I try and make anything I do as relevant

to the people who are listening to me at that moment,

so where are you guys?

How many of you are undergrads?

Show of hands.

Virtually everyone, oh my God.

Let's do that again.

How many of you are seniors?

Juniors?

(Cheering)

Sophomores?

(Cheering)

And freshmen?

All right. Good stuff.

I'm going to talk to you as if you're juniors.

I'm just going to land in the middle somewhere.

It's all good.

So, the theme is going to be the flow of talent.

The graphic that kicks us off, if I can get this thing to go -

Hey, Mike, where do I point this thing?

Sorry.

Thank you.

Or should I click this thing?

This is the graphic we're going to use to kick off the discussion.

For those of you who are seniors,

this might be more familiar than if you're a freshmen.

So what this graphic represents

is that it's a lot easier for a young, smart person right now

to become a banker, consultant, or lawyer

than it is to do just about anything else.

I resemble this.

I graduated from Brown in '96, and did not know what I wanted to do.

So I went to law school, which clarifies absolutely nothing.

(Laughter)

For those of you who are thinking about law school,

you should know that awaits if you do that.

(Laughter)

I graduated from law school and, not knowing what I wanted to do still,

I became an M&A and banking attorney in New York,

because that's what you did out of Columbia

if you didn't know what to do.

I was there for about five months.

I went home dispirited that Thanksgiving, to my parents.

I said, "You know, Mom and Dad,

when I was young, I didn't dream about being the scribe.

I dreamt about going in the woods and killing something."

They, of course, didn't know what I was talking about.

I then went back to my job and said,

"You know what, I feel like I'd like to try and build something,

but I don't know if I have wherewithal."

So I took a week off from work, and then tried to start this company.

Made enough of what felt like progress so that I then went and quit my job,

and then started a dot-com.

This was around 2000.

Had its mini rise and maximum fall.

We raised about a quarter of a million, got some press,

but then the bubble burst.

How old were you guys when the bubble burst in 2001?

(Audience) Eight.

Eight, nine.

(Laughter)

So, do you guys have any recollection of that time?

Maybe your parents watching CNBC, very sad for a little while,

or something like that.

Anything like that?

There are adults among you who remember this stuff.

When it burst,

it was like a giant hand went through the streets of New York

and swept away any company that was not nailed down,

including my little outfit.

At this point, I'm 25.

I've just lost investors about $0.25M.

I still own $100,000 in law school debt.

My parents are like, "What happened? You used to be smart."

(Laughter)

At this point, I had been bitten by the bug

and said, "You know what, I think I really want to do this.

I want to learn how to build a business, a company."

I'm going to submit this you.

What should young Andrew do now, 25,

lying on his floor, looking up at the ceiling?

What's the next step?

(Audience) Try again?

Try again, but how to try again, given that I just raised money and lost,

and it's like 2001, 2002 when no one wants to invest in anything?

(Audience) Getting them to believe in you.

Wow, I don't know what that means.

(Laughter)

Okay, so I'm going to submit something else to you.

Let's say you wanted to become a chef, really bad.

What might you do?

(Audience) Chef school.

Chef school. Another possibility?

(Audience) Get a job.

Get a job where?

(Audience) As a chef at a cafe.

Right, you would take your chef knife out,

and you would go down on one knee.

You would go to someone and say, "Be my master." Right?

You'd find someone who's a better chef.

So that's what I did: I found an experienced entrepreneur.

And I became his lieutenant, his VP of something or other.

And so for four years, I supported him

as that company raised about seven million dollars

and three million in revenue.

Then I became the CEO of a company called Manhattan GMAT.

Has anyone heard of it?

Juniors, seniors, maybe?

Manhattan GMAT grew from being a relatively small GMAT boutique

to number one in the US over the next five or six years,

to the point where we were acquired by The Washington Post in 2009

because we were number one in the US.

Washington Post owns Kaplan.

We were beating the tar out of Kaplan.

Kaplan got tired of it, so the CEO calls me and says,

"Hey, let's talk."

We have a little bidding process, and the company gets acquired.

It's one of the reasons I'm very familiar with this particular picture;

many of the people my company started in Manhattan GMAT

were bankers and consultants

who weren't really finding what they were looking for

as 20-something year olds,

so they would take the GMAT, apply to business school,

and then go to business school.

So, I'm going to continue with this.

Let's take a look at what the actual numbers are.

Let's take Harvard's class of 2011.

What were the most common things to do out of Harvard a year ago?

Shout them out.

(Crosstalk)

Yes, finance.

(Audience) Doctor. A.Y.: Consulting.

Law. Not accounting.

(Laughter)

And the fourth is med school.

The question is,

what proportion of Harvard students did one of those four things?

(Audience responses)

All right, so I've got between 40 and 90 percent.

And as usual, the wisdom of crowds, the truth is exactly in the middle.

It's 65 percent.

Then you have the potpourri category, which is a little bit of everything.

It's grad school, nonprofits, industry, government, IT, military.

Then you have its own line item, Teach for America.

18 percent apply.

Four percent actually become Teach for America corps members.

Then, undecided;

10 percent went to Europe, and then became consultants.

(Laughter)

So this is the picture from Harvard, a year ago.

Let me get some feedback.

It this surprising, unsurprising?

Not surprising.

Now, I throw the normative question.

Is this a good thing, a bad thing, or neutral?

(Audience) Bad. Neutral.

Wow, that one's fraught, right?

Let's keep on going.

If you take a look at other top schools, the picture's the same.

The picture is the same here at Georgetown.

I didn't pull the Georgetown stats, but they're quite similar.

You can see that it's not just a Harvard thing.

It's really a "any top school" thing.

I've spoken at 40 universities around the country,

and they all say the same thing.

So what does that mean in terms of our country,

let's say, "regionally"?

If you have half your smart kids

becoming bankers, consultants, and lawyers,

where are they going to live?

(Audience responds)

New York, DC, maybe Chicago.

(Audience) Boston. A.Y.: Boston.

San Francisco, LA, those are the top six.

We just listed the top four.

So then you have the rest of the country,

much of which is struggling with job growth and economic development.

One of the things we think this graphic represents

is that if you're a smart kid from, let's say, Florida,

who comes to Georgetown,

the odds of you becoming a banker, consultant, or lawyer

and living in New York, Boston, DC are very high.

Odds of you going back to Florida,

starting a business, creating jobs: very low.

You end up with a systematic talent drain on most of the country

if they happen to get identified by a national university.

This is the picture you end up with.

What do you guys think, empirically true?

(Audience) Yeah.

Absolutely. Wow, all right. We're starting to get something.

Good stuff. Why is this the case?

Those of you who are freshmen, raise your hands again.

How many of you who have your hands up, keep them up,

know what management consulting is?

(Laughter)

So how is it that that world goes from that

to, let's say, 20 percent of the class at least applying for consulting jobs

and maybe even converting?

How does that happen?

Seniors, chime in, please?

(Audience) Salary.

Money's there. What else? Keep going.

(Audience) Creating new jobs.

Sorry?

(Audience) Security.

Security, fear.

(Laughter)

Keep going. Keep going.

(Audience) Diligent recruitment.

Yes, resources. This is not an accident.

People spend money and time

educating the market, that is all of you, over your four years.

By the time you're a senior, you'll know the names;

McKinsey, Bain, BCG, Deloitte, etc.

Let's take a look at how this list looks.

Prestige, easy to find, progress, seek the next level, opens doors.

Money's on the list, gain skills, community;

and then there's this last one,

which is something pro-social, like change the world.

This even applies if you become a banker or consultant,

because the theory is, you must become a baller

before you can come back and change the world. Right?

Then you can come back to the people with loaves of bread.

(Laughter)

Those of you who are seniors, can I get a - yes, this is accurate?

(Audience) Yes.

All right, thank you.

Now, I usually talk to people who are interested in startups,

so this is a little bit overly broad.

But let's say you were interested in startups.

Show of hands: how many of you are interested in startups?

A significant subset.

The seniors among you, why is it that it's unlikely

you're actually going to go work for a startup when you graduate?

Risky.

Money.

(Audience) Loans.

Loans.

(Audience) It's scary.

It's pretty much the opposite of the last slide. Right?

It's like you're not recruited.

It's hard to find. There's no structured path.

There's no community or peer group.

Unclear prospects for training, advancement, or success.

No network, idea, money, tech proficiency.

But a lot of you really want to, and then you talk about doing it,

but first, you want to "learn about business "and then come back.

Is this accurate?

Am I - ?

(Audience responds)

It's like I was one of you.

(Laughter)

So here's the big question that Venture for America seeks to answer: