“When valuing a startup, add $500k for every engineer, and subtract $250k for every MBA.”
-Aaron Patzer, Founder/CEO Mint.com
Yikes. If you’re an MBA looking to get into the world of startups (especially if you’re looking west), you’d best understand the history.
MBAs of the late ‘90s flocked to Silicon Valley, with generalist skillsets and massive egos in tow. When the dotcom bubble burst, many founders were left holding the bag while the MBAs left for more established companies. The hangover from the 90’s was enough to sully the name of the MBA, especially in the Valley, for years. PayPal cofounder Peter Thiel even remarked, “Never hire an MBA; they will ruin your company.” Ouch.
But the times, they are a-changin’. MBA curricula increasingly emphasize hard skills like data science, quantitative decision-making, and coding. And the startups are growing up too – with almost 200 unicorns (private companies valued at +$1B) in the US, MBAs are getting hired by the hundreds for roles in product management, business development, and operations.
Okay, duh – it’s mostly in tech.
Maybe a graph wasn’t necessary. But the point is, tech seems to have wised up to the fact that MBAs can – and do – help drive growth and (dare we say the p word?) profitability in the technology sector.
Significantly more late-stage companies find use for MBA talent
Makes sense, right? Late-stage (Series C and beyond) firms have the greatest need for business talent, since they’re focused on growth, profitability, and (if you’re not Uber) a path to IPO. For the earlier-stage companies, graduating MBAs take director-level titles or above 80% of the time.
Most MBAs hired for “traditional”, more generalist functions
Business Development – that pesky catch-all category often filled with not-quite-sales, not-quite-strategy roles with maybe some M&A thrown in – takes the top spot in a fragmented spread of post-MBA roles. Some job titles include Director of Partnerships and Business Development Associate. Marketing (PMMs, Digital Marketing) and Ops (Logistics Manager, Business Operations Associate) closely follow.
More technical jobs like Data Science, Product Management, and Engineering make up 30% of all hires
Product management has become the belle of the MBA ball in tech, especially for those with technical backgrounds who want to attain more strategic roles post-graduation.
What Does This Mean for Me?
No two startup experiences are the same. Overall, MBAs headed to startups after graduation report 12% higher overall satisfaction and 10% better ratings on the impact of their work. They pull 53-hour workweeks, which sits just in line with the average graduating MBA. Says one second-year student taking a role in a seed-stage company, “We work hard, but at the end of the day I’m getting experience in dog years…It’s a crazy life but worth it to me.”
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