Smart People Should Build Things

Smart People Should Build Things Plot Summary

Introduction

The American economy faces a fundamental problem: our top graduates are consistently choosing similar career paths that concentrate talent in just a few industries and locations. Financial services, consulting, and law attract a disproportionate number of the brightest minds from elite universities, while entrepreneurship and value-creating ventures struggle to compete for this talent. This systematic misallocation has profound consequences for economic growth, innovation, and job creation across the country. Through rigorous analysis and compelling evidence, this work challenges conventional wisdom about career success and proposes a solution to America's talent allocation problem. By redirecting human capital toward building companies and creating value, rather than serving existing structures, we can revitalize struggling cities, generate new employment opportunities, and restore a culture of entrepreneurship. The argument moves beyond theoretical considerations to offer a concrete framework for understanding how intelligent interventions in talent flows can transform our economic landscape and create a more prosperous future.

Chapter 1: The Misallocation of Elite Talent in America

America faces a crucial but often overlooked problem: the systematic misallocation of our brightest minds. When graduates from top universities enter the workforce, an overwhelming majority follow predictable paths into finance, consulting, and law. Data from elite universities confirms this trend - at Harvard, for instance, nearly two-thirds of employed graduates enter these three fields. Rather than creating new enterprises and opportunities, many of our most capable young people are joining existing systems that primarily manage, analyze, or facilitate existing wealth rather than creating new value. This pattern represents more than just individual career choices; it reflects a structured funneling of talent. Well-established recruitment pipelines from prestigious universities to Wall Street, consulting firms, and corporate law offices create a self-reinforcing cycle. These industries invest millions in campus recruitment, offering clear paths, immediate prestige, and substantial starting salaries. For achievement-oriented students accustomed to following defined steps toward success, these structured options present the apparent next rung on the ladder of accomplishment. The geographic implications of this talent flow are equally concerning. The overwhelming majority of elite graduates cluster in just a handful of cities: New York, Boston, San Francisco, and Washington, DC. Meanwhile, promising companies in Detroit, New Orleans, Cincinnati, and dozens of other American cities struggle to find the talent they need to grow and create jobs. This geographic concentration undermines economic development in regions that could benefit most from innovation and entrepreneurial energy. This misallocation creates a troubling paradox: while politicians and business leaders call for more entrepreneurship and innovation, our educational and recruitment systems effectively channel our most capable graduates away from building new enterprises. Professional service firms serve important functions in our economy, but they are inherently dependent on the existence of value-creating companies. Without people starting and growing businesses, these service providers have nothing to serve. The consequences extend beyond economic metrics. Many talented graduates find themselves in roles that don't align with their deeper aspirations. Studies and interviews reveal widespread dissatisfaction among young professionals in prestigious but unfulfilling positions. They chose these paths because they appeared safe and respected, only to discover that the work itself doesn't engage their full capabilities or provide the meaning they seek. This represents not just an economic misallocation but a human one as well. Changing this pattern requires understanding its structural causes. The problem isn't simply about individual choices but about systems that make certain paths far easier to access than others. Professional service firms offer clear recruitment processes, defined advancement tracks, and immediate validation. Entrepreneurial ventures, by contrast, often lack the resources and structures to compete for talent on campus. Addressing America's talent allocation problem means creating new pathways that make building things as accessible and appealing as analyzing them.

Chapter 2: How Professional Pathways Drain Innovation Potential

Professional training environments transform their participants in profound and often irreversible ways. When bright graduates enter investment banks, consulting firms, or corporate law offices, they undergo intensive socialization processes designed to make them excellent service providers. They learn to produce flawless analyses, create polished presentations, and identify risks with remarkable precision. These environments reward attention to detail, analytical thinking, and the ability to work within established frameworks—all valuable skills, but ones that can actually inhibit entrepreneurial thinking over time. The nature of professional work shapes cognitive patterns in ways that can make innovation more difficult. In consulting and financial services, professionals analyze existing companies and systems rather than building new ones. They become accustomed to resource-rich environments with administrative support, established processes, and clear hierarchies. The work typically involves short-term engagements with clearly defined deliverables rather than the long-term commitment required to build something from scratch. When these professionals later consider entrepreneurial ventures, they often find themselves constrained by habits of mind developed in professional settings. The financial realities of professional pathways create additional barriers to entrepreneurship. Many elite graduates leave school with substantial student debt, and the high salaries offered by professional service firms provide immediate relief from this burden. But these compensation packages can quickly translate into lifestyle commitments—expensive apartments, financial obligations, and social expectations—that make it progressively harder to accept the financial uncertainty of starting a business. What begins as a two-year stint to gain experience often extends indefinitely as the opportunity cost of leaving grows ever larger. Professional environments also shape identity and self-perception in subtle but powerful ways. Young professionals quickly internalize the norms, values, and perspectives of their employers. They begin to evaluate opportunities through the lens of their training, often unconsciously adopting risk-averse approaches to decision-making. The longer someone remains in these environments, the more difficult it becomes to envision alternative paths. As one former consultant noted, "Before I joined my firm, I thought I could do anything. After two years, I felt you couldn't accomplish anything meaningful without millions in funding and a team of MBAs." The specialization inherent in professional training presents another obstacle to innovation. Law, finance, and consulting all reward deep expertise in narrow domains. Professionals learn to excel within their specialized area but may lack the broad operational knowledge needed to build and run a company. They become excellent at specific analytical tasks but may not develop the versatile skill set that entrepreneurship demands—selling, recruiting, product development, customer service, and dozens of other functions that fall outside their professional specialty. Perhaps most significantly, professional paths alter how individuals perceive value and success. Achievement becomes measured by advancement within established structures rather than by creation of something new. The immediate feedback of promotions, bonuses, and peer recognition replaces the delayed and uncertain rewards of building a business. Over time, this reinforcement pattern rewires expectations and reduces tolerance for the ambiguity inherent in entrepreneurial ventures. The professional who once might have embraced uncertainty becomes increasingly uncomfortable with it.

Chapter 3: Building Companies: The Real Value Creation Engine

Company building represents the fundamental engine of economic growth and prosperity. While professional services manage and optimize existing value, new businesses create the products, services, and jobs that expand the economic pie. The process of building a company transforms potential into reality—converting ideas into organizations that employ people, serve customers, and generate wealth that ripples throughout communities. This value creation process stands in stark contrast to rent-seeking behaviors that simply redistribute existing resources. The challenge of building something new requires a fundamentally different mindset than analyzing or optimizing existing systems. Entrepreneurs face innumerable small obstacles with no predetermined solutions. Unlike professional services where expertise can be narrowly applied to well-defined problems, company building demands constant adaptation to changing circumstances. The process involves making decisions with incomplete information, learning from mistakes, and persisting through uncertainty. These challenges are precisely what make entrepreneurship both difficult and vital to economic advancement. Successful company building rarely hinges on a single brilliant idea or individual genius. Rather, it emerges from teams of capable people working together to solve real problems. Early-stage companies need diverse talents—technical expertise, operational knowledge, sales capability, and leadership skills. When these abilities combine effectively within an organization, the potential for value creation multiplies. This team-based nature of company building underscores why talent allocation matters so critically; without skilled individuals joining entrepreneurial ventures, promising ideas remain unrealized. Regional economic health depends on the presence of growing companies that create employment opportunities. New firms account for nearly all net job growth in the American economy, with young companies generating jobs at significantly higher rates than established enterprises. Moreover, new businesses drive innovation far more efficiently than their larger counterparts, producing thirteen times more patents per employee than large firms. These statistics reflect a fundamental economic truth: without a constant flow of new enterprises, job creation and innovation stagnate. The process of building companies has changed dramatically with technological advancement, creating unprecedented opportunities for value creation with relatively modest initial capital. Digital tools have reduced barriers to entry across many industries, making entrepreneurship more accessible than ever before. However, this democratization of opportunity has not been matched by a corresponding redistribution of talent. Even as starting companies becomes technically easier, attracting the human capital necessary for success remains challenging when elite graduates continue flowing primarily to established institutions. Company building creates value that extends beyond direct economic metrics. Entrepreneurs develop solutions to real problems, improving lives through better products and services. They build cultures that shape how people work and interact. They create wealth that supports philanthropy and community investment. Perhaps most importantly, they demonstrate what's possible, inspiring others to build and create rather than simply managing what already exists. This cascading effect multiplies the impact of individual entrepreneurial efforts across society.

Chapter 4: Creating a New Pipeline for Entrepreneurial Talent

Addressing America's talent allocation problem requires creating structured pathways that make entrepreneurial careers as accessible as professional services. Young graduates need opportunities that combine the security and clarity of traditional paths with the creative potential of building something new. This means establishing recruitment systems, training programs, and support networks specifically designed to channel talent toward entrepreneurial ventures and growth companies. The critical first step involves changing how talented graduates perceive entrepreneurship. Many view building companies as a mysterious process accessible only to rare visionaries or those with substantial financial resources. This perception must be replaced with a more accurate understanding of entrepreneurship as a learnable craft that benefits from proper training and mentorship. Just as law firms and consulting companies provide structured development for new associates, entrepreneurial pipelines must offer clear frameworks for skill acquisition and professional growth. Geographic diversification stands at the heart of effective talent redistribution. While Silicon Valley, New York, and Boston will always attract entrepreneurial activity, innovation needs to flourish across a broader landscape. Different regions offer distinct advantages - lower costs, industry-specific expertise, supportive local governments, and unique cultural contexts that inspire novel solutions. Creating talent pipelines to cities like Detroit, New Orleans, Cincinnati, Baltimore, and Providence connects promising graduates with entrepreneurial opportunities while bringing fresh energy to communities that need it most. Effective entrepreneurial pathways must address the financial realities that drive graduates toward traditional careers. Student loan forgiveness for those who commit to building companies in underserved regions could significantly alter the risk calculation. Similarly, modest but stable salaries during entrepreneurial apprenticeships make these paths viable for graduates without substantial personal resources. These financial supports acknowledge that talent allocation involves practical considerations, not just aspirational ones. Mentorship and community play crucial roles in entrepreneurial development. Unlike professional services firms with established training programs, early-stage companies rarely have formal systems for developing talent. Creating networked communities of entrepreneurial fellows allows young builders to learn from each other while receiving guidance from experienced entrepreneurs. These communities provide both practical knowledge and emotional support during the inevitable challenges of company building. The most effective talent pipelines connect promising individuals with companies at the right stage of development. Growth-stage ventures that have achieved initial market validation but haven't yet scaled significantly offer ideal learning environments. These companies have proven their viability while still being small enough that new team members can make meaningful contributions and witness the full range of business operations. This exposure provides invaluable context for eventually starting new ventures or helping other companies grow.

Chapter 5: Venture for America: A Model for Systemic Change

Venture for America (VFA) emerged as a direct response to America's talent allocation problem, creating a structured pathway for top graduates to join startups in emerging entrepreneurial ecosystems. By selecting promising graduates through a rigorous process, providing them with intensive training, and placing them with growth companies in cities outside traditional centers of innovation, VFA demonstrates how intentional intervention can redirect talent flows toward value creation. The program's structure addresses several key barriers that typically prevent graduates from pursuing entrepreneurial paths. First, it provides a prestigious cohort experience that offers the community and status traditionally associated with elite professional programs. Fellows undergo a five-week training camp where they develop practical skills while forming bonds with like-minded peers. This creates a support network that helps sustain them through the challenges of working in early-stage companies, replacing the institutional backing they would receive in traditional career paths. VFA deliberately targets cities with emerging entrepreneurial ecosystems rather than established innovation hubs. In Detroit, New Orleans, Baltimore, Cincinnati, and similar communities, fellows find environments where they can make immediate impact while living affordably. The lower cost of living extends their runway for entrepreneurial experimentation, while the less saturated business environments provide opportunities for meaningful contributions that might be inaccessible in more developed markets. This geographic strategy simultaneously addresses talent gaps in these communities while offering fellows greater scope for growth and responsibility. The program creates a reinforcing cycle of entrepreneurial development by maintaining connections between fellows across companies and cities. Regular gatherings, shared resources, and ongoing training create a community of practice that accelerates learning. When fellows encounter challenges in their roles, they can draw on collective wisdom rather than struggling in isolation. This network also facilitates future collaborations as fellows advance in their careers, often becoming founding teams for new ventures based on relationships formed during their fellowship. Evidence from VFA's implementation reveals promising patterns in talent redirection. Many fellows who would have otherwise taken positions in finance, consulting, or other traditional paths find unexpected fulfillment in entrepreneurial roles. Their contributions help companies grow and create additional jobs in their communities. Perhaps most significantly, a substantial number remain in their placement cities after their two-year commitment ends, contributing to long-term economic development in regions that have historically experienced talent exodus. The impact extends beyond individual career trajectories to affect broader systems. University career services offices that previously focused almost exclusively on professional service recruitment have begun developing relationships with entrepreneurial programs. Companies in emerging ecosystems report greater ability to attract and retain talent. Local investors gain confidence in supporting early-stage ventures when they see high-caliber talent joining these companies. These systemic effects multiply the program's direct impact, gradually shifting entire talent ecosystems toward entrepreneurial activity.

Chapter 6: Policy Solutions to Redirect Human Capital

Effectively redirecting America's talent flows requires coordinated policy interventions across multiple domains. These interventions must address both the supply side—making entrepreneurial paths more accessible and appealing—and the demand side—enabling more companies to successfully recruit top talent. By systematically removing barriers and creating incentives, policy changes can gradually shift the distribution of human capital toward value creation. Educational institutions must recognize their role in talent allocation and adapt accordingly. Universities should incorporate entrepreneurial experiences throughout their curricula rather than treating them as extracurricular activities for a self-selected few. Cooperative education programs that integrate work experiences with academic learning can help students develop practical skills and relationships before graduation. These institutions should also measure and report on graduate outcomes beyond starting salaries, highlighting entrepreneurial success stories and long-term career satisfaction across different paths. Financial barriers require targeted policy solutions. Student loan forgiveness programs for graduates who join startups or build companies in underserved regions could dramatically alter career calculations. Tax incentives for early-stage companies that invest in talent development would enable more startups to compete for top graduates. Public-private partnerships that create entrepreneurial fellowships with living stipends could make building things a financially viable option immediately after graduation, when graduates are most flexible but often most constrained by student debt. Geographic innovation hubs need systematic support to attract and retain entrepreneurial talent. Economic development agencies should focus on creating complete entrepreneurial ecosystems rather than simply offering tax incentives for business relocation. This means investing in quality of life improvements, supporting entrepreneurial training programs, developing mentor networks, and ensuring access to early-stage capital. Cities that build these integrated systems can become talent magnets that compete effectively with traditional centers of innovation. Professional service firms themselves should adapt their recruitment and development practices. The current "hire many, retain few" approach wastes human capital and often leaves former professionals struggling to transition to other roles. More selective recruiting focused on candidates with genuine interest in the specific profession would reduce attrition while allowing other talents to flow to entrepreneurial ventures. Professional firms might also consider creating structured pathways for employees to transition into client companies or startups after gaining valuable skills and experience. Media representation and cultural narratives play an underappreciated role in talent allocation. Policy interventions should include support for showcasing diverse entrepreneurial role models across different industries, geographies, and demographic backgrounds. Public broadcasting, educational programming, and media grants could help elevate stories of company builders solving important problems rather than perpetuating narrow conceptions of success limited to financial accumulation or professional prestige. Data transparency represents a powerful and relatively low-cost policy intervention. Requiring universities to report detailed information about graduate outcomes—beyond simplistic employment rates and starting salaries—would help students make more informed choices. Similarly, standardized reporting on job satisfaction, attrition rates, and long-term career trajectories across different professions would illuminate the true costs and benefits of various paths, enabling more rational talent allocation decisions.

Summary

The systematic redirection of America's top talent toward entrepreneurship and value creation represents one of the most powerful levers available for revitalizing our economy. By addressing the structural forces that currently channel graduates into a narrow set of professional paths concentrated in a few geographic areas, we can unlock tremendous potential for innovation, job creation, and community development across the country. This redistribution of human capital would not only generate economic growth but also increase fulfillment among talented individuals who find themselves in roles that fail to engage their full capabilities. The solution lies not in criticizing individual choices but in creating systems that make building things as accessible, prestigious, and supported as analyzing them. Through coordinated efforts spanning education, finance, public policy, and cultural representation, we can establish new pathways that connect talent with opportunity in diverse communities and industries. Such transformation requires patience and persistence, as talent allocation patterns reflect deeply embedded institutional structures and cultural expectations. However, each individual redirected toward building something new represents potential multiplied—a person who might create dozens or hundreds of jobs, solve meaningful problems, and inspire others to follow similar paths. By systematically enabling more of our brightest minds to become builders rather than analysts, we can create a more dynamic, equitable, and prosperous America.

About Author

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Andrew Yang

Andrew Yang is an entrepreneur, author, philanthropist, non-profit leader, and former 2020 presidential candidate. After working as a lawyer and executive at several early-stage technology companies, Andrew eventually became CEO of an education company that became #1 in the country. He then started a national entrepreneurship non-profit, Venture for America, which worked to empower thousands of young entrepreneurs to bring their dynamism to communities across the country, from New Orleans and Baltimore to Denver and Detroit.Andrew was named a Presidential Ambassador of Entrepreneurship by the White House under the Obama administration and a Champion of Change for his work with Venture for America. Initially dubbed a "longer than long shot" candidate by the New York Times in 2018, Andrew became a top-tier contender for the presidency, raising nearly $40 million in grassroots funding. With a vision to rewrite the rules of the United States economy through a “Freedom Dividend” of $1,000 a month for every American adult, Andrew became one of the most exciting stories in the 2020 race. Andrew's nationwide support, known as the “Yang Gang,” propelled him to seven Democratic primary debates, outlasting six senators, four governors, three members of congress, two mayors, and one secretary.Following this unexpected run for president, Andrew formed the non-profit Humanity Forward, successfully lobbying Congress for direct cash relief for struggling American families during the pandemic while simultaneously distributing over $8 million directly to struggling families. From his presidential and New York mayoral runs, Andrew has seen first-hand what’s preventing our country from getting things done, and he is now directing his energies towards fixing the machinery of our stagnant democracy. With FORWARD: Notes on the Future of Our Democracy, Andrew lays out the case for a variety of democracy reform measures that can unclog the pipes of our system and realign the incentives of legislators with the wellbeing of the American people.--

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