Students: Make the Most Out of the Recession
Last year, a colleague of mine and I were talking to a group of students about launching a social venture around a rural healthcare device in Africa. The students had successfully designed and prototyped the device; it had great possibilities. But as we started to assess the feasibility of it and take next steps, we had to stop. Why? The students got jobs offers that they just couldn’t turn down. The social venture idea just couldn’t compete.
This is a scenario this is all too common at universities. Students develop great “change-the-world” innovations but take no steps to commercialize them because the students get plucked away by large corporations upon graduation. As a result, the innovations just sit on shelves collecting dust.
But times have changed. Unemployment in the U.S. is hovering in the double digits and hiring has come to a standstill. Consequently, the opportunity cost for starting a social venture, or any venture for that matter, is significantly lower now. (What is opportunity cost? It is the next best alternative given a set of mutually exclusive choices. For example, the opportunity cost of going to grad school full-time is the salary you would receive from staying at your current job.)
MBAs grads used to have their pick of consulting firms and big banks after graduation. Six figure salaries were once as common as snowfall in Michigan during the dead of winter. Not anymore. Recruiting is down. Average starting salaries (plus bonus) are significantly lower and multiple offers are a rarity.
But if you have an entrepreneurial spirit and have been thinking about implementing your solution to improve the world, there is no better time. Social investment capital is still relatively accessible and there are many who are willing to support with in-kind contributions (i.e. pro-bono advice, access to social networks, publicity, etc.).
I’ve been chatting with a number of my students in Social Venture Creation about their commitment to their projects post class. To my delight, many are strongly considering moving forward to launch because of the state of the jobs market. And even better, they are recruiting their colleagues to join on!
It is well known that social ventures have a hard time recruiting high quality talent. I’ve written extensively on this subject and even wrote a case study on it with my friends at Acumen Fund. But because of the recent economic turmoil, perhaps this is the time for the social venture movement to cash in on its goodwill and recruit high-quality talent to the sector.
As for me, I will continue to encourage my students to start their social ventures. They have a great opportunity to address significant social issues, such as fresh food access in Detroit, healthcare training in Lesotho, internet access in Kenya, and car sharing in Ann Arbor. If you know them, please encourage them on their journey!