So Why the Big Pivot?

As I've written about in this here blog before, I started b-school with some entrepreneurial thoughts.    

Specifically, those thoughts spring from a basic observation:  The way people live, share information, and connect with others has shifted from analog to digital way faster than our society has learned to understand or manage the change.  [If that sounded like a bunch of gobbledygook, or if it didn't but the monetization plan doesn't seem clear, don't worry...I will return to this concept ad nauseam in future entries].

Then I stared into the debt abyss and thought, "No way."  [I will break this down in a future entry, too, with a detailed explanation of how the post-9/11 GI Bill works].

Then I got swept up in the entrepreneurial culture and thought, "Way."  (h/t to "Wayne's World")

Founding a start-up can mean doing something I love, carving out my own path, and lots of other neat intrinsic benefits.  It also means either a) raising money through traditional routes, like venture capitalists, or b) bootstrapping -- getting the business off the ground while working on the side to earn just enough to break even on basic expenses.

Now that I've got a more complete picture of the landscape, neither of those options seems as daunting as it once did.  A wannabe entrepreneur who is really playing the cards right can pursue those options while still in school.

This Boston Magazine article by Chris Vogel doesn't hurt, either.  It gets to the heart of the Sloan environment and culture that fosters and promotes entrepreneurial pursuits.  

People...and Things

"If everyone demanded peace rather than another television set, then there'd be peace."  - Lennon

If you've read this blog for a while, there's nothing new coming with this entry, because I more or less write the same thing after each major natural disaster that consumes the national media beyond the time of its actual impact.

I care a lot about people.

I don't, however, care a lot about things.  In fact, that's putting it very mildly.  If I were to really tell you what I think about things, it would probably require some rather graphic language that I don't typically use on this blog.

If someone you love -- a friend, a relative, or anyone else -- died as a result of Sandy, that is a terrible tragedy.  I know what it means to lose people, just as you do, and I empathize.

But the panorama shots of the flooded out houses near the Jersey Shore, or the cars floating around in Lower Manhattan, just aren't enough to sustain me.  Seriously.  I can skip all that stuff for the new Netanyahu-Lieberman government, the Hillary Clinton visit to Algeria, or even the economic slowdown in India.  I can read those stories and maybe just maybe learn something.

Someone in Point Pleasant or Seaside might have some flooding in their house.  All those things are replaceable.  Those homeowners are almost certainly insured.  And even the "irreplaceables" (i.e. old wedding photos, 8mm of the kids' first steps, family heirlooms, etc.) are really just things when you get down to it.

I have all the time, energy, and interest in the world for people.  I will continue to think about and pray for the people whose lives are still hanging in the balance due to the storm.  I learned today that a Sloanie (Class of '13) just passed away.  I have no idea what the cause was. I did not know her at all, but already have (and will continue to) think and care more about her than I will about all the stuff that was damaged or broken in this storm -- or any other future storm or natural disaster I will hear about, ever.  

A Thousand Words, Sure. Thousands of Dollars? That, Too.

It's an old truism that a picture is worth a thousand words.  Well how about several tens or even hundreds of thousands of dollars?  The picture you see here to the right is the result of Sandy-inspired hysteria at a supermarket in the American Northeast (I'm not sure of the exact location...I snagged it from a high school buddy's Facebook post).  What it shows me is that Pepperidge Farm Pumpkin Swirl Bread is being roundly rejected by shoppers at this supermarket.  So why is this picture so valuable?  It's because companies spend lots of money on focus groups, market surveys, and sample tests before they launch products.  And even after spending all that dough, they STILL sometimes don't get it right.  

Why not?

 

Because people aren't always honest about they way they respond to those things.  It's not that they're intentionally deceitful, but there's an inherent bias we have when we're asked about a theoretical idea (How would you like to take a cruise to Bermuda this winter?  What about a road trip to Niagara Falls and a Bills-Pats game?  Would you try a loaf of Pumpkin Swirl Bread?  Would you pay for a satellite radio subscription?) We sort of naturally just say "sure" to some of those questions because, well, why not? 

 

What we wacky consumers actually DO, though, is an entirely different story.  Trying to divine consumer buying habits in advance of real data is kind of like long-term weather forecasting, or thinking you have a system that's going to make you rich in betting on football games.                            

 

I acknowledge there are 3-4 loaves of something at the bottom of the shelf -- not sure what that is.  But any supermarket retailer knows that the eye-level and arm's reach stuff is what's going to move first. If there were just onesies and twosies of several other brand loaves on the shelves, this picture wouldn't be saying nearly as much.  However, the COMPLETE emptiness around the Pumpkin Swirl shows that whatever consumers came AFTER those other brands sold out preferred to risk going without bread rather than buying Pumpkin Swirl. 

Well Is It? Or Isn't It? I'm Shrugging My Shoulders

I caught an interesting Facebook exchange today involving several mutual friends and acquaintances that went something like this:

"University of Florida is considering charging more tuition [or giving fewer scholarships] for less 'lucrative' majors." 

"Whoa, that's terrible."

"An appalling shame."  [x2]

"But is it really?  If taxpayers are footing the bill, maybe this stuff matters."  

I am badly paraphrasing here.  The commenter who offered the opposing viewpoint brought up several interesting thoughts to support what he was saying (he was ultimately middle-of-the-road but was the only one of the four people involved to even concede any ground on whether this was the 'right' thing to do).

I've seen a lot in print and in the media in the past several years about the so-called "Higher Ed Bubble."  Obviously, I'm in a tricky position to start opining about this, because if I veer too far in either direction, I could be tarred pretty quickly with the 'hypocrite' brush (for starters, I'm 32 years old and a full-time student, which certainly raises some eyebrows at times).

One thing that has NOT changed is my skepticism -- which borders on something closer to hostility -- towards highly-successful people with multiple degrees who go around opining that "college isn't really worth it" for other people.  Peter Thiel is a case in point.  He is a gazillionaire who actually pays talented young people not to attend college, but has a B.A. and a J.D. from Stanford on his wall (and again, there's the bias thing coming in...but I'd like to think he learned a thing or two at the Farm...or at least thought it meant something to cross paths with the guys who would ultimately co-found PayPal -- they probably weren't hanging around at the public library in Menlo Park..but maybe Thiel is so rich that he can just write off all the cognitive dissonance going on there).

As Kad Barma says, quoting Ogden Nash, "People who have what they want are fond of telling others that they don't really want it."  If you're a huge fan of that quote -- as I am -- you should get in the habit of throwing a yellow flag onto the field every time you see it unfolding in practice.

And of course it's bigger than just Peter Thiel.  Plenty of journalists and other talking heads have raised this issue lately.

Although I disagree with them about the value of a Bachelor's Degree (just look at how much tougher the job market is for those without that education level), I would concede some ground as it relates to certain post-grad programs.

If we're going to define a 'bubble' as a situation in which the price of something spirals upward far beyond its value (and we'll define 'value' in the way that omniscient beneficiaries of hindsight would define it after the fact), I think that REALLY does apply to some programs.

I bumped into a buddy last week who is working towards a Certificate program at UML.  Just to be enrolled in one class this semester, he pays full freight on student fees.  Those fees, plus that class tuition, add up to nearly $2k out of pocket.  Bear in mind, that's not for some advanced computer programming thing that's going to translate into big bucks on the back end...this is for something very social science-y (and I'm not naming the Dept. only to respect/maintain some anonymity here).

With the explosion of online degree programs, there are increasing opportunities to enroll in programs in some pretty squishy areas that don't seem, IMHO, to make most of their graduates *more* employable.  Only if we blindly buy into the idea that "education is good, so more education must be better" would some of these make any sense.  When a third-party payer (such as Uncle Sam, in the case of many veterans) is picking up the tab, the economics can get pretty distorted, pretty quickly.

The ultimate "Are you a big fat stinking hypocrite" test should probably be "Would you apply what you're saying to your own kid?"  (Oh, and I have a big hunch that a lot of these op-ed people who are spouting the 'just forego the Bachelor's' drivel would never accept that standard for Madison and Aidan).

But back to the standard:  I hope that within the next 16 years I am able to earn/save enough money to be able to support the lion's share of my daughter's undergrad costs wherever those might be incurred, regardless of major or program.  Even if I can't do it 'out of pocket' I will still bear that cost through my own loans, home equity, or whatever other source.

However, post-grad is a different ballgame.  A top-50 law or business program?  I'll support it if I can.  Med school?  To the best degree possible.  A Ph.D. program?  I'm here for ya.

Where I would start to draw the line, though, is when it's "school...just because."  If it's a substitute for looking for a job, or a time-holder because of a lack of a job, or just a flight of fancy for some other reason, THEN I will join the chorus of the naysayers who question the value.

Terminal Master's Degrees in the Social Sciences and the Humanities?  Graduate "certificates" with hefty price tags?  An online Master's Degree in Social Media?

If there really is a bubble going on, those are the first places where I think you'd hear the *pop.*  I'm not expecting to hear it anytime soon, though:  First, because of the deeply ingrained American ideal that education is the path to upward mobility/more is automatically better than less/etc. and second, because many of the policymakers in a position to speak out on this risk sounding like elitist hypocrite a-holes.  

Just look at the current contentious rhetorical climate:  Romney, a man who holds an MBA and JD from Harvard, of all places, and Brown, holder of a B.A. from Tufts and a J.D. from Boston College, have questioned the idea of a high-volume financial aid spigot that never shuts off.

In both cases, their opponents didn't waste the chance to pounce.

This is a thorny issue.  

Congrats, Boys

I just heard some pretty awesome news:  RallyPoint just received 100k in MassChallenge.

Maybe somewhat ironically, since I just wrote here to complain about LinkedIn, I will mention that RallyPoint is designed to be a LinkedIn for the military (only much better).

For our Entrepreneurship & Innovation Team Project, we have to meet with start-up co-founders in the Boston area.  RallyPoint is the team we chose, and its co-founders, Yinon and Aaron, have graciously offered us their time and expertise on multiple occasions.

I am elated to hear this good news.

And now, good night.   

Et Tu, LinkedIn?

I was pretty excited to check my Yahoo inbox last week and see that a Lieutenant Commander I had worked with many moons ago had "endorsed me on LinkedIn."  I have a grand total of one LinkedIn endorsement* (plus a pending one from someone who I worked for last year...I just need to get on his case about it - gently), and it means a lot to me.  It's a paragraph long, it's heartfelt, and it could only come from someone who worked with me very closely in a very intense environment.

So when I checked my profile, I was eager to see what this Navy O-4 had written.  What I found was that it was...nothing.  LinkedIn has cheapened itself with the equivalent of Facebook "likes" in the sense that you can now mindlessly and effortlessly "endorse" people in area with a single, simple mouse click.

On my LinkedIn profile it now shows "Military," and "National Security."  Just that.  No explanatory bullet points or words, or anything to substantiate that.  Someone has taken the one second or so to officially acknowledge that I was indeed once serving on active duty in the military.  Then two other people who I don't even know from the military have seconded the notions, so to speak. 

I will admit that my LinkedIn profile could use quite a bit of touching up/fleshing out, but this is certainly not what I had in mind.

I feel like going back and "endorsing" the ability of people I know to magically turn oxygen into carbon dioxide.

* I had blurred the distinction but here it is.  A LinkedIn recommendation is where you can actually take the time to write something original and meaningful about a person you've collaborated with professionally.  An endorsement is the cheap-o equivalent of a Facebook "like" that means less than nothing.  

What Founders Say, Continued

As I've written before, the most interesting and practically-applicable class I have this semester is called "Entrepreneurship & Innovation."  I take pretty detailed notes during class, and I particularly try to hone in on the common themes that I hear from startup founders.

The one that I wrote about previously concerns founders' agreements, and the one I want to quickly write about now is related to personnel. 

The relevant Lesson Learned basically boils down to this:   "You cannot 'fix' problem personnel who do not perform, do not fit with your organizational goals, organizational culture, etc.  Your ego may tell you otherwise:  it may say you're a great leader, a great motivator, a great coach, etc. and you can turn things around...but you can't.  Once you've finally exhausted all your other options and decided to fire someone, you're never going to look back and regret it.  In fact, your only regret may be that you didn't do it sooner."  

When I heard it the first couple times, I thought maybe someone was just trying to project their own unique experiences into something broader, but after hearing it nearly a dozen times, I'm listening extra closely when the subject arises.  For a cash-strapped startup built around a 'service' (as opposed to physical hardware) your personnel are likely your biggest cost.  Unlike a major public or private bureaucracy, you simply can't afford to keep 'dead weight' around breathing your air and burning your investors' cash.

If you take this advice to heart (as I do), it means that your hiring decisions are among the most critical.  And because resumes and interviews don't always tell the story, that's a whale of a challenge...and the subject of several future entries.

But back to the major lesson:  My own life experience informs a pretty similar opinion to what all these founders keep saying.  Generally speaking, a person who's happy at [insert name of place or organization] would be happy somewhere else.  Conversely, someone who is miserable at [insert name of place or organization] would be just as miserable elsewhere.

Two days ago, in fact, I caught up with a Division Officer at one of my old Navy commands.  I asked her about two sailors who used to report to me, and she basically summed up how they were performing -- high points along with the warts.  Guess what?  Nothing had really changed.  Time had moved forward, a new Officer was in charge...and you could keep changing those variables but getting similar results.

I don't think I'm any different.  My personality, work habits, traits, and foibles would be pretty much the same if you dropped me just about anywhere.  I bet yours would, too.