Commentary on Political Economy

Saturday, 1 May 2021

 

YANK YANG! NEW YORKERS MUST SEND THIS CHINESE RAT BACK TO THE SEWER!

Andrew Yang Promised to Create 100,000 Jobs. He Ended Up With 150.

Andrew Yang in 2013, when he was chief executive of Venture for America. A review by The New York Times found that as the nonprofit’s leader, he failed to deliver on his bold promises.
Andrew Yang in 2013, when he was chief executive of Venture for America. A review by The New York Times found that as the nonprofit’s leader, he failed to deliver on his bold promises. Credit... Gretchen Ertl for The New York Times

The idea was as simple as it was ambitious: help struggling American cities by recruiting promising college graduates, finding them jobs at start-ups in those cities and training them to open businesses of their own.

That plan formed the backbone of Venture for America, a nonprofit organization founded in 2011 by Andrew Yang, who waged an improbably durable campaign for president last year and now has surged to the front of the pack in this year’s race for New York City mayor.

Mr. Yang has undeniable star power, helping to fuel his rise as a political newcomer with big ideas and boundless optimism about the future of the city. Unlike most of his opponents, he has not worked in government or managed any large organization. Indeed, the most extensive leadership experience of his life was at the helm of Venture for America.

With the zeal of an evangelist, Mr. Yang raised tens of millions of dollars for the organization with the goal of creating 100,000 jobs in cities where they were most needed, such as Detroit. The aim led the Obama administration to declare Mr. Yang a “Champion of Change” and paved the way for his political career.

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But a review by The New York Times of Mr. Yang’s tenure at Venture for America found a yawning gap between his bold promises and the results of his efforts.

Only a small fraction of the group’s alumni have started companies, and most of those businesses have either closed or moved to traditional start-up hubs like Silicon Valley. Today, only about 150 people work at companies founded by alumni in the cities that the nonprofit has targeted.

A self-described “numbers guy,” Mr. Yang left the group’s budget depleted, tax filings show. In 2017, when he left to run for president, the nonprofit spent $2.6 million more than it raised, ending the year with only about a month’s worth of cash in reserves.

The goal of Venture for America was to recruit college graduates to work in struggling American cities and train them to open their own businesses, creating jobs.
The goal of Venture for America was to recruit college graduates to work in struggling American cities and train them to open their own businesses, creating jobs. Credit... Gretchen Ertl for The New York Times

Mr. Yang also failed to recruit many participants of color, even creating a points system for applicants that ended up hurting graduates of historically Black colleges, records show.

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This uneven record threatens to undermine Mr. Yang’s main campaign pitch: that he is an enterprising problem-solver who can lead the largest city in the United States into its recovery from the coronavirus pandemic.

“Andrew comes up with these grand ideas, and he loves to obsess about them and talk about how great they are, but he doesn’t think through all the details,” said Cris Landa, a Venture for America employee between 2016 and last year. She said the nonprofit had an important mission and a talented staff, but Mr. Yang did not lead successfully. “He couldn’t be bothered to actually focus on the details.”

For this article, The Times interviewed more than 50 Venture for America alumni and former employees. Many praised the organization for creating opportunities for aspiring entrepreneurs. But nearly two dozen said that despite noble intentions, the program was misguided and ineffective.

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In a statement, a campaign spokeswoman defended Venture for America and also emphasized that Mr. Yang had experience running a company — managing a small but successful test-prep firm he had joined as an instructor.

“Andrew was the C.E.O. of a successful private company that became #1 in the country in its category and was acquired by a public company in 2009,” said the spokeswoman, Alyssa Cass. “He then started a nonprofit that helped create jobs around the country and a presidential campaign that grew from nothing to a national movement. He also wrote a New York Times best seller on the impact of technology on the economy.”

Venture for America, which is still in operation without Mr. Yang, declined to comment.

Mr. Yang has said he would be eager to delegate some of the gritty details of managing City Hall. He told The New York Post editorial board recently that he saw the mayor’s role as one that was, in part, about “team-building, culture-setting.”

Questions of managerial competence and the ability to implement a vision are of vital importance in the race. New York City has a $90 billion budget and a convoluted government bureaucracy with about 300,000 employees; a thicket of political interests compete for attention and money. The election is poised to be the most consequential in at least a generation, unfolding against the backdrop of a pandemic, economic uncertainty, gun violence and racial and socioeconomic inequality.

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Nearly all the leading candidates have more experience navigating city government than Mr. Yang does, including his chief rivals: Eric Adams, the Brooklyn borough president; Scott M. Stringer, the city comptroller; and Maya Wiley, the former counsel to Mayor Bill de Blasio.

Mr. Yang is largely running a personality-driven campaign that emphasizes his background as an entrepreneur, but he has little personal experience in founding companies.
Mr. Yang is largely running a personality-driven campaign that emphasizes his background as an entrepreneur, but he has little personal experience in founding companies. Credit... Gabriela Bhaskar for The New York Times

No tech, little entrepreneurship

Still, it is Mr. Yang who has led the polls, casting himself as a big-thinking candidate who is willing to experiment with unconventional proposals and build coalitions and relationships, including in the private sector, as he did at Venture for America.

Mr. Yang has proposed some specific policies, including a plan to give about $2,000 a year to the poorest New Yorkers, a scaled-down version of the universal basic income he proposed while running for president. But he is largely running a personality-driven campaign that highlights his background as an “entrepreneur” — the first word of the biography on his Twitter profile.

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The message appears to be resonating. Mr. Yang is perceived by many voters as a successful tech entrepreneur.

Despite that widely-held belief, Mr. Yang has little personal experience founding companies or in the tech industry. Ms. Cass noted that Mr. Yang, who is Asian-American, may face stereotypes because of his race.

Asked about his most successful entrepreneurial venture, she said, “nothing was more successful than taking an obscure idea of cash relief and turning it into the cornerstone of a presidential campaign that activated millions of Americans,” an idea that, she said, was reflected in federal stimulus payments during the pandemic.

Mr. Yang, 46, graduated from Columbia Law School in 1999 and briefly worked as a corporate lawyer in New York. He quit after five months.

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In 2000, Mr. Yang started a website called Stargiving that sought to use time with celebrities as an incentive for people to donate to charities. That project “failed spectacularly,” as he wrote in his first book.

A year later, Mr. Yang started Ignition NYC, which hosted parties for professionals seeking to have fun and make business connections. It flamed out after about a dozen parties, according to a co-founder.

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    Mr. Yang bounced between jobs before landing at the test-prep company, then called Manhattan GMAT, referring to the exam for business school. The founder was a former roommate of one of Mr. Yang’s high school friends, and eventually asked Mr. Yang to run the business.

    Mr. Yang ran the company for about four years and helped oversee a sale to Kaplan, the test-prep giant, which netted him a little more than $1 million, former employees said.

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    On the campaign trail, Mr. Yang talks often about that experience. But he played a much larger role in founding and leading Venture for America.

    A new idea

    Mr. Yang used $121,000 to start Venture for America in 2011, records show. He has said he developed the idea after seeing many students at the test-prep company go into finance or consulting, even as they said they wanted to change the world and nascent companies badly wanted their help.

    College graduates recruited by Venture for America attended a monthlong boot camp at Mr. Yang’s undergraduate alma mater, Brown University.
    College graduates recruited by Venture for America attended a monthlong boot camp at Mr. Yang’s undergraduate alma mater, Brown University. Credit... Gretchen Ertl for The New York Times

    “There’s a supply and a demand. We just need to connect the two sides,” he wrote in a letter announcing the group, which he said would resemble Teach for America, the nonprofit that recruits graduates to teach in low-income schools.

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    “Our stated goal is to generate 100,000 U.S. jobs by 2025,” he wrote.

    The idea drew widespread attention from the news media, including The Times, and donations poured in — mostly from big banks, including UBS and Barclays, as well as from Dan Gilbert, the head of Quicken Loans, and Tony Hsieh, the founder of Zappos, the online shoe retailer.

    In 2012, Venture for America selected its first class, 31 men and nine women.

    The group trained them at a monthlong boot camp at Mr. Yang’s undergraduate alma mater, Brown University, and then helped them apply to work for two years as fellows at start-ups in Cincinnati, Detroit, Las Vegas, New Orleans and Providence, R.I.

    The start-ups paid the fellows up to $38,000 a year, and gave $5,000 to the nonprofit. Many companies jumped at the chance to land top talent at a bargain rate. Venture for America encouraged fellows to come up with their own business ideas, offering to help them find funding.

    Soon, Venture for America began recruiting much larger classes of fellows and expanding to more cities as Mr. Yang raised more money — and made increasingly large declarations about the success of the program.

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    While leading Venture for America, Mr. Yang ultimately told donors the organization had already created as many as 5,000 jobs. While running for president, when critics questioned the claims of success, he said it had created thousands of jobs.

    But those numbers were based on an unusual calculation, according to former employees: If the nonprofit sent a fellow to work at a start-up, and that start-up later increased in size, then Mr. Yang claimed those new positions as “jobs created.”

    Ms. Cass, the spokeswoman for the Yang campaign, acknowledged that method, adding that the group also counted the jobs filled by the fellows themselves.

    Mr. Yang used $121,000 to start Venture for America in 2011. In the years since he left the company, it has stopped touting its goal of creating thousands of jobs.
    Mr. Yang used $121,000 to start Venture for America in 2011. In the years since he left the company, it has stopped touting its goal of creating thousands of jobs. Credit... Guerin Blask for The New York Times

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    In the years since Mr. Yang left Venture for America, it has shifted away from declarations about jobs and the 100,000-job goal altogether. Recently, it changed its website to say fellows had started companies that together created almost 450 jobs.

    For its analysis, The Times obtained a list of all current and past fellows, analyzed their profiles on LinkedIn and contacted everyone who said he or she had founded a company. In cases where founders did not respond, reporters obtained information about companies.

    The review found that of the nearly 1,000 alumni, about 200 said they had started businesses. But about half of those ventures quickly failed, which is not uncommon among start-ups. Many of the others have no employees other than their founders. And most of those that have survived have moved away from the cities where they began.

    In the cities Venture for America has targeted, there are only about two dozen businesses still in operation, collectively employing about 150 people. Ms. Cass, the campaign spokeswoman, said Mr. Yang was proud of all jobs created, regardless of where they ended up.

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    A movie starring Yang

    Several founders said they actually started their businesses before joining the group, including Yelitsa Jean-Charles, a 2016 fellow who invented Healthy Roots Dolls, a multicultural children’s toy company in Detroit that Venture for America has featured on its website.

    “I benefited from the training that I received from Venture for America, but I absolutely would be where I am regardless,” she said. “V.F.A. was not a determining factor in my success.”

    Other founders defended the nonprofit.

    “Did V.F.A. on paper live up to exactly what it said it was going to do? You already know the answer to that,” said Marino Orlandi, a 2015 fellow who founded Aiva, a tech company in New York. “But I don’t see that personally as an indictment. I see that as what happens when you try to be ambitious and solve hard problems.”

    In interviews, many alumni said Venture for America had succeeded in more intangible ways, teaching about entrepreneurship, fostering long-lasting connections and sending committed people into economically disadvantaged cities. Some said they still lived in the cities and remained friends with other fellows.

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    “It’s a network of other highly ambitious and, in my mind, talented human beings,” said Jack Feldman, a 2016 fellow. “You have a very good network of people who are capable of helping you do out-of-the-box things.”

    In the early years, Mr. Yang personally recruited fellows. Several alumni praised him as accessible and genuine and said they viewed him as a mentor.

    But others said they did not enjoy the same support. Some women said Mr. Yang seemed to prefer playing basketball with male fellows to spending time with them. And some fellows who are Black or Latino said they never felt welcome, partially because there were so few of them.

    Under Mr. Yang, Venture for America focused on recruiting from Ivy League Universities.
    Under Mr. Yang, Venture for America focused on recruiting from Ivy League Universities. Credit... Gretchen Ertl for The New York Times

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    Venture for America sent its fellows into cities populated largely by people of color, but its first classes were more than 80 percent white, and nearly 80 percent male, records show.

    Under Mr. Yang, the organization focused on recruiting at Ivy League colleges, former employees said. As part of the selection process, applicants received a score based on their alma mater. Internal records show the rubric ended up classifying virtually all the country’s historically Black colleges in the lowest tier.

    So all other things being equal, graduates of the prestigious Howard University, for example, would have had a harder time getting into Venture for America than students who attended other schools — including many that fell far lower in the college rankings released each year by U.S. News and World Report.

    Vanessa Paige, a Black woman in the 2015 cohort, said that at a start-up where she worked as a fellow, she heard an executive use a racist slur in a meeting. She reported the incident to Venture for America and transferred to a different company, but Mr. Yang and the nonprofit continued to work with the start-up for another four years, emails show.

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    “I believe that he had behaviors and practices at V.F.A. that were anti-Black, and that led to negative experiences for fellows of color, specifically Black women,” Ms. Paige said.

    Ms. Cass said Venture for America did the right thing by relocating the fellow and eventually cutting ties with the start-up. She also acknowledged that the application process was deeply flawed and said that any bias was unintentional.

    Others cited additional problems. During Mr. Yang’s tenure, some noted, the organization stopped sending fellows to several cities, in part because it struggled to raise money and find start-ups willing to accept fellows.

    After Mr. Yang left in 2017, Venture for America eliminated the metric that disadvantaged historically Black colleges, increased its diversity and expanded support for fellows, former employees said.

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    Although Mr. Yang does not emphasize his time at Venture for America on the campaign trail, his tenure is memorialized in a 2016 film about the program, starring him. The movie, Generation Startup, was directed by an Oscar winner and marketed as an independent feature documentary, available on Netflix.

    The nonprofit raised the money to fund the documentary’s $1.5 million budget, internal records show.

    The film follows six fellows in Detroit and ends triumphantly, suggesting that the nonprofit had changed their lives and led four of them to start businesses. (Ms. Cass said the filmmakers chose the subjects.)

    But none of the fellows live in Detroit today. Only one founded a business that got off the ground: Banza, a chickpea pasta manufacturer that is Venture for America’s biggest success story. It produces its pasta in California.

    Susan C. Beachy contributed research.

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