Debt-Laden Millennials Want Their Own Startups but Can’t Afford Them
bloomberg.com
bloomberg.com
Even the highest paying tech internships can't cover the cost of attending expensive private colleges. God forbid you 'merely' do banking, which pays $16k for a summer before tax, aka half the cost of a semester at my school. This is without considering the additional cost of wanting to eat and live better than cheap pizza, food truck chicken over rice, or info session sandwiches.
(I cut out a lot of snark above, but college tuition is just too damn high)
14 credit hours:
$4206/semester in-state
$11,159/semester out-of-state
$5381/semester in-state
$12,335/semester out-of-state
$1267/term in-state
$2815/term out-of-state
One other excellent property my community college (https://www.pcc.edu/) had: because they also catered to high-school-completion students, and students transferring in with gaps or inconsistencies in their knowledge, they had a placement exam for math and English as part of the application process. That exam could place you anywhere from "you need a few years of remedial classes" to "you can go directly to second-year classes".
Either way, between working part time through high school I paid for the first year or so. Worked basic service-type jobs back home during summers (retail, restaurant, etc) to pay for the next year's rent and food budget. Worked very part-time during the year (like maybe 6 or 7 hours a week at the computer lab) for bullshit money to spend on stupid stuff like $4-a-head keg party cover charge on the weekends because I wasn't just confined to school and work.
The rest was taken out in loans and after all was said and done, I probably owed around $25-30k in low-interest loans with an insanely low payment rate for the first year or so out of school.
So yeah, I owed the equivalent of a decent new car and when I was still scraping by as a recent grad I had to make <$80/mo payments before moving up to the "full" minimum payment of <$120/mo. That at least allowed me to keep up with payments while getting settled but incurred no penalties when I started paying much more than minimum once I was stable.
I guess my experience was that I financed the equivalent of a new car while gaining that much more each year in salary after a few years due to having that degree. Was it rough right out of school? Definitely. I had roommates for a good few years after graduation and never got to blow thousands on stuff like Spring Break or shopping trips.
Still, I'm glad I didn't end up like so many people I've met who went to schools that cost 2-5x as much, owned a car, went on trips, and didn't start paying for any of it until after graduation.
If you were to tell the average high school student who's in the top ~10% of their class to go to CC, you'd get laughed at.
Also, we're spoiled in programming and engineering in that we can go to almost any valid school and still get a job if we can build and ship software. In other careers, college or location choice really does matter!
On a better note, where I went to high school most students (even top ones) went to in-state schools, but that's because Texas has pretty good public colleges (though last time I checked they're getting more expensive).
> If you were to tell the average high school student who's in the top ~10% of their class to go to CC, you'd get laughed at.
There shouldn't be any such stigma; it's a great path to follow. If it was the last degree you got, sure, a 2-year degree won't get you the results you want. But as the first 2 years of a B.S. or graduate degree, it's a completely sensible path.
I went to community college for 2 years, graduated with an A.S., transfered into a full university as a junior, and then finished a B.S. and Ph.D. there. I can definitely vouch for that path, and never once has it mattered in the least where those first two years took place.
> Also, we're spoiled in programming and engineering in that we can go to almost any valid school and still get a job if we can build and ship software. In other careers, college or location choice really does matter!
True, careers like law or business seem to have a much larger problem with credentials.
My chemistry, math, and physics teachers excelled in their field and taught night classes because they wanted to. This was much better then the university classes taught by people who just wanted to research or who were too caught up in all the theory to figure out how to explain concepts.
Of course there's always a career path for people with a record of making impressive things, but if you're a CS major in the right schools you can get into the big-name tech companies just for having potential.
As for learning? Your peers won't challenge you, you'll be exposed to easier lessons, to easier concepts, you won't really get challenged at all. When I was keeping up with this stuff, in the UK the shit unis taught Java, the good ones Lisp or Python. The whole ethos is different. A friend of mine got a 1st (best degree in UK) from the 2nd tier University he went to.
But he couldn't remotely handle complicated code written by our literally genius colleague (I've honestly never met someone so insanely good again in 15 years). He was not anywhere near 1st material in a real top-tier university. He would have been lucky to get a 2:2.
I know someone who did the 2nd tier route and who is genuinely good. He, perhaps like you, is the exception, not the rule.
That said I've certainly met and worked with engineers with degrees from prestigious institutions that were lacking in their skill set, particularly when it came to "real" field work.
It's almost as if the west coast isn't as meritocratic as it likes to think, and is really just a mirror image of Wall Street...
I'm from the same state, and I chose the four year traditional route and it worked for me since I had lots of scholarships. If I didn't have as many, I may have started at the Community College instead.
Additionally, your point about 1st tier versus 2nd tier is kind of off when most of the time people go to community college to get their general ed. requirements out of the way and then transfer to the larger Uni for the specialized classes. If you're majoring in C.S. and you want to take Physics I,II, Intro level English, and programming I/II that's going to be nearly the same no matter which Uni you're at.
The strategic way to use college to start a startup would be to independently learn how to slam out CRUD web-apps, go to Stanford for a single semester, meet literally everyone you can in the CS and business departments, then drop out. You could shop around for a cheaper education, but you'd pay a lot of money and spend a lot of time for a less useful product.
And $16k after tax, housing, and food in NYC (Wall Street baby) isn't a ton.
You're not getting that by working at Dairy Queen in BFE.
The reality is it is easier to get a new job (let alone a good job) in a big metro with lots of businesses than it is in the middle of flyover country. For people burned by lack of employment, gainful employment, or secure employment, having a a couple companies within reasonable commuting distance is seen as a real risk since remote work is hardly common yet.
In those cases, the high costs of city living are seen as the cost of upward mobility and more stable employment. Unfortunately, the net result we've been seeing with housing/rent cost increases, etc. is that this leads to a reduction in overall standard of living compared to say, the Baby Boomers.
Bottom line, younger generations have the deck stacked against them in a lot of ways. Often times it is not "which is the better choice" but "which is the less worse choice."
1) people are more aware of the serious detriment to quality of life a long commute by car produces,
2) in many places, how far you have to drive keeps getting longer (or the roads keep getting slower), and
3) too much decentralization can close off opportunities that are theoretically in the same metropolis by pushing the commute from being arduous to being unacceptable. So the reason you moved to the metropolis (access to a large number of opportunities) evaporates as you move further to one edge.
The suburbs idea is not applicable to SV/SF since most of it is suburbs to begin with. Only a small portion of San Jose is what most people would consider city.
The crux of my point is that one-liner solutions don't universally solve the problem.
Seems like you'd probably want to take an accounting class or two, though, even if you didn't get a degree.
That actually doesn't bother me very much, to be honest.
Wages are too deflated for good overall economic prospects.
If I can criticize ourselves, it is with this:
I think millennials are too risk-averse, not because the opportunities are out there in waiting, but because the job opportunities are so poor.
There comes a point when you live in some degree of (relative) poverty at which not making a startup is dumber than making one.
There seems to be two cohorts of entrepreneurs. Working class ones forced into it by desperation and upper middle class ones who see it being at worst a good contribution to their CV if they fail, with unlimited upside. The acqu-hire system attests to this as a valid strategy because paper certs have such limited signaling potential now that everybody has them.
Honestly in either case it is a hard road. It is so much easier just to give up. Part of the reason I think people come here is the invigoration of seeing other minds at work.
Bridgewater told me, and others, that they love students who do things outside of traditional finance internships. 'Go travel the world! Go start a startup! Don't do wealth management!' The attitude feels so much like that New Yorker article about traveling the world with only a backpack, phone, and a trust fund [0]. It's not just a line on your CV - it's a great story to talk about in the interview. But the opportunity cost is very high, unless you're rich enough where that doesn't matter.
[0]: http://www.newyorker.com/humor/daily-shouts/why-i-quit-my-jo...
I call horseshit. "Considered" in the same way as "considered what life would be like if you could fly". There's a giant difference between daydreaming and taking even the first step towards merely investigating what's required to start a business.
> 72 percent think startups are “essential for new innovation and jobs,”
I'd be genuinely surprised if 72% even knew what 'startup' meant, let alone have such a strong opinion of them.
I'd believe the above numbers if the survey was limited to an area which is hyper-aware of startups, like a college in SF or similar.
To get them, you first need to meet them. Good luck with so many established businesses around. You do not get the chance to prove yourself and grow with your customers unless you invest upfront a lot. And since millenials are broke, funding comes from their parents generation that also keeps the profits. Have a nice life.
What are some industries that you're watching right now?
Just looking for ideas ;) 28yr old looking around here.
Any of those tickle your fancy?
Microsoft might kill off a product that only makes $500k/year, but for 2 guys in a garage, three $500k/year income streams is doing pretty good.
I'm really dubious of this as an explanation. The figure I found here[0] says the average debt is $37k. I bet that the median is actually quite lower than that because of how wildly different tuition can cost (private liberal arts versus state college). Either way that's not "massive" and hardly explains a cultural change.
This[1] article calls the group the most debt averse generation ever. Well which is it?
[0] http://blogs.wsj.com/economics/2016/05/02/student-debt-is-ab...
[1] https://www.google.com/amp/www.cnbc.com/amp/2014/09/05/debt-...
Yeah, startups are high risk, but if you can get something going, you are, for the most part, able to control your success to a larger degree than if you are in some random company where they could do a departmental layoff anytime they need to juice numbers before an earnings report.
Younger generations have a lot more financial uncertainty and distrust in their lives, and often see taking things into their own hands as the only long-term solution.
The bar for starting a startup is actually getting higher. While setup costs are coming down the product expectations are rising. Not only are all the good ideas taken but all the bad ideas are taken to, so no it's not a simple matter of setting up an LLC (besides you probably want to do it as a Depaware C-Corp if you want venture funding...).
useless without a baseline.