Yeah, that’s not relevant to the discussion at hand. One can become an entrepreneur just as easily with a degree as without.</p>
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Haven’t disagreed with that at all. One is still young when they have a degree. One can still be a young entrepreneur with a degree.</p>
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Then the word broke has no useful meaning in this context. All young people are broke. Fine. Not all young people have low income though. Engineers high income. The opportunity cost for the median person dropping out and starting a company is quite high.</p>
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The converse being that getting the degree doesn’t preclude you from starting a business. However, one has instant marketability upon failure of the business.</p>
<p>Uh, you said they were young. I asked you how young you were. You are now replying with a nonsequitur. </p>
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<p>The problem is that entrepreneurial opportunities won’t wait around for you to graduate. These windows open and shut quickly. You can’t just say “Hey, I have a pretty good idea right now, but let me wait until I finally graduate before I try it”. By the time that happens, the window may be shut. Again, imagine what would have happened to Gates if had decided to wait. </p>
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<p>See above. </p>
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<p>And similarly, the median person with a degree who starts a company has a high opportunity cost. Either way, it’s high. Hence, this is an irrelevant point. </p>
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<p>So? If you fail, you end up in exactly the same spot as you would have otherwise.</p>
<p>To illustrate: A 19 year old guy has an idea. He drops out of school to try it. After a year, it fails, so now he goes back to school. He then graduates at age 23.</p>
<p>Another guy also has an idea when he’s 19, but he decides not to pursue, instead deciding to go through school all the way through. He graduates at age 22. He then starts a company (perhaps with his old idea, perhaps with another). It fails in a year. So now he’s 23. </p>
<p>Hence, either way, he’s 23 years old with a failed company under his belt. </p>
<p>The major difference is that the first guy tried out his idea when it was still topical. And if his idea is successful, then he doesn’t ever need to go back to school. Hence, he has saved significant time. The 2nd guy, if his idea is successful, basically ended up spending extra time on a degree that he doesn’t really need.</p>
Honestly, I don’t know why I quoted that phrase, I meant to quote this:</p>
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That is a non sequitur.</p>
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If the opportunity disappears. The wealth was still created. Society still benefits. If that niche hasn’t been filled then the opportunity still is there and Gates (or other) could still come in and become rich.</p>
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True enough, they just don’t have the risk, because they are instantly marketable upon failure of the business.</p>
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Do you think their is advantage to completing the degree before starting your company?</p>
<p>Seems like their are 3 possible advantages:</p>
<p>1) Technical training.
2) Network effects (obviously one’s network grows the longer one is at the school).
3) Ability to get capital (small bit of credentialism).</p>
<p>I am a mechanical engineer and I work in a power plant. Right now I am managing a full turbine overhaul for an upcoming outage. I like the work but at the end of the day I am not content with the salary. I get 54k per year (after working 18 months with the company) but last year I made 65k with overtime. Good money for a 24 year old but considering the hours that engineers have to work and the pressure from management, it doesn’t seem like much. Being an engineer doesn’t carry much prestige for me, probably because management doesn’t like to listen to the advice of engineers. Usually engineers have to be more concerned about budget than with fixing problems and that is hard to do with aging power plants.</p>
<p>In regards to money, I couldn’t imagine making less than 54k and I can barely afford what I want with that. After rent, car payments (2006 Hyundai Sonata LX), utility bills, school loans, gasoline (for the next 18 months I am driving 55 miles one-way to work until my next transfer), and some other membership fees, I only have $500 left for everything else. The school loans and gasoline costs are the major killers, but the long commutes to work are only temporary. I am also married and have a baby on the way in June. The school loans are a sore issue with me because if I had done things differently I could have had more scholarships and grants instead of 40k in loans. </p>
<p>The salaries for engineers plateau quickly with my company. Advanced Engineers, which is the 4th level of engineer, only makes in the 70k – 80k range. Not much in my opinion. One young guy quit and went to work down south for another power company. He went from making 52k to 68k just by switching companies, but I don’t know what the cost of living is where he moved to. </p>
<p>I am planning to start working on my MBA in 2009. Hopefully that degree and my project management experience will open up doors for me.</p>
<p>Uh, how is it a non-sequitur? YOU were the one who brought up the notion of ‘expected value’. Perhaps you ought to look up the definition of EV. EV is the average, by definition. It has NOTHING to do with medians. </p>
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<p>Wealth was still created, BUT NOT BY YOU. Hence, you didn’t get rich. Sure, somebody else may have gotten rich. But that doesn’t do anything for you. </p>
<p>It’s like saying that if somebody offers you a great job, and you turn it down, then that job will probably go to somebody else. Sure, of course, but how exactly does that help you? Why would you want to turn down a great job to see it go to somebody else? You’re out to help yourself. </p>
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<p>Uh, see below. The essential point is that the guy who drops out of school can just go back. What is he really risking? </p>
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<p>And, again, opportunities don’t wait around for you to get credentialed. If Bill Gates had waited to graduate, his opportunity to start a company making the first commercial programming language for the Altair would have closed, as somebody else would have done it (and indeed, others entered that space not long after Microsoft was founded). If Gates fails, so what? He just goes back to Harvard. </p>
<p>The logical endpoint of your argument is that EVERYBODY should ALWAYS wait all the time. Why not? After all, the longer you wait, the more you will know and the larger your network, right? Anybody who is thinking of starting a company, by your logic, should never start it, but should always wait another year, and then another year after that, and another year after that, right? After all, you’re always getting better, right? If I just wait another year, I will know more, I will have met more people, I will always be better. But opportunities don’t wait for you to get better. They come and go. If you don’t seize them, somebody else will. </p>
<p>Let me tell you a story. I know a guy who, as a grad student, got called onto the gameshow Jeopardy. He could have turned it down, under the notion that if he waited until he graduated, he would know more and hence would do better. But so what? If he turns it down, they’re not going to call him back. Once it’s gone, it’s gone. His spot will be given to somebody else. So who cares if he knows more? He no longer has the opportunity.</p>
<p>Startups are like that. If Brin and Page had waited until they had finished their PhD’s, they wouldn’t be Google billionaires right now. If Mark Zuckerberg had waited until he graduated from Harvard, he wouldn’t be a Facebook billionaire right now. Somebody else would have snatched the opportunities. These openings don’t wait for you to finish school. </p>
<p>You keep talking about risk as if a 19 year old college dropout is really risking anything. He is not. Like I said, in the worst case scenario, the company fails, and he just goes back to school to graduate and ends up in the EXACT SAME situation as if he had graduated and THEN started a company that fails. The operational difference is that he attempted to exploit an opportunity when it was topical, not years later.</p>
<p>Actually, now that I think about it, I now see where the point of contention is, and it has to do with the fundamental determination of risk. That’s what we need to define.</p>
<p>What is risk? Risk inherently means to run the chance of losing something valuable. But that’s the key: it has to be more valuable. And the more valuable that something is, the more risk involved.</p>
<p>Hence, you say that somebody with a degree will be able to start a company with less risk. On the contrary: that’s actually more risk. Why? Because that person could have instead just gotten a regular job, earning (if an engineer) a standard entry-level $50-60k salary. Instead, he forgoes that salary in favor of starting a company that may fail. That is high risk. And the higher that forgone salary is, the MORE risky it is, because you are staking more and more. </p>
<p>On the other hand, some guy with no degree at all is risking little. Why? Because he doesn’t have much. Therefore he doesn’t have much to lose. So if he gives up a year of his life in a failed company, well, it’s not like he could have made a lot of money by taking a regular job, because he doesn’t even have a degree? So how much is he really staking? Hence, how much risk is he really assuming? His startup fails, so what? It’s not like he was risking very much. </p>
<p>Let me present a thought experiment. Consider a casino game in which, if you win, you get a million dollars. But if you lose, you lose all the money in your wallet (whatever that is). Clearly those people who aren’t carrying much cash would be far more likely to play this game compared to those who are carrying a lot. In fact, I would expect that those people who are not carrying any money at all would play the game over and over again, because they literally have nothing to lose. </p>
<p>But the takehome point is that risk inherently means to give up something of value, and that value includes the opportunity cost of pursuing an alternative. When your alternatives are not that good, your risk goes down because you will be giving up less. It is precisely those people who have great alternatives who would then be taking the most risk by not pursuing those alternatives.</p>
<p>Aibarr–I found your post to be refreshing, if not encouraging! I have a soph student majoring in Aero right now. It is tough–no way around it! And, he is not brilliant–very smart, but has to work hard. However, this is what he has wanted to do since elem school–oh, he thought he wanted to be an astronaut, but as he went thru the jr hi and HS years, he refined that thought into aerospace engineering. I will say that at times he is frustrated, tired alot, and has a very minimal social life (but he does try to maintain one!) As parents, we tried to encourage him to consider more of a liberal arts degree or business, for that matter, as one parent is an atty. Son is an excellent writer. However, he has since come to tell us that the liberal arts courses that are required are just to “boring”, even tho he can whip out a 10 page research paper with little or no effort and receive very good grades. Is he discouraged? No, he explains to us that he likes the challenge of it all–even if it means up till 3 or 4 am sometimes and grades that may not be the easiest to come by. My only hope is that he will indeed find the happiness that you seem to have found as it sounds like this was indeed a true passion for you. And, while you may not think you will ever make the “big bucks”–you sound happy and content and there are an awful lot of people who end up making millions because of their passion. Believe me, son is well aware of the salaries and is not in it solely for the money. Thanks again for sharing an insightful post!</p>
<p>I know I’m just one case, and I’m sure that the pursuit of happiness doesn’t pan out for a lot of people, and I have my days where I’m cheesed off that I have to stay inside and design beams while the other kids are out on the playground, but most days, this makes me happy, and so far, that happiness has been more than plenty (along, of course, with the steady paycheck)… until that changes, though, I’ll continue to champion the follow-your-heart cause. =)</p>