5 ms·

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 ti

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.

jacques_chester 13y ago
> I think demand-side investment by organizations like YC, 500 Startups, etc. -- many of which seem fairly indifferent to pedigree They are indifferent to pedigree because they are a new line of pedigree.
- jonnathanson 13y ago
  Fair point.
deleted 13y ago
[deleted]
rayiner 13y ago
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 13y ago
  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.

jacques_chester 13y ago

> I think demand-side investment by organizations like YC, 500 Startups, etc. -- many of which seem fairly indifferent to pedigree They are indifferent to pedigree because they are a new line of pedigree.

jonnathanson 13y ago
Fair point.

deleted 13y ago

[deleted]

rayiner 13y ago

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 13y ago
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.