This fellowship program will show young people the ropes of the start-up world so they don't have to learn the hard way.
What happens when a group of high-achieving 22 year-olds get sent to Detroit to work for a start-up company, live together in an historic apartment building downtown, and compete for $100,000 in business seed money? It sounds like the pitch for a reality TV show (The Real World meets Survivor meets The Apprentice?), but it's actually the concept for a new fellowship program, Venture For America, that's applying the Teach For America model to the start-up world.
Yesterday VFA opened up the application process for its first round of fellows. Chosen applicants will be assigned two-year work assignments at start-ups in Detroit, New Orleans and Providence, three low-cost cities that might otherwise struggle to fine fresh talent to fuel new businesses. At the end of the two-year stint, one lucky fellow will win $100,000 in seed funding for her own business. The rest could end up with full-time jobs (should the companies chose to hire them) or, at the very least, cellphones full of professional contacts and lots of hands-on experience in building a company. The project aims to create 100,000 new jobs in the next 14 years, helping grow the businesses of the future and the economies of ailing cities.
The project is the creation of Andrew Yang, a social entrepreneur who learned the ropes the hard way. When Yang graduated from Brown University in 1996, he was "directionless." So he did what countless other high-achieving grads do—applied to law school and became a lawyer. He got a job practicing law in New York City, but "pretty quickly found I wasn't a good fit for the work."
His exit from law coincided with the height of the dot-com boom, and he launched an "ill-fated dot-com, a fundraising site for celebrity-affiliated nonprofits" just as the bubble was about to burst. With law-school debt and a failed start-up behind him, he realized "just how difficult it was to start an enterprise."
While Yang went on to become the CEO of a successful start-up, Manhattan GMAT, he doesn't think that every aspiring entrepreneur should have to learn through expensive failures. "There's a myth about entrepreneurship that people drop out and start successful companies," he said. However, "like other things, you get better at it all the time." Young entrepreneurs need good mentors to succeed.
Yang believes that young people are eager for hands-on experience in building up a business. "It's something that if there was a pathway, I believe we'd have many, many more of our top young people heading into that direction," Yang said. "I experienced firsthand that it's very easy to be brought in another direction of recruitment and advancement." Consider the consulting and finance industries, which invest heavily in on-campus recruiting at prestigious colleges and typically snatch up around 40 percent of Harvard's graduating classes. Start-ups, on the other hand, "don't have the excess resources to send people to campus," according to Yang. Nor do they have the time to participate in multi-month recruiting processes.
Companies who sign on to host VFA fellows agree to pay students between $32,000 and $38,000 per year, plus benefits. They'll also have to front $2,500 to cover the cost of the summer training session, a crash course in entrepreneurial basics like social media and project management. Yang expects that the companies will put students to work in "avenues that will help grow the business," everything from sales to marketing to product development. Still, it'll no doubt still be difficult for start-ups to compete with the intense recruiting from more established technology companies.
Some of next year's fellows will end up working for Audiosocket, a music licensing firm in New Orleans, and Detroit Venture Partners, a venture capital firm in Detroit—two VFA partner companies that signed on early, according to Yang. As it expands, VFA will add partners with high potential for growth, focused on industries like energy, biotech, and information technology. "These companies represent the future of the American economy," said Yang. Let's see what happens when they stop being polite and start getting real.
Image via Venture for America