Andrew Yang (NY, '99) is the founder and CEO of Venture for America, a fellowship program that places top college graduates in start-ups for two years in emerging U.S. cities to generate job growth and train the next generation of entrepreneurs.
Andrew was named a Champion of Change by the White House for his work with Venture for America and one of Fast Company’s “100 Most Creative People in Business.” He is also the author of Smart People Should Build Things (Harper Collins, 2014).
What inspired you to create Venture for America (“VFA”)?
I was the head of the country's largest GMAT prep company and saw hundreds of smart young people head to McKinsey, Goldman Sachs, BCG, Morgan Stanley, etc., each year. I thought to myself, "Wow, we sure do have a lot of talent doing the same things in the same places."
That led me to think about what smart people should be doing in an ideal world. I thought their highest use would be to build businesses in Detroit, Baltimore, New Orleans, Providence, Cleveland and other cities that could use a boost. I was sure that young people would jump at that challenge if it was presented alongside prestige, resources, training, network and community.
I figured that if we could change the flow of human and intellectual capital, it would solve a ton of other problems at the same time and lead to more entrepreneurs and happier people. Basically, I wanted to create the path that I wish had existed when I was coming out of college.
Why was it important for you to target economically challenged cities as a platform for this fellowship?
Regional inequality was on my mind in 2010 when I came up with Venture for America.
A number of my friends on Wall Street had come from Michigan and Ohio for better opportunities. I found it understandable but also unfortunate – if the bright people left, who was going to make those places better and stronger?
I also believed that these cities had overlooked startups and growth businesses that could use talent to grow. In many ways, it's easier and more natural to start a business in Detroit or New Orleans where you can live cheaply and be scrappy than it is to try to do the same in Manhattan where everything is much more expensive and competitive.
I started my first company in New York and it was hard for some of those reasons – so hard that my company didn't work out.
After the two-year fellowship, do fellows typically start their own businesses?
20% of our alums have gone on to start companies themselves. About 50% stay on at their companies as managers and leaders. We have a small accelerator and seed fund to help our alums start their businesses. We also have an angel fund here in New York in case anyone wants to back some top-notch young entrepreneurs.
It has blown my mind how successful some of the VFA alumni companies have been – we're talking about multimillion-dollar businesses run by 25-year olds that make real products, not the app of the month.
It has affirmed my conviction that people are capable of much more than we believe if presented with the right mentorship, resources, community and role models.
You co-founded your first company, Stargiving, in 2000 with your Davis Polk officemate, Jon Philips (NY ’98). What gave you the courage to leave your job at Davis Polk to start your own company?
Courage is a generous interpretation. I began to think that the real danger wasn't going broke or starving – the real risk was looking in the mirror years later and wondering why I didn't do anything.
We're all motivated by different things. I was young and didn't have many personal obligations. My parents didn't need me to support them. I figured that it was going to get harder, not easier to take a risk over time.
One concrete thing I did was try to keep my spending low so I had flexibility. I valued flexibility more than a high standard of living. You tend to get used to things, and I didn't want to get used to things that I wasn't sure were going to be there for me down the road.
Research has shown that there is a substantial correlation between socioeconomic background and entrepreneurship. How does VFA seek to address this issue?
It's true that being from a strong background and entrepreneurship are highly correlated. It's also true that startup communities tend to be quite male-dominated.
We strive to address this through diversity in our own classes – 47% of our last class were women and 18% were underrepresented minorities.
We have an Opportunity Award to help less-privileged fellows pay back their student loans. We are trying to add diversity in different dimensions into the entrepreneurship community.
I'm glad to say that people want that at every level, from the entrepreneurs in these cities to our funders to the young people themselves.
The new documentary film “Generation Startup” follows the ups and downs of six young VFA fellows who put everything on the line to build startups in Detroit. Where did the impetus for this film come from?
I love this movie!
A film producer approached me in 2014 with the idea of following some of our Fellows for a year-plus. We didn't know where the stories would lead but I believed something good would come out of it.
PwC was the first company to see the filmmaker's vision – they deserve a ton of credit for making the film.
It is, to me, the best and most realistic movie about entrepreneurship ever made. And it's on Netflix so you can see it right now!