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Ray Hoffman introduces the guest for this episode. John Byrne and Ray Hoffman have known each other for so long that they refer to each other as old friends. John is one of the most significant business journalists of his generation, having written over two dozen cover stories for Business Week, where eventually he became Executive Editor. He also was Editor-in-Chief of Fast Company and the author of some major business biographies of such figures as Jack Welch of GE and the Whiz Kids, including Robert McNamara, who reshaped Ford Motor Company and industrial America after World War II. He’s probably best known and most highly regarded as the go-to journalist on all matters relating to MBA programs and graduate business schools. That began at Business Week in 1988 when he compiled the first ever published ranking of graduate business school programs. Today, that continues within his second career as an entrepreneur. He’s Chairman and Editor-in-Chief of California-based C-Change Media, which operates five websites, including the number-one source for information about MBA programs, Poets & Quants.Listen in to hear more of John’s journey from journalist to journalist-entrepreneur.
Key Takeaways:
[:22] Ray Hoffman introduces John Byrne for this episode of This Is Capitalism.[1:41] Did John imagine he would always be a professional journalist for a major publication? John describes the magazine publishing environment of Business Week twenty years ago and how he loved it. Then came the internet.
[2:43] Business Week went online for the first time in 1994. AOL gave Business Week a $1 million contract for its content. John built out a Business Week community online. It was clear that this was something that was going to be a major change in the way we thought about what we create, how we create it, and how our audience interacts with it.
[3:52] John created the first regularly-published ranking of MBA programs in the world in 1988. John was the Management Editor at Business Week at that time. He created the ranking to entice schools to seek to be included. It began as a biannual feature.
[4:52] Companies had been complaining for years that MBA graduates had ‘quant’ skills but were challenged in the area of soft, people skills, which were not being taught in schools.
[5:59] John’s idea was to hold schools accountable to their two primary audiences: the graduates and the people that hired them.
[7:17] The business school issue was the best-selling cover of the year in 1988. It became immediately controversial and it gathered a lot of attention. John explains how the coverage expanded over the years to an online community in 1994.
[7:51] Guidebooks were published by owner company McGraw-Hill. The guidebooks covered all aspects of MBA education and they became very big sellers.
[8:11] Toward the end of John’s career at Business Week, John was the Editor-in-Chief of online operations. The average monthly unique visitor at Business Week looked at 1.8 pages; the average monthly unique visitor to the business school section looked at 58 pages. That was an eye-opener.
[9:24] The first survey was a consumer satisfaction survey looking for opinions of graduates and the companies that hired them. John wanted it to be simple and pure. Business Week did not tell the survey respondents that it was for a ranking.
[10:01] Now, when you survey alumni or companies, there is an inherent bias to the results because they know that the survey will impact how their school fares on the ranking. There is a lot of ‘cheerleading.’
[10:40] The survey was a true labor of love. Back in 1988, there was no internet or email. John collected the names of the graduates, printed out surveys from his home Mac and printer, and stuffed, labeled, licked, and sent out the envelopes. His family helped, in front of the TV watching Yankee games. It took a month of nights.
[11:55] Ray notes that the first J.D. Power surveys were also sent from Power’s living room with the Power children helping.
[12:17] John tells about the creation of the Poets & Quants website. Quants & Poets was a common term in business schools but unknown outside of the field. A good business school brings together Liberal Arts majors and Science majors, so they can build on each others’ strengths and minimize weaknesses.
[13:49] When John thought about starting his company, he remembered this phrase. It is popular lingo to anyone in that world. About nine years ago, Bloomberg bought Business Week. It seemed like the right time for John to go on his own, online.
[14:51] John looked at the importance of engagement with his audience. Online content provides a very different level of engagement. John knew there was a market for his planned business from the business school section of the Business Week website.
[15:08] In John’s last few years at Business Week, the management did not understand all that John was doing. The average age of a Business Week reader was in the early fifties. John wanted to convert twenty-somethings who visited the website into readers.
[16:13] John’s idea was to do a Huffington Post for business. He talked to the former publisher of Forbes.com and to Andy Serwer, who was then Managing Editor of Fortune. John suggested that the three of them get together to build up this company with 10 microsites around businesses that were under-covered in journalism.
[17:41] The content would connect to a mega site that would cover business and the economy more broadly. They expected to rely heavily on contributions from consultants and professors with an editorial staff to create original content. Due to different individual financial goals of the group, it never happened.
[18:34] Instead, John went to California and started his first website, contracting with a web developer and a designer to create the site, while John created content and enlisted freelancers to help generate more content. John wanted the site to live with a fairly significant amount of journalism in place.
[19:13] In those days, Google might take months to recognize a site, but they were very quick to index social media like Twitter, LinkedIn, and Facebook, so John created channels on Twitter, LinkedIn, and Facebook using the new Poets & Quants logo before launching the site. He curated existing content to build an audience.
[19:51] When the site was launched nine years ago, in August, they already had an audience from social media, with Google helping their SEO.
[20:12] John did it on his own. John’s biggest investment was his time spent reporting and writing for several months to launch. John has not borrowed a dollar or taken a dollar of investment. He owns 100% of the company.
[20:35] John has five websites run by 12 full-time employees with benefits and 401(k) plans. The main Poets & Quants site gets 35% of its traffic from outside of the United States. One of the sites is a global conference business.
[21:06] John talks about the feature, The Best and the Brightest, about MBA graduates from various programs. John praises Senior Writer, Jeff Schmitt, who created the feature. John explains how they get nominations and pick the best and brightest.
[22:29] The feature puts a face on the program and the school and shows the graduate’s motivation and their journey. It is meant to inspire and motivate others to get more education in a program that is right for them.
[23:12] John brings up student debt and employment out of college. He discusses the value of MBAs and the market for them. John says 60% of MBAs don’t borrow for their degree because they get scholarship help but those that borrow can pay it off quickly.
[24:37] People look at the tuition and fees and get sticker shock but, in some schools, 100% of the students are on scholarships; many are on full scholarships.
[25:18] The average class at Harvard Business School is 930 students in a two-year program, so 1,860 are enrolled. 50% get scholarship help. The scholarships are based on need, not merit. Harvard spends $36 million a year on scholarships to 930 students.
[26:17] Stanford gives the same level of support to their students, individually. Many other schools are in an “arms race” to give out scholarship money. The MBA is a flagship program. The higher they can rank, the better it reflects on the entire school. So schools are willing to use the MBA program as a loss leader for their other programs.
[27:15] For MBA students who pay full price, John says they will have no problem paying off the loan quickly, with an employment sign-on bonus and a salary of $140K, depending on the field they choose.
[28:44] In our strong economy with virtually full employment, applications to MBA programs have fallen sharply. Sticker price and a decline in international candidates into the U.S. are other reasons for the dropoff. The documentation to get a visa can be burdensome. Also, good online MBA programs have become very popular.
[31:50] There are also specialized Master’s programs such as business analytics, supply chain management, HR management, healthcare administration, and others, that people are choosing right out of college.
[32:21] Young people often choose a one-year specialized Master’s or an online MBA.
[33:03] Across all the students, the discount on a Harvard Business School degree is 40%. Other schools vary. John cites major school offerings.
[33:28] Destination websites with a lot of content and advertising support are like gorillas in a cage that need to be fed a lot of bananas every day. Content is very important. John says content is the campfire around which you gather an audience that has a conversation that creates unity.
[34:29] The content has to be new, updated, creative, smart, insightful, valuable, and produced daily. If the content gets old, the traffic starts to fall. It’s a big, serious job.
[35:40] In addition to writing every day, editing, and publishing, John also has a company to run with all the money and management concerns running a business involves. John recruits clients from the business school community. Right now, John is considering investing in a customized software platform to do one thing for the site.
[37:03] Most of John’s life, he covered management and leadership. Now, he has a real P&L and it is work to get stuff done on a daily basis.
[37:44] Ray and John discuss their years of study of Frank Sinatra the performer. Sinatra recorded commercially in seven decades. John compares the body of Sinatra’s music to the work of an entrepreneur. John thinks Sinatra’s biggest regret might be the years he didn’t record. John sees and contrasts three phases of Sinatra’s work.
[40:07] John Byrne’s C-Change Media is capitalism — journalistic entrepreneurial capitalism. This is capitalism.
Mentioned in This Episode:
Bloomberg survey on grads from the biggest business schools
Stanford Graduate School of Business
W.P. Carey School of Business, Arizona State University
Isenberg School of Management, University of Massachusetts Amherst
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