Here comes a “back in the day” story…
Sung to the tune of So You Want to be a Rock and Roll Star.
I used to be a Silicon Valley entrepreneur.
Back in the day, you made a product, put it in a box, put the box through distribution, helped retailers sell it, got back a little money, paid your employees, and hoped there would be enough to make some more product, boxes, etc.
If you weren’t one of the BigCo’s the distributors would play games with your money. Eventually the games got so sophisticated, they had it worked out so you owed them more money than you made, so there was no way to get ahead. Unless you were one of the Big Ones. But even they hit the wall, and the software-in-a-box business went by the wayside.
A few people got rich from that. Yes, it was a bubble. What you got paid for was not your ability to make money. But, rather the ability of the VCs to sell Wall Street on whatever it is they sold them on back then. We were part of the whole system that eventually hit the wall with Credit Default Swaps and huge bailouts and unrepentant bankers. There was a trickle-down. The closer you were to someone who actually made something, the less you got paid. You read that right, the less you got paid. I’ll repeat it. If you made something you got paid less.
There was a lot of risk though, and that’s what capitalism rewards. A lot of my contemporaries went splat, and had to take jobs working for a salary with no hope of getting rich. That was also a big part of the Silicon Valley reality. But they had jobs, and they paid well, and that’s what most people want even if they dream about getting rich.
Mike Arrington is great at getting a cross-blog discussion going. There’s no doubt that his personal story is the honest to god truth. He did work hard. And often with no hope of getting anything back. He did love what he did and he was good at it. He had the chance to rake in the big bucks, and he did. And no one can blame him for that. It’s the right thing to do, imho.
A lot of young people are starry-eyed over the idea of being an entrepreneur. They think there’s glory and wealth in their future. I don’t think so, not for most of them. The bubbles have been getting bigger all the time. I guess it takes a bigger bubble to get rid of the headache caused by the previous ones. I don’t know. But just like the mortgage industry needed unqualified borrowers to take their junk mortgages, so does the new VC industry, such as it is, need a huge influx of young people willing to drop out of school, and work their butts off. And most of them will go splat. It’s a foregone conclusion.
I look at some of the kids who see themselves as entrepreneurs and think to myself there really aren’t that many real honest to goodness people who are ready to do it. And I think that’s a good thing! It’s not a very nice lifestyle. And getting rich solves nothing, if you’re one of the 1 percent that actually gets there. And what if you aren’t? What have you got to show for it? You’re a college dropout with nothing. If you go that route you have no one to blame but yourself if you go splat.
I’m afraid the adults are not levelling with the young folk. And we should be. Even the universities glorify the idea of being the next Zuck. That’s like betting your future on winning the lottery. And you’re not going to win the lottery. And you’re not the next Zuck.