Why are Grad Students Ditching Wall St for Small Business and Social Entrepreneurialism?
FILED TO: Economics
By Ben Cohen: One of the main motivators for doing exceptionally well at school is the prospect of a high paying job afterwards. In the modern economy, salaries are highest in the financial sector, and given America’s gigantic student debt problem, it makes sense that the best and the brightest would head off into the city to make their fortunes.
Or so we thought.
In a fascinating article in the Washington Post, Ezra Klein profiles ‘Venture for America’, an organization dedicated to playing the middleman between small, growing businesses and students who would want to work for them. It takes its cues from ‘Teach for America’ – a wildly successful non profit teaching program that has managed to attract top talent without top salaries. Writes Klein:
Teach for America solved that problem [attracting top talent] by providing schools across the country with the recruiting capacity and brand equity they lacked, enabling them to pool resources to attract top students. Venture for America is eager to play a similar role, serving as the middleman between small, growing businesses and students who might want to work for them.
In its first year, Yang estimates that Venture for America received about 500 applications for 40 slots. The jobs are in fast-growing companies that are less than 10 years old, and they pay from $32,000 to $38,000. Right now, Venture for America is working with companies in Cincinnati, Detroit, Las Vegas, New Orleans and Providence, R.I. Next year, the organization expects to have more than a thousand applicants for 100 positions, allowing expansion to Baltimore; Cleveland; New Haven, Conn.; Pittsburgh; and Raleigh-Durham, N.C.
It is a sign of changing times that money isn’t enough to attract the best and the brightest graduates anymore, an indication that the era of ‘greed is good’ is coming to an end. Klein spoke with a recent Ivy League Graduate who on paper, fitted the exact profile of a Wall St apprentice:
Two years ago, Mike Mayer appeared headed in the same direction. A high school valedictorian, he attended the University of Pennsylvania. As a sophomore, he worried that he wasn’t learning usable skills, so he switched into an undergraduate program at the Wharton School and, as he puts it, “followed the herd into the finance concentration, and then into New York and Wall Street.”…..he’s finished with Wharton and heading to New Orleans to work at a small software company. “There is a sense of creating something, of creating real tangible value,” he says. “A big bank does create value for our economy, but as a first-year analyst among 80 or 90 peers, you’re not seeing it. At a start-up, you’re seeing it every day.”
There are many other small to medium sized ventures out there doing interesting and important work that are attracting phenomenally bright and talented people – people who maybe 10 years ago would have committed themselves to the world of finance, but see a more fulfilling future for themselves doing something they find meaningful.
Take for example ‘Agora Partnerships‘, a company that accelerates early-stage businesses throughout Latin America and links them to impact investors around the world. They work specifically with “impact entrepreneurs” in the region – men and women who are intentionally using their business to solve a social, economic, or environmental problem in their community. Agora has attracted top talent to work for them, not because they’re handing out Wall St salaries, but because they get to be involved with something they feel is important.
Director of marketing and communications Jesse Grainger was attracted to the company because of the principles Agora adheres to. He told me:
I chose Agora because it meant something more to me than a paycheck. Right out of grad school I worked with a record label for a year before realizing that selling music and concert tickets wasn’t fulfilling enough for me. We’re facing myriad of problems in our society today. I wanted to feel as if I was a part of the solution. Also, it’s an exciting time for the socially responsible sector. Traditional “do-gooder” organizations are embracing more market reforms and entrepreneurial ingenuity. There seemed like a lot of opportunity in this space to grow.
The next generation of America’s best and brightest are not necessarily anti-money or anti-business, they are just concerned about the products they will be involved in making. Companies like Agora are for-profit businesses, but they care about where that profit comes from. That concern is also reflected in the talent they attract to work for them. Says Grainger:
We attract talented people by selling the vision/purpose of Agora as well as the nuts and bolts of what we do. We communicate to people that we are building a movement to use business to solve social problems using tried and tested best business practices.
Young people are growing up in a world where consumerism and materialism are the defining features of our culture – they are bombarded with non stop advertising encouraging them to buy an endless choice of products. The results have been disastrous from a societal point of view – mental illness is soaring along with reliance on chemical medication, young people feel increasing disconnected from the political process and are depressed about their future prospects. The idea of clocking in to a 9-5 day in day out for the rest of their working lives for institutions with little impact on anything relevant to them isn’t enough any more.
The rise of social entrepreneurialism, the rekindling of interest in small business is a sign that the next generation is fighting back – not by protesting on the streets or engaging with the political process, by opting out of Wall St and Big Business culture and forging their own paths. It’s a quiet revolution, but one that is definitely happening.
Issue 14 of the Banter Magazine is now out! Right now, you can try a membership for only 99 cents!