One does not normally think of pro football players when one thinks of tech startups. Few NFL players, if any, make it as software engineers, and probably no software engineers make it to the NFL.
What software engineers and NLF players do have in common is a rising propensity to drop out of college.
Wall Street Journal reporter Daisuke Wakabayashi describes how engineering students are dropping out of college to become tech startup entrepreneurs.
The college dropout-turned-entrepreneur is a staple of Silicon Valley mythology. Steve Jobs, Bill Gates and Mark Zuckerberg all left college.
In their day, those founders were very unusual. But a lot has changed since 2005, when Mr. Zuckerberg left Harvard. The new crop of dropouts has grown up with the Internet and smartphones. The tools to create new technology are more accessible. The cost to start a company has plunged, while the options for raising money have multiplied.
The NCAA governs college sports eligibility, and unlike engineering students, leaving college early for the NFL requires the NCAA’s permission. For 2015, the NCAA granted NFL draft eligibility to 74 underclassmen and 10 players who graduated without using up all four years of college eligibility.
There were a record 98 early entrants in the 2014 draft; there were 73 in the 2013 draft, 65 in 2012, 56 in 2011, 53 in 2010, 46 in 2009, 53 in 2008, 40 in 2007 and 52 in 2006. The number of underclassmen had increased six years in a row.
The NCAA and NFL operate a bilateral monopoly and monopsony. Very few football players can work in the NFL without first going to college, and colleges subordinate themselves to the NCAA as sole arbiter of eligibility. The gap between professional pay (minimum $435,000 in 2015) and college pay ($0) incentivizes various forms of cheating that do not occur in the market for college software engineers.
That doesn’t mean the software engineer market isn’t sometimes ruthless. Also at the Journal, Mike Ramsey and Douglas MacMillan recently reported that
Carnegie Mellon University is scrambling to recover after Uber Technologies Inc. poached 40 of its researchers and scientists earlier this year, a raid that left one of the world’s top robotics research institutions in a crisis.
These researchers and scientists responded to incentives just as one would expect:
Uber offered some scientists bonuses of hundreds of thousands of dollars and a doubling of salaries to staff the company’s new tech center in Pittsburgh, according to one researcher at [Carnegie Mellon’s National Robotics Engineering Center].
Graduate students also are being recruited, but Ramsey and MacMillan do not identify any who have dropped out.
High salaries for NFL players and software engineers increase the opportunity cost of staying in college. Wakabayashi reports that some engineering students have received, and accepted, six-figure offers. Colleges recognize the sports analogy even if the colleges losing engineering students never would lose football players to the NFL:
William Aulet, managing director of Martin Trust Center for MIT Entrepreneurship, compares the people encouraging students to leave school to sports agents who lure college athletes to turn pro.
The primary difference is that the market for software engineers is ruled by supply and demand, whereas the market for football players is ruled by the NCAA/NFL bilateral monopoly/monopsony.Wakabayashi notes that engineering students can be paid while in school and have to deal with the expectations of parents and grandparents if they think about dropping out. In football, you are not permitted to be paid for your work while in school and you have to get permission to enter the paid labor market.