Smart People Should Build Things, by Andrew Yang: on Corporations

Economies recede after switch from making things to services

Our economy has progressed from making things to supplying financial services. It's not the first time an economy has made this transition.

Both the Netherlands and Great Britain were global manufacturing powers in their day. The Dutch and British then turned to financial services and insurance as the drivers of their economies. Unfortunately, it's hard for an economy to rely solely on financial services, and both countries receded from the world stage.

We no longer manufacture devices, we manufacture analyses. Investment banks, private equity firms, corporate law firms, and management consultancies are all vitally important to today's US economy. They offer prestige, high-starting salaries, training, expense accounts, and the promise of community and open doors.

Source: Smart People Should Build Things, by Andrew Yang, p. 16-7 Feb 4, 2014

Explore ideas on the side while working full-time job

Here's a list of things you can reasonably do on the side as you're working a full-time job to explore an idea for a great new business:
    Research your idea (figure out the market)
  1. Undertake legal incorporation and trademark protection
  2. Claim a web URL and build a website or have it built; get company e-mail accounts.
  3. Get a bank account and credit card (you'll generally have to use personal credit at first).
  4. Initiate a Facebook page, a blog, and a Twitter account
  5. Develop branding (e.g., get a logo designed, print business cards).
  6. Talk it up to your network; try to find interested parties as cofounders, staff, investors, and advisers.
  7. Build financial projections and draft a business plan
  8. Engage in personal financial planning (e.g., cut back on expenses)
  9. Create a mock prototype and presentation for potential investors or customers.
Source: Smart People Should Build Things, by Andrew Yang, p. 63-4 Feb 4, 2014

Send top people to startups, not financial services

This book makes a basic argument. If year after year we send our top people to financial services, management consulting, and law schools, we'll wind up in the pattern we're already seeing: layers of highly paid professionals working astride faltering companies and industries. But if we send them to startups, we'll get something else. Early-stage companies would have a better chance of innovating and creating value. Even allowing for a certain amount of failure, we'd create hundreds of new companies and tens of thousands of new jobs over time. Our economy and our country would be better off.

We'd restore our culture of achievement to include value creation, risk and reward, and the common good. By solving this one problem, we solve many other problems at the same time.

We are hyper-allocating the bulk of our top graduates to professional services industries, while leaving promising new companies around the country under-resourced.

Source: Smart People Should Build Things, by Andrew Yang, p. xiv-xv Feb 4, 2014

Venture for America: non-profit entrepreneurship support

My parents came to the US from Taiwan to make a better life. I wanted to do something to give back to the country that had given my family so much. I mean, here I was, a moderately rich dude in my mid-30s.

I began talking to people about this idea, which I called Venture for America--the most self-explanatory name I could think of. It would be a nonprofit with a three-part mission:

Our immediate goal would be to help create 100,000 new US jobs by 2025. To do that, we would provide to startups and growth companies around the country the talent they needed to expand and hire; and we would train a critical mass of our best and brightest to become business builders and entrepreneurs.
Source: Smart People Should Build Things, by Andrew Yang, p.115-6 Feb 4, 2014

Start a company? More realistically "Join a team"

You want to join a team before it's cool and hope that the company takes off. If it does, you could have yourself a very good run. You could even wind up being the difference between the company taking off and languishing on a small scale.

These people--the builders who work with the founders to help these companies grow and prosper--are, in many ways, more appropriate role models. The plan should not be, for the most part, "start a company." More realistically, the plan should be "join a team." If you're positioned to start your own organization, that's great--but rare.

If you join a growth organization, you'll likely do different things in different roles throughout your career. If you have a good run, you can always come back and start something later.

And it's not just coders and engineers that these new companies need. Just about any growth company is going to need smart salespeople, content creation, and analytics.

Source: Smart People Should Build Things, by Andrew Yang, p.151 Feb 4, 2014

Enlist entrepreneurs as mentors

Source: Smart People Should Build Things, by AndrewYang, p.178-86 Feb 4, 2014

Ran test-prep company, then sold it to bigger company

I was thirty [in 2005] when I started running Manhattan GMAT, and I was pumped. I articulated three core values and started putting them up on a screen before each meeting:For the full-time staff, it was important to me that they regard our little test-prep company as a great place to build a career: I decided to build a corporate culture. We had regular staff outings to celebrate record months. I figured that if these expenses kept turnover low and morale high, they would pay off many times over in high performance and consistent growth.

Prior to Manhattan GMAT, I'd been accustomed to something of a venture-capital mindset, to try to keep your investors excited. With Manhattan GMAT there were no investors to placate.

In 2009, after a competitive bidding process, we agreed to be acquired by Stanley Kaplan Test Prep and the Washington Post company.

Source: Smart People Should Build Things, by AndrewYang, p.83-5;92-6 Feb 4, 2014

  • The above quotations are from Smart People Should Build Things:
    How to Restore Out Culture of Achievement,
    by Andrew Yang
  • Click here for definitions & background information on Corporations.
  • Click here for other issues (main summary page).
  • Click here for more quotes by Andrew Yang on Corporations.
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