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From the Front Lines

Tech Startups to Veterans: We Love You, We Want Some More of Ya

BG Georges Doriot : First Venture CAPITALIST Invested $70K in DEC 1957, In 1972 cashed out for $450M

BG Georges Doriot : First Venture CAPITALIST Invested $70K in DEC 1957, In 1972 cashed out for $450M

After a slow start, the Tech community has come to realize that veterans can be effective tech entrepreneurs and facilitators. Graduates of TechStars Patriot Boot Camp, StartupWeekend, VictorySpark,and Incline are now program managers, HackStars class participants in accelerators/incubators. Not to mention, 2 veteran founded startups being acquired in the last 12-18 months.

Just 3 years ago this was not the case and much hand wringing was occuring over veteran unemployment. Non-profits advocating for veterans, government officials and to a lesser extent, the Fortune 500, were bantering about many well intention, but half -baked solutions. The Tech Crowd with the exception of Craig Newmark, was not even apart of the veteran unemployment discussion.

Most of the early conversation focused on the poor translation of military skills to plain English that civilian employers could easily understand. More effort is being put forth educating military alumni on job search subjects such as writing an effective resume, how to do a phone interview, sourcing job leads, dressing for the interview etc. However this only addresses the here and now of the veteran unemployment equation.

Up until late Summer of 2011 the discourse seemed to have more of charity overtone to it. The thinking seemed to be veterans are entitled to jobs merely because they fought for our country regardless of individual capability. A small minority of veterans seemed to think they were entitled as well. On LinkedIn I have seen my share of posts that blast civilian hiring managers who don’t hire vets while arguing for front of the line privileges in the federalemployment process.

Thankfully the discourse seemed to change from an emphasis on charity and entitlement to one of getting the most out of our investment in today’s young people. As part of Time magazine’s cover package entitled The New Greatest Generation Rajiv Srinivasan advocates in his piece that causes that are presented as a charity get treated as such, with interest fading with time, causes that get pitched as investments are taken much more seriously and have legs that can run the marathon that is a career.

As part of treating our veterans as an investment in our future we need to acknowledge that the biggest factor in veteran long term unemployment is the lack of education whether in the form of a degree or a certification program

An April 26, 2011 Tech Crunch article stated despite triple the education resources in the new GI Bill, less than 6% of military men and women use their complete education benefits and only 25% complete the degrees they start.

Of the 6% of former military men and women who do use their GI Bill, a significant number are earning their degree through for-profit schools. The concern here is that veterans are not being properly counseled toward a degree plan that will lead to a viable career path that is the right fit for the individual. The emphasis is on profit and not the long term career goals of the student. Approximately $1B of the $4B of GI Bill funds paid out last year ended up in the hands of just 8 schools as reported by Bloomberg BusinessWeek.

Many veterans who do take advantage of their GI Bill benefits are the first members of their families to attend college. That’s ok. Just like the settlers in the 1800’s who headed out west for better opportunity, these veterans often joined the military with the goal of in mind of improving their lot in life. Unfortunately they don’t have the same support system I had when I first left the service in the mid 90’s. I had a multitude of professionally successful, college educated friends and family I could rely on for advice and encouragement. I could ask:

· What criteria should I use to choose the university to attend?

· How should I schedule my classes and which professors teaching style best suites my learning style?

· How many hours should I work at an outside job?

· What kind of job I could get with a Criminal Justice degree as oppose to a business degree?

· What are the ramifications of taking a general business degree as oppose to afinance degree?

Should I immediately complete an MBA instead of earning a commission and going back in the service?

The veteran who does not have the support system that I had may fail if they have to figure it out on their own.

This is where veteran friendly, education startup companies like Uvize come into play. Uvize (‘12 Tech Stars PBC & ‘13 Kaplan EdTech) provides personalized academic preparation and coaching for college bound military veterans. Uvize is looking to decrease the crazy 88% attrition rate of freshman veterans. That’s a failure rate 8% higher than that of BUD/S, the qualifying course for SEALS!

As if the lack of a formal education isn't bad enough, possessing the wrong skill set is even worse. This became evident to me while screening candidates while filling a position one of our clients at Hello I’m Logistics. I asked each candidate why they picked the degree they did. An overwhelming number of responses ran along the lines of wanting to “check the block” on a job application. Having a criminal justice degree is ok if you are looking at law enforcement career but that degree however does not give you the background needed to land a logistics management position.

A few days ago I was reading a post by Mark Suster, a celebrity venture capitalist , concerning an investment he made in an online education company called Tree House . During the course of outlining his thesis behind making the investment, Mr. Suster has this to say about education in America:

One of the biggest problems I see with our university system is that we’re graduating too many people from 4-year universities who have the wrong skillset and come out owing large sums of money. I call them “indentured servants” because they come out of college already having an anchor around their necks.

If you have spent the last 3 or 4 years taking courses online or in the classroom while holding down a full time job (either inside or outside the military) while raising a family be sure your effort and your dollars will provide the outcome you desire.

It is entirely possible veterans may not know what different careers are out there. So veterans may just pick a course of study that their friends are following. 4 years later they are walking across a stage to accept their degree. 6 months on the job they realize they don’t like what they are doing after exhausting their GI Bill benefits.

As part of the transition process out of the military HR professionals from Fortune 500 firms from banking, manufacturing, logistics/supply chain, IT, and the trades sectors (to name only few) should be incentivized to share information about their sector to veterans. I am not talking about $5,000 or $6,000 tax credit I am talking something of substance north of $10M a year in order to pay salaries of top notch folks, training aids, constructing buildings the like.

No matter how much we complain about how manufacturing jobs paying middle class wages have migrated overseas, it will never bring them back to the United States. For that matter, well paying Services related jobs are on the way out as well. The US Economy is firmly a knowledge based one in the second decade of the 21st century.

Encouraging veterans to enter fields such as renewable energy, healthcare, engineering and IT that require a firm understanding of science and math is a must. We must educate veterans, especially those that are under age 35, that there are more career options outside the military than defense contracting. Defense contracting is a short term, old man’s game. It’s not meant to offer a viable, sustainable, family friendly career path. The “Get Rich or Die Trying”mantra only works for the likes of 50 Cent.

Encouraging our young men and women to learn a portable skill such as computer programming, even if it’s outside of a traditional university environment is a winning strategy. Udemy , Khan Academy Tree House and Incline are excellent online outlets for learning and are well suited for the tech savvy youth of today.

Although the US job market is experiencing a 7.6% unemployment rate, technology firms located in San Francisco, Austin, Boston, Boulder and Seattle have programming positions open for months due the dearth of qualified candidates. While I was working on Hello I’m, I spoke with two tech firm founders in the LA and San Francisco area and both don’t understand why more young people are not skating to the where the puck is.

Getting an education in a field that provides both career fulfillment while also allowing us to provide a reasonable quality of life for our families does not have to be an either / or proposition. Investing in yourself is a risky venture, not just a simple color by number process. Don’t just make decisions…. Make GREAT decisions.

If we all do this, then we will surely see the number of veteran founded companies and along with founding team members, grow on AngelList.

- Bill McNeely
@billmcneely