The College Monopoly Is A Tiger Trap

Moontower Munchies #51

Friends,

I hate everything about this article:

How Rich (or Not) Do You Have to Be to Get Into the Ivy League? (NYMag)

Just to pick one example — the "recruit to reject" tactic where elite colleges encourage applicants unlikely to be admitted to apply to pad selectivity numbers. This practice is part of broader slate of strategies that create a more competitive admissions environment.

It just feels like colleges are overplaying their hands in a world where gate-keeping is becoming harder. Their cocktail of deadweight loss and hubris goes down harsh and burps up schadenfreude.

I enjoyed Byrne Hobart’s discussion of education in this podcast interview:

Antitrust, the Future of Competition, and Harvard (The Riff)

2 delightful excerpts:

Say more about what you expect your kids to do. What do you predict for their higher education, “your kids” being a stand-in for high ambition smart, parents of kids.

College might not be an option. However, I would like it to be more of a backup plan for them. If they haven't found a worthwhile use of their time or developed meaningful talents, despite having nearly two decades to do so, then yes, they can and should consider college. They should aim for a good school, although if you extrapolate, they'll be borrowing significant amounts of money, it'll be incredibly expensive, and who knows when the school will all burn down during a protest or something.

Assuming things revert a little bit, going to a good school is still a good way to meet a high concentration of very smart people and those who have dedicated their lives to understanding something that you also find interesting. You can have information-dense conversations with world-leading experts on a topic you find interesting. They can provide insights on ideas that you suggest, tell you who came up with an idea 20 years ago, what the rebuttals were, who tried it, how it worked, how it didn't, etc. This can be very valuable.

But these people also have email addresses. If you find an academic paper on a topic you like, read it carefully, and provide constructive criticism, you are probably at the 99th percentile for a young person engaging with their work, inclusive of the people who are getting graded in their class. You don't want to abuse their time, but in many cases, these people are either part of the public sector or their existence is government-subsidized. They are public servants, and their job is to be helpful. And if you can actually engage with their material in a meaningful way, then it's valuable to them too. This is what they wanted to do with their lives.

You can 80/20 a lot of the benefits of college without paying huge amounts in tuition by reading things by people you like, writing them thoughtful emails about what you read, and sending them the thoughtful thing that you wrote in response to their work. You can get some fraction of the college experience without having to live in a dorm or something similar.

I think it's a bad idea to over-optimize for some specific hypothetical future plan. I do emphasize to them that schooling is optional, and the better they're doing in life, the more it is just a purely optional thing. Some of them will likely go to school, hopefully not all of them will finish, and hopefully, it will be because the opportunity cost of getting that degree from Stanford, MIT, Harvard, or whatever, is simply too high compared to their other slightly better options.

I understand the YC analogy [as a substitute for college] as it relates to startups. But what do you think is the equivalent for lawyers and doctors? Another way to put it is, imagine your kids going to college in 10 years. Are they going to go to college? If they are, what's an alternative look like? How do you think the ecosystem is going to look in a decade? When is it going to materially change? What could that look like?

There’s not going to be a YC for doctors or lawyers. Part of the reason for that is those are both cartel businesses where they want to limit entry into the business and they can. Especially the lawyers, their whole job is parsing rules and writing rules, so they're really good at coming up with rules that are advantageous to them.

It's hard to replace those, but there's room to try to route around them. In general, it's good life advice to push back on 18-year-olds who have an entire plan for how they will get their dream job and it can't happen until they're 25. You have a lot of life ahead of you at that point and a lot of changes you will go through. It's hard to reverse course. Getting half of an MD or JD is very expensive and not incredibly valuable. [Kris: I’ve had the same thought. Premature optimization is a recipe for waste and sadness for humans. It also discards the timeless, nature-tested decision-making algorithm of evolution —> optionality]

A lot of those jobs are easy to glamorize from the outside, and they're less fun on the inside. Doctors and lawyers have high divorce rates, high substance abuse rates, and a lot of people try to get out of those professions. They're great for some people, but it's easy to see a cultural narrative that is out of date when you saw it. By the time you're actually doing that thing, it's even more out of date.

[Kris: notice the market principle embedded in Byrne’s comment — the bullwhip effect. There’s a lag between heightened job demand and the skill to supply it. I don’t want anyone to get bent out of shape, but here’s a generalization (that means exactly that — it may not apply to any specific instance) — tiger parents are risk averse. They project their risk aversion on their kids. Either by command-and-control or Ouija board nudges, they direct their children towards legible paths that are currently in vogue. It’s probably software engineering more so than lawyers these days but you know what I mean. Legible paths get overbid. And competition is a form of hormesis — it’s all about the dose. If you take too large a dose relative to the reward, especially if the reward is only externally motivating, you will find yourself in the latest new-age rehab — slurping health gurus, chasing real estate syndications for passive income or heaven forbid writing a substack. Also these are best outcomes. The dark side is having the narrow path steal whatever’s left of your vitality. You know, that youthful perspective that still couldn't read a line chart.]

In the piece that I wrote on education financing, I have a footnote on this. Sometimes the cultural norms for a profession get established because there was some group that was very idiosyncratic and someone wrote a book about them or made a movie about them. That solidified that particular group's norms, and they became the norms for anyone with that job.

A lot of people who are law students or aspiring law students watch the movie, The Paper Chase, where it's all about a guy's complicated relationship with his brutally demanding contracts professor. The movie is about 50 years old, so a lot of the professors have also seen it. They sort of know what the great law school professor is supposed to be like, and what the great student is supposed to be like. Everyone sort of plays these roles.

This was also revealed by law enforcement wiretaps of mafiosos that they actually started using cliches from The Godfather after the movie came out, and they all loved the movie. So the movie's stereotypes became more accurate because it got more widely accepted.

But if you're entering some career because you've heard about it in some context where you know exactly what it's going to be like, and it sounds incredibly glamorous, you just have to know that to the extent that it actually meets your expectations, it's because everyone is LARPing. They read the same thing you read, or they watched the same thing you watched, and they're just trying to bring it back.

This is probably a good reason to not work in the White House. Everyone just wants to be pretending it's a West Wing episode, and it's just going to feel so weird and dated and retro and 90s. If you see someone in a meeting reading the Financial Times in the West Wing, you're just obligated to give them a swirly or something, tell them to knock it off. It was just a TV show. The writing was good, but it shouldn't have changed your life.

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From My Actual Life

The bullwhip effect in Byrne’s take is humbling because there is no solution to “safety” if safety requires sacrificing your life for it. Instead of checking a bunch of boxes, flourishing requires a fuzzy mix of imagination, persistence, self-awareness, and perhaps in no small way, savvy. Sheep get shorn eventually.

Once of the glaring examples of this bullwhip thing has been my read on how friends’ feel about their occupations. Doctors and lawyers, what we were told to chase as 80s kids, don’t exactly seem thrilled about their careers. The happiest ones feel like they make a difference. And they do. That matters and it’s awesome. But they don’t think it’s a good deal.

On the other hand, my contemporaries in tech and finance, while having their share of complaints, as a cohort think it’s a pretty damn good deal. Sure it can be dystopian and soul-sucking. But nobody wants to switch spots with a doctor.

I do have a HS friend who was an I-banking analysts for a year and decided the job was full of the worst people. The bosses are miserable, but…rich? The middle-class mind could not comprehend this. He went back to school and became an oncologist.

There’s always a couple older dogs in med school so these stories happen.

In contrast, the list of doctors and dentists I am at least one degree separated from who pulled the chute and went into RE, business, or franchises is long. Nobody leaves trading to buy a McDonalds. It’s hard to think of a crappier job to buy which makes me think the bar of “what’s a satisfactory way to spend my day” must get real low in some branches of medicine.

Then the debt, extra years of schooling…I don’t need to explain, you have friends and family too. You see it.

I don’t understand the underlying forces that led to this but I can see where we are now. How much of it is bullwhip? Growing up, nobody said become a plumber or electrician. Today, you called in a favor to get one to swing by the house for less than $150/hr.

Prestige has a benefit. And a cost. The market is looking for a clearing price every time someone fills out an application for trade school or a school school.

One day in the future, a chip cluster will re-write this essay and “software developer” will replace “doctor” and maybe “doctor” will replace “plumber”. Maybe deciding what we do should have less to do with how far in the future these replacements will happen but on something else. A few months ago I gave a talk at Cal to the quant trading club. It had some broader relevance on the topic of careers. (See Make Yourself Future Proof)

Parents push smart but innocently naive teens towards highly competitive fields because they think the path is safer.

Safer for the parents’ egos maybe.

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Further learning:

Marc Andreesen ranted on education almost 5 years ago. I published my notes on it back then.

Notes from Marc Andreessen on Education (Moontower)

It remains highly relevant. Here’s a few excerpts:

The value proposition of university for people in “show your work” fields is changing.

One of the most basic revelations the internet has surfaced is the different nature of professions.

Internet has made the largest difference in “show your work” professions: occupations where it is valid and easy to demonstrate your value online. For example, coding, design, music, art, game dev, animation. Open source projects and writing, democratized, pure examples of “show your work” fields.

From an employer’s point of view conscientiousness is a proxy for being a good employee. But this can be circumvented by just showing your work online. This erases the value of a degree that derives from employer demand.

GitHub has like an internal ranking and rating system for software code, and for programmers. So you can actually build an actual professional reputation as a software developer on GitHub without ever actually being face to face with another human being. People all over the world today who were basically taken advantage of this to be able to basically build these incredible track records as a software developer and make themselves more employable. Employers like my venture firm. We recommend that our employers spend as much time on GitHub looking for good programmers as they do on LinkedIn, or going to college fairs.

YouTube, blogs, Figma for design all play a similar role as GitHub does for software developers. He tells the story of South Park as an early example of a viral video that was able to spread organically through a distributed technology. The show born from Matt Parker and Trey Stone’s irreverent holiday card which made its rounds as a downloadable Quicktime vid!

“If you can go to college, go to college”

• Even jobs that probably shouldn’t require degrees require them.

I think it’s actually quite dangerous to give somebody, somebody as an individual the advice, don’t go to college, like in the current system that we have that’s basically saying don’t prove that you’re smart don’t prove that you’re industrious, and conscientious and then basically be prepared to settle for fundamentally lower income for the rest of your life.

• Understand the proposition

Gates and Zuckerberg notwithstanding, if you go to college finish college. Get the piece of paper.

• The 2×2 matrix of what to study and where to study.

The spread of outcomes for technical degrees is not that wide. If you have a technical degree your choice of school matters less. This is exactly the opposite of what you find with liberal arts degrees. Since the output of a liberal arts degree are more subjective or uneven the school issuing the diploma carries more weight. 

Possible explanation: in absence of concrete skills, the network from a top school is valuable.

Tips for those in college or considering college

Execute on the opportunity — take the hardest course load you can. Get the skills (obviously get good grades but focus more on getting the skills).

If you are at a sub-tier college taking liberal arts, de-risk by acquiring marketable technical skills.

For those considering alt paths

At this point Marc, still recommends college and acquiring technical skills but if you choose an alt path be aware of the trade-offs. For example, if you choose to do open source work recognize it’s better to make major contributions to one project (as opposed to minor contributions to multiple projects) because that really demonstrates what employers are looking for. Put yourself in the mind those who will be evaluating you years down the road.

Consistent work demonstrates conscientiousness and the nature of the work is an embedded intelligence test.

What should a software developer do? Unquestionably the answer is create an open source project or go become a member of an existing open source project and make successful high quality sustained contributions to that project over time. At this point I think that’s clearly a better credential than getting a computer science degree. I’d hire people like that myself and the great thing now is you can do that from all over the world.

So what matters to Andreesen when they hire or fund someone?

The good news:

They do not care about a degree or GPA or test scores and in fact question if too much conscientiousness means you are too much of a rule-follower.

The tough news:

They measure you by what you have actually done. Building companies requires being able to do things so that is the capacity they are looking for. List of things a founder will need to be able to do:

• Building an actual product that somebody will actually pay for.

• Figuring out a way to actually sell it to them

• Actually collect the money

• Actually service the customer so they actually have a good experience

• Actually tell their story so that anybody will even know that they exist

• Run a finance function so that they don’t lose all the money

• Run a legal function so they don’t get sued all the time

• Actually get others to work with them.

There are many talented people so the way to stand out is to actually demonstrate the ability to build or create.

Steve Martin best career advice ever: Be so good they can’t ignore you.

☮️

Stay Groovy

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