A classic, but long.
Ultrashort: star undergrads should start companies. The trends of startups, tech, labor markets, investing favor it and so does the risk-reward math.
The argument step by step, but shorter:
Startups are cheaper now so more can try, like undergrads.
Some founders have it all but lack only energy or only intelligence, but the ones that lack only experience are interesting.
Their variance is huge — some are 10x their seniors.
But big companies can’t correctly value and reward young stars, they use the law of averages. [This isn’t true among elite orgs. -Amol]
Instead: be the boss, let customers value you, and thereby have measurable performance that big companies can pay to acquire.
They’ll also value the new product development you do, because they can’t do that well. Innovators dilemma, yes-men, limited internal R&D experiments, weaker incentives for success, and bloated insulation from the end-user all make big company product development bad. [Except at Apple? And Google? And Disney? And…?]
Big companies will increasingly buy startups for talent and product, as they overcome their not-invented-here pride.
Investors are ceding power to founders too, since their money is less needed; in the future the MBA will come in as COO more often than as CEO.
Animals sometimes don’t leave through open cage doors. Blogging was like this: possible for years before it took off. Young stars should realize this.
Startups are riskier but over time return better, like stocks vs bonds. And young people have more time. And less downside to failure, with low living costs and a job market that values risk-takers. Math: risk-aversion makes it relatively less competitive, and the math suggests better overall returns, despite 90% failure rate, to founders.
Post-college is your first big choice. Why not choose the ultimate motor of the economy — the end-users — and make things for them? Not big companies that merely serve them.
Grad school is a pretty good deal though.
Experience only has one benefit – helping you see what people really want. Technical skill and thrift, the other two essentials of starting successful companies, are plentiful in the young. So skip experience and just accelerate your learning of what people want.
And finally, while parents say “you should work and get experience”, they know you won’t listen.
The original:
http://paulgraham.com/hiring.html