The Average MBA Gets One Job Offer for Every 3.6 Interviews

Find out how much MBA's made in 2010 and what they had to do to get those jobs from the GMAC annual salary survey of MBAs. Learn what a BATNA is how how its the key to getting that salary you are looking for after business school.

Happy valentines day MBA’s.

(1) Headlines: GMAC MBA Salary Report

If your partner if partner has recently of being stingy, The GMAC says they’re right. The median MBA Salary last year was $94K

That is a lot of padfolios.

To get those jobs the average MBA sent out,
33.3 resumes
6.3 interviews
1.9 job offers


What the heck is 0.9 of a job offer?

Rip last zero off a $100,000 job offer.

This comma is in the wrong place!

That’s because you only sent me .3 resumes.

Great news, 93% of respondents were employed.

Great news, 86% of respondents were employed … by other people than themselves.

Being self employed is a real job!

Are those the people who hang out over at the unemployment office?

Tom, how many times do I have to tell you? that’s the entrepreneurship center.

It’s not like everyone who’s working for other peopl. Here’s an interesting stats, 48% of people opened their search up to lower compensation levels.

48%?! Good god, that means almost half of all MBA’s are earning below-average salaries.

Just one good bubble and we’ll push that number down to 40%. Comeooooooon bubble.

http://www.businessweek.com/bschools/blogs/mba_admissions/archives/2011/02/mba_pay_is_up_maybe.html
http://www.gmac.com/NR/rdonlyres/0B6401AE-EDB8-4984-A51D-09032D5FD200/0/2011AlumniSurveyReport_WebRelease.pdf


(2) MBA Valentines Gifts
Did you just find out that it was valentines day three days ago? Not to fear, we here at The MBA Show have some last minute gift ideas that can be quickly adapted for a nice valentines day surprise.

Nothing says I love you like a nice leather valentines day card.

Miro: Open card, show audience.

Want something to put flowers in that doesn’t look last minute? That Bain water bottle becomes a nice vase.

Miro: Oh, and look, it’s personalized! Turn around and show back.

We’ll you know those necklaces that have people’s names on them … how about a business school version

I hate you TheRealTomRose … and what’s with the photo????

Gotta stay true to the brand!

(3) Malcom Gladwell hates business school rankings
Malcolm Gladwell, author of Business classics like “Blink” and “The Tipping Point” has 6 page page article in the current New Yorker trashing college rankings as capricious and arbitrary. He says they basically reflect whatever criteria you use.

My god, is that what gladwell looks like? He has a huge afro, I had no idea. If comrade obama has his way, soon this is what all of wall street will look like.

He writes for the New Yorker, what did you expect,

I was expecting a confusing, poorly drawn cartoon.


(3) Jargon: BATNA

This is a term from Negotiation.

Best Alternative to a Negotiated Offer.

Before you go into a negotiation, this is your best alternative of what you will do if you can’t reach a settlement.

When you’re applying for your first job offer, this zero is your BATNA.

The classic example is when negotiating that 2nd job offer... (Or your 1.9th Job offer)

... your BATNA is the salary the other guys offered you.

For example, when I was looking for cohosts for The MBA Show. Mirokaz was my BATNA.

The best way to negotiate from a position of strength is to have an amazing BATNA.



(5) Business School Tip of the Week: Have a good BATNA

So this might be counter-intuitive, but you might want to first negotiate the offer on the job you are less interested in.

This is easier said than done, but it can be worth a lot if you can make it happen.

(7) What’s on your Radar?

Tom: I’m going to Killington Vermont
Miro: Haas Educational Case Compeition

Bonus Content:

Miro: Using BATNA to get three internship offers.

# Book “Re:thinking the MBA, Business Education at a CrossRoads.”
http://hbswk.hbs.edu/item/6363.html
# “rebalancing from the current focus on "knowing" or analytical knowledge to more of what we call "doing" (skills) and "being" (a sense of purpose and identity) must occur.”

# They provide an interesting model of how it could be
# Harvard Med School: 165 incoming students, 10,000 faculty members

Top MBA Salaries

Find out which MBA's are getting paid the most, and how much they're making. Tom and Miro discover why people who work in private equity are the best people in the world. Plus, the new painless way to write group papers.

(1) Business Porn: 2011’s Highest Paid MBAs

Some outrageous numbers:

The highest paid Wharton graduate reported a $350k starting salary. He’s going into private equity. That’s more than three times the median salary of $110k.

It’s about time! The market is finally working correctly. I love to see hard work getting rewarded.

Tom, how can you possibly justify a 27 year old kid who has been sitting in a classroom for 2 years getting half a million dollars.

If you want to get the best person from Wharton, you might have to pay $0.5M.

Who could this mythical person be?

It’s a combination of two things. It’s the skills of this person are tremendously important to this job. And second, the nature of the business that they’re being hired into allows for more productivity.

So are you saying that someone in private equity is more skilled than someone at a non-profit?

Not by definition, but probably. That’s not my point though.

My point is that the value of the job you are doing and consequently the value of your salary is based not only on what skills you possess, but on the job that you are performing. Someone mining diamonds will probably make more money than an equivalently skilled counterpart mining coal.

You’re assuming rational behavior here. When I look at these numbers, I see irrational factors at work. If you’re classmate comes to you and says they got a job with a $500K salary, I’ll bet you you that their last name matches the name on the firm and probably the building you are studying too. Any industry where 29 year olds are making over $500K a year is headed for a crash as surely as a real estate bubble.

Tom, these folks are making 20x what the lowest paid MBA is making. What do you think about the lowest paid Wharton MBA making $25K at a ‘media’ company in the Midwest?

Let’s hear it for personal fulfillment.

http://poetsandquants.com/2010/12/27/when-the-sky-is-nearly-the-limit-highest-paid-mbas-of-2010/

(2) Headlines: Harvard Changes Curriculum

Harvard announced that they are going to change their curriculum. Harvard has been know for there tradition of teaching every single class with the case method. They are going to include more experiential learning and global perspective.

Woah woah woah, stop right there. I can already call this a good decision. I don’t even need to know what they are mixing in to know that this is a good decision. When you teach 100% cases, mixing in 3% of anything else will be a move in the right direction.

They are adding exactly one class that will be a field learning class. It’s going to span the whole first year and actually have an international field component.

When you have a investment portfolio that is 100% bonds, you could invest 3% in rocks and be more diversified.

(3) Jargon: Air Time

Air time describes how much time you get to talk in class. So if someone talks a lot during class, you might say, they got a lot of “air time” that day.

In case study classes, the learning primarily comes from students talking to each other. Sharing their perspectives and analyzing the case.

THIS IS GOOD!

And the majority of your grade is based on the quality and quantity of your airtime.

...This is bad :(

As you have probably noticed. Most MBA’s have an insatiable appetite for air time that manifests itself in several ways [arm gesture, pause, guilty look].

Business school and the case study method teaches us one thing. It’s that there is no sweeter sound in the world than your own voice.

(5) Business School Tip of the Week: Google Docs

Miro’s latent, homoerotic dance. Oh my god, oh my god, oh my god! Tell them about google docs.

If you write papers in groups. No, if you write ANYTHING in groups, you need to be using google docs.

Real-time multiple edits.
No version control.
Revision history is captured.
Saving happens automatically.
You can

IT’S FREE
You don’t even have to steal it. This software comes pre-stolen.

DOCS.GOOGLE.COM

(7) What’s on your Radar?

Tom: I’m going to the tobogganing world championships in Maine.
Miro: My wife and I have an annual Valentines tradition? We go to Providence, Rhode Island and go to Dave & Busters.

Join Y Combinator Get (nearly) Free Money - The MBA Show Episode 19

Will MBA's follow all the money sloshing into silicon valley?  Yuri Milner offers $150k in convertible debt, no cap, no discount to every Y Combinator participant and Tom and Miro explain what the hell that means.   Bonus: How to turn one informational interview into 10.

(1) Headlines: Financial Times Ranking
LBS and Wharton are Tied for 1st place. They’re neck and neck.

Wait! LBS? What’s a foreigner doing on the list?

Financial Times is one of the only rankings to combine foreign and domestic schools

Why aren’t there international schools in other rankings?

When Business Week started doing rankings of Business schools in 1988, international schools weren’t on the list, simply because they didn’t make the list. The focus of management education was the US. There wasn’t global competition.

All current US business school rankings are now out of date. And we are calling for the inclusion of international schools on ranking lists.

Thanks to Poets & Quants for their great analysis of the FT Rankings

http://poetsandquants.com/2011/01/31/wharton-london-tie-for-first-in-2011-financial-times-mba-ranking/
http://poetsandquants.com/2011/01/31/winners-losers-in-the-2011-mba-ranking-by-the-ft/
http://rankings.ft.com/businessschoolrankings/global-mba-rankings

Financial Times Global MBA Rankings 2010 (no that's not a typo, it says 2010)
1. LBS
2. Wharton
3. HBS
4. Stanford
5. Insead
6. Columbia
6. IE Business School
8. MIT Sloan
9. Chicago Booth
9. Hong Kong UST

(2) Business Porn: Free money

Yuri Milner, the guy who invested hundreds of millions in FaceBook, Zynga, and Groupon, is partnering with SV Angel and is offering $150k to every company in Y Combinator. What the hell is a Y Combinator? (~40)

Y Combinator is a camp/incubator

The terms are very generous:
$150k in Convertible debt, no-cap, no-discount. Think of this as a loan someone is giving your start-up that you never need to pay back in money. You can pay it back in stock, and you only have to if you’re successful.

So what do you think tom?

[Skeptical] So Yuri is investing with out doing any due diligence or background research? The bubble is back baby! Where’s my check book? I’m investing too. Thank god. I can finally stop doing this due diligence that is sooooo 2008. … Where’s my bonus?

Well, it’s not really no background, what’s he’s doing is depending on Y Combinator to do his diligence for him.

Tom can’t keep a straight face. Other people are doing it? It must be right.

Okay, okay. it’s a little nutty. But this money out there and other money chasing it means that there’s going to be more opportunity for MBAs. When companies have money they can afford spend a little more on things like MBAs.

So the takeaway is: The startup money is back. Put startups back on your opportunities list.

Thank you Russian Oligarchs.

http://techcrunch.com/2011/01/28/yuri-milner-sv-angel-offer-every-new-y-combinator-startup-150k/

http://onstartups.com/tabid/3339/bid/38607/8-Reasons-Why-SV-Angel-Yuri-Milner-Investing-150-000-In-Every-YCombinator-Startup-Is-Brilliant.aspx

These are the terms your dad would give you.

3) Jargon: Convertible Debt

Two big to raise money: stock and loans.

Miro: Got that!
-In loans you get money and pay back that same money to owner plus a fee.
-If you sell stocks in your company take money and give them a worthless piece of paper in that entitles future profits in the company.
Where does converable debt

Convertible debt is a hybrid. It starts out feeling like a loan. Because someone gives you cash. At the end of the day the debt is converted into stock.

I understand why I would give people a loan: If they are stable they’ll pay me back with interest
I understand why I would buy stock: becuase if I think a company will grow alot, then a small amount of money will turn into lots of profit.
Why would I give that loan to a highly unstable company hoping for stock? It seems like a worse deal.

Well let’s role play it.. You be the entrepreneur and I’ll be investor.

E-preneur: Dude, man, hey, i just smoked some grass and cake up with this amazing idea: crowd-sourced, social, micro-payments, freemium. It can’t fail. …. Give me a loan.

Investor: It feel a little sktechy right now, can you give me any proof you’ll be around in one week.

E-preneur: [long pause] No

Investor: Okay, why don’t we try this. I think company worth 10. I give you another 10 to make 20. You give me 50% of the stock?

E-preneur: No way this thing will be worth billions!

Investor: That’s the best you can get. No one is going to give you more money for your company than that.

E-preneur: In case you haven’t noticed. This is silicon valley. There’s people around the corner to fund my weed-based brilliance.

Investor: Woah woah woah … woah. Don’t do anything drastic. How about this. I give you $10k now. You go build the thing. If it’s really worth $1,000,000 like you say and you can get someone to pay you for that, then you just give me $10k worth of that deal.

E-preneur: Done! [Handshake]

Both: And Scene! [Hippie gesture].

So the takeaway here is that Convertible Debt is generally considered great for the entrepreneur. If it’s an option, it’s really worth considering.

(5) Business School Tip of the Week:
- Get two referrals at the end of every conversation. Job networking, business starting. Any question.
Follow-up: can i use your name

You only need one cold introductionn.

Thanks for sitting down with me. Who else should I be talking to about this topic?

(7) What’s on your Radar?
Miro: Superbowl party
Tom: Tutoring Indian b-school students DURING the superbowl

Sign-up for our newsletter at www.thembashow.com to check out the following bonus content (the newsletter will be launched by 2/17/2011):
Bonus Topics:

(1) Convertible Debt: Exists where there is competition

(2) Convertible Debt: Seems like a buyers market to outsiders, but in reality, highly limited access to amazing deals.

(3) Convertible Debt: What the hell is Milner thinking?

(4) Convertible Debt: What other terms do you typically see in convertible debt deals?

(5) Converitble Debt: Why would any sane investor ever agree to give convertible debt?

Your Non-HBS Degree is Worthless - The MBA Show Episode 18

The GMAT company has good news: every MBA is getting a job. The bad news comes from a study at Kellogg Northwestern: If you didn't go to HBS or Wharton you may have a hard time getting that i-banking job.

(0) CTA: SUBSCRIBE TO US ON ITUNES

(1) Headlines: WE ARE ALL GETTING JOBS
• GMAC, company that makes the GMAT, released it’s annual hiring survey
• Good news: 20% more companies hired at least one MBA than 2009. even better next year
• Nearly everyone is maintain or increasing the salaries they offer MBAs.

The unemployment rate is over 9.4% and home prices are falling, and for MBA’s hiring is up 20%!

Miro: Is that good news?

This is part of a new presentation strategy that I’m trying out. I end every rant with a positive statistic and say everything like it’s good news. Go ahead and try it out with some more stats.

Our national budget deficit this year is $1.5 trilliion
Our national Debt is $13 trillion
64% of companies plan to hire MBA’s next year.

Celebration. Things are looking bright my friend!

http://www.gmac.com/NR/rdonlyres/4E0EF485-A6DE-40EB-B2FB-11747DCF2711/0/2010EmployerPollReport_WebRelease_Amended.pdf

(2) Headlines: YOUR NON HARVARD DEGREE IS WORTH NOTHING

Many people wonder how many schools are the top tier of b-school.

We’ve been doing an informal survey of people and we have found that if you ask students at the 5th ranked business school, they’ll say that there are about 5 elite business schools. And if you ask students at MIT, the 9th ranked MBA program, they’ll say that there are about 9 elite business schools.

But now, for the first time, has scientifically determined the actual number of top-tier schools out there. The number is 2.
Lauren Rivera, an assistant professor of management and organizations at Northwestern University has gained access to the secret hiring practices of several prominent firms and
If you go to Harvard or Wharton, your degree is like gold. You are sporting some killer fairy dust.

Since we don’t know who these mystery companies are, lets just call them G. Sachs. and O’kinsey.

What she found was a hiring culture that is extremely obsessed with pedigree.

No surprises there. But even great schools don’t make the cut:

“Hey, I didn’t go to HBS [Harvard Business School] but, you know, I am an engineer at M.I.T. and I heard about this fair and I wanted to come meet you in New York.” God bless him for the effort but, you know, it’s just not going to work.

What happens to a resume that comes from Rutgers? And the guy says “I’m just being really honest, is basically goes into a black hole.” Yikes.

Miro, this hurts me because

So the take away is if you are going to a non-harvard, you can still get an iBanking job, but don’t expect to be hired because of your degree. You need to bring real skills.

http://poetsandquants.com/2011/01/07/is-an-elite-mba-degree-worth-the-cost/
http://chronicle.com/blogs/percolator/brown-and-cornell-are-second-tier/27565


3) Jargon: Fairy dust
Is that an MBA street drug? Not quite. Fairy dust is what you get when you rub your resume really hard against a top tier educational institution such as Harvard.

So how would someone use this term in a sentence.

Well, suppose someone asks you why you are attending Harvard Kennedy School to get a dual degree along with your MBA. You might respond in the following way. Well Miro, aside form the obvious Harvard fairy dust, I’m hoping to go into politics.

So you’re saying that It’s a way of casually acknowledging that part of the reason that you’re going to Harvard is just so that you can say I went to Harvard. Which everyone knows, but it feels cheap to say it out loud.

(5) Business School Tip of the Week:
- Get two referrals at the end of every conversation. Job networking, business starting. Any question.
Follow-up: can i use your name

You only need one cold introductionn.

Thanks for sitting down with me. Who else should I be talking to about this topic?

(7) What’s on your Radar?
Miro: Nephew’s birthday
Tom: Tutoring Tutoring Tutoring

How Much Money Did You Lose In The Dot Com Boom?

Take a trip back to the go-go late 90s with The MBA Show. While Tom and Miro are on vacation, they look back what life was like when everyone was getting rich and nobody knew what their Internet Start-up did or how it would make any money.

Tech Bubble 1999

Big news.  My company just IPO’d for $50M

what does the company do?

Here’s the pitch content-is-king, get big fast, first-mover-advantage.  

You don’t know what your company does do you?

Not in the slightest, but that doesn’t seem to matter to investors.

So how much money have you made in this game so far?

Billions, you should see my e-trade statement. 

So how much actual CASH have you made so far.

Well none, but that’s simply because I haven’t sold the stock yet.  And why would I do that?  Stocks only go up!

Stocks don’t only go up.  What about the tulip craze or the great depression

This time is different! Any information you need in the world, will be available at your fingertips.  Two years from now, you won’t have: a phone, a TV, you won’t need a photo alumb, you won’t need to buy dog food, you won’t go shopping, and the PORN, my god, THE PORN!

Miro, this is the internet:

picture of naked person slowly downloading … it frose.  [both: ahh, damn]

Business School tip of the week:

Both: Drop out.

MBAs Sure Did Love Coke In The 1980s - The MBA Show Episode 16

While they are away on vacation Miro and Tom dip into the MBA Show archive for this classic episode on Corporate Raiders from the 1980s.

LBO (1981)

(4) Jargon: LBO

LBO: like a regular business, except set to the musical soundtrack of the hit movie wallstreet

Seriously though, a leveraged buy out is where one company takes out a loan and uses that loan to buy another company.

Famouslt used in hostile take overs. Where the management doesn’t want to sell, and so another company. A Raider, takes out a loan so big that they offer the individual shareholders of the company a price they can’t refuse.

And what’s great about this type of play is that once you buy that company, you can take any cash that they have on hand and use it to pay off the loan you took out!

For example:

show business card and then structure of new business with giant debt card underneath.

Returns are multiplied by 10 times! 1% becomes 10%.  10% becomes 100% We CAN”T LOSE!!!  What if we lose money?  [pause]  WE CAN”T LOSE!

* What if we DO lose money?  

I don’t know, what if we quit our jobs and start non-profits?  [pause] hahah

So this shows why you don’t want to sit on a mountain of cash? Because people will buy your company and finance it with that same cash.

But isn’t this irresponsible?

no, irresponsible would be giving huge mortgages to people with no credit, no down-payment, and no job.

that is a rediculous example.  Something like that could bankrupt the entire financial system.  WHat bank would be stupid enough to do that?

I know, what’s on your radar?

A ton of coke.

Well, it is the 80’s

Finally, A Professional School For The C Student - The MBA Show Episode 15

Harvard awards the first MBA : (1908)

How are you going to teach business?  It’s not a real science like metallurgy or phrenology.

Harvard is hiring former executives to teach people how they became successful.

Give me an example of how this might help me?

Well, the classic example is this:  Your family’s whale oil business has fallen on hard times because of those hippies and their green, all-natural oil that comes right out of the earth. So, you got to school to find out how to compete.

So, will all the teachers be former whaling executives?

Some of them will be, but you’ll really be learning from people in other industries who have solved similar business problems before already.

This is a total scam.  You can’t teach business in a classroom.  You have to get our there and learn by doing at your father’s company.  You can’t learn your way into the aristocracy.  We’re at the top now, and we’ll always be at the top

what about those people who aren’t at the top?  

You mean the jews and the irish?  They’ll never own companies.  They don’t have the moral fiber for such a lofty persuit.

I’ll drink to that!  To WASPy christianity.  To the the rich getting richer.  Here’s to C-students finally having a professional school that they can attend.

(2) Undermining the constitution. States make a move to amend the constitution to allow something called an “income tax”.  [Fade to black] 

Son of a bitch!