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If MBAs are useless, we’re all in big trouble

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Re: If MBAs are useless, we’re all in big trouble

#41

Post by VLM »

MisterBastahrd wrote: post #28
tbatterii wrote: post #26

Earlier quoted context omitted.

my thoughts exactly. the only folks who seem to value mbas are other mbas. i don't even think i can accept the defined success criteria outlined in the article (un-sustained long term growth) much less the premise that only mbas know how to achieve it.

Didn't some guy just kill himself a while back because he didn't have the training to so much as read a balance sheet and ran his company into the ground? While MBAs may not be the best entrepreneurs, they are more valuable in keeping large, mature organizations up and running than Joe Nerd and his series of weekend projects. Hell, that's the very purpose of an MBA.

I was commenting on that very topic. Guess how I learned basic accounting better than approximately one startup-ish CEO? Playing "Railroad Tycoon" on a PC in the late 80s (90s?). And a couple other games, but mostly RRT. That much later led me to read Graham and Dodd and the more modern fundamental analysis guys, although analysis is useless in the current mostly speculative driven equities market. Anyway the point is you can learn the basics playing a computer game.

Its pretty scary that a little gaming decades ago puts me ahead of at least the absolute bottom of the CEO barrel. It would be like discovering that a couple hours playing Doom and Quake put me ahead in tactical skills of at least one SEAL team member. The amazing part NOT being my minimal skills, but the amazing part is the bottom of the barrel of "famous major real world players" is so incredibly deep that my minimal skills none the less easily beat theirs.

The other weirdness is I spent about $50 and a couple hours (well, maybe dozens... it was fun) playing a game and that boosted me into the low percentile of CEO skills. Apparently I would be well qualified to run an absolutely bottom of the barrel startup as CEO into the ground, and instead of spending $150K and thousands of hours to learn that, I just played a game for awhile. The financials and time investment must depress the guys who graduate at the bottom of their MBA classes knowing less than I know. That weirdness is an interesting aspect of tech/gaming/computers in that most people pay attention to the highest achievements but the effect on low end is also important and not discussed enough.

Re: If MBAs are useless, we’re all in big trouble

#42

Post by michaelochurch »

eli_gottlieb wrote: post #36
michaelochurch wrote: post #21

Earlier quoted context omitted.

I am using such "phraseology" because we are at war with the upper class whether we want to be or not. What we call the "technology industry" is one of the hottest battlefields out there. The well-connected/zero-sum evil (the current social elite) are taking on the hard-working-and-talented/positive-sum good and while we had no choice in starting the fight, it is in our territory and we must end it. This goes back to…

You should come over here. I think you would like Israelis.

Interesting. Why do you say this?

I've heard that Israel is an amazing place, and most of the Israelis I've known well I've really liked.

Re: If MBAs are useless, we’re all in big trouble

#43

Post by hga »

michaelochurch wrote: post #18

The hatred for "MBAs" has little to do with the degree itself. ======================== First, an aside. Paul Graham was wrong about something. He wrote "Why Nerds Are Unpopular" (still a great essay: http://www.paulgraham.com/nerds.html ). He was mostly right: Being smart seems to make you unpopular. Ok. Reading on... Being smart doesn't make you an outcast in elementary school. Nor does it harm you in the real worl…

If your thesis about current "VC-istan" is correct, it could help explain their flat results for the last decade and counting.

Re: If MBAs are useless, we’re all in big trouble

#44

Post by wtvanhest »

tbatterii wrote: post #32
MisterBastahrd wrote: post #28

Earlier quoted context omitted.

Didn't some guy just kill himself a while back because he didn't have the training to so much as read a balance sheet and ran his company into the ground? While MBAs may not be the best entrepreneurs, they are more valuable in keeping large, mature organizations up and running than Joe Nerd and his series of weekend projects. Hell, that's the very purpose of an MBA.

it doesn't take an mba to read a balance sheet. a bachelors in accounting is enough to be a cpa. and you don't have to be a cpa to read a balance sheet. perhaps it takes an mba to manufacture a fake balance sheet that will pass wall street muster though. > they are more valuable in keeping large, mature organizations up and running than Joe Nerd and his series of weekend projects this is the same premise as the artic…

> this is the same premise as the article. who says an organization has to be large to be successful?

The people who invested in it.

Re: If MBAs are useless, we’re all in big trouble

#45

Post by michaelochurch »

hga wrote: post #43
michaelochurch wrote: post #18

The hatred for "MBAs" has little to do with the degree itself. ======================== First, an aside. Paul Graham was wrong about something. He wrote "Why Nerds Are Unpopular" (still a great essay: http://www.paulgraham.com/nerds.html ). He was mostly right: Being smart seems to make you unpopular. Ok. Reading on... Being smart doesn't make you an outcast in elementary school. Nor does it harm you in the real worl…

If your thesis about current "VC-istan" is correct, it could help explain their flat results for the last decade and counting.

I think so. I think there's a ghetto effect. They select from the middle. They reject the really bad (which is probably most of the proposals they get) but their terms (that essentially make them bosses, even though they're minority owners, and render the "entrepreneurs" mere PMs but with fast-firing instead of the usual corporate severance) keep out the really good.

Re: If MBAs are useless, we’re all in big trouble

#46

Post by tbatterii »

wtvanhest wrote: post #44
tbatterii wrote: post #32

Earlier quoted context omitted.

it doesn't take an mba to read a balance sheet. a bachelors in accounting is enough to be a cpa. and you don't have to be a cpa to read a balance sheet. perhaps it takes an mba to manufacture a fake balance sheet that will pass wall street muster though. > they are more valuable in keeping large, mature organizations up and running than Joe Nerd and his series of weekend projects this is the same premise as the artic…

> this is the same premise as the article. who says an organization has to be large to be successful? The people who invested in it.

investors want a return on their investment.

i believe the technical term would be ROI otherwise known as rate of return not the rate increase of the rate of return or ROI.

an investor who demands constant growth in their rate of return on an investment is either irrationally optimistic or stupid.

Re: If MBAs are useless, we’re all in big trouble

#47

Post by danmaz74 »

michaelochurch wrote: post #35
davidw wrote: post #31

Earlier quoted context omitted.

> we are at war with the upper class whether we want to be or not Does that include people like PG? I'm not sure quite how to put it in a way that will do any good, but the amount of anger you seem to be carrying around does not sound healthy. Finding a constructive way to deal with it - perhaps by finding a better job, moving somewhere better, or whatever else works for you - might be something to consider.

Does that include people like PG? My honest feeling about it is that opposing (much less violently so) people because they are rich or well-connected is just as wrong as what the upper-class is doing. That's just envious malevolence and I can't support it. I don't know enough about PG; he sounds like a stand-up guy. My ideology about the class war is pretty simple. If you're well-connected and rich, good for you. No,…

> However, the minute a powerful person decides to "pick up a phone" and make someone unfundable or unemployable, the targeted person has the right to destroy that adversary (through exposure, or violently, up to killing) and is doing a heroic and hygienic act if he does.

Do you mean that the solution is making your own justice? Moral considerations aside, do you REALLY think that this way the system would be more fair?

Re: If MBAs are useless, we’re all in big trouble

#48

Post by podperson »

MisterBastahrd wrote: post #27
podperson wrote: post #23

Earlier quoted context omitted.

While obviously I think you're intentionally overstating your case for rhetorical effect, it's worth mentioning that workplace "popularity" is not uncorelated with competence (it may not be strongly correlated, and there are always individual counter-examples) whereas highschool popularity was often negatively correlated with competence, or simply not correlated at all. People might not like the nerd, but they do app…

High school popularity is usually correlated with social competence, which is a very valuable and underrated skill on its own. Given two people with somewhat similar technical skills, the guy with the ability to mingle outside his comfort zone is usually going to win out over the guy who just wants to work.

Fair point, although it's only slightly correlated. There are people in high school who seek popularity and devote a lot of effort to it, and then there are those who achieve as much popularity as they want/need with fairly minimal effort. Meeting both at reunions, the difference is striking.

Re: If MBAs are useless, we’re all in big trouble

#49

Post by FelixP »

I think non-business people frequently make the error of lumping all MBAs together; practically speaking, there's a decent gap between the top three programs (HBS, Stanford GSB, & Wharton), the rest of the top 10-15 (Kellogg, Berkeley, Sloan, Booth, UCLA, etc.), and there's a pretty massive gap from there to everyone else.

I think folks often make the assumption that MBA program quality follows a similar distribution to undergraduate education, but unfortunately there's a much steeper falloff from the top few schools.

Re: If MBAs are useless, we’re all in big trouble

#50

Post by wtvanhest »

tbatterii wrote: post #46
wtvanhest wrote: post #44

Earlier quoted context omitted.

> this is the same premise as the article. who says an organization has to be large to be successful? The people who invested in it.

investors want a return on their investment. i believe the technical term would be ROI otherwise known as rate of return not the rate increase of the rate of return or ROI. an investor who demands constant growth in their rate of return on an investment is either irrationally optimistic or stupid.

There are a variety of terms describing how to measure the success of an investment. Return On Investment (ROI) is one of those.

The most important measure is arguably NPV (Net Present Value) because it takes in to consideration the size of the amount of money you get back after adjusting for the required rate of return.

As an extreme example, imagine if I gave you the option to get a 1000% on a $1 investment. But, the entire investment could only be $1, in otherwords, you couldn't make a $1,000 investment and get $10,000. The most you could make is $9.

Now, imagine if I told you there was a 3% chance that you would loose 50% of your money, and a 12% chance that you would get just your money back and an 85% chance you would make 1,000%!

On the face of it, it sounds like a good deal, you have a really strong possibility of making a 1,000% return and a really small possibility of losing some money.

But, what if I told you that it would take you 10 hours to figure out whether my return estimate (1,000%) and probabilities, 3%, 12%, 85% were accurate? Would it be worth 10 hours to make $9?

Obviously it wouldn't unless your current hourly wage were less than $1 an hour.

That is one of the reasons VCs do not invest in businesses that don't have the possibility of becoming huge. There is really no reason for them to spend the time on figuring it out. It is also the reason that in order for a business to be "successful" the people who invest in it, must end up owning a part of a very large business.

Small businesses can be successful for the individual entrepreneur, but they are not investable.

Also, you don't become a CPA from just doing an accounting undergrad, you also have to have work experience in public accounting in most states. But, I do agree that you don't need an MBA to read a balance sheet. A few months of self study should allow you to understand the basics of financial statements. A few years of working with them will get you pretty good at analyzing them and may even give you the experience to construct them.

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