What They Can't Find ...
... After An MBA From Harvard/MIT/Stanford
Jobless Education
I saw this gloomy graph recently suggesting that MBA graduates, even from the most prestigious institutions, are likely to remain unemployed for longer.
This is a secular, meaning not cyclical, trend. The pendulum is unlikely to swing back. Some of this is happening because consultants and investment banks have cut back on MBA hiring. Computer scientists and engineers are in vogue — almost 25% of Goldman Sachs’ employees are now engineers, surprisingly.
Financial engineering has a new meaning nowadays :)
Abhijit does a great illustration.
Entrepreneurship 101: Class Projects
I didn’t go to business school, but I have many friends who did and some mentees who are enrolled right now. So I know that a part of the curriculum involves pretending to do business stuff. Like class projects: come up with an ambitious plan to develop a quick commerce (QC) business in India, build a financial model, create a slide deck and do a presentation in class arguing for your vision. Sometimes this is a hypothetical situation, but more often, in the best schools, it is based on real business situations. To keep things relevant, the case might be from recent history. To be really relevant, and to make it a bit more challenging to find the answers, the case might involve an evolving market situation: Here is an actual QC startup that raised a lot of VC money and began operations 9 months ago; what can you learn from them as you develop your plans?
So student teams come up with a plan and build a financial model. And maybe they are good, and think ‘this is indeed a great opportunity. If we actually developed this business, we could make a lot of money.’ But then they finish the project and do the presentation and get an A- and merely consider a career in retail/QC. Perhaps when they graduate, they may even get a job at that already funded QC company.
Its not all doom and gloom.
But what if they stopped pretending? What if the opportunity is too good? What if they go and raise funding to develop their own business?
Well, they would get an A+ in my class. That is really putting their business education to work - a better way to earn a return on the expensive MBA education. Wrappers
Wrappers are a simple variation. I have written previously about search funds1, which are glamorous wrappers for service businesses like plumbing, pest control and HVAC.
To recap, the idea of a search fund is something like this:
Your local plumbing business could probably be managed more efficiently if it was run by a recent MBA grad than if it was run by the son of the retired founder.
That recent MBA grad will be happy to run the plumbing business if he could take most of the efficiency gains as a bonus.
So the deal is that investors give the search fund some money which in turn gives a portion to the MBA grad; he uses the money to buy the plumbing company, runs it well; he and the fund split the gains.
Financial alchemy has turned a plumbing business into one that can attract MBA grads and get funding from sophisticated investors.Old Wine In Different Bottles
Fellow Substacker and music writer Will Friedwald recently shared some links to music mashups — performances of rock songs in old swing jazz styles.
Here’s The Beatles’ ‘Get Back’ sung as a jazz number from a bygone era. I can't believe it's not a human voice — this is AI generated. Give it a listen.
Which serves as a reminder that AI will be a gamechanger — and that the most expensive and prestigious courses and careers of yesteryears won’t last forever. Switch To Law?
Law appears to be an evergreen profession. Here’s a practice question for the Law SAT to see if you have the aptitude.
