A Defense of Business Majors

I read a recent piece from The New York Times today questioning the rigorousness of undergraduate business degrees. Basically, the article presented evidence that business classes are soft, students don’t learn as much as those of other majors, and a traditional liberal arts education holds greater value. I also saw another article raising some of the same questions about MBA degrees. You can obviously see my interest in this debate. As a business major concentrating in finance, I feel like it is my duty to defend my degree’s honor and provide a rebuttal to these arguments.

For the past four years, I have been a student at Boston College’s Carroll School of Management, which BusinessWeek recently ranked #9 in the country. The majority of my experience has been overwhelmingly positive and I have nothing but the utmost respect for my professors and fellow classmates. Yes, there were some really easy classes along the way, but I think you will find those in any major. For the most part, my professors have challenged me with the course material but they also made it relevant by tying it to current and real life events. I went from knowing nothing about business to being able to invest my own money and speak intelligently about the markets and the financial crisis. And yes, our coursework involves a lot of in class discussions and group work, but I think the point of all this is to prepare students for life in the workforce. Many of my Arts & Sciences friends tell me they wish they had more opportunities for group work in their classes. The ability to work effectively with others is a valuable and highly underrated skill in almost any career. The students that I have had to work with have been absolutely professional and accountable. I have rarely had issues with inequitable distributions of work.

I do think there are two broader issues that both the Times and Poets and Quants articles failed to address. First, it ignored the economics of higher education. College is really expensive. For all majors. Unfortunately, not all majors are created equal in terms of employability. Therefore it is not unreasonable for a student and his family to choose a major at least partly because it is perceived to have a better chance of maximizing his future income. I wonder sometimes how a teacher or social worker (both of whom I admire greatly) will ever pay off his or her student loans from a 4 year private institution on their modest salaries. This is a problem that has potentially serious economic and social consequences. I am starting to agree with Peter Thiel that there is a higher education bubble. (Note that I say the decision is based on perceived future income. As the article noted, the average starting salary of business majors is higher, but the gap narrows as time goes on. However, perception is just as important as reality when you’re a college freshmen and all you’re going to see is the six figure Wall Street salaries and bonuses, even though few students will actually get those jobs).

The second issue has to do with MBAs. I do not have an MBA so I cannot claim to be an expert on the subject. I have spoken with older folks both with and without MBAs about the issue. As a Business Analyst at Deloitte, I am also obligated to get an MBA at some point if I want to stay with the company after a few years. From what I understand, the MBA is as much about the degree itself as it is about having it on your resume. A plain Bachelor’s degree is no longer special; you need an advanced degree to differentiate yourself. For better or worse, having an MBA will help you get a raise, earn a promotion, and in general open up more career opportunities. Therefore some students may be motivated to pursue an MBA not for the learning but simply for the degree. With that kind of attitude, it’s no wonder the academic environment at even the top MBA programs has broken down. The devaluation of the Bachelor’s degree and the sustainability of getting more advanced degrees is another serious question that merits more discussion.

I will concede a few points to the writer of the Times article. Business majors are notoriously bad at writing; even we know it. I have been fortunate enough to be an above average writer since elementary school and I have consciously tried to hone that skill in college by writing for the campus newspaper and my blog. BC also has a significant liberal arts core requirement which forces all students to take at least a few classes that require written papers. Still, the writing skills of many business students are woefully underdeveloped. I wouldn’t blame business schools entirely for this failure though; some of the fault has to be placed on the K-12 education system. In my opinion, a high school graduate should be able to construct a coherent essay. Yet despite all the standardized testing from No Child Left Behind, students are coming out of high school without this and other basic skills.

The article also made a point to distinguish between the top undergraduate business programs and lower tier ones. I am grateful to be attending a top notch institution such as BC and perhaps my experience has been more similar to that of the University of Virginia than some of the other schools criticized in the article. Many of my peers are heading to Wall Street, Big Four accounting firms, consultancies, or big name corporations. As the article pointed out, students from lower tier business schools are going into regional banks, insurance companies, or governments. These two groups have different needs and these differences should be reflected in their respective curricula. While I think all students should get the best education possible, the contrast does allude to the need for the right type of education.

Finally, rhetoric tradition requires me to make one completely self deprecating statement to feign modesty and exonerate myself from any shortcomings in my arguments. I have thus far defended the value of an undergraduate business education, in particular my own at BC. In fact I think non-business students should be encouraged to take a few business classes in their four years of college because a lot of concepts are important not just as a job seeker, but as a citizen. At the same time, if I had one academic regret in college, it’s that I never got a chance to double major in a field that either improved my quantitative skills, computer programming ability, or scientific knowledge. I think these skills are complementary and, to borrow one of business school’s favorite words, synergistic with any business education. It is especially for important for aspiring entrepreneurs who want to be on the cutting edge of technology and understand what’s going on. Thus I do think it is important to encourage business students to take plenty of non-business courses.

I’ve ranted on long enough. What do you think? Are undergraduate business and MBA degrees becoming a joke? Or is it part of a larger problem with education? Please comment!

Job Search Advice

Anyone who’s talked to me in the past 3 months or so knows that my preoccupation this semester was finding a job. It was an arduous process and very nerve racking at times, but I came out with a job I like and I’m looking forward to enjoying myself next semester. Given the amount of time I spent though, I thought I would share my thoughts and tips about finding a job with anyone who’s interested.

I would start off by saying to go into your search with a plan. You don’t need to know exactly what you want to do for the rest of your life or have a dream employer per se, but have a general idea of what industries and positions you’re interested in, and what criteria (geography, pay, hours, work-life balance) are important to you. Given the state of the job market right now, I would cast a wide net but also be careful not to overwhelm yourself with too many prospective employers. You still want to be able to do a good job on each resume and interview so that you’re not applying to places just for the sake of applying. In my case I probably applied to too many as I ended up having to pass up interviews because they conflicted with other ones. I recommend approaching it like applying to college where you have a couple of dream jobs, a couple of good jobs that you have a reasonable chance of getting, and a few jobs that you may not be crazy about but have a pretty good chance of landing.

In terms of the actual interview, the best advice is also the most clichéd advice: relax and be yourself. It’s hard with all the pressure and high stakes, but you really think and do better when you’re relaxed and employers will notice. Ironically some of my best interviews were probably ones where I didn’t particularly care for the job or when I was more stressed about a different interview. That being said, you still need to practice and do your due diligence on the employer. Try to talk to past or current employees about the interview process and corporate culture. Read the job description and the company’s corporate website carefully. Be aware of any headlines involving the company or industry. You want to show you did your homework.

As for yourself, know your resume cold. You should be able to summarize the highlights in about a minute without any trouble. In general, practice behavioral questions about your skills, weaknesses, leadership abilities, and past experiences. There’s no guarantee which questions you’ll get so I would have several broad stories about jobs, activities, and accomplishments prepared and then spin those according to the question you get asked, focusing on different aspects depending on the situation. One question you will always be asked is why you want the job. Have a good but honest response ready. Interviewers can see through a completely BS answer.

One of the most dreaded parts of the interview is when the interviewer asks you if you have any questions for them. This is really tricky because you want to show interest and knowledge about the company but you don’t want to ask questions for the sake of asking questions. I typically start off with something easy like asking the interviewer why they chose their current career or how they got to their position. If there was something during our conversation that I wanted the interviewer to clarify or that I genuinely had an interest in, I would ask about that. Same holds true for any headlines or upcoming developments in the firm’s industry. Finally, I make sure I ask about the corporate culture to show that I’m serious about the company and the job. Also be sure to remember to ask for a business card or email address at the end. Follow-ups are pretty important. At worst, it gives you some closure about the interview. At best, you might see your interviewer again and he or she can give you some tips on next steps.

I will conclude by saying that looking for a job sucks. It’s like taking an extra class, except the class has a test every day and your grade has more real life implications that any other class. Regardless of preparation, you will have bad interviews where you’re having a bad day or you just don’t have any chemistry with your interviewer. Don’t let this get you down and whatever you do don’t let the job search take over your life and overwhelm you. You still want to leave some time for friends, family, relaxation, and doing things you like.

Best of luck to everyone out there who’s still in the hunt!

Digg: What Went Wrong?

You may have heard recently that news sharing/ranking website Digg had to lay off a third of its staff after a relaunch of its site flopped. Two years ago when I visited Digg on TechTrek, Digg was a darling of the Web 2.0 generation of startups. It had a charismatic founder in Kevin Rose, a veteran of the first dot-com bubble in CEO Jay Adelson, and an innovative idea that was poised to change how we consume news. Those Digg icons were all over the web. It turned down lucrative acquisition offers from Yahoo and others. Digg was the kid that was too cool for a million dollars because they had their eyes set on bigger things.

Well things have unraveled since then. Digg had trouble with mainstream adoption and lost its core users to Reddit. More importantly, Facebook’s “Like” and Twitter’s “Retweet” buttons have replaced Digg on most websites. This latest round of layoffs is the largest but certainly not the first as they’ve cut 10% of staff twice since 2009. Jay Adelson left the company earlier this year. Even the company’s major revamp, Digg 4 (which I reviewed favorably in beta), was poorly received. Digg appears to be a dead man walking now eclipsed by its rivals and its core fan base is in revolt. With such a dramatic fall from grace, one has to wonder: Was Digg’s fall inevitable, and if so should we be concerned about many of today’s social and mobile startups?

The answer to the first part of the question is a resounding no. Just look at Reddit, which has thrived during the same period of time. Reddit is a favorite of the hip, quirky, tech-savvy community. In other words the same group that made Digg cool. However, as a mainstream consumer, I would never use Reddit because its UI is unpolished and most of the top stories are kind of odd. Again, I said the same things about the original Digg. Digg knew it had to become more mainstream in order to compete with the rising popularity of Facebook and Twitter. Yet when Digg tried to change, its fanboys revolted. This brings me to my first conclusion about many startups these days:

The business interests of a social startup and the community’s interests are sometimes at odds. Niche fan bases have limited value and in the long run may actually be a constraint.

Few companies have successfully made the leap to mass adoption. Most companies have fallen to their deaths or are too timid to try. The last outcome is fine if you sell out. Reddit is part of the massive Conde Nast publishing empire so it has no pressure to grow and give its investors a payday all on its own. Digg turned down acquisition offers and tried to build its own empire. Its competition was Twitter and Facebook. The problem is news sharing is a feature on Facebook and Twitter while on Digg it is the entire product. This brings me to my second and more important conclusion:

A feature is NOT a product and definitely NOT a sustainable company.

This is what really worries me. A lot of startups I hear about these days are very narrowly focused. They have a novel way of doing something but they compete against one feature of someone else’s product. The current environment makes it possible for these companies to get funded and move their ideas to market, and there’s nothing wrong with that. There is some real innovation going on here. However, it’s foolish to think there are any fortunes to be made with most of these startups, and founders and investors alike would be wise to sell sooner than later.

I don’t think there’s going to be another bubble like 2000 because this boom is not driven by the stock market. Even if a lot of these companies fail, there will be a much smaller impact on the overall economy. However, you do have to wonder how many of these companies have a future. For example, I’m worried about Foursquare and Gowalla. Although they’re slightly differentiated and have strong communities, they are merely features on Facebook. With Facebook Places and the inevitable check-in fatigue setting in, they could risk becoming the next Digg.

Campus Recruiting as a Sport

It’s good to be back at BC, but this semester is going to be hectic in large part due to on campus job recruiting. It’s stressful and eating up a large chunk of my time, but if I’m going to get through it, I have to make it fun don’t I? Therefore, I’m going to compare the job search process to a professional sports season:

  • Training Camp (Career fairs, information sessions): Get you back into shape. Also gives you a chance to make some evaluations and finalize your roster.
  • Pre-Season (Mock interviews, preliminary interviews, phone interviews): Final tuneup before the real thing begins.
  • Regular Season (1st round interviews): First chance to make a lasting impression. Performance in this round will determine whether or not you advance.
  • Post Season (2nd round interviews): Stakes are higher this time as we get closer to the big prize.
  • Championship (Getting an offer): Obviously this is everyone’s ultimate goal. Let’s hope I can win a championship.

As you can probably guess I’ll pretty much be on social media blackout until November or whenever I get a job. I apologize if I’m anti-social and unresponsive until then. Don’t worry, I’ll catch up in the off-season!

Dangers of Abbreviations

I don’t usually get into political stuff on this blog because it generally just makes people angry for no good reason nowadays. However, I was interested by a certain business related aspect of the BP Gulf oil spill that I think deserves some commentary. Apparently, some Brits are concerned that American political rhetoric against BP is also directed at the UK as a whole. The reason? Many in the US government and press have referred to BP as “British Petroleum” even though the company officially changed its legal name to simply BP in 1998 to reflect its more international and clean energy focus. Whether you buy any of that is up to you. Let’s look at the debate from a marketing and branding perspective.

In the 90s and early 2000s, there seemed to be a trend to rebrand everything with abbreviations. Kentucky Fried Chicken became KFC. General Motors is GM. Electronic Arts, EA. It seemed like shortening your brand into an acronym somehow made it modern, relevant, and cool. There’s only one slight problem. When you rebrand something by simply abbreviating it, it’s going to be hard for people not to associate your new abbreviation with the old name it was derived from, especially if the old name was already established. The name BP came from abbreviating British Petroleum. Most people who are in government and the media right now grew up and lived knowing the company as “British Petroleum.”  More importantly, while abbreviations are widely used in popular culture, formal speech and writing conventions still encourage you to spell out the full name. So don’t be surprised if consumers mistakenly refer to your new abbreviated brand by the long form brand which it was derived from because…that’s how you came up with it in the first place right? I mean, people can be stupid, but not that stupid.

So all you branding experts and marketers out there, if you really want to break from your past, how about doing something a little less obvious than abbreviating your name? This is your job, at least put some effort into it.

Entrepreneurship in London

So in the aftermath of the Entrepreneur’s International Challenge, I have to write my post on business and entrepreneurship in the UK. I already started profiling a few startups in London through a guest post on the RUNmyERRAND blog last semester. Here, I’m going to focus on more big picture things.

First off, London is no Silicon Valley and it’s probably not even a Cambridge, but there is a good deal of activity going on here. When I was doing sponsorship work for EPIC, I visited several modern, unconventional, and fun startup and small business offices that reminded me of those we saw on EPIC. We also went to a massive 2 day entrepreneurship fair where startups and businesses that support startups (like IT and marketing) tried to promote their businesses. There were keynote speakers, “speed dating” style workshops, and all sorts of networking going on.  And despite this recent article on TechCrunch, I do think the UK government is legitimately trying to promote entrepreneurship especially through giving out seed grants. They’re just really inefficient by nature.

Nor are UK startups absolutely dull and old fashioned. No one’s expecting the next Facebook or Google to come from here, but as you can see from the four business I profiled for RUNmyERRAND, and WAYN.com (Where Are You Now, a travel social network), another EPIC connection, are tech related. Some of them are uniquely London or big city like eCourier. Others are just downright quirky like carding service Serve Legal (don’t know if paying someone to make sure your own employees are carding is really sustainable) or Ben and Jerry style smoothie maker Innocent (who have an annual cap knitting campaign for their bottles).

Even students are coming up with some good ideas. The finals for Pitch It! this week, LSE’s version of BCVC, featured three interesting but in my opinion misguided companies:

  • BestGiraffe is an online marketplace for corporate advertisements. However, other companies have already done this and the mid-smaller size firms they’re aiming for could easily use Craigslist or crowdsource directly to get their work done. Also the team relied on leveraging developing countries for labor to offer low prices but since advertising is highly sensitive to regional and cultural nuances I doubt its really as useful as they believe.
  • Pressure Trade is an online game that simulates certain trading skills. It’s obviously targeted to investment banks and those who want to get jobs with them. Honestly though I think this is a very weak idea. Why not just play a real stock market game that simulates actual trading, not just activities that are similar to trading? One of the judges was smart to point out that this business could have a lot more potential if they just made it a fun, social game. Think WoW or Farmville for trading and investing. I would play that.
  • Youny is a matching service for tutoring. I think this one ended up winning (I didn’t stay till the end) but again I thought it was a weak idea. First off, most universities offer formal tutoring programs that will do this for free. You also run into a one time user problem because once someone finds a tutor they like, they’ll bypass the middleman and arrange future sessions on their own. Finally, the team wanted to attract users by building up a database and having live responses but this can be done for free through a wiki or forum.
  • Younity is a social enterprise that allows users to donate their loyalty points from shopping to charities. I didn’t stay for the social enterprise portion of the competition, but this one caught my attention. I like it because it’s creative, simple, and viable. However, I think most loyalty programs/credit card rewards programs already give you this option to an extent, so I don’t know how much of a market they’ll have.

So maybe I’m a little harsh on these business plans, but as you can see, there’s no shortage of ideas or inspiration.

The problem I think lies in the culture. Entrepreneurship just isn’t something most people consider as a career path. Students at LSE are mostly stuck on the investment banking/consulting route. There’s a culture of working for a nice corporation with a steady paycheck and not taking risks. One entrepreneur told me that in some parts of England, there’s actually a social stigma attached to being an entrepreneur or small business owner. I find this to be the complete opposite of the U.S. where the small business is heralded as the everyman of America. The education system also has a lot to do with it too. The university system here is really focused here so there’s little to no chance to explore outside subjects. The core and liberal education in the U.S. may be a pain at times, but it definitely stimulates creativity and innovation.

Will things change here? I think so. Just look at the popularity of BBC’s Dragon’s Den, an American Idol style competition for business plans. In fact, of all the reality show competitions the Brits could’ve exported to the U.S., I wonder why this one hasn’t made it across the pond yet.

Google China

Update: This Week in Google had an excellent discussion on the Google-China story and I absolutely agree. The story here should really be about the security of Google’s cloud, but the company has brilliantly spun it into a PR win by turning it into a moral issue.

Last year, I wrote a paper for TechTrek examining Google’s failures in China and how it could improve its position in the search market there. I was hoping to update it this year with new information and data that has been released since then (such as the departure of rock-star executive Lee Kai Fu). Given the Google-China dispute that’s been making headlines though, it appears there may not be a Google China soon. So instead, I thought I would briefly weigh in on the situation (if you care to hear what a random college student has to say).

First of all, let’s make a few things clear: The U.S. government will not intervene. Even though the Obama administration and Google are pretty tight, the White House has been pretty reluctant to get too involved in human rights issues regarding China. Also, if Google does pull out, this will not cause some domino effect of American companies following suit. There are different factors and issues at stake for every company and they will respond according to their own positions. For most companies, they can hardly afford to lose a market like China under current economic conditions.

Now to the issue at hand. I don’t think Google will leave China, at least not permanently. I understand Google prides itself on not making decisions based purely on profit, but I think China is too big of a market to pass up even for them (but since this is Google, nothing’s ever completely out of the question). Some have tried to argue that China would not be losing much if it pulled out now. I beg to differ. It’s been reported that China earns $600 million in revenue a year for Google and that’s only with about 25% market share of the 25% of Chinese that are online  in a developing country of 1.3 billion. Speaking of market share, 20-25% may not be Google-esque domination, but it’s pretty good compared to how they’ve fared in other Asian markets. Despite its difficulties against Baidu, Google does have a strong following with white collar elites in China’s cities, and as the middle class continues to grow, that’s going to be the sweet spot for both Google and advertisers. And this doesn’t even take into account the possibilities with mobile search.

Instead, I think this whole episode is one big bluff on both sides. Google knows if it pulls out of China, that market will probably be lost to it for good, but it’s also frustrated by the wild west business climate there. China’s government wants to maintain its authority, especially over foreign firms, but it also doesn’t want to scare away direct foreign investment that it needs to keep growing. Therefore, I think what we have here is a classic standoff where each side is waiting for the other to fold. Google sent its employees home on vacation to show they’re serious. China quickly reassured the U.S. that it would not threaten diplomatic relations. Aside from that, both sides are relatively silent about their intentions and are clearly digging in for a long stalemate.

Barring a dramatic about face by the Chinese government on censorship rules, here are the outcomes I can foresee:

  • Google temporarily withdraws from China. Once the smoke from this incident blows over, they pick up where they left off. This will minimize damage to Google’s image while enabling it to maintain most of the foothold it has established in the market.
  • China makes a symbolic concession on some issue that positively affects Google. I’m not sure what this might be, but it won’t be an apology and it won’t be anything directly related to this issue (hacking, censorship). The last thing the Chinese government wants to do is to bow to an American corporation that is already seen in some circles as arrogant. This is good enough to give Google way to keep operating in China without appearing like a complete sellout. Given the fact that China doesn’t really need Google, especially when Chinese firms will most likely benefit from its departure, I think this scenario is less likely.

Of course, there is one other explanation for Google’s actions, and that involves looking at the big picture as opposed to Google China in isolation. Prior to this event, the biggest Google news stories were probably Android/Nexus One and Chrome OS. These are key products that could potentially change the direction of the company. Perhaps Google just wants to focus its attention and resources on developing these products instead of dealing with problems in China. Who knows, Android and Chrome may eventually become effective tools for penetrating the Chinese market.

As Google grows into all these areas, it also has to increasingly deal with the U.S. government, and this act of defiance may be a way to build ammunition for its run-ins with Washington, whether it’s questions about user privacy, the book scanning case, Google’s push for the FCC to enforce net neutrality, regulation of Google Voice, or anti-trust fears. The outcomes of these cases and disputes will likely affect Google’s core businesses. Maybe it’s just Google protecting home court.

Needless to say, I’m interested to see how all this will unfold.