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This isn't too surprising to me. An MBA doesn't teach you how to build anything, an Engineering degree does. The things that are important early on in most startups are the engineering things, not the business things.
They're both important skills, and neither has to be learned in school.
Earlier quoted context omitted.
120k salaries are typical for engineers though. MBA salaries are probably more varied.
Yes and no. Some engineers make ~200K to 300K, just for hacking code or selling it. Yes its true :-) Some MBAs make ~140K out of school. EG McKinsey is known to make you work your tail off for very little $ comparatively speaking. But thats a golden stamp: 4 years out of McKinsey and you could be a SVP at some dumbass BigCo in Silicon Valley making ~500K. Why the hell would you want to give it up and join/form a star…
And, as others have noted, the starting salaries are highly variable -- by school, by industry, and especially by job function. When people speak of "average" MBA salaries, they're usually speaking of a mean figure and not a median -- which is a bit silly, because the mean has traditionally been skewed very heavily by investment bankers.
At the end of the day, it's somewhat intellectually lazy to compare "MBAs" to "Engineers," as if both sets are relatively homogenous, or even normally distributed. The fact is, the designation "MBA" could mean so many different things. It could mean a nonprofit manager earning $65k, a brand manager earning $80k, a consultant earning $120k, or a private equity associate earning $200k+. To a certain extent, the same can be said of the broad category "Engineer" -- although there are so many subspecies of "Engineering" masters degrees, that selecting any one of them can yield a more homogenous set to work with.
In the long run, one thing seems abundantly clear: there are perhaps more MBAs entering the job market each year than the job market will actually bear. Conversely, there is a dearth of engineering talent, and a consequent seller's market in most engineering fields. That means engineering salaries will likely trend higher, while MBA salaries trend lower.
Being a founder is very different than coming into a company several years later and being a CEO. They are different phases in the businesses life.
I'm an engineer. I plan on getting an MBA someday. My dad is not an engineer, but does have an MBA. He has been the CEO of 3 companies in his career. The first company was 100+ years old. The 2nd company was 200 years old. The 3rd (and current) company is 2 years old and he just joined it as CEO this week. In the first two cases he grew the business substantially. But he will never put 'founder' on his resume because that would make no sense. So by this study he wouldn't count on the MBA tally.
In the beginning, a startup is mostly about making a product and finding product/market fit. But later on once you have an established product it comes down a whole lot more to sales, marketing, operations, partnerships, etc. My dad has a psych/business undergrad & a marketing MBA. All of his work is on improving the sales force, making new ad campaigns, opening new distribution channels, etc etc etc. Things that as engineers we probably don't really want to deal with, but are the difference between being #3 in an established market and #1 in an established market. And that's ultimately what an MBA is aimed at helping you do - growing larger businesses.
So this data doesn't really suprise me.
As an interesting data point - my dad largely runs company in the 100-150 person range and has been in the chemical industry for a while. He noted that almost all of those kind of companies would prefer someone with an engineering undergrad and an MBA because ultimately you oversee sales, marketing, engineering, manufacturing, finance, etc. So if you are blind to the factory you will not be an effective CEO.
Earlier quoted context omitted.
Yes and no. Some engineers make ~200K to 300K, just for hacking code or selling it. Yes its true :-) Some MBAs make ~140K out of school. EG McKinsey is known to make you work your tail off for very little $ comparatively speaking. But thats a golden stamp: 4 years out of McKinsey and you could be a SVP at some dumbass BigCo in Silicon Valley making ~500K. Why the hell would you want to give it up and join/form a star…
The job market has been exerting a lot of downward pressure on MBA salaries in recent years, especially in the wake of the financial crisis. While it's still possible for a newly minted MBA grad to make somewhere close to $140k at McKinsey, or more at an investment bank, most MBA grads are falling moderately to significantly south of that figure. And, as others have noted, the starting salaries are highly variable --…
Also with just seeing how things operate in the Valley. I haven't seen McKinsey around a lot here though...which may be a good thing. Back in the tech bust years, they seemed to have just one piece of advice for every problem: outsource to India :-)
I'm not sure they're doing good stats... A better first question is, "What % of advanced degree engineers become founders?" and "What % of MBAs become founders?" From there you can go on to questions of size and success. As listed, the answer tells us nothing. For all we know there are 30x as many engineers as MBAs. Or vice versa. The conclusion could be the same as stated too.
I compiled the statistics for this whitepaper. We do not attempt to quantify success or company size. We aware that our data set is biased toward smaller companies, namely start-ups. We simply examined CEOs at a certain time period and their degree composition.