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← Fixing the flow of human capital | Andrew Yang | TEDxGeorgetown

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Showing Revision 9 created 01/12/2020 by Rhonda Jacobs.

  1. I try and make anything I do as relevant
  2. to the people who are listening
    to me at that moment,
  3. so where are you guys?
  4. How many of you are undergrads?
  5. Show of hands.
  6. Virtually everyone, oh my God.
  7. Let's do that again.
  8. How many of you are seniors?
  9. Juniors?
  10. (Cheering)
  11. Sophomores?
  12. (Cheering)
  13. And freshmen?
  14. All right. Good stuff.
  15. I'm going to talk to you
    as if you're juniors.
  16. I'm just going to land
    in the middle somewhere.
  17. It's all good.
  18. So, the theme is going to be
    the flow of talent.
  19. The graphic that kicks us off,
    if I can get this thing to go -
  20. Hey, Mike, where do I point this thing?
  21. Sorry.
  22. Thank you.
  23. Or should I click this thing?
  24. This is the graphic we're going to use
    to kick off the discussion.
  25. For those of you who are seniors,
  26. this might be more familiar
    than if you're a freshmen.
  27. So what this graphic represents
  28. is that it's a lot easier
    for a young, smart person right now
  29. to become a banker, consultant, or lawyer
  30. than it is to do just about anything else.
  31. I resemble this.
  32. I graduated from Brown in '96,
    and did not know what I wanted to do.
  33. So I went to law school,
    which clarifies absolutely nothing.
  34. (Laughter)
  35. For those of you who are thinking
    about law school,
  36. you should know that awaits
    if you do that.
  37. (Laughter)
  38. I graduated from law school and,
    not knowing what I wanted to do still,
  39. I became an M&A and banking
    attorney in New York,
  40. because that's what you did
    out of Columbia
  41. if you didn't know what to do.
  42. I was there for about five months.
  43. I went home dispirited
    that Thanksgiving, to my parents.
  44. I said, "You know, Mom and Dad,
  45. when I was young, I didn't dream
    about being the scribe.
  46. I dreamt about going in the woods
    and killing something."
  47. They, of course, didn't know
    what I was talking about.
  48. I then went back to my job and said,
  49. "You know what, I feel like I'd like
    to try and build something,
  50. but I don't know if I have wherewithal."
  51. So I took a week off from work,
    and then tried to start this company.
  52. Made enough of what felt like progress
    so that I then went and quit my job,
  53. and then started a dot-com.
  54. This was around 2000.
  55. Had its mini rise and maximum fall.
  56. We raised about a quarter
    of a million, got some press,
  57. but then the bubble burst.
  58. How old were you guys
    when the bubble burst in 2001?
  59. (Audience) Eight.
  60. Eight, nine.
  61. (Laughter)
  62. So, do you guys have
    any recollection of that time?
  63. Maybe your parents watching CNBC,
    very sad for a little while,
  64. or something like that.
  65. Anything like that?
  66. There are adults among you
    who remember this stuff.
  67. When it burst,
  68. it was like a giant hand
    went through the streets of New York
  69. and swept away any company
    that was not nailed down,
  70. including my little outfit.
  71. At this point, I'm 25.
  72. I've just lost investors about $0.25M.
  73. I still own $100,000 in law school debt.
  74. My parents are like, "What happened?
    You used to be smart."
  75. (Laughter)
  76. At this point,
    I had been bitten by the bug
  77. and said, "You know what,
    I think I really want to do this.
  78. I want to learn how to build
    a business, a company."
  79. I'm going to submit this you.
  80. What should young Andrew do now, 25,
  81. lying on his floor,
    looking up at the ceiling?
  82. What's the next step?
  83. (Audience) Try again?
  84. Try again, but how to try again,
    given that I just raised money and lost,
  85. and it's like 2001, 2002
    when no one wants to invest in anything?
  86. (Audience) Getting them to believe in you.
  87. Wow, I don't know what that means.
  88. (Laughter)
  89. Okay, so I'm going to submit
    something else to you.
  90. Let's say you wanted
    to become a chef, really bad.
  91. What might you do?
  92. (Audience) Chef school.
  93. Chef school. Another possibility?
  94. (Audience) Get a job.
  95. Get a job where?
  96. (Audience) As a chef at a cafe.
  97. Right, you would take your chef knife out,
  98. and you would go down on one knee.
  99. You would go to someone
    and say, "Be my master." Right?
  100. You'd find someone who's a better chef.
  101. So that's what I did:
    I found an experienced entrepreneur.
  102. And I became his lieutenant,
    his VP of something or other.
  103. And so for four years, I supported him
  104. as that company raised
    about seven million dollars
  105. and three million in revenue.
  106. Then I became the CEO
    of a company called Manhattan GMAT.
  107. Has anyone heard of it?
  108. Juniors, seniors, maybe?
  109. Manhattan GMAT grew from being
    a relatively small GMAT boutique
  110. to number one in the US
    over the next five or six years,
  111. to the point where we were acquired
    by The Washington Post in 2009
  112. because we were number one in the US.
  113. Washington Post owns Kaplan.
  114. We were beating the tar out of Kaplan.
  115. Kaplan got tired of it,
    so the CEO calls me and says,
  116. "Hey, let's talk."
  117. We have a little bidding process,
    and the company gets acquired.
  118. It's one of the reasons I'm very familiar
    with this particular picture;
  119. many of the people my company started
    in Manhattan GMAT
  120. were bankers and consultants
  121. who weren't really finding
    what they were looking for
  122. as 20-something year olds,
  123. so they would take the GMAT,
    apply to business school,
  124. and then go to business school.
  125. So, I'm going to continue with this.
  126. Let's take a look
    at what the actual numbers are.
  127. Let's take Harvard's class of 2011.
  128. What were the most common things
    to do out of Harvard a year ago?
  129. Shout them out.
  130. (Crosstalk)
  131. Yes, finance.
  132. (Audience) Doctor.
    A.Y.: Consulting.
  133. Law. Not accounting.
  134. (Laughter)
  135. And the fourth is med school.
  136. The question is,
  137. what proportion of Harvard students
    did one of those four things?
  138. (Audience responses)
  139. All right, so I've got
    between 40 and 90 percent.
  140. And as usual, the wisdom of crowds,
    the truth is exactly in the middle.
  141. It's 65 percent.
  142. Then you have the potpourri category,
    which is a little bit of everything.
  143. It's grad school, nonprofits,
    industry, government, IT, military.
  144. Then you have its own line item,
    Teach for America.
  145. 18 percent apply.
  146. Four percent actually become
    Teach for America corps members.
  147. Then, undecided;
  148. 10 percent went to Europe,
    and then became consultants.
  149. (Laughter)
  150. So this is the picture
    from Harvard, a year ago.
  151. Let me get some feedback.
  152. It this surprising, unsurprising?
  153. Not surprising.
  154. Now, I throw the normative question.
  155. Is this a good thing,
    a bad thing, or neutral?
  156. (Audience) Bad. Neutral.
  157. Wow, that one's fraught, right?
  158. Let's keep on going.
  159. If you take a look at other top schools,
    the picture's the same.
  160. The picture is the same
    here at Georgetown.
  161. I didn't pull the Georgetown stats,
    but they're quite similar.
  162. You can see that it's not
    just a Harvard thing.
  163. It's really a "any top school" thing.
  164. I've spoken at 40 universities
    around the country,
  165. and they all say the same thing.
  166. So what does that mean
    in terms of our country,
  167. let's say, "regionally"?
  168. If you have half your smart kids
  169. becoming bankers,
    consultants, and lawyers,
  170. where are they going to live?
  171. (Audience responds)
  172. New York, DC, maybe Chicago.
  173. (Audience) Boston.
    A.Y.: Boston.
  174. San Francisco, LA, those are the top six.
  175. We just listed the top four.
  176. So then you have the rest of the country,
  177. much of which is struggling
    with job growth and economic development.
  178. One of the things we think
    this graphic represents
  179. is that if you're a smart kid
    from, let's say, Florida,
  180. who comes to Georgetown,
  181. the odds of you becoming
    a banker, consultant, or lawyer
  182. and living in New York,
    Boston, DC are very high.
  183. Odds of you going back to Florida,
  184. starting a business,
    creating jobs: very low.
  185. You end up with a systematic talent drain
    on most of the country
  186. if they happen to get identified
    by a national university.
  187. This is the picture you end up with.
  188. What do you guys think, empirically true?
  189. (Audience) Yeah.
  190. Absolutely. Wow, all right.
    We're starting to get something.
  191. Good stuff. Why is this the case?
  192. Those of you who are freshmen,
    raise your hands again.
  193. How many of you who have
    your hands up, keep them up,
  194. know what management consulting is?
  195. (Laughter)
  196. So how is it that that world
    goes from that
  197. to, let's say, 20 percent of the class
    at least applying for consulting jobs
  198. and maybe even converting?
  199. How does that happen?
  200. Seniors, chime in, please?
  201. (Audience) Salary.
  202. Money's there. What else? Keep going.
  203. (Audience) Creating new jobs.
  204. Sorry?
  205. (Audience) Security.
  206. Security, fear.
  207. (Laughter)
  208. Keep going. Keep going.
  209. (Audience) Diligent recruitment.
  210. Yes, resources. This is not an accident.
  211. People spend money and time
  212. educating the market, that is all of you,
    over your four years.
  213. By the time you're a senior,
    you'll know the names;
  214. McKinsey, Bain, BCG, Deloitte, etc.
  215. Let's take a look at how this list looks.
  216. Prestige, easy to find, progress,
    seek the next level, opens doors.
  217. Money's on the list,
    gain skills, community;
  218. and then there's this last one,
  219. which is something pro-social,
    like change the world.
  220. This even applies if you become
    a banker or consultant,
  221. because the theory is,
    you must become a baller
  222. before you can come back
    and change the world. Right?
  223. Then you can come back to the people
    with loaves of bread.
  224. (Laughter)
  225. Those of you who are seniors,
    can I get a - yes, this is accurate?
  226. (Audience) Yes.
  227. All right, thank you.
  228. Now, I usually talk to people
    who are interested in startups,
  229. so this is a little bit overly broad.
  230. But let's say you
    were interested in startups.
  231. Show of hands: how many of you
    are interested in startups?
  232. A significant subset.
  233. The seniors among you,
    why is it that it's unlikely
  234. you're actually going to go
    work for a startup when you graduate?
  235. Risky.
  236. Money.
  237. (Audience) Loans.
  238. Loans.
  239. (Audience) It's scary.
  240. It's pretty much the opposite
    of the last slide. Right?
  241. It's like you're not recruited.
  242. It's hard to find.
    There's no structured path.
  243. There's no community or peer group.
  244. Unclear prospects for training,
    advancement, or success.
  245. No network, idea,
    money, tech proficiency.
  246. But a lot of you really want to,
    and then you talk about doing it,
  247. but first, you want to
    "learn about business "and then come back.
  248. Is this accurate?
  249. Am I - ?
  250. (Audience responds)
  251. It's like I was one of you.
  252. (Laughter)
  253. So here's the big question
    that Venture for America seeks to answer:
  254. What would happen
    if the same proportion of talent
  255. that is currently flowing
    to banking, consulting, and law school
  256. were instead going to startups
    around the country?
  257. How long would that take
  258. to impact job growth
    and innovation nationwide?
  259. How many years?
    Can I get an over/under on this?
  260. (Audience) Five.
  261. Five.
  262. (Audience) One.
  263. One, wow.
  264. (Laughter)
  265. That's belief. That's self-belief.
    You should become an entrepreneur.
  266. So between one and five years.
  267. And so we see - "we,"
    as in certain people -
  268. (Laughter)
  269. we see that there are structural forces
  270. that make this reality
    very difficult to achieve
  271. because, if you think about
    who can come get you
  272. here in this collection
    of intellectual capital,
  273. it's high-resource organizations
    from high-resource industries.
  274. And so startups are actually
    neither of those things.
  275. Startups are generally low-resource.
  276. And they also don't have the time horizon.
  277. They can't recruit you
    eight months in advance.
  278. They don't need 20 of you.
    It's all real-time.
  279. And if they came, they would have
    a hard time competing.
  280. So how would you go about
    trying to fix this problem,
  281. if you decided that this
    is a vision worth achieving?
  282. If you said, "You know what,
  283. this is actually potentially
    a rosier picture"?
  284. And speaking personally,
  285. I believe it's even a rosier picture
    for the individual
  286. because there's something
    about what you do
  287. that comes to define you
    over a period of years.
  288. You will actually become
    a different person.
  289. If there's one thing
    you remember from this,
  290. as a young person, you imagine
    that you are a static self.
  291. Like, I'm young Andrew, and I say,
  292. "Hey, I'm going to do X,
    and then I'm still going to be Andrew,
  293. I just will have done X."
  294. The truth is, Andrew changes
  295. if you have him go to law school
    or be in a law firm,
  296. look at contracts all day, or whatnot.
  297. We're all very adaptable.
  298. And so,
  299. in my view, the activities
    that lead you down the startup road,
  300. actually end up forming a different self
  301. that I'm going to go on a limb
  302. and say, for some of you,
    would be more appealing.
  303. If you were to want
    to try and affect this change,
  304. what would you do?
  305. (Audience) Think of it
    as primary school for startups.
  306. Maybe you'd tinker
    with the educational system.
  307. (Audience) [Inaudible]
    just like what they do
  308. to get psychologists to go
    and practice in rural areas,
  309. Yes.
  310. If you were me, what you would do is
    you would go raise a million dollars,
  311. and then start an organization
    that does this.
  312. (Laughter)
  313. So I started an organization
    called "Venture for America."
  314. And this is particularly relevant
    for the seniors among you.
  315. We recruit top college graduates
    from around the country.
  316. If you get into the program,
    we bring you to a training camp
  317. with, let's say, 80 other ass-kickers
    who all want to be entrepreneurs.
  318. We train you. McKinsey comes. IDEO comes.
    Cambridge Leadership Academy comes.
  319. David Tisch comes from Techstars.
  320. Everyone comes, trains you,
  321. and then you go in groups of 10 or so
    to a city that needs talent,
  322. and you work at a startup there
    with an existing entrepreneur.
  323. What we're doing here -
  324. and I'm going to do
    something I shouldn't do;
  325. but whatever, I'm going to do it.
  326. So what we're going to do is,
  327. we're going to give you
    all of these things that you want,
  328. because it's prestigious,
    it's ultraselective.
  329. All of these things, progress,
    open the doors -
  330. you get a community,
    you get the whole thing.
  331. Because we are adults.
  332. If we want you to do something,
  333. we shouldn't expect you
    to have to somehow
  334. swim against some
    violent current to do it.
  335. We should actually pave the path.
  336. That's what Venture for America's about.
  337. It's about giving you
  338. all of these things that you want,
    that we know you want,
  339. in order to do what you want to do
    and what the country wants you to do.
  340. That's build a business in Detroit,
    New Orleans, New Haven, Baltimore,
  341. Cleveland, Providence, etc., etc.
  342. Venture for America
    is in the process of doing this.
  343. If you come into the program,
  344. you agree to work for a startup
    company for two years
  345. with an existing entrepreneur
  346. at around, let's say,
    $36 to a $38K a year,
  347. which doesn't sound like a lot of money,
  348. but the guys in Detroit,
    whom I'm visiting next week,
  349. they're living in a fancy building
    with a pool and a gym,
  350. for 400 bucks a month.
  351. So you actually can live pretty well.
  352. Plus, they've got 11 buddies around,
    they have little road trips,
  353. and they have a good time.
  354. Then throughout the two years,
  355. we supply you with
    programming and support.
  356. At the end of the two years,
    we give $100K in seed funding
  357. to whoever's made it through the two years
    and has done a good job.
  358. It's like a combination of everything
    you guys grew up watching,
  359. "Real World," "Survivor," "Road Rules."
  360. (Laughter)
  361. So this is the plan.
  362. We're going to create
    100,000 new US jobs by 2025.
  363. I just want to bring it back to the theme.
  364. What you guys do is all important.
  365. Intellectual capital
    attracts financial capital,
  366. as well as the reverse.
  367. If you had enough talented people
    heading in this direction,
  368. then you would see the impact
    that we're talking about,
  369. in terms of job creation and innovation.
  370. So this is our goal as an organization,
  371. to revitalize American cities
    and communities through entrepreneurship,
  372. to enable our best and brightest,
    that's all of you,
  373. to create new opportunities
    for themselves and others,
  374. and restore the culture of achievement
  375. to include value-creation, risk,
    and reward, and the common good.
  376. I think I'm before my time,
    but that's cool. That's all I had to say.
  377. (Laughter)
  378. Thank you all.
  379. (Applause)