I am only a few years older than most of you in this room — I was born in the early 90s, rather than the late 90s — and I have to tell you, I am almost jealous of you already. The world into which you are growing is one of the most prosperous, least violent, and fullest of opportunity that the world has ever seen, and you are immersed in the very depths of it. How many of you remember dial tones?
The world into which you are growing is one of the fullest of opportunity that the world has ever seen.Exactly. I do remember them — I remember when Apple was a fringe company and my family was the only one in town with a Macintosh computer. Now, most of you have iPhones and this is your norm.
But this isn’t a conversation about how exciting it must be to be young right now — rather, I want to focus on how much opportunity the world into which you are growing has for you and how fundamentally different it is than the world one hundred years ago, fifty years ago, or even twenty years ago.
Wealth Creation at Youth
Instead of focusing on statistics and boring you with those, let’s just look at the world being built around us and compare it to how the world used to be.
I flew into the Orlando airport this morning from San Jose, California — the heart of Silicon Valley, a place built on the promethean idealism of youth. While I was there, I spent about two days in San Francisco. There were banner ads on the streetlights there advertising a new hospital. No big deal, right? This was the Zuckerberg Hospital.
Think about that for a minute.
Hospitals are very expensive undertakings.
Mark Zuckerberg is 32 years old — he was 31 about a month ago.
Let that sink in. Traditionally, hospitals, universities, and these massive endowment projects are named after old people. They’re named after people who are getting ready to die and are thinking about their “legacy” now, after they’re done with their wealth creation. Carnegie, Vanderbilt, Rockefeller, Perelman, Mellon, Morgan. How do you imagine these people? Probably old, wrinkled, and with bushy beards and mustaches if they were robber-baron types.
And this makes sense for their generations! It took an entire lifetime to build up the wealth needed to endow hospitals and universities. Today, a 32 year-old college dropout is probably the wealthiest person in the world if you are looking at a wealth:years-old ratio. He started when he was just a little older than you.
Uber is the world’s most valuable unicorn at over $70B. Its founder, Travis Kalanick, isn’t even 40. He started hist first company when he was just a little older than you.
Not Necessarily Outliers
Don’t worry. I’m not saying everybody in this room has to be Mark Zuckerberg or Steve Jobs or Bill Gates. I’m not even saying that you need to go off and launch a software company. What I am saying is that this is the new normal when it comes to wealth creation. The world you are going into is not the world of old. Some of the wealthiest people in the world today are real estate developers — the wealthiest people of your generation will all be tech entrepreneurs. And this should excite you — not only because it means that your quality of life is going to change in drastic ways (your iPhone has about $1M worth of 1970s technology in it and you can afford it pretty easily) but also because it means there’s more opportunity and a greater need for you to think entrepreneurially.
We’re just at the beginning of the software and Internet age — what we will see coming in the next few decades hasn’t even begun yet. That provides a lot of room for you to be the people to build the future.
Easier Than Before
And building this future has never been easier. You, right now, at 18, 17 years old, can build a website in the time that I am giving this talk and begin to cater clients for any number of businesses.
I was at a get-together in the Bay Area on Thursday night where I spoke to a number of men who had built their first companies in the 1990s up to the Dot-Com bubble (you, as I, are too young to remember this, but go read about it before you take a macroeconomics class). One of the men had noted to me that it took him raising several million dollars before he could build the minimally viable product of his first company. Today, a 17 year-old with a laptop and an Internet connection can build most MVPs.
Your iPhone has access to more human knowledge than the entire Library of Alexandria contained.The ease with which you can learn the fundamentals for this new world is greater than ever before, too. Your iPhone has access to more human knowledge than the entire Library of Alexandria contained and more useful information than all of the Ivy League libraries did in 1950. You have better access to successful people, mentors, advisors, and those who will root you on and support you, than any generation prior to you did. It’s no longer excusable for an American to not regularly speak to somebody outside of their county or even their state, let alone their hometown.
This wasn’t true just a few decades ago. To learn these basics you had to be enrolled in expensive schools and spend years with researchers, and you would probably want to land a job at IBM or Bell Labs to have any chance. To meet successful older people, you had to go to the most elite schools and land at the most elite jobs. Today, you can see how many circles removed you are from these people with tools like Facebook, LinkedIn, and email to use to make connections. You can build a track record showing that you aren’t just some schlub reaching out and that you are worth at least emailing back or getting coffee with by creating a paper trail. You don’t need to shower most people with credentials for them to get the idea that you may know your stuff.
Whether you want to go into software or tech is irrelevant — what is relevant is that technological innovation, mostly in information technology, has lowered the barriers to entry for many other fields. Want to learn stock trading? There are courses out there. Want to become a real estate agent? Much easier today than in 1980. Want to become a maker? You’ll be able to find courses and information without enrolling at MIT or Carnegie Mellon and get started earlier.
More Lucrative Than Before
Not only is value-creation easier than ever before, if you are successful, it’s more lucrative than ever before. Everything from consumer software to biotech, robotics, artificial intelligence, and mobile technology unlocks a lot more value than companies of yesteryear did. The amount of money you make in a salary or in an exit is an indicator of how much value you add to the lives of consumers — a company like Uber has the potential to add a lot more value to people’s lives than traditional companies like GM or Ford do; that’s why it is valued more highly than them. The impact is bigger — so the reward is bigger. It took Andrew Carnegie his whole life to build a fraction of the wealth that Mark Zuckerberg was able to build in just a few years.
“Software Is Eating the World”
This is all an implication of Moore’s Law (which I won’t get into here, but I encourage you to look up). As hardware gets better and cheaper, our ability to push it with software improves drastically.
Venture capitalist Marc Andreessen says that software is eating the world, and he is right. The operative words here are “the world.” Whether you want to become a tech entrepreneur or not, you will have to use software if you want to succeed.
Let’s use Uber and Airbnb as two examples — transportation and hospitality.
Software-based companies are eating traditional brick-and-mortar enterprises, and this process will likely continue until everything in your life is software-infused.If you wanted to start a transportation company twenty or thirty years ago, you would have bought a bunch of cars, hired drivers, gotten those drivers qualified and trained, and then launched a complex logistical and tactical operation that was extremely capital-intensive. Scaling would be even more capital intensive — buy or lease more cars, hire and train more drivers, advertise, and get out there and compete with black cars or taxis.
What Uber did was not compete with black cars and taxis (at least not directly and at least not with UberX) — they created an entirely new market by using software. You have some people who want to go somewhere and you have some people driving around with empty cars. Uber connects those two parties. The market in which Uber operates is not taxis or black cars — it’s strangers’ cars. When an Uber shows up, you are getting into a complete stranger’s car. The software platform connects you. That stranger does not work for Uber in any traditional sense, and they don’t have to for it to work. Taxi companies are scrambling to compete and are forced to resort to ham-fisted attempts at apps and government agencies to do their bidding for them. It’s probably too late for most of them.
If you wanted to get into the hospitality space years ago, I would have recommended buying buildings or land, building hotels with your name on them, hiring all these staffers to run the hotels, and launching that operation. This, too, is not easily scalable, and it doesn’t carry high margins. Airbnb, meanwhile, operates in this market by creating a new one. The product that Airbnb has created isn’t more bed and breakfasts or hotels — it’s staying in strangers’ homes or letting strangers stay in your home. As I talk to you, I have somebody staying in my house. I stayed in somebody else’s house when I was in San Francisco. I actively do not use hotels because the Airbnb experience is just that much more enjoyable.
Both of these are examples of software eating traditional brick-and-mortar enterprises. This process will likely continue until everything in your life is software-infused. Uber does not own a single car that is on the road as an uber. Airbnb does not own a single property. Yet both are worth more than their established competitors in transportation and hospitality. That’s the world we are going into. I don’t know about you, but I’m pretty excited for that.
I, For One, Welcome Our New Robot Overlords
Software doesn’t just eat business models — it eats jobs, too. Many of the jobs you will be working in once you graduate don’t even exist yet — and many of the jobs you may think you’ll want to work may cease to exist.
This applies to you even if you don’t want to do work that seems like it can be easily automated. Agriculture and construction are easy examples of industries where automation displaces people from work. Why hire 10 people to dig a ditch when you can have one person operate a backhoe? Service, too: self-serve kiosks and drones remove another layer of operational and staffing expenses from many enterprises.
"Knowledge" jobs will be displaced by technology, which will open up opportunity for "creative" jobs led through entrepreneurial problem-solving.But here’s where things change for us. Thanks to Moore’s Law, more people have access to computing power that can do a lot more than just ring up orders or tell some systems to spray a field. Jobs that we once thought of as “knowledge” jobs will be displaced by technology (and this opens up opportunity for the “creative” jobs led through entrepreneurial problem-solving).
I was speaking to a young man last weekend in New York whose father works for International Business Machines — better known as IBM. He was telling me that his dad urged him not to become a lawyer or a doctor because IBM was actively working on displacing people in these fields. IBM’s Watson supercomputer — famous for its win in Jeopardy! — has started to be applied to other fields, like law and medicine. Watson is supposedly 50% better at diagnosing ailments than human doctors. If that doesn’t terrify you, it should, for a host of reasons. Services like Ross Technologies remove a lot of the need for law clerks and paralegals from corporate law and will likely expand into displacing lawyers themselves. These services will continue to expand into knowledge-based jobs. The difficulty for people just entering these industries is that these are traditionally very tracked careers. You become a lawyer and remain a lawyer in most cases. Few people go from lawyer-to-poet or lawyer-to-businessman. Same goes for doctors.
Yes, this will displace a lot of jobs in the short-term. Yes, this will mean that a lot of people who spent time getting fancy credentials from expensive schools will have to rejigger themselves for new careers. But this opens up even more opportunity for those who are cognizant of this shift. Access to knowledge-based skills and services will become cheaper as they are turned into services for things. For example, AI will probably be a subscription-based service like server-space, not something that you buy and keep in your home in a big closet. This will enable people to continue this process of driving down barriers to entry into new industries.
You could take this as reason to fear the future — to be worried about employment and to be unsure — or you can seize it as an opportunity. Most pundits on this topic prefer the former. As for me, I choose the latter.
Practical Words of Advice
I hope by now I have provided you with sufficient reason to at least be a little excited about your future and to be excited to come to understand it as different than the world that your parents grew up with. There are some practical implications from all this — and it’s not just “invent the next Uber!” You don’t have to to seize this opportunity. But you do have to do some things differently.
Substance Trumps Process
The world of your parents was a world where process trumped substance. This isn’t because they don’t care about quality things or things that don’t work. It’s because people develop heuristics and shortcuts to figure things out. Getting lots of credentials tended to mean that you meant more than somebody who didn’t have those credentials (or, it was perceived that way). This could make sense when knowledge is largely locked up in schools and institutions with high barriers to entry. But in a world with near-zero-cost information and knowledge, this simply isn’t the case. Today, it is more valuable for you to show off the substance of what you can do than just going through a process that you hope will show that you know things. This isn’t so much because of a fundamental shift about how we view value and signaling, but more about the fact that signaling is important in context, not in a vacuum. When considering different signals, always ask, “is this effective compared to the next-best option?” When there really wasn’t a “next-best option,” as was the case in the pre-Internet era, then many people simply felt forced to settle on process over substance. Today, there are better options.
It is more valuable to show off the substance of what you can do than just going through a process you hope will show that you know things.I recently joined John Stossell on Fox News and he asked me if in my work I am “disrupting higher education,” and I told him I would like to think so, but that people think of this question the wrong way. Lots of people focus on Coursera or MIT Open Courses or Udemy as “disruptive” in this space. But the true disruptors are LinkedIn, Google, and Wordpress. They lower the cost of signaling your value to potential employers, business partners, and investors. This can save you tens of thousands of dollars.
Buy [YourName] dot com. Put a blog up. Write once a day for thirty days. Put up examples of your work. Be consistent and get work done. You can do this pretty easily today. If anybody in this room successfully does this, please email me. You will have my email address. When I am reviewing job candidates, somebody who can set themselves to a goal, execute on that goal, and do so well consistently is far more impressive than somebody who just hands me a credential and tells me to trust the institution from which that credential came. I have placed people at companies based solely off of a well-catered LinkedIn profile showing off accomplishments or a robust personal website. It’s not that hard. And that’s a good thing for you.
If you buy into the mantra, “it’s not about what you know, it’s about who you know,” then there’s good news for you, too. Seize this ability to present yourself as talented and valuable and reach out to those you find interesting and with whom you want to work. You would be amazed at how easy it is to build relationships and grow beyond your circle of acquaintances today. The worst somebody can say to a coffee request is no.
Risk and Employment
You may be thinking, “okay, you’re exhorting us to think and act entrepreneurially at a young age, but that’s risky! Shouldn’t we go get safer jobs first?” To this, I say you have the thinking backwards. First of all, it’s never been safer to try something risky. You live in the wealthiest developed nation on the planet. The bottom here upon failure really isn’t that bad. We’re fortunate in that regard. You can go out, try something, and if you fail, you probably won’t starve to death.
I also just tend to find this a silly claim. Compared to what? Working for somebody else who could fire you for no reason? Working for a big company that is subject to business cycles and the associated layoffs, and those being outside of your control? Working in an industry based solely on process (seniority) rather than substance and value creation? When you work for yourself — whether as an entrepreneur or a freelancer, whether running a startup or a lifestyle business — you are accountable first and foremost to your consumers. If you are good at your job of serving them, you’ve got better job security than most people who are teachers, bureaucrats, consultants, pilots, lawyers, or doctors. Yes, at a certain point your bosses become investors or business partners or your board, but your job security is much more closely tied to your performance here than it is in more established companies.
Risk is over-feared in our society. When you grow up spending most of your time in school, you learn to fear risk. Why risk things when following a safe path will get you to just as good an outcome? Why risk failure when failure will define your status until you graduate? The real world simply doesn’t work that way. People are more likely to forget failures more quickly than you think.
Youth = Freedom
As a young person, you are freer now than you will ever be in the future. This may sound absurd to you right now. You don’t have credentials or experience. You’re still in high school. If you’re still 17, then you are pretty much considered property of your parents and the State for the next year. But you also don’t have a mortgage, credit card debt, auto loans, $37,000 in student loans, a family for which you must provide, and golden (or copper!) handcuffs keeping you in a job you hate.
Many young people work at an established company to gain experience and then quit to join a startup, but then never quit.You have more flexibility now than you will ever have in the future. You can work long hours building something you love and not burn out as quickly. You can keep your burn rate low and live on much less than somebody who must feed several mouths and know from where their next paycheck will come. You can pick up new skills faster and devote time to learning. This is the huge advantage you have over older people. What you lack in experience and money you can make up for in time.
I was recently speaking to a young lady who was thinking about taking a job at an established company “to get experience for a few years” and then pursuing her entrepreneurial dreams. Her logic was simple: get more experience, make some money, then go into the ground floor of a very early-stage startup or launch your own. I had to disagree. The work she’d be doing at such an established company is fundamentally different than the robust, fast-paced work that you do at an early-stage company. Not only that, but if I had a dollar for every person who told me they want to get some experience in an established company and then quit and who then never quit, I could seed-fund my own venture tomorrow. We’re really bad at stepping away from cushy gigs, especially when those gigs are intentionally cushy. Companies have an incentive to try to keep you around as long as possible if you are a good employee. Finding good help is hard and on-boarding new people is costly. If you’re weighing these decisions like this young lady, be aware of this.
Don’t Squander It
You don’t have to follow established paths. Nobody is going to give you permission to start — you just have to. Use this time to seriously reflect on this opportunity you have. You’re some of the wealthiest, freest people who have ever lived on this earth. You live in a time with more opportunity for young people than ever before.
Don’t squander it.
Thanks to Derek Yonai and the Center for Free Enterprise at Florida Southern College for inviting to me to share these remarks.