The a16z Show - The Question of Education

Episode Date: September 11, 2020

Monopoly, oligopoly, cartel. All three of those words can describe the (not so) modern education system today, given the cost structures, economics, and accreditation capture -- in everything from who can and can't start a new university (when was the last time a significant change happened there anyway?!) to where government funding really goes to the student loan and debt crisis.Yet degrees do matter, just not for the reasons we think. So what are the tradeoffs -- when it comes to the "right" school, making money, and assessing skills objectively -- between what's been called "hard" (B.S.) and "soft" (B.A.) degrees? What's the best book on career advice, and what advice does Marc Andreessen -- who went to a public university, worked on a revolutionary project there, and started a company right after -- have for students (and others contemplating change in their careers)... and especially for those considering dropping out, delaying, or skipping college altogether?Andreessen shares his thoughts on the purpose, past and present of education (briefly touching on the impact of the pandemic as well) with Dylan Field, CEO of Figma, which is free for students and educators. The Q&A was recorded in August 2020 and originally appeared as a video in their "Back to School?" interview series; it was actually inspired by the question of taking a gap year and questions about whether or not to go back to school this year that came up in their Virtual Campus community of students from across the world. image: Lyndsy Rommel / Flickr Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hi everyone, welcome to the A6 and Z podcast. Today's episode is all about education. It's based on a conversation that took place last month between Mark Andreessen and Dylan Field, CEO of Figma, as part of an interview series they hosted for Back to School. And we're running it here as part of our post-Labor Day, Back to School Week theme with Mark. Earlier this week, we also ran another Q&A he did on productivity, scheduling, reading habits, and more. This Q&A, which originally appeared as a video, covers the purpose, past, and present of education, briefly touching on the current pandemic and its impact. It goes into the costs and economics of education, everything from student loans and the debt crisis, government funding, industry cost disease, credentialing and accreditation capture, and more

to the tradeoffs of what's often been described as hard and soft degrees when it comes to making money and assessing skills objectively. To finally sharing lots of advice for students and others contemplating change in their careers, and especially how to show your work and get noticed. While throughout the episode, threading the tricky question of what to make of those who have considered dropping out, delaying or skipping school to go straight to field work or startup, the conversation was actually inspired by students in the Figma design community, who were contemplating the decision of whether to go back to school earlier this summer,

and is part of their broader and free program to help make design accessible to all. For links to Figma's community of students and other resources, please see the show notes and go to figma.com slash education. For more in our education series and archives, you can go to A6NC.com slash education. Well, let's start off with an easy one. What's the purpose of college? Well, there's the overt purpose of college and then there's the actual purpose of college. So, I mean, the overt purpose of college is fairly obvious. It's sort of this bundle of services. And it's, you know, the bundle basically is like, you know, some level of sort of educate,

some level of actual education slash skills training. We'll probably talk a lot about that today. And then it's, you know, basically this kind of four-year kind of, you know, adventure for young adults, you know, where they get to, you know, in theory, socialize with their peers and so forth, form networks. And then it's, you know, it's a dating service. It's a real, it's a real life Tinder experience, Tinder larping, maybe. And then it's, you know, and then it's a giant sports complex, you know, generally attached to a hedge fund in the form of the endowment. So it's like some bundle of services.

It's obviously the brand plays the plays a big role. And it's obviously very important potential in today's society. That's the overt purpose. The sort of, you know, slightly more cynical view is that there is sort of an implicit purpose, which basically is, it's basically the way employers delegate personality testing to somebody else. So they basically don't get in trouble for it. So in the old days, you know, 20, 30, 40, 50 years ago, employers used to actually do personality testing. And so if you applied for a job at Hewlett-Packard as an example

or one of the big companies at the time, you would actually take like a battery personality test. And they would actually test your IQ. They test for intelligence. And then they would test for personality traits. And they'd be fundamentally trying to get to. In particular, they were trying to get to a personality trait called conscientiousness, which basically is sort of what it says.

but it's basically like, you know, are you a self-starter? Like there's actually two sides to conscientiousness. There's what's called industriousness, which basically is energy, self-bearing, being self-repelled. And there's orderliness, which is basically attention to detail. So they're kind of trying to capture a sunset of both of those. It became some combination of kind of socially undesirable and illegal for employers to do those tests. And so basically those, the current theory kind of is that those have been outsourced to the colleges.

And then so basically the implicit purpose of college, number one, is basically it's an IQ test in the way in. form of the SAT or the ACT. And then the other part is of college is what's called the, they call it the sheepskin effect, which is basically the fact that you prove that you can actually finish the program. Yep. And that basically, it's basically an applied test of conscientiousness, this personality trait called conscientiousness, which basically is, basically it's a predictive thing. If you can finish a four-year college degree, it is believed by employers that that is suggestive that you can also finish many other tests, that you'll be a responsible worker. The reason we know that's the case is because of what's called the sheepskin effect, which is 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. And so there's basically the sheepskin effect is either that last semester is responsible for a full half of the skills in education that you receive while you're in college, or the skills of education are somewhat beside the point. They're just trying to see whether you can get over that four-year hurdle. And so the sheep's going to affect is what psychologists refer to or education experts kind of refer to is like it's basically the proof that you were able to complete the program. And so anyway, then if you're an employer, this is why employers have indexed right so much

on college degrees over the last 30 or 40 years is because it's just, it's the easy way to say smart kid can finish his work done. So when should someone go to college? Yeah. So I'm a believer, so I'm a pragmatist. We'll have, you know, multiple, I think, parts of this conversation today, but I'm a pragmatist at heart. So my view is like you basically, you have to, at the individual level, you should take the system kind of as is constructed. Like you shouldn't try to like fight to like basically overturn the system starting at age 18. Like you should get in a position of maybe power and authority before you do that.

And so I'm a big believer. It's like the system as it is today, American employers are very, very heavily, and Western employers generally are very, very heavily focused on college graduates. In fact, one of the really weird things that's happened in the economy that probably is a bad thing, but it has happened, is that there are just, there's been a steady increase in the percentage of jobs that actually require bachelor's degrees, including for jobs where you would think it would, you know, you wouldn't need that kind of requirement. But it's just it's, it's because of how the system is of all this kind of where we are. And so, so I think it's actually quite dangerous to give

somebody the, 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. And I think that's extremely dangerous advice. So the general advice is basically, if you can go to college, go to college. That said, I think it's worth being very aware, right, of basically what that actually means. And we already discussed, you know, some of that in terms of like what you're actually proving. And so, for example, if you go to college, the general best advice is finish college, right? And as you know, like one of the things that we've

kind of fetishized a little bit in Silicon Valley over the last, you know, 20 years is basically this idea that dropping out, right, is just a benefit of. Because I've been a benefit of. which I've been a benefit of probably to be very clear. That's right. And so basically, like, again, it, like, it is true that, like, Bill Gates and Mark Zuckerberg and all these people dropped out of college. It's also true that that's very bad advice for most people. Most of us, it turns out, aren't Bill Gates or Mark Zuckerberg.

And so, like, generally speaking, go to college, finish college. That said, be aware of what's happening. And then the other thing, which hopefully we'll talk about at length. But, like, we sort of have this tendency in the public discussion on college just talk about, like, going to college. And we're already doing that. But it's like, okay, there's two big loaded kind of dependencies in there, One is which school matters like enormously.

And then the other is which major, which matters enormously. And I think there's, you want to kind of think about like a two by two matrix of majors in schools. And the outcomes are wildly different depending on where you land in that matrix. Yeah. So basically I think people focus way too much in whether to go to college. I don't spend nearly enough time focusing on what school and what major. And so basically, and here's where things get like super interesting.

So basically what you see is that for the sort of hard. disciplines of like engineering and math, it actually turns out there's a fairly flat distribution of income by rank of college. And so generally speaking, if you go get like a electrical engineering degree or a CS degree or a math degree, and then you look at kind of earnings over time, you know, you do somewhat better if you go to a school that's kind of high up the rankings, but you do fundamentally more or less the same over time across all the schools, which is like an engineering degree as an engineering degree. And like electrical engineering, or computer scientists or programmers or whatever, you know, to the extent that they're kind of always in demand, like there's a market clearing wage for that skill set. And it kind of doesn't matter. Now, there are certain employers where they, like, will only hire people out of certain top engineering programs, but like most employers across the economy hire out of a very broad range of schools. And so, so like, anyway, so those are like the hard disciplines. We've talked more about that. Then there's sort of the soft disciplines. And this is sort of, you know, kind of liberal arts, humanities, you know, kind of all of the, you know, sort of, I'm going to say, BA versus BS.

Right? So the BS degrees are like the hard degrees, the hard science and math and, and, and, uh, and engineering degrees, the BA degrees, Bachelor of Arts are usually the software, you know, sociology or English lit or, you know, philosophy or, you know, a lot of these, you know, kind of humanities, liberal arts, kinds of things. For those, there is a dramatic curve, which is you get paid much more with those degrees coming out of a top school than you do coming out of the average school or a lower rank school. To the point where you really kind of got to ask the question, like is a sociology degree from like, you know, from the lower two-thirds of colleges, like, at this point, is it actually worth anything? And the answer, you know, the answer there might actually well be, it may not be

worth anything. Like, there may just simply not be jobs for those people who have that degree from those schools. And the conventional explanation for that, people could have different theories on this. The conventional explanation of the education experts kind of believe is that basically for the soft degrees, like for the hard degrees, there's definitely a skill. Like, can you design a circuit or not? Can you solve an equation or not? Can you write a computer program or not. For the kind of soft degrees, liberal arts, humanities, everything's a little bit, you know, more open interpretation, you know, like good essay versus bad essay kind of thing, is a little bit more in the eye of the beholder. And so basically the theory is that if you get

one of those degrees from a top school, you also get the network. So from an investment standpoint, if you're looking for ROI, you should, at any school, it sounds like hard sciences, you're saying good investment, sort of softer sciences or humanities, a bad investment unless you're going to a top tier school. Well, yeah. So, yeah, yeah, yeah, I think that's right. And of course, this, this begs of, I can hear the howling kind of in the, in the, in the audience already on this topic. Like, this begs the question, right, of like, what is the purpose of a college education? I would just say this. Where I come from, which is like rural Wisconsin, it was just sort of obvious, which is the entire point of a college education is the income that you make after you get the,

after you get the degree. And so I was, as a kid, like, I was never confused about that, right? And the idea that there are all these intangible kind of things about like, you know, whatever social, this and that and, you know, kind of the all the other, you know, I would say aspirational right with the liberal arts people will say is it's about how to live a good life and it's about how to have the right values and it's about how to this, you know, become like aware of the world and all these things. And like, and again, I'll try not to take a position on that. You could, you can believe either sides of that. And so maybe my point is, like, maybe there are non-economic reasons to get a liberal arts degree. Maybe there are non-economic reasons to get a liberalized degree even at a college that's not top tier.

However, even if you believe that, you should go into that eyes open of what the economic result of that is likely to be. And the economic result of a liberalized degree from a lower-end college is not likely to be what people think it is. And by the way, this factors, you know, this factors then directly into the whole kind of concept of the student loan crisis, which is like a huge, basically the student loan crisis is basically a two-part crisis. But the part of it is just like the most kind of, you know, kind of honestly tragic is basically kids. that realize too late that they're getting the wrong degrees and or from the wrong school, and then they just don't have the income to be able to service the degree. And I think in that case, like, it's basically like that that's the part of the college system that, like, honestly enrages me because I think it's basically taken advantage of naive kids

and naive parents who basically have been sold this concept that college is good, even when that's not always the case. So if you were president of the United States, total control of Congress, so scary, but if you were, and you could do anything to address student loan crisis, What would you do? Yeah, so first I would resign instantly, which I think honestly would be the only responsible thing to do. Well, look, this is starting to.

So I forget what it was. I think it's the governor of Kentucky, if I recall correctly. One of the governors a while ago came out because, you know, these are all, there's a big state level kind of component to this because they're all these state, they're all these state colleges, universities that the state subsidizes for these states, excuse me, subsidized. And so I forget, I think it was Kentucky. The governor of Kentucky, I think came out and basically said, like, we need to stop. basically it's time for these state schools to stop teaching like liberal arts. Like it's just not an economically like valid proposition because like the degrees aren't worth as much. And you know, of course that generated. I don't know if I don't know if he's

followed through on that because that generated huge controversy because people people hate to hear that. But you know, look at some point that has, look at some point you have to have a question about value given value received. In particular, look, I think people should be able to buy and pay for anything that they want. Like, you know, people want to go get whatever degree they want and they want to pay for it. I'm all in favor. But like we do have this like federal loan program that is just basically is this monotonically increasing pile of debt. And by the way, like the student loan program is like it's basically this load, right, of like trillions of dollars of debt on the American taxpayer. And so there's like one question

there. And then there's the other like impact on the students themselves, which is like student loan debt, at least today, student loan debt is the one form of debt that you don't can't discharge through personal bankruptcy. Right. And so these students aren't just basically getting victimized on behalf of society. They're also getting victimized like personally. And it's like, causing, you know, big, you know, especially this newer generation last 20 years. Like, there's a lot of kids running around, like, they've been very damaged by this. And so I think fundamentally, like, I think there has to be, at some point, there has to be the honest discussion about value given, value received. And then the other side of it, which we might talk about,

the other side of it is there has to be some examination into how we got a system that ended up with this kind of adverse outcome. And I think I know why that is, which is, it's a cartel. It's a government kind of sponsored cartel. And I think cartels are bad. And I think we need to kind fundamentally reconsider the system. But you can't just drop that without going into that. So what do you mean it's a cartel? So view through an economic lens. So K through 12 in the U.S. right is the monopoly, right? And it's just a government. It's just a flat out government monopoly. It exhibits all of the school and they have no option. It's compulsory education. It's completely compulsory audience. It's compulsory education. It's basically state, state, it's directly state funded and state

run. These are government institutions. These are government schools. It shouldn't be called public schools. which we call government schools, which is what they are. And so, you know, it's the government running a school, just like the government would be running a restaurant, right? You know, the question I always want to ask on these things is, how would you feel about eating government sushi? Right? And then, you know, equivalently, how do you know,

how would you feel, how would you feel, how would you feel that the Department of Transportation started making cars? Okay. Right. Would you, would you want to drive the official U.S. government DOT design and manufactured automobile? Like, is that an attractive property? Do you think that would be a safe thing to do on the freeway?

Right. you know, the DMV, think about the DMV designing cars, right? And so, like, basically, we have decided that, like, we don't let the government make sushi and we don't like the government make cars, but we let the government make schools. And we expect that we're going to get better results. And of course, we don't. And of course, we don't. And the reason we don't is because it's a monopoly, right?

And the motto of any monopoly, right? The motto of any monopoly is we don't care because we don't have to, right? Like, it's just like the needs of the customers, like, don't matter at all to the monopoly. That's the whole problem of monopoly. It's okay through 12 as a monopoly. It exhibits all those characteristics. And just to pause for a comment before we go on to non-K-12, what data would you point to that says that,

because a lot of listeners are probably going, okay, well, I actually had a great K-12 experience. What data would you point to that says, okay, K-12 doesn't work? Oh, yeah, well, it's just spiraling prices. So the great myth is that we somehow slashed the funding for public education in the U.S. over the last 40 years. Like, that's just, like, false. We've, like, greatly expanded it. And so, like, the load per student, the dollars per student in real economic terms

in the last, like, 40 years, It's something like tripled in the U.S. And the results haven't moved at all. Like they're just flat, right? And so massive price increased, no quality increase. Like monopoly, right? Like, yes. Like, that's what you get.

If somebody had a monopoly on cheese, that's the same thing you would get. You would get the same cheese every year and it would cost more every year, right? And so it's the exact same thing. Now, and look, if it is where you say, like, people get what they want. If people are happy with the result, then, you know, fair enough. Like, if people are fine with this level of quality, then fair enough. And if they're fine paying more every year, fair enough. if they're fine having, you know, their taxes go up consequently, like, you know, fair enough.

But like that is the result of a monopoly, is that that's the case. For colleges, it's different. It's not, you know, the government doesn't actually own to run the colleges, but it's a cartel. It's an oligopoly, is the technical term. Okay. We think about it as it's a cartel. And it's a government orchestrated and blessed and sponsored and funded cartel. And this is really important.

So there's basically, there's four basically streams of money. effectively that end up going to the universities that are in the cartel all the current universities well so the the state universities get like direct funding right about from the states but then there's there's there's the other funding to the state institutions then there's the funding to the so-called private institutions this air quotes for those of you listening on on a podcast version it's basically number one is it's the student loan subsidies right and so none of these institutions would be viable right if they have to provide

their own financing which is why that you've got this federal message federal student loan program and access to the federal student loan program and access to the federal student loan is based on accreditation and the accreditation is run by the government. It's enforced by the government. And so it's basically like the challenge, the thought experiment would be try to start a new college today in the U.S. and try to get it accredited to be able to get access to the federal student loan program. And like I haven't tried to do that. I don't know, you know, do I say the odds of success in that are quite low because the existing universities would view that as new competition and they try to kill it. They try to make sure it couldn't get

access to federal funding. That's one. Second is there's all the federal research funding, right? And so for all these schools that do like science and engineering, there's always two sides. There's the teaching side and there's the research side. And so there's all the federal research funding. And again, that's a cartel. And then there's people in the government are, they are only going to give grants to people that they know or programs they know. Well, they're either only going to do that because like that's that sort of the reinforcing loop.

And there's like a revolving door of kind of who runs these programs also that we can talk about because kind of the standard form of kind of implicit corruption that happens with these kinds of systems. But then there's also like, can you, I don't actually even know the details, but like, can you actually get research funding if you're not an accredited institution? Like, can the NSF actually issue the grant? I don't know whether that's the case or not, but I wouldn't be shocked if they literally can't do it. Or if a bunch of people all of a sudden try to get access to that grant money that they would put that rule in place. And so it's basically, I mean, look, here's the thought experiment. Like, what was the last major new research university that was created in the United States?

That's true. Yeah. Nobody knows because it's been so long. right? Like it's been, I don't know. Like, I actually honestly don't know. It might be Stanford. Like, Stanford was 1890. Like, I, it was, as there been one since 1890, like, I don't know. And so, like, that just kind of tells you, like, the market, the market, it's not a properly functioning market. Like, if there has been a new entrant in a hundred years, like, the market's not functioning properly. I mean, even in the car industry, we have Tesla, right? Like, you know,

like, at some point, come on. Like, somebody's, somebody's, and look, people have tried this, but, like, it's indicative of how hard it is to do it, that they haven't been, they haven't kind of clear and obviously. And then research funding. Good loaned and then there's two forms of tax breaks. These institutions are all allowed to run as nonprofits,

which is a very specific kind of blessing that the government gives them. And there's two forms of tax breaks. There's tax breaks that are allowed to run nonprofit at the operating level. And they're allowed to run their endowments, invest them on a nonprofit basis. And so they not only have,

they not only do not have to pay taxes on their actual operating income. They also don't have to pay taxes on their investment income. And again, like try to try to get get a new university in place and not only get access to the first two that we talked about, but also get access to these tax prices and nonprofit. And by the way, you just go to these universities now, these are big businesses, right?

These are like, you know, they run these like giant sports programs, right, that like have like, you know, national audiences. They run these giant endowments, you know, that happens. You know, some of these endowments are not $30, 40 billion big, right? These are like, you know, huge hedge funds. You know, there's all these programs. There's like, you know, steadily rising, you know, kind of compensation to administration. There's, you know, all these things.

And so, like, they have many of the hallmarks of a for-profit business. they just don't get tax like one. Yep. And so anyway, so it's just, and so basically, and then it's the accreditation cartel that kind of reinforces all that. And so it has all of the same basic characteristics that you would expect, you know, it's a slightly less worse form of monopoly. So basically K-12 monopoly college system is an oligopoly that is jockeying position

and trying to increase status and rank. And then would you say that's like the pure explanation for why price outpaces inflation? Yeah, so then, yeah, so this is exactly. So this then is the front. So basically, there's a very clear formula for basically skyrocketing prices, right? And just to kind of put the, put the issue on the table, on the track that we're on right now, the price of a four-year college degree in the United States is on its way to a million dollars. Right. At the top institutions, it's already cleared a quarter million, right? It's already over $250,000. Right. And it's escalating much faster than inflation. It's, you know, escalating extremely rapidly. And so like you just, all you just need to do, you can, maybe we could link to some of the charts, but like you just, you just project out the chart. It's just this linear rise in prices over time, far faster than inflation. You just like write it, and you can just kind of pick the year when it crosses over a million dollars. And so, so on the one hand, college, four year college degree is going to cost a million dollars. On the other hand, a hundred inch

flat screen TV that you can watch Netflix and play video games on is dropping and it will ultimately cost $100. Wow. Right. And so, and again, so this is the very clear like compare and contrast, which is basically, right, the colleges are like the ultimate, basically monopoly, oligopoly, as we discussed. Plask green TVs are like the ultimate what they call perfect competition, right? There's just like, there's just endless competition to drive down the price, increase, quality of those things. And so we're getting the exact results that we would expect in the systems that were built. We're just like really angry about it, right?

Because like we, you know, we think it's unfair and unjust. But like it, the system is running as design in both directions. The economic system that we have is running as designed. Yeah. So, oh, so, so, so, so, so, so, so, so yeah. So then you basically say, well, okay, why, why on earth is this, this price just keeps skyrocketing and it's basically it's just it's basically supply supply needs demand like any market and basically what the government does in education is just like what they do in health care

and it's just like what they do in housing is they basically have a two-part strategy for managing these markets they restrict supply right so the fact that you can't build as we discussed like you basically practically speaking can't build new colleges and universities in the same way anymore and then and then subsidizing supply causes price or sorry restricting supply causes prices to rise naturally right because there's more kids that want to go to school than can get in so the prices rise and then on the other side, because prices are rising, that creates political pressure, which they resolve by subsidizing demand, right, with taxpayer funding. And so it's, which also causes prices to rise. And so what they're doing on the supply side is causing prices to rise. And so there's, there's twin forces propelling prices to the moon. And there's no sign of anything that I can see anywhere in the system. I see nobody pushing back on this. No, sorry, I see nobody in a position of power and authority push you back on this. So I expect it to continue indefinitely. I'm very tempted to go into just very briefly the parallels to health care and housing.

Because that's kind of a new idea for me that they are parallel to education. I know that they are in some places increasing also faster than inflation. But what do you mean in terms of government, restricting supply and subsidized demand for health care and for housing just briefly? Yeah, yeah. So for housing, it's basically right, it's housing all the places where people really want to live. So this is not really an issue in like, you know, rural Wisconsin or like rural Arkansas or something. Like this is an issue in like San Francisco and New York and San Diego and Seattle and

Austin and all the places where people are, you know, all the places where there's like lots of economic opportunity. It's always the same housing policy. And the housing policy is don't build housing. Right. Like again, it's basically these cities are like local monopolies.

These cities are local monopolies over their own geography. They've got their local employers. And so their attitude towards, you know, somebody who's who would be made. What's that? And stakeholders in the form of taxpayers that. Yeah. Yeah.

And then you've got this kind of warp in the market where basically the people who participate in local government or the retirees. And so you get this, there's kind of this very deep inherent conservatism to city governments, even in these very liberal cities. And so the result basically is that basically in these cities, they've largely outlawed the construction and new housing. And there was a, there was just a great example of this. There's a guy named Robert Reich, who used to be the labor secretary under Bill Clinton,

who's become this like firebrand liberal activist. He's like an AOC kind of type. And he's been like railing on the increase cost of housing, you know, kind of in public. And somebody just found, he lives in Berkeley, because of course he lives in Berkeley. And somebody just found a letter he and his wife wrote to the local planning commission, basically attempting to kill a new housing development down the street from his house on the grounds that it would ruin the historic character of his Berkeley neighborhood. Which is in a microcosm, basically, the mechanism by which these cities are all basically not building new housing. They say things like we don't want to ruin the character.

They say things like this and that, construction and traffic and all this stuff. what they actually mean is like this city is ours and like we don't want more people to move here and again like it's not restricted supply yeah and so basically the government's basically the city level government's basically just like they don't permit new housing to get built so i just as an example san francisco is a city with a population a little under just slightly under a million people annual budget by the way of 13 billion dollars which is amazing if you think about what you're getting for your money there um and then they authorized the average year about 6,000 new housing units total right and so think you know think about your company or think about figma right

which is San Francisco base. Think about how many people you're hiring, and all of your peer companies are hiring, and all the big companies are hiring, and then think about the idea there's only 6,000 new housing units a year. Like, what, you know, it's like, what do you think is going to happen to prices, right?

Yep. You go through the roof. And then again, because the price of housing rises so fast, because of the restricted supply, that creates pressure on the politicians, right, who need an answer to like, what is the government going to do about that? And so their answer is to subsidized demand.

And that's in the form of all the federal mortgage programs, right? And then that ultimately, right, is what led to the 2008 financial crisis. And that continues. We continue to subsidize housing in the U.S. And so, again, it's these twin forces both driving prices to the way done. And then the exact same thing is, healthcare is the exact same system.

And then here's the significance to this, which is just like, okay, think about for a second. It's like education, healthcare, housing. It's like, one of those things all have in common. Like, it's like, why those three? Because if you look at like the chart of prices, like those three are like the three outliers, and actually it turns out those three, those are the three indicators of a successful thriving middle class. Wow. Right. What does it mean? Like, what's the difference, what's the difference in a country like the U.S. between being middle class and lower class? The difference is I own a house,

right, in a nice place, like in a nice neighborhood. Like, I am able to send my kids to, like, good schools, both, you know, primary and secondary. And I'm able to get, I have health insurance. Like, those are like the three markers of middle class success. And these are the three parts of the economy of the government has decided that we need to send prices to the moon. Okay, so if I was listening to this in 2009 when I graduated from high school, my sort of reaction would be, screw this. I don't want to participate in the system. Sounds like your advice from earlier on was you might want to reconsider that. You should definitely, as a newly mentioned high school graduate, you should definitely participate in this hopelessly corrupt system.

I mean, maybe this leads to COVID-19. How does COVID-19 change this? Is this the wrecking ball here? Yeah, so COVID-19, COVID has a bunch of implications for this. So there's a meme that's been going around the internet that basically says, you know, video streaming services, Netflix, $10 a month, Hulu, $5 a month, you know, whatever, HBO Max, $20 a month. Harvard, $60,000 a year. Right? And so there's this, the first thing is just like, okay, we're about to find, like, to the extent that colleges actually can't reopen in person, which I think,

it's actually honestly the case for this this year like a bunch of them are trying but i think it's basically hopeless with what i'm seeing on the policy side on on the health side right now like we're about to find out like this is a good test of you know i mentioned earlier like what are the potential sources of value of college like if the source of value of college is what you learn then presumably it has the same value if it's being streamed over video right but because we have no reason to believe that that is the primary source of value um because of things like the sheepskin effect like it now really raises the question of like okay is is a video streaming service that costs 70 000 even if as the Harvard name attached, right, or Stanford name attached? Like, is that actually a thing?

Right. And so that, that's like a very big and important kind of stress point. There are two other really big and important, I would say, stress points on the system, though, that are surfacing really quickly, which is one is these institutions are not designed to run for a year or multiple years with like no revenue. Like they just, even the ones of the endowments are not designed to run that way. And most colleges, universities don't have big endowments. Most of them run on annual budgets, annual cash flow. And so, how many colleges, there's whatever, 3,000 colleges, universities in the U.S. something, how many can survive with basically a year with no revenue or with like greatly diminished

revenue and like we're about to find out. And I don't know the answer to that, but there are predictions that this puts as many as two-thirds of them in economic peril. Yeah. So there's an economist named Noah Smith. And he writes for Bloomberg and he's an economist. He has been studying this. If you check his Twitter feed and his Bloomberg writings, he's been looking at this in quite a bit of detail. He's very concerned about it. So he's, that's the best analysis I know. But like there's quite a bit of concern. Also, Clay Christensen, who was the creator of the disruption theory, who passed away, unfortunately, recently.

He wrote books and published a whole bunch of papers on what he viewed as sort of an impending storm in education. He, unfortunately, passed away kind of right before COVID, so we don't know what he would think today. But I think he was already bearish on the economic future of a lot of these institutions for all the reasons we've discussed, and I think he would, I think if you were with us there, if you read his work, you can kind of extrapolate forward.

So there's that. And then there's the overseas student aspect of this, which is like super interesting, right? which is overseas students, and in particular students from places like China, play a disproportionately important role in American colleges and universities because they pay full freight. They don't get all the federal student loan access and they don't get all the scholarships. They pay full load. And the reason they pay full load is some combination of the value they want the degree.

But also, it's the way, if you're a rich, you know, Chinese parent, it's the way to get your kid a visa. You can basically buy a visa by sending them to an American college. Yeah, and sit down. Yeah. And if you, like, literally can't get here because, travel is shut down, right? Like, you know, and if in, yeah, and, you know, there's been this work or graduate student you're being sent back. Yeah, yeah, exactly, 100%. So there's been this big wrestling match. The Trump administration actually moved to prohibit overseas, you know,

basically students with these visas from actually staying in the U.S. if they weren't actually physically going to come. And there's a huge fight over that. University's objected and all that. And like, and again, it's one of the political issues I won't take a stance on. But like, to the extent that foreign students can't physically be here to be on campus, it does raise the question of whether that they will continue to enroll in these programs. Like, they have all people are, they are the presumably least likely to pay $70,000 for the video feed, I said put it that way. And they really were paying $70,000 like they were paying. And so if you look at the budgets of a lot of these colleges, like basically, they're heavily dependent.

They basically charge the foreign students full freight. And then they basically, the domestic and foreign subsidies is what you're saying. Yeah, yeah, basically right. Yeah, exactly right. And so it's like if I'm, if I'm an administrator at one of these universities right now and if I'm looking at a year of no foreign students and I'm looking at for a year of no physical campus. Like, I don't know. By the way, I also know sports program, right? So it's, it's, yeah, no, so this is, this is what my old CFO used to call this the shake and bake. Like, this is one of those moments in which everything has been thrown up in the air. And I think it's really, really unclear where this all lands. Now, by the way, the most, the most obvious thing that's going to happen is just like a massive federal bailout.

Right. And so the most, the obvious thing is just like the government will just decide to bail out the entire system because that's what the government does. And of course, the taxpayer will pay for it. And so maybe it will be okay. in that sense. But again, like if there's like a massive federal bail out of all these colleges, it once again, it'll be like what happened with Wall Street in 2008. It'll just cause, it'll cause people to ask this question of like, wait a minute, like what are we paying for? And so I think that these topics, we will all get very dramatic over the next few years. I would say that, you know, colleges are shutting down. People are not going as much.

Do you see that basically making us that degrees are equally valuable, more valuable, or less valuable in 10 years, 20 years? So very unclear. Right, very unclear. Well, because there's, there's several dimensions to that question. Like, one is just like, do you, like basically, do you believe there is such a thing as an online degree? Like, look, there's been remote learning for a long time. Like, there have been extension programs, like, you know, night schools. And, like, those degrees have never been worth the same. And so is the video version worth the same? Like, I would say unknown, but like we're going to find out. It's like an x-ray kind of test being applied to the system to see what's actually there. In a way that I,

personally, I'm very excited about. I think we should find out, but like we might not like the answer. So I think there's that question. By the way, the other interesting thing is in parallel, basically the SAT, A, C, and GRE are all being ejected right now. They're all being basically pushed out of the system. And again, this is a political topic I won't take a view on for the purpose of this discussion. But like, there's the view on the left that these standardized test basically are biased and lead to what they call a disproportionate outcomes. And so to the extent that the theory that schools are in intelligence, the admissions process is an intelligence test,

to the extent that that is true, they're about to toss that out. They're just getting rid of that. So the UC system has gotten rid of that. Harvard has now dropped the GRE and to an entrance exam for their physics program. Right. And so if they're not doing the GRA for the Harvard physics program, like it's going to be dumped across the board.

And so like that's also happening in real time. To the extent that college admissions was an IQ test that employers were relying on, that signal is also being erased right now. is being deleted. And so we've got this kind of twin question kind of playing out in real time in terms of like what the app. And by the way, let's like what's the value. You think about it from the employer standpoint. Like does the fact that somebody sat in front of the video stream for four years actually validate that like, you know, their conscientiousness?

Like it seems pretty conscientious to me. Well, it is unless, you know, I don't know. Like, you know, he takes like 20 minutes to write a script that like moves the mouse right on a Mac. So it like fakes the fact that you're sitting there paying attention. So like, was that actually the person or was that, you know, her Zoom background. Right? Like, that's not a question people have had to think about

and all of a sudden, like, it's a question. By the way, also, this other fun thing is GPT3, so there's been this, there's been a huge breakthrough this year in what's called

natural language processing. And so there's this algorithm now called GPT3 that basically will write, it'll basically, basically, it can basically write your, your, your entrance essay for you.

Yeah, no, so it's like, what kind of world are we living in? Like, what kind of world are we living in if literally we're taking an educational format that was developed literally, like when universities were first created, like it's like,

what, 800 years ago or something? 700, they were kind of standardized 500 years ago. I mean, the university format was standardized before the preaching press, right? Like, it was basically, it's like, it's like, it's based on like, I don't know, it's like the old monasteries or something, right? And so like the idea that there's like, you know, the guy at the front of the room with like the 20 students and like there's, you know, talking, you know, meeting in person and then talking and then the way that they do the tests and all that stuff like, you know,

in the new world, like, like, I mean, number one, would you ever build an education system today the same way with the technologies we have now. And obviously the answer is no. Like you wouldn't build anything the same way. You build everything differently. But then there's the like, okay, we're now going to try to transplant this 500 year old model into these new technologies in a way where we're not even going to be sure the people were actually sitting there, much less that they actually filled out the exam themselves or actually wrote the essay themselves. Like it's just increasingly going to provoke all these questions of like what the actual value is. And then aspirationally, you know, as a venture capitalist and an entrepreneur, like aspirational,

it means like this ought to be prime time for new models. And we're, and, We are, we maybe we talk about those, but like we are starting to see those emerge. We are starting to see alternatives emerge, and some of them are very promising. But like, I would say, like, we like to quote, my partner and I like to quote Lenin as much as we can, because we're, of course, staunch capitalists. And we think it's funny. So Lenin once said about, he said once said about social change. He said there are decades in which nothing happens. And then there are weeks in which decades happen.

I quote on Twitter, but I didn't know it was Lenin. Yeah, yeah. And so this feels like, this feels increasingly like there will be more change in education in how we think about education and how we fund education in the next five years than there have been in the last 50. And I think that's, I think it's going to be very distressing, but I think it's also exciting. And I think this might be prime time for new approaches.

After decades or centuries of the same model perpetuating, we have a period of uncertainty and chaos for students that are looking at that and going, maybe I should take a break from college and try that gap year or try some break or something something else, some working, for example, you know, what would you advise them with if they are not going to subscribe to the view of like just stick it and stick with it and get that degree? Yeah. So I was, I was teasing Dylan in the run-ups doing the session. There's this concept of gap year and I was teasing Dylan that like where I come from, there is no such concept. And so I've always thought gap year is like this rich kid thing because like only rich kids can afford to take that like the whole

idea of a gap year. Oh, great. A year of vacation. Like, boy, that sounds nice. People use gap years to work, too. Okay. So then there's that, yeah. Maybe it's a process of meteration. You could argue there's a process of maturation maybe, or yeah, maybe stockpiling money to live on.

And then, of course, you know, there's countries like Israel where there's like mandatory military service, right? And so you kind of get a whatever it is, two year gap year, whether you want it or not, right? And arguably, right, arguably that's good, right, for a number of reasons, not least of which is maybe you're actually mature when you get into college. Maybe you actually get more out of college. Maybe you're, you know, you're two years older and maybe more disciplined and more motivated, you know, kind of having been on the.

real world for a while. And so yeah, so I can see all those arguments. And then I think there's the very specific form of that argument, which is the one that you bring up, which is like, okay, if I'm not willing to pay the X thousand dollars for the, for the streaming service, like, okay, what should I do instead? And I think that is like, you know, obviously the purpose of this video, but also like an incredibly compelling and important question. So a couple things. So one is there are actually like new programs. And so the one, and I'm actually not investor in it, but like the guy who runs it as a friend of mine. So there's Lambda. There's this thing called Lambda, which is basically like an entirely new way to basically get essentially the equivalent

of a computer science bachelor's degree basically in a year with a different economic with no loan. It's actually a free program and then there's what's called an income share agreement. And so there's that program, which is well worth looking at. There's Udacity, which is a company that we're involved in that has sort of a nano-credentialing approach where you can kind of pick up skills and there's credentials attached to them and there's a bunch of employers that are very excited about those skills now. You know, there's Coursera, which is another company that's done a lot to push forward kind of online college education recently. And then there's all these existing kind of extent, like I said, extension programs and night school programs and so forth that maybe all of a sudden are more relevant. There's kind of like all the new education methods.

And so the thing to do might literally be to like do one of these other things instead. Right. And so basically like take the year. And like let's hypothetically like let's even say you're going to college for music or something like that. Maybe take the year and go take the audacity or of course, error or Lambda thing and basically become a computer scientist in the next year. Right. And then basically like and then go back to school, finish your music degree. And now you're a musician who also knows computers.

There are those kinds of options. And then the other option is to actually build something, right? Which is where our figment comes in. But the way to think about that, so take a brief digression on kind of how to think about that and come back to this gap of your idea. So basically, like one of the interesting things about the Internet is basically it turns out, one of the things that have become very clear is they're actually, as far as the Internet is concerned, there are actually two kinds of professions.

They're the professions that have the characteristic we call you can show your work. right um and so where i can whatever it is that i do in my profession or in my field i can actually show the results online in a way that's like very clear and compelling and like you know sort fully valid and then there's the professions where like i just can't like it just doesn't make sense so like i would say like professions where it's hard to show your work like heart surgeon is like a profession where it's hard to show your work right like you know maybe you can maybe you could maybe you could get permission from the patient with hippa and everything else to stream a video of heart surgery but like who can even evaluate that other than other heart surgeons and

And I don't, like, that's not really how heart surgeons advance their careers. And then I don't know, you know, how would, you know, somebody doing, you know, there's lots and lots of fields. I won't pick on fields, but there's lots of fields that might be lower value in which it's really hard to show the work. It's harder to see the value. But then you have these fields and computer science has kind of always been the leading one on this, I would say, or maybe like writing has been the main one, but now computer science more recently, which is like, this is the whole thing with like open source software, right? like open source software, like you literally show your work. Like you write software code and then the software code actually goes on the internet and everybody can see it.

And then you have, as you know well, but there's a system called GitHub that a lot of people choose to use to kind of put their software. And then GitHub actually has like an internal ranking and rating system for software code and for programmers. And so you can actually build a, you can build an actual professional reputation as a software developer on GitHub without ever actually being face to face with another human being. And so there are people all over the world today who are basically taking advantage of this,

you know, to be able to basically build these incredible track records as a software developer make themselves more employable, right? Because the employers, and like my venture firm, like, we recommend that our employers basically spend as much time on GitHub looking for good programmers as they do on LinkedIn or as they do going to, to like, you know, college, college fairs or whatever. And so it's like software development, you can show your work. Obviously, creative writing, anything that involves, you know, written expression, you can show your work. You know, increasingly, by the way, the performing arts, you know, video, music, right, all these things, animation, you can show your work, you know, basically for free, which it used to be

I mean, it used to be if you were like going to be a professional animator or something, you might make a short film in like, you know, film school. But like you'd have to get that like short film put like on this like weird conference circuit and exhibited to, you know, convention circuit and it'd be exhibited to like 18 people, you know, at like midnight or something. And now you can like put it on YouTube. And like, you know, if it takes, all of a sudden, you know, you actually just like literally become like a star based on it.

And then that has real professional credentials, you know, kind of attached to it. And then there's like, then there's everything like figma gets. And then there's sort of all aspects of design, right? So basically all aspects of design, both the creative forms of design and then also the engineering forms of design. Yep. And so if there's a real argument that this should be prime time for people who have the kinds of skills where they can show their work to basically buckle down and make something. But take the maybe in build your portfolio instead of seen on Zoom classes, perhaps. Yeah.

And then basically like in some fields of like design, it may be literally a portfolio. It may be literally the design portfolio. And then it may also be actually build a working product. right so actually like design and build a software application like all the way to completion right or by the way or join a startup right their way to do this is as a team join a startup or form a startup right and basically have like you know you know get together with like your four you know your four friends or meet four people on the internet who are also interested in the same thing or you know whatever or through a figma user group or something, and then all of a sudden you have a joint project and you're able to, you know,

and you literally may never, you know, the great thing about the internet, you may never meet, right? Like, you may never physically meet, but it's actually feasible now to actually do the work, potentially all the way to completion and then really show it off.

And this is just, this is like an avenue for career success that just literally was like basically impossible, you know, 20 years ago. It's actually interesting in the creative arts. I don't know if you know this story. This is actually South Park. This is actually the story of South Park.

So South Park was the first viral internet video. This is actually really funny. So Treystone and Matt Parker in 1993, and there was no video on the internet in 1993. It was like a brand new idea to do that. They were these, I don't know, whatever, art school kids or whatever. They got hired by an executive,

a Hollywood executive to make basically a funny and very dirty, basically Christmas card video. And literally using cardboard animation. And it was literally the characters from South Park, and it was just this really filthy little cartoon. And it went like super viral on it. internet in like 1993. And it was like another whatever, I don't know, it was like that was what, that was 10 years before YouTube, right, that they did this. But it went viral literally as a

quick time download. And then literally based on that video, they got the contract to make South Park the TV show, which has now been on the air for like 20 years. And it's been, you know, gigantically successful. And so like they in a lot of ways were like the origin story for this kind of thing. And that's the kind of idea where it feels like we're still in the very front end of that. Well, it's like the best career advice in the world. Okay. So the best book on a career advice, it's ever been written as Steve Martin wrote his autobiography, and it's called Born Standing Up. And he's basically said the entirety of all career advice that you can ever get, basically distills down to one thing, which he says, be so good, they can't ignore you.

Right? It's basically, it's just like everything else washes out. It's just like the work is so good that like they can't resist. They have to hire you. They have to get you on a contract. They have to whatever it takes. And so, you know, for people with talent, there are a lot of people of talent in the world, you know, basically, like, show it off. Like, be so good they can't ignore you. One thing that I hear from a lot of students who are considering taking some time away from college, whether it's working or building their portfolio or all these examples of work, you know, thinking about alternative approaches to education, is, okay, well, I don't love the idea of going on Zoom classes all day long, but I also don't love the idea, you know,

unstructured time, because I'm not somebody that has a lot of structure to myself and not very disciplined. and college is a way for me to surround myself with people that are inspiring me, that are encouraging me to progress in this way. As somebody who is like extremely intellectually curious, very disciplined about your time, what tips do you have for students around that time? Okay, so here's the big, there's actually been a breakthrough on this front. It's called Google Calendar. So we talked earlier, we talked earlier about there's actually,

this actually gets in psychology, this is very interesting. So there's this personality trait called, conscientiousness. It has what are called two facets, which is there's industriousness, which is raw energy. And a lot of people have, you know, a lot of people, the kind of people you're talking about, a lot of people end up in college have a lot of industriousness. But then there's the other side of it, which is orderliness, right, which is basically like, do you line up against, basically expectations, right? And so like, and literally it's orderliness is like, it's like a core part of your personality where it's like, do you make your own bed in the

morning, right? Do you like wash your dishes after you have a meal, right? Like, is your house like kept up? Is your lawn kept up? Is your car clean? Right. And like a lot of people, people like by the way including me like listening to a lot people listen to the video are like oh shit like you know my car's a mess right like if your car's a mess like you probably are like low orderliness because it like honestly it doesn't take that much time to like keep your car neat right so it's like a it's like a basic it's a basic it's a basic test and so you've got a lot of people basically who are for this question out of people who are like they're smart and they're creative right and they're actually industrious and they're ambitious and aggressive and

they want to do things but they're just not they're just not they're just not inherently all that orderly and like you said basically one of the things the college does is it basically a is the structure. It basically can paper. And by the way, a job does this also, right? Job can pose orderliness also, you know, with things like schedules and deadlines and things like that. And so, yeah, so there is this like fundamental challenge, which is now you're on your own, like, basically, what basically is your proxy for whatever level of orderliness you don't naturally have? And most of us don't have enough. And by the way, I include myself, like, me without a calendar is a disaster. So, like, I include myself in this. And my, my car and bedroom left to its own

devices are both just disasters also. So like, I sympathize with this. And so literally the best advice I've ever gotten is literally it's literally Google Calendar. And so it's literally, you know, pick your choice, but like Google's, Google is a good one and it's free. And basically, the best advice basically is schedule everything. Yeah. Right. And again, this is the part where everybody immediately turns how it's howling because they're just like, oh my God, that's the opposite of how I want to live. But it actually turns out the answer is actually schedule everything.

And here's the key is you start by scheduling all the stuff that you actually want to do. Right. So you start by scheduling your free time. Right. So it's like, I'm not going to work from whatever. Like for me, it's like I'm not going to work from like 7 to 11 at night. Okay. 7-11 at night or free time.

Like, that's just how they're scheduled. Right? But then I also schedule 11 p.m. bedtime, right? Like, so that's like, you know, and then there's that. And then I schedule, okay, then I schedule if I'm going to work from like eight to five. I actually schedule what I'm going to do. And then by the way, I don't, I have a to do list, but like generally the goal is, keep things off the to do list, put them on the schedule.

Right. And so it's basically like get everything off that damn list, get it on the calendar in a slot, right? And then basically it's like during the work day or the work period or whatever it is, just, you know, this is easier said than done. but like just do those things. Yep. But do those things knowing that that will end at whatever time you choose to have it

end and then you will go get to do the other things that you want to do, spend time with friends or with your spouse, with a partner, go for a run or watch TV or whatever. Like literally, schedule, watch TV, right? Schedule, play video games. Right?

And then look, this isn't like a silver bullet because like you still have the challenge of like adhering to the schedule. Yep. But I just find for me the big breakthrough was like it's a lot easier to like force myself through a lot of stuff I don't want to do if I know that there's a big block of time coming up down the road. that's like my reward for doing those things, which is like I actually get to do what I want.

And so I think that's, it's the best method anybody's found so far. As we come to the end of this conversation, so I won't be respectful for our time. I'm curious, a lot of people that are watching this are likely entrepreneurs or people that want to be entrepreneurs and they're likely wondering, okay, well, but will he put his money where his mouth is?

Will Mark or Andreessen Horowitz, would they actually fund me if I, you know, end up dropping out or focusing for a year on a project it ends up going well, you know, by some definition, or it seems promising, would the me drop me off college, would that be used, would that be a reason why they wouldn't fund me? How do you think about that or how do you respond? Yeah, so I would say the good news on that is we don't really care. Like, I can't even remember, I don't think we've ever had a discussion. I don't think we've ever had a discussion of did this person finish college. I don't think we've ever had a discussion about,

there is some signal, you do hear a lot. It's like, okay, like, the people who went to the programs that are like unusually good. You know, the conversation we had earlier, like there are certain, for example, computer science programs that are just like outstanding and are known about standing. And it's just clear on the data that they're outstanding. And so, you know, there is some edge. That is a case, there are cases where there is an edge to kids who've gone to certain schools for sure.

But yeah, did you finish? Not necessarily, you know, did you, it's, so that's the good news. That's not so much the factor. And by the way, the other thing, like, we never, we have no idea what anybody's SAT scores are. We have no idea with, I mean, I guess we do know what their GPA is. But actually, it's funny, we always worry about the kids of perfect GPAs as founders, because it's like, are they kind of too orderly? Like, are they too, are they too much rule followers, right? It's like, on the one hand, they demonstrated that they're like really smart and really conscientious.

On the other hand, it's like they demonstrated they love following rules, right? Because they've gotten it's like, you really want your entrepreneurs you fund to be like rule followers. Like, is that a good idea as a venture capitalist? And so anyway, but like we don't, we never, we never look at SAT scores or ACT or G or any of that. That's the good news. the bad news is we're looking at everything else, right? And everything else is basically like, it's basically like, what have you actually, it is what have you actually done?

It's like what, what, what, what reason do you have to believe that you actually have the skills and experiences and basically capacity to be able to do all the stuff that's going to be required to build a company? And the thing that we always point out, and this gets, this topic also gets kind of highly contentious in a real hurry. But the thing we always point out is a lot of entrepreneurs, especially these days, venture capital has become this very kind of public. concept. Like people used to not even really, I never even knew about it until I came to Cal, like,

I never even heard of it until I moved to California, but now, now everybody knows about it. And so there's this view of like somehow the threshold of being like success, successful entrepreneur is raising venture capital. I always point out, and you can, you can talk to any, you know, you're a great case study of this, but you can talk to any founder who's actually built a successful company. Raising venture is the easy part, right? Like, the VCs are like sitting there, like, we sit there every day, like, waiting for like the next Mark Zuckerberg to show up. What's that? Your job to give out money. The job is exactly right. It's the job to give up money. And like, the big problem we have is we don't have enough people coming in who like have all the skills and attributes. You know, to be able to build these companies. And so like we're just, we're in constant despair. There aren't enough people for us to fund who have those scales and attributes. The reason for that is because you raise the money from us, that only begins all the actual work. Right. Because all the actual work is 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 customers so that they actually have a good experience and they're

referenceable, actually tell their stories that anybody will even know that they exist, you know, run a finance, you know, function so that they don't like lose all the money, run a legal function so they don't get sued all the time, right? All the things involved recruiting, like actually get anybody else to ever work with them, right? It's like a really like fundamental thing. And so the challenge we always have is trying to explain, including entrepreneurs we meet with, the challenge always is like, look like, you know, we love you, but like, honestly, like they're, you know, we just have not yet seen in you that you can, that you can do some set of those things. And of course, we can take flyers,

on some of those things, like some of the time and nobody ever comes fully formed. But like we can't just take like a raw flyer on anything. Now, that said, the number one thing that causes a first time founder to get funded is a working product. Right? So the general rule of thumb is like if you're just like a brand new kid in the industry and like you haven't built anything and you shop for venture funding, generally you're going to be very disappointed because like there's a million of you.

Like great. Your mother loves you. Like, you know, there's another thousand of you like right down the street. Like I don't know what to do with this. But like, if you're a kid, nobody's heard of, and you show up with, like, Facebook.com and it's working, right? Like, that's a, like, that's a thing, right? That's important. And so this is why I like the Steve Martin thing so much, right? Be so good they can't ignore you. The way to be so good they can't ignore you for venture capital is coming with a working product. You're an A16 portfolio company listing or you want to be an A16 portfolio company. Should you require a college degree when you hire somebody? So that is a very rapidly changing topic for the reasons we've discussed. I think Google actually just dropped the requirement.

together for college degrees and probably the most of the other major employers are going to follow. That is a really good question. It begs, again, it begs the question of what was it good for in the first place, right? And especially, like I said, once they finish dumping the SAT, ACT, like, it'll be interesting to see kind of what happens to that part of the signal. If these, you know, if people can't actually go to college and go to campus, it begs the question of what's going to happen to the conscientious metric. And then really the question is like on the other side, right?

It's like, okay, like what then will employers actually be looking for, right? What is the thing that they'll be evaluating and judging? And so we've talked about a lot of this, but I think it's going to be like, okay, alternate credentials. Like I think there's a real opportunity here. Obviously, as I said, you'd ask you one of our companies in this we're very excited about, but there are others like Lambda. There will be new credentials that will be taken very seriously.

Google, by the way, Google has also, I haven't seen the details. They've actually announced a certification program. It's actually interesting. Google's been doing these math competitions forever as a sourcing mechanism. So they have these math and coding puzzles. and at least in theory, they'll hire the winners of those kind of essentially sight-unseen, I think. And so the new version of that, they're kind of standardizing that. So they've got this like coding credential.

I saw something where it's like $300 or something. And if you can like basically pass this coding test, they'll basically consider it to be the same thing as a bachelor's degree in computer science. And so like they may, in other words, like an employer creating their own credential is something that I think is going to happen. So new external credentials, new internal credentials. And then I think employers, like as I said, we've been encouraging our companies to focus a lot on this show the work thing. Yep. And so like GitHub in particular,

GitHub used to be one of our companies now by Microsoft. GitHub in particular has become a major credential, independent of all the rest of this for hiring software developers. Your suggestion to an entrepreneur would be look for people that have a great, you know, basically GitHub presence or portfolio versus people who necessarily went to like the most amazing school and finished. Well, think about the pros and cons, right? Because the question is like, okay, for the show your work stuff,

It's like, okay, that, presumably that actually is a good IQ test, right? Because, like, you know, basically people have to be smart to, like, write good code and have to do a good design. So that's like, that probably hasn't embedded. Is there a conscientious test embedded in there? Maybe, right? You know, or maybe it's an artist who's just, like, really a discipline, but got, like, one, you know, had one really creative thing. And maybe they're going to be a great artist, but maybe you wouldn't want to actually have them work for you. So there's like a, you have to kind of, again, you have to kind of probe in on like, okay, what actually do you know?

You know, that said, look on GitHub up, people are building real track records on conscientiousness. So in GitHub, you can actually see how much code they've made and over what period of time and how many check-ins. And it's like, you know, it's look, number of lines of code is not like the metric that we measure good software by, but like, if somebody's checking in code every day for five years, right, like in its code that is building like a successful project at scale

and you can kind of see the quality of the work, like at that point you've proven more than any college degree could possibly prove. Well, so I guess I'd say this. If you're specifically, this is a more specific form of the question, what should a software developer do? The question is unquestionably the answer is open source. right unquestionably the answer is go basically 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 and that's like that that i think at this point i think that's clearly a better credential than getting a computer science degree

and i've hired people like that myself like that that that makes tremendous sense and of course the great thing now you can do that from all over the world and so i think that's great and then i'll defer to you on the design front of you probably know more than i do but like i think a very similar phenomenon is starting to happen for sure and there are designers who have gotten hired entirely on basis who have done very well. Actually, you probably know this. Video games. You know, there's this whole, there's video games, and there's whole community of basically, basically, amateur, basically, game designers who, you know, what are called mods and levels, and mature basically user-generated, basically sort of expansion packs for these games. And actually, the game companies have been hiring more aggressively recently out of that modder community. And again, independent of any credential. So that's probably another great example. So this conversation is a pretty wide-ranging.

if you relieve a student listening that's either considering in college or they're in college right now with a quick piece of advice, what would it be? Yeah, look, I mean, if you're in college, like, execute on the opportunity. So, like, I mean, honestly, you know, take the hardest, you know, take the hardest course load you can. Like, you know, try to get a good GPA, but, like, basically try to get the skills, right, try to get as many of the skills. By the way, you know, cross-disciplinary, we haven't talked about, but, like, you know, look, let's put this way. If you're going to get my advice and getting an English degree or something from a, you know, from a sub-year college and you can settle up with all this debt, like, at least. at least start taking coding classes, like start to like, start to like layer in the skills and

take full advantage of the opportunities. And so, yeah, you know, maximize that. And then if you're looking for these alternate paths, and this is why I started with a recommendation that kids go to college, which is like if you're taking these ultimate paths, like just be very clear-eyed about what you're actually getting, right? So if, you know, with these new credentials, you know, or with the work that you're going to do, like the kind of thing that you're going to work on. Like so, for example, if I'm going to work on open source, so I'd be better off making minor contributions to five projects or like a major contribution to one project like make this is the second one make a major contribution to one project because that really demonstrates what the what employers

are looking for and just be kind of put yourself in the mind of what how somebody's going to be evaluating you three or four years down the road and then basically apply against that awesome mark thank you so much uh this has been really fun conversation good thank you Dylan