MBAs and Silicon Valley
Earning an MBA is no easy task: With so much time and money invested in a business education, the last thing you need to hear is that your degree isn’t worth the effort.
And yet, just a few years ago, many MBAs hoping to enter the tech industry heard just that.
MBAs and Silicon Valley: Loveless Beginnings
The question of whether or not an MBA education is “worth it” is not just a conflict that undergraduates struggle with as they contemplate their future. In 2012, an article from Business Insider posed the question directly and concluded that the answer was “no.” In particular, the article examined how an MBA education would fit into the world of tech startups, especially inside the startup mecca of Silicon Valley.
The conclusion was less than favorable, with concerns not entirely unfounded: Young professionals looking to enter the startup world may be forced to take a higher paying job at a more established company in order to pay off their student debt. Then, as financial obligations increase over time, transitioning into the startup world may seem financially unfeasible for other reasons.
Other concerns include the negative perception of MBAs by higher-ups in Silicon Valley who perceive MBA graduates to be overpaid, entitled and lacking a professional network upon graduation. For example, Facebook COO Cheryl Sandberg, a graduate of Harvard Business School, famously commented that “MBAs are not necessary at Facebook and I don’t believe they are important for working in the tech industry.”
It’s clear that there’s no love lost between certain major figures in Silicon Valley and MBAs, and one might imagine this signals an invisible wall for students with graduate degrees seeking to enter a tech startup. So why are the numbers of MBAs entering Silicon Valley on the rise?
The Surprising Rise of MBAs in Silicon Valley
Despite comments like Sandberg’s, MBAs are being hired into tech startups at an ever-rising rate: roughly 16 percent of graduating MBAs this year reported receiving offers from such companies, making it the third-highest industry in terms of the number of MBAs hired—more than the financial industry.
Even though many notable startup founders possess no higher degree at all, a closer look at the industry finds that the leaders of 24 of 67 companies on the S&P 500’s Information Technology Sector Index have MBA degrees or the equivalent. Nevertheless, the negative characterization of an MBA in the tech sphere could have a worrisome impact, such as decreased enrollment in MBA programs.
Can’t Everybody Just Get Along?
Even if tech leaders aren’t happy with the truth, the surge in hiring MBAs in Silicon Valley is a positive step forward—one from which both sides can benefit. While the benefits for an MBA seem apparent, it is clear that tech companies haven’t fully accepted why hiring MBAs is so important. Despite the “rough around the edges” feel that makes startup brands unique, the skills and training of MBAs can be irreplaceable when it comes to marketing and expanding the organization. In our fast-paced world with so many ways to connect with consumers, having someone on the team who understands the science and skill behind marketing is a tremendous asset.
Even more, MBAs can be incredibly important throughout the growth of a startup. If a company is lucky, a startup can go quickly from between one and five employees to more than 100. An MBA has the skills to help a company through this transition, establishing much-needed procedures and standards and leaving the leaders to focus on ideas.
While the business community is constantly changing and adapting, the relationship between MBAs and Silicon Valley is an important one, with benefits on both sides. And the stats don’t lie—MBAs are being hired by tech companies in ever greater numbers, regardless of the occasional anti-MBA rhetoric making headlines.
About the Author
Alanna Shaffer
Staff Writer, covering MetroMBA's news beat for Atlanta, Houston, and Dallas.
