On MBA

I start my MBA today—four years after receiving a deferred admit from the Indian School of Business. In this time, I have thought a lot about formal education in general and the utility of an MBA in particular. Since I encounter a lot of people going through a similar dilemma, this post is a summarization of how I figured out whether the MBA made sense or not.

Background

It is important to set some context before I delve deep into the actual question.

I grew up in a quintessential middle-class family where the people whom I looked up to were the ones who had engineering and management degrees from top institutes in the country. I aspired to live a similar life when I grew up and that subconsciously steered me towards this career path.

That’s the way it typically is in tier-2 cities in India. If you’re good at academics you end up preparing for the engineering or medical entrance exams. I had no inclination towards Biology so JEE became the natural choice.

When I entered engineering, I chose to study Math and Computing because it helped me optimise for optionality. I could have gone into Software Development, Finance or Analytics upon graduation.

I had entered the program with no proclivity towards Computer Science and when it became sufficiently clear that the course also couldn’t spark any interest in me to pursue it, I decided to focus on non-core roles and started to think about the MBA very seriously.

My target was to get into one of India’s top B-schools but among them, ISB was a dream program because of a couple of reasons.

1. It offered a deferred admit so I would have the opportunity to work for a couple of years and do my own exploration.
2. It was a one-year program which I felt was the optimal amount of time that I wanted to devote to my MBA. Having wasted the final year of undergrad virtually doing nothing once I got placed and hearing that the same thing happens in the second year of the two-year MBA programs, I was very sure that I didn’t want to do that again.
3. I particularly liked how ISB was a very efficiently run school. After being underwhelmed by the educational experience during my engineering, I wanted a better outcome for my B-school stint.

Given my predisposition for ISB, I was happy when I managed to secure the admit. But the years that ensued gave me a lot to think about.

What changed?

Startups and the Silicon Valley influence were two things that transformed my worldview completely.

After college, I went to work in a slow-moving large organisation and I left it within three months of joining. I was not cut out for long drawn orientations, excessive shielding and minimal responsibility. I was a fresh undergrad but I wanted to be thrown into the deep end because I felt that it was the only way to grow.

Thankfully startups exist to fulfil this need.

I joined a growth-stage company where I worked across Analytics and Product for a couple of years. I met some very smart folks there and received great constructive feedback on how should I plan my career.

During this time, I also got introduced to the likes of Naval, Paul Graham, Patrick Collison, Balaji S etc. and their ideas forced me to think for myself for the first time in my life.

Following are some broad themes that I spent time on:

1. What to work on? - I have grown to love technology’s permeability and how it helps in taking the human race forward. It makes me convinced that I want to be in and around it and work on interesting problems for the foreseeable part of my future.
2. Where to work? - This decision concerns itself with the size and stage of the company. My previous roles at very early and growth-stage companies have exposed me to the relatively unstructured parts of a start-up’s journey. For the next phase of my career, I would like to explore and understand how things work at a considerable scale.
3. To startup or not to startup? - I love the idea of startups—building things from scratch and having your intellectual imprint on the various aspects of the business—it is a perfect way to assimilate and apply your experiences to create something novel. For a curious and eccentric soul like me, I feel that it would be a great thing to do. But I also understand that in most cases the decision to startup is an irrational one—economically as well as logically. A large number of startups fail and you have to suffer for a considerably long period of time to reap the disproportionate rewards that it ultimately brings. At this stage, I am not ready to start up but I am not discounting the thought of doing one in the future. By extension, I am clear about two things:
   • I’ll only start a company if I feel that there is something that I want and can’t get without making it on my own (obviously a lot of other people should want it too for a market to exist). I will probably never make an app that lets you hail cabs or sells some FMCG product. There are people who are already doing this stuff with remarkable guile and precision.
   • I want to optimise for freedom going forward. That is having the ability to work when I want, on things that I want to and with the people I like. Being financially independent and highly credible are two pillars on which this aspiration stands so the goal is to attain these two as fast as possible.

The case against the MBA

Given that I was getting more and more clarity on how I’d like my life to shape up, I began to think through my decisions and as the MBA was already planned, it naturally went through a lot of scrutinies. I had three major concerns with it.

1. There is this notion that tech companies and startups don’t care as much about the credentials as legacy consulting and finance firms do. I already had a head start because I was a part of the tech startup ecosystem and was doing well in my role. The MBA wouldn’t have added much value in getting a substantial pay-raise or a more senior position as that would have been anyway accessible by the time I would have graduated.

2. I had serious doubts about the kind of academic learning that I would have at B-school. The case-based method is essentially an analysis of different scenarios under which a company thrived or failed. The problem with this is that it is riddled with hindsight bias and the halo effect. Daniel Kahneman discusses this in detail in his book Thinking Fast and Slow—the following excerpt brings out his point:

   Stories of how businesses rise and fall strike a chord with readers by offering what the human mind needs: a simple message of triumph and failure that identifies clear causes and ignores the determinative power of luck and the inevitability of regression. These stories induce and maintain an illusion of understanding, imparting lessons of little enduring value to readers who are all too eager to believe them.

3. I also had inhibitions about the short-term opportunity cost of foregone income and the exorbitant fees when measured against the overall value that I’ll derive from the program especially when it would have meant being okay with all the superficiality that comes associated with the MBA. I was in a happy place in my life because I had structured it in a way that I didn’t encounter pointless BS and didn’t do anything that I didn’t like. I knew that the MBA experience would have aspects like forced networking, countless parties, and excessive selling of shallowness. A lot of people enjoy these things (nothing against them) but I just don’t like putting up with all this on a regular basis. The thought of being in the midst of all this made me uncomfortable.

Why did I still go ahead with it?

I simply tried to reason through each of the three points mentioned above and arrived at satisfactory counters for them.

1. While it is true to some extent that credentials are getting irrelevant by the day, the pace of change is still very very slow. When Silicon Valley tech giants like Google, Facebook and Microsoft have MBAs leading them, it’ll take countries like India a couple of decades to disregard the MBA altogether. The MBA might not be a necessary condition for most managerial jobs these days but there is no denying the fact that it does help you get a foot in a lot of doors, sets you up for a steeper growth trajectory and offers better financial incentives.
2. I am going in with the realisation that most of what I’ll learn might not be useful or directly applicable but I am certain that I’ll come out of the program with richer and broadened perspectives.
   • There are deterministic subjects like Accounting, Corporate Finance, Micro-Economics and Operations Research that have significant roles to play in business which I’ll definitely never spend time on if I don’t go through a structured learning program.
   • ISB offers some uniquely relevant courses like Negotiation Analysis, Power and Politics, Arts of Communication etc. to expose us to the softer side of work-life. These are taught by faculty from top schools from all around the globe. Some amount of grooming on these aspects will help me become a more proficient communicator and leader.
   • This will be the first time in my life that I’ll be surrounded by a carefully curated bunch of people belonging to different parts of the world and coming from different educational, functional and industrial backgrounds. Their experiences will help me question my biases and develop a more holistic way of looking at situations. This is useful because it very closely resembles the distribution of people that I’ll encounter later in life.

3. I realised that the short term is not a good way to look at it. When thinking in terms of the career span (~40 years), spending one year and 40 lakhs doing the MBA—that offers long-term credibility, financial and network value—makes a lot of sense. As for dealing with the BS, the ever so balanced Morgan Housel proved to be very helpful. His view on how one needs to endure an optimal amount of hassle to survive and thrive is what gave me the confidence to take the plunge.

   BS, in all its forms, is similar. A unique skill, an underrated skill, is identifying the optimal amount of hassle and nonsense you should put up with to get ahead while getting along.