The (Non-)Utility of College
On a semi-regular basis, I interact with people who have dropped out of school, are on leave, or are considering dropping out. This is partly due to the industry I'm in (tech), the city I live in (San Francisco), and partly because of where I work (Contrary).
Contrary is a newer venture capital firm with a truly people-first thesis. We identify great up-and-comers in tech, and then invest in and support them relentlessly through their careers - often well before they even decide to start a company. We have a network of 500+ really sharp young people in our community. Many are in or have attended elite universities, and many dropped out of school. Within the firm itself, we have some college dropouts working for us full time, several advanced degree holders, and one PhD.
Now that I'm almost two years out of school, I'm starting to take a wider view of my college experience, and reflect on how it was useful so far in my career. My hope is that anyone who is teetering on dropping out can read this and absorb it into the constant stream of information that is often encouraging them to leave school.
I came close dropping out of college - not once, but twice. Not only did I finish, but I stayed to earn a master's degree as well. I believe these decisions were ultimately the right ones for me, but maybe not for others. I think there are a number of reasons why it may be worthwhile to leave school, but this post isn't meant to convince you one way or another. I want the reader, above all, to use this information in the context of their own situation - and as always - to think for themselves.
With that in mind: Why did I find college useful?
I first want to get the point across that college became most useful when I stopped expecting it to be. I came to college with the expectation that all of the content would have practical utility, as many do. This was a large source of my frustration while in college and only ceased when I was willing to stop concerning myself with this aspect of it. Once this happened, it paradoxically became much more "useful". I'll explain how:
I learned to truly love learning.
I started to enjoy solving problems simply because they were hard or interesting, collaborating with or learning from others because they creative or brilliant, and going deep or wide on a new subject simply because it was new.
College is a unique playground for the mind. If you're curious by nature, it'll be one of the best times for you to go and study something interesting for the sake of it. A well-structured course is like climbing a mountain of knowledge, and a good professor is like a sherpa. It's well worth it to climb such mountains with a guide who knows the route.
I learned how to "wrestle problems to the ground."
I was handed lots of super hard and ambiguous problems during my studies. Collaboration was usually encouraged and support was regularly available. However, it was ultimately on you as an individual to find the right mechanisms to solve problems. Cheating was rare because of the honor code at my university, or impossible because there were no resources containing solutions to the problems. So you had no choice but to find a way to solve them. I remember working on math proofs that would individually take upwards of twenty hours to solve. This was an absolutely invaluable process to learn/skill to obtain.
The harsh truth is that most problems you'll encounter in professional life are actually not that hard. I'm a software engineer, and most code I've come across requires far less brainpower to write compared to solving a modestly hard math or physics problem. If you want to increase your overall problem-solving grit - or just like to be challenged - I recommend studying hard subjects and being held accountable for achieving a baseline proficiency in them.
I attained new mental models that changed how I look at the world and process information.
As you might know if you've taken computer science classes, there are algorithms that are far more efficient than others at sorting and processing data. So if you can hardwire new algorithms into your brain that improve your ability to process information and make decisions, you effectively become smarter. It wasn't the actual algorithms I learned in classes which enhanced my perception of the world, but rather the constructs required to understand new subjects.
For example, graph theory taught me to look at the world as a series of connected entities, forming and clustering in predictable ways. My differential equations classes taught me to see functional relationships in my day-to-day, and how varying inputs or rates-of-change of inputs can effect outputs. Economics and game theory classes taught me view the human nature response to incentive systems. Artificial intelligence and machine learning classes taught me about models of learning themselves, among humans and computers alike. Art and architecture classes taught me to see how you can design spaces to encourage or discourage behavior. And so on with dozens of more classes.
"Standing on the shoulders of giants" - and seeing the world through their constructs - allows you to see more, understand things in new and unique ways, and begin to distill or create your own mental models for interacting with the world and making decisions. Ultimately, life is just a series of connected decisions, so it's worth doing what you can to learn to make better ones.
The Dunning-Kruger effect is real.
If you're not familiar with it, the Dunning-Kruger effect is a rough model of the relationship between confidence and competence over time for most people. Early on - as you wade into a new subject - your confidence will be super high and then quickly drop off into the "Valley of Despair" as you realize how little you know. If you're undeterred, you'll slowly climb out of the valley, and eventually back up to some point where you feel you understand the subject, but know where your limitations lie. This is an incredibly important process to go through over and over again - and worth it each time.
College is a uniquely great place to experience this in short and medium-term bursts, without consequence. I failed my first graph theory exam miserably. However, I knew that I had a passion for the subject, so I fought through passing the class. I then went on the next semester to do research in the subject with the postdoc who taught the class and made it a cornerstone of my senior thesis. But had I been unwilling to enter the valley this outcome would not have been possible.
Every single semester I made sure to take at least one class that I felt was stretching my capabilities in some form or another. In doing so, I dove headfirst into the valley, knowing that discomfort was actually a friend. I'd trudge through the course, and climb out of the valley once again. I rarely cared what my grade was in such courses - it simply wasn't the point.
While watching Hulu's show about Elizabeth Holmes (the disgraced founder of Theranos), my girlfriend astutely pointed out that Elizabeth Holmes simply never trudged into the valley of despair. She pretended to be a genius, lied when she couldn't produce a working product, and pretended to sail right over the valley to greatness. Of course, she'll go down as one of the biggest frauds of all time, simply because she never was willing to have the humility to accept that she had more to learn.
Being a finisher is critical.
Learning to complete something is an absolutely critical skill to learn and practice routinely. It should be obvious that this skill is mostly for yourself.
But externally there are even more reasons. I remember when I was considering leaving school I read a quote from David Rose, a venture capitalist, that effectively said he was unwilling to invest in dropouts, simply because he had no data to indicate they could commit themselves to completing something of meaningful duration. Fighting your way through hard courses and completing degrees signals to others that if they hire or invest their time and money into working with you that you'll deliver.
College is a great place to "make yourself valuable to yourself."
You may be noticing a trend by now that most of these points have little to do with landing jobs or gaining credentials. There is more and more evidence pointing to the fact that you don't need a college degree to do reasonably well in your career, especially in tech.
I took the approach in school - and continue to in my career - to continue to make myself increasingly valuable to myself, not others. My goal has never been to become a tool for someone else. I want to set myself up to achieve my goals, pursue my passions, and live a fulfilling life. However, doing great work in challenging environments where you aren't in full control can make you far more valuable to yourself than the alternative. College is one of those environments, and only by the end did I realize I had also accidentally made myself useful to others in the process.
College opens doors.
Whether you like it or not, graduating from a great university still means something to most people, and they'll hold doors wide open for those who did. Sometimes, it seems almost to a strange or unfair extent. Without the degree, some of these doors are not held as wide open (or are shut entirely).
You might be excluded from things that otherwise seem trivial but require a college degree. I don't want to spell out too many anecdotes here, but I've already seen a surprsing number of these situations.
The network is useful (friends are good too).
Frankly, I think this aspect is a little over-emphasized, and becoming less important as there are more communities you can become part of during and after school. However, you can still certainly build a strong network of people in college that might help you along the way. In fact, I became involved in Contrary through their fellowship (one such alternative community), but I was referred by a friend from college.
To wrap this up, it may surprise you when I say that I never really liked school, and still don't. I didn't get great grades growing up, was fairly rebellious, and found most of K-12 excruciatingly boring. But I always loved learning about things I was genuinely interested in and wanted to find powerful ways to advance myself. I found a way to have college satiate both of these desires.
It was ultimately an imperfect place for someone like me, and I often felt like a square peg fitting into a round hole. If you've read thus far, there's a good chance you feel this way too. But if you relax your prior assumptions about what college should be and how it's failing to live up to your expectations, perhaps you'll start to discover some unexpected benefits of your own.
Doors that Open Doors - What is (and isn't) a Technology Company?
In case you haven't noticed, there's been an explosion in "tech" entrepreneurship recently. This is probably a good thing, but also requires some more careful thought on behalf of founders, VC's, and public market/retail investors to avoid another dotcom bubble scenario. I put "tech" in quotes here because this is the exact word I think we should be more careful about using liberally.
Being technical myself, it's more or less straightforward to make the distinction between a technology company and a tech-enabled company. It may not be so clear to others, so I'll make it clearer here:
- A technology company builds technology (i.e. digital and/or physical tools - something that you can use to build something else), sells it to other businesses (sometimes directly to consumers), and/or uses the technology directly in-house to accomplish its goals.
- A tech-enabled company uses technology (often purchased from a series of technology companies) to sell products or services that would not be considered technology itself.
Some examples of technology companies include (in no particular order):
- Joby Aviation
- Boston Dynamics
- Two Sigma
Snowflake builds and sells its advanced data-warehouse technology to other companies, whereas Joby plans to use its advanced eVTOL aircraft to build an air taxi service, but will not sell the aircraft to other businesses.
I'm actually not going to list out any specific tech-enabled companies, because I don't want to point to a finger at anyone and call them "less valuable" (but they realistically are, and I'll explain why). Categories include but are not limited to:
- Digital marketplaces
- Social Media Apps
- Most B2B SaaS
- Consulting or Agencies
These types of businesses often have many more sales, marketing, and other non-technical employees than engineers or developers (which might be a good rule of thumb to use when drawing the distinction between the two).
Technology companies do much harder technical things than tech-enabled companies. So hard, in fact, that each are likely more constrained by available talent in the world to work on such problems than by capitalization concerns. If you want to create a competitor to some of these businesses, you may need to poach talent from them directly to even get started. Not to mention, you should expect to spend years working on the problem to even create an MVP. Go ahead - try taking a weekend and building a cloud hosting provider, orbital rocket, or payments processor.
Businesses that are tech-enabled do not suffer such ills. You can not only find a highly commoditized pool of talent to work on your application, but these days you can probably outsource the whole job to contractors. You can also likely build an MVP for many tech-enabled businesses in a weekend.
Simple economics says that when there is abundant competition, businesses will continue to fight a "race to the bottom" to drop the price of their product or service below that of their competitors. In turn, margins will continue to get eaten away, and profits will stagnate or drop over time. In the case of tech-enabled businesses, there are way more competitors - and new ones can show up in a matter of months. Not to mention - there may be free, open-source alternatives. As technology companies democratize access to creating tech-enabled companies - and knowledge of how to use their tools becomes commonplace - this trend will only continue.
A good way to think about this is the analogy of each company holding a key to a door. In earlier-stage companies, you can't really see what's behind the door, if the founder(s) have chosen the right door, or have the right key to it. As the door cracks open, you can get a better sense of what treasures lie inside, and you can keep funding it until the door is pushed all the way open. However, the difference between a technology company and a tech-enabled company is that inside the room of a technology company there are more doors. These can be opened by other founders or by the business itself. For a tech-enabled business, there may be a bunch of treasure but usually no more doors.
It's obviously a better scenario when there is a cascading set of doors behind the first one, because a whole bunch of treasure will have to pass through the first room to be obtained. In most cases, you know in advance which doors could have more doors behind them, and which have only treasure behind them (their are exceptions, of course).
Therefore, I would expect that over time public/private market valuations and revenue multiples will reflect the results of this economic principle. That being said, creating a successful technology company typically takes much longer, will often face steep adoption and regulatory hurdles, and underlying the technology being pursued can turn out to be flat out wrong in principle/made irrelevant over time.
So if you're a founder jumping on the bandwagon of "now is a great time to start a tech company" - think carefully about which category you fall into and how that squares with your intended time/wealth outcome for the endeavor. If you're an investor - this might be an interesting thing to consider when evaluating your portfolio or deal flow.
- This is not necessarily a new argument, but a re-hashing and reminder of ones we've seen before (see Peter Thiel's "Technology vs. Globalization" and "Competition is For Losers" arguments in Zero to One).
- Technology is not the only way to produce anti-competitive effects for a business. Take Airbnb for example, which builts its moat by cultivating a strong double-sided marketplace and community.
- Some tech-enabled businesses can build technology in-house that eventually make them technology businesses. Take Amazon for example. It started as an online bookstore, but later built state of the art optimization and logistics technology that other retailers can't compete with. Similar stories with Uber, Facebook, and many more.
The Metaverse Will Be Paved With New Communication, Not Payments Layers
I'm about to share some pretty unpopular opinions among the crypto/NFT/web3 crowd, so if you're deep in that game and are too uncomfortable with new ideas, here's your exit.
For those who are interested in sticking around, I'd like to start with a brief history of another technology. In 2011, three years after Satoshi Nakamoto introduced Bitcoin and blockchain technology, the first WebRTC spec was introduced. For those unfamiliar with WebRTC, it's a free, open-source set of protocols that enables peer-to-peer, low-latency real-time communication over the web. Using it, you can link two users via web browser and allow them to share bi-directional streams of audio, video, and other arbitrary data in real time.
WebRTC (and related technology) has enabled a slew of new applications that have subtly become a part of our everyday lives. I'd go as far as to argue that without WebRTC, the global economy would have not been able to weather the Covid-19 pandemic with the (relative) success it did with the transition to remote work/learning.
In the last year and a half, I started building in this space. Most recently I launched Mantis. Before that, I built roundtable.audio. From it, I learned this technology is non-trivial. For certain applications which involve multiparty communication, it requires very sophisticated engineering. There are lifetimes of work to be done here. I'll take the opportunity to shout out the open-source Pion project, working to democratize and extend WebRTC technology, on which much of Mantis and roundtable.audio are built.
I believe that the next version of the internet (or at least part of it) will be the "real-time internet." That is, since static websites in the 90's, and more complex web apps through the 00's and 10's, bandwidth has only kept increasing and our lives have become only more coupled to the web. One would only expect that the packets will continue to fly faster and in greater volume. Pair this with the frightening improvements in video game graphics plus powerful cloud computing, and the ultimate end of this probably looks something like the "Ready Player One" fantasy metaverse that has launched into the spotlight recently.
This is where my path intersects with the crypto folks. I'm still not exactly sure what these people mean by web3, but I think that's okay because I don't think they really know what they mean by it either. A common answer to someone asking for a definition is "it's still too early to tell."
But from what I can tell, web3 is about:
- users of web apps "owning" the data they produce on the apps
- payments (in the form of cryptocurrency) and asset ownership (in the form of NFT's) being central to the apps
- virtual spaces for live work, play, and study where such data will be produced and payments/asset transfers will be conducted
I'm not here to argue against the value or truth of these individual points (although I'm tempted), but really about the backwards mindset of which point is clearly the most important with respect to the metaverse.
Discounting the strong possibility web3 will be a short-lived hype, the truth is that the internet of tomorrow will look very different than the internet of today. But if you look at the history of new means of communication, they came to fruition before people started thinking, or even caring about using them for transactional purposes. I actually think there is a great SNL skit in the making where Mark Zuckerberg steps into the metaverse only to find a giant NFT flea-market where an AI avatar is hounding him to buy an original jpeg of an ape for a trillion dogecoin. (He then naturally takes off his headset, throws it in the trash, and deletes all the code ever written at Facebook/Meta.)
This payments-second history will likely be as true of the metaverse as it was the internet, television, phones, mail, and most real-life places of gathering. If they were designed first and foremost as means of buying and selling, I'd suspect they'd have never seen mass adoption; they'd be absolutely repulsive.
On the other hand, if I can step into a virtual world that enables more productive and enjoyable work, learning, and play - that's a beautiful future. I not only think it can be, but has the potential to be perhaps the greatest, most fulfilling medium of all time for builders, engineers, scientists, artists, and more due to its unconstrained nature. And I most certainly believe people will be able to make immense amounts of money within it by providing real value to its users - and that's a great thing.
So if you're trying to decide what the future looks like - and consequently how to spend your time and money - I urge you to look at the spaces where people are building new things that enable other new things. I think by now it may be clear that I'm less than bullish on blockchain-based technologies, and that's because I've seen close to zero successful applications enabled by it that weren't cryptocurrencies, a derivative or cryptocurrencies, or means of exchanging cryptocurrencies.
I’m actually hopeful to be proven wrong in this regard, and somehow see the emergence of a bunch of decentralized applications that lead to better economic incentives and outcomes. But as a comparison, in a shorter amount of time WebRTC and related technologies has quietly enabled more change in your life than you probably care to know about, and may have been the only reason you were able to afford your NFT's (by keeping a paycheck, customers, or investors) in the first place. Yet for some reason few seem to care about this, and other more fruitful technologies relative to blockchain.
As always, I'd love to hear the adversarial views on my ideas. Tell me directly using Mantis, drop a comment, or send me a Tweet. And if you're reading this in 20 years, come find me in the metaverse and let me know how I did.
Automation != Leverage
There's a subtle but dangerous misconception about technology that seems to lead many business decisions astray. Worse, it paints a bleak outlook of the future. That misconception is that somehow automation always produces additional leverage in a business context. This is false.
First, a couple quick primers: A lever is a simple machine which, when you apply force, outputs a magnified force on the other end. You can think of the magnitude of leverage as how many units of output you get for every unit of input in a given system. For example, a walking human burns about 50 units of energy (kCal) to travel a kilometer. Give that human a bike, and they can travel roughly 2 kilometers with the same energy. Juice up a Lime scooter with that same energy, and the human can travel roughly 5.5 kilometers. That's technological leverage.
Automation is even simpler; it's the process of taking a system and removing (or minimizing) the need for human involvement for the system to function. Much of software is about automating tasks. That newspaper that used to show up at your door is now automatically delivered to your inbox in the morning. And it probably costs 1/1000th of what it used to for the newspaper company.
In many if not most cases, automation does directly produce more leverage. It's probably the main driver of the massive creation of wealth in the software and internet industry. Because of this, when presented with an opportunity to automate something, software companies jump on it. This knee-jerk reaction can come at a serious cost.
Consider an email campaign. Your business has 1,000 current users, and you want to inform them of a new product offering to generate more ARR. Easy! Create a series of campaign emails, and set your preferred email tool to blast them out one at a time to all 1,000 over the course of several weeks. You obtain a 5% conversion rate, translating to an additional $30000 in ARR for the year for your $50/month offering. Couldn't be easier - great success.
Now consider this alternative approach. Instead of blasting the campaign emails to all 1,000 users, you choose the top 100 you think are likely to buy your new offering. You craft personalized emails to them about why you think this offering can benefit them and offer them a calendar time to learn more. 80 of them convert. You net $48,000 in new ARR for the year. Besides the $18,000 additional ARR, you may have had some very useful conversations informing future product ideas.
Oops. Your automation actually produced less leverage than the alternative. Yes, your super cutting-edge software company incurred a large opportunity cost because of technology.
Now, critics will cry "you've toyed with the numbers!" and "this doesn't scale!" The most keen observer might say, "you actually may have produced more leverage in the first case depending on how long each of these took, and you simply got better results from the additional effort." Perhaps for this example they'd be right (or perhaps not).
Regardless, the basic idea is that companies are often faced with the decision of doing N units of shitty work or far fewer than N units of great work. It's not always a simple calculus to determine which will yield better results; sometimes the unintended consequences of doing great work are not always clear (and likewise of doing shitty work). And sometimes it requires doing great work manually before you should ever consider automating the task. As someone who loves automating just about every mundane task I do, this idea definitely got me thinking about when I'm doing this appropriately, and when I'm not.
E-commerce and SaaS companies love the idea of putting their offerings on autopilot, and allowing self-serve automations to take care of their customers from A-Z. Don't get me wrong, I love this idea too. But theory is different than practice, and you'll be hard pressed to find a company of this type that strictly benefits from removing humans from their sales/support process. A good company knows how to automate all of their processes. A great company knows when not to.
I've been thinking about this a lot as it pertains to Mantis. I talk to a lot of businesses who feel they are too big, too small, or too busy to have a human taking calls from customers and prospects. Sometimes when I hear this I feel bad for myself because I've built something they don't want. But usually I feel bad for the business mistaking their "AI" chat bot, FAQ page, or "we'll get back to you in 1 - 2 business days" autoresponder for "solving" one of their most critical problems: making their customers happy.
Have a different opinion? Feel free to tell me about it using Mantis in the bottom corner.
SaaS on a Hunch
A few weeks ago I launched Mantis, a live-audio chat plugin that any business can embed on their website. It allows site visitors to speak with them directly through the browser, with a single click, from anywhere in the world.
Unlike some SaaS offerings which are built around the discovery of some problem, Mantis is built on an opinion, hunch, or hypothesis about how things ought to be. Taking this approach is a bit like rolling a boulder to the top of a hill; I believe it actually requires me convincing (some) potential users to view things from a new point of view instead of just solving some pain. Let me elaborate.
There's a longer story here, but in short Mantis came from an end-user pain. I'm someone who:
a) likes to ask get answers to multiple questions before buying basically anything online, and
b) actually prefers calling businesses to get these answers when possible.
In my opinion, text-based live chats and email support are way too slow, and frankly demeaning when you're given a bot instead of a human. Even if I get a reply, the clarity and throughput typically is almost always worse than a call. But if I as a user/customer feel this pain, it clearly must translate to pain for a business, right?
Maybe, maybe not. Even for similar businesses, there's a ton of variation in approaches to user/prospect/customer interaction. Some businesses have told me they intentionally try to produce friction for a customer to speak to them; others have told me their availability for prospects (let alone paying customers) has made all the difference in their growth and success.
I was going to originally title this post "The Cost of Facelessness", or "No Business is Too Big to Be Faceless", but I'm not ready to quantify the earlier, or make a claim to the latter. These are the answers I'm looking for as I grow Mantis, and confirmation of such ideas will only aid its success. I'm also not driving towards binary answers, but rather seeking to understanding the conditions under which a business can greatly benefit from enhanced user interaction.
My hypothesis is that offering a frictionless, high-throughput means of allowing someone to contact an internet business (especially customers), has a positive ROI in almost every case. The magnitude of that ROI is highly variable.
For startups, speaking to users and prospects to drive product direction is downright necessary, so the ROI could wind up being the continued existence of the company (see this YC post if you don't know what I'm talking about).
For growth and later stage companies, letting your paying customers come to you about any issues seems like it should be a top priority, and efficiently answering questions for prospects should convert more customers, or generate more qualified leads. To me, these things seem obvious, but maybe I'm overlooking something.
Obviously such opinions will be met with adversarial points of view, and I welcome those. Any and all feedback is welcome, either via comments where I post this, or directly to me if you want to use Mantis in the bottom corner.
But if you really want to help me answer these questions, give Mantis a try, and let me know what you find. Right now I'm pulling people off the waitlist and provisioning access. I encourage you to drop your email there. If you want access even sooner, just shoot me a note at email@example.com, and I'll try to serve you as fast as I can.