Why we have never hired an MBA

I’m a founder at GoCardless, a London based start-up with 15 employees. I was driven to write this post by a jobs fair we recently attended, and the number of deluded MBAs / ex-consultants (NB. I and my co-founders are all ex-consultants) who came to talk to us – all under the same terrible misconception.

“I want to be a Product Manager at GoCardless”

Nine out of ten of those guys (not all guys by the way) came over, and, after a well-rehearsed handshake and polite introduction, began to tell me how much they would love a role as a Product Manager at GoCardless. Now the fact that you want to work at my company is a huge compliment, thank you, but hang on, I didn’t see a job ad on our site for a product manager. Come to think of it, what the hell would a product manager do at an early stage startup like GoCardless? We have got 15 employees. As one of our Biz Dev guys, Nabeel, said at the weekend: “Do they seriously think that they are going to rock up on day 1, be given a team of developers and let loose on the product?”

“So I asked them”

I was initially a little taken aback and would outline how GoCardless worked and the kind of roles we had and they seemed a little shocked, like it wasn’t quite what they were expecting. So I started asking them: “What do you think a product management role at GoCardless would entail?”. Most responses took a similar theme: “I can devise a product strategy to help you grow your company over the coming years”. Wtf? Would you like a corner office with that?

Frankly, this is crazy talk. How can you possibly think that anyone in their right mind is going to hire you, Joe Schmo, from semi-respectable business school A, with all of six case studies under your belt to define the product strategy for their startup? That is simply not how early stage startups work.

“So how do early stage startups work?”

More so than later on, early stage startups need to be driven by a collection of people who get shit done. If they are not, then nothing will happen and the company will die. The kind of people who work in startups early on, in whatever role, are there because they want to take ownership of and see impact from their work. When you are that small, everyone has to have the product manager mentality. But they also have to be able to get shit done.

This fits with my personal belief that early stage companies work best when they have a flat structure. But even in a situation where that is not the case (or that I am wrong), you would expect management of any type, product or otherwise, to come from the founders/management team at this stage in the company’s life. If you have a need for a distinct product management function at this time, I would be extremely worried about either the kind of management team that is in place, or the kind of people the company is hiring; in fact, probably both.

“Asking a startup to hire you as a product manager is basically asking for a call-up to the management team”

Expecting to become a product manager at a large corporate, or even a later stage startup like Twitter or Google, is a great option for an MBA, particularly one with a semi-technical background. It also makes a lot of sense for the company. However, asking a startup to hire you as a product manager is basically asking for a call-up to the management team. Unless you have exceptional experience, skills or connections, this is delusional.

Now I am not trying to argue that there is no place for MBAs, or that no MBA has a clue about startups – both of those are demonstrably untrue. Also having an MBA itself is clearly not the problem. So what is?

The problem is that a large proportion of MBAs ambitions seem to have moved away from entering a large corporate to becoming part of the burgeoning startup scene, and this shift has not been reflected in the course content. Most MBAs will offer whole modules on entrepreneurship and startups, yet they somehow fail to communicate the most basic understanding of what it takes to start a company to their students. (I acknowledge isolated exceptions such as Peter Thiel’s Stanford lecture series.)

“Biz Dev is a clever name for dirty work”

As a result there is a large number of people qualifying from business schools in London (and probably in most other places outside SF) that do not understand the fundamental rule of startups: ideas & strategies are worthless, execution is everything. If your whole role is to come up with ideas & strategies for the product but you can’t make them happen yourself, and have a very limited understanding of how you could, you are pointless. Trust me, as a non-technical co-founder, I know.

This is particularly true of non-technical students who seem to think that working in a startup is all about coming up with high-level strategies, negotiating big sales deal and raising multi-million dollar investment rounds. It’s not. As this post from Christopher Steiner says: “Biz Dev is a clever name for dirty work”.

“Whenever I see a CV with an MBA on it, I view it as a blackmark”

So many MBAs come out of b-school with this mindset that I have now reached the point where I see having an MBA on your CV as a blackmark. And it’s not just me. If you have one and you’re serious about applying to a startup, I would explain in your intro email why you’re not like most other MBAs and you actually understand what it takes to be successful at a startup.

Don’t fancy getting your hands dirty? Then don’t join an early stage startup. And whatever you do, don’t start one: I spend at least 50% of my time doing crap that I wouldn’t ask anyone else in the company to do. Like I said earlier, you can probably snag a product management role at a corporate or even a later stage startup and do a great job there.

“If you have read all that and you still want to join an early stage startup, then read on”

So what can you do to make yourself better equipped for working at, and more attractive to, a startup? There’s no single answer, but the kind of things that distinguish applicants (and eventual employees) at GoCardless are:

(1) embracing new technologies and learning to code – even if you will never be a hacker, a basic understanding will deliver a step-change in your effectiveness;

(2) a proven ability to get shit done – start and keep up a club, blog (hypocritical I know given my recent hiatus!) or other small enterprise; or

(3) knowledge and experience of working at a startup – the only way to really learn about doing a startup is by working at or starting one yourself. (The next best thing is to be well-read on the space and with the number of great resources out there you really have no excuse.)

We are currently hiring for pretty much everything – except product managers. If you’re interested in working with smart people on hard problems, check out our jobs page and get in touch. You might even be the first MBA that we hire!

27 Comments

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27 responses to “Why we have never hired an MBA

  1. Pingback: Why we have never hired anyone with an MBA | My Daily Feeds

  2. Excellent post, and very true. This may sound hypocritical since I am currently working for an early-stage start-up after completing my MBA, but most students passing out with an MBA have no freaking idea what it is like working in one.
    As an alumnus, I get so many calls from current students in my university asking how to enter a start-up after doing their MBA, and my honest advice is – don’t!. Because most that I have spoken to do not have the attitude (not aptitude) to survive (or even contribute) in such an environment.
    Talking about Product Management, nobody better than the founder(s) can do the job better. Everyone else has to find a valuable way to contribute in whatever way possible – roles and titles are least important, unless you have been hired for something specific such as engineers (and MBA’s are not specific, they are general). So it is possible that you do not see a balance sheet for one whole year, something you have spent one whole year before learning the skills. And you have to be comfortable with that scenario.

    And I was there at the London Silicon Milkroundabout this weekend, but never came to your stall (because I knew you are not looking for a Product Manager, and well I was not looking for a job). But would have been nice to have a chat :)

    • Sorry, I forgot to include this link that I read a few days back and something that fits perfectly well with your post:

      http://www.linkedin.com/today/post/article/20121104000733-7298-it-s-fine-to-get-an-mba-but-don-t-be-an-mba

    • Thank you Matt, thank you! I think you hit perfectly into the point that MBA Programs prepare students for corporate jobs, not startups. I lived it while I was doing my MBA and creating my second startup. Also believe that your concepts apply to corporate employees trying to jump the boat to startups. In a Startup, resources are always scarce and multidisciplinary teams are always required. Corporate employees are used to have people and resources for everything and when in a startup you have to help in many ways. I build our office network several years ago in my first startup and deposited checks because the bank was near my commute. A day would go like this: Sold a contract, deposited a check on my way back to the office, once there I started coding the project I just sold. Next day I would continue coding and giving myself 2 hours to do more calls to sell one more contract and after the two hours I would call the client to see if the initial payment of the contract sold yesterday was ready to be picked up. Guess who picked up the check?

      Now at Pricetaghq.com we also do everything as well, although we do it smartly. And there is where a successful employee will shine. “Doing the right things while doing the things right”. Focusing the energy that will make the startup successful.

  3. MBAGRAD

    I’m actually interested in working for GoCardless. Any product manager positions I can apply to?

  4. hahahahaha. I have an MBA, and I still agree :). Thanks for writing this! Here’s to gettin’ s**t done!

  5. JeffTdx

    This article points out the reasons why you need to be picky in who you hire, no matter what their background is, at any startup. If you are non-technical, MBA or no MBA, you better be ready to hustle. If you do have an MBA, all the better, and it means that while you hustle you should also be helping out with a marketing strategy, customer acquisition, financial modeling, creating pitch decks, finding/schmoozing/courting investors, etc. I don’t know that it makes sense to blanket statement ‘I will never hire an MBA’, just don’t hire any wearing white shoes.

  6. Dave

    I don’t have any MBA shit, I am only interested in a Franchisee position for the EU continent. Think BIG Think the World.

  7. Beezzee

    Do you have any other products besides accept-direct-debit? A product manager for one-product-start up is … CEO. Am I wrong?

  8. Agree – most of the time… if I hear the word “BD” or “Strategy” come from an MBA candidate, they’re out. If they say “market rate”, they’re out. If they’re smart and willing to do anything, they’re in. (Caveat – I have my MBA)

  9. Guy who worked in a 15 employee startup for 3 years

    Why a MBA would want to work in a 15 employees startup? The MBA programmes are specifically designed for executives. So the question must not be: Why we have never hired an MBA, it must be: Why the hell a MBA is sending you a CV.

    The article only proofs that you treat your candidates with very few respect. When selecting a candidate, you only need to assert the background of the candidate and if he is able to perform the tasks that you need to do. But if you expect an Aladino genius that enters by the door and knows what to do and what not to do. I have to say it: Take it easy.

  10. I fully agree that MBA does not prepare you at all to be a product manager in a startup. I will also claim that MBA does not prepare you to be a product manager in a bigger company, but that’s a different story.

    That said, I’m surprised that a 15 employees startup does not have a product manager. A startup product person is usually focused on data and UI, and gets a lot of important s**t done. Typical responsibilities include flows, conversion optimization, quantitative and qualitative analysis (analysis of how users are using the product and users feedback) and leveraging opportunities whether those are at the OS level, a marketing channel or anything else.

    Such a person will not necessarily manage the team, but will serve as an individual contributor. There are very few engineers and UI designers that can cover for all of these responsibilities.

    I’m curious why you think that such a role is not critical for a startup success.

  11. Barbara

    I think your article could have used a little editing. You repeat yourself often! I find your attitude towards learned people disgusting! If a MBA shines upon your dingy, low paying door step then PERHAPS it’s because they really believe in your product and want to help you grow from the one city, one country widgit that you are and into a fucking household name!Small minded, mean, ignorant and uneducated people like you who surround themselves with others who are smarter, only to suck them dry and belittle their accomplishments are DOOMED to remain just that, small, common and yesterdays  news. a hobby. It’s not meant to threaten ignorant uneducated loud mouths like you!All that talk and you didn’t USSR one word to describe what your start up is.  Who are you and why should anybody want to work for you our use this unknown product  that you are so proud of, but certainly could not have developed alone?Miss MBAand PROUD of it

  12. Alex

    Why you no hire people with a macbook air??!

  13. Agree that a startup with only one product does not need anyone other than founders to strategize. But your article is a gross generalization on MBAs. As a current MBA student having previously worked at early stage startup as engineer (and everything else) to get shit done, and at the big superstar dot-com and at a huge consumer electronic company in the mentioned roles, I disagree on the generalization you have made.

    Probably you’ve seen such MBAs mostly because, as you have mentioned, they would have tried to get a job at the big corporates and on not succeeding, would have looked for lesser known startups. But why you wouldn’t hire such applicants, makes sense.

  14. Marcus

    The first rule of MBA school is … You must tell everyone that you have an MBA. The second rule of MBA school is … You must tell everyone that you have an MBA. The third rule of MBA school is … You get the picture.

    In my experience by far the most irritating thing about people with MBAs is the fact that they can’t help boring you to death with tedious tales about their sodding MBAs.

    In theory I have nothing against people with MBAs. After all it is just a qualification / certification and it could even mean that they learned something useful – a bit like any other kind of education such as a computer science degree.

    In practice I instantly feel put off as soon as I see those 3 dreaded letters anywhere apart from the education section on said person’s Linkedin or CV, or worst of all … out of their mouth!

    This is the reason there are so many articles like this one which specifically (and IMHO rightly) single this group of people out for criticism.

  15. chickerino

    The first rule of MBA school is … You must tell everyone that you have an MBA. The second rule of MBA school is … You must tell everyone that you have an MBA. The third rule of MBA school is … You get the picture.

    In my experience by far the most irritating thing about people with MBAs is the fact that they can’t help boring you to death with tedious tales about their sodding MBAs.

    In theory I have nothing against people with MBAs. After all it is just a qualification / certification and it could even mean that they learned something useful – a bit like any other kind of education such as a computer science degree.

    In practice I instantly feel put off as soon as I see those 3 dreaded letters anywhere apart from the education section on said person’s Linkedin or CV, or worst of all … out of their mouth!

    This is the reason there are so many articles like this one which specifically (and IMHO rightly) single this group of people out for criticism.

  16. Stu

    I’m really confused – what does basketball have to do with startups .. is this article a satire that I don’t get ?

  17. BigBalli

    this is the age old debate that school have to teach how to think not what to think. I have an MBA and I think it’s priceless when managing myself, my brand and also talking to clients.
    Like any tool, then you need to adapt it to the case at hand and obviously a startup is not a common MBA class case study scenario.

  18. BigBalli

    Reblogged this on Giacomo Balli and commented:
    This is the age old debate that school have to teach how to think not what to think. I have an MBA and I think it’s priceless when managing myself, my brand and also talking to clients.
    Like any tool, then you need to adapt it to the case at hand and obviously a startup is not a common MBA class case study scenario.

  19. MBA Schools have diverse groups of students. Some make excellent entrepreneurs and some don’t. Don’t mistake the ones who are just looking for a job with those who will make excellent entrepreneurs and will utilize what they learned in their MBA’s to complete gaps that are missing in your startup.

    • BigBalli

      Gil: that is very true, I believe the goal of the article is to generalise to convey a common concept. Obviously not all MBA students are the same… me included! :)

  20. Hey Matt, this is SO true and I love your expression ‘get shit done’. As an MBA networking website for MBAs and b-schools (AND a start-up) we often experience this attitude – a lot of the time we have people applying to help us with our ‘strategy’, of course expecting some kind of up-front equity…way before any ‘shit has got done’. Having said that for all the slightly ignorent apples in the MBA crowd there’s a HUGE amount of start-up talent, but I guess we don’t hear from them so much…as they’re busy with their heads down working on their next enterprise.

    I’m gonna link to this blog from my blog, and share it on our fb page because this is clearly a great start up resource…for MBAs to read – nice one!

    Sian Morley-Smith | BusinessBecause

  21. David G

    Hi Matt,

    Great post – I’m studying for an MBA and completely agree with what you’re saying here.

    As you touch on, having an MBA is not the cause of the problem, it is the attitude and mindset that typically goes with it. It has become very clear in the past decade that academia alone is not enough and needs to be grounded with real experiences.

    As it happens, I’m coming in to meet some of your team (and possibly you) tomorrow to chat about possible opportunities at GC. With regards to your last sentence – game on :)

  22. Pingback: Should startups hire MBAs? The great debate continues! | John's Jobs

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