They did a study at harvard, and they figured out that MBA's flock to the wrong industry right before it dies. It was bonds, equities and then silicon valley in the 90s.
It was an interesting anecdote which I have heard often, but now am certainly curious enough to try and dig up that article/study.
edit: The author seems like an accomplished person, and I don't want to paint in the tech v. finance differences, but to highlight what camp she is from, take a look at the first sentence describing Mor Assia:
Mor advised Israel’s global telecommunications billing giant, Amdocs, to choose the right verticals for diversification in their technology acquisitions and launched offerings like Billing for Dynamic Pricing to create new growth opportunities.[0]
I mean, sure, I parse JSON data to codify the new web standard leveraging agile tooling like visual basic to fast-follow with a GUI interface which is deployed into our cloud based infrastructure to track the IP address, but I wouldn't write that down in the 2nd sentence of my biography.
[0]https://www.iangels.co/team/mor-assia/
edit: I can not find the video clip. My memory is that the study was done by Harvard Business School, and it found that MBAs were categorically picking the wrong industry. The examples cited by the speaker, I am 90+% confident it was pg restating it, were going to wall street to trade bonds with Michael Milliken right before he went to jail, Silicon Valley right before the bubble burst and one other which I would guess to be real estate or M & A post KKR, but that is just complete conjecture. Don't take my word for it, and I don't want to misquote PG quoting some study, but I am fairly confident for what it is worth.
It's this kind of quick buck thinking around simple, non-inventive iterations on existing models that are actually killing the Valley. The Valley should be for big ideas and wild bets. Not bets on people to do your laundry for you.
These Wall Street/finance people need to pack up and go back east.
(1) This was the idea behind Long Term Capital Management (LTCM). We all know how well that worked out.
Also, comedic if you think that LTCM was well run. They were sniffing their own flatulence and getting high on their own supply. They employed two Nobel laureates and based their model on those laureates....whose work ended up being completely flawed. How many people use Black-Scholes today? Zip (if they have a clue). You really should read "When Genius Failed" if you think they ran a good business.
I live in a European capital. I have been calling cabs by SMS to address for 15 years now. I write starting address, end point and receive in sms the number of the cab and in how many minutes it will be at my door.
Can you point the fundamental difference with Uber?
So we all gravitate towards making a web app to do laundry quicker. However since there is no real competitive advantage to whose web laundry app is better, coders are actually the commodity used by the business/marketing to a race to the bottom of who can raise the money the fastest, do the best viral marketing and creating a cult of persona in the tech press.
I don't mean to be negative but I just want to make a point that it is up to ourselves to learn a new skill-set if we want to solve bigger problems vs. carping about scruples-less businessman exploiting coders whose skills due to agile, coding bootcamps and improved programming toolchains are getting increasingly commoditized.
If you can't see the value created by each of these companies, I kinda have to wonder how much you ever get out of your house. Even just the amount of consumer surplus generated by Uber -- not driving home drunk, and not having to wait for a completely unreliable cab company -- is massive. Classifying what they're doing as nickels and bulldozers is so short-sighted it's a little hard to understand as anything other than simple sour grapes.
Hydrogen fuel cells, if practical, would be worth massive investment, but folks who would use them seem to have decided that lithium ion batteries would make more sense and are making a $5 billion investment in that.
There are a lot more smaller companies pursuing small ambitions, but that makes sense: a small company doesn't have the resources to tackle a capital-intensive problem without first demonstrating that it is a somewhat-reasonable bet.
"Soifer has long studied the proportion of Harvard MBAs who pursue careers in finance; when more than 3 in 10 head for Wall Street, it's time for investors to sell, he says."[1]
I used to work on Wall Street. I left because of this issue writ large. There are quite a few pieces of research claiming this trend is a negative indicator.
I took a Masters CS class some time ago, and for our final class project, not knowing anyone else in the class, I got lumped in the "leftover" group with a working engineer and a Wharton MBA student. We meet up the day before the project is due to integrate each of our individual pieces together into a final submission and the MBA candidate shows up empty handed. Turns out he had spent his time trying to "schmooze" the answers/code out of the professor and the TA, who, to their credit, had stood firm. Guess who spent that entire night writing that dolt's portion of the project from scratch.
I was once in a group for a university project when we had to implement this piece of software for a real world client. There was software that needed to be built, and documentation that needed to be written, as well as content that needed to be provided, e.g. weekly meeting diaries one is required to do in such university projects. Everyone else in the group had difficulty writing working, useful code, and progress was slow, even when I thought it was an easy project. A few days before the first milestone deadline, I sat down and finished the thing in an afternoon. And so, for the rest of the semester in that class all we had to do was the paperwork, and naturally that wasn't my job because I saved everyone so much time.
Sometimes BS needs to be written...that's when it's useful to have people who's best to do that kind of thing in your group.
And that is how the MBA learnt a very important life lesson about the most efficient way to get work done.
The End.
It was this: https://en.wikipedia.org/wiki/Comparative_advantage
That said, I think the relationship network is a huge advantage too. Reminds me of a story about, if memory serves me well, an economic university student, who was bad at learning but good at throwing parties (with lots of vodka). It was in Poland around the fall of the Soviet Union. The guy apparently got very successful because through his parties, he befriended a lot of people people who later graduated and became directors of private and national enterprises.
I'm not holding my breath.
...and when I think about where the 'talent' is in the financial world, it's on the technical side and all of those people are still there.
