Before the Techonomy Detroit conference in September, we talked to Venture for America founder Andrew Yang about how his new program is attracting young talent to startups in Detroit and elsewhere. Like a Teach for America for wannabe entrepreneurs, Venture for America matches the best and the brightest young graduates with startup companies in struggling cities. Ultimately the program hopes to help reinvigorate the American economy and entrepreneurial spirit, says Yang.
What is the problem that Venture for America aims to solve?
About half of our national university graduates are going to end up in one of three environments: management consulting, financial services, or law. That’s been going on for the past couple of decades.
But it’s been well established that promising growth companies, companies that are five years old or less, are the consistent engine of job creation in this country. Large companies are essentially net zero, and it’s the growth companies that are actually going to create new opportunities.
The odds of a really smart young graduate going to an organization like that are really low. Those firms don’t have resources or brand equity, they generally don’t pay very well, they’re high risk, and parents have never heard of them. Venture for America believes that college grads who want to learn how to build a business are getting the wrong training. The training they need is actually out there in the field, at the startups in Detroit and elsewhere. Right now they are going to Bain or McKinsey, getting training for a very specific professional skill set that they’ve been told is going to translate into long-term entrepreneurial ambition. But it’s not the most direct path, and we’re going to create the most direct path.
How do you go about doing that?
We put out the dragnet. We go to Emory and Wesleyan and we say, “Hey, who wants to learn how to kick ass and help our startup succeed?” And Brian Rudolph applies, gets through our process, goes to our training camp for five weeks, and starts working at Quikly? We fill a massive need for these companies. These companies need ass-kickers early, and it’s a pain to get them. It’s hard to hire in the best of circumstances, much less if you have no bandwidth, not that much money, and you’re in Detroit.
We think that if we supply ass-kickers to companies in these environments, we’re going to increase their success rate, and we’re going to help these companies hit a level where they expand and hire more people. We’re going to train our best and brightest to themselves become job creators and business builders as opposed to financial model creators.
Where do you concentrate your efforts?
The five Venture for America cities are Detroit, New Orleans, Las Vegas, Providence, Cincinnati, and we’re expanding to New Haven, Baltimore, Cleveland. We’re rebuilding the country. There’s a disease going on right now. The disease is that there are few eco-chambers and cultures of sexiness and few visions of success that are being presented to our young people. And most of the value is being created outside of those pockets. We can’t have all of our smart kids move to New York, and there is a lot of great stuff being done in places that aren’t New York or Silicon Valley.
If you apply to our program, you know that you are going to an American city that is probably somewhat hurting. It’s like the new American frontier.
How do you decide which firms they work with?
It’s like Teach for America. You’re accepted to Teach for America and then you apply for a teaching job through Teach for America. It’s the same with us.
For example, they say, “I want to be in Detroit, and I’d like to work for an Internet company in Detroit.” We find a company that fits that bill, and each company typically gets three to four profiles from us. They interview them and take a close look at the people they like. It’s a relatively complicated matching system. We placed 40 out of 40 this first year. All of them went out and interviewed with the companies and then accepted the offer.
There’s a really good mix of fellows, and they all make it through a very competitive application process. So they’re a bunch of ass-kickers. We’ve had kids that turned down consulting offers to make $33,000 in Detroit.
How can Venture for America help spur growth in a city like Detroit?
There are 12 Detroit fellows, working for 12 different companies in Detroit. They are all at venture firms or startups, because we think that’s where the growth and innovation will come from. The fellows are all rock stars and they’re high character. These are kids that turned down all these opportunities to go to Detroit and do some good things. You can see it on their faces; they are smart, good people.
Let’s say you’re Quikly, or Are you a Human, and you’re operating in Detroit, and you need a rock star. There are going to be some people who are in Detroit that fit that bill—but there are also going to be people in other parts of the country who would come work for you. But there’s no way you’re going to Emory or Wesleyan to recruit Brian Rudolph or Max Nussenbaum, you know? You’re in Detroit, doing everything you can to make the company succeed.
How does the program help sustain this kind of hungry startup culture in its target cities?
Those 12 fellows are in place this year. Let’s say another 12 to 15 show up next year, working at some of the same companies or different companies, and another 12 to 15 the year after that. Then two years from now these first 12 are done with their commitments and decide to leave—or, the company is taking off and one fellow is offered a raise and a manager title. At this point he is a Tiger’s fan, he has friends and coconspirators in Detroit, he can actually upgrade his lifestyles if he wants. And then he decides to start his own company four years later, and he hires out of the program. A virtuous cycle begins, and Venture for America ends up feeding itself. This is how you rebuild the economy.