Interview an MBA: Contrarian Investing in People

4 06 2012

The prevailing thinking seems to be MBAs shouldn’t take part in this recent ‘startup fever’. As the thinking goes, MBAs are money-hungry robots that lust for power and drain culture from the startup environment. If they are given the reins of a startup, the bubble is sure to follow (strange duality, since many are saying the social media bubble has been defined by a company run by a college dropout). I remember reading sometime ago about a ‘rule of thumb’ for valuing startups: add one mill for each programmer, and subtract half that for each MBA. That is to say, the MBA adds negative value. The fact that investors would have a ‘rule of thumb’ that they actually follow or prescribe for investing is another matter for another time (I mean, this is your expertise, right? A rule of thumb??), but I attack the very notion that this could possibly be true.

Instead, I would argue that just like any other degree, the MBA doesn’t define the person underneath – aka ‘garbage in, garbage out’. I find it almost impossible to believe that only greedy, ‘gutless’ (Seth Godin’s words, not mine) people would sign up for MBAs. So then it must be while in school they turn into evil people. Let’s see, I can remember taking Accounting, Venture Capital, and Marketing…which classes taught us greed and overconfidence again?

The current stigma against MBAs is, in my opinion, pretty lazy thinking. Why waste time actually getting to know the person, if you can find a way to write them off? Our brains seek these heuristics all the time, but I find this one to be pretty destructive. Hiring and maintaining culture is hard, really hard. We’re collectively shooting ourselves in the foot if we ignore/deride an entire group of people.

In my opinion, lots of startups could use what MBAs do gain in school. Big picture thinking, business model evaluation, and a tireless work ethic can be invaluable assets. The ability to learn new concepts, to defend oneself in arguments, to evaluate other perspectives before making snap judgements – these are great skills to have in a startup employee. MBA grads just got out of a program working with brilliant and incredibly driven people – sound similar to a startup? You can’t get much done as a ‘shrinking violet’ in either environment, either.

While the case method isn’t exactly a silver bullet for business greatness, it does teach you to identify the right things to do from a long list of things you could be doing. The requirements of the MBA curriculum also forces more prioritization and focus than the typical undergraduate experience. These might not be the skills typically associated with MBAs, but they are incredibly important as a startup employee.

Jason Freedman has a pretty interesting take on MBAs: “Beware of MBAs!” and I don’t think he’s necessarily wrong. Startups are not smaller versions of normal companies, and the way they compete/grow/learn cannot be taught in a classroom. But knowing the ‘frameworks’ isn’t so destructive, it’s about how they are applied. Yep, that actually means MBAs can work in a ‘lean’ environment. Or a fat environment, or whatever becomes popular next.

You see, it’s not the degree that makes an MBA ineffective (or worse, negative) in a startup, or megacorp, or something inbetween. It’s the person underneath. There are folks from my MBA class that I would work with, and there are some I wouldn’t. No different at all from undergrad. Some people seem hung up on the idea that MBAs don’t listen to engineers or treat them like second-rate citizens. This is simply a matter of personal respect, not a degree-defining quality.

I’ve met a bunch of MBAs who work at startups during the last year and a half, and I’m always left impressed by their intelligence, experience, and depth of thought. I work with another MBA everyday, and his work ethic is pretty unstoppable (despite his dress code). I find it (again) impossible to believe together we contribute a negative valuation to the company. We’re both learners and builders, which we were long before we went to school.

Perhaps we’re an exception to the larger MBA rule. Totally possible. But here’s what I recommend: define your job openings, your salary range, and the qualities you want in a coworker. If MBAs apply for the position, interview them. Get to know the person, you may find them to be a great addition to the team (or you might not!) but it’s silly to exclude them because of the degree. Also, good news, right now might be the time to hire them.




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