Seth Godin wrote a few days ago student debt has reached new record in the US, now totalling at about one trillion dollars, which equals 10 million people with $100,000 of debt each. There are some folks who argue spending this money is an investment like a mortgage on your future home, because currently a college graduate earns about $20,000 more per year than someone who has only completed high school, but I think that’s not going to last because of the erosion of all these certificates. However, my point is an entirely different one.
Everyone, no matter what age, has an idea what their life should be like in the future, and for most of us it’s one where we’re better off than today (whatever that may mean). And some of us will be the one who come up with ideas that will completely change our lives. And some of these people are not going have these great ideas in 5 years, but right now. The problem is, no one is listening to them. Because they aren’t experts. What do these greenhorns know? And even if they could put their idea to work, how would they know how to run a company that commercialises the idea? No, way too risky, thinks the man on the opposite side of the bank teller.
The problem with banks is not only that they (still) misjudge credit risks, it’s even worse: this is their purpose. What’s more valuable: Someone who owes you $50,000 in startup credit who can pay it back within two years, or someone who owes you $100,000 for their degree at first, then $100,000 more for their new home, then $60,000 more for a car and so forth? Their interest is to make money by leading people through a debt curve which has been proven to work for the bank, but nothing else.
Young people are trying to find their way into their best future, but obviously it doesn’t lead through a bank’s portal. Someone who has an idea is most likely better off to find a supportive venture capitalist, even if it requires flying to Silicon Valley or wherever that person may be located. To believe they could buy an expert status with the degree of a well-known institution might end up with someone else having the idea too and turning it into reality before them. Then what?
Then comes the insight that ideas and expertise are two different pairs of shoes, interacting but not interdependent, and one can’t replace the other. And there also comes the (sometimes long) wait for the next idea.