Transcriber: Michele Gianella Reviewer: Muriel de Meo
I try and make anything I do as relevant
to the people who are listening to me at that moment,
so where are you guys?
How many of you are undergrads?
Show of hands.
Virtually everyone, oh my God.
Let's do that again.
How many of you are seniors?
Juniors?
(Cheering)
Sophomores?
(Cheering)
And freshmen?
All right. Good stuff.
I'm going to talk to you as if you're juniors.
I'm just going to land in the middle somewhere.
It's all good.
So, the theme is going to be the flow of talent.
The graphic that kicks us off, if I can get this thing to go -
Hey, Mike, where do I point this thing?
Sorry.
Thank you.
Or should I click this thing?
This is the graphic we're going to use to kick off the discussion.
For those of you who are seniors,
this might be more familiar than if you're a freshmen.
So what this graphic represents
is that 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.
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.
(Laughter)
For those of you who are thinking about law school,
you should know that awaits if you do that.
(Laughter)
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.
I was there for about five months.
I went home dispirited that Thanksgiving, to my parents.
I said, "You know, Mom and Dad,
when I was young, I didn't dream about being the scribe.
I dreamt about going in the woods and killing something."
They, of course, didn't know what I was talking about.
I then went back to my job and said,
"You know what, I feel like I'd like to try and build something,
but I don't know if I have 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.
This was around 2000.
Had its mini rise and maximum fall.
We raised about a quarter of a million, got some press,
but then the bubble burst.
How old were you guys when the bubble burst in 2001?
(Audience) Eight.
Eight, nine.
(Laughter)
So, do you guys have any recollection of that time?
Maybe your parents watching CNBC, very sad for a little while,
or something like that.
Anything like that?
There are adults among you who remember this stuff.
When it burst,
it was like a giant hand went through the streets of New York
and swept away any company that was not nailed down,
including my little outfit.
At this point, I'm 25.
I've just lost investors about $0.25M.
I still own $100,000 in law school debt.
My parents are like, "What happened? You used to be smart."
(Laughter)
At this point, I had been bitten by the bug
and said, "You know what, I think I really want to do this.
I want to learn how to build a business, a company."
I'm going to submit this you.
What should young Andrew do now, 25,
lying on his floor, looking up at the ceiling?
What's the next step?
(Audience) Try again?
Try again, 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?
(Audience) Getting them to believe in you.
Wow, I don't know what that means.
(Laughter)
Okay, so I'm going to submit something else to you.
Let's say you wanted to become a chef, really bad.
What might you do?
(Audience) Chef school.
Chef school. Another possibility?
(Audience) Get a job.
Get a job where?
(Audience) As a chef at a cafe.
Right, you would take your chef knife out,
and you would go down on one knee.
You would go to someone and say, "Be my master." Right?
You'd find someone who's a better chef.
So that's what I did: I found an experienced entrepreneur.
And I became his lieutenant, his VP of something or other.
And so for four years, I supported him
as that company raised about seven million dollars
and three million in revenue.
Then I became the CEO of a company called Manhattan GMAT.
Has anyone heard of it?
Juniors, seniors, maybe?
Manhattan GMAT grew from being a relatively small GMAT boutique
to number one in the US over the next five or six years,
to the point where we were acquired by The Washington Post in 2009
because we were number one in the US.
Washington Post owns Kaplan.
We were beating the tar out of Kaplan.
Kaplan got tired of it, so the CEO calls me and says,
"Hey, let's talk."
We have a little bidding process, and the company gets acquired.
It's one of the reasons I'm very familiar with this particular picture;
many of the people my company started in Manhattan GMAT
were bankers and consultants
who weren't really finding what they were looking for
as 20-something year olds,
so they would take the GMAT, apply to business school,
and then go to business school.
So, I'm going to continue with this.
Let's take a look at what the actual numbers are.
Let's take Harvard's class of 2011.
What were the most common things to do out of Harvard a year ago?
Shout them out.
(Crosstalk)
Yes, finance.
(Audience) Doctor. A.Y.: Consulting.
Law. Not accounting.
(Laughter)
And the fourth is med school.
The question is,
what proportion of Harvard students did one of those four things?
(Audience responses)
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.
It's 65 percent.
Then you have the potpourri category, which is a little bit of everything.
It's grad school, nonprofits, industry, government, IT, military.
Then you have its own line item, Teach for America.
18 percent apply.
Four percent actually become Teach for America corps members.
Then, undecided;
10 percent went to Europe, and then became consultants.
(Laughter)
So this is the picture from Harvard, a year ago.
Let me get some feedback.
It this surprising, unsurprising?
Not surprising.
Now, I throw the normative question.
Is this a good thing, a bad thing, or neutral?
(Audience) Bad. Neutral.
Wow, that one's fraught, right?
Let's keep on going.
If you take a look at other top schools, the picture's the same.
The picture is the same here at Georgetown.
I didn't pull the Georgetown stats, but they're quite similar.
You can see that it's not just a Harvard thing.
It's really a "any top school" thing.
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"?
If you have half your smart kids
becoming bankers, consultants, and lawyers,
where are they going to live?
(Audience responds)
New York, DC, maybe Chicago.
(Audience) Boston. A.Y.: Boston.
San Francisco, LA, those are the top six.
We just listed the top four.
So then you have the rest of the country,
much of which is struggling with job growth and economic development.
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 becoming a banker, consultant, or lawyer
and living in New York, Boston, DC are very high.
Odds of you going back to Florida,
starting a business, creating jobs: 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.
This is the picture you end up with.
What do you guys think, empirically true?
(Audience) Yeah.
Absolutely. Wow, all right. We're starting to get something.
Good stuff. Why is this the case?
Those of you who are freshmen, raise your hands again.
How many of you who have your hands up, keep them up,
know what management consulting is?
(Laughter)
So how is it that that world goes from that
to, let's say, 20 percent of the class at least applying for consulting jobs
and maybe even converting?
How does that happen?
Seniors, chime in, please?
(Audience) Salary.
Money's there. What else? Keep going.
(Audience) Creating new jobs.
Sorry?
(Audience) Security.
Security, fear.
(Laughter)
Keep going. Keep going.
(Audience) Diligent recruitment.
Yes, resources. This is not an accident.
People spend money and time
educating the market, that is all of you, over your four years.
By the time you're a senior, you'll know the names;
McKinsey, Bain, BCG, Deloitte, etc.
Let's take a look at how this list looks.
Prestige, easy to find, progress, seek the next level, opens doors.
Money's on the list, gain skills, community;
and then there's this last one,
which is something pro-social, like change the world.
This even applies if you become a banker or consultant,
because the theory is, you must become a baller
before you can come back and change the world. Right?
Then you can come back to the people with loaves of bread.
(Laughter)
Those of you who are seniors, can I get a - yes, this is accurate?
(Audience) Yes.
All right, thank you.
Now, I usually talk to people who are interested in startups,
so this is a little bit overly broad.
But let's say you were interested in startups.
Show of hands: how many of you are interested in startups?
A significant subset.
The seniors among you, why is it that it's unlikely
you're actually going to go work for a startup when you graduate?
Risky.
Money.
(Audience) Loans.
Loans.
(Audience) It's scary.
It's pretty much the opposite of 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, or 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 "learn about business "and then come back.
Is this accurate?
Am I - ?
(Audience responds)
It's like I was one of you.
(Laughter)
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, and law school
were instead going to startups around the country?
How long would that take
to impact job growth and innovation nationwide?
How many years? Can I get an over/under on this?
(Audience) Five.
Five.
(Audience) One.
One, wow.
(Laughter)
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 certain people -
(Laughter)
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 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 the 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,
this is actually potentially a rosier picture"?
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.
If there's one thing you remember from this,
as a young person, you imagine that you are a static self.
Like, I'm young Andrew, and I say,
"Hey, I'm going to do X, and then I'm still going to be Andrew,
I just will have done X."
The truth is, Andrew changes
if you have him go to law school or be in a law firm,
look at contracts all day, or whatnot.
We're all very adaptable.
And so,
in my view, the activities that lead you down the startup road,
actually end up forming a different self
that I'm going to go on a limb
and say, for some of you, would be more appealing.
If you were to want to try and affect this change,
what would you do?
(Audience) Think of it as primary school for startups.
Maybe you'd tinker with the educational system.
(Audience) [Inaudible] just like what they do
to get psychologists to go and practice in rural areas,
Yes.
If you were me, what you would do is you would go raise a million dollars,
and then start an organization that does this.
(Laughter)
So I started an organization called "Venture for America."
And this 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 Techstars.
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.
What we're doing here -
and I'm going to do something I shouldn't do;
but whatever, I'm going to do it.
So what we're going to do is,
we're going to give you all of these things that you want,
because it's prestigious, it's ultraselective.
All of these things, progress, open the doors -
you get a community, you get the whole thing.
Because we are adults.
If we want you to do something,
we shouldn't expect you to have to somehow
swim against some violent current to do it.
We should actually pave the path.
That's what Venture for America's 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.
That's build a business in Detroit, New Orleans, New Haven, Baltimore,
Cleveland, Providence, etc., etc.
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, $36 to a $38K 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, they have little road trips,
and they have a good time.
Then throughout the two years,
we supply you with programming and support.
At the end of the two years, we give $100K in seed funding
to whoever's made it through the two years and has done a good job.
It's like a combination of everything you guys grew up watching,
"Real World," "Survivor," "Road Rules."
(Laughter)
So this is the plan.
We're going to create 100,000 new US jobs by 2025.
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 through entrepreneurship,
to enable our best and brightest, that's all of you,
to create new opportunities for themselves and others,
and restore the culture of achievement
to include value-creation, risk, and reward, and the common good.
I think I'm before my time, but that's cool. That's all I had to say.
(Laughter)
Thank you all.
(Applause)