The credentials trap

I talk a lot to people who are deciding between startups and established companies. They’re usually early in their careers and have been exclusively affiliated with well-known schools and companies. As a result, they’re accustomed to praise from family and friends. Going to a startup is scary, as Jessica Livingstone, cofounder of Y Combinator, describes:

Everyone you encounter will have doubts about what you’re doing—investors, potential employees, reporters, your family and friends. What you don’t realize until you start a startup is how much external validation you’ve gotten for the conservative choices you’ve made in the past. You go to college and everyone says, “Great!” Then you graduate get a job at Google and everyone says, “Great!”

But optimizing for external validation is a dangerous trap. You’re fighting over a fixed pie against well-credentialed peers. The most likely outcome is a middle management job where you’ll have little impact and never seriously attempt to realize your ambitions. Peter Thiel’s personal experience illustrates this well:

By graduation, students at Stanford Law and other elite law schools have been racking up credentials and awards for well over a dozen years. The pinnacle of post law school credentialism is landing a Supreme Court clerkship. After graduating from SLS in ’92 and clerking for a year on the 11th Circuit, Peter Thiel was one of the small handful of clerks who made it to the interview stage with two of the Justices. That capstone credential was within reach. Peter was so close to winning that last competition. There was a sense that, if only he’d get the nod, he’d be set for life. But he didn’t.

Years later, after Peter built and sold PayPal, he reconnected with an old friend from SLS. The first thing the friend said was, “So, aren’t you glad you didn’t get that Supreme Court clerkship?” It was a funny question. At the time, it seemed much better to be chosen than not chosen. But there are many reasons to doubt whether winning that last competition would have been so good after all. Probably it would have meant a future of more insane competition. And no PayPal. The pithy, wry version of this is the line about Rhodes Scholars: they all had a great future in their past.

Great institutions can prepare you for great things. Credentials can open doors. But don’t let them become an end in themselves.

78 thoughts on “The credentials trap

  1. great post chris. i think your conclusion hits the nail on the head. theyre not an end in themselves, but they certainly can be an important tool in your arsenal. when you think of applying for jobs and separating yourself from the rest of the pack, often times before you can even prove your worth with a case study or project, there is an initial filter that comes into play that you need to cross.

    as things progress though, credentials change. take for instance the way a coder is hired, wherein today stats like your github and stack overflow accounts play a larger role than where you went to school.

    so while optimizing for external validation is a dangerous trap, it is critical to know what validation is required for your particular industry and then being sure that you dominate your field.

  2. mkrecny says:

    For me the most tangible ‘credential trap’ is that which my one living parent (mother) enforces. Being entrepreneurial becomes a source of guilt. Concurrently worsened and alleviated by getting older (now 25) .. on the one hand ‘what am I doing with my life?’ on the other, higher intellectual independence from her.

  3. Kevin Gibbon says:

    The happiest moment for me was when I realized I didn’t need any more external validation in general. Life, career whatever. You need to be happy with you. Once you realize this you will be able to take these ‘scary’ risks and potentially create something life/world changing.

    Whats the worst that could happen? You fail and learn a ton.

  4. Dmitri Cherniak says:

    About a year and a half ago I sent Chris an email asking for advice. I got a job at one of the best hedge funds in NYC, but really wanted to start my own company because I had an idea I loved. I asked whether if he had the chance, he’d have started his own company earlier instead of working at a hedge fund. He said yes except he didn’t know me, so it was hard to say what to do in my case. I worked there for 8 months, paid off all my student loans, and had the chance to work with really smart people… But it just didn’t do it for me. The most important thing I learned was that if you get the “top”, and you still aren’t satisfied, there’s a big problem. Life isn’t a competition to see how upper middle class you can get, it’s short, so if you aren’t doing something you love, you should be. I haven’t gotten paid in 8 months, and have been sleeping on couches, but I have a bootstrapped startup with just under 60k users and the most passionate set of core users I’ve ever seen. I’m challenged in unbelievable ways everyday and get to do something Im passionate about. I wouldn’t trade the experience for anything … definitely not a couple 100k in the bank.

  5. Seth Gold says:

    You can tell whether someone is Intrinsically motivated or extrinsically motivated by asking a simple question.

    How do you know if you did a good job? Someone that is motivated by the outside world will say ‘because my boss told me so’ and the ones motivated by themselves reply ‘because i know so’.

    I think the best entrepreneurs tend to be Intrinsically motivated and than get recognized by the outside world. Credentials meant nothing to Gates, Ellison, Jobs, Zuck. Not that I think getting a college degree is a bad thing…but they certainly can slow you down if your on the path to greatness.

  6. Peter says:

    Sage advice from one of my mentors “the hardest decisions in life are made for you.” I missed the Princeton application deadline by a day because I misread the brochure and there was no recourse. I decided to goto Stevens Tech and recieved a better education on life, hustle and engineering than I could have anywhere. Many of you are thinking is that a trade school, nope, its one of the oldest engineering schools in the nation and I received a bachelor of engineering (not science) after 160 credits. It was one of the most wired schools in the US and I used the Internet before we knew what the Internet was. Anyway, I founded three companies with Stevens alum, built lifelong friendships and married one of the 20 girls who went there ;). I am sure Peter Thiel is as happy about that clerkship as I am about missing that deadline.

  7. sigmaalgebra says:

    Yes, you are right, but to borrow from JLM at
    Wilson’s AVC.COM, well played and I agree with you
    more than you agree with yourself.

    One explanation is that many people in small
    communities were reared to be astoundingly strongly
    concerned about their ‘image’ before others in their
    community. There was a good reason for this: Such
    communities had a ‘social safety net’ available for
    ‘deserving’ people, i.e., ones with a good image.
    The pressures to have a good image could be

    Some details about how people can work to build a
    good image in a small community are in E. Goffman,
    ‘The Presentation of Self in Everyday Life’,
    Doubleday Anchor Books, New York, 1959.

    More generally, there is a book, E. Fromm, ‘The Art
    of Loving’ which has some succinct and expert
    explanations of people. One of the explanations is
    that, for a rough quote, the central problem in life
    is responding to the anxiety from the realization
    that alone we are vulnerable to the hostile forces
    of nature and society. Only four responses have
    been used.

    One of these four is membership in a group, and
    there the person adopts the norms, values, etc. of
    the group and, then, gets security from praise,
    acceptance, and approval from the group.

    The motivation for such group membership can be
    super strong stuff.

    So, then, sure, a lot of people, an especially large
    fraction of the high school Merit Scholars and
    Valedictorians, were, really, working their little
    tails off not for the learning but just for the
    grades for security from praise, acceptance, and
    approval from their school, parents, and community.

    Of course, among the books D. Knuth wrote is ‘The
    TeXBook’ about his word whacking package TeX for
    mathematical writing. But tucked away in that book

    “The traditional way is to put off all creative
    aspects until the last part of graduate school. For
    seventeen or more years, a student is taught
    examsmanship, then suddenly after passing enough
    exams in graduate school he’s told to do something

    and, then, here he explains some of why a
    Valedictorian in high school and a PBK in college
    can encounter terrible problems doing the research
    for their Ph.D.

    For more, Fromm goes on to explain that being an
    ‘adult’ involves being one’s own parents, that is,
    the adult tells themselves the important advice that
    as a child they got from their parents. Then a
    person still seeking their security from advice,
    guidance, praise, acceptance, and approval from
    their parents can have a difficult time being an
    ‘adult’ and can feel lost without motivation or

    Here we are seeing why the best creative work is
    from people who are trying to please themselves
    instead of others: Why? Because the best creative
    people are much better critics than nearly anyone
    else and, thus, when they please themselves they do
    their highest quality work. This point does not
    mean that all creative people who ignore what others
    think do good work or that all creative people who
    do good work ignore what others think. It’s just
    when you look at the very best work, the person who
    did that work was trying to work to their own
    standards higher than those of others. That is, for
    the best work, the person trying to please
    themselves is a necessary condition but not a
    sufficient condition.

    Of course, if a person is to work to their own
    standards instead of the standards of others, then
    the person needs some good understanding of
    standards, what’s too low, too high, appropriate, or
    inappropriate, and that understanding and more is
    needed so that they can feel secure working so

    Some PBK Members just wanted the praise, worked just
    for the grades, got the praise, never cared about
    the knowledge, and when the course was over promptly
    forgot the knowledge. Moreover, the person didn’t
    try to get a deeper understanding of the material on
    their own, a ‘synthesis’, because they didn’t care
    about the material and any such deeper understanding
    would take effort wasted for their main goal of just
    the grades and praise.

    In this case, when such a person left school they
    didn’t take much education with them.

    Of course, these considerations can be important in
    hiring technical expertise: Does the candidate
    really like the material enough really to master it
    or did they just make grades and forget the

    One point about our education is that in grade
    school the girls are much better than the boys at
    much of the work and at using good social skills to
    please the teachers. So, some boys can just give up
    or continue to learn what they are interested in but
    just ignore, ‘tune out’, the teachers. If such a
    boy likes mathematics, then he can suddenly discover
    in high school mathematics that he really likes the
    material and is really good at it while suddenly
    nearly all the girls who did so well in the early
    grades struggle terribly. With high irony, such a
    boy is a better shot for writing a Ph.D.
    dissertation than the high school Valedictorian and,
    net, can find the Ph.D. research easier than grade

    But there is a huge swath of US society where the
    people are relatively comfortable being ‘adults’ —
    US Main Street small business. Such a businessman
    quickly learns what efforts are important and
    effective and what efforts are not. He tries to
    please his customers, not based on some sense of
    ‘image’ but in the sense of mostly just an economic
    exchange. Such a businessman has learned a lesson
    that a person going for good grades, high degrees,
    and then a good ‘job’ doesn’t.

    With some minor editing for grammar and punctuation.

  8. I feel like I’m hearing my story: gratuated from France’s top engineering school (Ecole Polytechnique), MS from Stanford, and first job at Bain. So much external validation, but so boring too.

    One year ago, I quit Bain to create my company ( and I could see that none of my friends understood why. Even now after some external validation (we’re a Seedcamp startup), they still don’t quite get it 🙂

  9. External Validation is more like a dysfunction than a trap. It is hard not to acquire the perception that life-after-school = job. The perceptual blindness this causes especially among the young literati actually makes entrepreneurial ownership less of a challenge for even the barely schooled. Playing the corporate/job game isn’t necessarily a bad way to start until you get clear what you can CREATE on your own. My father often said you often need a job to be able to afford your own business. It boils down to how much you can stomach playing someone else’s game to win and how much you must play your own game. My warning is once you work for yourself it’s hard to go back.

  10. Joshua Fox says:

    This is selection bias. Thiel took the hard route and won. Most people who make the risky choices lose. That’s what risk means.

    Meanwhile, those who make the safe choices more often do BETTER than those who took risks and failed, e.g. a good-paying middle management job.

    However, those who make the safe choices will never have the big wins, and they may end up bored and unfulfilled.

    But please recognize the true tradeoffs.

  11. I disagree. E.g. I graduated from Harvard Business School in 2003. The people who did the “best” were all the ones who took to riskiest paths. Mostly entrepreneurial.

  12. That’s a great piece of anecdote Chris. I have found this common notion that the median person in the group which takes greater risks fares worse than the one in the group which takes lesser risks. There is no evidence to support it, but this belief is used by many to dissuade people from pursuing their dreams.

  13. This post reminds me of Paul Buchheit’s ‘I am nothing’. One of the greatest mental barriers that we face is our perception of what others think about us.

    > “These are all false standards and false dichotomies, but they are so common and so ingrained that we sometimes believe in them without even realizing it. And this leads to a mountain of insecurities, because nobody measures up to these crazy standards (and nobody should).”

  14. Indeed. What they do get however, is that I’m very hapy with this choice and that my job is much more fun than theirs (esp. thinking about my pals who still for at Bain).

    That goes to show how strong the pressure for external validation is: most of them tell me how envious they are and how much they would like to start a company, but no one actually does it.

  15. Aren’t top-level students used to being constantly challenged and aim higher? At some point, appreciation stops being the main motivation for some people. Obviously, they get a lot of praise and awards but from my observations, rather than settling for what they have, they usually regret not researching a cure for cancer or tackling some important global problems.

    I’ve seen a lot of top-level graduates getting bored after a year or two of working for Google/Facebook/Microsoft because they didn’t think their work made enough difference. Maybe it’s just an IT-specific trend but I have certainly heard a lot of such complaints recently.

  16. Always a pleasure reading your post/comments Sigma. I try to sneak a little guilty pleasure “creative” side project time into my schedule, but the demands of working as an early employee for a startup consume all my work energies/time.

    There’s a notion of later I’ll have time to pursue more fun side work (I love my job but enjoy variety). In life there is no guarantee on the promise of future free time, and the higher likelihood is that’ll I’ll have even more responsibilities as I age.

  17. scott_mcleod says:

    Most people who went and received a degree here in the valley went specifically for external validations, usually parents or societal pressure, therefore they are already well trained as to how to live life this way.

  18. Richard Fletcher says:

    The trap is thinking that you are better off with a job that leads 95% of the time to failure approximately 5% of the time to something vaguely good, and almost but not quite 0% of the time to untold riches (like building and selling paypal), as opposed to something that maybe 95% of the time leaves you very well off and well respected and rewarded. Like being a doctor.

    Peter Thiel was good, and he was lucky. You may be as good as Peter but will you be as lucky? Almost certainly not.

  19. timrpeterson says:

    @cdixon:disqus great post,

    think internet-based credentialing such as that implemented by Stackoverflow is what we will increasingly see…

  20. LE says:

    Divorce is the same way. It’s a enormous shock when it happens. But as time passes (and assuming you land on your feet) you realize how the other party actually did you a favor.

  21. timrpeterson says:

    yes definitely more of this please!

    This is what Stackoverflow is doing (Klout is too convoluted) and my as-yet launched startup is following their model.

  22. At the end of the day you just have to decide if that external validation is what motivates and defines you. If it doesn’t, you won’t have any problem taking the risks you want. If it does, then you’re in trouble when it stops.

    This can also work the other way – sometimes people are pressured into taking a risk they aren’t comfortable with based on how they are defined externally – as the A student who must go to a top school – but maybe we don’t see how much they struggled to get those A’s, or what they sacrificed… and the top school may not be the best fit for them. Granted, these kinds of “risks” seem “safe” to most people – establishment even – but for the individual in question it may be very uncomfortable if it isn’t how they see themselves.

    I had all the external validation I ever wanted in school, highschool, sports, college… and even work after college (working at two different startups). Often people assumed that that external validation was motivating, but it wasn’t (to me). I majored in the subject for which I got negative feedback rather than the ones where I was clearly an over-achiever. I went to the company everyone thought was crazy. I stayed in enterprise software when everyone was starting their lean startup. Started a consulting firm when everyone says consulting isn’t starting up 😉 Sometimes you just have to blaze your own trail – right or wrong.

  23. I really like the phrase “optimizing for external validation is a dangerous trap”. Richard Feynman used to say “What do you care what other people think?”. Never cared, never will. 😀

  24. Informerly says:

    This is the most relevant, insightful quote I’ve read in a long, long time: “What you don’t realize until you start a startup is how much external validation you’ve gotten for the conservative choices you’ve made in the past.” Thank you Jessica Livingstone.

  25. Yes, all successful entrepreneurs are lucky. But I’d also argue that people who purse careers in startups who are talented, ethical, hard working etc generally end up very successful. At least from what I’ve observed.

  26. jusben1369 says:

    This was interesting: You go to college and everyone says, “Great!” Then you graduate get a job at Google and everyone says, “Great!”

    One thing I’ve heard about the reason the US has so many more entrepreneurial success stories than Europe and elsewhere is that saying you’re an entrepreneur elicits much more positive responses in the US than elsewhere. This doesn’t necessarily contradict Jessica’s point – there’s probably still a lot of resistance that individuals in the US feel – but in general it’s a choice that’s more likely to result in positive external validation here in the US vs elsewhere.

  27. Ryan Critchett says:

    Love it. It’s great to see the general tone of the world moving toward you actually doing something as an indicator of your effectiveness or status as a business person.

  28. Arlo Gilbert says:

    Running a startup is stressful, hard, expensive and unlikely to succeed. I don’t remember where I read it (some VC’s blog) but they had great advice (not verbatim)… “If you aren’t sure whether to get a job somewhere or start a company, get a job. Startups are for the unemployable and convicted (not in the criminal sense)”

  29. joeagliozzo says:

    It’s because that’s what they are taught in high school. High school is all about gathering credentials to get into college! Grades, test scores, awards, athletic letters, etc. No college admits you based on work experience (or at least it’s very rare). So you have a “credential focused” population headed to college and that’s what they continue to focus on – it’s a continuing paper chase (full disclosure – I have a bachelors and a law degree!). While credentials are often “necessary”, I am trying to explain that they are not “sufficient” (usually) to succeed in the world, especially the world as it is now!

  30. At Wharton, there was a bit of wisdom that went “the top third of the class worked for managers from the middle third of the class at companies started by the bottom third”. I’ve seen this to hold true.

  31. God is just. If you get-in over your head, it won’t be pleasant. If you get paid too much, your employer will have leverage on you. If you marry above your league, she will dominate. Pride before a fall and humility before honors. I postulate a humble, unpleasant, period always preceeds every exaulted period in your life.

  32. LE says:

    (Graduated from Wharton quite a bit before 2003).

    Keep in mind that over time (and 10 years is nothing) fortunes change. I can think of many cases of “reversal of fortune” that I’ve observed over time both personally and publicly. I remember a time when the hype about Trump (around 1980) was so intense that I thought “this guy has to die I can’t imagine how successful he will be 10 years from now”). Of course he went bust and then boom a few times and reinvented himself. But for sure way back after those initial gambles it was hard to see a downside. But my point is not toward people we all have heard of but people who I know of personally (that you have never heard of). Rich guy in the neighborhood growing up went bankrupt. Mentor rich guy went out of business. Entrepreneurs I interviewed at Wharton fell from grace. Morris Ballen of Diskmakers (who bought CD baby) he was bankrupt in his early 40’s you would have counted him out. Not now though.

    Fred iirc (who graduate Wharton) in the 80’s I believe mentioned the he was “poor” until about the late 90’s? I’m sure he has surpassed many classmates who did much better in the early years.

    Of course I’m talking mainly about people who operate businesses not people who have had success and then simply take some of that money and invest it where they aren’t gambling all of their own money on a new idea combining it with other people’s money.

  33. Sandy D says:

    Chris what timeliness! Not by chance! I have taken the plunge and started a new company after 20yrs of a most enjoyable career – “it is time” simply became louder and louder! What I am learning right now is about validating myself, not waiting for external validation and boy I am conditioned for such! I am passionate, intelligent, nimble, and responsive, but this has has been the greatest personal challenge and unexpected outcome in the journey thus far! I have to rely on my own self acceptance, positive reinforcement, and inspiration without a vast audience to cheer me on in a new industry with no previous experience. Finding my own strength, tenacity, and voice and having unshakable trust in yourself is an amazing journey of growth and learning. Good days and bad, I am reminded the gift of this opportunity to know myself at the deepest level. Thank you for sharing this ever so timely topic it couldn’t have been more generously received!

  34. Saul_Lieberman says:

    You might like this old story that I call the “Shammes Effect”:

    An extended family is sitting around the Thanksgiving Day table listening to stories how “Zaideh” (grandfather) came to the
    US with “nothing” and eventually built an “empire”.

    In the early days, Zaideh could not find work, so he
    asked the rabbi of the synagogue for a job as the “Shammes” (caretaker) of the synagogue. The rabbi was amenable but had to get the approval of his board. The board rejected Zaideh, “how could we employ a man who does not even have a high school

    So Zaideh became a street peddler, which led to a small store, a larger store … and eventually an “empire”.

    The grandchildren marveled: “Could you imagine how successful Zaideh might have become if he had received a high school education?”

    Zaideh jumped in, “If I had received a high school education, I’d still be a Shammes!”

  35. Failure is far far worse prospectively than it is in reality. When you get there, you bounce really fast and really hard and rationalize like crazy to make it feel better. It ends up being nowhere near as bad as what you imagined it might be. Kennedy had it right – we just need to fear fear. Sometimes hard to do. A friend of mine is an extraordinarily accomplished entrepreneur – two very well know and successful companies. He had a great line “it’s ok to put your smile on, walk into the VC meeting and pitch your heart out and then go puke in the parking lot because the company is running on fumes”. Daniel Gilbert’s Stumbling Onto Happiness talks eloquently about these things.

  36. abhi says:

    An entrepreneurial spirit doesn’t just stop after the first failure. You keep on learning and taking “riskier” options. That way you are bound to hit “big money”.

  37. Peter Thiel’s experience is the exception: statistically, the startup you join will fail. And if it does succeed, in the form of an acquisition or IPO, the success won’t be a lifestyle changer unless you’re a founder. I feel that you’re not being honest about the risk and the outcome.

  38. Martin_Naess says:

    “Credentials can open doors. But don’t let them become an end in themselves.” A good condition to end on

  39. I feel like I just watched Fight Club and instead of a condo full of IKEA furniture, my expectations and assumptions from the last 2 decades have been blown up. I’m five months into building a new company after leaving (voluntarily) a credentialed world. It’s scary, but so rewarding and education thus far. External validation has zoomed down to zero, but internally, I’m a PHD. Thanks for this post.

  40. Aaron George says:

    This is precisely why i made the decision to drop out of law school before my 3rd year – credentials don’t mean shit

  41. Arlo Gilbert says:

    hah, “some vc”… I wish Disqus notified via e-mail about comments, I often don’t notice that somebody replied for a week or two..

  42. RobMorganAU says:

    Actually, no, if you’re taking in round statistical terms. Most fail, as do most small conventional business enterprises.

  43. Hi Chris, thank you for this post. You described a feeling I’ve experienced so much early on in my career, and still see in a lot of my former coworkers in finance.

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