The Social Network
I turned 20 years old when The Social Network (movie) was released. The story plot is about how Mark Zuckerberg and his friends started Facebook. It was super inspiring especially for kids feeling different than others. They could find themselves in Mark Zuckerberg's picture created by Jesse Eisenberg. I was one of those kids.
I was impressed by them. Bunch of guys started a billion dollar company from their dorm rooms. In the same time I had maybe $100 in savings with a negative increment outlook. I needed to fill tank in my car. My car was worth $500, also not spectacular. I felt like I made some fatal mistakes since I wasn't even near starting my own business.
I took a closer look into my friends and fellow computer science students. About 60% of students dropped out or were failed in the very first year. Did they start their own billion-dollar startups? I found one guy - he started a marketing company focusing on bakeries. I don't get me wrong, he was very successful comparing to me and other students. He managed to grow his business to 5 employees before I graduated than I lost track. I haven't seen him at the news so I guess he isn't a billionaire yet. Despite, he was fairly successful it still wasn't that.
Startups vs Old money
I went down this rabbit hole and started to dig deep into the whole European ecosystem. I didn't find that many good examples. The only startup billionaires I found were Samwer brothers. They started company called Rocket Internet. Rocket Internet were analyzing early stage US startups and starting their copies in the DACH market. DACH are the countries in Europe with German-speaking majorities (Germany, Austria, Switzerland). Samwer brothers built an excellent startup factory. Rocket Internet was able to launch fully working products within 90 days. Often those products weren't software products but required physical infrastructure. They are very impressive but there is one problem with them. Marc and Alexander Samwer hold MBAs from Harvard.
The stories of European startup billionaires were almost non-existent. Even stories on millionaires were at least rare. The richest people are not really people but entire families. They made their wealth through generations. The most common were inventors. They patented their ideas and made fortune on it or government contracts.
Have you heard about company called Dr. Oetker? They make frozen pizza, baking ingredients and other perishable goods. The company was started by August Oetker in 1891. He invented baking powder and patented it. This patent created multigenerational wealth for his family that lasts until today.
Unfortunately, there isn't much wealth that originates from high tech startups in Europe. It seems like every successful software company is getting acquired by large investors. European states have capital and agencies investing in startups. But for whatever reason they cannot replicated the US nor Israel success. It means there must be something about Ivy League colleges and their students or the whole US. Something that makes them very special.
Today, 13 years later, I am a software engineer with 10+ years experience. I worked for the whole spectrum of companies in 5 countries. Some of those companies were startups, SMEs, enterprises. A year ago, I became a hiring manager for one cryptocurrency startup based in Palo Alto, CA. Our company is fully remote and our team is distributed across the world. The best thing this job gave me is an opportunity to work with people from all backgrounds and learn about them.
As a hiring manager, I conducted interviews and reviewed software engineers from Fortune 500 and FAANG companies. We were hiring various candidates from interns to experienced contributors. The hiring spree happened in the first half of 2022. It was a time of the crypto bull market and great resignation. Our company was trying to fill positions in almost every departments. From accountants until software engineers.
We didn't have an employer brand in the Bay area yet, so we decided to hire interns. We had internship candidates from Ivy League colleges and also lower tier colleges. The Ivy League candidates were usually rejecting our offers. They preferred to take internships at Amazon, Google or any other FAANG company.
From learning perspective, they could learn more at our company. We are a small team that is building the entire decentralized finance application. This internship would give them a possibility to try different things and pivot their careers.
From the resume standpoint, an internship at Microsoft gives handicap in their careers. There is no chance that interns could make changes on the live system and jump between roles there.
But what about interns from lower tier universities? Were they worse than those ones from Harvard or MIT? No, not at all.
There is one main misconception about the universities. The main purpose of universities isn't teaching but doing scientific research. Period. The education is how they make money, and it isn't limited to private but public universities as well.
If you look at all university ranking you will find out they aren't ranked by salaries of their graduates. The most meaningful rankings are based on amount of scientific papers and patents produced by them. Since all universities want to focus science, they need to enroll PhD students to do so. Those students want to join the most prominent universities since they open doors to the world of science.
Unfortunately, it is hard to make money on science and PhD students do bring enough tuitions. Universities are forced to "gigs" for businesses and states. Either by doing research or student tuitions. Have in mind that even Harvard gets 70% of its research funding from the federal government.
But let's consider public education system in Europe (Germany or any European country). The public education is free on the mainland of Europe (excluding UK). We pay nothing to study there.
The education costs are beared by taxpayers in exchange for services. To provide free education and healthcare. The government needs to educate doctors and nurses. Also, skilled workers contribute more to the GDP. The GDP is invested to increase country's HDI index. It means, even people with elementary education have benefit in some ways from highly qualified workforce.
The government pays university for every enrolled student. Even if student drops out the university gets paid. Otherwise the university would be incentivized to let everybody to get the diploma. This allows them to keep the high standards.
But Why Top Tier Universities are Better?
I have no doubt that an average bachelors or masters student will not be able to learn more at the tier A university than his fellows students at less prominent institutions. It isn't about the lack of opportunity but time constrains. Tier A, B and C universities get the same amount of time to educate their students. It is 3 years for bachelors and 2-2.5 years for masters.
If you look at the most degree programs you will realize that most of subjects are tackled within one semester. 3-4 hours weekly. It isn’t enough time to gain broad insights on the subject.
Only the PhD students will be able to take true advantage from the tier A universities. They have the most time to focus on studying and have access to the best professors.
It doesn't mean that attending the best universities is a waste of resources for an average joe. Those institutions have the best professors and they have high standard and are very demanding. It means students will need to work hard and earn their grades. They will learn to collaborate, develop discipline and possibly work ethics (but not always). These are desirable traits in an adult life. Also, the best universities attract students from wealthy families. It means students build a meaningful network that can skyrocket their careers.
If you graduated a university known from good parties you will have hard time to compete with Harvard alumnus. They are set for success since they learnt the most relevant skills at the university. Likely, you didn't need to get involved into politics or other difficult dynamics. It means you will learn those things on your during the first few years of your career.
Does it mean your case is lost? Not at all. If you are talented you can still outwork Harvard alumnus but it won't be easy. You will need to work harder than they do and exceed the expectations. Always.
Whatever you do in life you need to develop discipline and take responsibility. The best opportunities are never the easiest ones so if you are getting involved into something you really need to own it. You can outdo the doomed to success ones but it takes personal sacrifices.