Listen to this article
Growing up often means changing your attitudes to how the world works. The mantra of drop out, start up, helped define the revolutionary spirit of companies like Facebook, Apple and Microsoft, whose founders quit formal education to launch what became world-beating ventures.
However, data from business schools shows that these very companies, plus peers such as Google and Amazon, now rival consultancies and investment banks as the big MBA hirers. Growing up has brought a new attitude to business education among Silicon Valley’s elite.
At UCLA Anderson School of Management in Los Angeles, 30 per cent of the 2015 MBA class took roles in technology companies. For the first time, the tech-bound cohort equalled the proportion of students taking the established business school graduate route into the consulting sector.
Adobe Systems took the lion’s share of Anderson MBA graduates last year, pushing Bank of America Merrill Lynch and Deloitte into second and third place respectively. The most popular place for an internship was Apple, ahead of Deloitte, Mattel and PwC.
The increase in technology industry hirings is being driven by changing attitudes among Silicon Valley’s key players and an acknowledgment that many have become the kinds of large companies they used to contrast themselves with, according to Phil Han, Anderson’s director of recruiting operations.
“Even five or six years ago, newer tech firms felt that MBAs weren’t needed as much in the technology industry because they felt they needed engineers,” he says.
“Many of these companies are now growing so fast that they need the strategic thinking and leadership skills provided by an MBA. As a result they are coming to us more often.”
The biggest loser from the rise in technology industry recruitment at Anderson has been the entertainment industry, whose campus is a short car ride from Hollywood’s film and television studios.
Companies like Google and Apple, with their freewheeling work practices, office ping pong tables and slides, have stolen the entertainment industry’s crown as the most fun place to work, according to Mr Han.
“It is not that students do not want to do media, banking or consulting jobs any more, but these tech companies are offering some really interesting perks and benefits,” he says.
Convergence means that it is also harder to distinguish between an entertainment and a technology business.
One of the biggest recruiters of Anderson MBA graduates in recent years was Hulu, a streaming service for television shows, video clips and movies. Many people would view this as a technology company but its output puts it at the heart of the entertainment industry.
Digital divisions of the traditional entertainment studios have also begun hiring MBAs, particularly for roles in analytics and digital distribution and operations, Mr Han notes.
Mike Carley is in the second year of his MBA at Anderson, but recently secured a job offer from Adobe after a summer internship as a product marketing manager.
“Tech companies hire incredibly smart people to work on really cool, complex, game-changing products,” he says. “That is the type of life I want to live, and the type of culture I want to be a part of.”
Even at business schools where consultancies and investment banks still take the largest share of MBA graduates, the technology sector is now the fastest growing source of jobs.
A fifth of MBA students graduating from London Business School (LBS) last year took jobs in technology companies, up from 6 per cent as recently as 2010.
Despite London’s global pre-eminence in banking, barely a quarter of last year’s MBA graduates took jobs in the financial services sector, down from more than a third in 2010.
The rise in technology company hires reflects a rebalancing of London’s economy following the growth of tech start-up clusters around neighbourhoods such as Shoreditch and Bermondsey, in turn driving some of the most successful Silicon Valley-based companies to open large offices in the UK.
Amazon is among the biggest recruiters of MBA graduates worldwide, amounting to hundreds of jobs globally. It tops the list of tech industry hirers at several top schools in Europe and the US, including LBS.
Miriam Park, Amazon’s director of university recruiting, says her employer targets specific schools for a combination of factors, including an evaluation of whether the institution’s ethos fits with the online retailer’s culture.
“We value MBAs for, in many cases, the global approach that they can bring to the business with many candidates having worked and studied in more than one country,” she says.
“Their range of experience and variety of backgrounds is invaluable in bringing a different way of looking at our business.”
Edward Layoun was among 16 MBA graduates at LBS taking jobs with Amazon last year, more than went to work for Bain & Company or Goldman Sachs.
The former management consultant, who changed careers to work for the online retailer after graduating with a distinction from LBS, says he was attracted by the chance to lead teams that are trying to make significant changes to the age-old activity of shopping.
He claims that his career highlight last year was helping to lead the roll out of Amazon Prime’s same-day delivery service. “It showed how you can really touch people’s lives in this job,” he says.
The perception that companies born in Silicon Valley value employee happiness and work-life balance as a crucial part of their success is a big selling point for those who have worked in other sectors. “I fundamentally disagree with the concept that you have to answer emails at 1:30am or work multiple 20-hour days to do good work, yet stories involving those elements are ubiquitous in the consulting and finance industry,” Anderson’s Mr Carley says.
Jovanna Youssef, another Anderson MBA student, is moving from Deloitte to Apple after working in the Cupertino-based computer company’s product management team during an internship.
“While I enjoyed my time at Deloitte and learned a lot, I knew I no longer wanted to work on engagements for various clients, but rather I wanted to work within a company,” she says.
LBS’s Mr Layoun claims he switched away from a career in consultancy into technology because he was not satisfied with the focus on moneymaking in his former job.
“Consulting and investment banking can get you a big pay cheque but at the expense of a lot of things,” he says, adding that he wanted to work for a company that talked about innovation and not just the bottom line.
Given the cost of obtaining an MBA, money does play a part and may be a barrier to technology jobs surpassing consultancy positions as the career of choice for business school graduates.
Among the class of 2015 MBA graduates at Northwestern University’s Kellogg School of Management, the average base salary for those taking jobs in the technology industry was $119,459.
This was better than the average for many other sectors, but not as good as consulting, where the average base salary was $133,253, and financial services, with an average base salary of $125,415, according to data from the school.
At Kellogg, the largest proportion of 2015 graduates took consultancy and financial services jobs, pushing the technology industry into third place.
There are some mixed messages coming from those at the top of the fastest-growing technology companies about whether getting an MBA is important for a career in the sector.
Her boss, Mark Zuckerberg, has taken the opposite journey. Having dropped out of his Ivy League education to build his social network, in 2014 Mr Zuckerberg joined the advisory board of Tsinghua University’s School of Economics and Management, one of China’s top business schools. He even delivered an address in Mandarin to students at Tsinghua University’s Beijing campus. Perhaps it is time for Facebook to post a status update to clarify its position.