The Startup Economy

Decades ago, New York’s Wall Street was the employment hotspot for the world’s finest young adults — and the most coveted street in America for prospective millionaires. Now, however, Harvard grads are leaving the east coast and heading straight for Silicon Valley, where men in hoodies have far more influence than men in suits. The dream is no longer to close a five million dollar deal, but to build a microchip in your garage and sell it to Google. This fundamental paradigm shift in the minds of young entrepreneurs is the thesis behind what experts call The Startup Economy.

As with anything, there are positives and negatives to this new economic model. The startup economy rewards hard work above everything else, in a way that previous systems have not. The idea is that if you’re smarter than everyone else, that’s all you need — you don’t need school, or a degree, or even the social skills to hold a dinner meeting. If you can sit at your computer and code for 18 hours a day (and do it better than anyone else) you can be the next Mark Zuckerberg. This is, again, a dynamic shift from the “Wall Street” culture that valued prestigious universities and framed degrees. Now, this is excellent if you’re in the minority that achieves startup success, but for every Mark Zuckerberg, there are thousands of college dropouts with nothing to show. A Google search or quick scroll through LinkedIn show a million blog posts about 19 year old entrepreneurs who dropped out of high school but are still waiting for their big break.

Silicon Valley has thousands of startups, but few find huge success.

The question is, what triggered this paradigm shift? The fact is, millennials feel let down by the previous generation. Our failing job market means that even people with degrees have difficulty finding employment. For this reason, very intelligent, very motivated youth want to forgo traditional employment and be their own CEOs. Teens are becoming increasingly capable and increasingly employable at a young age, but opportunities are drying up. Contrary to the Millennial stereotypes, they aren’t lazy — they’re creating their own opportunities in the face of an unemployment crisis.

However, the issue with the startup economy is simple — it’s a clogged system that values efficiency. Most startups are a close and tight-knit group of 10–20 engineers and coders, often less. It’s hiring efficiency at its purest: you hire one or two people incredibly talented people who work incredibly hard, and you save the money you could have spent on a team of engineers. You have thousands upon thousands of up-and-comers entering an industry that values using as few people as possible. This means that everyone has to start their own business rather than joining others, which leads to hundreds of slightly-different copies of the same basic idea. Which means thousands of failed startups led by bright youth who dropped out of university and don’t have a backup plan.

Don’t get me wrong — I’m not bashing startups. It’s just reality that there’s no “perfect” job market and no perfect economic model. This startup economy is just getting started, and it’s constantly pushing out amazing ideas and amazing entrepreneurs. It may not be perfect, but it works.