Entrepreneurship as long-term risk mitigation

Stumbled across this today via HackerNews:

Just How Risky is Entrepreneurship, Really?

In addition to the psychic merits of working on the personally meaningful, in an economy where low-wage, high-skill overseas workers and no-wage machines encroach ever more rapidly, it is essential to compete both in input and output.

I think the importance of these points completely dwarfs the rest of the argument.

Set aside the fact that the psychic value of working on your own project can, for many people, offset much of the higher expected monetary value of a steadier job. Crucially, starting and running your own company rapidly develops your executive, decision-making and management skills, largely independent of financial success. These are skills that aren’t going to machines or offshore, at least in the near term. Entrepreneurship IS long-term risk mitigation.

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Would you buy a Lamborghini to mow your lawn?

Not unless you care more about impressing your neighbors than cutting your grass. So why do consulting firms look for Lambo talent to do John Deere work?

Lamborghini Tractor
Okay, maybe you can have both.

Performance on generic case interview questions and brain teasers can be correlated with quick-fire intelligence — or with how many editions of Case in Point the candidate owns. Less-structured interviews with principals and managers burn billable hours, and are impractical as an early-round filter.

Firms make these mistakes because they often fail to create a structured, relevant case process that identifies the best candidates (not the brightest) at the lowest cost.

Companies usually rationalize this away: “We just want the big brains. We can train them on any necessary skills.” That’s like buying a Lamborghini to mow your lawn because it has the most horsepower, even though you’ll have to spend the next 6 months modifying the undercarriage to install the blades.

If you hire the smartest people out of top schools without regard to relevant capabilities, you are overpaying for talent.

Consultancies whose entire business model is based around overpaying for talent are off the hook. Would you hire McKinsey if it didn’t mean a gaggle of Ivy Leaguers would soon be Thinking Very Hard about your business problems? This is part of their brand promise. And it works for them.

For most firms, though, the right evaluation approach is built around specific job skills. This isn’t because the ability to learn and grow is worthless; it’s just that you can’t evaluate it accurately. House keys, dark street, streetlight, etc. Firms overpay for proxies, like elite diplomas, when simply targeting the right metrics could radically widen the base of acceptable candidates.

Karl Kapp on educational revolution

Kapp on the need for revolutionary change in education:

Year End Musings, Reflections, Predictions and Thoughts: Part Two | Kapp Notes.

We need to wipe out the current structure and put into place a structure that recognizes the realities of today’s modern world, that emphasizes 21st century skills like problem-solving, creative thinking and entrepreneurial thinking.

The school day shouldn’t be divided by subject, it should be based on projects, students working in teams creating a company or answering a request for proposal or preparing for a forensic debate…

We don’t need to band-aid the school system; we need to fundamentally change its core. We need to align the educational structure with the needs of society and the world. 

Where do I sign up?

It’s not an either/or issue; creative, integrative and relational skills are ways to reinforce and solidify subject-area learning, not some new-age replacements for concrete knowledge.

Education certainly would be more efficient if the human brain were built to process narrative-free modules of pure information. But since it’s not, why do we keep teaching that way?

First! (Or: Hopefully we’ll look back on this one day and laugh)

4/366: Beginning

In many ways, this post is like a beige LEGO -- boring, yet full of potential.

The very first post on any blog cannot, I suspect, escape the connotations of its low-tech parallel: an unfamiliar person on your favorite form of public transportation speaking coherently to no one in particular. In fact, the latest in nano-headset technology ensures that our prospective madman has far more excuses than we to be holding forth at the apparent void. When you begin writing on the Internet, it is assured that your first words are ignored at the time of writing. So think of this post as a time capsule — not meant for immediate consumption. Less self-indulgent content: TBD.

I record the proposed subjects of this blog below, partly as a commitment device to restrain my topics of exposition (it won’t), and partly as a guide for you, the currently-nonexistent reader, on what you might find here someday. The areas that most interest me are:

  • Nontraditional education and self-directed learning
  • The methods firms use to select, recruit, evaluate and train employees
  • Labor market skill gaps and solutions
  • Entrepreneurship and the development of human capital

Off-topic posts are likely, ranging from small-city life (Boston) to nutrition (it’s…good?) to gentlemanly attire (assuming I find any).

See you out there.

-Geordie