Technology: Collapsing Industries and Training Risk Takers
The other day I was talking to Mary, a high school student I mentor once a week. I’ve known Mary for two years; she is finishing up her senior year and is about to head off to college. Rather than come down with senioritis, she is working harder than ever. She was telling me about her economics class, where she had to do a report on entrepreneurship. She did so well, she told me, that her teacher asked her if she would one day start her own company.
“Yeah, of course. Why not?” She shrugged nonchalantly, smiled and then checked her iPhone for a text from her boyfriend. Why not? There are hundreds of reasons why one should never, ever become an entrepreneur. The biggest and most severe one is the risk involved.
And then it hit me. Today’s children have access to information and technology at an increasing rate. This changes the very mentality of an entire generation. Today’s kids see industries transform overnight and then hear success stories of twenty-something billionaires. Kids are naturally nomadic in their interests, and today’s environment rewards, rather than punishes, such riskiness.
Many roll their eyes at the millennials. They dismiss them as lazy or pampered. However, there is something else going on. Technology is training an entire generation to take risks, the most important American trait. It was the risk-takers who first ventured to the New World. It was the risk-takers who piled into covered wagons to explore the west. And it was the risk-takers who started the world’s biggest companies and cured the world’s most powerful diseases. Now, it seems, there is an entire generation for whom risks don’t seem as severe. And for them, the strain of entrepreneurship has easily taken root.
Thanks to technology, our youngest generation may be the country’s next "greatest generation."
- Comment (17)
- · Quote
- · UnfollowFollow (3)
Comments:
Apr '11
Re: Technology: Collapsing Industries and Training Risk Takers
There's not a lot of support for true entrepeneurs anymore. Most supporters of entrepeneurs have rigid requirements that have little to do with how good or bad an enterprise might be.
The guys in silicon valley must know this better than most. They basically had to invent their own new enterprise support structure. It's the reason why there is a silicon valley, a Hollywood, a Wall Street, etc...
Re: Technology: Collapsing Industries and Training Risk Takers
Not sure I'm following, Felix. Are you saying there isn't cultural support for true entrepreneurs, government/legal support?
Apr '11
Re: Technology: Collapsing Industries and Training Risk Takers
More cultural, I suppose. Most industries support their own entrepeneurs, basically, but they judge new enterprises against a predefined "recipe for success", which excludes truly enterpeneurial enterprises.
Aug '10
Re: Technology: Collapsing Industries and Training Risk Takers
There's a difference between being unafraid of risk and being competent at managing risk.
If a kid is raised in a risk-free environment, where everything is paid for by "helicopter parents" who work to make sure nothing unpleasant can ever happen to their little darling, and who can always be counted on to step in in case something goes wrong, why shouldn't a kid be oblivious about financial risk?
We don't want people to be unafraid of risk. That's like a mouse that is unafraid of cats.
We want people who are smart about managing risk, like a mouse that is friends with a particular cat, but knows that not all cats are so friendly.
Aug '10
Re: Technology: Collapsing Industries and Training Risk Takers
Now, clearly, the girl in Mr. Kessler's example is well-equipped to manage risk, as evidenced by the fact that she's doing very well in an economics class, and that she's smart enough to know the value of a good mentor.
Is she representative of "her generation"?
If you asked a hundred high-achieving students in an economics class if they would be willing to start a company some day, I'd be surprised if they didn't say yes.
But how many high school students take those courses, and how many of those do well?
This particular girl will likely be successful regardless of what career she chooses, so why shouldn't one of the options be "start a company"? If her company fails, she'll have the skills to get a different job.
For her, a failed company isn't a worst-case scenario. That's a pretty good example of risk-management.
Edited on April 24, 2012 at 8:30pmOct '10
Re: Technology: Collapsing Industries and Training Risk Takers
I think my generation is a bit more skeptical (and, sadly, cynical) then our parents, which might be good for entrepreneurship; I don't really know. However, there is a bit of idealism involved too; people think if they create a good product, it can pay for itself by hosting ads, and that just isn't the case. Business model innovation is where the real action is at, in my opinion.
Jul '11
Re: Technology: Collapsing Industries and Training Risk Takers
American youth are falling behind in every measurable area with the exceptions of self-esteem and body mass index.
We definitely need risk takers and those trained to think critically to combine to achieve greatness. Mentors are extremely helpful at spotting talent and nurturing it but it is unusual to find someone willing to do that job.
Dec '10
Re: Technology: Collapsing Industries and Training Risk Takers
In decades past, one compared the risk of starting one's own business to the security of a career with an employer. Nowadays, is the risk gap all that great?
Feb '11
Re: Technology: Collapsing Industries and Training Risk Takers
I am not sure I agree with your conclusion that technology itself trains young people to accept risk.
There are other factors at play here. My homeschooled children do not have the same ideas about education that I did at their age. They view education more as something they must achieve, rather than something that is given to them. There are certain non-negotiables in their curricula, but they can also finish at their own pace and not judge themselves by how a classroom of supposed peers is performing.
Scoff as I may at diversity, I recognize that the proliferation of non-traditional lifestyles may also result in risk affinity. My husband and I, a Jew and a Catholic, met older people at our wedding who described outraged and horrified family and friends regarding their inter-faith romances.
(continued)
Feb '11
Re: Technology: Collapsing Industries and Training Risk Takers
(continued)
One of the biggest creators of risk affinity, it seems to me, is one that many young people have little to no experience with -- namely, being outdoors for hours of unsupervised and exploratory play. Looking at my 3 year old dangling from the red maple tree swing while her 6 year old brother whoops at her from his lofty perch in the nearby mulberry, I see a pair of crazy risk takers and draw the curtain.
Is anyone familiar with the outrageously funny illustrated children's book, How Tom Beat Captain Najork and His Hired Sportsmen? The answer is that Tom spent most of his days just messing about, learning all the skills he needed, while Captain Najork concentrated on specific rules of play. Wisdom in there...
Aug '10
Re: Technology: Collapsing Industries and Training Risk Takers
Risk, without competence, results in the Tacoma Narrows Bridge.
Risk, without character, results in the Costa Concordia.
Risk, without a strong work ethic, results in gambling addiction.
Risk, without healthy skepticism, results in ponzi schemes.
Risk, without respect for others, results in armed robbery.
Risk, without common sense, results in trying heroin for the first time.
Risk, without planning, results in starving to death alone in the wilderness.
Risk, without good morals, results in fathering an illegitimate child with a campaign worker.
Risk, without accountability, results in Solyndra.
Risk, without consequences, results in the welfare state.
How do North American "millenials", as a generalized group, stack up against previous generations on all these different criteria?
Jul '11
Re: Technology: Collapsing Industries and Training Risk Takers
Misthiocracy: Risk, without competence, results in the Tacoma Narrows Bridge.
Risk, without character, results in the Costa Concordia.
Risk, without a strong work ethic, results in gambling addiction.
Risk, without healthy skepticism, results in ponzi schemes.
Risk, without respect for others, results in armed robbery.
Risk, without common sense, results in trying heroin for the first time.
Risk, without planning, results in starving to death alone in the wilderness.
Risk, without good morals, results in fathering an illegitimate child with a campaign worker.
Risk, without accountability, results in Solyndra.
Risk, without consequences, results in the welfare state.
How do North American "millenials", as a generalized group, stack up against previous generations on allthese different criteria? · 6 minutes ago
Perfect.
Jul '11
Re: Technology: Collapsing Industries and Training Risk Takers
College will change her point of view, by the time our upper educational system gets through; if she has any entrepreneurial spirit left she will be driven to start up a lobbying firm to petition the government for free contraceptives and possibly to shutdown a religion.
Aug '10
Re: Technology: Collapsing Industries and Training Risk Takers
Instead of risk affinity, I think that the quality that the girl in Mr. Kessler's example actually exemplifies is individual sovereignty.
By that, I mean the belief that one is the master of one's own destiny, irrespective of one's social class, gender, race, or political jurisdiction.
When she says, "why not?", is she talking about the risk of starting a company, or is she saying that nobody has the right to tell her she cannot start a company?
Say you live in a jurisdiction with excessive regulation of business. A sovereign individual says, "I'll move to a different jurisdiction."
Say you grew up in a poor neighbourhood. A sovereign individual says, "I'll work hard and rise above it."
Throw virtually any obstacle into the scenario, and a sovereign individual says, "there's a way around it."
I might be willing to agree that the current generation may be more likely to embrace individual sovereignty, thanks in large part to technology.
After all, thanks to labour-saving technologies, individuals are able to survive and prosper much more independently today.
But I do not think the relationship to risk is the key variable in the equation.
May '10
Re: Technology: Collapsing Industries and Training Risk Takers
Hopefully she'll start right out of college, or even instead of college when her personal overhead will be lowest.
Mar '11
Re: Technology: Collapsing Industries and Training Risk Takers
I think this has always been true for smart kids at her age who also happen have little to no professional work experience and little money or time invested in a given profession. At her age she has little to lose and a lot to gain from what she sees in starting a business. Secondly she as no obligations. Risk taking is non-linear because losses at the same probability are Psychology more harmful. Business and people in general take less risk the more they have to loss despite the up-sides. After her same peer group has spent time and effort on working their way up in a profession and saving ask the same group again about starting a company. I bet they will be a lot more pessimistic even if their obligations are roughly the same. Education can only go so far before experience is needed to gain meaningful amount of knowledge for productivity /quality improvements for a worker. That is why the marginal rate of return for college is so much less for a society compared to Primary/secondary.
Aug '10
Re: Technology: Collapsing Industries and Training Risk Takers
Unless technology is also training that generation how to deal with losses arising from risks as well, I remain skeptical of their potential.
Basic litmus test: do you view taking out college loans and carrying that debt as an investment, a risk, or an entitlement? Do you feel student loans should be written off by creditors, or have their cost spread beyond the individual and socialized away?
The defining characteristic of an entrepreneur is someone willing to bet his own capital, labor, and time on a project he perceives to have higher value than what the market currently offers for the individual inputs. He invests himself in a risky venture that may not pay off. He gambles that his foresight is greater than the market's.
Now, this high esteem in one's own foresight is common enough throughout all mankind. But only entrepreneurs are willing to risk their capital and person on such judgement. He expects to collect the profits if he is correct, and to suffer capital losses if he is wrong.
Confidence in your own opinion without the willingness to suffer loss--or the humility to contemplate loss as a potential outcome--is no recipe for greatness.