I may be wrong and this may be more fueled by my own insecurities about not having gone to a top school, but this attitude that The End of The Degree as the next phase of education shows a real two-faced side to Silicon Valley.
You have investors and startup founders who firmly believe that soon degrees won't matter, that credentials and pedigree shouldn't be a reflection of your skill and talent. They write blog posts, they invest and start companies. And yet, when you go look at the biographies of many of the rising stars, you'll notice that the majority of them do have pedigree. When watching TC Disrupt last weekend, I tried looking up the background of every investor and founder that stepped on to the stage, and it became obvious just how many of them have a strong pedigree. You can't help but think that it actually does go a long way in Silicon Valley, despite what's said.
Maybe people with those pedigrees on average are more intelligent than those who aren't, but nevertheless it's a pattern you can't ignore, and one that makes me doubt the Valley's conviction to topple formal education.
One theory some skeptics have is that the movement towards MOOCs/etc. isn't really about toppling formal education overall, but about toppling non-elite formal education, which would cement the dominance of a handful of top institutions. In that view, MOOCs become a kind of franchising for MIT/Stanford/Harvard, where they offer a lower-tier product that mainly aims at competitors, but doesn't really threaten their own top-tier product. If anything it might provide some advertising for the "real" university, by increasing name-recognition of their faculty.
A decent number of people at the top of the food chain in Silicon Valley come from finance, a world very much driven by pedigree. We tend to forget that from time to time, most of us here (I would imagine?) being engineers, and fewer of us being financiers. But pedigree has always counted in finance. Though it counts slightly less today than it did 30 years ago, it still counts for quite a lot.
To this day, there are circles one simply can't break into unless one comes from a top Ivy/Stanford undergraduate program or business school. These circles dominate recruiting at top investment banks and consultancies, which in turn feed VC firms and executive positions at many tech companies. It's not impossible to land one of these roles without a degree from, say, Harvard Business School. But that degree will open doors that are, by default, closed to most everyone else without extraordinary hustle.
Another very important point: many of those doors opened on campus, not afterward. Having Harvard, Yale, Stanford, etc., on your resume looks lovely. But that's almost incidental to the real benefit. The real benefit is that the top banks, consulting firms, and recruiters show up on those campuses and pay greater attention, hire more interns, and so on. The advantages begin at school and start accumulating afterward. This is the secret sauce that MOOCs will have a hard time replicating, at least until the top firms become more open-minded about recruiting.
The importance of pedigree will change when the demand for pedigree changes, not the supply. This is why I remain optimistic about the prospects of online courses in the long run, but skeptical of their prospects to really shake things up in the short run. So long as top-tier job recruiting demands pedigree, pedigree will matter.
I think demand-side investment by organizations like YC, 500 Startups, etc. -- many of which seem fairly indifferent to pedigree -- will make a bigger impact than will supply-side attempts such as MOOCs or their equivalents. At least for now.
I count 15 of 23 that have either an undergraduate degree or an MBA from an Ivy-league school or Stanford. Mostly HBS/GSB. That's 65% representation, relative to the less than 1% of undergraduates who graduate from the Ivy league.
Now, you can theorize that maybe it's because people who get into these schools are smart to begin with, and would have been equally successful elsewhere. But there is a lot of overlap in predictors between these schools and the ones right behind them. E.g. SAT Math interquartile ranges for Duke are 690/780 and the ones for Princeton are 710/800, and within that narrow range also fall Northwestern, Stanford, U Chicago, Penn, Columbia, Harvard, and Yale. The student bodies at these schools overlap more than they differ. If the key differentiator was the quality of the people coming in and not pedigree by itself, you would see a more graduated drop-off in representation.
I think it's obvious that the pipelines that Harvard/Yale/Princeton/Wharton/Stanford have to elite organizations in finance are a huge boost for people who have the option to acquire that credential, distinct from the qualifications those people come in with.
True. It should be pretty simple to model this out in Bayesian fashion. Doing so would probably bear your theory out, i.e., these schools seem overrepresented in top-tier finance relative to their numbers of graduates in any given region (VC in this case, perhaps IB/PE/etc. in other cases).
It goes beyond the credential, though. The credential is a side effect. Many (most?) lucrative careers in finance don't happen when a person with a Harvard/Yale/Princeton/Stanford diploma applies blindly to a job at Goldman Sachs. They begin when that person is an undergraduate at H/Y/P/S, where the Goldman recruiters show up in greater numbers (and with bigger quotas) at those schools than they do elsewhere. That's where the pipeline begins, and that's precisely why it's very hard for any credential to rival the pipeline these schools have built. From there, advantages begin to accrue and compound over the years (the "Cumulative Advantage" Theory).
Arguably, in many cases you could trace the origins of the pipelines even further back, to the elite private and prep schools with well-paved inroads into H/Y/P/S/etc.
There's no question you need to be smart to flourish at these schools, and to succeed in high finance. Probably in the top decile of IQ and effort, at least. But smart is just table stakes.
I don't think it's about intelligence, I'm from Chicago, I know a lot of incredible people from the top schools, but I've also met plenty of the "less intelligent" people from Northwestern and University of Chicago.
I believe it could be about being able to get your way in into the right circles. Getting in into an ivy league school is usually challenging, unless you're born into money, you have to figure out a plan and correctly execute it in order to get in--just like meeting the right people, starting a business, and then getting funded.
Also I think we like to associate and surround ourselves with people of the same background. So when a successful Harvard graduate sees another Harvard alumnus, there is an automatic desire to help out.
"Getting in into an ivy league school is usually challenging, unless you're born into money, you have to figure out a plan and correctly execute it in order to get in--just like meeting the right people, starting a business, and then getting funded"
You do realize that the planning for getting into an Ivy League school has to start at around age 14, right? At that age, whether you'll be able to "execute a plan" to get into a school (or even have the perspective to care what school you get into) will 100% depend on whether your family is rich and privileged itself.
Poor kids don't think about going to Ivy League schools at age 14. And neither do rich kids. Only rich kids' parents do.
I was thinking about getting into a top school at this age, although I was thinking CalTech and MIT for science instead of the Ivies, and while they were a special case (as in, not really planning on spending anything to speak of on our educations), my rich parents were very much not. Of course, one of the reasons for that was I'd been told for as long as I could remember that I had to study and make good grades or I'd end up "digging ditches" as a career.
Heinlein wrote a book, Have Spacesuit, Will Travel that you tend to read at about that age which has a hidden sub-agenda of telling you exactly what you need to do to get into one of those schools. Hmmm, his first juvenile also touches on it, but its much more of an aside.
I applaud your approach and don't know whether your conclusion is correct.
But if it's not, it's for reasons right in front of you - TC ain't doing any investing. An invite to participate at Disrupt is less like a "most likely to succeed" award at a regular high school and more like "best hair" at a magnet high school.
Oh, I know. I wasn't going for a solid experiment. I was curious to know where these guys came from and noticed the pattern in the process, one that I'd noticed before.
I was not born into a rich family (although we were not living in indigence either) so maybe my arguments will carry more weight. The way I see it is that the world is unfair. If I were to make a simile with athletics, I'd say we don't all start from the same line in the race of life. Some (the ones born into wealth) start much further ahead than you do and it is not their fault as no-one chooses the family he is born into. This has been the case for millennia and I doubt it will change before long.
However if you who started much further back manage to catch up to these kids, say at university or any other time in your lives, then you should feel emboldened to have made it this far through luck and hard work and keep working towards your goals. Remember that the race is still rigged but you may get that gust of wind in your back that would propel you forward.
So instead of moaning you should keep your focus and run down the path you have chosen, while thinking of ways to even up the starting positions when you find yourself in a position of power and influence in the future. Of course you may fall along the way or be overtaken by the privileged ones or by someone who started even further back than you - remember that there is always someone who started behind you.
Yes, not to mention that it simply means people that don't fit their pedigree filter are available. I have met brilliant hackers from MIT/Berkeley/et al, I have also met average hackers from those schools, and brilliant hackers from other schools. My experience leads me to believe the correlation between brilliant hacker and school (if any) is positive, but not dominating. The again maybe that is just me hoping, not having come from their vaunted halls :)
As sad as it may be that the current California-centered incarnation of technology has fallen to become Yet Another Feudal Reputation Economy, I think the only thing worth doing is to figure out what comes next. It's dead, we won't be able to save it, so let's move on. The established players aren't going to quit their shitty behaviors just because a few negative blog posts are written about the death of meritocracy in the Valley (which is old news; they're the ones who killed it).
Rather than complain about MBA culture and colluding VCs and Stanford Welfare, we should be figuring out a way to replace these assholes. What are we, as a generation, going to build that shows them up? The same inefficiency that beset large corporations in the 1990s is hitting the mainstream startup scene now.
Maybe Austin will take the lead, possibly somewhere else like Portland, Chicago, Baltimore, or Durham. It might not even be in the US.
What does make me sad was that I thought (being extremely naive) that the Crash of 2008 might have a positive effect on technology, by reversing the "talent graveyard" effect of finance. However, quants (the ones we'd want) mostly stayed in high demand; the ones who moved into tech from finance were the MBA-culture types who ruined New York's potential to ever be taken seriously as a startup scene. It had the exact opposite effect of what I was hoping for.
What does make me sad was that I thought (being extremely naive) that the Crash of 2008 might have a positive effect on technology, by reversing the "talent graveyard" effect of finance.
The crash, and the policy response to it, are basically the reason why The Startup Scene looks like it does. We have banks full of cheap capital from QE but nowhere to lend it because aggregate demand is weak, large corporations with lots of cash on hand from cheap labor and asset appreciation, but nowhere to spend it because aggregate demand is weak.
Banks can't just sit on the money because they're not allowed to, and large corporations can only use so much as dividends or cash reserve before people start to wonder if they have any business plan at all.
The current startup scene is mostly an arbitrage trade on this scenario. You acquire liquid capital on the cheap, convert it into a little unit of fixed capital (i.e. startup firm) and sell it at a markup to a motivated buyer (i.e. cash-rich BigCorp who desperately needs the appearance of a forward looking business plan).
And really, this is the kind of inefficient market where something like credentials would become more important.
> It's dead, we won't be able to save it, so let's move on.
I think rumours of the California start-up scene's demise are vastly exaggerated. Maybe we should wait proclaiming it 'dead' until it is no longer the top foundry for new start-ups world wide?
Is it the top foundry? It depends on what sectors you look at, I believe. It's definitely still top in web technology. But in other areas I'm less sure.
One slice of the successful startup market is looking at tech IPOs, which are on the upswing again. This probably downplays the Valley scene, which focuses more on quick smallish exits (acquihires and other kinds of acquisitions), but does give a view of where the next-gen of large tech companies is coming from.
According to PWC's Q2 2013 tech IPO report [1], there were 13 North American tech IPOs:
EVERTEC: $505m, Puerto Rico
CDW: $395m, Chicagoland
Tableau Software: $254m, Seattle
Blackhawk Network: $230m, SF Bay Area
Gogo: $187m, Chicagoland
Gigamon: $128m, SF Bay Area
Cyan: $88m, SF Bay Area
Rally Software: $84m, Boulder CO
ChannelAdvisor: $81m, Research Triangle NC
Marketo: $79m, SF Bay Area
Tremor Video: $75m, NYC
Textura: $75m, Chicagoland
Halogen Software: $55m, Ottawa Canada
The SF Bay Area is still the largest single source, with 4/13, but not in a dominating sort of way.
your numbers are off - took me a lot of tab switching on my tablet to figure out the mistake :) it should be millions, not billions, and they represent the proceedings (the amount raised on IPO), not the market cap.
It's dead in the "Microsoft is Dead" sense, which means that it's not actually out of business, but that it has ceased to be exciting, innovative or useful. Microsoft is still in business, but no one finds it very interesting anymore.
The VC-funded game that has taken over the Valley is now just a way for those who were preselected to win at birth to launder their inherited connections and make it look like they built something. It's for legacy rich kids to make the appearance that they created something, when the hard work was done by hired-gun software engineers getting 0.05% equity slices.
But many engineers are choosing to do exactly that with their micro-startup idea vs work for that 0.05% equity slice. Start up recruiters have a hard time and have to compete against Google hours & compensation or engineers going into business for themselves.
On top of the equity slice can often disappear from a firing whim, since they often expire soon after you stop working for the company. On top of that many employees who leave startup's don't actually buy the options, as the founders of ESO fund found out.
You have investors and startup founders who firmly believe that soon degrees won't matter, that credentials and pedigree shouldn't be a reflection of your skill and talent. They write blog posts, they invest and start companies. And yet, when you go look at the biographies of many of the rising stars, you'll notice that the majority of them do have pedigree. When watching TC Disrupt last weekend, I tried looking up the background of every investor and founder that stepped on to the stage, and it became obvious just how many of them have a strong pedigree. You can't help but think that it actually does go a long way in Silicon Valley, despite what's said.
Maybe people with those pedigrees on average are more intelligent than those who aren't, but nevertheless it's a pattern you can't ignore, and one that makes me doubt the Valley's conviction to topple formal education.