Vote for Venture for America | Mashable Awards 2011

Vote Venture for America to win the “Must-Follow Non-Profit on Social Media” award at the 5th Annual Mashable Awards.  If you enjoy learning about the latest VFA news and updates via our Facebook, Twitter, and blog, now’s the time to let us know!

If you have one minute, go to the Mashabale Awards 2011 website and type in “Venture for America” in the blank box. Be sure to vote for us in the “Must-Follow Non-Profit on Social Media” category.

Thank you to everyone who has already voted for us! You can vote once per day for each category. We hope that through the Mashable Awards more people will learn about Venture for America and our goal to create 100,000 jobs by 2025.

 

Mashable Awards 2011: http://mashable.com/follow/contests/mashable-awards-2011/

Guest Blogger- Taylor Fleming, Colgate University

Venture for America is excited to feature guest blogger Taylor Fleming. Taylor is a junior at Colgate University, majoring in English with a minor in Middle Eastern Studies:

As the semester rolls along, many Colgate seniors are beginning to wonder about their future plans. Andrew Yang, graduate of the Brown University class of 1996, found himself, only a few years back, in the same boat. After graduation he practiced law for a bit and even got a job as a CEO of Manhattan GMAT. Yet, during his time at Manhattan GMAT he found a common trend among the recent college graduates he encountered. Grads had major interest in the work force and specifically in entrepreneurship. Like young Colgate graduates and students, these grads all had what Yang characterized as “pent up energy” but no where to use it. At the same time, new and eager venture capitalist firms and entrepreneurship startups seemed to have trouble finding a way to connect to the desirable candidates for their open positions.

The need for a connection between the two appeared essential to Yang. This idea, complied with many months, a lot of hard work and what Yang refers to as “a long story,” created Venture for America. The organization, which will launch into action in June 2012, is the construction of a bridge between hiring startup companies and hard-working graduates. Modeled after Teach for America, Venture for America aims at placing eager college graduates in low-cost cities where they can work with and for startup companies. Venture for America hopes that the work at the companies will spark business, create more jobs and help improve the economies of these cities.

Those who are accepted into Venture for America will spend two years in the program. The experience will begins at Yang’s alma mater, Brown University. Fellows will spend five weeks on campus training for the next two years in the “Venture Fellow Summer Institute.” At the Institute, fellows will experience all the hands on technological training necessary for placement in the low-cost cities. They will also have the chance to study and discuss entrepreneurship with successful professionals and investors who have seen it all.

After the institute, Venture for America provides a two-year assignment in groups of ten to twelve at a startup company in a city, such as Providence, Detroit or New Orleans. Yang believes that the assignment ensures that the fellow works in that city “doing what that city needs.” The companies that they are assigned to are ones with great potential and varying interests. Among those involved, Detroit Venture Partners is the largest early-stage company. The company, founded by the majority owner of the Cleveland Cavaliers, describes the group as “street fighters [who] are willing to get down and dirty with our entrepreneurs in order to drive results.” Other companies deal with sustainability and renewable energy sources. At every company, fellows will earn a full salary and health benefits. The Venture for American website, ventureforamerica.org, estimates the salary in the range of $32,000-$38,000.

While at work over the two years, fellows will meet twice a week to confer about their experiences and assignments. The first year concludes with an ‘Intermission,’ or debriefing convention between all the fellows. At the end of the two years, one student, who is selected as the best performing fellow of the class, will be awarded $100,000 to either finance the fellow’s current company or a new company, which the fellow will found or co-found.

For graduates of Colgate University, Venture for America is an amazing opportunity. Applicants do not need a certain major and might even benefit from their background in liberal arts. Venture for America is a young company, and they are looking for people who mesh well with their program. The recent Colgate grad, from the year 2012 or earlier, embodies the description that Yang, founder and now president of Venture for America, depicts for ideal candidates. “We need our best and brightest,” he said. And they are well on their way. The organization, which is in its first year, already has over 700 applicants, but they, “hope to get more.”

In fact, they are so hopeful that Venture for America personally contacted Colgate University to seek more applicants. Yang and his entire staff at Venture for America believes in placing, “people with ambition and ability into places where they can stimulate careers,” and ultimately, help, “the country begin to grow again economically.” And they reached out to Colgate University as a perfect place to obtain the people to fill these roles. If Colgate students have any questions, they are encouraged to visit the VFA website at ventureforamerica.org. Applications are due by two different deadlines, November 28th, 2011 or February 15th, 2012, both for the session beginning in June 2012. The application is available on their website at ventureforamerica.org/apply.

Professional Services as Training Grounds

One of the most frequent narratives I encounter in achievement-minded college seniors is a (very reasonable) plan to spend several years advancing professionally and getting trained (and paid) by an investment bank or consulting firm or law firm. Then, the thought process goes, one can set out to do something else with some exposure and experience under one’s belt. This mindset is reinforced by the intense recruitment culture at many schools.

I subscribed to a version of this mindset when I graduated from Brown back in the day. In my case, I went to law school thinking I’d practice law for a few years (and pay down my law school debt) before lining up another opportunity. I wound up working at the firm for less than six months before leaving to co-found a start-up.

My sense is that there are plusses and minuses to ‘the Plan.’ There are some immensely constructive things to be said about spending 2 – 3 years in professional services after graduating from college:

    1. Training. Professional service firms are designed to train large groups of recruits annually, and they do so very successfully. You will emerge with a set of skills that can be applied in other contexts (e.g., Excel modeling if you’re a financial analyst, Powerpoint if you’re a consultant, editing if you’re a lawyer). You also often develop domain expertise (e.g. you’ll work in a particular industry and so you become conversant with the firms in that field, etc.).

    2. High-level work product. If you spend time at a bank/consulting firm/law firm, you will become excellent at producing world-class work. Every model/report/presentation/contract needs to be sophisticated, professional, and error-free, in large part because that’s one of the core value propositions of your organization. The people above you will push you to become more rigorous and disciplined, and your work product will improve across the board as a result.

    3. Socialized professionally. After a couple of years in a professional setting you’ll get used to dressing presentably, preparing for meetings, speaking appropriately, showing up on time, writing professional correspondence, etc. You can speak corporate. You also become accustomed to working very long hours. These attributes are transferable to and helpful in many other contexts.

    4. Learn how large organizations work. If you work for a top professional service provider that is hired by big companies, you will grow to understand how successful corporations make decisions, organize themselves, adopt policies and procedures, purchase from suppliers, etc. You will also learn to be process-driven, which is necessary for most large organizations to function properly.*

    5. Confidence. If you spend a couple of years at a big-name firm, it gives you an acute sense of the sort of people that populate and succeed in these environments. They’re your friends and colleagues (and you, for as long as you’re there). Emerging from a firm gives you a sense that you’ve worked among some of the best in a field, and that you’re as capable as anyone else.

    6. Credentialing. Similarly, your experience at a big firm is a great signal to prospective employers and partners. It will give you a source of credibility with clients, investors, and anyone else you deal with for the rest of your career.

    7. Network. You will almost always leave a professional services environment with a few noteworthy friends and relationships. These contacts can prove to be extremely valuable both personally and professionally.

    8. Motivation (sometimes). Some people who come out of these firms are ideally motivated and hungry. They’ve seen the other side, and now they want to accomplish something and make a mark. They’re not afraid to work hard, and they’re determined to achieve something significant outside of their old context.

It’s a pretty impressive list, to be sure. It’s no wonder that so many recent graduates find these options so compelling. So what are the drawbacks, if any? After going to law school, practicing law briefly, working in start-ups for over a decade, running a GMAT prep company for 5+ years, and seeing any number of personal career paths play out, here are some potential considerations: 

    1. Different Process/Output. In professional service environments, the output is almost always analytical (e.g., a set of valuations for a company, a series of cost-cutting recommendations). Sometimes, an analysis can take months to generate, with a half-dozen people working on it for hundreds of hours. In the start-up setting and in most companies, the output is action-oriented. You need to be getting things done and making decisions, often with limited information. You need to hire people, devise and improve a product, get customers and drum up business, market yourself and the company, learn how to manage and lead a team (when they’re not all either analysts or support staff), allocate scarce resources, etc. For most companies, the value is in the execution. You pick a path and find out if you’re right in real-time, and then change approaches accordingly. Mistakes are acceptable if they’re the result of moving forward. You develop judgment and instincts around execution that are very different than what is sometimes jokingly called ‘analysis paralysis.’ It’s the difference between examining a company and operating it.

    2. Switching Costs. Much has been made about how companies struggle to innovate and challenge themselves if they have a business that is successful.** People function the same way. If you’re a young professional making $100k producing spreadsheets/analyses/recommendations, it’s extraordinarily difficult to then switch to doing something else where you’re starting from scratch. I’ve seen many people leave to try their hand in another arena (e.g., writing, starting a business, etc.) and get discouraged with their lack of pay or quick success, particularly when they’re competing with people who have been engaged in the new activity for years.

    3. Difficulty Identifying Opportunities. Contrary to popular belief, exciting companies are not generally reaching out to banking analysts/junior consultants/corporate lawyers with great opportunities. Start-ups, for example, often hire out of personal networks and people who are actively engaged in the start-up community. Headhunters are eager to place you at another investment bank/consulting firm/law firm, but they’re virtually always industry-specific (it’d be a tougher sell for them to try and help people switch, plus the commission would be smaller). This is exacerbated by the fact that, for many professionals, this is the first time they’ve had to engage in a conventional job search (most were recruited directly out of school). Many of them struggle. Sometimes people will find a promising opportunity, but often they grope unsuccessfully. Many wind up giving up and applying to business school.***

    4. Narrowed Focus and Competency. Professional service providers often become very good at their particular discipline at the expense of other capacities. The skills developed in finance/consulting/law are valuable in certain contexts, but most businesses revolve around some other central activity (e.g. retail, energy, tech, entertainment/media, etc.). Many professionals become specialized in certain types of roles (e.g., the number-cruncher/analyst/lawyer) and don’t have the chance to develop in ways that would make them more central to building or driving a business.

    5. Value Creation vs. Optimization. By the time a company can hire an investment bank or consulting firm, it generally has already reached a certain stage of development. You’re seeing mature organizations that are trying to do a deal (buy another company, go public, etc.) or optimize. Consequently, your exposure is well past the stages where much of the value gets created. You have limited exposure to what makes small organizations grow and succeed, as well as minimal experience executing with limited resources.

    6. Commitment/time-frame. The nature of professional services is that you’re typically working on a deal or a client engagement that lasts a brief period and then ends. You’re used to relationships measured in weeks or months (or even days, in the trading context). You’re also used to colleagues coming and going very quickly (e.g., the attrition rate at one top-tier consulting firm is 30% a year, one reason they’re always hiring). Companies, in contrast, typically rely upon long-term relationships to function well. They require a significant commitment, where the time frame is measured in years, not weeks or months. Turnover is detrimental to developing a good management team. Building up the value of one’s equity and relationships takes time.

    7. Relationship with Work. As a professional service provider who is changing clients or transactions every period, it’s hard to become emotionally invested in your work. It’s like trying to care about a car you know you’re renting. Your clients are themselves big companies, and your interaction with them will often be limited to the occasional meeting with a senior executive or a manager. You’re there as a transaction cost because someone wants to get something done. You’re grease on a wheel. Your main motivation is to avoid looking bad to your superiors who may not expect you to stick around long-term because they’ve seen so many young people come and go.

    8. Appetite for Risk. One’s appetite for risk generally diminishes as you get older. This can become even more pronounced in a professional setting. You spend your working life in nice offices around well-compensated people. You often have support staff from Day 1. The only people you interact with work at large public companies. Your expenses creep upward over time – you get used to nice things. Your interpersonal obligations mount. As you adapt to your role and circumstance, taking a risk professionally becomes more and more of an abstraction. 

In my view, professional services have become conflated with ‘business’ when really they’re a narrow subset/category of businesses. College seniors would often benefit from figuring out what their long-term aspirations are and then try to pursue them directly. In particular, going to banking or consulting to learn how to start or run a business is not ideal. It’s like trying to learn how to become a chef by going to a company that sells things to restaurants.

One of our goals with Venture for America is to introduce some of the benefits of professional services environments (e.g. training, strong work product, socialization, credentialing, network, etc.) while enabling some of our best and brightest to take risks and become action-oriented builders from the beginning of their careers. At a minimum, they’ll have 2 years of seeing how early-stage businesses perform from the ground floor. Entrepreneurship is something you get better at over time, and an early start can make a big difference.

I also hope that Venture for America can represent part of a more genuine range of choices for our talented young people to start their careers and develop professionally. What they do should be more than a function of which organizations and industries have the highest levels of resources to recruit.

  • *Professor Gregg Fairbrothers, Director of the Dartmouth Entrepreneurial Network, made this observation and shared it with me. Great guy – Dartmouth students are lucky to have him.
  • **The Innovator’s Dilemma by Clayton Christensen spells this out in complete and compelling detail.
  • *** The average post-MBA job tenure is less than two years, and the same types of firms recruit the second time around.

 

 

 

 

 

 

 

VFA Company Spotlight- Audiosocket

Venture for America Company Spotlight with Audiosocket, located in New Orleans, Louisiana:

Ever heard a song in a movie, a TV show, video game or other media project and wonder how it got there? That’s what Audiosocket does. We help media producers that are looking for music find it. We help artists get paid for placement.

Audiosocket is a boutique music licensing agency, not a stock music library. We represent more than 1800 emerging bands, composers and record labels from around the world. We’re a next-generation content provider, and we thrive at the intersection of music and technology.

CEO and Co-Founder of Audiosocket, Brent McCrossen, tells us more:

 1. Tell us about your company.

I was working as an artist in management and talent buying. I was watching records sales fall, touring becoming more expenses and realized it was getting harder and harder for artists to make a living at music. Around that time I secured a sync placement for a couple of the artists I managed, one on the Sopranos and the other on a Video game. A light bulb went off. I thought to myself, “If you had a large catalog of music that was pre-cleared for licensing you could scale that.” 

I brought the idea to a colleague who was on the buy side, actually licensing the music to films she produced for the extreme sports industry. She loved the idea. As we explored it together the idea of Audiosocket was born. One night, over a round of margaritas, we raised a glass and officially decided to start the business. 

2. What does your ideal Venture Fellow look like?

I’m looking for a leader with an entrepreneurial spirit. One key focus for us is marketing. I want to hire someone, who while not knowing it all, knows people and how marketing conversations are built in the digital age. They should be willing to take calculated risk and push the evolution of marketing in general. They need to be laid back but driven, opinionated yet willing to learn. They need to love music and digital media. 

 3. Provide a fun fact about your company.

We’re all music fanatics. Everyone in the office is constantly running in with some new song or artist they’ve discovered, making everyone stop what they’re doing and rock out. It’s a daily activity.

To find out more about Audiosocket:

Web: www.audiosocket.com

FB: https://www.facebook.com/Audiosocket

Twitter: @audiosocket

Starting a Business on the Side

I’ve met dozens of people over the years who were working on something ‘on the side.’ As in, they had a full-time job or were full-time students but were thinking about starting a company.*

In the vast majority of cases, the company never comes to pass. There are a few reasons for this. First is that getting a business off the ground is not quick or easy. In many cases, the individual in question has a demanding full-time job that goes well past 9 to 5 (e.g. a lawyer/banker/consultant). They’re often forced to simply recharge during their scarce downtime, leaving little time or energy left over for starting the next big thing.

Second, there’s a structural limit to how much you can get done for a new business while holding down a full-time job or keeping your grades up. Here’s a list of things you can reasonably do on the side as you’re working full-time:

  • 1. Research your idea (e.g. figure out the market, talk to prospective customers about what they would like, see who your competitors are, etc.)
  • 2. Legal incorporation and Trademark protection (if necessary, most companies don’t need a Trademark)
  • 3. Claim a URL and build a website or have it built
  • 4. Get a bank account and credit card (generally have to use personal credit)
  • 5. Initiate a Facebook page, a blog, and a twitter account
  • 6. Develop branding (e.g. getting a logo designed, printing business cards)
  • 7. Talk it up to your network, try to find interested parties as co-founders, staff, investors, advisors
  • 8. Build financial projections and draft a business plan if necessary
  • 9. Personal financial planning (e.g. cut back on expenses, budget for start-up costs, etc.)
  • 10. Mock-up a prototype and presentation for potential investors or customers

If all of this sounds like a lot already, you’re right; getting the above done while holding down a job or carrying a full courseload requires a significant investment of time. Most people really don’t want to spend their spare time and money on running down vendors, building projections, etc. If you do dedicate yourself to getting these things done, it’s a good sign that you’re serious (or you really don’t like your job/classes).

Even with all of the above done, much of the heavy lifting generally requires that you quit your job and devote yourself full-time to the business. The big lifts include:

  • 1. Raising money. Investors typically don’t want to invest in an idea as much as they want to invest in a team. As in, a team that is currently working. If the company founder isn’t willing to bet his or her full-time on the business, then it’s difficult for an investor to believe that the team is going to be successful.
  • 2. Developing the product. For the most part, product development is a full-time endeavor. Even if you’re hiring someone to build the product, managing them to specifications is a task in itself. Sometimes you’ll need to travel to find the right partners, suppliers, etc.
  • 3. Building a team. You can hire vendors without being at it full-time, but it’s hard to get high-quality people to join you when you’re still holding down the day job. It’s tough for a team to come together if the founder is absent most of the time.
  • 4. Getting customers. Customers want commitment too. They want to know that you’ll be there for them. They can smell it if you’re moonlighting, and it’s not something that inspires buy-in.

What I’ve seen in the vast majority of cases is that the individual in question entertains the idea for a business on the side as a way to make the days pass but, perhaps wisely, never takes the step of committing to it fully. The business remains more or less on the drawing board.

This isn’t necessarily a bad thing. Starting a business is not for everyone, and most people would be better served by staying in their current job or getting a new one. The failure rate for new businesses is very high. And people do learn a few lessons from exploring their idea (mainly that starting a business is hard).

If you quit your job or school and put your heart and soul full-time into starting a company, it may succeed or it may not.** But if you never fully commit, the business is almost certain to fall short of its goals (or not exist). Starting a company is a lot like trying to lead a charge to take a hill. If you run up the hill with everything you’ve got, it’s the best chance you’ve got to get others to follow you and reach the top.

If you find yourself working on a business on the side, occasionally ask yourself how serious you are. Are you willing to give it 100% if certain things fall into place? Would you really quit your job and go for it? Knowing how much risk you would or wouldn’t tolerate can help guide your actions moving forward.

*We’re not talking about a side business you can do in addition to your job (e.g.. tutoring, selling things on eBay, etc.) Side businesses are a great way to learn, try things out, and make a bit of money without much risk. And sometimes they lead to great opportunities.

**When a young person asks me about trying to start a company, I generally try to be encouraging. I figure that even if the company doesn’t work out, he or she will learn a ton from the process and be better equipped for the next time. Entrepreneurship is like a lot of other things where you get better at it with experience. It’s a rare founder who hits it out of the park the first time. It’s not a terrible idea to get a stumble out of the way early (while of course trying your best to remain upright).

VFA Company Spotlight- Digerati

Venture for America Company Spotlight with Digerati, located in Detroit, Michigan:

Formed in 2001 by Brian Balasia, Digerati Solutions fills a critical need for businesses in the metro Detroit region. Digerati believes that information technology is merely a set of tools to drive efficiency, quality, and ultimately improve the bottom line. The company works with clients in a wide range of industry sectors to evaluate business processes, human resources, and technology systems, in turn creating streamlined operations and driving tangible returns.

The company has seen considerable growth over the past five years, and moved its headquarters to Detroit’s Guardian Building in 2005. It currently employs 4 full-time and 4 part time professionals and attracts over 20 retired engineers as volunteers.

Founder and President of Digerati, Brian Balasia, tells us more:

 1. Tell us about your company.

We recently underwent an exercise to record the company’s history and distill it down to a compelling brand story. I think it captures the essence of Digerati and how we got to where we are today. Check out the history here: http://thedigeratiprocess.com/about/history.html

2. What does your ideal Venture Fellow look like?

We love processes. We are hired by companies, foundations, governments, and non-profits to fix large scale problems by studying how technology affects the choreography (physical actions) that take place in an environment. We consult, build software, and are now starting to spin off companies. We are looking for a fellow who wants to help us to develop new technologies for our clients and growth strategies for our spin offs. An ideal fellow must be passionate about their ideas and fearless about sharing or defending them. They have to be comfortable working in a fast moving company where the work moves quickly and logic based creative thinking is rewarded.

3. Provide a fun fact about your company.

At Digerati, we believe that any problem can be solved. We compete monthly against companies downtown…we are the 3 time broomball champions…we have come in second in nearly every other category. Help in Volleyball, Softball, Kickball, Bowling, or Floor Hockey would be a plus.

To find out more about Digerati:

Web: www.thedigeratiprocess.com