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Millennials & Risk vs. Upside

with 2 comments

I felt compelled to write this post for two distinct reasons:

1) I am worried about the low level of risk tolerance in some of our generation’s most well-educated and promising students and future leaders.

2) I have been asked over the past few months on job thoughts from students at universities and people <5 years into their career.

I read a piece by Priya Parker who recently completed a study on “the values and behaviors of the world’s next generation of leaders – the most talented, educated, capable Millennials”.  These include those from the best institutions, at the most prestigious firms, and with the greatest ambitions.  What Parker finds is spot on:

“What I found was a rising generation of elite leaders who bring wonderful new gifts to the table – more empathy than their predecessors, more worldliness, more pragmatism for an angry, ideological age. But I also found my generation of young leaders paralyzed, hesitant, and unwilling stick their necks out and lead on the big questions of our time: how to build a more equitable and sustainable capitalism, how to manage the transition to a post-Western world, how to extend prosperity to developing countries without pushing the planet over the brink.”

She said our generation effectively has a FOMO syndrome, or ‘fear of missing out’.  It’s perhaps the biggest reason why our top institutions’ graduates seem to migrate towards consulting and investment banking at higher rates than ever before: it’s prestigious, it’s broad in terms of skillsets acquired, it pays well, and, most importantly, it keeps our options open.

When I was in my second year at Stanford, I wanted to go work for McKinsey or Goldman Sachs.  They were the two firms that some of the smartest upperclassmen I knew were joining post graduation.  After I went through the interview process myself, I ended up receiving offers from both of those firms.

Then, I received some great advice.  A professor emeritus, David Abernethy, asked me to design my ideal job assuming monetary considerations were thrown out the window.  We eventually arrived at the conclusion that often the most exciting jobs have to be designed yourself since hardly any job description can possibly contain all that we wish.  I wanted to invest and work with many entrepreneurs that are building technologies to change the world, so I thought I should try and do everything to found my own venture or get into venture capital, an asset class known for high risk investments in budding startups, with the intention of carving out an emerging markets niche.  And, although my ultimate choice of VC isn’t as high risk as starting your own company, I do think I took the “less safe” route.

Our 20s are the time where we can, and should, be the most risk-seeking.  We’re free of familial obligations and are used to a relatively lower quality of life having been stuffed in dorm rooms.  We may, however, have considerable student debt that we need to pay off (a whole different subject), which is a very valid reason for going into guaranteed low risk, high paying jobs straight out of school.

I would implore anyone graduating soon or considering an early career change to do something slightly riskier, but with greater upside.  Upside can be monetary (say: early stock options in a company), measured through diverse experiences (for example, traveling to countries or places outside your comfort zone), or even personal fulfillment/growth (for example, always wanting to do XYZ, like work for X organization, rally for Y cause, or start Z nonprofit, etc).  I have nothing but respect for an institution like McKinsey and if two years there increases your confidence, network, and appetite to dive into something higher-risk, then it is a tremendous option.  But, if you have even the slightest inkling as to a high risk, high reward job or career path that you would find fulfilling, assuming financial obligations are not too crazy (which is not a safe assumption anymore) then you should go for it.

I think we would all be surprised by how much we learn, how much we can impact, and maybe even how much we can personally gain for ourselves when we take the higher risk, higher reward option.


Written by sheeltyle

March 14, 2012 at 9:26 am

2 Responses

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  1. Great post – I also decided not to pursue a post-college career in management consulting. I love my job now but sometimes still wonder about that decision – if I had spent a few months in consulting, would I be more polished in my pitches, more structured in the way I speak about things, more knowledgeable about a wide range of industries?

    Part of the problem lies in undergraduates’ exposure to different opportunities. I’d imagine that post-graduation opportunities that were made available to Stanford students were more diverse. But from my experience, coming from an undergraduate business school, nothing can compare to the visibility of management consulting firms and investment banks on campus. Riskier opportunities at start-ups and such are much less visible. The application process is murky at best.

    So undergraduates need more exposure to the broad range of opportunities out there, and they need to hear case studies like yours about what’s possible outside of banking and consulting. But in addition to that, companies need to get better at training and learning how to *manage* highly ambitious and intelligent undergraduates. Banks and consulting firms have ushered in class after class of these folks. They provide extensive training, connect them to mentors, and generally create an enriching experience for undergraduates (arguably not everything they’re doing on the job is “enriching” – but in general, they’re being challenged and have the opportunity to take on big projects).

    Outside of banking and consulting, how many companies can actually do thatt? Maybe a handful of corporations who have had an established solid “new hire” programs (American Express and PepsiCo are just a couple who recruited actively on my campus, and I’ve heard great feedback about their entry level programs). But speaking honestly, at most other companies, entry level positions are just not challenging or interesting enough for top-tier graduates. I’ve heard many stories from friends who interned at startups and found themselves updating blogs, monitoring customer support forums, or cold-calling potential leads all summer. It requires *a lot* of proactiveness to get something truly valuable from an experience like that.


    March 15, 2012 at 2:52 am

  2. Have you read The Start-Up of You? A chapter on risk…

    Ben Casnocha

    March 28, 2012 at 8:07 pm

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