Fixing the Flow of Human Capital: Andrew Yang at TEDxGeorgetown

All right, so I try and make anything I do as relevant to the people who are Listening to me at that moment. So what where are you guys like how many of your undergrads show hands virtually everyone? Oh my god. Let's do that again. So how many of you are seniors? juniors sophomores And freshmen. All right, good stuff All right, so I'm going to talk to you as if you're juniors I'm just gonna land land in the middle somewhere. It's all good. So the theme is going to be the flow of talent and and the Graphic that kicks us off if I can get this thing to go Hey Mike, where do I point this thing? Oh Sorry Know So this is the graphic we're going to use to kick off the discussion and for those of you are seniors that this might be more familiar than if you're a freshman So what this graphic represents is that it's it's a lot easier for a young smart person right now to become a banker Consultant or lawyer than it is to do just about anything else And I resemble this I graduated from Brown in 96 and did not know what I wanted to do So I went to law school Which clarifies absolutely nothing? So so for those of you who are thinking about law school, you should know that awaits if you do that so So I so I graduated from law school and not knowing what I wanted to do still I became an M&A and banking attorney in New York because that's what you did out of Columbia if you didn't know what to do um, so I was there for about five months and I went home kind of dispirited that Thanksgiving my parents and I said You know mom and dad like when I was young, I I didn't dream about being described I dreamt about going in the woods and killing something and they of course didn't know what I was talking about, but I then went back to my job and said, you know what I Feel like you know, I'd like to try and build something I don't know if I have the wherewithal so I took a week off from work and Then tried to start this company Made enough of what felt like progress so that I then went and quit my job and then started a dot-com There's around 2,000 had its mini rise and maximum fall We raised about a quarter of a million got some press But then the bubble burst and how old were you guys when the bubble burst in 2001? eight nine So Do you guys have any recollection of that time? Maybe your parents were watching CNBC very sad for a little while or something like that I mean that there are adults among you who remember this stuff So when the bubble burst it was like a giant hand went through the streets of New York and swept away any company that was Not nailed down which included my little outfit So at this point, I'm 25. I've just lost investors about a quarter of a million I still owe a hundred thousand in law school debt and my parents like what happened used to be smart But but at this point I've been bitten by the bug and said, you know what I think I really want to do this I really want to learn how to build a business create a company. So I'm gonna submit this to you So what should young Andrew do now 25 lying on his you know floor looking up the ceiling like what's the next step? Try again, but but how to try again given that I just raised money and lost and it's like 2001 2002 when no one wants to invest in anything Wow, I don't know what that means. Um, so Okay, so so I'm going to submit something else to you let's say you want to become a chef really bad What might you do? Chef school, what's another possibility? Get a job where? Right you would take your chef knife out and you would go down on one knee and you would go to someone and say Be my master, right? You'd find someone who's like a better chef So that's what I did. I found an experienced entrepreneur and I became his lieutenant Is VP of something or other and so for for four years? I supported him as as that company raised about seven million dollars and went to three million in revenue And then I became the CEO of a company called Manhattan GMAT Junior seniors, maybe So Manhattan GMAT grew from being a relatively small GMAT boutique to number one in the u.s Over the next five or six years to the point where we were acquired by the Washington Post 2009 because we were number one in the u.s. Washington Post owns Kaplan We were beating the tar at a Kaplan Kaplan got tired of it. So the CEO calls me and says hey, let's talk We have a little bidding process and then the company gets acquired So it's one of the reasons why I'm very familiar with this particular picture because many of the people that my company served at Manhattan GMAT were bankers and consultants Who then weren't really finding what they were looking for as 20-something year olds And so they would take the GMAT apply to business school and then go to business school All right, so I'm gonna continue with this. So let's take a look at what the actual numbers are So let's take Harvard's class of 2011. What were the most common things to do at a Harvard a year ago? Shout them out Yes finance Consulting law not accounting and And the fourth is med school. So what the question is what proportion of Harvard students did one of those four things? All right, so I've got between 40 and 90 percent and as usual the wisdom of crowds. The truth is exactly in the middle so it's 65 percent and Then you have the potpourri category, which is a little bit of everything Scraps school nonprofits industry government IT military then you have its loan online item teach for America 18% apply 4% actually become teach teach for American Corps members and then undecided So 10% went to Europe and then became consultants So So so this is the the picture from Harvard a year ago. So so let me get get some feedback Is this surprising unsurprising? Not surprising and now I'm gonna throw the normative question out there. Is this a good thing a bad thing or neutral? Wow, wow, that one's fraught, right? All right. So let's uh, so let's keep on going So if you take a look at other top schools, the picture is the same The picture is the same here at Georgetown. I didn't pull the Georgetown stats, but they're quite similar And so you can see that it's not just a Harvard thing. It's really a Any top school thing and I've spoken at 40 universities around the country and they all say the same thing So what does that mean in terms of our country? Let's say regionally So if you have half your smart kids becoming bankers consultants and lawyers, where are they gonna live? New York DC Maybe Chicago, Boston San Francisco LA those are the top six. We just listed the top four So then you know the rest of the country much of which is struggling with Job growth and economic development and one of the things we think this graphic represents is that if you're a smart kid From let's say Florida who comes to Georgetown the odds of you coming a banker consultant and lawyer and living in living in New York Boston DC very high Odds, you're going back to Florida starting a business doing something that create jobs opportunities very low you end up with a systematic talent drain on most of the country if they happen to get identified by a national university and Then uh, and then there this is the picture you end up with. Um, what do you guys think empirically true? Absolutely. Wow. All right. All right. We're starting to get something good stuff. So Why is this the case and uh, those of you were freshmen raise your hands again How many of you who have your hands up keep them up know what management consulting is? All right, so so how is it that that that world goes from that to let's say 20% of the class like at least applying For consulting jobs and maybe even converting like how does that happen? Seniors chime in please Money's there. What else keep going? Sorry Security fear Keep going keep going Yes resources. This is not an accident people spend money and time educating the market That is all of you over your four years, you know by the time you're senior You'll know the names McKinsey Bain BCG Deloitte, etc, etc. Um, all right Let's let's take a look at how this list looks Prestige easy to find Progress seek the next level opens doors money is on the list gain skills community And then there's this last one, which is something pro social, you know Like change the world and this even applies if you become a banker consultant because the theory is you must become a baller Before you can come back and change the world, right? It's like You you know, and then you can come back to the people with loaves of bread but So those of you who are seniors, can I get a yes this is accurate All right. Thank you. So now I usually talk to people who are interested in the startup So this is a little bit overly broad But let's say you were interested in startups gonna show hands as to how many of you are actually interested in startups So a significant subset, right? So the seniors among you Why is it that it's unlikely you're actually gonna go work for a startup when you graduate? risky money Loans It's it's pretty much the opposite of the the last slide, right? It's like you're not recruited. It's hard to find There's no structured path. There's no community or peer group unclear prospects for training advancement of success. No network idea money tech proficiency But a lot of you really want to and then you talk about doing it But first you want to quote unquote learn about business and then come back. Is this is this accurate am I? Am I it's like I was one of you All right, so so here's the big question that Venture for America seeks to answer What would happen if the same proportion of talent that is currently flowing to banking consulting or law school? We're instead going to startups around the country. How long would that take to impact job growth and innovation nationwide? How many years I can over under on this? five One Wow That's belief that's self-belief you should become an entrepreneur So between one and five years and so we see we as in, you know certain people We see that there are structural Forces that make this reality very difficult to achieve because if you think about who can come get you here in this collection of intellectual capital It's high resource organization high resource organizations from high resource industries And so startups are actually neither of those things startups are generally low resource and They also don't have a time horizon. They can't recruit you eight months in advance. They don't need 20 of you It's all real time and if they came they would have a hard time competing So, how would you go about trying to fix this problem? If you decided that this is a vision worth achieving if you said, you know, what like this is actually Potentially a rosier picture and and speaking personally I believe it's even a rosier picture for the individual because there's something about what you do That comes to define you over a period of years You will actually become a different person and this is something, you know, if there's one thing you remember from this as A young person you imagine that you are a static self like, you know, I'm young Andrew and I say hey I'm gonna do X and then I'm still gonna be Andrew I just will have done X but the truth is Andrew changes if you have him go to law school or be in a law firm or you know Look at contracts all day or whatnot. Like we're all very adaptable and so In my view The the activities that lead you down this road the startup road actually end up forming a different self That I'm gonna go on a limb and say for some of you would be more appealing But so if you were to want to try and try and affect this change, what would you do? Yeah, maybe you you tinker with the educational system you Yes so what you do is Well, if you were me what you would do is you'd go raise a million dollars and then start an organization that does this So So I started an organization called venture for America and is particularly relevant for the seniors among you We recruit top college graduates from around the country if you get into the program We bring you to a training camp with let's say 80 other ass-kickers who all want to be entrepreneurs We train you McKinsey comes IDEO comes Cambridge Leadership Academy comes David Tisch comes from you from tech stars like everyone comes Trains you and then you go in groups of 10 or so to a city That needs talent and you work at a startup there with an existing entrepreneur So what we're doing here and this is um, I'm gonna do something I shouldn't do but whatever All right, so we're gonna do is we're gonna give you all of these things that you want because it's prestigious it's ultra selective You know all of these things progress opens doors You get a community you get the whole thing because we are adults and if we want you to do something We shouldn't expect you to have to like somehow swim against some violent current to do it we should actually pave the path and So so that's what venture for America is about it's about giving you all of these things that you want That we know you want in order to do what you want to do and what the country wants you to do and that's build A business in Detroit and New Orleans New Haven, Baltimore, Cleveland, Providence, etc, etc So venture for America is in the process of doing this If you come into the program you agree to work for a startup company for two years with an existing entrepreneur at around Let's say 30, you know 36 or 38 K a year, which doesn't sound like a lot of money But the guys in Detroit whom I'm visiting next week, they're living in a fancy building with a pool and a gym for 400 bucks a month So you actually can live pretty well Plus they've got 11 buddies around and they have little road trips and that they have a good time And then throughout the two years we supply you with programming and support and at the end of the two years We give a hundred K and seed funding to whoever's made it through the two years and has done a good job So it's like a combination of everything you guys grew up watching real-world survivor road rules Hey sack So so this is the plan. We're going to create a hundred thousand new US jobs by 2025 and I just want to bring it back to the theme What you guys do is all important Intellectual capital attracts financial capital as well as the reverse if you had enough talented people heading in this direction Then you would see the impact that we're talking about in terms of job creation and innovation. So this is our goal as an organization To revitalize American cities and communities or entrepreneurship to enable our best and brightest That's all of you to create new opportunities for themselves and others and to restore the culture of achievement To include value creation risk and reward of the common good. I Think I'm before my time, but that's cool. That's all I have to say So, thank you all