Taking Risks

It seems the market for taking risks as a young person today is fantastic, and there’s still a shortage of people doing so.

Here’s a hypothetical scenario, but not uncommon in Silicon Valley. Student A and Student B graduate from college, and both know how to program. Student A gets a job at Google, paying 75-80k. Student B starts a company with his college buddy, raises money (very likely in this environment), and earns 50K while he runs his startup for 2 years. In 2 years, Student A is still at Google, now making between 90-100K. His path is pretty certain.

Student B’s path is a bit unknown. If the worst case scenario comes to fruition (his company fails, he runs out of money, nobody uses his product), he’s still very likely to come out ahead of Student A in terms of professional advancement. Student B can probably name his position despite his company’s failure, and if Student B starts another company and fails again (with investors money who seem eager to fund young risk takers), the same will probably remain true.

So sure, he’s given up 2 (or 4) years and 30K/year of income, but thinking long-term (which is usually beneficial), he hasn’t lost much, and we can argue he’s gained a lot in terms of skills and experiences.

Of course, this doesn’t account for the possibility that Person B’s startup will be successful, and he’ll make a bunch of money. This isn’t the likely scenario, but it’s not uncommon. Knowing what we do about his likelihood of getting the virtual pick of the litter irrespective of his company’s outcome, the chance of him getting rich doesn’t need to be high to justify taking the leap and starting the company.

Being a programmer and a risk taker is very well rewarded in today’s environment.

In my experience, it’s a fallacy to believe that starting a company will somehow become easier over time (I’ve found the opposite to be true). Being 21 or 22 provides a great amount of wind beneath your wings that should be utilized. Each year that passes presents a new set of head winds slowing you down – there’s something to the expression that it’s hard to teach an old dog new tricks.

When I took a job at Westfield after college, I believed another fallacy – that the connections at a big company would propel me into an entrepreneurial career. Of the thousands of people who worked at Westfield during my tenure, how many do I know that have started their own companies? 0. Most remain at Westfield, in very similar roles. It’s not that these people weren’t smart or motivated or capable. But the environment didn’t encourage risk taking, creativity, and outside the box problem solving, as is the case with most large organizations (at Google and Facebook things aren’t as extreme, from what I gather).

As a young person considering his options, I’d think about optimizing for something that those 5 years older than you think is acceptably risky, and something your parents and their peers think is a tad too risky.

And please, learn how to program.

A world that has changed due to new technology, combined with the continued pressure to conform, has left an environment that young people can capitalize on by taking risks (specifically in tech).

In nearly everything, reward is proportionate to risk. And erring on the side of conservatism is still erring.

Why to Not Not Start a Startup

The Credentials Trap

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2 responses

  1. Dave, I cant agree with you more! I’ve always known that I’d like to start my own company, and be entrepreneurial. Risk I feel is necessary and understanding that there is risk keeps you sharp. Great entry!

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