Link: https://a16z.com/2020/09/10/education-myths-monopoly-oligopoly-cartel-costs-past-present-change/
The education system is based on model that pre-dated the printing press. It has had little innovation in light of the technological advancements. Yes there are experiments like Lambda School and its ISA alignments. There are MOOCs which offer micro degrees. But in 2020, distance learning as necessitated by Covid, has accelerated the questions we have about a system whose costs were already outpacing inflation. We are left to wonder who our current system is serving and if it is time to examine more efficient possibilities.
Recently Google dropped the requirement that new hires need college degrees and it’s expected other large employers will follow suit. It begs the question, what were degrees good for?
The CEO of Figma, Dylan Field, interviews Marc Andreessen to hear what the cost/benefit of our college system is and how recent developments will test theories about what college is good for and what alternatives may serve those requirements better or more cheaply.
Purpose of college
Overt purpose: A bundle of actual education/skills acquisition, social/dating service, network building, “attached to a hedge fund” (in the form of an endowment)
Cynical purpose: Outsourced personality and IQ testing (via SAT) as these screens have become either socially undesirable or illegal for employers to perform.
The personality dimension being tested for is known as conscientiousness 1 which has 2 components.
- Industriousness: Basically self-starting energy
- Orderliness: Attention to detail, time management, organization
The “sheepskin effect”
Somebody who goes to college for seven out of eight semesters does not receive seven eighths of the income of somebody who goes for eight out of eight semesters, they receive half the income of somebody who goes for eight out of eight. So the diploma signals your conscientiousness by evidence of you clearing the 4 year hurdle.
A diploma tells employers you are a smart kid who can get their work done, signaling conscientiousness, rather than being about knowledge acquired.
Testing the purpose of college
- Covid-19 will tease out how much people are willing to pay for an online education which will hint as to how much of the value proposition derives from the degree, from the social, and from the actual learning (this acting as a constant). International enrollment which is unsubsidized would be an especially useful clue as you would expect the loss of social network effects would impact those students the most.
- The test of college as an outsourced intelligence test will naturally occur as leading universities shed standardized testing requirements
Understanding the source of the student debt crisis
We need a conversation about value given vs value received of college from an economic lens because it is subsidized by Federal and state government. If the ROI is not there the victims are tax payers and the students who cannot discharge the debt via bankruptcy.
How did we arrive at a mountain of debt that cannot be serviced?
The system is a hostage of a govt sponsored cartel.
- K-12 education is compulsory and state-run. Captive audience.
- Hallmark of monopoly: real dollars spent on education have 3x in 40 years and outcomes are unchanged
- Funding is monopolized
- Accreditation: Loans are subsidized by the government and are only available to accredited institutions that are certified by the govt. Accreditation or admittance to the cartel is nearly impossible.
- University research funding comes from the government. Can’t remember the last research university to come into existence
- Operating a university is taxed as a non-profit
- Endowments are taxed as non-profit
Meanwhile between sports programs and endowments these institutions have more in common with for-profit businesses.
The spiraling costs are exactly what you might expect from a monopoly and to be contrasted with perfectly competitive businesses such as manufacturing that have led to goods disinflation.
Basically what the government does to education is just like what they do in health care, it’s just like what they do in housing. A two part strategy for managing these markets. They restrict supply. And then, and then restricting supply causes prices to rise, because there’s more kids that want to go to school than can get in. And then on the other side rising prices create political pressure which they resolve by subsidizing demand.
(This was part of his anti-govt rant. I haven’t fact checked any of this. He also points out that spiraling costs without an improvement in service is also the hallmark of 2 other heavily govt influenced areas: housing and healthcare. The story of the ultra-liberal Cal professor who called for subsidized housing while he votes against development to maintain “historical charm” came to mind.)
The value proposition of university for people in “show your work” fields is changing.
One of the most basic revelations the internet has surfaced is the different nature of professions.
Internet has made the largest difference in “show your work” professions: occupations where it is valid and easy to demonstrate your value online. For example, coding, design, music, art, game dev, animation. Open source projects and writing, democratized, pure examples of “show your work” fields.
From an employer’s point of view conscientiousness is a proxy for being a good employee. But this can be circumvented by just showing your work online. This erases the value of a degree that derives from employer demand.
GitHub has like an internal ranking and rating system for software code, and for programmers. So you can actually build an actual professional reputation as a software developer on GitHub without ever actually being face to face with another human being. People all over the world today who were basically taken advantage of this to be able to basically build these incredible track records as a software developer and make themselves more employable. Employers like my venture firm. We recommend that our employers spend as much time on GitHub looking for good programmers as they do on LinkedIn, or going to college fairs.
YouTube, blogs, Figma for design all play a similar role as GitHub does for software developers. He tells the story of South Park as an early example of a viral video that was able to spread organically through a distributed technology. The show born from Matt Parker and Trey Stone’s irreverent holiday card which made its rounds as a downloadable Quicktime vid!
“If you can go to college, go to college”
- Even jobs that probably shouldn’t require degrees require them.
I think it’s actually quite dangerous to give somebody, somebody as an individual the advice, don’t go to college, like in the current system that we have that’s basically saying don’t prove that you’re smart don’t prove that you’re industrious, and conscientious and then basically be prepared to settle for fundamentally lower income for the rest of your life.
- Understand the proposition
Gates and Zuckerberg notwithstanding, if you go to college finish college. Get the piece of paper.
- The 2×2 matrix of what to study and where to study.
The spread of outcomes for technical degrees is not that wide. If you have a technical degree your choice of school matters less. This is exactly the opposite of what you find with liberal arts degrees. Since the output of a liberal arts degree are more subjective or uneven the school issuing the diploma carries more weight.
Possible explanation: in absence of concrete skills, the network from a top school is valuable.
Tips for those in college or considering college
Execute on the opportunity — take the hardest course load you can. Get the skills (obviously get good grades but focus more on getting the skills).
If you are at a sub-tier college taking liberal arts, de-risk by acquiring marketable technical skills.
For those considering alt paths
At this point Marc, still recommends college and acquiring technical skills but if you choose an alt path be aware of the trade-offs. For example, if you choose to do open source work recognize it’s better to make major contributions to one project (as opposed to minor contributions to multiple projects) because that really demonstrates what employers are looking for. Put yourself in the mind those who will be evaluating you years down the road.
Consistent work demonstrates conscientiousness and the nature of the work is an embedded intelligence test.
What should a software developer do? Unquestionably the answer is create an open source project or go become a member of an existing open source project and make successful high quality sustained contributions to that project over time. At this point I think that’s clearly a better credential than getting a computer science degree. I’d hire people like that myself and the great thing now is you can do that from all over the world.
So what matters to Andreesen when they hire or fund someone?
The good news:
They do not care about a degree or GPA or test scores and in fact question if too much conscientiousness means you are too much of a rule-follower.
The tough news:
They measure you by what you have actually done. Building companies requires being able to do things so that is the capacity they are looking for. List of things a founder will need to be able to do:
- Building an actual product that somebody will actually pay for.
- Figuring out a way to actually sell it to them
- Actually collect the money
- Actually service the customer so they actually have a good experience
- Actually tell their story so that anybody will even know that they exist
- Run a finance function so that they don’t lose all the money
- Run a legal function so they don’t get sued all the time
- Actually get others to work with them.
There are many talented people so the way to stand out is to actually demonstrate the ability to build or create.
Steve Martin best career advice ever: Be so good they can’t ignore you.
Developments to watch
- New credentials2 to replace bachelor’s degrees (ie Google certification program, coding tests, and math puzzles)
- Still early innings of “show your work” online as way to qualify yourself
- Engineer Slava Akhmechet wrote:
The easiest way to think about it is in terms of the big five personality traits. These are kind of like Myers Briggs, except real. The three traits you especially care about are conscientiousness, agreeableness and neuroticism. Psychologists have precise technical definitions for these terms, but in plain language you’re trying to find out (a) whether the candidate is lazy or hard working, (b) are they an asshole, and (c) are they going to be stuck in analysis paralysis and invent life emergencies for themselves all the time instead of working. - Alex Danco wrote:
This week, a bunch of news to share from Shopify-side:
First, Dev Degree admissions are now open for Fall 2021. If you’re interested at all in getting a computer science or software engineering degree, or know someone who is, Dev Degree is a pretty remarkable program. You’ll get 4,500 hours of experience over four years, and come out with the same credentials as a four-year undergrad (but with an enormous head start in joining the tech workforce.) You’ll also spend the majority of your time working on actual software projects inside Shopify, contributing actually valuable work. We have some Dev Degree students in Money, and they’re fantastic.
You know I’m not huge on the “college will collapse in a few years” train, which is fashionable in a lot of parts of tech. I had a great undergrad experience, I learned a lot, and I wouldn’t change it for anything. I don’t think you can flippantly say, “skip college and get some real-world training, it’s the future, go for it.” But Dev Degree is really something special. Oh also, instead of paying tuition, you get paid a salary. As you should! All told, when you add up your salary + vacation + paid tuition for partner programs, you end up getting paid something like $160,000 over 4 years. Anyway, if you or someone you know needs to hear about this, please send them here, Here’s an FAQ.