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!", chances are that people like Tom Mueller [0] or Gwynne Shotwell [1] will choose the latter.
The book "Good Strategy, Bad Strategy" discusses this. There seems to be a group of people that think that "grow by 8.2 percent" is a strategy. It is not, it is a goal. Companies with a good strategy will eat the lunch of a company who doesn't know what a strategy is.
The anti-MBA movement is really trying to redefine what an MBA means. Bad business decisions are "M.B.A.-ization". Good business decisions are... something else. Therefore, MBAs are bad.
There are plenty of bad MBAs running around, but it's no different than how we also have plenty of bad software developers out there despite having C.S. degrees. In both cases, the worst offenders are over-represented in the talent pool because they're more frequently pushed out of companies, while the best talent is locked up with high compensation.
Quoting Joel Spolsky: "The cult of MBA makes you think you can manage the businesses that do things you don't understand"
The problem is in thinking of MBA cult itself. If I was an MBA without software engineering experience I would also not understand intricacies but would think I can manage it anyway.
A recent major example of this may not be in the software area. The Boeing 737MAX was started and largely developed under Boeing's first non-engineer MBA oriented CEO. Of course to fix it the engineer CEO left holding the bag with the MAX has been replaced again with a non-engineer leader.
A counter example would be to ask the question if AMD could have navigated it's resurgence if it had not been led by deeply technical CEO, Lisa Su
This isn't limited to MBA's. There's plenty of (non-cs) engineers out there that are in high ranking positions, making decisions over areas of the business that they know absolutely nothing about.
It's not an MBA cult problem, but it is a management-academia problem. Universities provide classes about management and business without focussing on the actual business part of businesses. If you want to succeed, domain knowledge will almost always be the most important thing, and business and management schools basically brush this to the side as an afterthought.
Can you try to tally the list of actually innovative companies (let's say in tech or bio) headed by MBAs vs. non-MBAs? The only notable MBA ceo of a massive tech company from history was Steve Ballmer and let's at least agree there's no consensus if he was any good for Microsoft. Tim Cook is arguably good, but that's just 1/5 if we are looking at top 5 tech. Even the "business" CEO of Google, Eric Schmidt, is not an MBA.
The book "Good Strategy, Bad Strategy" discusses this. There seems to be a group of people that think that "grow by 8.2 percent" is a strategy. It is not,
Michael Porter has been cautioning about mistaking a business model for a strategy for nearly 40 years, his ideas are taught in every business school, and the lesson still needs to be relearnt by every fresh set of senior managers.
> or engineering (and other) talent will look elsewhere.
The term for this process is 'The Elves are leaving Middle Earth'.
Coined by Steve Blank in 2009 about when the coffee and sodas aren't free anymore in the break room. When the bean counters look at the line item that is free coffee and soda, they see a big old number to cut. But it causes the staff to have to run over to the coffee shops to grab the joe, taking a lot longer time than the break room commute. Meaning that management isn't really thinking hard anymore. The talent notices this and starts to quietly put out the CV again, as they know that the company is going to go into stasis or downhill altogether without intelligent bosses.
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) or more people willing to risk their savings investing in companies that are trying to achieve great things.
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.
1) American school education, and college education is amazing. ( if you can afford it). Talk to immigrant parents From other countries for a contra point. Crushing the soul of students isn’t fully installed in America, yet (which brings us to point 2)
2) It’s the economy. At some point, the American economy stopped working as well for blue collar roles as paths to middle class incomes.
The new path required white collar credibility. Humans naturally optimized for this. Which brings us to The fundamental conflict for American education, that gets distorted depending on how you enter the discussion.
3) the American liberal arts system, produced great intellectual output, for an economy where you could pursue both intellectual limits and get a decent paying job. The number of people entering were small, and you could lavish your attention on those pursuits.
It does not work for a majority of America customers/students who simply want credibility when it comes to entering paths to social mobility, and are not interested in a life of intellectual pursuit.
Look, colleges and schools have different problems, but for businesses, a degree has become the basic filter, where it was never meant to be.
Moocs simply don’t have the credibility to fill in the gap, and you can’t make a github or deviantart for roles which don’t have a standardized output.
Related to your second and third points, I think there is at least some case that the U.S. has moved away from the idea of liberal arts schooling towards being more vocationally minded. The intent, going back as far as the mid-1800s with the Morrill Act, was specifically intended to help serve a new growing economy.
If you ask, I bet more people look at college as a way to get a job than to learn to appreciate and contribute to culture
Contributing to culture ship has long sailed away with the extreme capitalistic society of ours. If there was any kind of cushion (specifically with healthcare), non-vocational education would make sense. But with our current society, life would be futile without real world white collar skills.
Extreme capitalism is a society where the risk taken is not just encouraged, it's a necessity.
Ironically, in such societies, people will latch on to anything that provides stability. For example, vocational degree that signals high skills or petitioning for NIMBY laws.
The reason people latch on to these is simple. There is too much to lose. The crash is too deep. If one loses a job, they lose healthcare. Not because of shortages like 200 years ago, but because of the extreme capitalism taking over healthcare, incentivizing providers and insurance companies to lobby for shitty laws instead of true competition.
1. American education isn't 'amazing' by default just because other countries do things differently
2. The article is about the interrelationship between high-level education and the economy. There is cause and effect at play here, you can't just say 'at some point this happened, move on and don't ask why'
3. Just because something worked in the past does not imply it will continue that way
It's weird, most of my personality traits that were liabilities going through school have become massive assets in the workforce. I only hung onto those traits through sheer stubbornness, despite the school system's continuous efforts to stamp them out.
I'm stubborn too. I find my traits are still working against me. Neither bosses nor professors like their mistakes being called out. And it seems being well networked or making a good impression is more important than actual work or results (you're better off with the abilities to build junk and sell junk, than with the abilities to build good stuff and sell nothing)
Oh yeah stubbornness isn’t one of the traits I meant as good. I only meant that stubbornness is all that allowed me to keep certain good traits from being stamped out.
It can just as easily (and in my case also sometimes has) prevented some bad traits from being stamped out. So I need to consciously go way overboard with “I could just as well be wrong” to balance out my natural stubbornness.
I wasn't talking about my stubbornness being a good trait. It's hurt more than helped, of that I'm sure.
The traits that hurt me in school still hurt me today. Like not being afraid to voice a minority opinion. Or correcting the boss/professor. Or having a strong adherence to the rules/policies and holding people/institutions to their word. Thinking outside the box or being more independent.
>Along with the fact that most people don't even have the option to take risk with the massive increase of cost of housing.
This just means people won't be taking risks in places like SF. There's plenty of cheap housing out there. Just not in places where the market is driven up by supply constraints and money printers. And before anyone says "hurr durr, nobody wants to live in BFE Alabama" I'm talking about places like Buffalo, Hartford and Atlanta.
You need decently large populations of risk takers living in reasonably close proximity to create an environment like silicon valley. There are plenty of places that have low cost of living, but as soon as you create that environment, the costs of living will skyrocket. Further, while costs may be lower than is SF, costs are rising nearly everywhere faster than inflation. For example in Cleveland the median home price was a mere $18k in 2008, in 2016 it was $40k, it's currently $110k. Buffalo went from $95k in 2016 to $180k now, hartford from $100k to $190k, and atlanta from $200k to $350k. Cost of living is of course more complicated than just median home price but you get the idea.
2016 is the baseline in my comment. In Cleveland the median home price increased by 122% in the 8 years from 2008 to 2016, then increased 175% in the past 4 years.
I think the other thing is retirement, I'd live a much more radical existence and take business risks if I didn't have to worry about being homeless when I'm 60 if things don't work out.
Maybe these things are related because the CEO too has the same concerns.
We don't live in a society that favors innovation, we live in a society that's cutthroat.
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.
This is a good reason to keep the company private, or issue and sell only non-voting shares to the general public.
Wall Street seems to be mostly interested by the current quarter's results, or the current year's at best. This may mismatch and undermine your long-term goals.
I would invest in SpaceX in a heartbeat if I could.
The financial markets have both very low risk investment options (e.g. government bonds) and very high risk investments (e.g. options), and both ends are attractive to a range of investors. I would agree that you can't pivot a company like Microsoft to a high-risk strategy with uncertain payoff; their existing shareholders would rebel. But if you have this strategy from the start then you only acquire shareholders who are fine with this kind of strategy, and I don't see why that shouldn't work out.
That reminds me of my time at IBM under Palmisano a decade ago.
His goal was to increase the share price by x%. It was no secret one of the strategies was to cut jobs in high cost regions (US) and hire in low cost regions. You'd actually hear this in all hands meetings. It was shockingly shameless.
>> It was no secret one of the strategies was to cut jobs in high cost regions (US) and hire in low cost regions
What exactly is wrong with that strategy? You would prefer to own stock in the company that employed people in a high cost region when they could hire someone with the same skill set in a low cost region?
People are not interchangeable parts. If you have high-output staff in a high cost-of-living area, the strategy that recognizes this does what it can to "keep the band together" and keep them doing good for the company, not just saying, "Oh, they're an Engineer 3, why am I paying for a Boston Engineer 3 when I can hire a <insert low COL area here> Engineer 3 for less?" That kind of false equivalence thinking is part of what inspires anti-MBA rants. It's not just about the "same skill set" or title.
I think that is a short term issue. Yes you need to spin up the high-output staff in the low cost-of-living area before you fire the high-output staff in the high cost-of-living area, and yes you need to do knowledge transfer, the devil is in the details.
This has happened to me before, the location I worked in shut down and the jobs were moved to a lower cost location. Many years later, they seem to be doing fine. If it was up to me, they would have kept the people in the high cost location but not hired replacements when people left while adding people in the low cost location, but they didn't see it that way.
Also, the longer I work in software development, the more I disagree with "People are not interchangeable parts", at least with respect to developing software. People come work on a code base for a while, they leave, other people get hired on, the code base lives on. If a code base can't be handed off from one group of developers to another group of developers without much trouble, something is wrong. And yes, I know that is an unpopular opinion and the role of a good development manager is to pretend like it isn't true, but there it is. In a well run software shop, you should ensure the people are interchangeable parts.
The thing about treating people like interchangeable parts and optimizing for low wages is you also get low skilled people / compromise. (low CoL but why stop there, why not look for cheaper people)
Low skilled people will slow things down, will destroy any quality and advantages you have in your code and then leave as they get better (or stay if they're really crappy)
It's worse if they stay as they have a tendency to multiply and get promoted to middle management and crap even more on things...
This will only be noticed via the occasional question "why does it take so long when competitors already did this" after a few years.
Also, by not keeping talent you lose their knowledge. All for what?, I doubt their wages factor too much in any product.
Alternative is to keep good people and pay them well, nurture a culture of excellency and kick out occasional bad hires.
That way you get great products and usually good costs as you tend to need fewer people to get things done (even if they cost more)
Note: I've seen both types of companies and some in between.
Sounds like people at my company. We are building a cloud product but there's a ruthless crack down on cloud costs (2 30-minute meetings involving some of the most highly paid people in the company) with the result that most things go untested. Customers find those issues and decide not to use the product. Management wonders why we can't get traction and grow the business. There are other reasons too but there's a clear lack of common sense. I lost 2 weeks of valuable work to one of these 'crack downs'.
>"We want to grow our market by 8.2 per cent and give our bosses higher Christmas bonuses"
This isn't a bad thing. Profit and price are, in most cases, still reasonable signals for what consumers want, and growing your market means you're serving real demand in the actual world. This is what creates employment and utility.
Flying to Mars and ignoring market share is nice but doesn't serve any actual point, other than Musks idiosyncratic desire for it. He can pursue it because in other areas the company actually does pay attention to growing their market and funding it.
But overall companies should pursue growing their market share because it means they're serving customers. I don't think the world would necessarily be better served if Walmart focussed on shooting rockets to the moon, rather than making it so the shelves are stocked and the products are cheap.
Right. But the company needs to have a point. Growing market share doesn't mean you're serving your customers' needs. You can grow your market share quite well by acting anti-competitively, or by exploiting your customers' weaknesses (gambling). No thanks.
This is wrong. It is confusing the side effect from the cause. There are many ways to grow. One way would be to build a better product. Another way could be to bribe officials in charge of purchasing. Another way would be to fake numbers.
The first kind of job might be treating you much better than the second kind though. People with high motivation can often perform better while being treated worse. The game industry is a good example for that.
I heard that musk complained about programmers not willing to put in overtime for Zip2. All his companies after PayPal are based on motivating workers with some goal people can get behind (Environment, Mars colonization).
> but it should not become Mission A of the company, or engineering (and other) talent will look elsewhere.
There's 3 things that I judge an employer by
1) Sector the company is in (Space, electric cars - Yay)
2) Revenue/Growth of the company (pie grows, does your share?)
3) Company culture (that's catch-all, but if you want a negative see that "don't hire the hot girl" guy)
A lot of ways I care more about the sector, because that's the thing I cannot hope to influence, but the rest is actually open to improvement if you're high enough on the ladder.
I think the "bean counting led" is a failure on #3, but might be a win on #2.
I would say that there's a difference between bean counting and an MBA. Unfortunately, most MBAs focus on finance and not strategy and that's the problem.
Caveat: I have a MBA and my focus was not on finance.
Bean counting is not mba work. It is cfo work. Let’s not mix the two. And there is no one more disconnected from the work of the business than the cfo.
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...
Something interesting has struck me about this thread. In almost every HN thread about higher education, there is a very strong if not prevailing view, that advanced degrees are primarily a form of empty credentialing or signaling. Yet a search for those terms in this thread yields almost no hits.
I wonder if what's missing here is a deeper dive into what MBA's actually learn in business school, if anything. Sure, they learn something. There are certain kinds of data gathering or processing tasks that I would assign to an MBA. But I've known several people who have gotten MBA's after getting advanced degrees in the sciences or engineering. They all expressed that the work was time consuming, but not intellectually demanding for someone who is basically literate and comfortable with arithmetic. Their MBA "capstone" projects were nowhere near as meaty as their MS or PhD theses. A perusal of the flagship Harvard Business Review supports this notion.
Supporting your idea, I've noted in the past (probably here in HN) that the people who value the MBA degree the most are other MBA's. The "problem" with the MBA might have nothing to do with the actual content of the degree, but the formation of an insular tribe that develops a shared language and culture with a life of its own. People of real intellectual distinction may be a minority within that tribe, thus its effect may be as simple as a dumbing down of management.
If I've noticed one intellectual trait held in common by the MBA's, it's the ability to speak in a language that avoids any mention of the human impact of their actions. A sort of learned sociopathy if you will.
"Never ascribe to malice that which can be adequately explained by stupidity."
> I wonder if what's missing here is a deeper dive into what MBA's actually learn in business school, if anything.
A friend with an aerospace engineering degree said there was only one thing in his MBA program that he couldn't have figured out with a little thought. That was the principle of comparative advantage. He said what made it worth it was the great network that he built.
I can agree with this. Before I got my MBA, my perspective was always from the pure technical solution; thinking about the business wasn't as natural. Getting MBA gave me the business perspective of the companies and clients I've worked for. Now, I don't have to squeeze out the extra thinking.
"I determined absolutely that never would I join a company in which finance came before the work or in which bankers or financiers had a part. And further that, if there were no way to get started in the kind of business that I thought could be managed in the interest of the public, then I simply would not get started at all. For my own short experience, together with what I saw going on around me, was quite enough proof that business as a mere money-making game was not worth giving much thought to and was distinctly no place for a man who wanted to accomplish anything. Also it did not seem to me to be the way to make money. I have yet to have it demonstrated that it is the way. For the only foundation of real business is service."
Henry Ford - http://www.gutenberg.org/cache/epub/7213/pg7213.txt
Looked for managerialism, as this is what I think Musk's objection is caused by. Warren Buffet famously said, “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
Institutionalized management rewards a set of skills that are not the ones that create growth, which is sort of the point. They find growth and then "manage," it on behalf of other people who "manage" money. It's the classic principal-agent problem, where managers as a class have enriched themselves at the expense of owners like pensioners, savers, entrepreneurs, and taxpayers.
IMO, the whole managerial problem is caused by a mix of high and complex tax regimes, and low interest rates. The former is a make work policy for a clerical worker class, and the latter means banks become the cultural and political centre of everything. It causes the economic shift from making things people want, to doing things nobody wants.
'The work which we describe as Studies in the Jewish Question, and which is variously described by antagonists as "the Jewish campaign," "the attack on the Jews," "the anti-Semitic pogrom," and so forth, needs no explanation to those who have followed it.' Henry Ford - http://www.gutenberg.org/cache/epub/7213/pg7213.txt
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.
Spot on. MBA's aren't meant for 0 to 1. They're meant to optimize and sustain business models with the foundation of innovation and revolutionary ideas. Companies that only stick to one or the other are doomed, or require their industry to be that much more technical or business focused.
I would say MBAs are excellent at extracting value, rather than sustaining value generation. Actually producing value is clearly not a priority in MBA culture.
Worth looking at it from the viewpoint of the Multi-Armed Bandit problem as well, or in other words, companies sometimes shift their focus from "exploration" to "exploitation," and it can be a challenge for the company to learn to shift back to "exploration."
Electric cars are 2.6% of cars sold, and Tesla is 18% of that EV market. That's not really any proof that the MBA's are "ruining" other car markers, is it?
EV cars will be 95% of all cars sold within 20 years. Most likely much faster.
Lack of early, large and decisive investment in EV shows a stunning lack of foresight from all ICE car CEOs. Suicide by inaction.
18% is more market share than the biggest ICE car companies (VW and Toyota have ~10% market share).
This shows that Musk handily outperforms all ICE car makers in his sub-market (EV cars). It's not like Tesla lacks competition in EV market (NIO, BYD, XPeng, Nissan, GM, Hunday, Renault, Rivian, Lucid...)
In theory....the share price is the discounted cash flow of Tesla in all future years. Using a discount rate of 8-10% means the annual cash flows for the next 20 years or so are important (any further than that has very negligible effect on the share price). So the share price is counting on explosive growth.
Now, considering Tesla doesn't pay dividends ... what's really the "cash flow" for investors?
This is why it's mostly a theory...human beings don't behave like Excel spreadsheets.
Elon isn't taking their market share. He's banking on the future and stealing their market cap. What people are missing is that every car company is a fast follower and Elon's head start and subsequent lead is disappearing as Porsche (VW) and others are stealing the limelight and performance ranks. Similar to Apple, Elon is thinking in terms of profitability and long-term strategy and wants to focus on taking that over all else.
How is Porsche stealing the limelight? With the Taycan? Which starts at >$100k, with half the range and slower 0-60 numbers than a lumbering $70k base model Model S? (I know they're not direct competitors, I expect the Porsche to have significantly better fit/finish and handling, and the Taycan doesn't really sit 5 comfortably). At the top end, it looks a bit better, but then it's priced in the range of the 2021 Roadster, which seems likely to be a monster.
VW's offerings are obviously more affordable, but they don't seem to offer the same range per buck that Tesla does?
Yep, the Model S is a large family sedan, that's why it's a bit absurd for it to win. My point was that a sports car from Porsche should be winning, and not by a little.
That video is comparing the Turbo S (the $185k version of the Taycan) to the $92k version of the Model S. The $140k version is significantly faster, let alone the 2021 Roadster.
The ID.3 seems to have a stated range of ~200 miles?
Alright, how much range do you get in an ID.3 that’s the same price as the base Model 3?
EDIT: Also, WLTP vs. EPA range isn't apples to apples, EPA is something like 10-20% more conservative, and that's what Tesla quotes, at least on their US site. I can't seem to find EPA range results for ID.3, maybe because it's not available in the US yet? And to be clear, I'm really happy that VW appears to be pushing into EVs in a bigger way than most of the big car companies. I wish they all would. But I think they're a ways from taking the limelight.
Ah nice, sounds like they're doing quite well, then! Looks like Model 3s are significantly more expensive in Europe than in the US (the base model in France is 51k Euros/61k USD vs $38k USD in the US, before tax rebates, which can knock off a significant chunk of it). Which is also part of why the quoted prices for the ID.3 seem so expensive to us in the US (49k Euros/59k USD for the 340 mile version in France). That's a lot to pay for either of those cars.
On track? Which one? Care to share the video evidence?
All I've seen are 1/4 mile drag races that show that yes, indeed, the Taycann has a 2 speed gearbox. There isn't really a big advantage outside of that.
The allure of Tesla is that their DNA and proposed vision is all-electric performance without compromise. They've forgone the luxury market and gone all-in with performance. The 3, Y, and even X rely on the nostalgia of the Roadster and soon the S. Despite the fanfare of the S, Tesla hasn't been able to convince the average consumer with multiple cars to own multiple Teslas nor the PR firm that their other models deserve to be on the Top 10s, etc. I'm never going to bet against Tesla. I've seen my $500 TSLA purchase go up 15,000% to $75k in just a few years. That being said there's a lot more work to be done for Elon to get to the top and stay there.
Tesla isn't about performance, that's just a by-product of making EV suitable for everyday use. Teslas are about adequate range (400+ Km, 250+ miles), fast charging and a charging network that enables long-distance journeys, as well as getting as close to self-driving as possible. That's why 1 million or so people chose a Tesla over other EV and gasoline cars.
> What people are missing is that every car company is a fast follower
I don't know if it can be considered "fast" when Daimler copies the Model S vertical touchscreen after 8 years and puts it in the S class. They seem to be slow followers in an industry that wasn't moving fast for decades and has now picked up a pace.
Pretty well. The large car companies are prioritizing the markets with the strictest emissions standards. Renault and Volkswagen EVs outsell Tesla in Europe. Toyota's already in a good position for fleet emissions because it's been selling hybrids for so long.
EVs are still only a small percentage of the overall car market. The world's biggest car companies won't stop being the world's biggest car companies. They'll just start selling more EVs.
They are in decline. They need MBAs to manage their pensions and health care liabilities. Elon Musk wouldn’t last a week at any of them. He needs to be in a growth company.
> “I think there might be too many M.B.A.s running companies,” the Tesla Inc. chief executive said. “There should be more focus on the product or service itself, less time on board meetings, less time on financials.”
> Many business-school leaders shot back, saying that Mr. Musk’s comments don’t match the reality of what is taught in M.B.A. programs and that more students than ever who are pursuing the graduate degree are interested in entrepreneurship and tech rather than Wall Street.
That last part seems perfectly tone deaf. "What do you mean, too much time focused on financials? We took jobs outside the finance industry! Isn't that enough?"
It's less than tone deaf, it's plain ignorant. As much as I find Musk's unabashed ego distasteful, he has actually built companies and hired thousands of people. Musk is a doer - and you know the old saying about "those who can't do, teach." So if we're appealing to authority, I'll take Musk's over "business-school leaders."
Side note: I've rarely met a top b-school grad who could say they valued much taught during their MBA (aside from statistics). The consensus is usually that it's a great networking opportunity.
I think that's being uncharitable to "business-school leaders".
Ignoring the people who are going to business school for a two year vacation, which a lot of M.B.A.s do, there's a growing contingent of people who are going in with technical skills and experience. I think business schools deserve some credit for that.
There are still plenty of people from non-technical backgrounds hoping to be your traditional M.B.A.s, but the culture is shifting in the right (IMO) direction.
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.
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.
I've definitely worked for medium-sized tech companies that could use an MBA or 3. Once there are more than 3 tiers of employees, managers can't hero their way to effectiveness.
Organizational management is important, hard, and has decades of study behind it.
Finance is also important. My former employer has never made a profit in the seven years since IPO, and clever financing means that it is still a going concern.
GE was burning the furniture to heat the house - what should be seen as a red flag - but nobody cared because there was just so much furniture it didn't seem like a problem until there was nowhere left to sit.
This is what happens when highly credentialed operators are brought in as decision makers, but they were not there from the beginning and have no idea how irreplaceable the specific furniture and its arrangement over the years actually is.
They didn't go through the building process. They might not even be builders at all, even if given more than enough resources.
And it doesn't matter to them fundamentally since their personal best oportunities will be with a different future organization anyway. Even if they stay, the organization will be different before they are done. More like the average company you could read about in business school, and more understandable for students, with much less focus on the unique things that brought that particular company as far as it had beforehand.
If a company has reached a lofty place and the decision making changes that significantly for some reason, it is most likely that there will be some sinking to a significantly less lofty position. And in some unfamiliar direction downward.
The best possible person to run a particular company will be using company-specific approaches and drawing on talents that very few MBAs possess.
For those MBAs who do have such rare natural talent, it has been a characteristic since before university anyway so the degree is definitely not necessary.
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).
Just getting accepted to Harvard is the accomplishment. When have you ever heard someone say something along the lines of "Well this guy only got a 3.2 GPA at Harvard, I'm more impressed by the guy with a 3.9 from Michigan"
I'm definitely never going to work for a startup with an MBA in charge ever ever again. They enjoy negotiating and often assume that their employees do too, so it's like pulling teeth to get the smallest issues dealt with, much less big ones like getting reasonable pay without having to raise a stink first. It was stupid and counterproductive.
Even outside of startups, they can be detrimental to brands. After seeing what's happened to TravisCI, Sencha and QlikTech, I can only assume that the private equity firms that bought them are rife with MBAs. And the story is the same, buy the company, cut engineering, murder new development, choke support and off-short what survives and then eat off of the trapped subscribers. They don't create value, they don't make a better product, all they do is stagnant the company while eating off of the lowered OpEx.
Forsure, intel comes to mind when you say this. Focus on profits, milk 14nm, screw R&D for 10nm and appoint the CFO to CEO. Perfect combination for the current market where intel is dying and AMD ate their lunch.
Contrast that to AMD which has an engineer with a PHD in engineering from MIT as there CEO.
Somebody had to tell them. What a bunch of cry babies. These bean counters are ruinous to companies. And no, I don’t buy this simple narrative that MBAs are good for mature companies. Not at all. Look at companies like Boeing, ULA, Intel and others. Ruined by MBA guys. Why is AMD outperforming Intel today? Because they didn’t make an MBA person their CEO.
You need somebody in charge who understands the technology, product and customers well. Getting an outsider who only know how to look at spreadsheets and go to fancy dinners isn’t a receipt for success.
Boeing CEO is an ex-engineer. Boeing just made bad bets. A good ceo makes good bets. They have deep understanding of their product and the market. It’s a hard quality to acquire.
Elon is right. MBA doesn’t teach that. You have to learn it the hard way.
An engineer, or not, it is not what makes ones work cargo culting.
Not so few engineers have embraced the "big business" cargo cult as well.
One many things which completely offput me from "big tech" was seeing tech heads having to satisfy the earning for seeing people speak big, and mean little. A price for acceptance in that world of big business.
Back in 2012, I attended an event with Microsoft Venture sponsored for alumni by both the engineering and business schools at my University. I went hoping to meet cool technology people and exchange ideas. When I arrived and started talking to people it became clear that I was the only alum from the engineering school.
At that point, I had worked in Silicon Valley for 12 years and had several successful product developments under my belt. Yet I couldn’t understand a word of what the MBAs were saying. Their words would stream out and there was no content or substance whatsoever to anything they were saying. I left with the impression that very few had any idea what technology development was or how to bring a technology product to market.
When I mentioned that I was from the engineering school, few wanted to continue the conversation.
> more students than ever who are pursuing the graduate degree are interested in entrepreneurship and tech
And their degree is telling them to suggest that Tech companies laser-focus on a small portion of the market. I keep hearing it. There's excellent theory behind that reasoning: it's hard to execute and compete. Here's the reality: people are sick and tired of having 100 apps to check that all do one little thing.
I passionately disagree with Musk on many things, but I strongly agree with him here. Innovation is hard. If MBAs were really trying too innovate (I am sure there are some who do!), they would be figuring out how to broadly compete despite the challenges involved. Instead it's formulaic anti-innovation. It's possible, just look at Amazon.
I agree with the spirit of what you're saying here, but I think it's advice that needs some measure of backing assumptions. I think especially larger companies are failing at taking advantage of their much more reliable cash flows to take broad innovation risks. But for a smaller company or a company consuming investment capital with no positive cashflow at all, focus is the correct answer. Or maybe investment in innovation in correct proportion to resources is the right message here.
I've had a lot of bad experiences with what I think of as MBA types. Lots of lack of experience, naive about what they're managing and etc. They have often seemed heavily metric focused to the point that only the given metrics matter.
I've worked with managers and executives that I thought were great, but the folks who sort of step into a role seemingly because they have an MBA, it just seems like a recipe for just another layer of bureaucracy / hurdle. https://www.youtube.com/watch?v=NcoDV0dhWPA
I assume that I've had bad luck to some extent, but otherwise I'm really lost at what value an MBA should provide.
I think you've nailed the deficiency with regards to MBAs, as they often lack the domain expertise in many situations to be as effective as they might want to be.
However, often times the reason the MBA is dropped into that situation is the resident domain expertise owners inability to communicate effectively with senior managment via financial metrics/KPIs etc.
Worst I've seen was a fresh grad product manager who felt they needed to make Bold Executive Decisions and was really just fucking things up (since they didn't understand the product) and not listening to people...
Asking anyone this question who pursues the degree or has pursued the degree or insists on its value, often gives a non-answer. Like the following:
* it helps with networking.
* it helps with promotion.
* it helps with advancement in career.
* it helps with your resume.
Boiling it down, “I can show off better and tout an imaginary quality”.
If I was a person who was self employed or running my own company, how will an mba HELP ME SPECIFICALLY? No one can give me an answer.
I concluded to that it can’t help. It is like a dark personality trait. One that helps you relative to the people around you but doesn’t help the company, in the long run.
As an engineer, I think we need something else. Masters in engineering administration. Teaching engineers how to deal with bs that takes 5 years of career to figure out.
Not sure who you're talking to, but the answers to this are pretty straightforward. If you're only ever planning to work at or run small companies, an MBA is not for you. That's not what it was originally designed for, nor what it's meant for today regardless of what the program marketing says. If that's you, then instead you should take some community college or online classes in basic finance, accounting, statistics, and microeconomics, then spend some hands-on time learning how small business marketing and sales actually work in the real world.
Where an MBA will help you is if you do not have a business background, but want to either run a company that will one day be medium-large or work directly at a medium-large company. If that's you, a decent MBA program will teach you how large businesses actually operate - how they're structured, how they measure performance, how they interact with shareholders, how they make financial decisions, how they choose which market strategies to pursue, etc. - and how you can talk with and interact with other executives without being a naïve "engineering is the only thing that matters" idiot. Additionally, if a large company career path is for you, the network and credentials that come with a high-tier MBA tend to pay for themselves because outside of tech, hiring and job hopping don't depend on github profiles and whiteboard coding to get $250K+/year jobs.
> As an engineer, I think we need something else. Masters in engineering administration. Teaching engineers how to deal with bs that takes 5 years of career to figure out
The "Executive MBA" is trying to fill this void, I believe.
I'm a mid-career corp finance exec that has painstakingly resisted the inertial forces that want me to obtain an MBA. I do not see the value from an investment or knowledge perspective (I went to bschool for undergrad). At this point, my experience and existing network far outweighs what a MBA on my resume would provide however I am intrigued by the EMBA. My hesitation is pulling focus away from what's working for me.
There are some engineering management (quite the oxymoron...) degrees, see https://www.mempc.org/engineering-management-programs/ (full disclosure, I attended one such program also I did not slip onto the dark side!).
It's quite funny (or sad, depending on your point of view) that at the same time large companies are desperate to find technical leaders, yet the middle-management layer is filled with MBAs that prevent engineering managers from even existing. There's definitely a glass ceiling there.
Some companies have come up with a partial solution to this antagonistic need, they invented the "Product Manager" position (or "PM"), which is a kind of not-so-technical engineering position (who does not and cannot really "manage" anything)... and then filled those positions with technically inept MBAs.
Unfortunately, an MBA is a degree in nothing of substance (See Mintzberg), so technical acumen cannot come from the MBA per se.
"I've come to the conclusion that a degree I don't have and have never taken any classes in cannot help anyone and is a big negative for a person". Seems a very broad generalization, doesn't it?
I feel like the problems (to the extent there are problems—covid aside, a lot of things are going pretty well is my understanding) are more structural in nature. Right now, afaik the fed is pursuing a strategy of cheap capital, with the idea that the economy running hot will benefit workers by eventually increasing competition for workers. From some data I've seen, this was actually working before covid set in, with even the lowest wage workers beginning to see upticks in their wages.
However, I think a low-regulation, high-capital environment ends up favoring the "MBA-ization", because investors gain a lot of sway, without many backstops. For example, when unions are strong, they can drive employers to invest more in their workforces. If your employees are expensive, you're more inclined to spend money to improve their productivity. This happens when the minimum wage is increased as well. But without those incentives, companies instead spend their surplus on buybacks to keep investors happy. I think that low regulation on private equity may be another factor here. So it's not that just that MBAs have a particular way of viewing things that creates problems. It's that the economy is structured in a way that gives the stereotypical MBA point of view a lot of power.
This is kind of a straw-man argument. The reason MBA-zation is a thing is because companies are forced to permanently grow and cut costs to indulge investor expectations.
If you hire non-MBAs they will be tasked to do the same thing and you will have the same result.
Change your capital structure, stay private, take as little money from investors as possible and you'll no longer need MBAs to make every single quarter look like a success. However you may not grow as fast as you like.
If you need large capital inflows on a regular basis, you have to satisfy the people that gave it to you.
Hi, I’m a bean counter. We don’t cut your budgets. We keep the system going when people interact with purchasing equip,ent, getting you paid, processing your orders internally and externally. The ones cutting out your company swag and free coffee are your ceo, cfo and finance managers. The controller is often told to find a way to save money or fire people for the company’s shareholder fiduciary responsibilities. Your board members drain the organization of its resources and go unchecked.
The way unemployment is measured both practically and in the abstract (a PhD working as a cleaner is still employed) too subtle for a blanket dismissal like that.
No doubt it is complicated. Yet I was replying to a claim that there is not enough work, presented with no evidence or argument, that contradicts the most basic employment statistic. I think the burden is on the original claim.
Not really - I think you missed the point of the original claim, it wasn't meant to be interpreted literally. In this case, "not enough work" does not translate to "not enough jobs". It translates to tons of useless jobs that employ people to count beans and create powerpoint presentations.
Perhaps the original claim would've been better phrased as "not enough real/useful/impactful work".
The MBA-ization of America is a risk management strategy to avoid failure-by-bad-management among small companies that get big enough to receive outside investment. It has probably saved a lot of companies from cratering early.
Musk is correct that it also vacuumed up creativity and reduced total entrepreneurship as a result, Stanford Business School professor opinions notwithstanding.
This is a big impact. It is much easier to get a highly technical job at one of dozens of entrepreneurial companies that are bouncing along. The appeal of those jobs makes it less urgent to go do your passion project and succeed.
Is this situation definitely bad today? Does it point to a bad future?
I, for one, sometimes miss the knowledge that an MBA might give me. I'm a technical CTO and I have some trouble with long term planning, budget, managing people, etc.
I report to a CTO and manage a large team. You probably need to delegate your planning and budget activities and serve as mostly an approver for those things.
Managing people is hard and it’s unlikely you will learn how to manage people from an MBA. Managing people is an experience thing.
If you’re bad at managing people, my advice is that you hire people who are good a managing people and have those people report to you. At the same time, you probably want to minimize your number of directs.
You might even consider keeping your org small and have a VP of Engineering report into someone else on the C-Staff for all things execution related.
This will allow you to focus on your strengths which hopefully are technology roadmap/vision and selling that vision to customers.
I agree that this is a huge weakness of some MBA programs. I think this is because a lot of the curriculum comes from academics, people with a consulting background, and people with a finance background. For many of those careers managing lots of people is not a number one priority.
When I got my MBA there was a case study(it's like a lesson chapter) I read about a top performer who didn't get along with a team. We never got to that one and it probably wasn't a favorite of the professor. But we did do a lot of cases about reallocating assets across a conglomerate or relaunching a fifty year old product or what have you. In retrospect, any insight in how to handle that troublesome high performer would have been really helpful, particularly at the start of my career.
Many CxO's have same problems. IT is hard to plan. Budgets are moving targets. I know this thread is about the opposite, but this is where I'd recommend someone at your level not try to become an expert budgeter. Find/hire a partner who is even if it's just on a CFO advisory level (can be a more junior person if it's just budgeting, planning, etc; CFO level if more strategic).
Managing people is more of a craft. Approach it the way you would learn to build furniture as a hobby. Gradually over time through practice and experimentation acquiring tools for your shop along the way.
> I, for one, sometimes miss the knowledge that an MBA might give me. I'm a technical CTO and I have some trouble with long term planning, budget, managing people, etc.
Is it your first time? If so, you would probably have similar growing pains MBA or not. Being a business conversant technical CTO is the kind of thing you only get good at by doing it.
I started doing an MBA at a top Australian university. I won the top student award in digital marketing.
I found that I was spending most of my time carrying other students rather than actually learning something beyond what I could read in a book or already knew, at least at the conceptual level.
And believe me when I say I’m not smart in an academic sense.
Family issues came up and with a waning interest I dropped out while getting enough points for a Grad Cert.
Fast forward a decade later and I’ve filed a patent pending in AI and another one in video messaging.
The MBA was for the most part a waste of time, money and energy.
I really didn’t learn much, except to recognise getting an MBA is more to do with ones ability to persevere through an incredibly dry and uninteresting range of subjects for many years at a time.
Save your money, and spend it on something more useful. $40k gets you a lot of azure/aws/gcp credits plus lifetime accounts of Lynda.com training and pretty much any other online course aggregator you care to imagine.
He is more MBA than engineer at this point. Just because he doesn't have the letters doesn't mean he isn't deploying the knowledge and approach of an MBA.
His companies have successfully deployed plenty of MBA-style strategies and their "creative" financing/PR indicates this. I'm not disagreeing with the premise of his argument (I actually agree to an extent) but using his public voice to downplay the expertise of a large group of people is... odd. Fundamentally, his businesses have plenty of weak spots and maybe criticizing the credentials of those who criticize his businesses is a valid strategy?
Honestly, the problem is that most people who get an MBA seem to do it just so they can get a promotion and more money. Especially at larger companies, the vast majority of these MBAs will likely never be in a position with enough authority to truly innovate or use most of the skills. I feel like it's just a prerequisite for climbing the corporate ladder.
The most significant thing he said in this interview was probably on the regulatory burden that California businesses have to deal with. He compared regulatory creep to a frog boiling slowly in water. He also indicated his 2 companies Tesla and SpaceX are the last - automotive and aerospace companies in California, a state that was once a leader.
> He also indicated his 2 companies Tesla and SpaceX are the last - automotive and aerospace companies in California, a state that was once a leader.
Except it isn't true. Other companies still make rockets in SoCal. For example Areojet Rocketdyne is still headquartered in El Segundo (next to LAX). They made the main engine for the Space Shuttle and are currently still making it for the upcoming SLS.
While you are correct, Elon's point is about "the writing on the wall" and in that, he's on point. Other than the small (OK, small-ish, given Virgin Orbit) startups, most aerospace companies are leaving CA or not bothering to incorporate there.
So much modern aerospace technology historically comes from SoCal, and yet CA as a state doesn't seem to care about hanging on to world-changing industries like it.
Your example about Aerojet Rocketdyne is telling. They are contracting - I believe the Aerojet facilities in Sacramento are being divested if that's not already done. Boeing is divesting most of its Huntington Beach campus, and Rockwell in Downey is long-gone. A lot of Space Shuttle Main Engine/RS-25 work is done at their Stennis facilities or in Huntsville.
Areojet Rocketdyne also gets 100s of million per engine because they live of massive SLS pork. They will produce a very small number of engines. Comparing that to what SpaceX is doing is a bit ridiculous.
Its not the amount of money I'm complaining about but the amount of money compared to the services rendered. SpaceX has an amazing track record in terms of that.
The pork of the SLS program and the RS-25 program has been well document.
Do you have a cite for them making rockets (not just engines) in CA? I glanced at their 10-K from last year and they talk about moving some of their production from CA to AR and VA.
Weird thing for him to complaint about "regulations", considering said regulations helped kick start the electric car industry and saved his car company. The 7.5k fed credit, the 2500 CA tax credit, mandated charging stations, solar subsidies, HOV sticker, upcoming mpg mandate - all of this was necessary to support Tesla. I literally bought electric for the HOV sticker that comes with it. I feel like I am losing respect for Elon everyday, even though I own two Teslas.
> He also indicated his 2 companies Tesla and SpaceX are the last - automotive and aerospace companies in California, a state that was once a leader.
How much of that is because of regulatory creep, and how much is because California has brought in even-more-valuable industries that have cranked up the cost structure, in turn pushing out manufacturing industry?
It is easy to moan about been counting when you are riding a wave of intellectual property rights that protect your business (patents on tesla/spaceX tech). Try selling apples. Try manufacturing nails. Try opening a family restaurant. Most businesses live and die in tiny margins. Been counting keeps them alive.
Musk is such a frustrating person because he says important things like this and he should have the credibility to make it meaningful, but he's shot his mouth off so many times that half the world will say "lol, whatever Elon". Like remember when he called the diver in the Thai cave rescue a pedophile?
Here’s the rub. I’m an MBA. But I’m primarily a programmer. I run my own firm, so some ‘MBA’ skills do get used. But you don’t need an MBA to run a business. Its not the degree that’s the problem. It’s the focus on the short term that’s toxic.
In the tech industry it's become common that companies like Facebook pay an insane amount of money to starve the competition out of talent. It's very bad for consumers and innovation.
So maybe not just MBAs, but who knows maybe MBAs came up with that plan.
Looking at AMZN beyond Bezos (who, let's not forget, worked in finance before he founded AMZN): Jassy went to HBS and JAW to Sloan. Since they are both 'CEOs', feel like they need to be taken into account, similar to how it's correct to regard Sandberg as the one who 'runs' FB on a day to day basis.
Thus amongst FAANG its only N which is not 'run' by an MBA. Sarantos, who runs content, is a college dropout. Yes, Hastings does have a MSCS from Stanford- but he was also a liberal arts undergrad (Bowdoin) and a Peace Corps volunteer. Of all of them, he's got the most interesting story to me.
This isn't to say MBA's haven't screwed things up- of course they have. But so have engineers. Apparently the idea of engineers building cool tech with no use case has never occurred to anyone else here.
The 'M.B.A.-ization' of the corporate west -- it's not just the U.S. where this is happening -- is in some ways a specific example of a more general problem in which professions that just don't need robust credentialism aspired to do just that. They wanted to seem as important as the medical or engineering disciplines were. There are very valid reasons we don't just let anyone design a bridge or prescribe medicine. We make people who aspire to do that jump through a bunch of hoops to protect all of society from the downside risk that would follow if we didn't do this. In return, society confers on these people prestigious credentials so only they can perform medical duties and professional engineering tasks.
Universities just so happened to be a practically convenient location for medical doctors and professional engineers to get their education. But universities were never supposed to be general vocational learning institutions.
Business schools are just one department in a long line who wanted to push the notion that people need to jump through their hoops to learn a particular discipline well enough to perform a role professionally. Nothing could be further from the truth and in pushing this myth, they've helped contribute to systemic fault lines that could ultimately undermine western society and democracy itself. They've heavily indebted learning that people were traditionally paid to do via apprenticeship. They have invented credentials for disciplines which don't need them and offer no financial path to ever provide a return on the learning investment. They've promoted the idea that useful learning can only happen within their walls and under their syllabus.
But I'm off on a tangent. Business schools specifically have essentially been cosplaying as something they are not: schools teaching a rigourous applied science. As Medical School is to Biology, Math and Chemistry, Business School is to Economics. But economics as a social science had just not advanced far enough along to provide meaningful insight. So business schools did the next best thing which was to create the illusion of an advanced science by helping backfill, promote, and apply bullshit economic theory. This went hand-in-hand with a conscious effort to create prestige like the Nobel Memorial Prize in Economic Science.
But the illusion is starting to all fall apart under the scrutiny of disastrous political policies, gutted zombie corporations, and a broken social contract, all under their direct sphere of influence. The irony is that in aspiring to have the same prestige as doctors and engineers, business schools have actually done far more damage to society, the environment, and our future than they could have hoped to imagine if they went back to their traditional proprietary school roots.
Business schools are very worried that society will realize that being a smart autodidact is a better recipe for success in business than paying six figures to earn an M.B.A..
Is our ultimate goal to do things or to move money around? For the past ~50 years we've been optimizing for moving money around as the most important activity.
Looks more like design-by-committee to me e.g. committee decided "we need more uniformity across our logos" and then some poor designer gets landed with the task of making that happen.
From what I can pick, Javier Soltero, ex-Microsoft, arrived at Google's G Suite in last year's October. [0] Then the pandemic hits and it gives reason to Google's Creative Director Margaret Cypher to "reinvigorate the design [...] that's remained mostly untouched since its arrival". [1]
>“The individual apps serve as expressions of Workspace capabilities... but they also need to be individually awesome,” Soltero says.
Which to me looks like a failed endeavour, because it obviously lost individuality and just seem to enforce the idea of the umbrella that Google Workspace encompasses, and he now leads.
>“This is the moment in which we break free from defining the structure and the role of our offerings in terms that were invented by somebody else in a very different era,” says Javier Soltero, Google’s vice president and general manager of G Suite and now Workspace
And that's how you say that it "changed because I arrived and yes, I'm asserting dominance."
Maybe it is just Oklahoma and New Mexico, but most of the MBAs I work with have engineering or other technical backgrounds. Endless MBA bashing is like making fun of liberal arts students half worth a damn do both anyways.
haha a downvote. Seriously been on here since 2009 getting tired of the thought police. At least responded with some kind of point then the normal business school bashing that happens on this site.
Musk is managing his companies as pure hype-machines. This can only successfully work for a couple companies that operates as cult.
If there is one thing that made Tesla successful, is the charismatic leader personality of Musk. Tesla is only a success on the stock market. They are not profitable, and the coming years will be the turning point for EVs. I don't see them coming out ahead.
Tesla and SpaceX make things. Calling them “hype machines” when there are countless tech companies that have literally ran on hype and have no product to show for it is doing a massive disservice to what Musk has done.
Have you seen the recent launch? A ship the size of the Soyuz rocket, built literally in a shed in the desert, which flies to 25km, turns off the engines, glides to the landing site -- then performs a 90-degree turn, in the air, in a second.
So Mr. Musk doesn't have swarms of top MBAs working in upper echelons of Management in each and every one of his Companies?
I am sure Mr. Musk and Mark Zuckerberg and Steve Jobs can succeed without having MBAs but I would believe that they heavily rely on MBAs to actually run the financial matters of their respective Companies.
But alas, who am I to differ Elon Musk - he is the Thomas Edison + Henry Ford of our era.
Innovation is learned. When u go to school, u r mostly rated on giving the single correct answer. This is fine. But if you get a chance to go into graduate studies (Ph.D.), u would see some good innovators there, and learn how to innovate. I am sure there are other life conditions that also teach you how to innovate. But I agree, by comparisons with the product managers in the enterprise where I work, people are scared of innovations and prefer the sure thing instead.
Innovation is learned, but it’s learned through a diverse set of experiences (which most incoming PhD students lack). From my experience working in research, a PhD primarily teaches you to communicate simple ideas in innovative sounding language. In that sense, it’s closer to sales than invention.
Of course there are innovative people in a research program but far fewer than an undergrad program in my opinion. A PhD only gives you the opportunity to innovate on a broader scale, which is why there is more visibility when you succeed.
The last thing I’ll say is that it is challenging to be truly innovative in academia due to the peer review process. Especially in certain fields today, reviewers resort to certain heuristics right pattern match for credibility rather than take time to assess the inventiveness of the idea. It is a very noisy process and truly innovative papers don’t get published that easily.
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 founders in companies he'd later buy actually had to get an education, he just used wealth to stand on their shoulders.
> 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?
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.
You’re really grasping at straws here. Even if the articles you linked to are true, that means Elon raised 90% of the initial $200k from outside his family. $20k from his dad is hardly what I would consider wealth privelage, especially after considering what Elon has gone to achieve
So much nonsense, that gets constantly repeated. Its sad how this nonsense gets repeated even by people on HN.
His father was made money from being an engineer. With that money he bought a small stake in a mine, making it out that they were some billionair mine owners is total nonsesne. However Elon had very bad relationship with his father and his father did not want him to go to Canada/US and refused to pay for his education there.
So if you want to call everybody that is not born into abject poverty 'not self made' that is of course simply a expression of your (appallingly bad) politics, but its not how the rest of the world uses that phrase.
PayPal was merger between two companies doing the same thing.
Tesla was not a 'growing company', Tesla was 2 guys who had a business plan written on a piece of paper and nothing else, they were certainty not growing. Elon and JB both wanted to found a company and somebody told them that these two were also working on the same thing. So Elon agree to get together with them rather then start a separate company.
Elon financed Tesla basically by himself, without him Tesla would have never existed and it would certainty not be nearly what it is now. There is a reason that all 5, were officially named founders, and not just the 2 guys who came up with the name Tesla.
SpaceX, Boring Company, Neurolink and Zip2 were all created by Musk.
I have genuinely struggled to find this information.
* How wealthy was Elon before starting his own products ?
* How much of this investment in various companies was non-bootstrapped / not momentum from a past sale ?
________
I feel that many people born rich do not wider idea behind Henry Ford's famous quote:
" don't ask me how I made my first million. "
It highlights the inbuilt privilege that those born rich/stable have, and the luck/shady-ness required to reach that 1st point. Would Musk have been able to do any of the things he does if zip2 wasn't such a huge success. Would have been able to start anything if he didn't have the financial stability due to being born rich or the access granted by a network at UPenn.
I'd say the goalpost has been moved to the point of FIRE. A silicon valley employee won't be able to take any of the risks/efforts needed to summon lady luck. If you're spending 60 hrs/week at work, have family to support or simply a bad visa situation, then good luck taking your 1st leap.
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.
This is an article/thread discussing his anti-education take, when he himself (in spite of having a first class education) doesn't feel like he gained from it, and suggesting others don't either (or even that education is harmful).
His wealth and privilege is absolutely topical because he was able to bypass certain checks due to his family is.
I recall something about a degree not being a requirement to be hired by Tesla, but I’m assuming anytime this sort of headline makes the news (supposedly the federal government did something similar recently) they almost exclusively mean “for software developers”. I would be incredibly shocked if Musk was hiring self taught, say... material engineers or any other “traditional” engineer.
I’m not really a fan of credentialism, especially when it can be expensive and painful as hell to obtain them, but I don’t put much stock into most “anti education” type stuff.
Self-taught engineers of the old fashioned sort typically is a fancy way of saying really good with CAD & some intuition about what will fall apart. Credentials are more important for design engineers compared to software engineers.
elon grew up not rich at all and his mother and his father had an abusive relationship, difference is elon at 13 sold a video game(https://blastar-1984.appspot.com/) to get pubished by atari...at 13.
with a mediocre education, you aint competing with that.
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!", chances are that people like Tom Mueller [0] or Gwynne Shotwell [1] will choose the latter.
[0] https://en.wikipedia.org/wiki/Tom_Mueller
[1] https://en.wikipedia.org/wiki/Gwynne_Shotwell