DotCommenting

So how valuable do you think you are? It’s a question everyone at some point discovers and decides needs to be answered. I’d suggest that if you’re reading this and you’re my age (20), you should have already considered the question (and hopefully arrived at some answer).

I was reading an excellent essay written by Paul Graham titled “Hiring is Obsolete”, where he speaks about the value of a student, a college student specifically, and how, considering the average value of our demographic, we are undervalued. As a college student, whether you’re in college or have recently graduated, should you accept a job or start a business? Those are typically the only two options one really has, the former being the most popular. The problem lies in a company’s perception of the marginal value in hiring you. Their take on it, as a whole, by definition, will be an average marginal value, and so because the majority of our demographic is inexperienced, the mean is brought down significantly. But individually, any 22 year old can be as competent, if not more so, than their boss who hired them. So what that implies is that your opportunity cost of starting a company is much greater than working for a company, since you have the potential to market directly to the consumer. So you’re immediately valued by the customer rather than a company who is, at a very simple level, exploiting you. Now this doesn’t mean that by working for a company, even if you value yourself higher than the marginal value the company values you at, you are doing yourself a disservice. Ultimately, it comes down to a personal choice. Get yourself a job at Goldman Sachs and get into I-Banking, by the time you’re 28, you’ll be making 750k. That’s a safe bet. I’d stretch it so far to say that $750k gross income is higher than what the average entrepreneur makes at 28. At the same time, I think Warren Buffet was worth $400 MM by the time he was 28, so it can go both ways –granted, if you think you’re Warren Buffet, I suggest you drop me a line and I’ll give you a job.