Smart People Should Build Things

One thing that’s been pissing me off for years is the fact that our smartest and brightest talents go into consulting, law, or finance.

These jobs pay well. It’s a “proven” career path. It makes a ton of money. 

But with what purpose? Creating shareholder value? What does that even mean?

• Take Investment Banking. In terms of value creation, it’s mostly a zero sum game. You make a trade where you make money, somebody else loses. Very little value created for society. 
• Take Consulting. You get paid large amounts of money to generate slide decks to confirm a decision that’s already been made. Very little value created for society. 
• Take Law. You write thousands of pages of contracts, most of which never gets used. Very little value created for society. 

So why the hell do we send our best & brightest into these professions?

The Data

Look at this Deep Research output for the top 5% of graduates from the top universities: 

Even at WHU, a university, praised for its production of entrepreneurs, consulting still has a higher share than technology (which is a proxy for startups/scaleups).

For bachelor grads, the numbers are similar:

Consulting is almost always the most common option for the top graduates (except for TUM, SSE, LSE). 

Why is that?  

The inherent laziness of following the beaten path

When I graduated from university, I was that person.

Studied at TUM. Top 11%. Worked at a fast-growing startup for most of my university career (Flix). Ran a student org with 120 people. 760 GMAT score. 

I knew I wasn’t gonna stay at Flix. So intuitively, I did what everybody else did: apply to the most prestigious management consulting companies and MBA schools.

It was the obvious thing to do: all of those consultancies recruited heavily at our universities, as did the major Munich corporates. We had exposure to zero startups (I only ended up at Flix because a friend of mine was interning there). 

To me, as a bachelor graduate who simply didn’t know better, the options were: 

1. Work at McKinsey, BCG, or Bain
2. Work at BMW, Siemens, or Allianz 

The promise of a safe job with a good salary and high status among my peers was attractive: not just to me, but also to the people around me. (My grandmother still asks me when I’ll finally get a real job.) 

But is playing it safe really the best way to live life?

Following the beaten path is intellectually lazy. Instead of thinking about what’s best for you, you just do what others tell you. Go to business school. Get a master’s degree. Work in consulting. Buy real estate. 

With the allure that afterwards, you can still do anything. 

Except that you can’t. 

• You’re used to cozy salaries and services inside your company
• Your lifestyle has crept upwards and is hella expensive
• You’ve learned how to do strategy, not business. 

All of these massively limit your options. 

In reality, you’ve simply postponed the decision on what you want to spend your life doing.

You think you need more information. You don’t. You need more action. Trying things, seeing what sticks. Not thinking, mapping, designing – doing.

If you stick with the intellectually lazy path of doing what everybody else is doing, you’ll have what everybody else has. 

The dream of having your own business

“I’ll do a few years in consulting or banking, and then I want to start my startup.” 

Who came up with the idea that somehow, creating strategy decks for Fortune 500 companies and underwriting IPOs will prepare you best for the operational grind that building a startup is? 

Sure, you learn a few valuable skills: structured communication, ability to work hard and perform under pressure, absolute mastery of MS Office, stakeholder management. All of this is valuable. 

But building a startup isn’t about that. It’s about making something people want, and telling people about it.

It’s product, operations, marketing, sales, hiring, finance, management, engineering, all at once. 

Having learned how to consolidate balance sheets or restructure large organizations won’t be particularly helpful here. 

Societies thrive when entrepreneurship runs rampant

In “Smart People Should Build Things” (the book that finally pushed me to write this newsletter), Andrew Yang argues that consultants, lawyers, and bankers are the “arms dealers” of our society.

In case of a war, it’s always better to be the arms dealer than the soldier. You can play both sides, and will always have a business. But what if society doesn’t have any warriors, only dealers?

Entrepreneurs are the warriors. Without entrepreneurs, there are no IPOs to underwrite, no contracts to be written, no strategy decks to be produced. Companies can exist without service providers, but not vice versa. 

We don’t need more consultants, lawyers, bankers. We need builders. 

People who step up, identify a problem, and solve that problem. Europe is built on the back of small businesses – some of which eventually became very large. 

How to become a builder 

Right now, the default still is to go into the service professions. We need an alternative to this. Founding right out of university is one option, but it’s scary and definitely not for everyone. 

The best alternative is to work in an early-stage startup, as close to the founders as possible, right out of university. There, you’ll learn the chops: everything you need, across the board, to become a future founder or world-class startup operator. 

Especially if you don’t want to specialize, consulting is very appealing. Generalists work equally well in early-stage startups where you have to do a little bit of everything. 

My mission at Generalyst is to make that early-stage, generalist path more visible and accessible.

So that our brightest people build instead of consult. 

Our economy needs it. 

Call to Action

If this resonates with you, there are a few things you can do: 

1. Forward this email to someone about to graduate and thinking about doing consulting/finance 
2. Tell others about Generalyst (or apply yourself!) 

3. Reply to this email if you’re open to hire outlier talent 

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