Message to All VFA Applicants

Thank you for considering applying to become a Venture for America Fellow. Your interest says a fair amount about you as a person– enterprising, motivated, and looking to have an impact.

My belief in you and the potential of our country’s best and brightest is why I founded Venture for America. I know that what makes the biggest difference on the ground is having the right combination of people. A core group of smart, energized individuals has been behind every success story, in business and every other realm.

I want to acknowledge a painful truth that the number of applicants to Venture for America will far exceed the number of Fellowships. At present, we will be able to offer approximately 150 Fellowships for 2015. The precise number is indeterminate because we are continuing to identify new companies that want to hire a Venture Fellow, and the circumstances of companies change in both directions (i.e. a company that is committed in August may not have the resources the following March, while another company may successfully raise money and be newly interested).

Our expectation is that over a thousand individuals will apply for the Venture for America Fellowship in 2014 – 2015, resulting in a very low offer rate.  An offer rate this low means that we are by definition going to miss out on many exceptional candidates.

In recognition of this, if you are a finalist for the Venture for America Fellowship and find it appealing, we will share your information with start-up companies around the country that have opportunities for recent graduates. There are many growing businesses that will want to talk to you. In this way, we hope to connect a larger number of applicants with early stage companies that could use a talented, energetic hire.

As for the awarded Fellowships, in a standard admissions process, you look for candidates who have certain qualities to the extent you can discern, and you select the individuals who perform above a certain level.

Here, the number is so small and the needs are so distinct that we are almost looking for specific individuals. That means that applicants can do everything right and possess a phenomenal set of attributes and still not be selected.

First, we will consider three threshold questions:

1. Does this applicant satisfy a particular company’s requirements? Each Fellow will be working for a real company that has specific needs. As we review candidates, we will have the companies’ needs in mind. Yes, if you are an engineer or programmer you will likely have a better chance at getting a closer look, though we expect over half the positions to be non-technical in nature.

2. Does this person satisfy our program’s requirements? We are looking for individuals with high records of achievement in academic, athletic, extracurricular, personal, or business contexts. Basically, we believe that the virtues of talent, work ethic, attitude and character are transferable to the early-stage business setting, and are seeking individuals who have demonstrated the ability to be successful in whatever they have done to date. Venture for America is also seeking to build a diverse group of Fellows in terms of geography, major, gender, ethnicity, socioeconomic background and other considerations.

3. Would this candidate represent Venture for America’s values and mission and serve as a role model and example to others? Our mission as an organization is to rebuild American cities through entrepreneurship, enable our best and brightest to create new opportunities for themselves and others, and restore our culture of achievement to include value creation, risk and reward, and the common good. Any startup entrepreneur will tell you that an organization’s culture is crucial to its success – we feel the same way.

Beyond these qualifications, we will ask “Is this person likely to be okay with failure?”  Entrepreneurship, start-ups, growth companies, cities in transition, human relationships – none of these things are linear or certain.  Venture for America is the real world.  We’re not a great fit for people who want sure things or controlled environments.  We’re looking for people who can grow through genuine uncertainty, ambiguity, and adversity and come out the other side stronger, whole and ready to contribute.

Only if the answer appears to be a clear “Yes” to all of the above will a candidate be considered past the initial submission. We expect that the vast majority of candidates will not make it past the first stage.  The subsequent rounds will consist of a video submission  as well as a phone interview, each of which will yield a proportion of the remaining candidates. The final stage will consist of an in-person Selection Day in New York with Board members and established entrepreneurs; if you make it to Selection Day there is still a substantial chance you will not receive an Offer.

If the above sounds forbidding or discouraging, we want to be forthright in what are looking for. We will be working hard to find the right candidates who will be able to make a real difference in the success and development of an early stage company and contribute to the economic and cultural revitalization of our country.

Best of luck in applying, and looking forward to meeting some of you in the coming months.

Andrew Yang

CEO and Founder

Venture for America

 

[Excerpt] Professional Services as Business Training

There’s fewer than two weeks left until the release of “Smart People Should Build Things” by our Founder, Andrew Yang! We’ve released a handful of excerpts over the past few weeks, and you can check back for even more between now and the February 4th release.

To pre-order your copy today, visit SmartPeopleShouldBuildThings.com!


As we’ve seen, one of the most frequently pursued paths for achievement- minded college seniors is to spend several years advancing professionally and getting trained and paid by an investment bank, consulting firm, or law firm. Then, the thought process goes, they can set out to do something else with some exposure and experience under their belts. People are generally not making lifelong commitments to the field in their own minds. They’re “getting some skills” and making some connections before figuring out what they really want to do.I subscribed to a version of this mind-set when I graduated from Brown. In my case, I went to law school thinking I’d practice for a few years (and pay down my law school debt) before lining up another opportunity.

It’s clear why this is such an attractive approach. There are some immensely constructive things about spending several years in professional services after graduating from college. Professional service firms are designed to train large groups of recruits annually, and they do so very successfully. After even just a year or two in a high-level bank or consulting firm, you emerge with a set of skills that can be applied in other contexts (financial modeling in Excel if you’re a financial analyst, PowerPoint and data organization and presentation if you’re a consultant, and editing and issue spotting if you’re a lawyer). This is very appealing to most any recent graduate who may not yet feel equipped with practical skills coming right out of college.

It seems like an incredible set of benefits. How can there be any downside either to the individual or to the economy that a significant proportion of our top graduates are being professionalized as bankers, consultants or lawyers?

The nature of professional services dictates that you work on a deal or a client engagement that lasts a brief period and then ends. You’re usually staffed on a deal that will last for a finite period until the deal either comes through or falls apart. You begin a new transaction or client engagement every several months, perhaps longer if it’s a protracted consulting project. You’re used to relationships measured in weeks or months, or only hours or minutes in the trading context. Clients arrive and demand a flurry of activity until a transaction is complete, then disappear. Senior managers at your firm maintain relationships with clients, but you’re a level or two removed. You often develop strong relationships with colleagues due to the long hours, extensive travel and intense work environment. But you’re used to people coming and going very quickly as teams either shift and change or people leave the firm. For example, the attrition rate at one top consulting firm is 30 percent per year, which is one reason they’re always hiring.

The constant flow of different deals is presented as a selling point by many consulting firms and investment banks. They’ll say it’s “fast-paced,” things are “changing all the time,” and that you’ll work on one deal or project “and then move on.” Most operating companies, in contrast, typically rely upon long-term relationships to function well. They require a significant commitment in which the time frame is measured in years, not weeks or months. Turnover is detrimental to developing a good management team; building a business, and building up the value of one’s equity and relationships within an industry, takes time.

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 be concerned about taking care of a car 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. If you’re a consultant, you’re generally set up in a conference room from Monday through Thursday in a far-flung city; then you fly home on Thursday night. You’re there as a transaction cost because someone wants to get something done. One ex-consultant I interviewed noted, “It’s hard to get personally attached or invested when you know you’re only there for a number of months. I had assignments and deliverables that I knew would get changed after six months because we were a stopgap solution — I knew my work would disappear in a little while after the new system was put in.”

Your 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 one. The only people you interact with work at large public companies. Your expenses creep upward over time, and you get used to having nice things. Your interpersonal obligations mount, and the people you’re dating and family members expect you to earn lots of money. As you adapt to your role and circumstance, taking a risk professionally becomes more and more of an abstraction.

Once, while I was having drinks with a friend of mine after she started working at a top-tier consulting firm, she said, “Before I got here, I thought I could do anything. Now, I feel like you can’t do anything unless you have a budget of millions of dollars.”

In the minds of college seniors, and thanks to prodigious investment on the part of the firms themselves, professional services — financial services and management consulting — have become conflated with “business” when really they’re a narrow subset or category of businesses with distinctive features.

If you work in professional services you will be paid handsomely and have a brand-name firm on your résumé. You’ll gain skills, confidence, and exposure. But you may also become heavily socialized and specialized, more risk averse, and accustomed to operating in resource-rich environments with a narrow set of deliverables. You’ll be likely to adopt an arm’s-length relationship with your work. You won’t build anything; instead, you will compartmentalize and put the armor on each day as deals, clients and colleagues come and go.

Professional services are being used as a de facto training ground for our top college graduates — with mixed results for everyone concerned. In particular, going into banking or consulting to learn how to start or run a business is not always ideal; the processes are very different, and give you a sense of companies trying to do different things. It’s like trying to learn how to become a chef by going to a company that runs analyses for large restaurant chains. Yes, you’ll get a better grasp of how chain restaurants work. But will you learn to cook?

There are, of course, any number of successful business builders and entrepreneurs who started out as professionals, as one would expect given that literally half our top graduates have pursued these paths for the past couple decades. David Gilboa worked at an investment bank before co-founding Warby Parker. John Delbridge worked in equity research before co-founding Mimeo. People have long careers that aren’t defined by their first few years.

And it’s easy to get excited about a potential hire if he has spent a couple of years at a top firm. There’s a good chance that this person is smart, motivated, capable of long hours and detail-oriented work, and is looking for a change. If applying to work at a startup, he probably expects a pay cut and has the right motivation.

But if I had a dollar for all the bankers, consultants and lawyers I’ve met who told me that they were “really interested in entrepreneurship,” I’d be awfully rich. Meanwhile, they struggle to transition into different roles, and many of them have lost some of the qualities that would have enabled them to take on their original ambitions.

Their problem isn’t just theirs — it affects all of us. We’re breeding large battalions of indifferent professionals in a handful of cities, when what we need is something very different. We need committed builders.


From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang. © 2014 Andrew Yang. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.

[EXCERPT] Talent Allocation is a Zero-Sum Game

VFA Founder and CEO Andrew Yang will release his first book, Smart People Should Build Things, on February 4th, 2014. Check out the most recent excerpt below on the chosen paths of talented young people, and check back for more in the coming weeks.

You can also pre-order your copy today at SmartPeopleShouldBuildThings.com!


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Excerpted from SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang


You could ask, so what if our talented young people all march off to become lawyers, doctors, bankers, and consultants? Isn’t that what smart people are supposed to do?

There are a few problems with this stance. First, the degree to which the recruitment infrastructure exists is a relatively recent phenomenon. Bain and Company, a premier management consulting firm, wasn’t founded until 1973—now it employs over 5,000 talented people and recruits hundreds per year. The financial services industry has mushroomed in size, with Wall Street firms employing 191,800 at their peak in 2008, up from only 65,300 in 1975. The growth in professional services has given rise to an accompanying set of recruitment pipelines only in the past several decades.

Yet the allocation of talent is a zero-sum game. If the academically gifted are funneled in higher numbers toward finance and consulting, then lesser numbers are going into other areas, such as the operation of companies, startups, and early-stage enterprises. In the United States, companies with fewer than 500 employees account for almost two-thirds of net new jobs and generate thirteen times more new patents per employee than do large firms. If the US economy had generated as many startups each year for 2009–12 as it had in 2007, the country would have produced almost 2.5 million new jobs by 2013. If we’re interested in spurring long-term job growth, we want as much talent as possible heading to new firms so that more of them can succeed, expand, and hire more people.

Further, the current talent flows have a pronounced regional bias. The hubs for financial services and consulting are New York, San Francisco, Boston, Chicago, Los Angeles, and Washington, DC, and these cities are magnets for the preponderance of top university graduates. Meanwhile, dozens of other US cities and communities are home to promising growth companies that don’t have the talent they need to develop and expand. Companies in Detroit, New Orleans, Las Vegas, Providence, Baltimore, Cleveland, and other cities are poised to hire and to provide new opportunities and products. Yet our national university graduates are being consistently channeled elsewhere.*

Professional services industries like finance, consulting, and legal services are, by definition, meta-industries. That is, they serve to help large companies raise money, buy and sell each other, reorganize, implement new systems, conduct complex transactions, and so forth. They are dependent on companies coming into being and becoming big enough to hire them. The economy needs more companies to start, grow, and thrive in order for the service organizations themselves to prosper. For example, if Mark Zuckerberg had become an investment banker or gone to work in a bank’s information technology department, then the bankers wouldn’t have had Facebook to take public. It’s actually far better for the investment banks (and everyone else) that instead of heading in their direction, he started his own company.

Another issue is that professional paths aren’t always the right fit. Everyone reading this knows a host of former lawyers, bankers, consultants, academics, or doctors for whom the work or environment was not right, many of whom eventually left the profession or stuck around halfheartedly. This represents a massive social cost. Instead of an army of bright college graduates, we are left with an array of often indebted former professionals who are only starting years later what should have been their first act. Some find roles that fit. But for most this transition is not seamless; there are often time-consuming stumbles and periods of exploration before a new path is forged or found—if one is found.

Last, and perhaps most important, professional services socialize individuals in ways that are not conducive to their ability to contribute in other ways. All of us, and particularly young people, have a tendency to view ourselves and our natures as static: you’ll choose to do something for a few years, and you’ll still be the same you. This isn’t the case. Spending your twenties traveling four days a week, interviewing employees, and writing detailed reports on how to cut costs will change you, as will spending years editing contracts and arguing about events that will never come to pass, or years producing Excel spreadsheets and moving deals along. After a while, regardless of your initial motivations, your lifestyle and personality will change to fit your role. You will become a better dispenser of well-presented recommendations, or editor of contracts, or generator of financial projections. And you will in all likelihood become less good at other things. You will not be the same person you were when you started.

It is no accident that many of those we regard as our most productive individuals—Bill Gates, Steve Jobs, Jeff Bezos, Howard Schultz, Jack Dorsey, Reid Hoffman, Larry Page, Sergey Brin, and the like—were not products of our professional paths. Michael Dell actually entered the University of Texas intending to go to medical school. He probably would have made a fine doctor. But thanks to him over 100,000 people are now working at his namesake company, both in Texas and around the world.

* One could argue that our national university system has become a de facto talent drain for much of the country. Many states and communities send their top students away to great schools, never to hear from them again.


From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang. © 2014 Andrew Yang. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.

[Excerpt] Smart People Should Build Things:
The Prestige Pathways

VFA Founder and CEO Andrew Yang will release his first book, Smart People Should Build Things, in early 2014. Check back between now and the February 4th release date for more excerpts. You can also pre-order your copy today at SmartPeopleShouldBuildThings.com!


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Excerpted from SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang


Let’s imagine a very large company. It is a leader in its industry and much admired by its peers. It invests a tremendous amount of money–literally billions of dollars a year–in identifying, screening, and training its many employees. Those employees who are considered to have high potential are sent to special training programs at substantial additional cost. Happily, these top training programs are considered to be among the best in the world. After these employees complete their training, the company encourages them to choose for themselves the division in which they’d like to work. Employee preferences are deemed to be the most efficient way of deciding who works where.

This seems like a good system, and it works well for a long time. However, perhaps predictably, many of its most highly rated employees eventually become drawn to the finance and legal divisions because these divisions have very effective recruitment arms, are more visible, pay better, and are thought of as providing a more intellectual level of work. Over time, proportionally fewer of the top recruits go toward the management of the company or the company’s operations. The company’s basic training division is considered a backwater, with low pay and low recognition. And only a relative handful of employees go toward research and development or the launching of any new products.

Take a second to think about the company described above. What do you think will happen to this company as time passes? And if you think that it’s not set on a path to success, what would you do to fix it? This company reflects, in essence, the economy of the United States of America.

If you are a smart college student and you want to become a lawyer and go to law school, what you must do has been well established. You must go to a good school, get good grades (already accomplished, for many), and take the LSAT (a four-hour skill test). There is no anxiety in divining the requirements, as they are clearly spelled out. Most undergrads, even those with little interest in law school, know what it takes to get in. The path location costs are low.

The same is true if you want to become a doctor. Becoming a doctor is hard, right? Sort of. It is arduous and time-consuming, but it is not hard if you have certain academic abilities. You must take a battery of college courses (organic chemistry being the most infamous and rigorous of them) and do well, study for the MCAT (an eight-hour exam), and spend a summer or even a year caddying for a researcher, doctor, or hospital. These are time-consuming, hoop-jumping tasks, to be sure, but anyone with a very high level of academic aptitude can complete them.

If you attend an Ivy League university or similar national institution, legions of suit-wearing representatives from the big-name investment banks and consulting firms will show up at your campus and conduct first-round interviews to fill their ranks each year, even in a down period (as with the recent years following the financial crisis). They will spend millions of dollars enlisting interns and educating the market annually. Most freshmen have no idea what management consulting is, yet seniors can rattle off the distinctions of different firms with little difficulty. All undergraduates have friends in the classes above them who have gone through this process and gained analyst or associate positions at major investment banks and consulting firms.

Again, the requirements are clear: you have to have good grades, be able to perform some cognitive tasks with words and numbers in the form of case studies that you should prepare for and practice, and hopefully look good in a suit. It is also very helpful if you spend a summer in college doing something that can be presented as relating to your professional interest; in many cases it’s necessary that you intern at the employer the summer before your senior year in order to get an offer. Summer internships have become vital for getting jobs in the most selective firms, so the process begins quite early–junior year at the latest. This path requires some early choices, but you don’t have to spend time taking another standardized test. Of course, many of the people who go into finance and consulting take the GMAT and go on to business school.

These structured paths are clearly laid out, and are pursued collectively by many–or most–of the students who have been screened and sorted as the academic and cognitive elite. These “prestige pathways” have become the default options. In 2011, 29 percent of employed Harvard graduates went into finance or consulting, while 19 percent of the class applied to law school and 18 percent applied to medical school. That’s a majority of the class. California (San Francisco), New York (New York City), and Massachusetts (Boston) were the only states that received over one hundred Harvard grads in 2012, with Illinois (Chicago) and Washington DC, being the only other destinations to receive fifty or more. The statistics from Yale, Dartmouth, Penn, and other top schools are similar.

Perhaps this is somewhat surprising–wouldn’t college students at these top schools be positioned to blaze their own trails and pursue less conventional routes with the access that they have been given?

Unfortunately, hardworking, academically gifted young people are kind of lazy when it comes to determining direction. If you give them a hoop to jump through, jumping through that hoop can take two, twenty, or two hundred hours, and it won’t make a big difference. But they are quite lazy when it comes to figuring out what path to take or–more profoundly–building their own path. They’re trained to get the grade or ace the application. That is what has made them successful in most every conventional respect each step of the way up to their senior year in college, at the point that this process is well underway.

“It’s doing a process that you’ve done a billion times before,” explains Dylan Matthews, a 2012 Harvard graduate who wrote for the campus newspaper, the Harvard Crimson, before becoming a journalist. He adds, “Everyone who goes to Harvard went hard on the college application process. Applying to Wall Street is much closer to that than applying anywhere else is. There are a handful of firms you really care about, they all have formal application processes that they walk you through, there’s a season when it all happens, all of them come to you and interview you where you live. Harvard students are really good at formal processes like that, and they’re less good at going on Monster or Craigslist and sorting through thousands of job listings from thousands of companies whose reputations they don’t know. Wall Street and consulting (and Teach for America, too) turn applying to jobs into applying to college [again], more or less.”

Of course, the same procedural comfort level applies to law school and other graduate programs, and the same mindset pervades competitive campuses around the country.


From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang. © 2014 Andrew Yang. Reprinted courtesy of HarperBusiness, an imprint of HarperCollins Publishers.

Smart People Should Build Things

We couldn’t be more excited for our founder, Andrew Yang, to publish his first book, Smart People Should Build Things, in early 2014. In Smart People Should Build Things, Andrew lays out where our talent is going, how one develops as an entrepreneur, and discusses possible solutions (including Venture for America!) for the problems in our human capital markets.

Check back between now and the February 4th release date for more excerpts. You can also pre-order your copy today at SmartPeopleShouldBuildThings.com!


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Excerpted from SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang


I believe there’s a basic solution to our country’s economic and social problems. We need to get our smart people building things (again). They’re not really doing it right now. They’d like to. But they’re being led down certain paths during and after college and told not to worry, they can figure it out later.

Take me, for instance. I wasn’t very enterprising when I graduated from Brown in 1996. I had a general desire to be smart, accomplished, and successful–whatever that meant. So I went to law school and became a corporate attorney in New York. I figured out I was in the wrong place after a number of months working at the law firm. I left in less than a year and cofounded a dot-com company, Stargiving, which helped raise money for celebrity-affiliated nonprofits. It was extraordinarily difficult. My company failed spectacularly, but I recovered. I went to work for a mobile software company, Crisp Wireless, and then a health care software company, MMF Systems, over the next five years, eventually becoming the CEO of a test-prep company, Manhattan GMAT, in 2006.

I spent five years running Manhattan GMAT, helping young people get into business school. I taught our corporate classes of investment banking analysts and consultants at Goldman Sachs, McKinsey and Company, JPMorgan Chase, Morgan Stanley, and Deloitte, as well as hundreds of individual students over the years. Some were exactly where they wanted to be. But there seemed to be just as many top-notch young people who wondered why they didn’t like their jobs more. They sought a higher sense of engagement with their work and their careers. Sometimes they would put words to what they were looking for; they’d say they wanted “something entrepreneurial” or “to be really excited about something.”

By the time my company was acquired by Kaplan and its parent, the Washington Post Company, in 2009, I knew a few things. I knew that there were promising startups and growth companies all over the country that needed talent to expand and thrive. I knew firsthand that there was an army of talented, ambitious, somewhat directionless young people who’d love to work for a startup. And I knew that if we could connect these two groups, we’d help everyone: the individuals, the companies, cities and communities around the country, the economy, and society as a whole.

When I was younger, I subscribed to a general view of our educational system that goes something like this: If you study hard and do well in high school, you’ll get into a good college. Where you go to college is very important. Then, if you do well in college, perhaps you’ll go on to law school or med school, or maybe academia if you’re an intellectual sort. In any case, if you’re smart and work hard, you’ll wind up with a good job.

That “good job,” in this scenario, is a job that requires a lot of complex analytical thinking and pays well, like investment banking or management consulting. If a student takes a professional route, becoming a lawyer, doctor, accountant, or dentist, he or she will need additional years of special training to develop professional skills and judgment–all very attractive to high achievers.

This is our system of training and employment, and it functions very well. Smart, hardworking kids go to good schools and get trained for good jobs. The job market operates with great efficiency, and that is a big reason why our economy is so successful.

There’s another view of the current system, though–that it’s a mess. Ambitious college students have no real idea what to do upon graduation, but they’re trained to seek the “next level.” Many apply to law school, grad school, or even medical school because of a vague notion of status and progress rather than a genuine desire or natural fit. Those who try to do something independently often find themselves frustrated by their lack of rapid advancement, and so default to a more structured path of law school, business school, or graduate school. The concentration in professional services leads our national university graduates to congregate in a handful of metropolitan areas–primarily New York City, Silicon Valley, Boston, and Washington, DC. Those who become bankers or consultants are highly paid and heavily socialized, yet many become disaffected due to a lack of purpose an unsustainable lifestyle, and some simply discover they don’t enjoy their roles. We train thousands more lawyers each year than legal jobs exist for, and hundreds more academics than there are academic jobs. Each path throws off waves of refugees who are often at a loss as to what to do with themselves, only at that point they’re in their late twenties, possibly in debt or used to an expensive lifestyle, and trained to do something narrow and specific.

Meanwhile, massive needs in other sectors are not being met. American companies need smart people who can manage, operate, innovate, and improve them. And startups and early-stage growth companies are in desperate need of talent in order to create jobs and drive economic progress. The metropolitan areas of Detroit, New Orleans, Baltimore, Philadelphia, Cleveland, Cincinnati, and Las Vegas account for over $1 trillion of US gross domestic product and represent a vastly diverse range of industries. The trajectory of the young growth companies in these cities and others like them will determine the direction of our economy. Detroit alone is our twelfth largest metro region, with over 3.6 million people. Its post-bankruptcy renewal is one of the great projects of this age. Unfortunately, it doesn’t have a giant recruitment arm to make the case on college campuses.

Our identification and distribution of talent in the United States has gone from being a historic strength to a critical weakness. We’ve let the market dictate what our smart kids do, and they’re being systematically funneled into obvious, structured paths that don’t serve them or the economy terribly well.

The book “Smart People Should Build Things” makes a basic argument. If year after year we send our top people to financial services, management consulting, and law schools, we’ll wind up with the pattern we’re already seeing: layers of highly paid professionals working astride faltering companies and industries. But if we send them to startups, we’ll get something else. Early-stage companies in energy, retail, biotech, consumer products, health care, transportation, software, media, education, and other industries would have a better chance of innovating and creating value. Even allowing for a certain amount of failure, we’d create hundreds of new companies and tens of thousands of new jobs over time. Our economy and our country would be better off. Our communities’ tax bases would go up, shoring up our ability to pay for schools and long-term development. We’d restore our culture of achievement to include value creation, risk and reward, and the common good. By solving this one problem, we solve many other problems at the same time.

© 2014 Andrew Yang. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.

Businesses take time to build

After over a decade working in startups, Andrew Yang has learned many important lessons about what it takes to build a business. But according to him, what entrepreneurs really need to found a successful organization is patience and willingness to dedicate time to the idea.

In his recent article in the Huffington Post, Andrew discusses how in business, there’s no such thing as an ‘overnight success’, and how hands-on experience is the only way to understand what to expect when building a company. For more from Andrew Yang, you can check out his other Huffington Post articles here.


By Andrew Yang, CEO and Founder of Venture for America

One of my mentors once said to me, “It takes at least four or five years to see if a company is going to work. Generally more. If you’re really fast, maybe you can get a sense of where things are going by the end of Year Three.”

This surprised me at the time. But I’ve come to realize that he was right.

There have been many recent accounts of companies becoming immediate successes, particularly in the Internet space. But for most businesses, ‘overnight success’ is an outlier. Generally, a company makes progress incrementally, and the overnight success was years in the making.

Even for the rare product or software app that does become a rapid hit, it often took the programmers or product developers or designers time to build up the necessary expertise. In many cases, they might have worked on some earlier product that no one ever heard of, learned from it, and came back to build something great. Rovio was around for six years and underwent layoffs before the ‘instant’ success of Angry Birds, for example.*

Think about what goes into a company. First, the founders are on the drawing board developing the concept, testing ideas and preparing the offering. Sometimes this takes months in itself. They have to spend a considerable amount of time gathering resources (people, capital, know-how, sourcing, vendors, infrastructure). Then, the company has to land its first customers who kick the tires and make suggestions.

Sometimes these initial customers aren’t paying. The feedback the founders get at each stage can take months to incorporate. A company can set off in one direction, figures out that it’s not the right way to go, and then go in an entirely new direction. Over time, the product or service improves, and the company gets better at executing and delivering.

Eventually, the initial customers are happy enough that they tell their friends, and word of mouth slowly spreads.** Vendors begin assuming you’re going to pay them. The company may even start generating enough revenue so that it can invest in sales and business development, perhaps migrating to multiple locations or new distribution channels.

All of the above typically describes a painstaking, multi-year process. Most businesses require a complex network of relationships to function (e.g., staff, investors, suppliers, vendors, partners, customers), and these relationships take time to build. In many instances, you have to be around for a few years to receive consistent recognition. And it often takes time for staff, and founders, to become effective in their roles.

Experienced entrepreneurs have a number of advantages where pace is concerned. First, they know roughly how long it will take to get something done if they’ve done it before. Second, they can move faster because many of the necessary relationships are already in place (e.g., they can call people they’ve worked with, use the same lawyer/accountant/P.R. firm, draw on earlier investors, reach out to past customers, etc.). Third, they can proceed more decisively because of greater confidence in their judgment, both internally and externally.

Still, if you’re building a new business, you should expect it to take time, as in several years at least. If you’re not prepared to fully invest yourself in the business for 3 -5 years, you might not want to start down the road, particularly if you’re planning on having other people rely upon you. Prepare yourself for the long haul, and maybe you’ll surprise yourself if it develops faster than you think.

* There’s a story about a woman asking Picasso for a drawing. He drew a quick sketch on a napkin, and said to her, “That will be $5,000.” She exclaimed, “But that only took you one minute!” Picasso replied, “No. It has taken me my whole life to draw that sketch.” The one-minute sketch is generally years in the making.

** Despite the advent of social media, most things gain traction and spread at a deliberate pace. Even if someone likes your service, it’s generally not going to be a priority for him or her to go around telling his/her friends about it or liking your service on Facebook. Think about your own behavior – When’s the last time you went around telling everyone you know about something you liked, even if you genuinely enjoyed it? People should do this more often. Spread the word about something you like today!

Andrew Meets President Obama

Last month, Andrew Yang was one of twelve past White House Champions of Change who were invited to meet President Obama in Washington, D.C., and the White House recently sent us pictures from the big day! Read more about Andrew’s visit and the other Champions of Change in The White House Blog.

President Obama addressing the Champions of Change.

Andrew explains to President Obama how Venture for America works.

Andrew and the other Champions of Change. Congratulations to you all!

Andrew’s Visit to the White House

Yesterday, VFA Founder Andrew Yang visited the White House to meet President Barack Obama as one of twelve “Champions of Change” alumni who were invited to celebrate the one year anniversary of the program and share the work they are doing around the country. Photos to come!

On the way home, Andrew reflected on his experience meeting President Obama and wrote the following message:

“I’m on a train home and wanted to share my visit to the White House.

I was invited to meet the President as a past Champion of Change who had made progress since the award last year. So to everyone who’s supported Venture for America this past year, “Thank You for making this visit possible!”

It was a pretty amazing experience. I was seated next to President Obama (!!!) for 45 minutes. I told him about Venture for America – our goals and mission, what we do, the cities we’re launching in this year, and our plans for expansion. He asked a number of questions (“How did people find out about the program on campus” and “Do the participants get any support or program throughout the 2 years”) At the end, he suggested that I connect with Startup America; I told him that I have a call with Steve Case next week. I’m confident that the President now knows about Venture for America and likes it.

Afterwards, I was interviewed for a video for the White House public engagement team.

Overall, it went phenomenally well. It’s quite a trip having the President sit within inches of you. A senior White House official invited us to bring our first class of Fellows to the White House at some point – we’ll have to see about that.

Because you’ve seen the President so many times, he seems very familiar. And the impression he gives is exactly like the one you get on TV. He was very warm and friendly toward the group, and made a number of jokes to loosen everyone up. You got the sense that he was working to make those around him more at ease.

I shook his hand twice: when he first arrived and at the close of the event. He’s got a big, firm handshake. I remember thinking that his large hands must help his basketball game.

It was one of the most memorable days of my life. I know that any recognition Venture for America receives is due to the hard work and support of Eileen Lee, Mike Tarullo, Bernie Sucher, Charlie Kroll, Darren MacDonald, Cameron Breitner, Sy Jacobs, and so many other people who have gone above and beyond to make our organization a reality. And most of all it’s a testament to our first class of Fellows, without whom Venture for America would remain just an idea. Thank you all for making today happen. Here’s to even brighter days to come (though this one will be tough to beat)!”

-Andrew

White House “Champion of Change” Alum Andrew Yang Meets with President Obama

THE WHITE HOUSE

Office of Communications

FOR IMMEDIATE RELEASE

April 25, 2012

White House “Champion of Change” Alum Andrew Yang Meets with President Obama

WASHINGTON, DC – Tomorrow, Thursday, April 26th, Andrew Yang will be one of twelve White House Champions of Change Alumni who will meet with President Obama in celebration of the program’s one year anniversary. The Champions of Change program was created as a part of President Obama’s Winning the Future initiative. Each week, a different sector has been highlighted and groups of Champions, ranging from educators to entrepreneurs to community leaders, have been recognized for the work they are doing to serve and strengthen their communities.

Since the program began, the White House has hosted over forty Champions of Change events honoring over 500 individuals from all 50 states for their work in their community. This event highlights the great accomplishments the alumni have achieved since initially being honored as White House Champions of Change.

“We created the Champions of Change program to honor ordinary Americans who are doing extraordinary things,” said President Obama. “By making their communities better places to live, our Champions are helping to ensure that our country’s best days lie ahead.”

To learn more about the White House Champions of Change program, visit www.whitehouse.gov/champions.

Andrew Yang, a Youth Entrepreneurs Champion, is the Founder and President of Venture for America, a non-profit fellowship program that sends top college graduates to start-ups and early stage companies in Detroit, New Orleans, Providence, and other economically challenged U.S. cities in order to generate job growth. Previously, Andrew spent over 10 years as co-founder and executive of several start-up companies, most recently as the CEO of a test prep company that was acquired by Kaplan/the Washington Post. Andrew graduated from Columbia Law School and has a B.A. in Economics from Brown University.