On the eve of making our first College Recruiting trip of the 2013-2014 school year, it seems appropriate to turn our attention to a very relevant topic - staying in school, or dropping out to start up.
Mike Olson wrote a great piece featured in LinkedIn, advising students to stay in school and "hang up" on Peter Thiel if he calls.
More recently, Peter created the Thiel Fellowship. The Fellowship recruits current college students to drop out, and provides funding and resources for them to start companies.
The Thiel Fellowship is just one example -- albeit a highly visible and influential one -- of a growing trend in the tech sector these days. Angel investors and Amazon Web Services are contributing to it, too: More people, often younger than before and with steadily less practical experience, are using less capital and fewer resources to start companies of their own.
I'm a crotchety old guy. I worry about all these new companies. I'm glad that they're easier to start, but the problem is, they're just as hard to finish as they have always been.
I think what makes Thiel's fellowship a bit different is that he isn't just helping people who drop out to start startups be more successful - he's encouraging them to do it.? In an era where there is a bit of startup fetishism in the air, one worries that he is just making it worse by starting younger.? Olson on the value of graduating and working:
She'd graduate and find a job working for an established company, where she'd plow in the hours, get a bunch more practical experience, wow her superiors and work her way up the ladder.
One day, she'd look around the company and think to herself: I could totally do this myself.
Exactly how it has worked (for the most part) for many generations. But:
The Thiel Fellowship telescopes that experience by taking out the parts where the young entrepreneur got the classroom facts down and then saw how companies operate. No more apprenticeship. No painful grind. No time-consuming mentoring. The Thiel Fellowship tells her that she can leap directly to "I could do this."
But that's wrong.
It isn't wrong that the young entrepreneur can write the code.? Or build the product.? Or start the company.? But:
Management is a tremendously undervalued skill on the tech startup scene, and that single fact contributes, I believe, to the failure of more companies than any other factor.
Many aspects of being successful depend upon emotional maturity and life experience.? We can acquire maturity at different rates of speed, at different times of our life.? And some life experiences are more telling than others-? and have greater impact.
But at the end of the day, it takes time to develop expertise, it takes time to achieve significant emotional maturity, and it takes time to collect the life experiences you need.? And that is especially true for managing other people - as Olson points out.? And once you're past the seed funding stage and raising a Series A, a founder's most valuable skill will be their ability to lead, motivate, and manage other people.
Olson doesn't let up by just pointing out the obvious, he beats the drum:
Our theoretical college drop-out entrepreneur starts her business with a serious handicap: She's never seen the job done right. She doesn't know how to run a good hiring process. She won't be able to set good targets, closely tied to critical business objectives, for her senior executives. She won't know how to motivate her team -- to walk the fine line between encouragement and correction that makes good people better. She'll have to learn on the job -- the most expensive way to learn! -- how to manage people to the right outcomes, and how to turn a group of individuals into a team.
Those are fantastically difficult, and fantastically important, skills. Because she skipped the apprenticeship that working for an existing company provides, she will have missed the chance to learn them on someone else's dime.
And a really critical learning this theoretical student entrepreneur might not have learned is to empathize with the people working for her and their situations.? Will she sympathize with their need for health insurance? 401k matching?? Will she understand their obligations to family both older and younger in time of need?? Will she understand that as she's rolling the dice with her business that she is also rolling the dice with the livelihood of her team?
If you're our theoretical college dropout entrepreneur, here are some questions you should be asking: Do I want to be the CEO of my company for the long term? If so, how am I going to master the skills I need to do that? If not, how am I going to run it until it's big enough to attract my replacement, and how am I going to master that collection of skills?
In my first job, I avoided getting promoted beyond one level of management.? I turned down promotions and I moved laterally in the organization, working for Consulting, Technical Sales, Development, and a couple of different industry-focused teams.? Projects I worked on were worth hundreds of millions of dollars to my employer, and I worked on the small teams that made those projects, sales, and products happen.
And I learned a lot about management - and leadership.? And I had time to grow up, to learn empathy for my peers and my reports (and my bosses).? Mike Olson's post is spot on in that regard.? And we all have time to grow up.
There's no race to the finish line. No prize for being first.? Businesses like BP3 and startups and investors in Silicon Valley are always in a hurry to get there yesterday.? Part of the beauty of being in school is that you can allow time to move more slowly, and you have time to really think about what you're doing and learning - to synthesize all these experiences into the adult version of you.? That idea that you think you have to be first to market with? There are a dozen others (at least. in this country alone.) chasing that same idea.? Learn how to execute and you can chase whatever ideas motivate your dreams in the future.
By the time Lance Gibbs and I started BP3, it wasn't our first rodeo.? Would you trust someone to be your CEO for whom it was? If you think BP3 would be a good place to learn, come on down to Austin and join us.