[Smirnoff]

Ok, I agree that some MBAs can be full of it but can we already stop this MBA hate on HN? I feel like lots of people here think that if you build something then customers will surely come. I've got a huge surprise for you. You will have to sell your product and some of the MBA's are really great at that. In B2B a single sale can make or break your company when you're low on cash.

You do your job and let them do theirs. You code, talk to users, ship, and iterate. They handle sales, operations, marketing, and maybe fundraising. These other things can be done by a technical founder but they are not fun. There is a reason why some companies hire COOs so that CEOs can focus on their job.

Finally, it's not MBAs who decided to focus on growth at all costs. It's the nature of the game. Either you get to the top or your competitors will do that. So don't hate the player, hate the game.

[beefield]

> Finally, it's not MBAs who decided to focus on growth at all costs. It's the nature of the game. Either you get to the top or your competitors will do that. So don't hate the player, hate the game.

Well, I do think it is fair to make a strong connection between the whole concept of maximizing shareholder value being the ultimate corporate goal and MBAs and their education. If the ultimate corporate goal would be maximizing customer value instead, the whole social media landscape would look very different.

And the funniest thing is that nobody has ever been able to explain me why maximizing long term shareholder value would be a better goal than e.g. maximizing long term customer value. I mean, in order to maximize long term shareholder value, you need to pay your taxes and competitive prices to other factors of production like labour and debt holders and your supply chain. There is no rocket science there. And if your goal was to maximize customer value instead, of course you would need to pay competitive rates to equity holders, otherwise you could not run the company and maximize the customer value.

The corporation is an independent legal entity. The whole idea that the stakeholders who get their moneys last in case of bankruptcy and risk only the money they have invested (others are risking their careers, homes, businesses etc) are designated as "owners" of this entity is really weird once you start thinking about it.

[FabHK]

Very good observations. And indeed, the whole notion that maximising shareholder value is the goal to pursue stems, I think, from a naive "economism", as James Kwak called it in his excellent book Economism: Bad Economics and the Rise of Inequality [1], namely the following train of thought:

The whole point of society is to maximise utility. We can't do interpersonal utility comparison, so we're satisfied with a Pareto optimum (where you can't improve anyone's situation without making someone else worse off). By the two main theorems of welfare economics, Pareto optima are basically equivalent (under the "usual" assumptions) to market equilibria. Thus, free market.

Next, there's the agent/principal problem: the principals (owners=shareholders) of a company delegate the actual running of it to agents (managers), and now the problem of value alignment arises - the managers could be tempted to maximise their own utility (empire building etc., or even beneficial things such as employee health insurance) instead of that of the owners. And the theory suggests that the solution is maximising shareholder value, because then the owners can themselves decide how to allocate the proceeds (eg into voluntarily providing employee health insurance) as to maximise utility.

[As an aside, btw, the theoretical case for free trade rests on an Economics 101 argument (comparative advantage), but is predicated on redistribution (free trade creates efficiency gains such that even after compensating losers you still retain a surplus, therefore it's better). However, the funny thing is that the (eg libertarian) figures promoting free trade frequently conveniently forget about that part of the argument.]

And of course the whole pareto optimum/market equilibrium/maximising shareholder value argument is based on assumptions that just don't hold; the world is more complicated than Econ 101, and very often more careful empirical examinations of the evidence support much more progressive/liberal policies than Economism suggests. (That's also the gist of Kwak's book, IIRC.)

TLDR: Growth at all costs is not necessarily the nature of the game, it's contingently so because of flawed policies and flawed economics: the oh-so-rational, yet so limited Econ 101 view that MBA students are typically subjected to.

[1] https://economism.net/

[s73v3r_]

You're completely ignoring that them doing their job often means promising features that do not exist on a timetable that is nowhere near reasonable, thus forcing me to bail their ass out by working ungodly amounts of overtime, punishing me for no good reason.

"Finally, it's not MBAs who decided to focus on growth at all costs. It's the nature of the game."

It became the "nature of the game" because of them in the first place.

"Either you get to the top or your competitors will do that."

So what? In just about every field out there, there is room for more than one entrant.

[nickthemagicman]

Craigslist isn't playing the game and doing fine. The game is all in your head. Feels like even the IDEA that there's a game is MBA hogwash they're trying to sell you.

[point78]

Craigslist is doing amazing, but they are definitely an outlier

[nickthemagicman]

They're an outlier by not being greedy.

[bredren]

Craigslist is a benevolent dictator, but it is no saint.

Craigslist is greedy in a strange way. Craigslist is greedy over their the simplicity of their product and desire to hold on to their turf.

The company makes more than enough money to offer all kinds of improvements that need not markedly change how the marketplace behaves.

These features would not exploit the user or the user's experience. (In the spirit of this thread, "MBA" ideas)

When someone comes along and tries to ship the same thing, improved, and break TOS to get exposure to CL users, CL shuts them down. The big difference between craigslist and other startups is craigslist rarely incorporates competitive ideas into their product.

I support the position craigslist holds, but not the way craigslist holds it. I believe it will be toppled by a group less benevolent or be forced to add features at a date far later than it could have added utility to so many people's lives.

[sangnoir]

> When someone comes along and tries to ship the same thing, improved, and break TOS to get exposure to CL users

Well, that's an incredibly euphemistic take on it, if nothing else. Let's see someone try to "get exposure to" (scrape) Facebook's user graph for a competing product and see how long that attempt would last. I don't understand how people can feel entitled to data that CL gathers: obviously they'd be protective of it as it's their secret sauce/crown jewels.

[nickthemagicman]

So you're saying change the simplicity of their product and give their data away?

That's literally their entire business model.

They could make so much money with all that data but stay true to their original goals of providing a classifieds service.

[pishpash]

But OP is hating the game, the game that is developed collectively by MBA's who dehumanize business from what was a human endeavor into a marketplace of exchangeable values and exploitable externalities.

[drb91]

> You will have to sell your product and some of the MBA's are really great at that.

I'd bet that this is true of any degree. Not saying MBA providers don't teach useful stuff, but the degree is a terrible signal of quality--after all, it is by far the most popular graduate degree. I'd much rather work with someone who can state business options articulately and intelligently than someone with degree X; if this articulate/intelligent person happens to have an MBA that's great for them.

I don't get why MBAs get brought up at all.

[concretethrow]

Here is a good example of what MBA's can do.

First, go to Disneyland and look at the ticket prices. They're really high, right? On a per-day basis?

So next you price out the season passes. You do the math and you find that if you are going 6 or 7 days in a year or less, you are better off without the season pass. If you are going 8 or more days ( for instance ), the season pass makes more sense.

So you do the math and think about it some more. 7 or 8 days sounds reasonable, my family will enjoy it, right?

The next thing you know, you are happily shelling out $1000 per family member, thinking of all the happy times you will have and all the money you are going to save.

[drb91]

I’m having difficulty understanding you. Is this a scenario where you’re arguing for or against MBAs? It either sounds like you’re arguing a) MBA teaches you grade school reasoning or b) an MBA teaches you to maximize your revenue stream by providing pricing structures that encourage people to spend more than they want. In either case I’d rather work with someone with a wider skill set providing someone people do want and are willing to pay for.

[squarefoot]

I think the context is vital here. In the ideal situation of 5 people hungry and the only shop in town with exactly 5 sandwiches ready, nobody loses: shop sells, people eat, workers get paid. But in this world there are more products and services around than people wanting to buy them, so people have to be convinced, and engineers usually are really poor at lying.

A revealing sign that an engineer isn't running that shop would be the production climbing to 50 sandwiches. The same 5 people would be fooled into buying all of them by advertising, special discounts etc, then they would eat 5 each instead of 1 becoming obese, thus helping the medical business, and throw away the rest helping the trash collection and disposal business.

[drb91]

> But in this world there are more products and services around than people wanting to buy them, so people have to be convinced

Or, the products could shut down, or lower their prices. If there’s no demand, why put energy into making demand rather than making something people want? It’s the lowest bar of achievement in this society; while I understand money can be a powerful motivator, this lowers the value of the entire work force.

[bicubic]

That's literally the endgame of capitalism.

Capitalism is, and always has been, about reaching a state where supply exceeds demand. One could argue that once a business reaches that stage, they can put up a Mission Accomplished banner and fire most of their workforce. But because of how wealth is distributed, workers always need to be working so they're incentivized to extend the work and market as long as possible.

The same mechanism is responsible for the situation where institutions tasked with solving a certain problem (crime, cancer, etc.) invariably end up perpetuating the problem so they can continue existing.

You think some shmuck MBA setting up a devious pricing structure at Disneyland is bad? Consider that the US has more empty houses than homeless people, and more unsold cars in lots than people who lack reliable transportation.

[baddox]

That calculation sounds extremely obvious to someone with no MBA or sales/marketing experience whatsoever. I’m confident that MBAs or experiences people in those roles do a heck of a lot more than calculations like that.

[yalph]

I am not that confident.

[eevilspock]

Thus our world races to the bottom in integrity, values and the common good. Eat or be eaten. Kill or be killed.

Those committed to non-violence do so without regard to whether they'll win or lose.

The players make the game.

[swaggyBoatswain]

Being an MBA doesn't change whether or not you can sell something though. Anyone can equally be good at selling things, its more of a personality type if anything

I don't see the purpose of MBAs unless you are doing high level management at a mid-large company, and you are supplementing it with other (core) skills such as software development. The other reason you would take an MBA is if you want an equivalent knowledge set of a bachelors business degree without having formal training.

I think the MBA hate is warranted to some degree, because you see far too many people taking an MBA as a "backup" option. I've dealt with way too many people with MBA degrees that have no idea what they are talking about.

I'm a strong believer that business skills need to be won by hard-earned experience.

[enraged_camel]

You don't need an MBA to sell something, even when the target customer is an enterprise.

[sp527]

Can report from the trenches of a major software consulting firm: putting a sharp engineer who's even reasonably good at communicating in front of the C-suite is 5-20x more effective than using someone with an MBA.

[fooker]

But is it the best use for the engineer's time? Does the engineer want to talk to a bunch of strangers every ..say.. week?

[sp527]

My role evolved in that direction, mostly because I was okay with it. Other roles can be designed to be cross-functional from the beginning. Generally it's a useful application of engineering time if it's a high-leverage situation with decision-makers in the room and meaningful potential deal value at stake.

[enraged_camel]

The best use of an engineer’s time is whatever makes the company the most money. If talking to customers C-level people is a weekly requirement for that, then that is what the engineer needs to do.

[fooker]

That's true if the company and the engineers exist in vacuum.

Very often, the engineer would get frustrated with this and look for work which is more interesting. That way, the company will be, increasingly, left with engineers who are there because they have no alternative.

[krageon]

"Either we do this or they will" is a bad argument as justification for doing something unethical. The reason I think it is bad is because it is lazy, and it is lazy because it is circular. You say it is true, and because you say it is true (and you act as if it is), it is true. It's not very interesting to follow and it should also be pretty plain to see why it doesn't work as a justification.

[ythn]

From my perspective, any company that goes public will eventually turn to crap (or go through decades-long crap/good cycles). It's not MBAs that drive for growth at all costs - I would argue it's shareholders. Shareholders are greedy and don't care about anything else besides ROI. Even if that means throwing the consumers under the bus in the long run to achieve that.

[ng12]

Yeah but who do you think is pushing the company to bow to the shareholder pressure?

[rm_-rf_slash]

It could very well be the engineers looking to make a lot of money with their stock options after all their hard work.

[pishpash]

It could very well be the MBA's who designed the incentives program.

[yalph]

It is the Boardroom === MBAs.

[lordgrenville]

A company has a fiduciary duty to the shareholders, who bought the stock on the assumption that the company will be run in their best interests. If they do't do that they are open to shareholder lawsuits. (This is the way that activist investors often work.)

[tjoff]

A company does not have an obligation to be short sighted. This is also something the company can communicate to any investors.

Is it really common for lawsuits against normal sized companies? (I'm not talking intel, facebook etc.)

[zeusk]

Activist investors fight for power in board rooms, not in court rooms.

[jwsec]

IT doesn't appear that FB values user privacy, this is not a surprise.

[kolbe]

The legal system? Shareholders can vote to replace board members.

[envy2]

Not really at a controlled company like Facebook.

[oculusthrift]

eh why feel bad for mba’s? some of the highest paid most privileged people in the world

[rhizome]

Ok, I agree that some MBAs can be full of it but...[Y]ou will have to sell your product and some of the MBA's are really great at that.

Some are full of it, some can sell. What about the rest, and what are the proportions?