
In Silicon Valley start-up world, pedigree counts - kenshiro_o
http://www.reuters.com/article/2013/09/12/us-usa-startup-connections-insight-idUSBRE98B15U20130912#!
======
kyro
I may be wrong and this may be more fueled by my own insecurities about not
having gone to a top school, but this attitude that The End of The Degree as
the next phase of education shows a real two-faced side to Silicon Valley.

You have investors and startup founders who firmly believe that soon degrees
won't matter, that credentials and pedigree shouldn't be a reflection of your
skill and talent. They write blog posts, they invest and start companies. And
yet, when you go look at the biographies of many of the rising stars, you'll
notice that the majority of them do have pedigree. When watching TC Disrupt
last weekend, I tried looking up the background of every investor and founder
that stepped on to the stage, and it became obvious just how many of them have
a strong pedigree. You can't help but think that it actually does go a long
way in Silicon Valley, despite what's said.

Maybe people with those pedigrees on average are more intelligent than those
who aren't, but nevertheless it's a pattern you can't ignore, and one that
makes me doubt the Valley's conviction to topple formal education.

~~~
jonnathanson
A decent number of people at the top of the food chain in Silicon Valley come
from finance, a world very much driven by pedigree. We tend to forget that
from time to time, most of us here (I would imagine?) being engineers, and
fewer of us being financiers. But pedigree has always counted in finance.
Though it counts _slightly_ less today than it did 30 years ago, it still
counts for quite a lot.

To this day, there are circles one simply can't break into unless one comes
from a top Ivy/Stanford undergraduate program or business school. These
circles dominate recruiting at top investment banks and consultancies, which
in turn feed VC firms and executive positions at many tech companies. It's not
impossible to land one of these roles without a degree from, say, Harvard
Business School. But that degree will open doors that are, by default, closed
to most everyone else without extraordinary hustle.

Another _very_ important point: many of those doors opened _on campus_ , not
afterward. Having Harvard, Yale, Stanford, etc., on your resume looks lovely.
But that's almost incidental to the real benefit. The real benefit is that the
top banks, consulting firms, and recruiters show up on those campuses and pay
greater attention, hire more interns, and so on. The advantages begin at
school and start accumulating afterward. This is the secret sauce that MOOCs
will have a hard time replicating, at least until the top firms become more
open-minded about recruiting.

The importance of pedigree will change when the _demand_ for pedigree changes,
not the supply. This is why I remain optimistic about the prospects of online
courses in the long run, but skeptical of their prospects to really shake
things up in the short run. So long as top-tier job recruiting demands
pedigree, pedigree will matter.

I think demand-side investment by organizations like YC, 500 Startups, etc. --
many of which seem fairly indifferent to pedigree -- will make a bigger impact
than will supply-side attempts such as MOOCs or their equivalents. At least
for now.

~~~
rayiner
Experiment. Pick a random VC firm, look at the bios, and count Ivy/Stanford
UG/MBA.

E.g. Accel Partners, just the SV office:
[http://www.accel.com/#people](http://www.accel.com/#people).

I count 15 of 23 that have either an undergraduate degree or an MBA from an
Ivy-league school or Stanford. Mostly HBS/GSB. That's 65% representation,
relative to the less than 1% of undergraduates who graduate from the Ivy
league.

Now, you can theorize that maybe it's because people who get into these
schools are smart to begin with, and would have been equally successful
elsewhere. But there is a lot of overlap in predictors between these schools
and the ones right behind them. E.g. SAT Math interquartile ranges for Duke
are 690/780 and the ones for Princeton are 710/800, and within that narrow
range also fall Northwestern, Stanford, U Chicago, Penn, Columbia, Harvard,
and Yale. The student bodies at these schools overlap more than they differ.
If the key differentiator was the quality of the people coming in and not
pedigree by itself, you would see a more graduated drop-off in representation.

I think it's obvious that the pipelines that
Harvard/Yale/Princeton/Wharton/Stanford have to elite organizations in finance
are a huge boost for people who have the option to acquire that credential,
distinct from the qualifications those people come in with.

~~~
jonnathanson
True. It should be pretty simple to model this out in Bayesian fashion. Doing
so would probably bear your theory out, i.e., these schools seem
overrepresented in top-tier finance relative to their numbers of graduates in
any given region (VC in this case, perhaps IB/PE/etc. in other cases).

It goes beyond the credential, though. The credential is a side effect. Many
(most?) lucrative careers in finance don't happen when a person with a
Harvard/Yale/Princeton/Stanford diploma applies blindly to a job at Goldman
Sachs. They begin when that person is an undergraduate _at_ H/Y/P/S, where the
Goldman recruiters show up in greater numbers (and with bigger quotas) at
those schools than they do elsewhere. That's where the pipeline begins, and
that's precisely why it's very hard for any credential to rival the pipeline
these schools have built. From there, advantages begin to accrue and compound
over the years (the "Cumulative Advantage" Theory).

Arguably, in many cases you could trace the origins of the pipelines even
further back, to the elite private and prep schools with well-paved inroads
into H/Y/P/S/etc.

There's no question you need to be smart to flourish at these schools, and to
succeed in high finance. Probably in the top decile of IQ and effort, at
least. But smart is just table stakes.

------
kenshiro_o
I am going to play devil's advocate here.

I was not born into a rich family (although we were not living in indigence
either) so maybe my arguments will carry more weight. The way I see it is that
the world is unfair. If I were to make a simile with athletics, I'd say we
don't all start from the same line in the race of life. Some (the ones born
into wealth) start much further ahead than you do and it is not their fault as
no-one chooses the family he is born into. This has been the case for
millennia and I doubt it will change before long.

However if you who started much further back manage to catch up to these kids,
say at university or any other time in your lives, then you should feel
emboldened to have made it this far through luck and hard work and keep
working towards your goals. Remember that the race is still rigged but you may
get that gust of wind in your back that would propel you forward.

So instead of moaning you should keep your focus and run down the path you
have chosen, while thinking of ways to even up the starting positions when you
find yourself in a position of power and influence in the future. Of course
you may fall along the way or be overtaken by the privileged ones or by
someone who started even further back than you - remember that there is always
someone who started behind you.

------
r0h1n
Reuters' URLs seem to be messing up HN dupe-detection. Here are 2 other prior
posts of this story:

15 points -
[https://news.ycombinator.com/item?id=6377663](https://news.ycombinator.com/item?id=6377663)

1 point -
[https://news.ycombinator.com/item?id=6379004](https://news.ycombinator.com/item?id=6379004)

------
jacques_chester
I think pedigree is largely contingent on luck:
[http://chester.id.au/2012/03/02/does-leadership-
matter/](http://chester.id.au/2012/03/02/does-leadership-matter/)

I'm already one of the 1-2% of the luckiest people alive. Billions of people
have nothing like my opportunities.

Bugger Stanford. I was born to middle class Australians, I can take it from
here.

~~~
ryanmolden
Yes, not to mention that it simply means people that don't fit their pedigree
filter are available. I have met brilliant hackers from MIT/Berkeley/et al, I
have also met average hackers from those schools, and brilliant hackers from
other schools. My experience leads me to believe the correlation between
brilliant hacker and school (if any) is positive, but not dominating. The
again maybe that is just me hoping, not having come from their vaunted halls
:)

------
ronilan
Advice from Pedigree suprisingly on Topic :)
[http://www.youtube.com/watch?v=Z3aP5Ks7e1s](http://www.youtube.com/watch?v=Z3aP5Ks7e1s)

------
gametheoretic
Everywhere, pedigree counts.

Silicon Valley ∈ Everywhere, whether it likes it or not.

------
michaelochurch
As sad as it may be that the current California-centered incarnation of
technology has fallen to become Yet Another Feudal Reputation Economy, I think
the only thing worth doing is to figure out what comes next. It's dead, we
won't be able to save it, so let's move on. The established players aren't
going to quit their shitty behaviors just because a few negative blog posts
are written about the death of meritocracy in the Valley (which is old news;
they're the ones who killed it).

Rather than complain about MBA culture and colluding VCs and Stanford Welfare,
we should be figuring out a way to _replace_ these assholes. What are we, as a
generation, going to build that shows them up? The same inefficiency that
beset large corporations in the 1990s is hitting the mainstream startup scene
now.

Maybe Austin will take the lead, possibly somewhere else like Portland,
Chicago, Baltimore, or Durham. It might not even be in the US.

What does make me sad was that I thought (being extremely naive) that the
Crash of 2008 might have a positive effect on technology, by reversing the
"talent graveyard" effect of finance. However, quants (the ones we'd want)
mostly stayed in high demand; the ones who moved into tech from finance were
the MBA-culture types who ruined New York's potential to ever be taken
seriously as a startup scene. It had the exact opposite effect of what I was
hoping for.

~~~
jacquesm
> It's dead, we won't be able to save it, so let's move on.

I think rumours of the California start-up scene's demise are vastly
exaggerated. Maybe we should wait proclaiming it 'dead' until it is no longer
the top foundry for new start-ups world wide?

~~~
mjn
_Is_ it the top foundry? It depends on what sectors you look at, I believe.
It's definitely still top in web technology. But in other areas I'm less sure.

One slice of the successful startup market is looking at tech IPOs, which are
on the upswing again. This probably downplays the Valley scene, which focuses
more on quick smallish exits (acquihires and other kinds of acquisitions), but
does give a view of where the next-gen of large tech companies is coming from.

According to PWC's Q2 2013 tech IPO report [1], there were 13 North American
tech IPOs:

    
    
       EVERTEC: $505m, Puerto Rico
       CDW: $395m, Chicagoland
       Tableau Software: $254m, Seattle
       Blackhawk Network: $230m, SF Bay Area
       Gogo: $187m, Chicagoland
       Gigamon: $128m, SF Bay Area
       Cyan: $88m, SF Bay Area
       Rally Software: $84m, Boulder CO
       ChannelAdvisor: $81m, Research Triangle NC
       Marketo: $79m, SF Bay Area
       Tremor Video: $75m, NYC
       Textura: $75m, Chicagoland
       Halogen Software: $55m, Ottawa Canada
    

The SF Bay Area is still the largest single source, with 4/13, but not in a
dominating sort of way.

[1]
[http://www.pwc.com/gx/en/technology/publications/assets/ipo-...](http://www.pwc.com/gx/en/technology/publications/assets/ipo-
review-q2-2013.pdf)

edit: Oops, those are millions, not billions; fixed. Nobody is raising a half-
trillion dollars in an IPO...

~~~
sashagim
your numbers are off - took me a lot of tab switching on my tablet to figure
out the mistake :) it should be millions, not billions, and they represent the
proceedings (the amount raised on IPO), not the market cap.

