My Sunday Washington Post Business Section column is (belatedly) up online. This afternoon, we look at the next generation of tech entrepreneurs Step aside, old man. Let moxie and imagination lead the way.

The online version was the conservative On Investing: The future isn’t grim, and it belongs to young entrepreneurs; the print print version had the more interesting Step aside, old man. Let moxie and imagination lead the way.

Here’s an excerpt from the column:

“On these pages, I have cast a rather skeptical eye on all matters financial. I have mocked the housing recovery calls, critiqued the valuation of Facebook, despised the robo-signing settlement, urged caution on the Black Friday retail hype. The silliness coming out of Wall Street is much like a carnival barker urging us to play one more of “games of skill.” All of which goes to say I am not your run-of-the-mill perma-bull or economic cheerleader. Readers, in fact, have called me a curmudgeon.

And yet, as I look to the long term, I’m optimistic.”


I really like what the Post did in the dead tree version of the paper — the art work is really interesting:
click for ginormous version of print edition


On Investing: The future isn’t grim, and it belongs to young entrepreneurs
Barry Ritholtz
Washington Post, April 22 2012

Washington Post April 22, 2012 Gx6(PDF)

Category: Apprenticed Investor, Venture Capital

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

32 Responses to “Step aside, old man. Let imagination lead the way.”

  1. ConscienceofaConservative says:

    Re the old silliness. I can’t help but notice the increase i auto sales tied to a huge increase in auto-debt, much of it subprime. Wasn’t auto lending exempt from Dodd Frank?

  2. rd says:

    I would say that most people under the age of 55 have figured out that they are a company of one. By now they will have seen at least one round of massive layoffs and will have seen their portfolio hammered at least once.

    The changing of the guard takes one to two decades. It took the 1930s and WWII to end up with true new leadership that set up the golden age of the next 30 years.

    Similarly, it took the late 60s and 1970s to move the baby boomers into the fore. The leading edge of that generation was dynamic for a decade or so but then started to calcify their positions to maintain their lead on previous generations. We are now seeing the unravelling of that calcification. Another 5-10 years and the control will have been handed off to Generation Y etc. A couple of decades later, they will have calcified in turn.

  3. 4whatitsworth says:

    It all sounds great except.. In the United States the young will pay much more for education and likely get a far less benefit the previous generation most will be in massive debt when the graduate from college. They next generation will pay much higher taxes and not have nearly the free cash flow to save and invest. The ratio of people working, creating value, and paying taxes will continue to decline while the number of people drawing on government benefits will continue to increase.

    But yes the Dow goes to 20,000 and and the “Death Tax” will probably go down so long live socialism!

  4. InterestedObserver says:

    Best line of the piece was “It’s as if we now live in an ALL CAPS WORLD”.

    So true. Personally, I’d like to kick the drama level down a notch or two….

  5. MayorQuimby says:

    USA’s balance sheet is *completely* effed. The ability to create new technologies is not the issue.

    Aggregate demand is. And there isn’t a thing anyone in gvmt can do about it other than let things correct naturally.

    THAT is the correct path forward – embrace asset price collapse and high unemployment to clear markets and restore growth from the bottom up. Yes it sucks, but it is the only viable alternative. Even Krugman will be wishing we had done so eventually.

    Instead we will try to prop up the hyperinflated bubble economy 3rd world style but to no avail. So we will get 3rd world volatility and ultimately a 3rd world hockey stick collapse.

    And the whole while there will be thousands of potential entrepreneurs out there with fantastic ideas but how many of those people existed in other screwed up cultures? Many. They were too busy with survival to put those ideas to use unfortunately.

    Sorry BR but the glass is 9/10ths empty. I wish it weren’t the case.

  6. Mayor Quimby

    Bought from you . . .

  7. MayorQuimby says:

    Need a grin smiley but…sold to you!

  8. ZackAttack says:

    A 4th Turning.

  9. MayorQuimby says:

    “A 4th Turning.”

    Or…just a good old fashioned Depression.

    Savings rate tanking:


    Credit up 300% in 20ish years:


    Salaries up 20% in same time period:


    All the ideas in the world won’t help America pay its bills or drive demand for new products. India and China bubbles will probably deflate and Central Banks are going to have to QE just to remain solvent – no longer will QE drive growth. The 1% will be taxed up the whazoo (what is a whazoo anyways?) etc. No way out by printing.

    Look – the Aston Martin Vanquish is a really sweet car but I don’t know many people with enough dough to buy one!

    BTW – If anyone has an Aston Martin Vanquish they feel guilty about owning, let me know. I think I can help.

  10. romerjt says:

    Doomsday chic . . it’s all linear assumptions – there will be no unknowns that turn out for the best. Don’t know what it will be but it’s a good bet that something will develop . . but even if it doesn’t – every problem is an opportunity.

    So, the climate change that is underway and increasing will produce an “oh shit” moment of understanding that will spur an opportunity to actually deal with the problem – net positive.

    Current challenges to the archaic dysfunctional education system will force it to adopt technology to restructure the system – think new efforts of Khan Academy and Microsoft.

    The transition away from oil is underway and when everyone recognizes it there will more great opportunities. Even though the high price of oil right now and at least for a while is political instability, not actual shortage (this includes the vast reserves in Iraq) business world-wide has already adjusted to this and is way head of the government and the people. Old cars and old home will be replaces with versions that require much less oil – this drain on economy will be removed.

    The big drags will continue to be health care, especially the delivery system and the untrustworthy financial sector, oh we can’t we forget the government.

  11. jwagner says:

    Barry, I hate to be a pessimist (really), but I just don’t buy the view that the young entrepreneurs will be a powerful enough locomotive to pull this train. Technology is one of the sectors of the economy where we have a mostly free market, and the results are truly amazing. Innovation makes even entrenched monopolies like Microsoft less relevant over time. But that’s not the case in many other sectors – healthcare, finance and banking, etc., – their wealth and power will not be beaten by good ideas and enthusiasm. And since our political leadership is fundamentally a whore to any well financed interest, their long term survival and dominance is insured. Our decline isn’t due to a lack of good ideas and hard work, it’s more that free markets and capitalism are dying in this country and being replaced by a corrupted economic system that benefits only the most powerful and wealthy.

  12. eliz says:

    BR bullish. Can you say “contrary indicator”?

    From where I sit: The mainstream youth of today are immersed in social networking, secular idolatry, and a stalwart embrace of the me-myself-and-I entertainment-and-acquisition society. I estimate 5-15% of youth are aimed at a true alternative — they are the ones connected with the occupy movement and the kind of currents covered by Yes! Magazine. * I am neither pessimistic nor optimistic about the future as a whole – it could go either way, depending on how people respond to the changes before us. In any case, I don’t see any indication we are headed towards another industrial-revolutionary type economic boom.


    BR:If you want to take the other side of my trades, please let me know

    ; )

  13. sshopa says:

    Too many software companies.
    We need more food, water, and clean energy.

    Go to Climate Progress and read Joe Romm.
    The media in the USA don’t mention the horrendous
    weather related problems around the world.

    The only time I ever heard about flooding in Thailand
    was on Nightly Business Report where they explained
    it was a problem for getting PC disc drives.

    No mention that Thailand provides a lot of rice to Asia.
    Flooding ruined rice crop.

    Farmers are committing suicide in Australia because of drought.
    Ever here about that?

  14. ZedLoch says:

    Thanks for this BR. I’m just graduating with a PhD from Tech at 27 and decided to head out on my own venture rather than sit in a lab/office for the rest of my life.

    You’d think that extra 5 years of education I just put in would count for something towards my capability for such things, but I’ve had many many people express “concern”, doubt, and confusion.

    “You want to do what? You can’t do that. That’s not something people do. I’m worried about you…”

    Perhaps it’s the prospect of being next to broke for the next few years instead of a six-figure salary at a national lab or consulting company that has people so perplexed. But as a professional student, I’ve lived on less up until now (I’m also blessed with having all of $0 in debt coming out).

    And that’s the point that gives me complete re-assurance in the near future: I have a great education, no dependents, no liabilities, and no assets. i.e. I’ve got a ton of ideas and nothing to lose. If ever there was a time to do something crazy awesome, now is it.

    Anyway, I thought I’d have more cheerleaders on this venture. But alas, there are many skeptics and it kind of bothers me. You’re article is an inspiration to keep it up. I know 9/10 new businesses fail, but someone has yet to present me with a good reason as to “Why not try?”

    Thanks again!

  15. yon’ Zed,

    which Field is your PhD in?


    you may care to (re-)read Galbraith’s “New Industrial State”..

    “…With searing wit and incisive commentary, John Kenneth Galbraith redefined America’s perception of itself in The New Industrial State, one of his landmark works. The United States is no longer a free-enterprise society, Galbraith argues, but a structured state controlled by the largest companies. Advertising is the means by which these companies manage demand and create consumer “need” where none previously existed. Multinational corporations are the continuation of this power system on an international level. The goal of these companies is not the betterment of society, but immortality through an uninterrupted stream of earnings.

    First published in 1967, The New Industrial State continues to resonate today.


    Praise for the original edition: “The New Industrial State deserves the widest possible attention and discussion.”–Raymond J. Saulnier, New York Times

    Praise for the original edition: “[The New Industrial State] is a dazzling work, full of brilliant epigrams, intriguing aphorisms and sardonic humor.”–Harvey H. Segal, Washington Post

    Praise for the original edition: “[W]ithout a doubt one of the most provocative offerings of our time in the realm of economics.”–John McCutcheon, Chicago Tribune

    Table of Contents



    I’d, personally, Love to hear how his Thesis, now ~45 Years Old, is defunct/any less True..

  16. InterestedObserver says:

    ZedLoch – different details, different path, but it will work out just fine, and yes, now’s the time to test that.

    Me – went into academics, wasn’t my cup of tea after a number of years, and jumped to industry. When I made the jump, I basically started at the same level as my students and plenty of folks figured I was still an impractical academic. Well, the stuff I learned as an academic let me zip through the ranks. As long as your learning stuff that matters, solving problems that have value being solved, and staying curious teaching yourself new things, you’ll do fine whatever path you follow.

  17. Greg0658 says:

    “present me with a good reason as to – ‘Why not try”
    ever heard of ‘private profits socialized losses’
    and peter francis geraci info tapes
    nothing ventured nothing gained – sign on the dotted line

    The Whispers – Rock Steady

    ok – No Pain, No Gain is another on the same cassette

  18. Pantmaker says:

    The Washington Post owns Kaplan. If I were you I might consider passing on this specific column gig. You are too good for them. They have all the bases covered. Govt. money, predatory lending, worthless paper etc. etc. the list is endless.

  19. theexpertisin says:

    Used to be that most genius innovators were not worried about being in the so-called 1%. They labored for the delight in creating a better mousetrap.

    The trappings of wealth were left in large part to the greed of bankers, financiers and other swindlers.

    Perhaps someday genius and creativity will again top the accumulation of sheckles in the hierarchy of worthy goals in a free society.

  20. normal1 says:

    I think about the new guard vs. the old guard every time I read one of those chain/propaganda emails sent to me from my relatives. Here is where you’ll find some perfect examples of the old, stale, and discredited ideas that many of our elders still cling to, stubbornly. And proudly, too, the hell with facts. I think readers of this site are well aware of this, and probably give it a chuckle and think no more of it. For me, I find them endlessly fascinating and informative, and very, very effective.

    Consider this: the general tone of these chain emails is just a reinforcement of old stereotypes painting the young as naive and foolish and themselves (the elders) as wiser and more experienced. When you consider that these wisened elders are the same people who open EVERY link in EVERY email sent to them, and then wonder why their computers are so slow, things start to come into focus. When they express pity and disgust at the “dirty hippies” of Occupy Wall St., you know, all just sitting around listening to the Greatful Dead and getting stoned, that’s when the lines really start to become clear between the old and the new. These “kids” in the park don’t want lectures, they want more wi-fi access so they can hook up with fellow protestors through twitter or 4chan. Their patronizing elders, meanwhile, don’t think to question why our internet speeds aren’t as fast as they could be because they wouldn’t dare question the superiority of the U.S.

    If there’s any hope to be had, my money’s on the side of those who dare to question conventional wisdom. And, if the elders were really that wisened, they’d welcome the new guard not as threats, but as allies in progress.

  21. wrongwy says:

    After reading your essay, I feel like the glass is half full. Thanks, Barry.

  22. SOP says:

    Re. Contrary Indicator

    “BR :If you want to take the other side of my trades, please let me know.”

    Barry, I think the world’s militaries, and insurance industry, and the scientists who study the Real “Big Picture” (see Club of Rome and its updates) want to take the other side of that trade.

    Maybe they need to spend a weekend with tech entrepreneurs.

  23. Bruman says:

    So, Barry, instead of being steamrolled over by emerging market labor arbitrage and computers replacing human brainpower, now we’re going to be steamrolled over by someone else’s kids?

    Yay for them, I guess, but it still sucks for me. Between the baby boomers and the millenials, I feel like the tune changed from “wait for your turn” to “too late for you, bub” overnight. :-p

    (Said somewhat tongue-in-cheek, but there’s an element of real pain mixed in there too…)

  24. Bruman says:

    Perhaps I should have said: it changed from “Wait for your turn,” to “too late for you,” with only two wars, two stock crashes, and two recessions to mark the middle.

    (OK, sorry, it’s Monday morning… ;-) )

  25. Greg0658 says:

    rainy days and mondays get me down
    Sing a Song – the Carpenters

    2 for Tuesday (ya early – it is in China ain’t it)
    3 Dog Night – Our B Side

  26. victor says:

    BR: we all know that youth always prevails over experience. Trouble is, NOT ENOUGH youth is being produced nowadays, at least not in the Developing Countries and with dire consequences, see Eric Kaufmann’s “Shall the Religious Inherit the Earth?”. Now, THAT”S a BP vision and it is not pretty.

  27. ZedLoch says:

    @Mark Hoffer- My degree is going to say Electrical and Computer Engineering, but my field is more materials science w/ expertise in LEDs, lasers, solar panels and the like. As per BR’s other post of fastest growing fields, its a good place to be ;)

    @InterestedObserver – Awesome! So glad things worked out! Hopefully I can find some similar success.

  28. ZedLoch says:

    @mathman re: 1 in 2 graduates without full time jobs–> more incentive to be self-employed. I think things are going to work out. And I think its going to be sooner rather than later…

  29. Zed,

    though, something like..



    “…”We make a semiconductor phosphor that employs a nanomaterial called a quantum dot,” explains Nanosys CEO Jason Hartlove. “It’s made out of indium phosphide, and the synthesis process is all in the lab. There’s no heavy metal mining, no destructive mining practices.”

    Nanosys’s QuantumRail LED backlighting device is made out of quantum dots, which can purportedly generate brighter and richer colors than their rare earth metal counterparts–all while delivering a higher efficiency and lower cost.

    Unsurprisingly, big-name electronics manufacturers are interested in what Nanosys has to offer. “We work with LG, Samsung, and a number of other companies that are unannounced. Our customers have a strong interest in alternatives to rare earth metals,” Hartlove says. That’s because LED backlighting is big business–think about all the televisions, cell phone displays, and computer monitors that rely on the technology.

    The next step for Nanosys is scaling up as fast as possible. “There are no scaling limits on what we can do in terms of production,” Hartlove explains…”

    may be closer to ‘Home’ ..~