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Elon Musk Decries ‘M.B.A.-ization’ of America

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Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#41

Post by sixQuarks »

Someone1234 wrote: post #35

Musk isn't purely a self-made success story. He was born into emerald mines, got a first class education, and used that inherited wealth to start companies, sell, and then buy stakes in growing companies other people founded (inc. Tesla, incidentally). So is the lesson here to be born rich rather than try to get an education? Or just that when you are born rich education is optional? It is notable that the other foun…

Not sure where you’re getting your info from. Musk and his brother started and sold zip2 for millions, while living a very frugal existence. He used that money to start x.com, which merged with PayPal, sold to eBay. He used that money to start SpaceX and invest in Tesla.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#42

Post by cogman10 »

johntb86 wrote: post #28
_jal wrote: post #6

Finally, he says something I can agree with. MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.

Even for stable firms they can be death. "Lights Out: Pride, Delusion, and the Fall of General Electric" makes the case that the MBA mindset (exemplified by Jeff Immelt) of focusing on finances and acquisitions while ignoring the actual products has been leading to the downfall of GE.

MBAs seem to just be bad for tech companies.

It's like they want to turn every business into an automotive business completely missing the point that car design is practically unchanged in the last 50 years. You can see just how terrible these companies are at adopting change by their pathetic attempts at getting EVs up and running.

Tech requires constant change and innovation to be successful. Companies who primarily deal in tech NEED R&D to survive. They can't just establish dominance and stick around for 100 years. (Generally. There are obvious exceptions).

This is why you see these major old tech companies struggling. IBM, HP, Cray. They all got taken over by MBAs who tried to "toyota" the companies into further success.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#43

Post by throwaway0a5e »

Someone1234 wrote: post #35

Musk isn't purely a self-made success story. He was born into emerald mines, got a first class education, and used that inherited wealth to start companies, sell, and then buy stakes in growing companies other people founded (inc. Tesla, incidentally). So is the lesson here to be born rich rather than try to get an education? Or just that when you are born rich education is optional? It is notable that the other foun…

Musk climbed the ladder several rungs.

If musk isn't self made then neither is the guy who was born into welfare and dies the owner of a successful independent used car lot. Climbing the ladder is climbing the ladder regardless of where you start.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#44

Post by ProAm »

mathattack wrote: post #11

It’s a matter of phase of company. MBAs are better at measuring and capturing value. Weaker at creating it. Therefore the non-MBA expert outperforms in the growth phase, though it takes a different mindset for mature companies.

This is an underrated comment.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#45

Post by wpietri »

One book I found really interesting on this theme is "Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance": https://www.amazon.com/dp/B00A76WZ96/

Core to their point is that managers have basically become a caste. They define managerialism as "what occurs when a special group, called management, ensconces itself systemically in an organization and deprives owners and employees of their decision-making power (including the distribution of emoluments) and justifies that takeover on the grounds of the managing group's education and exclusive possession of the codified bodies of knowledge and know-how necessary to the efficient running of the organization."

It had a lot of resonance for me because engineers think of optimization fundamentally differently than MBAs do. When I want to make something better, I tend to optimize for increasing value and/or lowering cost. MBAs tend tend to optimize for profit and things that drive profit. Which you would think wouldn't be all that different, but it becomes really obvious when you look at how private equity can destroy a company over time. E.g., Simmons Mattress: https://www.nytimes.com/2009/10/05/business/economy/05simmon...

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#46

Post by nbardy »

mhaberl wrote: post #40
inglor_cz wrote: post #2

He is onto something there. Bean counting is useful and companies cannot survive without good cashflow, but it should not become Mission A of the company, or engineering (and other) talent will look elsewhere. If one company's de facto mission statement is "We want to grow our market by 8.2 per cent and give our bosses higher Christmas bonuses" and another one comes and says "Guys, we want to fly to fscking Mars!", c…

He is in a very specific situation, he is the founder and the CEO and has a lot of money to burn. He wants to do big things and he can do them. A lot of companies have stock holders who expect some return every year without risking too much. As a society we sure would be better off if had more Elon Musk type company leaders, but for that too happen we would need more exceptional people like him (not going to happen)…

Our society has plenty of Elon Musks. Their being snuffed out by a academic system designed to churn out people can repeat "the correct answer". Heterodox thinking is a liability not an asset in Academia now.

Along with the fact that most people don't even have the option to take risk with the massive increase of cost of housing.

Our society has been designed to squeeze out cash flow and it's smothering our creatives.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#47

Post by [deleted] »

jrpt wrote: post #23
_jal wrote: post #6

Finally, he says something I can agree with. MBAs are for optimizing stable firms. They're walking death for startups, I personally have seen it happen.

I mean, Doordash just IPOed this week, and that come out of Stanford GSB. If you want something with an arguably more innovative product, Stitch Fix also came out of Stanford GSB, and it was a pretty unique business model at the time. Some MBAs are pretty good, although I suspect it’s mostly selection bias (the people would’ve been great even without attending b school).

[deleted]

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#48

Post by jessaustin »

mhaberl wrote: post #40
inglor_cz wrote: post #2

He is onto something there. Bean counting is useful and companies cannot survive without good cashflow, but it should not become Mission A of the company, or engineering (and other) talent will look elsewhere. If one company's de facto mission statement is "We want to grow our market by 8.2 per cent and give our bosses higher Christmas bonuses" and another one comes and says "Guys, we want to fly to fscking Mars!", c…

He is in a very specific situation, he is the founder and the CEO and has a lot of money to burn. He wants to do big things and he can do them. A lot of companies have stock holders who expect some return every year without risking too much. As a society we sure would be better off if had more Elon Musk type company leaders, but for that too happen we would need more exceptional people like him (not going to happen)…

The bean-counters strangle dozens of Elon Musks in their cradles every year. Remember Musk was avoiding mandatory military service in various non-South-African schools until he sold his first company in 1999. There was something special about that time in Silicon Valley. The bean-counters were somewhat on the back foot.

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#49

Post by blendergeek »

Someone1234 wrote: post #35

Musk isn't purely a self-made success story. He was born into emerald mines, got a first class education, and used that inherited wealth to start companies, sell, and then buy stakes in growing companies other people founded (inc. Tesla, incidentally). So is the lesson here to be born rich rather than try to get an education? Or just that when you are born rich education is optional? It is notable that the other foun…

> and used that inherited wealth to buy stakes in growing companies other people founded (inc. Tesla, incidentally).

His first success was x.com. This was bought by confinity; this led to the creation of Paypal. Who did Musk buy x.com from?

When Musk "bought his way into" Tesla, he used his X.com/PayPal money, not the emerald money (which he received little of). Musk also founded SpaceX using his X.com/PayPal. Who do you think Musk bought SpaceX from?

Re: Elon Musk Decries ‘M.B.A.-ization’ of America

#50

Post by Someone1234 »

sixQuarks wrote: post #41
Someone1234 wrote: post #35

Musk isn't purely a self-made success story. He was born into emerald mines, got a first class education, and used that inherited wealth to start companies, sell, and then buy stakes in growing companies other people founded (inc. Tesla, incidentally). So is the lesson here to be born rich rather than try to get an education? Or just that when you are born rich education is optional? It is notable that the other foun…

Not sure where you’re getting your info from. Musk and his brother started and sold zip2 for millions, while living a very frugal existence. He used that money to start x.com, which merged with PayPal, sold to eBay. He used that money to start SpaceX and invest in Tesla.

The Musk's families wealth is common knowledge and widely reported[0][1][2]. But more to the point Elon and Kimbal's dad funded Zip2, which completely undercuts your point.

> In Ashlee Vance's biography of Elon Musk, it is claimed that the Musks' father, Errol Musk, provided them with US$28,000 during this time, but Elon Musk later denied this. He later clarified that his dad provided around 10% of US$200,000 as part of a later funding round.

[0] https://www.businessinsider.co.za/elon-musk-sells-the-family...

[1] https://www.insidehook.com/article/history/errol-musk-elon-f...

[2] https://www.dailymail.co.uk/news/article-5513787/Billionaire...

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