Can you clarify? In my experience in finance this has not been true for at least the past decade.
Blackrock, JPMC, and many hedge funds hire out of good schools but solely Ivy League or elite MBAs.
And certainly the director level has plenty of state school graduates.
Am I missing something?
Never come across less than positive content about MBAs from anyone who holds one though.
in the past on several occasions ive seen hiring managers open to interviewing candidates with no relevant experience but simply because of the brand name. the brand name elicits a signal of quality that is hard to ignore (consciously or subconsciously) - that may change in the future but to this point my personal opinion is going to harvard, mit, yale, princeton, columbia, etc. is absolutely an advantage in getting "noticed".
imo paying out of pocket for an MBA from a mid tier or lower school is increasingly less useful, bordering on being completely neutral in terms of benefit while having substantial opportunity cost. certain scenarios (employer paid, necessary to break through glass ceiling, etc) can certainly change that calculus.
my personal experience (undergrad from a mid tier expensive private university in a large city, MBA from a state school) is that almost no one has cared about me having an MBA to this point, and the brand names of either school are nowhere near strong enough to get noticed. my MBA was a very unique program and I feel was very enriching but unfortunately others can't see that in a quick glance.
if I had to do it over again i would attempt to get a stronger brand name somewhere in my resume - whether undergraduate or graduate. in fact im considering further graduate study for that exact reason.
Your point about career shift is really where the MBA shines. MBAs should be viewed as a tool for those who are moving out of a direct technical field into management, and MBA students should bring some real world context with them to their classwork.
The problem with the so-called elite MBA schools is they are designed not for people with experience, but recruit those right out of undergrad with 0 business experience. This results in a general graduate population with highly inflated sense of confidence and no actual work to back it up, a very dangerous combination.
I have no interest in an mba, but I was under the impression most elite programs expected significant work experience. At Harvard the 2023 has an average of 5 years work experience. https://www.hbs.edu/mba/admissions/class-profile/Pages/defau...
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[1] https://news.ycombinator.com/item?id=28799646
But perhaps a more interesting question is, if those are the real goals, is an MBA the most effective and direct way to deliver them? If no one seems to be arguing that their value is what happens in the actual classes, why should gate-keeping and network-creation happen through a degree program?