Entrepreneurship has become as commoditized as college
As most of you know, the tech industry has made a sport out of bashing college. One of the core criticisms of higher education is that college degrees have become ubiquitous and commoditized. The argument posits that so many institutions of suspect quality are handing out degrees like candy that college has lost its value as a reliable credential and is therefore no longer worth pursuing. Having graduated with a useless degree from Cal State Northridge, I generally agree with this argument when applied to middle of the road schools.
But the problem of commoditization is not limited to college degrees. In fact, the core group of people at the forefront of the critical attacks on college, startup entrepreneurs, are suffering through the same process of being commoditized themselves. Let’s consider some of the factors affecting both college grads and startup founders.
1. Ubiquity -- There was a time when both college and entrepreneurship were rare and that scarcity made them special. If you had a college degree in 1950, you were almost guaranteed to be on the fast track. Over the past 70 years, the number of college graduates exploded and significantly drove down the value of the degree. If you look at internet entrepreneurship, the same thing has happened and at a much faster pace. Fifteen years ago you had Idealab and that was about it. Now incubators are sprouting up faster than we can keep track of them and turning out entrepreneurs by the thousands. Both groups have become overpopulated and in the process both have lost their luster.
2. Lack of focus and intention -- One of the developments that caused college to become devalued was when it became something people did “just because.” I clearly remember the high school conversations of, “it doesn’t matter what you study, as long as you go to college.” In hindsight, this was terrible advice. The same “just because” reasoning has now infected internet entrepreneurship. Y-Combinator effectively declared the “it doesn’t matter what you start” argument as valid when they began accepting teams without ideas. The focus and intention that were once so important for entrepreneurs are no longer required. They’re just like students who wander into college without picking a major.
3. Interchangeability -- Most college grads are interchangeable. An accounting grad from San Jose State can easily be replaced with an accounting grad from USF and vice versa. This common interchangeability is a large part of what has devalued the college degree. These days in the startup space, you see the same kind of interchangeability. Go to an incubator and look around. I’ll bet you’d be hard pressed to say why one team is better, or even different, than any other. Any group of guys in their mid-twenties who know how to code is virtually indistinguishable from another group of founders. Just like your average college graduate, founders can be swapped out like Lego blocks.
4. Declining legitimacy -- College lost its value when many employers stopped believing in the legitimacy of its credential. For now, investors, who essentially employ entrepreneurs, are still “hiring” them. But we are already seeing a dichotomy between top tier incubators and everyone else. A Y-Combinator or Techstars graduate is far more likely to receive additional funding than a graduate from a no-name incubator. This mirrors the dichotomy between Ivy League graduates, who are still in high demand, and people who graduate from average schools. Just as most colleges below the top tier have seen a decline in their ability to produce positive outcomes for their graduates, we are seeing a similar decline in legitimacy for second and third tier incubators and accelerators.
It’s easy to see the forces of change affecting other people but we rarely recognize it when it’s happening to us. I wonder how many internet entrepreneurs realize the factors that have made college a debatable endeavor are now commoditizing internet entrepreneurship at an even faster rate. Entrepreneurs aren’t going away, of course. People will always start new businesses. But just as college grads largely lost the favored place in society they once held, startup founders may soon find themselves similarly commoditized. The once fabled internet entrepreneur is starting to look a lot like the common college graduate with an art history degree from State U.
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