In theory, an Ivy League degree should prepare you for just about any career you’d like. In practice, the paths for these high-achieving grads seem pretty limited. They are, as Andrew Yang points out, “doing six things in six cities.”
Yang, an alum of Brown University and the founder of Venture for America, realized that a majority of the graduates of 14 of the country’s most elite universities will move to New York, San Francisco, Boston, Los Angeles, Chicago or Washington, DC, and pursue careers in finance, consulting, law, medicine, Teach for America or grad school.
However worthwhile these pursuits might be, none of them “leads to new business formation or growth.”
And whatever contribution these grads are making, they’re not doing it in places with the most economic need.
The young men and women providing legal or financial services to businesses are providing more and more layers of frosting for an ever-shrinking cake. New-business formation is at a record low.
In 2011, Yang, who had worked at a dot.com before the bubble burst, put together a program modeled on Teach for America. VFA recruits and trains students from top campuses. Small businesses, with between five and 20 employees, pay these fellows $38,000 a year to work for them.
The fellows go to Cleveland, Detroit, New Orleans and nine other cities, helping those small businesses grow for at least two years. After that, top-performing fellows are eligible to receive $100,000 in seed investment to start their own businesses.
Which is exactly what happened to Brian Rudolph. From Pleasantville, NY, Rudolph attended Emory and then accepted a job as a consultant. He ended up joining VFA instead.
He had done “entrepreneurial things” in college like working to organize and publicize concerts. Like many young adults, Rudolph clearly had a passion for starting up new businesses.
Rudolph went to work for a tech startup in Detroit, helping it grow. All the while, he was tinkering in his kitchen. Recently, he and his brother launched Banza, a company that sells pasta made from chickpeas.
This healthy alternative to spaghetti is being stocked by more than 200 stores, and Rudolph was recently a contestant on CNBC’s Restaurant Startup. He won investment capital from the show’s host and hired his first employee (another VFA fellow).
But what most excites him is that his product is being manufactured in Michigan. “It would mean a lot to me personally to be able to create jobs in Detroit,” he tells me.
Yang and VFA are being honored tonight by the Manhattan Institute with an award for Social Entrepreneurship. VFA doesn’t take public funding, though Yang said he wouldn’t object if offered a grant.
Interestingly, says Yang, it is not hard to persuade grads to move to these less hip cities.
Some have roots there and would be happy to move back, if there were job opportunities. Others would relish the chance to live somewhere a little more affordable. Rudolph is about to move into a seven-bedroom house a friend bought for $9,500 in Detroit.
Many cities are focused on providing incentives for businesses — tax breaks and the like.
But Yang believes if you can get educated young adults to your city, investment capital will follow. Indeed, at all levels we seem to be putting in place the wrong incentives.
Not only can’t small businesses compete to recruit at top schools, the government is subsidizing the wrong things.
It’s relatively easy to borrow $100,000 to go to law school, though we have thousands of unemployed lawyers. What if we offered that kind of capital to start businesses?
From tech startups to pasta companies, there’s tremendous opportunity, if only someone would steer young talent in a more productive direction.
There are 212 VFA fellows currently, but Yang is aiming high. He is hoping that VFA can help create 100,000 new jobs by 2025.
So to all the smart recent college grads out there: Come on people, let’s be a little more imaginative.