← Tom Bilyeu's Impact Theory
Tom Bilyeu's Impact Theory
Revitalizing America: Innovative Solutions for Economic Transformation | Andrew Yang (Replay)
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- [00:01]
Tom Bilyeu
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- [00:46]
Commercial Announcer
You're listening to Impact Theory.
- [00:48]
Andrew Yang
Impact Theory.
- [00:49]
Tom Bilyeu
Impact Theory.
- [00:49]
Andrew Yang
Impact Theory.
- [00:50]
Tom Bilyeu
Impact baby. Hey everybody. Welcome to Impact Theory. Today's guest is Andrew Yang. He's an entrepreneur and former presidential candidate turned philanthropist and CNN political commentator. The Obama White House named him a champion of change in 2012. And his fresh take on the faults in the current model of capitalism paired with his data driven, human first approach to business saw him enlisted as a Presidential Ambassador for entrepreneurship in 2015. Now, despite having suspended his 2020 bid for the presidency, he is nonetheless providing a vision for how we move forward through his podcast, Yang Speaks, and his philanthropic initiatives, including his most recent, Project Humanity Forward. Andrew, welcome to the podcast, man.
- [01:37]
Andrew Yang
Oh, thanks for having me, Tom. I appreciate it, dude.
- [01:41]
Tom Bilyeu
I'm super excited to have you on the show. Watching you go through the process of running for presidency, I was really excited. I was really excited by the way that you think, by the way that you let data drive your decisions. I'm so obsessive about that here in my company.
- [01:59]
Andrew Yang
I will say that, well, I understand the impulse as an entrepreneur because there is something very, very particular and important to starting a business, running a business, making payroll, being responsible for an organization, it is its own process and it certainly defined me as an adult. Really when, when I was the CEO of my company, I felt like I was the head of a family or head of a really big household.
- [02:29]
Tom Bilyeu
No question. When you really stop and take on that kind of responsibility and you take on the fact. One thing that I've said about being an entrepreneur is when your house is on the line. And those were really the stakes for Lisa and I when we first started Quest was, you know, we had been in this other company, we had been doing fine and when we transitioned to starting Quest, it was such a huge question mark and obviously we didn't know if it was going to work it was like, all right, if we do this, we have to face honestly that we could lose our house. And there was something clarifying about that. All of a sudden, for me, ego went out the window, and it was just, what is the data saying? What's working, what's not working? And then as you begin to take on employees, you really do feel like the head of a family. You're like, yo, these people either have a roof over their head or a great Christmas, or they're able to make sure that their family is eating healthy food based on whether I can keep this company running or not and whether I make the right decisions or not. And so that was. Going through that process was part of what gave me sort of this halo glow around capitalism, around entrepreneurship, running companies. And it's been really sad for me to see how dysfunctional it's become and that there are so many people. And in fact, this is. There's a couple things I want to talk about. One, why you're doing the podcast, which I think is interesting, and what sort of the core thesis is now that you're not running for office. And then, like, as we think about fixing the system, you know, capitalism was a system that treated me very well. So I came up middle class, maybe lower middle class, worked my way up, became very successful, fucking brutally difficult. Did not feel like things were handed to me. And so I'm looking back like, yo, this is possible. This is amazing. And to see so many smart people say, no, there is a deep and fundamental flaw, and unless we overcome that, people won't be able to change classes. So what do you see as the. To encapsulate sort of the broken part as it relates to, you know, the average kid coming out of college right now, which is probably my default, which I know is a little bit different than the default that you think from. But I'd be interested to hear what you think and then how you plan to get the message out to the podcast.
- [04:54]
Andrew Yang
Well, I'd say, Tom, everything you said I can relate to very, very directly. And in my mind, two things are fundamentally true. One is that entrepreneurs had to work themselves to the bone in order to build any kind of quality business or organization that's successful. And I take it from big company CEOs and entrepreneurs down to the person who just, like, opened that food truck. That food truck was so much work, you know, or like the quarter deli or whatever, it was. Like, so much went in, like, you know, like, they put their heart and soul into it. A lot of them have their savings or future on the line like those things are. It's totally the case that if you're an entrepreneur, you work your heart out if you were successful. And then the other thing that's also true now, and I'm a numbers guy, is that entrepreneurship went off a cliff over the last number of years for young people, for 80% of the country geographically, where we've consolidated away a lot of the opportunities that would have existed at another point in time. And so it's funny to balance this tension between being like, hey, go out, kick ass, take names, build something awesome, which I love. I mean, I spent years of my life trying to help people do that. And also, oh, by the way, I've looked at the numbers and we are making it progressively more difficult for anyone to do what I just said, because. And one of the examples I use, Tom, is like, if you were to rewind a couple of generations ago, what business would someone have started in Indiana or Mississippi or wherever? And they would have started a flower shop, a hardware store, a kid toy store, like, you know, some kind of business that like, serves people in the community. Like, now those opportunities don't even exist. It's like, you know, you have to be an idiot. Like a kid's toy store in like, Main Street, Indiana. Like, that's just dumb because everyone's just going to, like, hit a few buttons and like, get the toys delivered to them. So the nature of the opportunities has changed, and it's made it so that specific types of people are more able to capitalize on the opportunities that do exist.
- [07:11]
Tom Bilyeu
So let's talk about that. What are those opportunities? And the. I don't know if I'm using this term right, but the circle that I'm trying to square is that when I think about the journey that I went on. So I graduated from college with a degree in film. Not exactly very helpful. I didn't, you know, it's not like I have a degree in finance. I have no entrepreneurs in my background. I started at the very first company that was a startup that I worked at. I started as a copywriter and I worked my way up through that company and then ultimately founded other companies, multiple companies, but founded those from scratch with equal partners and built those up. And it we quest was started right at the sort of beginning of the Great Recession. So we started that company in 2009. It was the officially launched in 2010, but we were conceptualizing of it in 2009 at the height of all the problems, and we bootstrapped It, So it was like all of the things that I think about, like, I'm not the person that should have succeeded. Right. I didn't go to an Ivy League, I didn't go learn finance. I don't have rich friends. So how, what, what is the sort of core that's fallen out that makes this now so difficult for, like, me? Are you saying if I were to do all of that now?
- [08:32]
Andrew Yang
Well, your, your story actually feels very familiar to me, Tom. And at this point, you know, probably dozens of entrepreneurs who've done things in different lines of work. The fact that you are a film major or a creative or an artist is actually a very common theme in a lot of entrepreneurs. You remind me, frankly of many people I know who went on to become successful entrepreneurs. You know, you're like self disciplined, data driven, really clear thinking, like, no nonsense. It's like someone like you would find ways to succeed in a myriad of organizations. Just like you started out as a copywriter and everyone around you was like, you know what? Like, if you give Tom shit to do, he gets it done and it's good. And it's actually even better than whatever the heck you, like, gave him originally because he like, improved on whatever the heck the project was. And then you just keep on accruing responsibilities. You climb up and then you get to a point where you're like, you know what? Like, I am actually as capable of anyone as like, starting a business, running a business, and then you go out and do it. Yeah. So all of those things are actually achingly familiar to me. It's like if, if a young Tom, like shows up in an organization, I get so psyched because you can just like dump stuff on that person, like end up building a whole department and then eventually build a company. So there are people that are built like you. And if you had like 100 years lined up now, it's like many of them would still find success really in any circumstance. But there are, there are some people that would not. And the ratio of people that would find success because I'm like a data driven, like almost like pattern matching where like, so if there were like 100 years, like split up among the 50 states like, you know now, it would be a very, very different picture than it would have been a generation ago. I can say that with absolute confidence because, like, I've just looked at the numbers and the bottom has fallen out in terms of small business formation in most of the country. And the bottom has fallen out for this generation behind us. Like the folks who are in their 20s and 30s are starting businesses at multigenerational lows.
- [10:47]
Tom Bilyeu
So talk to me about what the bottom is, what, what exactly has fallen out, and I'll again, I'll contextualize where I come from. So I'm like, imagine me for a decade saying to everybody around me, yo, pull yourself up by your bootstraps. It's amazing. Like, you can do this. You got it. Get skills. That's my obsession. Get skills. And so I had to build up the sort of mental and emotional resilience. And I was not voted most likely to succeed. Like, this is all about the science. Seems to say 50% of you is just hardwired. 50% is malleable. So I've always counted the vast majority of my success to the 50% that's malleable. It's not all. Sure, some of it is a level of intelligence and all that, but so what? Why is that like a dirty word? The notion of pulling yourself up by your bootstrap?
- [11:36]
Andrew Yang
This is such a fun conversation because I think they're parallel tracks and I think that they're both necessary. So number one is to the extent that someone can take that 50% of themselves as malleable and improve upon it in ways that make them healthier, happier, more productive, like more successful, Better to work with a better partner. Because I know that just like you work on yourself for businesses, like you work on yourself in your marriage and partnership, like, those things are all awesome and we should be encouraging people to do that in whatever way we can. And I know you've done a lot of that and helped many, many people. You know, I like to think I've helped some people too. And then simultaneously you look up and you say, wait a minute, like, what has gone on with our economy where you have so much time and energy going to problems that are not actually productive, you know, you have really talented entrepreneurs who are just saying, my goal is to get it gobbled up by the tech behemoth and then get cashed out. And then even if they end up squashing whatever it is I was working on, like, well, you know, that's just the process now. Like, my investors will be happy, I'll be rich. Then maybe I'll like leave and do it again. Like you have at this point, like an economy that is not actually lining up market driven rewards with people's success. And then things that are beneficial for lots of folks, like that the three things are now kind of split into. It's like a trident or like they're heading in different directions. So I'm all for helping people kick ass in every circumstance, but then you look up and say, wait a minute, have things really kind of lost the thread? Do we live in the most dramatic winner takeout economy in the history of the world according to the numbers?
- [13:26]
Tom Bilyeu
Yes.
- [13:26]
Andrew Yang
Like, do we have greater consolidation in certain industries than we've ever had? Yes. Does that have like really demented effects? Yes. One example. Do you and Lisa have kids, Tom?
- [13:37]
Tom Bilyeu
No.
- [13:38]
Andrew Yang
So, so one thing that's happened to me is I became a dad, you know, like seven years ago. So we have two boys, seven and four. The seven year old's autistic and like now I'm very sensitive to the fact that we are seeing record levels of dysfunction among young people that are hand in hand with smartphone adoption and social media use. Just like the curve, just go straight up the same, like, you know, exact same. Can you.
- [14:06]
Tom Bilyeu
When you say dysfunction, what do you mean? What kind of dysfunction?
- [14:09]
Andrew Yang
Like high levels of depression, anxiety, antisocial behavior. It's particularly pronounced among teenage girls. And so one of the things you would say, you know, or this is sort of like a cousin to like hey, pull yourself up by your bootstraps is like, hey, parents, like figure it out. Like don't you know, like this happened. But then you have 40% of American children who are born to unmarried mothers, which is much higher than it was when I was growing up. And so if you imagine a household where there's like one parent and that person's working and then there's a kid and the kid like just is getting mesmerized by technology and then we can see population wide that it's like having a negative effect on their mental health. Then you look at it and say, okay, like there probably should be a role somewhere for us to try and improve these kids development environment if we're actually seeing systematic problems with their mental health. And one reason I'm passionate about this, Tom, is that I love entrepreneurship so much. And the fact that we've seen entrepreneurship plummet to multi generational lows among young people is related to some of these things I'm talking about that are system wide that we've created this environment where someone's not going to come out and kick ass and start a new business and so they're going to be depressed and miserable and indebted.
- [15:27]
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- [15:57]
Tom Bilyeu
Can we tease that out a little bit? So the thrust of my life is going to be to. I've always saw it as a mindset thing. Not that that solves the entire problem, but what is my particular skill set? Where do I think that I'm insightful? So by no means am I saying this is all you need to do. I'm just saying this is my area of expertise and the small piece that I'll be able to contribute. So I've always saw. Imagine me. So let me give you a little bit of background on myself and for anybody that's watching now and doesn't know who I am. I. For an extra credit assignment in college, I was asked to go in and help a kid in South Central Los Angeles, one of the worst school districts in the country, to go in and just help him, like, mentor him a little bit for eight weeks, help him get his homework done. So I go and do that. Supposed to be eight weeks, and he's a wild problem. And of course they're trying to get him out of class, which is exactly why they pick him. Throwing tantrums and all this. And he says to me, or one day, I say, you're supposed to tell him at week six I'm only coming for two more weeks. I tell him, he freaks out. Nuclear explosion. The kid is going bananas. I'm 18 at this point. I've never seen a human act like this ever in my life. I was beside myself. And I finally get him to calm down. I said, look, is this because I said I was only coming for two more weeks? He says, yes. I said, cool. Look, man, I will make you a deal. If. If you will do your homework the second that I get here. Because he used to, like, delay and end up keeping me for longer than I was supposed to. If you'll do your homework the second I get here, as long as I live in Los Angeles, I will help you with your homework. Is it a deal? He says, yes. Becomes an eight and a half year relationship. Okay? Now that plants a seed in my soul. I'm watching this kid struggle, but I'm young and stupid. I don't know how to help him. So I'm like, all right, my mission is to show them that beautiful things exist and show them that somebody loves them. So I'm dirt poor at this time, but I take him to see movies in Beverly Hills because I'm like, movie cost the same no matter where you see it, but in one place, you're surrounded by green palm trees. It's beautiful. And so I would do that. And then, long story short, he gets sucked into foster care. Move farther and farther away, we lose contact. Flash forward 15 years later. I now have 3,000 employees. A thousand of them grew up just like this kid did. And so I know how this plays out, and I'm devastated. I'm like, whoa, this is crazy. Like, how do I get them to think in a way that's going to propel them forward? And I start getting obsessed with this notion of skillset and getting them to build a skill set and to be able to go out. So, okay, this becomes my mission. I'm going to help people think in the right way that will lead them to acquire the skills that's going to be necessary to move forward. Then people hit me with the learn to code meme, right? Like, telling people to improve and get better is like, bullshit. So I'm like, okay, something is making people feel some kind of way, and it's stopping them from taking what I think are acts of self preservation. So my thing is, hey, the system might be broken, and I'm glad you're doing it. That's not my interest. I'm never going to get fucking involved in politics. I cannot tell you how much that does not interest me. I'm very glad people like you were doing it, but that didn't suck me in. So what I want to do is go, okay, if I'm going to help people.
- [19:05]
Andrew Yang
Dodged a bullet, Tom.
- [19:08]
Tom Bilyeu
Well, unfortunately, I may have dodged that bullet because you're willing to stand in front of it. So my thing is, my wife is saying. Your wife would say what?
- [19:17]
Andrew Yang
I said, my wife would say, the bullet hit me pretty good.
- [19:21]
Tom Bilyeu
Yeah, that. That seems pretty clear. So I. It is so important to me if I'm going to make a meaningful contribution with my life, to understand why I'm trying to plant a tree, right? The tree of think this way, Gain me skills so that you can control your life. Okay, That's. That's my punchline to lead to fulfillment, by the way, not money. But that's my thing. But it's like, I feel like the soul that I. The soil that I keep trying to plant this into has a problem that I don't Understand? Even after researching the shit out of you, I'm still having a hard time. Like, what is the floor that's dropped out? A kid is entering the workforce right now. What has gone wrong? It's a winner take all. But I don't understand why that's a problem. Unless the playing field has become unfair, they can't start a local business. That's one thing that you said, but I don't understand why that's a problem. I didn't start a local business. So is it debt load? Is it fear? Is it education? Is it all of those? Like, what if you had to say, like, the top three things we need to solve these three things, that would then make the soil fertile for individual responsibility, which to me ultimately is the punchline. What would those three things be?
- [20:32]
Andrew Yang
I love this question so much because I think you've hit the nail on the head, which is you're trying to play the trees and you're like, why is this soil not fruitful? Why am I having so much trouble planting these trees? And so this would be like a personal question. What kind of family did you grow up in, Tom?
- [20:52]
Tom Bilyeu
My dad sort of bounced back and forth between white collar and blue collar for the most of my life. He was a purchasing manager and then was an auto mechanic for a while. And then my mom stayed at home for most of my life, but then went into the workforce when I was like 11.
- [21:10]
Andrew Yang
And what part of the country was that?
- [21:12]
Tom Bilyeu
Tacoma, Washington. Cool.
- [21:15]
Andrew Yang
So number one, I would say, is the environment these kids are just reared in growing up in. Where again, I mentioned a fact where 40% of American kids are born to single moms. That statistic was around 15% when I was growing up in the 70s or 80s. So when I saw that it went from 15 to 40%, I was like, that can't be right. And I triple checked it and it's like, yeah, it's right. You know, it's more than doubled since I was a kid. So you look up and say, okay, what does the data say then about growing up with a single parent and 90% or so of single parents are single moms. So then you look at the kids outcomes with single moms, and again, we're talking about 40% of American kids, much higher in certain communities, you know, like, so. So the data says that if you're a little girl who grows up to a single mom, things are okay. Like you graduate from high school at normal levels. And there are a number of reasons for this. You have a strong female role Model, if you're a little girl growing up, you see mom, she's super mom. And little girls tend to be faster to mature, they're good at school, they don't have the same behavioral problems, they graduate from high school and, and go to college and at like relatively normal rates. If you have a little boy growing up to a single mom, then unfortunately the outcomes are significantly worse. Where apparently little boys have higher sensitivity to parental time input. And so if parents spend less time with a little boy, they struggle more, they have higher behavioral problems, they mature more slowly, they have academic problems, and they're less likely to pursue higher education. And so you're looking at like, you know, almost the new normal for like half of America. Like you know, 40% of American school kids. So then if you were to go to that kid and say like, hey, you know, like you show up to them and this is probably the sort of experience you had with your mentee when you showed up in LA with a person, you imagine that person multiplied out and you said you had like a thousand employees who might have been from similar backgrounds. Like that is the soil. And then you look and say, well, why did the American marriage rate go off a cliff? And there are a number of reasons for this. So marriage and childbearing have both fallen to historic lows in the United States. If you are a non college graduate man, you have a less than 50, 50 shot of ever being married in your life. A high school educated.
- [24:01]
Tom Bilyeu
Do you think that's by choice or what's driving that? I've never heard that stat. That's terrifying. I guess if people want it and can't have it, it's less worrisome if people just aren't choosing it.
- [24:12]
Andrew Yang
Well, you know, you can project how much of it is like, and I'm going to suggest that most dude probably want to at some point settle down. You know, there's like a period when they don't, but then eventually they do. So you rewind a generation or two and you say, okay, it's the 1970s, you're a high school educated man and you should know that the majority of Americans are high school graduates. Like, you know, the proportion of Americans who will graduate from college is about 35%. So you're looking at about two thirds are high school graduates. Another like 10% of that 65% are essentially community college, two years, associates vocational. But you're looking at majority high school grads. So if you were to rewind a couple generations ago and you were a high school graduate, what kind of work might you do? You might have worked in manufacturing. There were 17 million manufacturing employees in the United States of America up through the 70s and 80s and the majority of them were met. So that's one of the major employment sectors for you. And there were ways you could live a fine middle class life in Michigan as like an auto worker or whatever it was, never needed to go to College. We eliminated 5 million of those 17 million jobs. And again, vast majority of them were blue collar men. At that same time, then the marriage rate starts to decline. So imagine if you're a blue collar high school graduate man, you now do not have a steady income. And then it's very, very hard for you to propose to a woman and say, hey, marry me, because, oh, by the way, I don't have a steady job, I don't have any future. Like I'm, you know, it's like I'm not exactly a great prospect. And so that then marriage rate declines. You still occasionally procreate, procreation rate, or like the rate we're having kids has declined, but it hasn't declined as much as the marriage rate. So you have tons of these kids growing up in single parent households, generally single moms. And it's lockstep with the fact that we have decimated the opportunity set for men who do not have college degrees. If you want to dig even deeper, the, the academic outperformance for girls is systemic and it's not just here, it's everywhere. But approximately 58% of college graduates.
- [26:30]
Tom Bilyeu
Are you saying it's, it's global? It's a global issue.
- [26:34]
Andrew Yang
Generally speaking, girls are better at high school than boys everywhere, including the United States of America. So, so you're looking at approximately 58% of college graduates in the United States are women. And so, you know, so you have this like shrinking group of men that like, if you're a high school grad, again, less than 50, 50 chance you'll ever get married. And then if you never get married, I mean, you might have had this experience with Lisa. So I'm going deep into this one set of factors. But you said like, hey, what are the three top things where you would say like things are why is the soil not working? Number one is family. We have done a number on the family unit and kids are growing up in really, really adverse circumstances.
- [27:17]
Tom Bilyeu
And can I, can I say what you just said in different words just to make sure that I understand it? Because this is really profound if I'm understanding it correctly. So hey everybody, you Had a. You have, first of all, you have a world where there's a lot of people that all call under voiced. Maybe that's the right way to think about it. It's not that they're invisible or they don't have a voice, but they don't have as big of a voice or megaphone as a more highly educated person. So they're high school graduate. They're going out into the workforce. We've automated a lot of their jobs away. And this creates sort of an emotional death spiral for guys are not able to make the middle class income, which means they have insecurity around whether they could support a family or not. And I. And now I'm putting my own words to it. I'm curious to see if you agree now that level of financial insecurity becomes sort of emotional insecurity becomes a lack of confidence. And either they don't actively pursue a relationship for emotional reasons insecurities or they're financially. They don't feel that they could support a family and so they don't pursue it for that reason. And that is now creating.
- [28:27]
Andrew Yang
Tom. Is that maybe they do pursue it, but women are like, hey, like, you know, go get a job that I can rely on.
- [28:34]
Tom Bilyeu
Yeah, word. And so now you have the family instability created from this shift in the economy. Dude, that. That is. Is one. Is that accurate? That's what you're saying?
- [28:46]
Andrew Yang
Yeah, that's accurate.
- [28:47]
Tom Bilyeu
Do you know Jeffrey Canada?
- [28:49]
Andrew Yang
Yeah, yeah, sure.
- [28:51]
Tom Bilyeu
Dude, you're the first person that I think I've ever had say yes. So Jeffrey Canada. I am people.
- [28:57]
Andrew Yang
So that guy's a superhero.
- [29:00]
Tom Bilyeu
100%. I'm so desperate to get him on the show because I have a memory that I can't. I'm not sure if it's true, but my memory of his assessment of the situation is you have to give up on adults. You need to focus on women who are pregnant or about to become pregnant. Because if I remember correctly, his analysis was that the big thing that separates kids that grow up in the inner cities. So his what's wrong with the soil is basically your ability to deal with language and to communicate. So we said the average number of words that the kid growing up in the inner cities hears is like 2 million words by the age of 5. And the ratio positive negative is 70% negative, 30% positive. And the ratio in the middle income brackets is exactly flipped. So it's 30% negative, 70% positive. And they also hear about 5 million words by the time they hit 5. And he was like the impact that that has on their language centers and their ability to process in a communication environment that you would need to get a good career. He said, it cannot be overstated how important it is to have that additional access to those language skills. And I was like, can it really be that simple? And so hearing you talk about the weakening of the family through the weakening of a certain part of the economy rings very true. So if that's one, the weakening of the family, what are some other things that you think have depleted the soil?
- [30:27]
Andrew Yang
So number one is family. Number two is our educational system. And then number three is the nature of the marketplace right now and what returns your labor can command. So I'm happy to dig into number two. Um, but I just want to talk a little bit about the Jeffrey Canada. I. The research is really compelling. You know, it's like when you look at the number of traumas that a lot of these kids experience, it makes them incapable of learning. It makes them really, really averse to, like, certain types of stresses and environments. And then when you show up and you're like, hey, like, let's, let's fix it. Like, you know, you need a time machine. You need a time machine. You need to go back to, you know, like when that kid was in the womb, like, like Jeff talking about.
- [31:12]
Tom Bilyeu
Yeah.
- [31:12]
Andrew Yang
So number two is our schooling system. Like, our educational system is designed for an agrarian industrial economy and you have social promotion by age and you're preparing kids for a world in the economy that stopped existing a long time ago. Really. And so one of the things that breaks my heart is that we have systematically under invested in vocational education. Only 6% of American high school students are in technical or apprenticeship tracks. In Germany, that's literally 50%. So.
- [31:49]
Tom Bilyeu
Whoa.
- [31:50]
Andrew Yang
So what we have done is we've essentially said we're going to pretend that every kid's going to go to college. Oh, by the way, that's not true for the majority of you. And if college is not a good fit for you, we're not going to actually invest in getting you kind of hard technical skills that might lead to gainful employment. Why? I don't know. Like, why have we under invested in it? I think it's because it's more difficult and expensive to have shops and tools and garages and trainers and, you know, like, actual skills than it is just to throw the kids in a classroom with some old textbooks and be like, you know, let's just pretend they're going to go to college. So we need to be investing massive levels of resources in technical education. I would want to team up with Mike Rowe of Dirty Jobs and be like, look, these jobs are awesome. We have a massive shortage of people that build those jobs. And then what do we have is we have an overabundance of people who are going to college. And oh, by the way, we made college, you know, 40, $50,000 a year or whatever the heck it is. Like depending upon what type of school you go to. But why has college gotten two and a half times more expensive than when I went or I suspect you went. Did it get two and a half times better? No. Did they hire two and a half times more professors? No, what they did is they hired 150% more administrators, non academic. And then they said, hey, College is now 50,000 a year or 60 or whatever it is. And oh, if you want to go, don't worry about it, like, we'll give you loans. And so you have these kids showing up, going to school they have no business going to. The graduation rate for these kids showing up to college nationwide is around 59%. So you have 40% of these kids show up not graduating within six years. And so imagine ending up with like a debt load and no degree. Does the school ever forgive you if you like, if it wasn't a good fit? Like, of course not. They're like, hey, you owe us anyway. And so we have this completely unresponsive, out of date educational systems that is not actually preparing our kids with real skills, it's just pretending. And then they've also just ginned up the price tag because of essentially bureaucracy and overweight, lack of accountability, just, you know, institutional incentives. Like if you're a school, you just hire more people and then you just pass the price on to the families and students. And then the students look up and say, I don't have a choice. Which is why the school get away with it because like, you know, they don't have a choice. And then the family then turns to the government who then gives them loans that may or may not be the right idea.
- [34:33]
Tom Bilyeu
Yeah, there's, there's a lot of stuff going on in education that freaks me out. So number one, what I like what you're talking about with a vocation. And that to me is there, I think there's a lot of baggage to that word. At least where I grew up, it was just drummed into me that, you know, you didn't want to end up
- [34:51]
Andrew Yang
with a new color job, man. That's the stigma. It's like if you do that stuff, You're a loser, you're going to go to college. But then meanwhile, we have a total shortage of skilled work.
- [35:03]
Tom Bilyeu
So here's my obsession. I'm glad you're calling it skilled work. So my obsession is to get people to understand skills have utility. So right now, maybe partly because of the way the school system is rigged, it's like, you just need to get the grade. You don't have to think about what you're actually going to do with this information. If you ask your trigonometry teacher, why am I ever going to need this?
- [35:22]
Andrew Yang
They act.
- [35:22]
Tom Bilyeu
Most of them cannot answer you. So you get this sense of, okay, I'm being shuttled into this system. I need to get good grades to please my parents and society and to get into school and to sort of follow the path. So, okay, that's what I'll do. And so my path, just so you know, in high school, I just cheated. So it seemed very easy. Like, oh, cool, I get it. I see what the game is here. I will play it very well. I will use my charm to charm the teacher to turn a blind eye. I will charm my fellow classmates to give me their work so that I can cheat. And then when I went to college, I was like, whoa, hold on a second. I actually want to be a good filmmaker. So what purpose would cheating serve me? And I'm going to be taking out tens of thousands of dollars in debt. Like, this is crazy. So when I started college, I made myself a promise. Arf. Sink or swim. I wasn't going to cheat. Not a little bit, Nothing. I was going to see how well I did because I knew if I didn't actually learn what I wanted to learn, the whole rest of my life would be problematic. So now I'm like, when I have employees, I'm like, listen, you're learning this thing not to check a box or to please me. You're learning it because it lets you do something better than somebody else. This is. And I just think in competitive terms, though, I think you may point out that this is sort of systemically a problem, but. But it's like this is a winner take all game, homies. Like, this is. Not everybody gets to win. Like, we're either going to be the industry leader and we're going to get what we want and we're going to be able to outperform and stay in business, or we're not. And so I always liken it to building a bridge. It's like you learn architecture because it actually lets you build a fucking bridge, like an actual physical bridge. And getting people to understand that shit would crumble if somebody hadn't taken the time to learn a skill that allowed them to build that thing. And so that. That is definitely part of what freaks me out about the education system. The other one is just the crippling people with debt. That's the one that's always freaked me out. You graduate with $100,000 in debt, you're going to play it safe. You're not starting a business. No way.
- [37:20]
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- [37:35]
Andrew Yang
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- [37:39]
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- [37:47]
Andrew Yang
Five guys.
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- [37:50]
Andrew Yang
Yes.
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- [38:05]
Andrew Yang
Yeah, completely. And we've done that to millions of kids. At this point, we're up to $1.6 trillion in student loan debt. This is the third leg of the tripod. So, number one, families have disintegrated. Number two, our system of education has not actually tried to. Not even try to keep up with reality. It's gone up in cost and it's been like, we don't really care. We're not accountant. Doesn't matter. It's like, what matter to us? What happens to you? We already got paid then. Number three is the marketplace has changed fundamentally. This brings us back to the evisceration of manufacturing jobs. Yes, but if you look up, the majority of the jobs that are getting created now are temp, gig, or contract jobs in the economy. So the marketplace has gotten systematically more punitive, and it's harder to find a
- [38:54]
Tom Bilyeu
path forward and define punitive for me.
- [38:58]
Andrew Yang
You know, so the, the stat when I said the majority of jobs that are being created are gig, temper, contract jobs. I don't know how your organization functions, but, you know, if you are in those roles, then you have very little security. You often have very little in the way of benefits. There's massive income volatility for a lot of these workers. Where they can make some money one week and then very little the next week. And it's a massive stressor. That's what I mean by punitive.
- [39:26]
Tom Bilyeu
I want to talk about that for a second. So one of the things that I love about you is, dude, you're so even keel. And I feel like you really look at things through the lens of what humans are really like and what the reality of the situation is. So help me with this one. One thing that I think is in going back to education. So my mom and her husband work in. In education. Ish. They work for a school district. That's probably the right way to say it. And when I hear some of the stories about how impossible it is to fire somebody, I'm always telling them, you can't run a business like that under no circumstance. And so I get why you want to reduce or eliminate volatility, but without that, you're not going to get the A players. I would much rather be in a company where I've got a thing for my supper to keep you because you have options to go wherever you want to go. But I know that I can get rid of you if you're underperforming so that I can put together a dream team now to keep people they have to know. Like I always tell my employees, I want you to retire here. Like, I get, I'm bucking the trend. I'm not interested in 18 months. I'm interested in 40 years now to do that, I've got to create tremendous opportunities. I've got to give you autonomy. We won't go into all the things that I think are that secret recipe for success. But I want to be in that position where if you underperform, I'm not obligated to keep you and make sure that you have no volatility. But if you're killing it, I want you to be winning with me. How do you think about that?
- [40:53]
Andrew Yang
My organization was very similar to yours in the sense I wanted to keep people want to invest in them. And that is your mom's experience in the school district. Like, I would very much struggle in many of those types of environments because if someone does a bad job, I just want to be like, look, you're doing a bad job. Like someone needs to change or you got to go. But that's not the way school districts operate. You know, like, teachers are often unfairable after three years. So you should know my operating DNA is similar to yours. And the fact that many of the folks that are like working environments, they're not working environments like yours where if they kick ass, they're going to be invested in and then have a path forward and then be given room to grow and autonomy. And then. And the organization itself is growing because that's how you have to create these opportunities. Because you keep bringing people in like that. That's one of the things that was a massive imperative for me is like, if I'm going to create opportunities for these people, like, the top line has to grow. But you can create a virtuous cycle because if you get in the right people, they can grow the top line. And so it's like, oh, this is great. Like, I could just make this thing happen. But then if you get into an environment like let's call the school district, that school district is not growing. And so then, like, how can you create awesome opportunities for, like, different people? It's very hard. That's why you wind up with a zero sum game where it's like, hey, you know those environments where someone needs to die for you to get promoted? You know what I mean? There's no promotion happening. And so you'd be like, I can wait 10 years for that. That is not unusual in a zero sum environment. Your organization is unusual and unusually awesome. I always tried to create unusually awesome organization too. It used to be that people would go even like straight out of school. They go work for a company that had like some mild, reliable growth, and then they could grow with it and they'd have opportunities. But now you're looking at more of these zero sum environments or contracting environments, where the example I just used, I think, was like, you went, my dad worked for GE. GE had growth in the 70s or whatever. What happened to GE since then? I mean, the entire plants have closed down in many parts of the country. And so you're seeing obviously some pockets of explosive growth in our economy. But in most of the economy, you're seeing something closer to a plateau or even a decline. And then if someone's going to work in those environments, they're just trying to cut costs or control costs. And then if they bring in new people, they're like, hey, I'm just going to treat you like an interchangeable part.
- [43:31]
Tom Bilyeu
All right, let's talk about the context of where we're at right now. The economy. Talk about contracting. The economy is for sure going to contract for some period of time, maybe short, maybe a very long time. How can someone right now where we may not be able to make the systematic changes that we need to make as rapidly as we need to make them. How does an individual bulletproof themselves against what's going on in the economy right now?
- [43:58]
Andrew Yang
Right now is a very, very, very difficult time. The most difficult time in the generation. And you should adopt a very lean operating style for yourself. Like this is the time to really batten down the hatches. You have to be very, very realistic that this economy is not going to snap back like a rubber band. Millions of the jobs that have been lost are not coming back. I have heard from CEOs who said that they're permanently essentially automating and downsizing and that they don't plan on hiring back to previous levels even if things do reopen. We are not rubber bands. It's not like if the government says, hey, you can go outside again, that all of a sudden the bars and restaurants and concert halls and convention centers and theaters will be teeming with activity. Like, of course not. You know, everything's going to be at a diminished rate for a long time. So you should just imagine that it's going to be a really, really disastrous environment for the foreseeable future. Plan accordingly. And then if it's better than that, then we can be surprised positively.
- [44:59]
Tom Bilyeu
So one thing that people talk a lot about with you is you've got a sort of pessimistic, dystopian view of the world, but you present it so optimistically. So that's sort of the downside, right? Batten down the hatches, restrict your spending, sort of stay safe. If you will understand that you may be weathering a very long term storm. Now, what are things that, you know, people can be doing proactively? My prescription to everybody is one, get your head right so you can stay clear. Most people are going to panic. Even if you lose your job, panicking is not going to help you. So do whatever you need to do right now to learn to stay calm in the middle of the storm. Number two, understand if you can make money for somebody, you will always be able to find a job. So focus on skill sets, right? What you might refer to as a vocation. So focus on getting so good at something that you can help somebody else make the money. Because maybe now really isn't the time for you to start your business. Maybe it is. There's a whole subset of people for whom that will be the right solution. But just sort of speaking to the broad people, those are my two things that you're going to be in a constricted economy, which means that it's going to be an employer's market. They're going to have the pick of a lot of people coming to me, them. So now the way to rise up is to have a deeper skill set than other people. And some of that's interpersonal. Some of that is just the vocational skills of the job. Some of it is getting good at interviewing. But the sort of trifecta. So those two things, plus learning that the punchline of all this isn't money, it's fulfillment, it's a stable sense of emotional well being that should be ultimately what you're aiming for. And so those are the three things that I think people should be sort of obsessively focused on now is the economy. Economy, contracts. So beyond battening down the hatches, what are other things that you try to focus people on?
- [46:45]
Andrew Yang
I think your advice is very similar to the advice I'd give where you have to focus on yourself first. If you're not right, you're not going to be able to contribute a lot of value in a lot of different environments. And it's a really hard time to even stay positive and healthy oneself. You know, like, you need to have rituals, you need to give yourself victories. You need to create sort of like an environment of positive reinforcement even when you're alone in your house. And that's not easy to do for days or weeks on end for most people. But that's job one. You can't help someone else. You're in bad shape yourself. I agree with you about trying to develop skills. This is the time to try and dig into something that you have not traditionally had time to do. So that could be listening to podcasts like this one, or interviews, reading books. I'm a reader myself. Maybe try and develop a skill that you've wanted to develop in some dimension, whether that's some coding discipline or some skill with like a particular program or a creative endeavor even. I think if you can do something that's creative in this time, it might keep you balanced and positive, but it might end up making you stronger in some way. And I agree with you on relationships where it doesn't feel like it, but just try and help someone, and just by helping someone, it will end up making you stronger. You know, you'll end up building connections and a sense of value because, you know, if you have a position where you feel like you can add value in any environment, like you said, then someone will sense that about you and then the opportunities will be there. So my advice is very, very similar to yours. Hopefully that lived up to my dystopian yet Uplifting reputation.
- [48:36]
Tom Bilyeu
So far so good, man. So one thing I want to know. Your ability to assimilate data and turn it into a real world hypothesis, how to make things better is pretty extraordinary. You talked about you like reading. What are some things that you're reading? Where do you find your information? Are you just good at remembering things? You have a process for that
- [48:59]
Andrew Yang
right now. I just started a podcast which has been great for reading because a lot of the people I have on have written a book and then being a reasonably diligent type, I'm like, ooh, I should read this person's book. So my new podcast, Yang Speaks just launched this week. Number eight on Apple. Very exciting.
- [49:18]
Tom Bilyeu
Congratulations by the way. That's extraordinary.
- [49:20]
Andrew Yang
Thank you. And so then I've been reading the books that the guests have written so I can actually flash a couple of them for you because they're near nearby. So this is like a politics book. It's a populist guide to 2020 by Crystal Ball and Sagar Njedi. And then if you're a parent out there and you want to read that research on what technology is doing to our kids, this book Igen by Gene Twainy, who's a PhD, talking about what's happening with kids mental states. So in the like I love to read and having these guests on has been a great excuse to read. People learn in different ways. Like you know my, my brother in law is all about watching videos like tutorials. But yeah, just find like a way to learn that you enjoy and then try and go deep Podcasts, I mean like I know Tom's got this awesome podcast. I love what you're about man. Like I hope that people sense that it is okay to be maximizing your skills and self improvement and sense of responsibility and your control of your life, your universe while also saying there are systemic problems that we can objectively improve on. And I'm very passionate about trying to do both frankly. I love your focus on individual improvement because it's, it's about the individual and the world both simultaneously.
- [50:45]
Tom Bilyeu
Yeah man, that's that I think it's really well fed. A and B is super important. I had historically just, I don't know, I wasn't turning a blind eye to it. I just wasn't. It wasn't the thing that I paid attention to. But now as I really hold myself accountable to results and I say okay, I really feel like I know what people need to do at the individual level. But like I said at the beginning, so many people that I think are just unreasonably good at taking in the data. And I try not to say intelligent because I don't want to dismiss all the hard work that goes into informing, you know, that opinion. But you, Eric Weinstein, Sam Harris, like, there's so many powerful thinkers that I've had on the show that I've had a chance to just imbibe their information. And I see it changing the way that I think. And so then it's like, okay, well, cool if the analogy holds. What I'm trying to do is, you know, plant these seeds that will grow into something. I do have to understand the system, which is the soil, understand what's working, what's not working. So I think it's a pretty powerful one two punch. Man, I'm so glad, Like, I'm super conflicted. I really hope you run in 2024. I don't know if that's on the agenda for you or not, but having you as a part of the discourse, I was attracted to you like a moth to a flame, dude. Just the way that you analyze the situation, your background as a debater, the way that you stay super calm, that you actually seem open to new ideas. I am haunted by a quote, and I'm sure you've heard this before, but it's Niels Bohr, if I'm not mistaken, or Planck, one of the two, and said, you know, science doesn't progress with each new discovery. It progresses when the old guard dies and the new guard comes up, recognizing the truth is self evident. That sucks. What a lame way for things to make progress. Right? Like, I want to be fundamentally changed by the interaction. You have gotten me to fundamentally rethink, like, how sick is the soil here? Like, is there such a fundamental problem that it has to be addressed? And I think it has become obscenely clear through COVID 19 that the answer is yes. That we were always sort of teetering on this precipice of just catastrophic problem and weren't doing the things we needed to do. So that was a lot of words around. Thank you for what you're doing.
- [53:02]
Andrew Yang
Thank you, Tom. I respect people who are both open and flexible, but also just awesome at what you do. And, you know, like, you're clearly awesome at helping people get stronger. And I think it's beautiful. It's like I was an operator, an entrepreneur, if anything. Actually, it's just been a learning process for me, like, interacting with people in different types of organizations where I'm like, what the hell is going on? If you showed up and you'd be like, what's happening here? It's one reason why I think that we were able to compete and contend is that we had a different way of doing things than other people in politics, in this industry. And I think that Neil's bore quote, if that is a source, I mean, it's very apt, unfortunately. Like, you know, we. You don't have like a contest of ideas where like the best ideas win. Like there's actually something of an order and then you need to upend the order. It's one reason why we feel so far behind in the public sphere and one reason why someone like you saying, like, I don't pay attention to that shit. I 100% respect and appreciate because it's like, it's actually entirely rational not to pay attention. But I will say that some of the problems we're facing with the coronavirus, we're going to need our government to improve and accelerate in ways that it never has in our lifetimes or we're going to be facing a really, really difficult, challenging time for like years and years to come.
- [54:32]
Tom Bilyeu
Yeah. Well said, man. Well, dude, where can people connect with you, learn more, stay engaged. Where do they get the new podcast, Yang Speaks?
- [54:41]
Andrew Yang
Oh, thanks, man. Yang Speaks. Wherever you find your favorite podcasts, you can follow me on social media. I'm at Andrew Yang or Andrew Yang 2020 depending upon the network, but would certainly love to stay in touch with everyone. We have to dig out of this. We have to make it so that we can plant beautiful trees that become awesome pillars for like companies, families, communities, and build a future that we deserve.
- [55:05]
Tom Bilyeu
I love it, man. Last question. If you had to put into a sentence, what is the impact that you want to have on the world?
- [55:13]
Andrew Yang
Right now I'm focused on eradicating poverty. I genuinely do not think that there's any reason for people to be poor in the most abundant society in the history of the world. You know, we're at $21 trillion right now. Like, we can afford to improve people's lives and give them like decent soil essentially. And it's not going to work for everyone. You can't make it system wide. But there are some kids growing up right now that just literally have like zero chance, you know, and like you can see it very clearly. And that's something that we can change.
- [55:45]
Tom Bilyeu
I love it, dude. Brother, thank you so much for coming on the show, man. I really appreciate it. Everybody out there, it does not matter your political affiliation. It is good ideas. If you want to move your life forward. If you want to move the lives of other people forward, I promise you it's going to be an idea centric approach and not a person centric. Or you know what the your tagline is not right and left, it's forward. Which I think is brilliant and is how everybody should be looking at data should drive decisions. All right, speaking of good decisions, if you haven't already, be sure to subscribe and until next time my friends, be legendary. Take care.
- [56:19]
Andrew Yang
Thank you Tom everybody.
- [56:21]
Tom Bilyeu
Thank you so much for listening. And if this content is delivering value to you, please go to itunes, go to Stitcher Rate and review us. That helps us build this community and that is what we are all about right now. Building this community as big as we can to help as many people as we can deliver as much value as possible. And you guys rating and reviewing really helps with that. Alright guys, thank you again so much and until next time my friends be legendary. Take care.
- [56:50]
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