Published in the San Diego Union-Tribune, March 23, 2020
In 2008, Edward Lorenz died. He was the father of what is commonly known as Chaos Theory. He was a professor at MIT and a meteorologist. His breakthrough research validated the “butterfly effect” — which says that small effects can lead to big changes and that within the apparent randomness of chaotic complex systems, there are underlying patterns, feedback loops and fractals (don’t ask). So, with all due humility, allow me to offer some fractals of my own.
A recent Vanity Fair article by William Cohan highlighted the intersection of Hollywood movie stars, venture investing and entrepreneurship. The new money investors range from Will Smith and Nas, the rapper, to Ashton Kutcher and Ron Burkle. The startup companies competing for their money span from AirBie (Airbnb for bicycles) to Bidder (an app to connect Latino construction workers) to Socionado (helps small companies beef up their online social media), and so on.
But that is small potatoes compared to Kylie Jenner, 22, a Kardashian sister, who started a cosmetics company at 18 and sold half of it at the end of last year at a valuation of $1.2 billion. Actors and athletes have entered the venture game, and if you can get past the gatekeepers and learn the secret handshake, money seems to be flowing. For the entrepreneur, sure, take the money (dumb or otherwise), but remember the story of Joe Kennedy, who sold everything right before the Crash of 1929 because the shoeshine boy was giving him stock tips. The last paragraph of the article quotes a Wall Street wag, “I think these guys are going to get their heads handed to them.”
I believe strongly in the value of education and of an educated work force. But there is a corollary — use the right tool for the right job — a screwdriver is not a chisel. To that end, Joseph Fuller, a professor at Harvard Business School, suggests that companies today are guilty of “degree inflation.” They post jobs that “require a four-year college degree” that really do not require that certification.
In doing so, the companies exclude employees that may fit perfectly, as well as potentially ending up with the infamous Ph.D. who is making lattes as a barista. Only a third of the U.S. adult population has a four-year college degree, and the result is that “middle-skill” positions (more than a high school diploma, but less than a college degree) are being filled by overqualified individuals who tend to be “less engaged in their jobs and have a higher turnover rate.”
There is no reason to request a degree just because you can. The risk is that the employee knows he is overqualified and while he is working for you, he is also looking over his shoulder for a more appropriate job.
As an entrepreneur, you need to think carefully about your hiring plans. Maybe you can find exactly what you want and need, but we all know about needles and haystacks. In the alternative, maybe you can train someone to become that person, sort of like a custom-made suit that fits perfectly and lasts a long time.
Finally, with a full embrace of the current chaos, I want to explore why “women undervalue themselves.” Judd Kessler, a professor at Wharton, and Christine Exley, a professor at Harvard, did a study that shows that when it comes to self-promotion, “women systematically rate themselves lower than men, even when their work is objectively better.” The risk to smart, successful women is that they will be accused of “bombast” or punished for tooting their own horn. This feels like the classic Catch-22, damned if you do and damned if you don’t.
I like to occasionally watch “Shark Tank.” Here is a statistic that may shed some light on that issue. Though under-represented as contestants, “60 percent of women who made it on to the show got a deal compared to 53 percent of men.” In the tank, when you get 90 seconds to “pitch” yourself, the women entrepreneurs seem to excel. But in the day-to-day workforce, they are less assertive. I do not have answers to that puzzle, but I am hopeful that San Diego will continue to recruit and elevate women founders and entrepreneurs.
Senturia writes weekly about entrepreneurship in San Diego. [email protected]
Rule No. 650
Virus, stock market,
politics — chaos theory
is alive and well.