>> Michael McGauley: My name is Michael McGauley and I'm very happy to have the
opportunity to introduce Andrew Yang today. Andrew and I met a few weeks ago, or a month
and a half ago down in New Orleans where we were both at New Orleans Entrepreneurs’ Week
and Andrew is the CEO and founder of Venture for America, as you know. Previously, he was
the CEO of Manhattan GMAT, the GMAT course that he then sold to Kaplan and had kind of a
realization that what he really wanted to do was to enable entrepreneurship and in order to do
that he began Venture for America and I think that it was Peter Drucker who said the most
entrepreneurial thing you can do is start a university. Andrew has sort of flip that on its head and
said well actually, what he's going to do is work to make American universities more
entrepreneurial, or make the graduates of those universities more entrepreneurial. So happy to
have him here today, please welcome me in giving Andrew a warm welcome. [applause]
>> Andrew Yang: Thank you so much for having me. How familiar are you guys with Venture
for America? Raise your hand really high if you know everything about it and like not at all if
you know very little. All right. A lot of not so much. Venture for America, as Michael
suggested a little bit, is meant to address this problem. It is a problem I was talking with him
about in the back. It's a problem that maybe some of you thought deeply about and some of you
thought absolutely nothing about, is that if you are really smart person in the United States today,
the odds of you becoming an investment banker or management consultant for, like I was, a
corporate attorney, the odds are pretty high. If you want to do something like startups or
anything else then the odds are actually a little bit low. So how many of you guys have actually
had a thought like this at some point ever? A lot of you, which is unsurprising to me because
you guys in my mind represent industry and innovative industry in the form of Microsoft. You
guys actually build incredibly valuable tools that help other businesses come into being. You
guys in my mind are over here on the extreme left on like the good end the, and over on the far
right is what a number of people are doing. It's not a knock on them, because we all went to
school with them or we were them in some cases. I graduated from Brown. Anyone besides
Michael and me graduate from Brown? No one? Disappointing. I graduated from Brown in the
mid-‘90s and had no idea what to do and so I went to law school. Did anyone do that? Good.
[laughter] A lot have dodged bullets in this room. I went to law school at Columbia, found that
law school clarifies very little about what you want to do and so I became a corporate attorney in
New York doing banking and M&A transactions that a firm called Davis Polk and Wardwell. I
resembled this and so I understood how this came about. Just to run through some of the
numbers, if you graduated from Harvard in 2012, there were, generally speaking, six default
paths for you: financial services, law school, management consulting, medical school, graduate
school, Teach for America. Teach for America had 4 percent of 2012 Harvard grads become
core members and about 14 percent apply. Then after that you have nonprofits, governmentmilitary, media, arts, sports communications. Industry and IT is where you guys fall at
Microsoft, and then undecided traveling is 13 percent, so I joke that they went and found
themselves and then come back and apply to law school or become management consultants.
The industry IT side, if you were to try and suss out how many Harvard grads went to start ups
it's a sliver of a sliver. It would be like a subset of that 10 percent. How many of you went to
Harvard? I'll bet a few of you. Also none. Is this surprising, unsurprising, familiar to you,
unfamiliar, shocking, totally not shocking? I see someone smiling. What is your name, sir?
>>: Were you smiling? [laughter].
>> Andrew Yang: I was thinking you, Stephen.
>> Steve Schwartz: Steve Schwartz.
>> Andrew Yang: Steve. So yeah, you were smiling because this is totally what you expected,
or…
>> Steve Schwartz: Yeah, I'm aware of this. My son is a member of your BFA, so that's why I
came to see you.
>> Andrew Yang: Wow! That's incredible. What is your son's name?
>> Steve Schwartz: Brian Schwartz.
>> Andrew Yang: Oh yeah. Yeah, Brian’s a good guy. [laughter]. No wonder you raise your
hand so much. Someone else who found this stuff totally unsurprising, anyone?
>>: I graduated like a year ago, today, pretty much, actually, and I'd say it was like 90 percent of
my friends were you going into finance or management or consulting and struggled to think
about any other option that was, that led to something that would make them successful after
graduation, so I'm very familiar with this phenomenon.
>> Andrew Yang: And you went to Duke?
>>: Yes.
>> Andrew Yang: Anyone else? Give me a show of hands if you said yes, this is totally
unsurprising and you either went through this yourself or know people who went through it. The
vast majority of us, and so it wasn't just me. In my case I went to law school out of Brown, but if
you look like other schools like Duke or Cornell or Columbia or Penn, so it's not just a Harvard
thing. If you look at any of the top schools you see patterns among the top employers and the
paths that they take. These six default paths really end up being the paths of least resistance for
national University graduates around the country. I'm sure some of you guys went to the
schools. I'm going to stop with the school thing though. What does this mean regionally? If you
have a hyper concentration of smart young people heading to banking, law and consulting, where
does that mean they moved after college? Where did all of your friends go, Stephen, right?
>> Steve Schwartz: New York.
>> Andrew Yang: Yeah, New York’s one; anywhere else?
>>: Connecticut.
>>: Silicon Valley.
>> Andrew Yang: San Francisco, Boston.
>>: Chicago.
>> Andrew Yang: Chicago would be five or six, DC, LA. The top four are New York, San
Francisco, Boston DC. Chicago and LA are five and six. If you look at the rest of the country,
you have a bunch of states with difficulty generating new businesses and creating jobs in those
regions and they are essentially non-overlapping with the talent destinations with the exception
of California which is so massive that it can have big problems in addition to having some
pockets of prosperity. If you are smart, young person from a state like let's say, Georgia, and
you went to Duke with Stephen, the odds of you heading back to Georgia and starting a business
or working in a growth company there are really, really low. The odds of you becoming a
banker or consulting her lawyer in New York or DC are very high. And if you do this for a
couple of decades you end up with an economic picture that looks something like this. At
Venture for America we kind of joke that smart people are doing six things in six places.
They're becoming bankers, consultants, lawyers, doctors, academics or teachers in New York,
San Francisco, Boston, DC, Chicago, LA. What you guys think of this picture -- first, is this
surprising? Were you guys familiar with this? Thoughts, response? Yeah?
>>: I was surprised that Atlanta was actually following under the yellow star. I would think that
Atlanta has consulting and it has, it's pretty much the center of the South.
>> Andrew Yang: Yeah, Atlanta does get a lot of talent from the southeast part of the U.S. and
if we were to look at the town in migration numbers, I think you are right. It would probably be
in the top 12 in the country. The yellow stars are actually the statewide job creation numbers.
That's a good observation. This picture, one, is just numerical. It's just where states don't have
as many employment opportunities, but I think there's a picture that we are all familiar with
having gone to a number of institutions that funnel, like Stephen and Duke, a disproportionate
number of graduates come from a select number of cities. I'm not sure where Seattle falls in
terms of this discussion. I feel like you guys are like right after Chicago and LA, at least in my
mind. And then it would be like Seattle and Austin would be like the next level. I see some
nods there? If the weather was like this you guys would be like in the top three of the weather
was like this all the time. [laughter]. Why is it then that so many young people do the same
handful of things? What does this list look like? Why is it that so many of your classmates and
becoming management consultants even though they probably had no idea what management
consultant was when they showed up on campus? Factors? Money is certainly a big one, but
Teach for America has shown that money isn't necessarily the primary driver all the time, but
money is certainly on this list. What else is on this list?
>>: Prestige.
>> Andrew Yang: Prestige. What's your name?
>>: Auki [phonetic].
>> Andrew Yang: Auki. Prestige is certainly there. What else? Keep going.
>>: Experience.
>> Andrew Yang: Yeah, gain skills, training get experience, because most seniors in college
don't think of themselves as ready. They want to go to an environment that is going to help
make them ready.
>>: Stability.
>> Andrew Yang: Stability.
>>: Part of those numbers are driven by the companies that create markets for those universities,
so if you are J.P. Morgan Chase or Merrill Lynchs of the world, those are universities that they
recruit from which then begins to drive that road map for the next…
>> Andrew Yang: With your name?
>>: Iris.
>> Andrew Yang: Iris. So Iris said something that many of you are agreeing with, which is that
a lot of it is influenced by which companies spend time and money recruiting and so that is
certainly like a huge factor, a clearly marked path, easy to find or apply to. So it's prestige. It’s
progress seeking the next level. It opens doors, keep options open. So Stephen's friends at
Duke, a lot of them weren't making what they think of as lifetime commitments. They're saying
look. I'll do this. It'll look great on my resume and then the world will be my oyster, and that's
something that banks and consulting firms are obviously so pretty heavily. Money,
compensation, lifestyle, gain skills, training for the next thing, community, make sure you don't
fall behind peers. Work with other smart people. And then there's this notion of doing
something that's good or pro-social like Teach for America. This also applies to people who
become investment bankers and management consultants, because the thought process is that
they need to gain stature, become a baller before they can really do any good. It's like I will
make lots of money and then, you know, I'll go back to the people with loaves of bread from
horseback. What you guys think of this list? This has been road tested, if you will, on campuses
around the country and thousands of young people and they all say thumbs up. This is why we
do what we do. Certainly, when I went to law school I think it was some blend of these factors.
On the flipside, who is not getting the talent? The companies that are coming of age or getting
started in cities around the country aren't really there at Durham to compete for Stephen and his
classmates, and the structural impediments, one, as Iris said, you're not been recruited because
the startup is not going to come on campus six months in advance and start trying to recruit
dozens of people. Two, it's hard to find a suitable company if you did decide to look. You're
doing it alone. You have unclear prospects for training and advancement or success. You have
no network, idea, or money or tech proficiency. You just don't think you are ready. And so far
most young people, they say look. I'd love to join a startup. I'd love to be an entrepreneur
someday, but first I need to go learn about business and then I can double back later down the
road after I've gained some skills. Stephen, is this an accurate description of those of your
friends who might have an interest in entrepreneurship that came out of Duke?
>> Steve Schwartz: Yeah.
>> Andrew Yang: So these are the structural problems and I'm going to go out on a limb and say
if we can help address these issues, then we can do these young people a great service as well as
the country and the economy, if we can balance the scales. Because what Iris was suggesting is
100 percent right about the resources being employed recruiting our young people. Teach for
America has pointed the way. The question I'm going to ask and hopefully we can answer over
the coming years is what would happen if the same proportion of talent that's currently heading
to Wall Street, professional services and management consulting was, instead, going to startups
around the country to Baltimore, Cleveland Detroit, New Orleans, Cincinnati, Las Vegas
Philadelphia, this startups in all these cities? How long would that take to impact the rate of job
growth and innovation nationwide? If we could just reformat the numbers and say guess what?
This year 50 percent of Harvard grads, and Duke grads, whatever, head to startups. How long
would that take to have an impact?
>>: Per year?
>> Andrew Yang: I hear one year. You said, yeah?
>>: Thirty years.
>> Andrew Yang: Thirty years.
>>: Silicon Valley, 30 years.
>> Andrew Yang: So the over under is somewhere in that range, I would guess. [laughter]. It's
somewhere between 1 and 30. [laughter]. But one thing that no one here doubts is that it would
work. We all know it would work, and really the question is, you know, why don't we just make
it happen? And the reason we don't make it happen is in part, as Iris said, a resource question.
Teach for America had its genesis 24 years ago and this past year it had 50,000 applications.
How many have friends that are in Teach for America, first of all? A number of you. And so,
Akim, you graduated from Princeton last year? How many of your friends -- you said you had a
friend who is doing Teach for America?
>>: [indiscernible]
>> Andrew Yang: In LA?
>>: Yeah.
>> Andrew Yang: Do you know anything about how she got, how she became aware of Teach
for America?
>>: Wendy Kopp, the founder, went to our school so she's pretty famous on campus and I think
everyone was talking about it on campus when it came to applying for jobs and what they were
going to do next. That's more sort of like word-of-mouth, I would say.
>> Andrew Yang: Teach for America is very well established on campuses, but Teach for
America also spent 38 million on recruitment and selection in the last year of record. It's an
expensive process trying to recruit young people and for that 38 million they got 50,000
applicants for 5000 spots. That's how you become the sixth default path for young people, is you
spend tens of millions. I have friends who are in financial services recruiting and they say they
spend an analogous amount on recruiting people at Duke and other campuses nationwide.
What's going on right now is there is an arms race, like a stealth arms race for smart people in
this country, where some sides are fighting in some sides are not. Now Microsoft is fighting
because you guys are enormous and you say hey. We need smart people, so let's go get them.
The startups cannot really fight that fight, because they are out-of-the-way. They don't have the
resources. They don't have the brand equity. Even if they went to campus they would lose
because they're like hey. I'm some company you've never heard of offering less money at higher
risk. Who's into that? [laughter]. Most people would say, you know, Deloy has a giant display
right next to you. Let me go talk to them, which is not a knock on anyone involved. It's just that
everyone is doing something very rational. The fast forward a little bit for me, I became a
corporate attorney in ‘99 and left in 2000 to start a .com in the first bubble. You guys remember
the first bubble? Where were you guys? How many of you were here during the first bubble?
Probably like -- awesome, a few of you. The first bubble was excellent, wasn't it? [laughter]. It
was a good time. I started a .com at the age of 25, raised a couple of hundred thousand dollars
and launched this site. We got a lot of press with the New York Times, USA Today, CNN. And
then the bubble burst and then no one cared about my little .com. The NASDAQ went from
5000 to 2000. Our investors were worried about losing, you know, their mainstream investments
much less their little angel investment in my company. My company crashed and burned. I was
26. I just lost people $40 million. I still owed the hundred thousand in law school debt. And my
parents were like, what the heck happened to you? Didn't you used to be smart? [laughter].
And so I was trying to answer that question and I said you know what? I tried to start a business.
It didn't work out, but I found that process much more genuine and invigorating certainly than
being a corporate attorney was. And so I said I need to get better. I need to get stronger. So I
am going to ask you guys, what would you advise 26-year-old Andrew who had just started a
company and failed that wanted to get better at that process of building a business? What would
you say to that person to do?
>>: Do it again.
>> Andrew Yang: Do it again. So I felt like doing it again was going to be tough because I had
just lost these people’s money and it was 2002 and no one wanted to invest in anything and, you
know, I was kind of broke. But I went with you. If you can't start a company again, what might
you advise? If I were to say to you hey, that's like a bridge too far for me right now.
>>: Join a startup.
>> Andrew Yang: Join a startup, which is what I did. I became the vice president of something
or other, a tech company. There's rampant total inflation startups. You guys know that, right? If
you didn't know that, now you know. I found someone who is more experienced than me and I
knelt and said please accept my sword master. And he said rise and like knighted me and I
became his sidekick for four years. So that company raised $5 million and went to several
million in revenue. I then became, as Michael indicated, the CEO of a test prep company called
Manhattan GMAT, which taught people how to do well on the GMAT. I believe in very obvious
names. That company grew to be number one in the U.S. and I personally caught the analyst
classes at Goldman Sachs, McKinsey, J.P. Morgan, Morgan Stanley and these other firms how to
do well on the GMAT. I joked that I went into these incredible office buildings with beautiful
conference spaces and I was like let's talk about triangles, because the week was about.
[laughter]. It seemed like a lot of overkill. But that company was acquired by the analysts
Washington Post in 2009, and I was trying to think of the problems that I had seen over the years
and I might want to try to address personally. The problem I kept coming back to was that those
analysts reminded me of so much of myself when I was at the law firm, where they had done
well in school. They got the jobs they thought they were supposed to get and they were working
hard but they didn't really know what they were doing, why they were there. They weren't very
engaged with their work and so they were going to try to figure it out and leave to do something
else, but they would take the GMAT as a safety hatch, or escape hatch if it didn't work out. So
the path would go two years analyst program, try and do something else, find that it's not the
perfect fit, go to business school for two years, load up with 100 k in debt, have your choices
constrained a little bit and then go to do something else that hopefully will be a better fit and
that's typically not the last step, because the post-MBA position, the typical tenure -- actually, let
me -- and what do you guys think the typical tenure is of a post-MBA position measured in years
or months?
>>: Two years.
>> Andrew Yang: Two years, that's right. They do that for two years and, you know, they try to
figure out the next thing. So I saw that movie dozens or hundreds of times. I saw my own
movie and those of my law school classmates and I was like wow. What a weird five-year ringer
we are putting so many of our young smart people through. It's kind of unproductive. And at the
same time I saw that Teach for America had channeled so many young smart people into
education and saw that that transformed their lives in many cases. I thought it would be great if
there was a Teach for America for startups, and what do you call that? You call that Venture for
America. I quit my job in 2011 to start this nonprofit. I put in 120 k of my own to start the
organization and went without salary for a year while I was going around recruiting people like
Brian and I think Stephen actually saw me on the first college tour. I was on Duke's campus and
he said that he was the only one in the room which is probably right, because not many people
showed up to that first college tour. But now Duke is our number one feeder school where we
had, I want to say something like 70 applicants from Duke this past year and we're going to be
one of the top 20 employers out of Duke alone this year. In 2011 I started the organization. The
budget that year was around 200,000. Fast-forward to today, our budget is 3.3 million; we're
growing quickly. We had over a thousand applicants this year. What we do is we recruit top
college graduates from around the country. We bring them to training camp where we say look,
here's a little bit about startups. You become best friends with each other. They all come to
Providence, Rhode Island and live in a brown dorm, so it's very exciting. Those of you who are
young, you know, you can maybe imagine what that is like. And then they were in startups for
two years. We bring them back together for a reunion, have webinars for them and then they get
operating experience. They work in the trenches of a startup in one of these cities for two years.
At the end of the two years we have a seed fund waiting for them to invest in them if they decide
to start a business, and the angel investors in that seed fund include Jeff Wiener the CEO of
LinkedIn and a number of other very prominent businessman and executives. How do you guys
would've considered a program like this when you were coming out of college? A lot of you,
right? The point is that we want to try to create rational choices for our young people. Like right
now we're saying here are your six menu items, but in our heart of hearts we hope you don't do
any of the six things. We hope you do this weird off menu thing that we are going to hide and
make really difficult. I'm here to say that's really silly. It's a really silly way to try to build a
system or an economy. What we should do is we should give them more diverse paths and
diverse visions of success and make it just a principled rational choice where if someone is
designed to try and build something, that's what they should do. If someone is designed to be a
contract reader, they should do that instead. But right now we're saying look, no matter what
you are design to do, here are the paths in front of you. Choose one. It's a little bit like that
movie Divergent. Anybody seen that movie Divergent? It wasn't that good, but it did remind me
of this a little bit. Our mission is to revitalize American cities and communities through
entrepreneurship, to enable our best and brightest to create new opportunities for themselves and
others and to restore the culture of achievement to include value creation, risk and reward and
the common good. If we can do these things then we believe we can revive the capacity of our
top people to end up building the engines and innovations of prosperity for the future. It's all just
about where our talent is going. I think you guys would agree that where our talent goes is going
to end up determining the future 1 to 30 years from now. We can all tell the future as long as we
know what our smart people are doing. I'm going to stop there for a second because I've been
doing a lot of talking. Any questions or thoughts on this? Yes?
>>: You put up a very intriguing list there about what grads are seeking as they leave college,
prestige. What's your message to counteract all of that? That's a lot of weight there.
>> Andrew Yang: What's your name?
>>: Philip.
>> Andrew Yang: Philip. So Philip, what's amazing is that Teach for America provides all of
these things if you look at them, with the possible exception of, actually with the exception of
money. Teach for America is prestigious. It's clearly marked. It’s progress, opens doors gained
skills, community training et cetera. Venture for America checks every box on this list including
potentially money if you stretch your time horizon a little bit, because if you believe in yourself
and think that you have what it takes to start a successful company then you will defer some
short-term rewards and then maybe have a shot at doing just that down the road. We agree with
you that these are very compelling factors and we actually want to provide them, and if we
provide them, then young people will walk this path. Yes?
>>: Marcel. Post training, do you offer any resources to help them get started?
>> Andrew Yang: We have -- maybe we'll offer them Microsoft products if all goes well here
today. [laughter]. We have two full-time programming team members, one of whom is an MBA
from MIT and his job is just to offer professional development and help the fellows get stronger
at what they want to do. We also local resources in place for the fellows where we'll meet with
business leaders in their communities, so they get a sense of leadership in each city. But we have
programming, webinars, online licenses for various educational resources and then we bring
them back together for training camp after their first year. Yeah?
>>: How do you choose your target cities? Are there just those three cities that you mentioned?
>> Andrew Yang: Let's see if I have a map for you. What is your name?
>>: Dean.
>> Andrew Yang: Dean? Let's see. All right. So I will go a little bit bad. I will come to the
map in a second. What I'm going to do right now is just show you guys some young idealistic
smart people which may or may not include Brian, just sort of arbitrary. This is just to give you
guys a sense as to who is in the program. Steve might even have some friends. I don't know if
any of your friends are listed here. Do you know Jacob Robinson?
>> Steve Schwartz: I do know him.
>> Andrew Yang: Yeah. Do you like him?
>> Steve Schwartz: I don't know about that. [laughter]. That he was a leader on campus. I bet
he could've gone to any bank or consulting firm that he wanted.
>> Andrew Yang: Yeah. Jacob’s a winner. Here's some of the people that made it through our
selection process. We have a three stage selection process. This year we had over a thousand
applicants and about a hundred spots, so it's about a 10 percent acceptance rate. We had a
computer science major from Princeton who turned down Space X to join Venture for America.
We are getting very, very smart young people, to your question before. And here's some of the
people that are out there right now working at startups around the country. I don't know what
you think of when you see these faces, like what are the commonalities. I just think smart,
idealistic, full of energy and passion, right? Do you seem to get that from these guys? Plus a
little bit of diversity thrown in because we chose the faces. And then here are some of the
fellows that are coming out of the program, so the first class is graduating this year and these
guys are actually starting honest to God businesses and I can't tell you how excited I am about
that, because we don't expect everyone in this program to start a business. That would be really
very high bar, but I'm going to give some shout outs. Brian Rudolph graduates from Emory,
moves to Detroit to work at an e-commerce company and he started a pasta company called
Banza Pasta that's high-protein, gluten-free pasta made of chickpeas. Who finds that appealing,
appetizing? Go to Banza Pasta and sign up for their…huh?
>>: Do you buy some?
>> Andrew Yang: I do not, but you can have a box same time I do. Just go on to their website
and sign up for it. TERNPRO, Brentt Baltimore and Brian Bosche cofounded a company to help
small businesses tell their stories through video editing that's distributed. One of the ways they
get the contact is they give the businesses GoPro cameras and say put these on your employees
for a couple of days and then they'll edit the footage into a video for their website. CASTLE
which is Tim Dingman and a few other guys who aren't pictured. CASTLE is a software
platform for local landlords. These guys in Detroit, they bought a foreclosed mansion for $9000
and then they went around rehabbing it, and while they were doing that they figured out that
there is a disconnect between local landlords that have fewer than ten properties and tenants.
They don't like or trust each other. If you ask either party, what's the problem. They say like,
you know, those other, those tenants are trustworthy and then the tenants will say those landlords
aren't trustworthy, so they are building a communications platform between local landlords and
tenants that is being going to build in reputational scores so that if you are a local landlords that
does good stuff, then you end up with like a CASTLE reputation and maybe you can even charge
like 4 or 5 percent more rent over time, but in the meantime it's like a communications utility.
These are the startups that our fellows are starting themselves having been in the cities for less
than two years. And additional about 50 percent of the fellows are staying in their cities and
working at either the startup that they have been at for the last two years or another startup. It's
actually working on the ground in the most important of ways. One of the things I realize very
early on was that in order for young people to find this an appealing path, it had to be someone
who is cooler than me. I managed to enlist Tony Hsieh, the CEO of Zappos, Jeff Wiener the
CEO of LinkedIn, Dan Gilbert, the founder of Quicken loans. Dan is a story unto himself. How
many of you know who Dan Gilbert is or have a sense of what he is doing? Dan Gilbert has
invested a billion dollars of his personal wealth into downtown Detroit and is now Venture of
America’s biggest supporter in bringing talented young people to work at his startups in Detroit.
He is speaking at our summer celebration in June in New York. I guess you guys might not be in
New York next month, but if you know anyone, please, send them our way. It's going to be a
really good party. Dan Porter is the former president of Teach for America from the ‘90s. He
was the head of a company called OMGPOP that may draw something that was acquired by
Xinga, I want to say two years ago. Alisa Volkman was the cofounder of Babble.com; it was
acquired by Disney, so we have some real winning people associated with Venture for America
in part because we knew that young people wanted to learn from experienced entrepreneurs. The
team is very strong. Mike Tarullo is a Duke grad and in the same fraternity as Stephen. That's
one reason why we are so strong at Duke. We're going to get those Brown numbers up. The
team is the team. Here is the city question. Who asked the city question? What was your name?
I'm sorry.
>>: Dean.
>> Andrew Yang: Dean. We started out in Providence, Detroit, New Orleans, Cincinnati and
Las Vegas. We expanded to Baltimore, Cleveland and Philadelphia. And this year we are
expanding to San Antonio, St. Louis, Columbus and Miami. Miami has an unemployment rate
of like 10.2 percent, just so you guys know. It's a, you know, people think Miami. It's like more
prosperous than it is probably, at least statistically. These are the 12 cities we are in and I'm sure
you guys have other thoughts as to where we could or should be. We're just going to keep
expanding. Each new city needs to have a few things going for it. One, it needs to have a robust
set of startups for our fellows to work at because another premise of ours is that most of these
fellows need to have established businesses to work with. Having to start businesses from day
one would be a little bit overambitious. Two, leadership in that city needs to be supportive and
then three, there needs to be financial supporter for Venture for America because our costs for
doing what we do are about 35,000 per fell over a two-year period, which is about 4 percent less
than Teach for America is spending right now on a per teacher basis and they're at scale. They
have been doing this for about 24 years and we have only been doing it for a few years, so I think
we are relatively resource efficient. We can probably even get it a little bit tighter over time. To
go to a new city like San Antonio, we received a grant of 500,000 from Graham Weston who is
the founder of Rackspace and now the CEO again. When we go to a new city we're looking for a
partner like that to be able to provide a runway so that we can operate there for years, because we
know to your point in the back, it's going to take many years for us to be able to have a real
impact. You send in an initial group of 12 or 15 or 20 young people; that's going to be great, but
really we need to have the maturation period so that those young people end up becoming
managers, leaders, founders and contributors in a meaningful way. This 107 fellows from this
past year and we have another 104 fellows coming in for training camp this year and they are
going to be in their cities by August of this year, so this number will go up to about 210 or so.
Yeah?
>>: If I create a startup, for example, how do I engage with your company?
>> Andrew Yang: We have three people who go and kick the tires on a startup. Like if you
were to be in one of our cities, which city do you want to be in?
>>: Say Seattle. [laughter]
>> Andrew Yang: Seattle, interesting hypothetical there. Seattle right now is not one of our
cities, but let's say it was. You just contact us and say hey, I'm Henry, right? I'm Henry with a
really interesting startup. I think I could use some young smart people and then we would send
someone to meet with you and say what is the company? Who are you? What are your needs?
And then decide if it's a fit. If they decide that it's a fit and in your case it probably would be,
honestly, because you seem cool and you are clearly very smart to have the job you have. We
then put you in the mix. Right now for the hundred fellows in this year's program there are about
180 positions, so it's competitive on the part of the companies and we have a surplus of
opportunities relative to the fellows. You would have to go and compete and try and get a young
smart person that wanted to work with you. That would be the process. It's pretty
straightforward for the companies. We do turn down a lot of companies because they're not
growth oriented enough or the management team doesn't seem strong enough or the role isn't
appropriate, but I'm sure none of those things would apply to you. Yeah?
>>: What if there is a demand for startups that are in some of the major cities like San Francisco,
do you consider it for the program or do you only focus on the other areas?
>> Andrew Yang: Right now we're in these 12 cities and I daresay that San Francisco is going to
be maybe the last city we ever like actually go to, open up. [laughter]. But we have people
graduating each year and those people often are going to gravitate to San Francisco or New York
or Seattle or these other markets. We actually already have three or four fellows in San
Francisco because of their company got acquired and moved to San Francisco because they got
in the Y Combinator and so they opened the San Francisco office. Things like that happen and
we're not very dogmatic. It's not like this thing where if you leave your city all of a sudden, you
know, we are upset with you. If the needs of the company make it appropriate for you to end up
in any of these cities, obviously, that's cool. The other thing is two years is not forever, so let's
say we have 100 fellows this year and then 50 of them end up starting companies or staying in
their cities. That's still another 50 young people who are probably going to want to work at
startups in San Francisco, Seattle, New York et cetera. You can have them season for a couple
of years in their city and start up and then try to hire them on the way out.
>>: The other thing I was going to ask is there are entrepreneurs that are flocking so much to
San Francisco because -- I'm from the Bay Area -- that's where they actually can get connected
more easily, but they're not necessarily connected to talent that could help them, so sometimes
they can find founders or whatever. There's two entrepreneurs moving in there, but they are not
from there. They are just going there because they don't have any other options or they don't
think they do.
>> Andrew Yang: Yeah, and it's something that we'd like to come back over time is this notion
that you must move to a particular geography, San Francisco in particular, if you want to start a
business of a certain type. In order for the economy to grow the way we all wanted to, people
need to be able to start businesses in cities around the country. And if we can open up the talent
of pipeline for people who are starting companies in all of these cities are the ones that will
follow it will make a big difference. In our experience companies need the following three
things. They need capital. They need team and talent and then they need product market fit.
And people talk a lot about the first one, which is just like investment capital, but the
entrepreneurs we talked to say that team and talent is actually the key driver and that most of
them have trouble accessing that early on. Yeah?
>>: So building on that and thinking about the 30 year growth scale, what happens, or how are
you guys setting the system up that would support the growth of the -- once someone has
graduated from the program and they've started a company assuming in that city, do you support
their growth, the new company’s growth? Because they are drawing from a local talent pool,
right, so you don't necessarily have a pipeline of new grads coming in to feed the new startup.
Especially if they're growing, they are going to hire 25, 50, 100 people, whatever. And that's
really where it starts to affect the local economy in a much more significant way. What you have
in place for supporting that kind of growth?
>> Andrew Yang: I'm super excited for that phase and we're just hitting that phase, which is
fellows start companies. Our goal is to help start 100,000 U.S. jobs and a lot of that is going to
be seeing these companies succeed. I'm very happy to say that the people who have been
supporting Venture for America to date, like Jeff and Tony and Dan and UBS and Barclays and
all of these people, are all hovering there waiting for our guys and gals to start companies and
they can come in and say yes. Let's make this happen. How many guys in the room like you
yourselves personally would like to help these companies succeed, like these 24-year-olds
starting companies? You guys all would, right? I'm happy to say that everyone is all waiting for
it to happen and the fellows are up for the challenge; they are doing it. But you are right that that
challenge is going to mushroom quickly over time, or if you look at the math. Let's say 20
percent of our fellows start businesses. That means by two years from now we'll have something
like 35 to 40 businesses that we need to help support. And not all those businesses are going to
make it, clearly. We all know the statistics on this, but we have to make it so that enough of
them succeed and higher and thrive and hire more people that we can start to have a real impact.
A pet peeve of mine is institutions or programs that sort of have you for a particular period of
time and then when it's over they shake your hand and say yes to luck, you know? And I hate to
say it but that resembles most of the institutions I know that deal with people. For us, Venture
for America is much more than like this two-year program. We want to help you achieve your
goals for a long time to come and I'm happy to say that our supporters feel the same way. It's a
big challenge though, no doubt about it. We're looking at dozens and eventually hundreds of
businesses. Yeah?
>>: You mentioned that the seed funds wait for the graduates, so these graduates are guaranteed
to get seed funds?
>> Andrew Yang: No. This year, as an example, we have four teams, six fellows, four teams
and we have 150 k to distribute among them provided by UBS Americas, so they're all going to
get something. And then they have this Angel Council, between 500,000 and a million to pitch
to and that's going to be up to the angels how much they want to invest. You are guaranteed very
little. Our program is the real world. Just like in the real world you're guaranteed very little; you
have to fight for it from us to, but it's in our interests to help them to the extent we can. Yeah?
>>: We have an online question from Jeff. He says it seems the program gets its sourcing from
schools. There's been a lot of talk in the media that questions the value of college and their plans
to source kids straight out of high school.
>> Andrew Yang: First, I'm happy to say that we had applicants from 142 schools this past year
and we have fellows from schools that no one has ever physically visited because of resource
constraints. We have fellows from University of Oklahoma, Auburn. There's one guy who's a
Marine and served in Afghanistan and graduated from UC Santa Barbara and is now working in
Detroit, so we know that talent is everywhere. Certainly, if you have a limited amount of
resources, you might start at certain schools, but we know that people are capable of great things
from all sorts of backgrounds. To the high school, college question, we've drawn a line that we
are taking college graduates. That's somewhat arbitrary, but it's just something that we decided
to implement. In our opinion, and you can see from the nature of this presentation, people are
questioning college, but in our opinion most people are probably going to graduate. Most people
of a certain background are probably going to graduate from college and they probably should
graduate from college in our mind. And if there's a place where we can intervene, it's actually in
the options after college graduation. That's the approach that we're taking. I know Peter Teal
and others are like trying to go earlier, but we think the crucial juncture is this point after
graduation. Yeah?
>>: Now that you are back on the map, I'll go back to the geography topic. Is there anything
you do in your marketing or your programming to get people over any reluctance to go to some
of these locations? I hear you that two years is and forever, but I know I was fresh out of school
going to a great place was very high on my criteria. How do you overcome that?
>> Andrew Yang: What's your name?
>>: Kim.
>> Andrew Yang: Kim. So part of it is the self selection process, that if you apply to Venture
for America, you are not sure where you are going to wind up geographically, so you need to
have a degree of flexibility to throw your hat into the ring. By the time they get to us, you know,
they're not fixed on one location. When they get into the process, they quickly have a sense of
the fact that they are going to be working at a real company and get very focused on the specific
roles and companies that they are going to be working for. They become less fixated on what
city it's in. If they say just give me a great company. I don't care if it's Baltimore or
Philadelphia, Columbus, Las Vegas. They just want to find a great team that they mesh with.
And that, again, is the self selection based upon the people that came to us. The other thing is
that if you were to move to a city and know that you are going to go with like 5 to 10 of your
new friends, then it makes almost any environment much more hospitable. A number of the
fellows are living with people from the program or living in the same building or block, and so if
you put that hat on where you're like hey. I can go just about anywhere if I've got six new
friends and a bit of a network, then it makes them, I think, a little more versatile that way. It's a
good time. It's like, you know, two years in a major American city or less major American city.
But two years in an American city with like five new friends. It's like an adventure. Yeah?
>>: So your recruitment season is like the fall of a potential fellow’s senior year?
>> Andrew Yang: Yes.
>>: Okay. A lot of the places you described where smart people go, like the Goldman Sachs in
the McKinley's in the world, they get their students or their future employees locked in in that
post junior summer, so how do you combat that?
>> Andrew Yang: We are actually going to start a selection day for juniors where if they come
in they can get an offer spring of their junior year for the summer after graduation, and that's how
we are going to sort of make it even, but it's a great question. The process that we described here
does begin very early where many juniors are getting offers at the end of their summer before
their senior year and they take it so they can be set, so we're going to do the same thing. Yeah?
>>: What about offering internships at the same companies to juniors?
>> Andrew Yang: Yeah, we're going to start looking at that as well. We want to go both
upstream and downstream, so upstream would be summer internships. Downstream would be
PhDs, unhappy lawyers or bankers or consultants of which there is no shortage that want to head
on and do something else. My brother is an academic. How many of your academics? Probably
a number of you are at least not academics but have a PhD of some kind? Wow! For some
reason I thought this was a room full of PhDs. It does say Microsoft Research on the door, right?
[laughter]. My brother is an academic and I have a sense that there is a little bit of inefficiency
going on there and so we like to be able to offer options both up and down over time.
>>: What does Venture for America ask in return from startups?
>> Andrew Yang: That's a great question. For a startup to be considered, like Henry for
example, if Henry were to say I'd like to hire a fellow. We say one, you have to commit to
paying them a base salary of 38k to start subject to increases if they work out. That's very
reasonable to have at least two years of runway for that, because it's obviously like a genuine
early hiring of an employee. That's like the easiest thing. The next is that they need to have a
specific role that is not fungible, so you can't have like five people doing the same job and one of
them is a fellow. You have to commit to sitting down with them once a month as the founder or
a very, very senior executive so that they get a sense of exposure to the business. And then you
also have to occasionally like let them go to things like training camps, which is, you know, in
the confines of vacation, but you should know that there is some programming that takes place
that the fellow is probably going to want to go to that you should let them do, you know, within
reason. Also, you should invest in their development such that you can try to hire them after the
program ends, because we are not that interested in companies that are like hey. This is a twoyear thing and then that's that. We're looking for companies that are trying to fit that person into
their team long-term. If a company falls short of those things and the fellow is unhappy, then we
can re-examine the fit, which happened a little bit more in the first year or so, and in the second
year a little bit less so and I think it is continuing to improve as our relationships with the
companies get better and there is a firmer understanding. Yeah?
>>: I'm just curious about interest. For instance, I saw that there was someone who had a degree
in religion and are you matching jobs to the person’s degree? Like, how are you actually, are
they just doing straight management and they can go to a shoe company like Zappos?
>> Andrew Yang: Let me go back to some profiles. You can see some different majors here
and here. I'll use this because this is your religion major. Joe Morrison here started a backpack
company in college too, so he's very enterprising. But we believe that talent is versatile and can
do lots of different things, and if you are really good at one thing, you can probably learn to be
good at something else. So our fellows have what we call adaptive excellence, which is just they
demonstrate they are really good at something and then we can project that they can learn other
things. So I'd say 25 percent of the fellows are either engineers or hard science graduates where
they studied either biochemistry or chemical engineering or something like that. And then we
have a host of social science people like economics, finance et cetera and then a handful of
humanities people. I'd say about 25 percent are like Johanna or Joe. One of the misconceptions
we think is out there is that you need to be a computer science major to go into startups, but
startups need, as you guys know, very accomplished content creators, marketers, branding
people, business development, sales et cetera and so what we do is we source for all of those
roles in these companies. It's a little bit like what consulting firms do. No one majored in
consulting. You know what I mean? If you did major in consulting, people would probably be a
little worried about you. [laughter]. So the consulting firm's trust that if you are really smart and
hard-working and accomplished that you can learn consulting, so we are a little bit the same way.
Yeah, in the back?
>>: How do university students find out about you? Some of the schools, like the University of
Washington, which is probably not one of them that you go to; I don't know. But do you send
that information to all of the different career counseling offices at universities? How does
someone find you to apply?
>> Andrew Yang: We have a full-time recruitment team of three people. We have been in most
major publications at this point, but we also know that college seniors aren't sitting there reading
the New York Times or Wall Street Journal looking for stuff like us. So we do try to hit the
ground at these campuses, but we would love your help on this. I think that our brand right now
is still building up. Our awareness is still building up, but if you know young smart people
among your nieces, nephews, friends, neighbors et cetera that you think this resembles, please
have them apply. I mean, the more talent that we get in the more of an impact we can have. We
are just getting started on that front, but we love University of Washington. We love people
from all over. Yeah?
>>: And they have to be coming out of college or they could have been in the workplace?
>> Andrew Yang: They could have been in the workplace we say 0 to 3 years, so senior in
college up to a few years out. We had one guy, Brent Baltimore, was an investment banking
analyst at Credit Suisse for two years and then he was also on the national champion rugby team,
but that was in college. And then he was a Credit Suisse banking analyst and left to join us after
his analyst program was over, so he had two years full. So if you have people that resemble that,
you can send them our way too. So what do you guys think? Any thoughts or reactions to this?
Is it awesome?
>>: It is.
>> Andrew Yang: It is. I'm glad you like it. [laughter]. The plan here is to fix the country
[laughter] really. If we get enough smart people building cool companies throughout the
country, we think that this could be a game changer, especially because we could change the
nature of people's choices. Right now there's zero weight or morality to going to be a corporate
lawyer. No one says that's like good or bad. That's just what achievement looks like today, but
if you have different flavors of achievement where you can say to a younger version of me guess
what? Maybe that is not what you should be doing. Maybe you should be doing this other thing
instead, that it can have a profound impact. I mean that's about the restoration of the culture of
peace, because we need our best people trying to solve problems. We can't have people trying to
maneuver themselves close enough to the geyser where some of it like rains down on them.
That's a bad place to be as a country. Yeah?
>>: What does five years from now look like? Are you still around? You know, how is this
going in five years?
>> Andrew Yang: Am I still around? What kind of a question is that? My gosh! [laughter].
>>: I don't know. I mean like, you know, is this a, what does the long-term look like? Because
30 years is a long horizon; it's a long time horizon.
>> Andrew Yang: Yeah, I agree. I was joking with Amy on the way in here. It's like in 30
years they will like roll me out, you know, for special occasions and I'll like point some wise in
hand with someone, like scare some young person. It's been an incredible three years. Knowing
where we were three years ago, I mean we were like me and a PowerPoint deck and me and
Stephen in Durham looking at each other. [laughter]. Now I'm looking at all of you plus
whoever is looking online. It's been an incredible run because everyone wants to solve this
problem, you know, so if in five years the problem is solved, that would be dynamite. I have an
instinct that the problem will not be entirely solved in five years and that the organization will
still be doing work. By five years from now these guys will be five years out in the field like
having run companies for five years. I mean, oh my God! Like imagine what that does. Let's
say their company gets to 20 people and then they are hiring people from the program and then
like they look up these role models. I mean the fact that we have done what we have done and
these guys are the tip of the spear is encouraging in part because it just gets much more like self
reinforcing overtime. It's like if you can go to Duke and say guess what? Here's a Duke grad
from four years ago who is now CEO of a company in Baltimore. You know, like wait. That's
possible? I can do that? It's like, yeah. You don't have to go to McKinsey and try and like
scheme your way out. You can do this and then maybe you can be this guy. I mean the fact that
we have done what we've done without having that guy to point to, or gal, I mean it's nuts, really.
The first fellows deserve a lot of credit in part because they are taking a real leap, but as we build
a track record it's just going to get better. Are there thoughts? Where was I on this? Ah yes. I
wrote a book called smart people should build things. They are available back there and here.
The book’s about the ideas behind Venture for America and some of the things that went into
founding it. If you have an interest in seeing how the organization came to be where it is today,
the book has that. There's some nice quotes about the book. Who here has read the book? All
right. Michael and Amy. If you want an honest review after I'm done talking, sidle up to them
and then ask them what they think. One of the things the book does have is it has a breakdown
of the six paths and what it is that smart people are doing and it has primary research on all of
that stuff. So for those of you who are into that stuff, it's like a little bit of a social science
entrepreneurship tone. I contact information is Andrew@venturforamerica.org. We're excited to
work with Microsoft and all of you. The three pillars of what we do and you can help with all of
them. One is recruiting very smart young people. Two is enlisting cool startup companies
around the country and three is our own organizational resources, so we have young people. I'll
give you guys a story and hopefully it will make you mad and then you guys will like want to do
something about that. A guy, Tim Dingman is an electrical engineer out of Brown and he
wanted an engineer mentor. How many of you guys are engineers? Many of you? Excellent.
So you want to engineer a mentor and I was like we need to get you an engineer mentor and so
we found a guy at Google, Scott Johnston, who was like I'll be his mentor. So we have a host of
young people who all want experienced professional mentors and resources and that could be
many of you here in this room where if you want to take an enterprising 22 or 23-year-old who
was trying to rebuild the country under your wing, please get in touch with us. We would love
that. There are many things that, hopefully, we can all do together. I know you came to a book
talk and you're left with now this new set of responsibilities, but this organization is very much a
work in progress. I mean it's a living thing; you know, it changes every day and every week. If
you think that what we're doing is something that you would like to help with, please just get in
touch with me. I would love to hear from you. I know we've already entered the Q&A period,
but I guess we can officially do so now.
>>: Do you have any international students joining your program? [indiscernible] problems.
>> Andrew Yang: Yes. It pains me greatly on multiple levels. We have one international right
now but that is sort of an exception because most of the startups don't have the resources to
address these documentation issues, but it's something that we would like to help change over
time. We've got one, but we would like to have many, many more. Yes?
>>: Can they work in the country of origin for a start up here?
>> Andrew Yang: We haven't encountered that particular situation yet and we want the person
to live and work here in one of these cities to the extent possible because that is going to be a big
part of the social experience and everything, so we probably wouldn't want to have that situation.
Caleb, right, Caleb?
>>: Do the fellows have any say into what city they are placed into? Do they get a preference or
do you place them based on their skills?
>> Andrew Yang: They can express preferences and we try to meet them, because it's just good
for everyone if someone goes where they want to go, but in order to get into the program they
have to know that there is some flexibility involved, because we may not be able to find that
company for them in that city. I joke sometimes. We can't invent companies. The companies
that are in the cities are what they are and if it's a fit, great. I'd say we satisfy preferences a
majority of the time and often when they get into the interview process, they realize that their
preferences might not be as fixed as they thought. Iris?
>>: The gentleman upfront asked about what your long-term goal was and you gave him the 30
year plan. This is just more feedback. As you grow, you may want to consider Venture for
America veterans and doing the same model for people coming out of the military, or Venture
for America mid-level people, not necessarily right out of University. You know, the mid-group
that have been working but also want to be entrepreneurs as well. That could be something on
your roadmap.
>> Andrew Yang: Yeah. I would love all of those things. I just want to erase inefficiencies and
there are tremendous inefficiencies around the populations that you just described and we would
love to do that, veterans, mid-level, more experienced et cetera. Yeah, Henry.
>>: Do you plan on expanding internationally in the long run? Or are you scoped to the U.S.?
>> Andrew Yang: Some people have started Venture for Canada and Venture for India with our
blessing. I joke that we don't really want to start Venture for Earth. It just seems little too
grandiose and there's enough to do here. My personal motivation, obviously I like
entrepreneurship and the rest of it, but I'm American. My kids are going to grow up in this
country. I want to help this country, you know. If other people want to help their countries,
that's fantastic, but that's not really why I started Venture for America. I feel very indebted to
this country because I am a second-generation and a relatively recent arrival. I just saw that
there was a problem and I thought I might take a shot at contributing to the solution. That's my
personal motivation. 30 years from now I'm sure somebody will succeed me and say Andrew
Yang so sure excited, venture Earth and then there will be this giant globe and then it would be
like our founder didn't have the vision that I have. [laughter].
>>: [indiscernible] or be interested in the other entrepreneurs kind of doing some similar
models, because I think you could eventually figure out how to bring it together without you
losing focus on America.
>> Andrew Yang: We try to help Venture for Canada and Venture for India. I'm very
supportive. Part of it is that I think organizations do need to walk where they can run and focus
on what they need to do and the U.S., there is so much work to do here. I'm also much more
familiar with the setting here and the backdrop. People in Europe have told me that in England
this is super pronounced, just replace New York and San Francisco with London and replace
financing consulting with financing consulting. [laughter]. There are like issues around the
country. There are some universal truths here about just the fact that resources influence the
flow of talent and that if those market forces aren't somehow counterbalanced, they lead to a very
kind of extreme perverse outcomes over time. I think that that is true everywhere.
>> Amy Draves: Thank you so much.
>> Andrew Yang: Okay. Thanks guys. Thanks so much for having me. [applause]