Recent college graduates, myself included, are on thin ice.
Up until this point, we have pretty much been shepherded through a streamlined and somewhat mechanical educational process. At a moment’s decision, any one of us can fall into a sinkhole career, seduced by financial liberations that promise security and growth. And often they do. But we would be ill-advised to forget that the tone we set now will influence the next decade (or six) of our lives. This isn’t to say that it’s ever too late to change directions, but as the saying goes: staying in shape is much easier than getting back into shape. But how fit do we need to be? Or want to be? Can be?
According to a report by the Federal Reserve Bank of NY (Current Issues: Vol. 20, No. 1; 2014), “the percentage of those who are unemployed or “underemployed” – working in a job that typically does not require a bachelor’s degree – has risen, particularly since the 2001 recession. Moreover, the quality of the jobs held by the underemployed has declined, with today’s recent graduates increasingly accepting low-wage jobs or working part-time.”
That estimated number: 44%.
In other words, nearly half of all recent graduates either could not find a job they were looking for or were working a job in which their studies were not applicable nor necessary. Given the nature of being a college graduate, we can probably contend that those of the 44% that were working probably provide higher efficiencies and overall better and quicker results than had someone who more closely fit the job requirements fulfilled the role. But needless to say, this slightly positive benefit is vastly outweighed by the pure deadweight loss in applicable talent.
What happened? The educational “crisis” is certainly complex and although there are several movements to try and better it, the optimal answer is difficult to discern.
Titles are helpful for the sake of organization and validation, but over time (‘degrees’ included) have become sort of an empty promise. A degree is a piece of paper that certifies you went to college at university X and studied the required courses for major and/or minor Y & Z. This is essentially quality assurance. One large benefit is that hiring companies can see that an applicant with a diploma saw something through, from beginning to end. And when factoring in which university the diploma came from, allows for quality adjustment, filtering for certain traits when companies receive large amounts of applicants.
But why then the disparity between specific talent or background and available jobs? Even for those with a very technical background such as electrical engineering, finding a job is not very easy. With the average cost of attending college rising every year, the number of college graduates finding themselves in a completely different socio-economic situation than expected is constantly on the rise. Particularly in the United States, where over 4,000 various institutions are marketing their product and service as the best possible, teenagers with no better knowledge assume that it is the most logical step. The idea and standard of a college degree has been somewhat warped into a marketed product, and after the whole process, graduates hindered by debt have no choice but to work jobs that help pay off that debt regardless of whether it’s what they want to do or not.
This isn’t to say that everyone with a whim for poetry should expect to have healthy salaries readily available after graduating with a liberal arts degree in English. Hard work necessary is hard work required and regardless of what one majors in, it is naive and probably unwise to expect a job to come hand-in-hand with a degree. But the notion of ‘loving what you do’ isn’t entirely just a fantasy. In fact, in a perfect world, everyone should be able to work hard for something that they are passionate about and believe in.
We catch glimpses of this utopia within the intersection of Venture Capital x Technology.
The combination of VC x Tech is probably the best solution to accelerate improvements and innovation. Good VC’s and start-ups are kind of like good parent and child relations. Ideally, and hopefully I’m not stepping on any toes, a good parent, among many things, is a success in their own right and by the time they raise their child(ren), have the experience, knowledge and capital to provide them sound guidance as they pursue their own dreams- kind of like training wheels on a bike.
Furthermore, the combination of VC and technology is the sweet spot for all recent graduates. The first backlash is always the question of risk. Yes, VC’s are probably not the safest choice in terms of financial return, but when we as human beings ponder about the future, a mountain of cash is not the ideal picture that sparks genuine anticipation. That’s probably a large part of the spirit of start-ups. Money should never be the end, but rather a means to a greater end. The end being the innovator’s dream to better the world in some way or another. If the idea is ubiquitous and truly disruptive for the better, the valuation (and thus capital) will follow. This is kind of how valuation in general seems to work. Also, not to venture too much into lala-land, market forces do actually end up providing fruitful results. You just need the right people in the right roles.
Even today, the number of VC-backed start-ups seem to be increasing as people are embracing new ideas. Personally, I advocate that recent grads, or anyone of any age for that matter, take a moment to think about what their visions for the future are and how they might fit into the global model. What they would do, given the absolute luxury to do so, and to see if it’s worth pursuing. Technology will eventually close the gap between applicable talent and fitting jobs, so it’s actually quite worth it think on these terms instead of trying to simply accumulate wealth. Examples of this include HFT in stocks, where computer algorithms make hundreds (thousands?) of trades per second, AI-esque customer service call centers (speaking of AI..), or even accounting positions that are slowly being replaced by software.
Maybe I’m just naive. Maybe I have no idea what entrepreneurism is or how VC really works or what really constitutes the building blocks for the what’s so casually, and perhaps aptly, called the American dream. But for both the pursuit of what Peter Thiel calls the 0 -> 1 as opposed to the 1 -> n, as well as to aid in the acceleration of a better functioning economy, I strongly believe VC’s, start-ups, and great ideas in general will always be more valuable in the long run than other pursuits.