Smart People Need To Stop Becoming Lawyers
If you were to guess which achievements Andrew Yang, founder and CEO of Venture for America, is most proud of throughout his career as an entrepreneur, you'd probably choose one of the following: He became CEO of Manhattan GMAT by age 31, he successfully led the company through a multimillion-dollar acquisition by Kaplan, and President Obama named him a "Champion of Change."
None of those guesses would be correct. "I think the single biggest thing I'm proudest of I had control over is my decision to leave the law firm, strike out more independently, and learn to take on a high degree of uncertainty," Yang tells Inc.
Yang has an unwavering belief in entrepreneurship, which is why he's been constantly bothered by the disproportionate amount of bright people entering the workforce who choose investment banking, law, or other professions that don't help create jobs. His new book, Smart People Should Build Things, puts forth his theory about how the U.S. can spur its sluggish economy by making entrepreneurship an obvious choice for young people through changes in education, policy, and industry.
His book imagines a future where 25 percent of top college grads don't go to Wall Street and instead start building companies. (This future is also the inspiration behind Venture For America, his New York City-based nonprofit, which he founded in 2011 with a goal to create 100,000 jobs by 2025.) Below, Yang offers his thoughts about how to turn people on to building companies and advice for budding entrepreneurs.
How can we foster the growth of more graduates who choose to start a company instead of accepting a high-paying job at a law or investment firm?
Andrew Yang: One thing that has positively struck me is how many young people actually want to build something that they can feel a type of ownership and pride in, or feel they're part of something bigger than themselves. The problem right now is that they are not being given that choice, that there are massive structural forces that are pushing them into very specific directions, and as a society we are ignoring these forces and assuming that the market will always act optimally. But in this case, there are certain values at stake that don't have dollar values attached to them. There were times when a talented young person could take a job that paid less money and create more value. And right now, we don't have mechanisms that incorporate that reality into the decisions young people are being presented.
How can we make it a more obvious choice to become an entrepreneur?
AY: The role models and narratives we present are important. But we do have to recognize how hard it is to get started and embrace a sense of struggle and failure, especially early on in the development of our young people. We don't expect our athletes or doctors to be at their best when they start out either. We need to put our young people in environments where they can struggle, fall, and then get up and get stronger. Another issue is that there are these established paths where if someone spends time exploring [another industry], or are struggling, they are somehow deficient. This mindset is something we have to eliminate in order to make entrepreneurship a more realistic option.
In your book you quote an entrepreneur who says, "You don't want to be in the army, you want to be an arms dealer." You say that's flawed thinking for founders. Can you explain why?
AY: Most entrepreneurs find themselves in the position of leading a squad of fighters who they need to lead and energize and motivate. If you shrink from that set of responsibilities, then it is unlikely that you'll make progress towards your goal. Part of that is accepting sometimes that you rise to the challenge and don't quite make it. If someone wants to be the person who isn't actually in the fight, but providing tools to fighters, that's going to restrict the kinds of opportunities you can pursue. I'm all for businesses that don't have to take on earth-shattering risks, but certainly anything worth building is going to come with its own set of challenges that need to be fought, and entrepreneurs with experience don't shy away from that.
You also write about the importance of solving local problems. What should entrepreneurs look for when choosing where to start a company?
AY: I think the single biggest factor is where the entrepreneur has the strongest network. If you are from a certain region and have ties there, it will help you get things done. That's the biggest factor. Another important determinant is whether you believe you're going to build on existing strengths of the region or solving problems of local institutions. All things being equal, it's better to be closer to customers because you can learn faster what it is they want. Another thing, which should not be underestimated, is where you're going to be sustained over time in terms of your personal energy and well-being. You want to go someplace you can be sustained and energized over a multi-year period.
What's other advice do you have for young entrepreneurs?
AY: I think the single hardest thing to do as an entrepreneur starting out is to maintain the tension between getting things done as quickly and efficiently as you can and maintaining a sense of perspective of how long things take to build. I am now 39 and when I talk to 22-year-olds the single biggest advantage I have over them is that I can think in five-year increments. If you can pull that trick, it gives you a huge edge. Young entrepreneurs have the most trouble with the longer timeframe and often grow increasingly discouraged if things don't break their way after a period of weeks or months. Almost any entrepreneur will attest to the fact that the path they took doesn't look like the path they originally envisioned. It's up to you to keep pushing in the same general direction even while knowing you'll keep tracking back and forth in any company or career.