Startup Vs. Higher Education: Why Silicon Valley roots for the former
I was on my regular walk with some friends around the Dish, a 3-mile hike in the middle of Palo Alto around a satellite dish on the Stanford campus grounds when in between gulps of vitamin water and coloured and flavoured liquids that formed expensive and not as satisfying substitutes for coconut water, the topic of children invariably arose.
“My son is applying to the Ivy east coast schools, he wants to get as far away from us as possible” said one parent. “I’m trying to convince him to go to school nearby”.
Another chimed in “It’s good at least he wants to go to college. I’m just trying to convince my son to get a broad-based degree, then specialise in his master’s program, … , anywhere in the US or Canada is fine with me”.
A third parent crowed “College is passé. My daughter interned with Facebook the past two summers and is planning on skipping college, or at least taking a year or two off before she applies. She’s started a consumer app company and has Angel funding already”.
The rest of us murmured our congratulations and then fell into an awkward silence. We did not agree, but we chose not to air our opinions. The parent was expressing the prevailing opinion in the Valley after all. Around here, working at a startup, or starting a company, preferably as early in one’s career as possible is the way to go. If not, go work for Google or Facebook or Twitter or Uber and bide your time before you start a company. Never mind college, and forget a Master’s degree.
It is in the air in the Valley. Starting a company, raising money for it, or worst case, working for Google and Facebook or a hot startup before starting your own. Interestingly enough, entrepreneurship is not only the thing to do for children in many cases, it has become a badge of honour for parents, even in lieu of college.
Why waste four, perhaps five or six years of college, and then work for a large, boring company, when one can just start one on immediately, be lauded and get rich? Isn’t that what Bill Gates, Mark Zuckerberg, Michael Dell, and numerous others all did?
Numerous media stories and even famous billionaires are glamorising dropouts or the Peter Thiel’s of the world encouraging students to skip college entirely
. Never mind that the data is unequivocal that it is a myth that dropouts are successful. It is a classic case of the exception not proving the rule. A study by Duke University below is just one of several that show that success follows college, not the other way around.
But there is a lot to be said about what is behind this somewhat carefree attitude in both the parents and the children who are ignoring all the data that point to the fact that a college education is correlated to success. And, at least temporarily are forsaking a formal college education and start a company. It is part of what makes the Valley what it is. It stems partially from the increased appetite for risk from venture investors.
I remember sitting in a board meeting after presenting the company results for the past quarter and feeling proud that we were growing rapidly, generating positive earnings before interest, tax, depreciation and amortization (EBITDA) and had $40 million of cash (and increasing) in the bank. My glee was summarily punctured when one of the board members asked why we were hoarding cash and were not investing it. All my arguments about “a rainy day”, “investing judiciously”, and “analysis on the best path forward” were met with resistance. “Invest the money and take risk,” the board member insisted.
“I provided capital in this company and entrusted the management team to invest it in advertising technology and grow the business, not to leave it in the bank and collect interest. I am the banker, and I can do that without you”. Those somewhat cutting remarks form the basis for many of the attitudes here.
It is in the culture in the Valley to take risk, and since the ecosystem provides a set of opportunities are endless, there is little cost, other than time, to failure. Starting a company and failing is not a big blow. Just get up off the mat, dust yourself off and start over. One can always return to school, the thought process goes. And the experiences gained in the attempt to start and run a company are without parallel. Finally, the support infrastructure comprised of the friends, teachers, parents, and relatives are all extremely supportive, if not proud of taking such risks.
All that said, call me a dinosaur, but I, for one, am not joining the bandwagon and will be encouraging my children to get a solid foundation in college, get their Master’s degree and perhaps PhD or MD and then worry about starting a company and joining the ranks of the exalted entrepreneurship community.
My contribution to the conversation during our hike around the Dish was simply to say that my son has started tuition for his upcoming SAT test so he could get as close to 1600 as possible. And I left it at that.
(Jayant Kadambi is entrepreneur, technologist, and business leader who led his most recent company, YuMe, to an IPO as a global leader in digital media technology. Jayant is based in Silicon Valley and is spending his time as an advisor, board member, and angel investor