Harvard, Goldman, Startup

Roger Ehrenberg just posted an essay about why Harvard students prefer Goldman Sachs to a 15-person startup, which I found via Chris Dixon’s excellent Twitter feed. Roger speculates that “many equate start-up enterprises with uncertainty and fear, and only appropriate for those with massive risk tolerances.” This seems to me like the thinking of someone with a family who left a high-income job.

To my mind, fear that a startup will fail isn’t why Ivy-League graduates spurn startups. At least when I interviewed for a job out of college, it never occurred to me that a startup could fail. The startup was run by adults, and my relationship to adults was defined by their judging whether I succeeded or failed, not the other way ’round. Few college-level candidates have ever asked about Redfin’s financial performance, even when we had less than three months of cash in the bank.

So if it isn’t the risk of failure, what is it? I think the reason that startups struggle to recruit out of the Ivy League is more subtle:  startups just don’t seem elite to someone who has spent her whole life pursuing ever-more elite institutions. Since you aren’t likely to persuade a Harvard graduate that status doesn’t matter, you have to persuade her that your startup can confer status.

The status problem becomes evident when you compare a start-up to Goldman, then to Harvard. Harvard is self-evidently discriminating; like Goldman, it is notorious for interviewing many and accepting few. To college graduates who still believe in the Wizard of Oz, the bespoke suits and penthouse suites simply define new strata of ambition. By contrast, a start-up has ratty carpet and goofy people, who tend to be either anti-social or over-eager — or, like me, both. Few college students realize that many startups are pickier than Goldman; if the students knew how many candidates a startup rejects, more would apply.

Just as importantly, Harvard is broad, with courses in humanities, sciences, arts and engineering; Goldman covers many industries, with a wide range of abstract products like debt and equity that seem foundational to the entire economy, even intellectual. By contrast, a startup — whether it’s making real estate more consumer-friendly or inserting ads into mobile applications — can seem narrow.

What students don’t know is that banking analysts just run the same spreadsheets day after day, whereas new recruits often get to do everything at a startup. In my first few months at a startup; I wrote a white paper, learned Visual Basic and flew to Italy, where we tried to sell shrink-wrapped software at a trade-show for cash.

Moreover, Harvard is highly structured, with a four-year program defined by prerequisites, degree requirements, grades, honors criteria and graduation ceremonies. Likewise, Goldman has two-year programs, followed by business school or a promotion to the lofty title of associate. A startup has someone who will point you to a desk, and tell you to figure out for yourself how to connect to the network; where you make your way from there is anyone’s guess.

The problem isn’t that this lack of structure is intimidating; it’s that it’s potentially aimless. In my disorienting post-graduate world, the only direction I wanted from anyone was to figure out which way was up.  It was obvious at Goldman which way was up, because there were a dozen floors above you that you’d never visit until you had evolved from your current larval stage between frog turd and human.

Finally, Harvard, like Goldman, is filled with lots of people from your socioeconomic background, which you can befriend or even date. This is important when you’re moving out of the dorm and into a new city. If it recruits enough young people, a startup can function as a second dorm — it can be a sea of love — but most students don’t realize it. The only reason I joined my first startup instead of a bank or a consultancy was because I saw, during an office tour, the back of Michael Smedberg’s very young and handsome head. I thought he looked like someone who could be my friend. Seventeen years later, we are still friends.

So to recruit from the Ivy League, startups have to get elite: give recruits a brass ring to reach for, a sense of the broad responsibilities they’ll get, a structured program for touring those responsibilities, and a group of cohorts to poke on Facebook.

And yes, we have to take Roger’s advice, and speak at top universities every chance we get. Redfin, for example, is speaking on May 18, 3:30, at a University of Washington colloquium on why some universities produce entrepreneurs and others don’t. If you’d like to come, leave a comment and we’ll see if we can get you in…

(Photo credit: Mailaliasgar on Flickr)