The Prestige Trap

I started writing this blog while on a train from Nanjing to Beijing, travelling at over 300 km/h on one of China’s new high-speed railways. It’s a packed train, and will take just over four hours to reach its destination. Seven years ago, when I first visited Beijing, the two options were to fly or sit in the passenger car of a freight train overnight. Both options would have been more than twice as expensive as the fare I paid today.

Nanjing’s new South Railway Station

It is one thing to read about the rapid development happening here, it’s another to experience it. Infrastructure, technology, and the civil landscape have made leaps so large that one cannot simply grasp it by reading an economic figure. Other things have changed less.

Earlier this week, I visited my maternal family in Nanjing. We exchanged embraces and the customary questions: have I eaten (yes), was I alright (yes), how was the trip (long), am I tired and do I need to sleep (a bit and no). In fact I was eager to catch up with them.

As we sat down for tea, my maternal grandfather (who I call A Gong - 阿公) chimed in and said, in his customarily loud voice, “Hongwei, what are you doing here? You are kidding yourself. The businessmen here will not take you seriously, you are only a child!” I had expected this, and did not take offence. My grandfather has always worried about my venture. Being the patriarch of that side of the family, he’s also not concerned about being abrasive.

“… and you don’t even hold a degree,” he smirked, “What do you hope to accomplish in talking with them? They are just humouring you to look at your technology!”

Yup, saw that one coming too. At least he conceded implicitly that we had technology worth stealing. That was new.

Our family friend who dropped me off quickly came to my defense. He was my father’s former business partner, and I had just spent the day with him reviewing my planned meetings and seeking his advice. Having followed along with our company’s development for years and discussing this week’s opportunities at length, he reassured my grandfather, very respectfully, that I was adequately prepared. He added that, in his opinion [1], the business at hand was real and promising.

I simply sat and waited my turn, nodding in agreement with both sides. We have had this discussion before, mostly about me deferring my studies in engineering. In the end, I provided my customary remark that I am confident on the matter and appreciate his concern, that there are good reasons why the meetings should go well. We agreed that it was my risk to take, and that he would not be responsible. Smiling as always, we moved on to more casual conversation.

For A Gong, this is already a concession. He raised my mother’s family in the countryside, where he was an esteemed math teacher at the local school [2]. It was his reverence of education and hard work that propelled my mom and aunt to university, which has lead to their quality of life today. For him, dropping out of school and starting a business is a foolish pursuit, especially this early in life. My situation is even more suspicious because we make software, a less tangible good than the industries that built modern China.

And A Gong does have a point: this was my first business trip back to China. I couldn’t be sure that things would go well. The problem is, in his mind, anything beyond the certainty of university education followed by paycheques from a large company (or ideally the state) is the domain of wiser men. A degree from an Ivy League school is the highest achievement for someone my age. To him, I was taking a shortcut.

Admittedly, I have always liked shortcuts.

I don’t fault my grandfather. I can appreciate his best intentions. If a high school level education got him and his family out of rural poverty, and a university education got my parents and relatives firmly into the upper middle class, then a PhD degree will surely propel me to even greater heights.

As most recent college grads know, this is no longer the case. In both A Gong’s and my parents’ generations, higher education was a rare distinction, the possession of which guaranteed membership in the social elite. Their knowledge and designations allowed them to work higher up the value chain: lead projects, enter management, participate in politics. Today, higher education brings no such status, except with a few select schools and programs. Everyone has a degree, some have two or three. Other than genuine research or accredited professions, degrees have become an accomplishment in themselves, rather than a means to create greater value.

Then you get your masters /
Then you get your masters, masters /
Then you get your doctorate /
You go man!
- Kanye saying it best

My parents have tirelessly offered rebuttals, most recently that higher education teaches critical thinking and broadens one’s perspective. That is true. Independent living, new social environments, additional responsibilities, and challenging subjects combine to create a powerful learning environment. But there is actually another such activity that offers all of this, without the need to pay tens of thousands in tuition. Instead, it actually pays you and, ideally, makes the world better. Real work. [3]

The Germans got this right. In Germany, every high school graduate has to apprentice for three years before selecting higher education, if they choose to do so that is. Some simply move directly into the trades. Business publications have long argued for more trades and applied education over softer degrees. [4]

Yet with all this mounting evidence, parents and grandparents still blindly push their children towards higher education. In some ways its paradoxical that the most dedicated parents are most at fault here. After researching the best nutrition, place to live, programs to enroll in, and carefully scrutinizing the learning environment of their kids for eighteen years, helicopter moms everywhere point their kids at a reputable university and count their work completed. Ironically, this increases the cost of degrees while further diluting their value.

I think I understand why they still do this, now. More than tradition, more than their own validated experiences, they are following a heuristic: that prestige yields wealth.

Professions like medicine, law, engineering, are all respectable and earn high salaries. Successful entrepreneurs, scientists, politicians, astronauts, are all decorated with distinctions and awards. Surely then, one leads to another? Prestige, it would seem, is a reliable proxy for success. [5] Conveniently, it is far easier to determine which careers are prestigious, simply by watching the news and attending dinner parties, than it is to predict which careers will yield the greatest personal and societal gain. And so, spurred on by well-meaning parents and grandparents, Millennials are pursuing degrees as proxy to success.

This, too, is a shortcut. In principle, no one would refute that people should create their own path in life, without relying on the comfort of tradition and safety of group-think. But in practice this requires an uncomfortable amount of uncomfortable work. It’s hard to keep an open mind.

PG wrote an essay about doing what you love. In it, he explains the inverse relationship between prestige and happiness. Prestige and money, he says, are currencies paid to those doing unpleasant work. A guy who loves fixing old cars may take a bean counting job because it pays for the green lawn and picket fence. And the VP of the big firm accepts the high pay and reverence of his peers in substitute for the self-gratification enjoyed by artists and makers.

If it didn’t suck, they wouldn’t have had to make it prestigious.

I think the deception is more subtle, more tragic. People enter professions that they do not enjoy because they believe that there is joy down the road. Surely otherwise, there would not be so many smart, ambitious people clamoring to get into Wall Street and K Street. I suspect that many who succeed in climbing the ladder find a hollow existence, filled with money and admiration, lacking substance. That, to me, is the message presented in the Wolf of Wall Street, a tantalizing look at the excesses of the finance world [6]. The problem is, once at the top, people face huge social pressure to cherish their gleaming posts. To step down or to second guess would shatter the worldview of their colleagues and leave themselves as outcasts in the only world they knew. The perfect trap.

PG concludes his essay by prescribing another heuristic: that when presented with two conflicting uses of time, one which seems admirable and one which does not, one should favour the latter. That way, we counteract our own tendencies to indulge. Speaking at a conference instead of spending office hours with companies may seem the better use of his time – help the many instead of the few – but office hours provide tangible value to those who can make use of it, speaking at the conference serves partly to inflate his ego. This has become a guiding principle in how I make decisions. [7]

One consistent criticism given to me recently by advisors and investors is that I need to think bigger. To step above the daily routine that fills the hours and address larger, tougher questions about our business. It used to daunt me. I am now looking forward to it.

I also hope to learn more from people like my paternal grandmother. At 91, she was the first supporter of MappedIn in the family. Chatting with her never feels like a status report; grandma just wants to know that I’m working hard and having fun. It’s likely no coincidence that she is famous in our family circles as being exceptionally lively and lucid at her age. Being open minded leaves the mind sharp, with few regrets to weigh it down.

Grandma’s got swag

Modern education in some cases looks like a prestige trap. But mostly it is the result of inertia, which means recognition is the hardest step. It should get easier after that. Reform is starting to garner legitimate investigation. I only hope that the world comes around to addressing the tougher questions, together, before too many are so invested that we can’t walk away.

[1] As the founding chairman of a public high-tech company, his opinion thankfully carried weight, even to my single minded A Gong.

[2] He still teaches weekend “cram” classes on weekends, at age 78, forcing algebra and calculus upon students in the city. I imagine his hardened style must be quite effective at breaking through the fashionable disaffectedness of Nanjing’s wealthy youth.

[3] I won’t espouse the greater merits of entrepreneurship here. Enough people have already done that. Furthermore, I do not believe that startup is strictly more productive and educational than corporate. Both are a sliding scale, beginning at zero with no limit. The distribution is harder to guess, though I would expect that startups rank higher on average, for now.

[4] Not that arts majors are strictly bad. One of the most capable and impressive people I know is my friend Desmond, studying sociology. Though I don’t necessarily respect him for that choice, I guess.

[5] Personally, I care more about happiness than conventional success. Currently, my happiness is tied to the success of my venture. But since traditional parents generally equate success to happiness, I will also embrace that link for this discussion.

[6] I originally wrote the excesses of “investment banking,” but my friend Alex of CPP corrected me that the movie depicted only “boiler room stock brokers.” Presumably, IB parties are even better.

[7] I have found recently that I have gone too far: I was not simply discounting the perceived value of prestige in my decision making, but placing a negative weight to it. I am bringing this back to zero, now. Marketing, whether it be for myself or the business (the two are linked), can be shockingly productive.