<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" > <channel> <title>Smart People Should Build Things – GMAT</title> <atom:link href="https://www.manhattanprep.com/gmat/blog/tag/smart-people-should-build-things/feed/" rel="self" type="application/rss+xml" /> <link>https://www.manhattanprep.com/gmat</link> <description>GMAT Prep Course, Best GMAT Class & Study Books | Manhattan Prep GMAT</description> <lastBuildDate>Thu, 05 Sep 2019 16:05:35 +0000</lastBuildDate> <language>en-US</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=6.3.2</generator> <item> <title>Andrew Yang: “Smart People Should Build Things” Excerpt 6</title> <link>https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-6/</link> <dc:creator><![CDATA[Manhattan Prep]]></dc:creator> <pubDate>Tue, 11 Feb 2014 14:35:17 +0000</pubDate> <category><![CDATA[MGMAT News]]></category> <category><![CDATA[News]]></category> <category><![CDATA[Andrew Yang]]></category> <category><![CDATA[Smart People Should Build Things]]></category> <category><![CDATA[VFA]]></category> <guid isPermaLink="false">http://www.manhattangmat.com/blog/?p=6865</guid> <description><![CDATA[<p>Below is an excerpt from Andrew Yang‘s new book, Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in […]</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-6/">Andrew Yang: “Smart People Should Build Things” Excerpt 6</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></description> <content:encoded><![CDATA[<p><em>Below is an excerpt from <a href="//www.manhattanprep.com/gmat/staff-yang.cfm">Andrew Yang</a>‘s new book, <a href="//www.amazon.com/Smart-People-Should-Build-Things/dp/0062292048">Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America</a>, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in 2010. He left Manhattan GMAT in 2010 to start <a href="//ventureforamerica.org/">Venture for America</a>, where he now serves as Founder and CEO. </em></p> <h4><strong><a href="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg"><img decoding="async" fetchpriority="high" class="alignleft size-full wp-image-6515" alt="smart people" src="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg" width="260" height="393" /></a>The Qualities We Need. </strong></h4> <p>A friend told me about a young Princeton graduate she knew named Cole. Cole studied mathematics and went to work for a hedge fund directly out of school. He’s now making well into six figures at the age of twenty-four. That’s his whole story to date.</p> <p>That’s success and the American way. And yet how excited are you about Cole’s trajectory? Think about it for a second. I’ll admit that I’m not too psyched about it, even though I have friends at hedge funds who are very intelligent, stand-up guys and even philanthropists, and I know that hedge funds are positive in that they provide diversified investment opportunities to large pools of capital.</p> <p>My lack of enthusiasm comes down to a few things. If Cole successfully analyzes an opportunity for the hedge fund and it invests slightly more effectively, that will be a win for the fund’s managers and its investors. But there will very likely be an equivalent loss on the other side of the investment (whoever sold it to them makes out slightly less well for having undervalued the asset). It’s not clear what the macroeconomic benefit is, unless you either favor the hedge fund’s investors over others or have a very abstract view toward capital markets working efficiently.</p> <p>Cole is almost certainly very smart. But what has he done to merit his almost immediately elevated stature in life? He’s never hazarded anything. He hasn’t demonstrated any outstanding character or virtue, unless you consider studying math and being really smart intrinsically virtuous. He’s never had to go against the grain or go out on a limb. His rewards seem a little bit exaggerated for his accomplishments.<br /> <span id="more-6865"></span><br /> Finally, Cole’s life is very quickly going to become quite different from that of the vast majority of humanity. His housing, education, and professional circles will take him into rarefied air. He’ll donate to causes and he’ll retain an intellectual interest in policy matters. But his experiences are going to be wildly divergent and probably make it tougher for him to understand others’ customary everyday concerns and struggles over the coming years. Ultimately, Cole’s pursuits don’t reflect a sense of value creation, risk and reward, or the common good.</p> <p>Not to say that Cole’s not a good dude. I have no idea. I’ve never met him. And if your daughter got engaged to him five years from now you would probably think she was all set (and your grandkids would be good at math).</p> <p>Our culture of achievement has grown to emphasize visions of success that are, for the most part, fairly predictable. Cole skipped a couple of steps. The basic plan is to go to Goldman Sachs, McKinsey, or the like, then maybe to a top-ranked business school, then back to banking, consulting, private equity, hedge funds, or a name-brand tech company. Or maybe go from law school to top firm to partner or in-house at an investment firm, and live in New York, San Francisco, Boston, or Washington, DC.*</p> <p>Again, these institutions and roles are necessary, and they’re natural developments in our economy. We need them. But we need people doing other things too. We need people willing to take risks and, yes, to occasionally fail. Like real-world consequences fail. We need people committed over extended periods of time to creating value, no matter how hard that is. We need people who care deeply about the work they’re doing.</p> <p>Imagine someone who you think could stand to take on some risk—someone well educated who would always have something to fall back on, whose family might have some resources so he would be unlikely to starve. And this person would probably be young and free of major life obligations. Someone sort of like . . . Cole.</p> <p>What’s interesting is that many of the people I meet who are young, highly educated, and from good families are among the most risk-averse. They feel like they need to be making progress along a ladder with each passing month or year. Their parents have often set high expectations for them. They measure themselves each period against their peers, who are generally following various well-defined paths.</p> <p>Yet, as Reid Hoffman, the founder of LinkedIn, and others have pointed out, remarkable careers are unlikely to advance in a straightforward, linear fashion. They are more likely to contain breakout opportunities that lead to unusually rapid gains (and, of course, relative dips and plateaus).</p> <p>We need smart and hardworking people to build businesses around the country as much as or more than we need them to do anything else. We need more intelligent risk takers and value creators who see their communities reflected in the work they do. We need to restore the culture of achievement to include value creation, risk and reward, and the common good so that more of our top people are in position to create new enterprises and opportunities.</p> <p>If we succeed in this, our best and brightest will build the engines of future economic growth. If we don’t, our talent will continue to heed purely market-based incentives, our economy will likely continue to underperform, and our culture will become more and more bifurcated.</p> <p>I just had a son. I’d like him to be very well educated. But I don’t want him to necessarily enter a parallel universe where everyone is smart, well paid, and well dressed while the rest of the country wonders where the jobs went.</p> <p>This is easy to say, but very hard to achieve. People like Cole have every factor turning them toward their current choices; they’re heavily recruited and offered money, prestige, training, a network, community, and opened doors. Expecting people like Cole to completely ignore these inducements is unrealistic.</p> <p>What would the ideal be? There’s a renewable energy startup in Providence, Rhode Island, called VCharge that probably could have used Cole too. Its chief science officer, Jessica Millar, has a PhD in math from MIT. VCharge is trying to make our energy grid more efficient using energy storage and transmission algorithms. It’s not a sure thing, but if it succeeds we’ll all be better off for it.</p> <p>How could you get Cole to head to VCharge instead of to the hedge fund? First, you would hope that immediate income maximization is not the main driver—maybe Cole has a longer time horizon, believes he can make money down the road, and thinks that tinkering with the power grid sounds interesting. Maybe he even has an instinct toward value creation, building things, and having an impact. And second, you could employ resources to recruit him and offer him prestige, training, network, a community, and open doors to head in that direction. You could make it a rational, principled choice as opposed to a vague hope that he decides to do something value creating.</p> <p>One entrepreneur I met said, “You don’t want to be in the army, you want to be an arms dealer.” He meant that you want to build a business that doesn’t rely upon someone winning or losing but that would benefit from supplying both sides (say, a component manufacturer like Qualcomm that sells to all smartphones, as opposed to a smartphone manufacturer that has to duke it out in competition with the others).</p> <p>The quote sounded smart, but I’ve concluded that if our young people all follow his advice, we’re sunk.</p> <p>One reason the finance business is always busy is that it functions much like the arms dealer. You don’t need to figure out precisely who’s going to win or lose. You wait until a business gets to a certain point, and then you help them access capital in the form of equity or debt, give them a credit line, and help them get acquired. And if a company goes down, you’re there to assist with reorganizations, divestitures, and bankruptcies.</p> <p>Yet the real innovation and value are being created by the fighters who are forming little squads and cobbling together businesses. Some fail, some succeed. If they succeed, they wind up building an army that’s providing new software, better services, tastier food, or whatever else the world needs. They also create organizations that form the character of the people in the army who believe in what they’re doing.</p> <p>Which would you rather have, better arms dealers or better fighters? And which should our young people want to be?</p> <p>Personally, I always dreamed about going into the woods and fighting the dragon, not selling the guy a sword.</p> <p> </p> <p>* There’s also the path of going to med school, becoming a surgeon or other specialist and performing procedures three or four days a week. We have an acute shortage of primary care physicians because the achievers we cultivate to be doctors adopt rational incentives: if they specialize they’ll make more money and likely work fewer hours than if they’re frontline doctors who see patients every day.</p> <p>From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang© 2014 Andrew Yang. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-6/">Andrew Yang: “Smart People Should Build Things” Excerpt 6</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></content:encoded> </item> <item> <title>Andrew Yang: “Smart People Should Build Things” Excerpt 5</title> <link>https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-5/</link> <dc:creator><![CDATA[Manhattan Prep]]></dc:creator> <pubDate>Sun, 02 Feb 2014 14:00:16 +0000</pubDate> <category><![CDATA[MGMAT News]]></category> <category><![CDATA[News]]></category> <category><![CDATA[Andrew Yang]]></category> <category><![CDATA[Smart People Should Build Things]]></category> <category><![CDATA[VFA]]></category> <guid isPermaLink="false">http://www.manhattangmat.com/blog/?p=6863</guid> <description><![CDATA[<p>Below is an excerpt from Andrew Yang‘s new book, Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in […]</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-5/">Andrew Yang: “Smart People Should Build Things” Excerpt 5</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></description> <content:encoded><![CDATA[<p><em>Below is an excerpt from <a href="//www.manhattanprep.com/gmat/staff-yang.cfm">Andrew Yang</a>‘s new book, <a href="//www.amazon.com/Smart-People-Should-Build-Things/dp/0062292048">Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America</a>, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in 2010. He left Manhattan GMAT in 2010 to start <a href="//ventureforamerica.org/">Venture for America</a>, where he now serves as Founder and CEO. </em></p> <h4><strong><a href="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg"><img decoding="async" class="alignleft size-full wp-image-6515" src="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg" alt="smart people" width="260" height="393" /></a>Entrepreneurship Isn’t About Creativity. </strong></h4> <p>There is a common and persistent belief out there that entrepreneurship is about creativity, that it’s about having a great idea. But it’s not, really. Entrepreneurship isn’t about creativity. It’s about organization building—which, in turn, is about people.</p> <p>I sometimes compare starting a business to having a child. You have a moment of profound inspiration, followed by months of thankless hard work and waking up in the middle of the night. People focus way too much on the inspiration, but, like conception, having a good idea isn’t much of an accomplishment. You need the action and follow-through, which involves the right people, know-how, money, resources, and years of hard work.</p> <p>I learned this the hard way. 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:</p> <p>1. Research your idea (figure out the market, talk to prospective customers about what they would like, see who your competitors are, and so forth).</p> <p>2. Undertake legal incorporation and trademark protection (the latter when necessary; most companies don’t need a trademark at first).</p> <p>3. Claim a web URL and build a website or have it built; get company e-mail accounts.</p> <p>4. Get a bank account and credit card (you’ll generally have to use personal credit at first).</p> <p>5. Initiate a Facebook page, a blog, and a Twitter account if appropriate.</p> <p>6. Develop branding (e.g., get a logo designed, print business cards).</p> <p>7. Talk it up to your network; try to find interested parties as cofounders, staff, investors, and advisers.</p> <p>8. Build financial projections and draft a business plan (if necessary).</p> <p>9. Engage in personal financial planning (e.g., cut back on expenses, budget for startup costs, and so on.)</p> <p>10. Create a mock prototype and presentation for potential investors or customers.</p> <p>If all of this sounds like a lot of work to do before you’ve even really gotten started, you’re right. Getting this stuff done while holding down a job would be a significant commitment. You might not have time to hang out with friends and family and do the things people like to do when they’re not at work. It is doable, though; I’ve seen it done or done it myself.</p> <p>You’re just getting started. There’s a big jump in difficulty when it comes to the next things:</p> <p><strong>1. Raise money. </strong>In my experience, fledgling entrepreneurs focus way too much on the money—you can get most things done and figure out a lot without spending much. That said, most businesses require money to launch and get off the ground. For example, the average restaurant costs about $275,000 in construction and startup costs. Finding initial funds is the primary barrier most entrepreneurs face. Many people don’t have three or six months’ worth of savings to free themselves up to do months of unpaid legwork.</p> <p><strong>2. Develop the product. </strong>Product development is a significant endeavor. Even if you’re hiring someone to build your product, managing them to specifications is a huge task in itself. You can expect vendors to take twice as long and cost twice as much as you’ve planned for. Think of the last home improvement project you paid a contractor for; most experiences are like that. Depending on the product, you may need to travel to find the right ingredients, partners, and suppliers. This phase might require raising additional money as well. In some cases, you might want to patent your product, which will involve a patent search and thousands of dollars in patent attorney fees.<br /> <span id="more-6863"></span><br /> <strong style="font-style: normal">3. Build a team. </strong>Most people don’t build a business alone, and finding quality partners or employees can be time-consuming and unpredictable. Your first employee is going to look to you for guidance, and her productivity is going to depend on your ability to guide and manage. And with partners, you’ll need to make sure you can work well with them, since they’re going to be with you from the ground up and for years afterward.<strong style="font-style: normal"> </strong></p> <p><strong>4. Get customers. </strong>Going to trade shows or trying to get your first handful of paying customers is typically a major time investment. This can involve web marketing, producing content, and search engine optimization, all of which take significant energy and resources to generate a return. Despite the advent of social media, most things gain traction and spread at a deliberate pace. Even if someone likes your service, it’s not going to be a priority for him to go around telling friends about it or liking your service on Facebook. Think about your own behavior; when’s the last time you went around telling everyone you know about a company you liked? Getting early sales is very hard work. You’ll likely depend on relationships to help you get the ball rolling.</p> <p>You could give most people a fantastic business idea, and they would get excited about it but wouldn’t quit their job to take it on. And no one has an extra ten people in the back room waiting for a good idea either. How many great ideas have you had through the years that have remained just that thing you dreamed up with your friends that one time?</p> <p>Starting a new business is generally going to be a multiyear commitment at the very least. One of my mentors, Manu Capoor of MMF Systems, once told me that it takes at least four or five years to see if a company is going to work. If you’re exceptional, you can tell where you’re going by year three. My experience has shown me that in almost every case, he was right.</p> <p>If you just read business articles and blogs, you’ll get the sense that tons of companies enjoy immediate success, particularly in the Internet realm. But those are the anomalies. For most, overnight success is an extreme rarity. Generally, a company makes progress incrementally. Someone (or multiple people) likely suffered while figuring out how to make it work. Even for the rare product or software application that does become a rapid hit, it often took the programmers, product developers, or designers time to build up the necessary expertise. They might have worked on some earlier product that no one ever heard of, learned from it, and come back to build something great. This is a good description of Rovio, which was around for six years and underwent layoffs before the “instant” success of the Angry Birds video game franchise. In the case of the Five Guys restaurant chain, the founders spent fifteen years tweaking their original handful of restaurants in Virginia, finding the right bun bakery, the right number of times to shake the french fries before serving, how best to assemble a burger, and where to source their potatoes before expanding nationwide.</p> <p>Most businesses require a complex network of relationships to function, and these relationships take time to build. In many instances you have to be around for a few years to receive consistent recognition. It takes time to develop connections with investors, suppliers, and vendors. And it takes time for staff and founders to gain effectiveness in their roles and become a strong team.*</p> <p>*Experienced entrepreneurs have a number of advantages where pace is concerned. First, they know roughly how long it will take to get something done if they’ve done it before. Second, they can move faster, because many of the necessary relationships are already in place (e.g., they can call people they’ve worked with, use the same lawyer, accountant, and public relations firm, draw on earlier investors, and reach out to past customers). Third, they can proceed more decisively because of greater confidence in their judgment, both internally and externally. Last, they sometimes have lots of money. These are all reasons why some entrepreneurs seem so prolific.</p> <p>From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang© 2014 Andrew Yang. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-5/">Andrew Yang: “Smart People Should Build Things” Excerpt 5</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></content:encoded> </item> <item> <title>Andrew Yang: “Smart People Should Build Things” Excerpt 4</title> <link>https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-4/</link> <dc:creator><![CDATA[Manhattan Prep]]></dc:creator> <pubDate>Tue, 21 Jan 2014 14:08:06 +0000</pubDate> <category><![CDATA[MGMAT News]]></category> <category><![CDATA[News]]></category> <category><![CDATA[Andrew Yang]]></category> <category><![CDATA[Smart People Should Build Things]]></category> <category><![CDATA[VFA]]></category> <guid isPermaLink="false">http://www.manhattangmat.com/blog/?p=6859</guid> <description><![CDATA[<p>Below is an excerpt from Andrew Yang‘s new book, Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in […]</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-4/">Andrew Yang: “Smart People Should Build Things” Excerpt 4</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></description> <content:encoded><![CDATA[<p><em>Below is an excerpt from <a href="//www.manhattanprep.com/gmat/staff-yang.cfm">Andrew Yang</a>‘s new book, <a href="//www.amazon.com/Smart-People-Should-Build-Things/dp/0062292048">Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America</a>, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in 2010. He left Manhattan GMAT in 2010 to start <a href="//ventureforamerica.org/">Venture for America</a>, where he now serves as Founder and CEO. </em></p> <h4><strong><a href="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg"><img decoding="async" class="alignleft size-full wp-image-6515" src="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg" alt="smart people" width="260" height="393" /></a>Professional Services as a Training Ground. </strong></h4> <p>As we’ve seen, one of the most frequently pursued paths for achievement-minded college seniors is to spend several years advancing professionally and getting trained and paid by an investment bank, consulting firm, or law firm. Then, the thought process goes, they can set out to do something else with some exposure and experience under their belts. People are generally not making lifelong commitments to the field in their own minds. They’re “getting some skills” and making some connections before figuring out what they really want to do.</p> <p>I subscribed to a version of this mind-set when I graduated from Brown. In my case, I went to law school thinking I’d practice for a few years (and pay down my law school debt) before lining up another opportunity.</p> <p>It’s clear why this is such an attractive approach. There are some immensely constructive things about spending several years in professional services after graduating from college. Professional service firms are designed to train large groups of recruits annually, and they do so very successfully. After even just a year or two in a high-level bank or consulting firm, you emerge with a set of skills that can be applied in other contexts (financial modeling in Excel if you’re a financial analyst, PowerPoint and data organization and presentation if you’re a consultant, and editing and issue spotting if you’re a lawyer). This is very appealing to most any recent graduate who may not yet feel equipped with practical skills coming right out of college.<br /> <span id="more-6859"></span><br /> It seems like an incredible set of benefits. How can there be any downside either to the individual or to the economy that a significant proportion of our top graduates are being professionalized as bankers, consultants, or lawyers?</p> <p>The nature of professional services dictates that you work on a deal or a client engagement that lasts a brief period and then ends. You’re usually staffed on a deal that will last for a finite period until the deal either comes through or falls apart. You begin a new transaction or client engagement every several months, perhaps longer if it’s a protracted consulting project. You’re used to relationships measured in weeks or months, or only hours or minutes in the trading context. Clients arrive and demand a flurry of activity until a transaction is complete, then disappear. Senior managers at your firm maintain relationships with clients, but you’re a level or two removed. You often develop strong relationships with colleagues due to the long hours, extensive travel, and intense work environment. But you’re used to people coming and going very quickly as teams either shift and change or people leave the firm. For example, the attrition rate at one top consulting firm is 30 percent per year, which is one reason they’re always hiring.</p> <p>The constant flow of different deals is presented as a selling point by many consulting firms and investment banks. They’ll say it’s “fast-paced,” things are “changing all the time,” and that you’ll work on one deal or project “and then move on.” Most operating companies, in contrast, typically rely upon long-term relationships to function well. They require a significant commitment in which the time frame is measured in years, not weeks or months. Turnover is detrimental to developing a good management team; building a business, and building up the value of one’s equity and relationships within an industry, takes time.</p> <p>As a professional service provider who is changing clients or transactions every period, it’s hard to become emotionally invested in your work. It’s like trying to be concerned about taking care of a car you’re renting. Your clients are themselves big companies, and your interaction with them will often be limited to the occasional meeting with a senior executive or a manager. If you’re a consultant, you’re generally set up in a conference room from Monday through Thursday in a far-flung city; then you fly home on Thursday night. You’re there as a transaction cost because someone wants to get something done. One ex-consultant I interviewed noted, “It’s hard to get personally attached or invested when you know you’re only there for a number of months. I had assignments and deliverables that I knew would get changed after six months because we were a stopgap solution—I knew my work would disappear in a little while after the new system was put in.”</p> <p>Your appetite for risk generally diminishes as you get older. This can become even more pronounced in a professional setting. You spend your working life in nice offices around well-compensated people.</p> <p>You often have support staff from day one. The only people you interact with work at large public companies. Your expenses creep upward over time, and you get used to having nice things. Your interpersonal obligations mount, and the people you’re dating and family members expect you to earn lots of money. As you adapt to your role and circumstance, taking a risk professionally becomes more and more of an abstraction.</p> <p>Once, while I was having drinks with a friend of mine after she started working at a top-tier consulting firm, she said, “Before I got here, I thought I could do anything. Now, I feel like you can’t do anything unless you have a budget of millions of dollars.”</p> <p>In the minds of college seniors, and thanks to prodigious investment on the part of the firms themselves, professional services— financial services and management consulting—have become conflated with “business” when really they’re a narrow subset or category of businesses with distinctive features.</p> <p>If you work in professional services you will be paid handsomely and have a brand-name firm on your résumé. You’ll gain skills, confidence, and exposure. But you may also become heavily socialized and specialized, more risk averse, and accustomed to operating in resource-rich environments with a narrow set of deliverables. You’ll be likely to adopt an arm’s-length relationship with your work. You won’t build anything; instead, you will compartmentalize and put the armor on each day as deals, clients, and colleagues come and go.</p> <p>Professional services are being used as a de facto training ground for our top college graduates—with mixed results for everyone concerned. In particular, going into banking or consulting to learn how to start or run a business is not always ideal; the processes are very different, and give you a sense of companies trying to do different things. It’s like trying to learn how to become a chef by going to a company that runs analyses for large restaurant chains. Yes, you’ll get a better grasp of how chain restaurants work. But will you learn to cook?</p> <p>There are, of course, any number of successful business builders and entrepreneurs who started out as professionals, as one would expect given that literally half our top graduates have pursued these paths for the past couple decades. David Gilboa worked at an investment bank before cofounding Warby Parker. John Delbridge worked in equity research before cofounding Mimeo. People have long careers that aren’t defined by their first few years.</p> <p>And it’s easy to get excited about a potential hire if he has spent a couple of years at a top firm. There’s a good chance that this person is smart, motivated, capable of long hours and detail-oriented work, and is looking for a change. If applying to work at a startup, he probably expects a pay cut and has the right motivation.</p> <p>But if I had a dollar for all the bankers, consultants, and lawyers I’ve met who told me that they were “really interested in entrepreneurship,” I’d be awfully rich. Meanwhile, they struggle to transition into different roles, and many of them have lost some of the qualities that would have enabled them to take on their original ambitions.</p> <p>Their problem isn’t just theirs—it affects all of us. We’re breeding large battalions of indifferent professionals in a handful of cities when what we need is something very different. We need committed builders.</p> <p>From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang© 2014 Andrew Yang. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-4/">Andrew Yang: “Smart People Should Build Things” Excerpt 4</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></content:encoded> </item> <item> <title>Andrew Yang: “Smart People Should Build Things” Excerpt 3</title> <link>https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-3/</link> <dc:creator><![CDATA[Manhattan Prep]]></dc:creator> <pubDate>Tue, 07 Jan 2014 14:00:48 +0000</pubDate> <category><![CDATA[MBA]]></category> <category><![CDATA[MGMAT News]]></category> <category><![CDATA[News]]></category> <category><![CDATA[Andrew Yang]]></category> <category><![CDATA[Smart People Should Build Things]]></category> <category><![CDATA[VFA]]></category> <guid isPermaLink="false">http://www.manhattangmat.com/blog/?p=6856</guid> <description><![CDATA[<p>Below is an excerpt from Andrew Yang‘s new book, Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in […]</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-3/">Andrew Yang: “Smart People Should Build Things” Excerpt 3</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></description> <content:encoded><![CDATA[<p><em>Below is an excerpt from <a href="//www.manhattanprep.com/gmat/staff-yang.cfm">Andrew Yang</a>‘s new book, <a href="//www.amazon.com/Smart-People-Should-Build-Things/dp/0062292048">Smart People Should Build Things: How to Restore Our Culture of Achievement, Build a Path for Entrepreneurs, and Create New Jobs in America</a>, which comes out in February 2014. Andrew was named Managing Director of Manhattan GMAT in 2006, Chief Executive Officer in 2007, and President in 2010. He left Manhattan GMAT in 2010 to start <a href="//ventureforamerica.org/">Venture for America</a>, where he now serves as Founder and CEO. </em></p> <h4><strong><a href="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg"><img decoding="async" loading="lazy" class="alignleft size-full wp-image-6515" src="//cdn.manhattanprep.com/gre/wp-content/uploads/sites/19/2000/smart-people-.jpg" alt="smart people" width="260" height="393" /></a>The Prestige Pathways Part II. </strong></h4> <p>You could ask, so what if our talented young people all march off to become lawyers, doctors, bankers, and consultants? Isn’t that what smart people are <em>supposed </em>to do?</p> <p>There are a few problems with this stance. First, the degree to which the recruitment infrastructure exists is a relatively recent phenomenon. Bain and Company, a premier management consulting firm, wasn’t founded until 1973—now it employs over 5,000 talented people and recruits hundreds per year. The financial services industry has mushroomed in size, with Wall Street firms employing 191,800 at their peak in 2008, up from only 65,300 in 1975. The growth in professional services has given rise to an accompanying set of recruitment pipelines only in the past several decades.</p> <p>Yet the allocation of talent is a zero-sum game. If the academically gifted are funneled in higher numbers toward finance and consulting, then lesser numbers are going into other areas, such as the operation of companies, startups, and early-stage enterprises. In the United States, companies with fewer than 500 employees account for almost two-thirds of net new jobs and generate thirteen times more new patents per employee than do large firms. If the US economy had generated as many startups each year for 2009–12 as it had in 2007, the country would have produced almost 2.5 million new jobs by 2013. If we’re interested in spurring long-term job growth, we want as much talent as possible heading to new firms so that more of them can succeed, expand, and hire more people.<br /> <span id="more-6856"></span><br /> Further, the current talent flows have a pronounced regional bias. The hubs for financial services and consulting are New York, San Francisco, Boston, Chicago, Los Angeles, and Washington, DC, and these cities are magnets for the preponderance of top university graduates. Meanwhile, dozens of other US cities and communities are home to promising growth companies that don’t have the talent they need to develop and expand. Companies in Detroit, New Orleans, Las Vegas, Providence, Baltimore, Cleveland, and other cities are poised to hire and to provide new opportunities and products. Yet our national university graduates are being consistently channeled elsewhere.*</p> <p>Professional services industries like finance, consulting, and legal services are, by definition, meta-industries. That is, they serve to help large companies raise money, buy and sell each other, reorganize, implement new systems, conduct complex transactions, and so forth. They are dependent on companies coming into being and becoming big enough to hire them. The economy needs more companies to start, grow, and thrive in order for the service organizations themselves to prosper. For example, if Mark Zuckerberg had become an investment banker or gone to work in a bank’s information technology department, then the bankers wouldn’t have had Facebook to take public. It’s actually far better for the investment banks (and everyone else) that instead of heading in their direction, he started his own company.</p> <p>Another issue is that professional paths aren’t always the right fit. Everyone reading this knows a host of former lawyers, bankers, consultants, academics, or doctors for whom the work or environment was not right, many of whom eventually left the profession or stuck around halfheartedly. This represents a massive social cost. Instead of an army of bright college graduates, we are left with an array of often indebted former professionals who are only starting years later what should have been their first act. Some find roles that fit. But for most this transition is not seamless; there are often time-consuming stumbles and periods of exploration before a new path is forged or found—if one is found.</p> <p>Last, and perhaps most important, professional services socialize individuals in ways that are not conducive to their ability to contribute in other ways. All of us, and particularly young people, have a tendency to view ourselves and our natures as static: you’ll choose to do something for a few years, and you’ll still be the same you. This isn’t the case. Spending your twenties traveling four days a week, interviewing employees, and writing detailed reports on how to cut costs will change you, as will spending years editing contracts and arguing about events that will never come to pass, or years producing Excel spreadsheets and moving deals along. After a while, regardless of your initial motivations, your lifestyle and personality will change to fit your role. You will become a better dispenser of well-presented recommendations, or editor of contracts, or generator of financial projections. And you will in all likelihood become less good at other things. You will not be the same person you were when you started.</p> <p>It is no accident that many of those we regard as our most productive individuals—Bill Gates, Steve Jobs, Jeff Bezos, Howard Schultz, Jack Dorsey, Reid Hoffman, Larry Page, Sergey Brin, and the like—were not products of our professional paths. Michael Dell actually entered the University of Texas intending to go to medical school. He probably would have made a fine doctor. But thanks to him over 100,000 people are now working at his namesake company, both in Texas and around the world.</p> <p>* One could argue that our national university system has become a de facto talent drain for much of the country. Many states and communities send their top students away to great schools, never to hear from them again.</p> <p> </p> <p>From SMART PEOPLE SHOULD BUILD THINGS by Andrew Yang© 2014 Andrew Yang. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers.</p> <p>The post <a rel="nofollow" href="https://www.manhattanprep.com/gmat/blog/andrew-yang-smart-people-should-build-things-excerpt-3/">Andrew Yang: “Smart People Should Build Things” Excerpt 3</a> appeared first on <a rel="nofollow" href="https://www.manhattanprep.com/gmat">GMAT</a>.</p> ]]></content:encoded> </item> </channel> </rss>