Nov 9, 2016
Investing in the People Stack: Growing Oaks from Seed (Altruists Welcome)
This is about creating a mechanism to start building tomorrow’s tech people…and no, they’re not cyborgs, yet. It’s an exploration of a rationale for investing in the People Stack, earlier. Read on, I’d love to hear your thoughts on it. All feedback and opinions welcome.
What’s the problem?
I was reading an article about people struggling to find jobs or gain skills following finishing education at various levels — post school as well as university. It‘s a well established fact that there’s a disconnect between education and practical workplace skillsets. That’s okay as I do feel education should, at it’s core, be about learning for learnings sake, discovery and instilling lifelong inquisitiveness.
However, that doesn’t help young people leaving formal education, taking a look around and giving a big ¯\_(ツ)_/¯ that the world doesn’t quite work like they expected it too, and the important things to know and be able to do are evolving all the time. That the world isn’t as static as it has, hitherto, been represented. And. It’s. Accelerating.
Ok, I’m with you…so far. What else?
- Inexperience, failure rates, misallocation of capital
There’s a steep learning curve for those starting out on their own entrepreneurial journey. First time startup or business founders, and inexperienced teams, face a very bumpy ride. That’s okay, they’re learning. However, often, the wheels come off simply due to inexperience in the process or unreal expectations of startupland being a linear “get rich quick” scheme. It’s not. It’s about trying to make a positive improvement in the world, to fix something. Sometimes you get rewarded for it; sometimes with money, oftentimes with learnings.
It takes time to learn and there’s rarely a substitute for trial and error, rinse and repeat. Get up, dust off, move forward.
This said, it can feel like we’re not learning from a collective perspective; that founders and teams make the same misjudgements, repeat assumptions previously disproven. To continually support that is a misallocation of capital, both human and monetary.
Failure is inherent with taking entrepreneurial risk, it’s part of the journey. In the tech space perhaps more so. However, it is very possible to work to improve the ratio and reduce the total volume (or repeat rate) of failures.
2. Short Term Bias
We tend to have a bias towards short-termism. It’s hard to look far out and take action now for something on the horizon.
Where that horizon is depends on where you’re sitting. I’ve started thinking long as somewhere beyond 5 years to around 20 or 30 years out. Admittedly, what you can reasonably extrapolate gets pretty hazy after about 10 years.
Politics is a great, often cited, example of short termism as it’s so focused on the next term of office. I hardly see anyone talking about long term structural changes that would soften and capitalise on the astonishing next few decades of technological advancement and adoption. They can seem like they’re still attempting to fix the challenges of the past.
For example, the major role automation will play in the mid-long term. It will change work in the most profound way since we moved from a manufacturing to services based economy, some suggest the biggest impact since the Industrial Revolution. That’s not a bad thing, the opposite in fact. It’s progress. Although, if we don’t adequately prepare people, as well as organisations, it’s not only a wasted opportunity but could be damaging in human, social and economic terms.
Pretty obvious, right? Yet we’re not really doing things at scale to address it.
Why? It’s really hard to break the bias towards short term wins. It might not be your problem in X years time, but it will be a problem for someone. Taking action now could have meant a better outcome or resolution of that problem, and is likely to cost a lot less.
The long term is pretty uncertain. It’s almost too big. So taking bites is all that we can do, steps in what — at the time — appears the right direction.
There’s, of course, a structural capital bias for short-ish term returns also. Long term transformative ideas require long term capital support to achieve their potential.
3. Prepping for an uncertain future
Nope, I’m not quite digging a big hole to fill full of canned goods…yet.
If:
- aspects of the startup and scale-up worlds are how new companies or technologies will be created in the future (applied in whatever context large or small),
- small cross-skilled and experienced teams can/do/will have global impact,
- there’s a knowledge gap in the startup world which time and experience usually fills,
- people are the difference in a range of cases, between success and (bad) failure,
- automation is going to wipe out (or dislocate) a significant proporition of work apart from the most creative jobs, then;
We should be thinking long term about how we support a pipeline of people gaining real experience — embedding thinking and skills as early as possible — so that we’re all better prepared for this uncertain future.
Instead of learning by failure, learning over time. Inquisitiveness and curiosity as a hard skill.
It’s in all our interests to do so.
Right. So what’s the solution?
Here’s where the altruism comes in:
What if…instead of investing in ideas we invested in people before they have the ideas or the ability to execute them?
What if we created a “Future Fund” specificially to invest in people — aged c.18–25 — naturally interested (or not!) in technology to gain skills for junior level positions in the startup or larger tech world (or another industry in dire need of tech skills)? Then supported them to naturally develop through real world experience (the startup way!), with a solid foundation where they’re not starting from scratch or perpetuating bad practices?
There’s a myriad of courses out there right now that do a great job in many areas, however, it seems that the price of these can exclude someone that:
- cannot afford to pay the entry fee, or
- those who have already racked up huge debts from university and wouldn’t be able to add to them prior to starting to earn, or
- those who need extra support outside of the course itself
Objectives for the students
- provide a way into the tech world from a diverse range of backgrounds and education levels
- create opportunity without incurring debt for young people
- join a community of skilled people in more experienced teams and organisations
- accelerate learning to create forever learners with a “continuous skill development mindset”
- create a community/cohort/alumni that is both active & supportive
- embed startup “yes, try it” thinking and best practice into a generation
A good way to start would be very lean. A small cohort to test how it might function practically, while getting more people interested in it, and attracting investors and sponsors to get involved. It’d need to use existing course providers — some traditional institutional partnership combined with newer providers, perhaps — for various elements whilst directly providing core foundational/mindset materials also (Tech City’s Digital Business Academy looks like a good starter for 10).
That some of these things exist already is a good sign. It’s the bringing it all together that’s our challenge now.
This would address longer term structural workforce challenges that we should be actively preparing for now. It could arm a new generation of capable, entrepreneurially minded startupers, irrespective of their background. It also feels as if it fits with the tech culture of people helping each other.
It’s a mix of altruism and self interest — yet isn’t every early stage investment?
I’m quite taken with this idea, though imagine that, for some, the thought of “giving money away” might not seem like a good investment. However, in the long term from a macro perspective, my instinct believes it would payback over time. Investing in people, inspiring and empowering them to be competant creators, thinkers and doers is worth every penny.
From small seeds grow big oaks, or something like that…
Of course, this doesn’t preclude individuals developing themselves at speed and cost appropriate for them. This would be about accelerating and supporting that process, a framework.
If you know of anyone that’s doing something to bring all the parts together already let me know, it’d be great to chat with them. Equally, if you’re interested in this as an idea drop me a line on here or Twitter @AdamolaC.
:) If you liked this article please share it :)
Have fun! 🚀
Adam
This is the second part of a series of things I’ve been thinking about recently. Here’s the first part, in case you missed it: Startup Mittelstand (Pt.1): Creating a Culture
Some other stuff:
Swinging Cats & Cricket Bats: Fintech Startups, MVPs and Growth
Funding for Startups is Tough: How Crowdfunding Can Help
An Alternative Guide To Startup Terminology
