Katherine Boyle, GP at a16z, joins Anne Dwane and Lucas Bagno on this episode to discuss:
– What needs to change inside the federal government for more contracts to go to startups.
– How startups should think about working with state and local governments.
– How trust has declined in public institutions over the last several decades and how companies can credibly step into that void by building in public and telling their own story.
– How Starlink will change where people live and how they live their offline life.
– Why, if people are laughing at you, you’re probably taking yourself seriously enough.
– What tech misunderstands about government and vice versa, including how Silicon Valley came to have a positive sum mindset and Washington ended up with a zero sum mindset.
Transcript
Lucas Bagno:
Hey everyone. Welcome to Village Global’s Solarpunk. This is Lucas Bagno and I’m here today with my co-host and partner here at Village, Anne Dwane. Today, we have a very special guest, Katherine Boyle. Katherine is a general partner at Andreessen Horowitz, where she invests in companies that promote American dynamism, including national security, aerospace, and defense, public safety, housing, education and industrials. She was previously a partner at General Catalyst. Prior to GC she was a general assignment reporter at the Washington Post. Katherine holds a BA in government from Georgetown University, an MBA from Stanford, and a masters of public advocacy from the National University of Ireland, Galway.
Anne Dwane:
Welcome Katherine.
Katherine Boyle:
Thanks so much for having me, Anne and Lucas. It’s great to be here.
Anne Dwane:
Well, we’re very excited about your recent writing and could you define a little bit about what you mean by American dynamism?
Katherine Boyle:
Sure. Yeah, so we define American dynamism as companies that support the national interest and that support all of the problems that Americans need solved. So when you think about how problems used to be solved, when you think of big, massive problems like education, housing, public safety, these were company or these were problems that used to be solved by the federal government. If the federal government wasn’t solving them, it would be solved by state and local, but these were really things that elect politicians and politicians make policy decisions, and then they solved those problems through government. One of the things that we’ve realized is that technology increasingly is having a role in solving those problems. So when you think about companies that exist in public safety, there’s a number of companies now that are helping law enforcement officials, helping cities manage the questions of how do we keep our people safe, companies that exist in education.
When you think of what happened during COVID, particularly for early childhood education, parents were often asked during COVID to educate their children and how are they doing that while they relied upon companies that have been built that were able to work remotely. So the thing that we’ve been seeing, this is a broad trend in terms of decentralization and privatization that’s been happening for the last 40 years, but increasingly, we’re seeing technology pick up the slack of where government has fallen short. We think that’s a great thing. We think that a lot of the best builders in America today are deciding to build tech companies and to solve really, really important problems that affect all Americans. So we’re really proud to support companies that we believe are making America a more dynamic place.
Anne Dwane:
Just to double click on that, does that imply that these companies that you’re backing are planning on revenue from the government, or do they also plan on revenue from the private sector?
Katherine Boyle:
It’s a really great question because one of the things that we’ve noticed about companies that end up selling to government at the end is that oftentimes, they don’t start out as government companies. Sometimes they start out as consumer companies are competing with government. So one of my favorite companies in the portfolio is a company called Flock Safety, and they’ve built an incredible network of cameras that they’ve put up … they started out as a consumer company, selling to HOAs across America. They started out in Atlanta, and what they realized is that most crime in America and particularly most violent crime in America is done with a car, with a vehicle. So, if you can create a cheap license plate reader, that only looks at the car, so it doesn’t look at people.
It doesn’t look at any sort of trends, but really just looks at the vehicle and you have a network of cheap cameras around the city, you can actually solve things like Amber alerts, where if you’re a law enforcement official in a city like Atlanta and a child is stolen and the child is a baby, the likelihood that you’re going to find that child after 24 hours of a child going missing is actually quite low. If you have cameras and you have a network that plugs into central law enforcement agencies across various districts, you can potentially solve that crime, and the reason I bring that crime up is because that’s one of the use cases that I always pointed that Flock has been very helpful with. They’ve solved Amber alerts across the country because of this license plate reader that they’ve built. So, they started out as a consumer company.
They were selling directly to HOAs, but ultimately became so important that law enforcement started buying this product and now, they support law enforcement across America. So our view is that these are great companies. These are companies where citizens have defined a problem themselves and built all across America and ultimately become a very important tech company that work hand in hand with government. So you don’t have to start out selling to government. Oftentimes, a lot of education companies don’t sell directly to government. They sell to citizens, but they’re doing the work of civic society and helping to make America stronger.
Anne Dwane:
Can you elaborate a little bit, what’s your experience seeing companies do that transition? Because we have lots of founders listening who are probably thinking about that. What advice would you have for them?
Katherine Boyle:
Yeah, so it’s interesting because with some companies, you don’t necessarily want a dual use product or a product that’s going to make the transition. A company that I’m very close to is a company called Anduril that sells directly to the federal government, building next generation defense products and they’ve always sold directly to government. What’s interesting is when you talk to a lot of people in the defense world, they really encourage, what’s known as dual use technology, which means you’re going to sell to government and you’re also going to sell to commercial. Well, in the department of defense, like it’s actually very difficult for a startup to work on two problems at the same time and actually be able to solve the needs of government as an early stage startup, which is, I think one of the hindrances to a lot of these companies that are either doing hardware or software.
Building AI products for the government is that if you’re getting a mixed message of, “Hey, we’re not going to buy you until you’re a massive company, go sell to commercial,” you’re going to build the product in a very different way and you’re not going to build the product to solve the needs of government. So I think something that’s changing is a lot of founders are realizing it’s actually great to sell direct to the Department of Defense, it’s great to sell direct to the federal government, and that it’s actually more advantageous to start a company with a singular mission rather than a dual use mission. So, in the case of Flock, I think they’re a good example and that they realized that it was sort of a natural expansion of how they were working. They were selling to HOAs and then they got inbound from law enforcement.
Ultimately, their product, you don’t have to change the product necessarily in order to meet the new needs of both law enforcement and consumers. I think that’s different when you’re selling to federal government.
Anne Dwane:
It’s interesting, and are you seeing more of that trend, I guess, those dual use and then those commercial off the shelf technology buyers, is commercial off the shelf technology buying increasing in your view?
Katherine Boyle:
So increasing for what type of products?
Anne Dwane:
Well, for any products, I was just wondering is government ready for buying more of mainstream consumer products?
Katherine Boyle:
Yeah, so I mean, that’s an interesting question. I think government is buying more software that saw specific needs and understands that the software that they have, especially if you’re talking about the intelligence community, or if you’re talking about the DOD, they realized that the products that they have bought have been built to spec with requirements, and that is not how you build software. So one of the things that I feel like I’m always on a soapbox about, is that a lot of how the procurement system is built for the federal government, it is built in the same way that you would acquire tanks and the same way that you would submarines.
It’s how you acquire hardware. You say, “We need X, Y, and Z. Here are the things we’re looking for and if you don’t say that the car needs wheels on it’s not going to be built that way because we have a prime contractor system that follows everything to spec, and that we’ll do it on contract in perpetuity if allowed to do so.” That’s the opposite of how we build software. The great founders of software companies have a vision for how you build. You have a problem in mind and you’re trying to fix the problem. You’re not necessarily trying to follow requirements that have been set out by a customer. So that I think is one of the biggest problems, is that the procurement system actually, still has a very specific guidelines of how they require or how they put out requirements.
The government, over the last five years has changed in that regard. I think that they’re really trying to figure out ways to work better with early stage software companies, understanding that they can’t tell a software company necessarily how to build software in the way that they tell hardware companies or the way tell Lockheed Martin how to build an aircraft carrier say.
Lucas Bagno:
Katherine, I know that you and Trae Stephens have talked a lot about what needs to change in the procurement process. Is your perspective that we need a complete reboot, what do you think are the core things that need to change so that we see more Andurils come out?
Katherine Boyle:
So I love this question because the thing that I often hear from the DOD when I … and this is not what I’m suggesting, we don’t need to burn down the house. We’re not saying we light everything on fire and start from scratch. In fact, we don’t have time. This is I think the thing that has become a realization for a lot of people operating in the DOD and a lot of investors is we don’t have time to completely change how companies are procured through the US government, but I think we can change the culture. What’s good is that cultural shifts in companies are oftentimes the hardest thing to do, but they don’t require going through Congress or going through legislature and trying to change sort of everything from scratch.
So I think like the thing that we’re advocating and that I would love to see more is five years ago, the DOD didn’t even talk to Silicon Valley. I mean, this is like a modern thing in terms of the DOD being excited to work with startups. So I think what needs to change is there needs to be more incentive for the procurement officers, the people making the decisions about the types of technology they’re using to give contracts to startups versus contracts to Lockheed Martin. There has been this view that like, it’s risky to go with startups who knows if they’ll be around. Maybe it’s better to go with the companies that are literally 100 years old.
I think the thing that a lot of people in startup land always find surprising is that when you think of the big five primes, the government works with, they were all started in the 1920s. These are 100 year old companies and they’re building technology for the US government. So the thing that I think really needs to change is procurement officers need to realize that software is very different than hardware and that for certain types of requirements, for certain types of technologies the government needs, going with a startup is less risky than going with Lockheed Martin, than going with a contractor who’s going to subcontract it out five times. I think that message has gotten across, and I think like people are starting to understand that enough technologists in Silicon Valley want to work with government and government is starting to realize, “Okay, this is how venture capital works. This is how companies work,” and it’s actually a good thing that they’re moving really fast. It’s not a bad thing that they’re building the way that they’re building.
Lucas Bagno:
One of the things that you said is we don’t have time. Can you explain what you mean by that? Do we now have time because of China? Do we now have time because of Kiev, some of our institutions have … gotten to a critical point? What don’t we have time for?
Katherine Boyle:
Yeah. So I talked about this at the Reagan National Defense Forum, which is a big conference of basically everyone in defense that happens every year, and I think this was surprising, but something that was sort of a wake up call when we all sat down and discussed it, is that it’s been five years, six years since the defense innovation unit came out to Silicon Valley and said, we want to work with startups. This was a very bold thing under then Secretary of Defense Ash Carter, who was part of the Obama administration. So it’s actually a movement that started under the Obama administration, where there was a realization that there’s all of these great technologists in Silicon valley, and we need to work with them.
The conversation started happening then and I think investors heard that call. I heard that call and a lot of us got really excited about companies that wanted to build for our country. So, we started investing in these companies. The US government said, “Okay, we want to work with you. We’re going to give you these small contracts that are called other transaction authorities, OTAs. We’re going to give you SBIRs, small business grants, that basically allow you to work with us without having to wait five, 10 years for a program.” The thing that we have been saying for five years as investors is that’s great. A seed stage company getting a couple million of revenue from the government is great, series A. At a certain point, these companies have to transition from R and D projects with the US government to programs. They have to get programmatic dollars from the procurement officers. What you’ve seen over the last five years is that investors have wised up that that is not happening at a wide scale. It just hasn’t happened. It’s very difficult to make a transition. So while the government has put on all of these bake-offs, and you’ll hear the Secretary of Defense say, “We’re so proud. We’ve given out 2,500 SBIRs to defense technology companies.” I mean, Andreessen Horowitz doesn’t have 2,500 companies. There aren’t 2,500 companies that are worth investing in when we look at just how great the technology is and how useful it can be over time.
So the thing that makes me nervous, and I think the thing that makes a lot of companies in Silicon Valley and investors nervous is that, we’re on 18 month time horizons. An early stage startup as many of listeners know, like you’re making day in and day out decisions that are very difficult and that you’re worried about running out of capital. You’re moving fast. You’re trying to build a team and you don’t have five years to wait for the government to get its act together and think about what it wants to procure. So that I think is why we’re running out of time, and I think investors will give companies, a pass once, companies, a pass twice, if they’re still waiting on getting these production contracts.
If the government ultimately doesn’t decide that any of these companies are worth production contracts, you’re going to see capital dry up. That is something that I fear will happen, and I know it’s something that a lot of the people at the DOD fear will happen as well. So it’s something we have to be honest with ourselves about and make sure it doesn’t happen over the next two years.
Anne Dwane:
Is there a recommendation that you have either for government decision makers to practically make that happen?
Katherine Boyle:
Yeah. So I think like one of the things is, it’s not a question of dollars there’s always this like, “Oh, should we create a separate pool of capital?” It’s like, no, the procurement officers have the dollars to procure technology and it’s not even a question of the technology not being built in the right way. We’ve now had 10 years of just government advising a lot of these early stage startups on how to build, and there’s a number of people that have spun off companies like SpaceX and Palantir. I mean, these are companies that know how to sell to government and have tremendous empathy for the customer.
I mean, that’s the other thing too, is like this generation of founder, many of them are veterans. Many of them have worked at these companies that understands how the DOD works. There is an empathy for the customer and so they’re willing to build exactly for those needs. The real thing is getting the procurement office to make decisions about which companies are most important. There’s a saying in the US government, the DOD, which is that government, doesn’t like to pick the winners, but ultimately if you don’t pick a winner, then you’re only picking Lockheed Martin. So that is the real problem. There’s going to have to be a, “Here are the companies that we want to support. Here are the ones that we think are the most important and most critical for our needs,” and we’re going to give them contracts, even though it might feel a little scary that they’re a startup.
It’s actually safer and it’s less scary than going with 100 year old prime that doesn’t know how to build artificial intelligence.
Anne Dwane:
Right, and we’ve talked a little bit about DOD and the federal government, how do you think about startups interacting with federal and … or I’m sorry, state and local governments?
Katherine Boyle:
It’s a great question because I think it’s a totally different sales motion. In some ways, there’s an argument that there’s a very obvious procurement process, even if we’re complaining about the procurement process with the DOD, whereas it’s less obvious to work with cities and states. With cities and states, every city is actually structured different, there’s some cities that are really good at making purchasing decisions. There’s other cities that are bad at making purchasing decisions. California has things known as piggyback laws where certain counties will follow other counties if there’s a contract.
Every state is different and every city is different and I think that’s also one of the barriers we’ve seen is that for a lot of the kind of early companies that have really paved the way, I look at companies like Mark43, for example, where it’s like they were selling directly to state and local police. These are companies that like … to figure out the sales motion, to figure out how to work with various cities, every city is different. So that’s actually, one of the things that I think has often made it harder for companies that are selling direct, kind of quote unquote about gov tech for state and local is actually like learning with every state, sort of like learning with every customer being very different.
I think a lot of things also have changed on the state and local side too, where you now see winners, you now see companies that really understand kind of the needs of states. It’s not 10 years ago anymore. That’s the thing that I also like to say is a lot of people in Silicon Valley say, we’ll never work with government because government is so slow. It’s a laborious sales cycle. I don’t want to have to work with lobbyists, and the thing is, government is sort of this last vestige that really hasn’t modernized, and they’re still using systems that are in cases 25 years old internally to run the functions of government.
Katherine Boyle:
So there’s a number of companies that I think are kind of benefiting from the tailwinds of we have to modernize because this stuff doesn’t even work anymore. So, I do think it is an interesting time to be selling to state and local as well.
Anne Dwane:
Just to double click on that, is there any advice you’d have for founders about how to navigate that process? Do you start in certain friendly states or do you use one municipality to make a use case or a case study?
Katherine Boyle:
Well, yeah, so definitely on the use case, I mean, that can be super powerful, if you have a product that you have built tailor made for a city and a city is very much your advocate. I think that can be very useful. I don’t want to say that any state is better, but like every company, depending on its product will have a very different strategy of which state it goes to next. So I do think that’s a huge part of it, but yeah, I think there’s a ton of opportunity now. It’s just finding out that sales cycle based on your product, based on who your advocates and champions are going to be. Every city is different in terms of its priorities.
San Francisco has very different priorities than the city of Miami, and because of that, you’re going to have to either tailor your message, build your product and define like which cities you’re going to go to first as part of whatever you’re building.
Anne Dwane:
Is there such a thing as an early adopter city, should entrepreneurs be looking for that?
Katherine Boyle:
It’s interesting, there are some cities based on what you’re building that are more interested, but the flip side of some of those cases is that there are sometimes early adopter cities for R and D in the same way that there are early adopters within the DOD for R and D and it doesn’t necessarily always translate to procurement dollars or real contracts. So I think in some ways it’s one off depending on product there are certainly cities that are far more likely to acquire technology for use cases like public safety and they’re much more forward thinking about that, but it could also be related to labor shortages.
I mean, that’s definitely one of the things we’re seeing right now with public safety, which I think is a very interesting time to be building for public safety is that there’s just labor shortages across all cities. So, when you think about kind of the impact that then it has, it means that there’s more room for technology that even if budgets aren’t necessarily increasing, there’s just more of an acute need. So I think it’s one of these things where depending on the product, depending on the part of the city that you’re talking to or selling to, there’s a lot of opportunity but it’s not going to be a one size fits all, “Okay, this city is just so much more forward thinking on tech.”
Lucas Bagno:
Katherine on an adjacent topic, two very negative trends that we’ve seen is on the one hand, we’ve had a massive centralization in some of the sectors that you talked about. I think in defense tech, it’s crazy to think about that 100 years ago, we had 100 plus companies and now we only have five big ones.
Katherine Boyle:
Yeah.
Lucas Bagno:
Another negative trend is the massive evasion of talent from government.
Katherine Boyle:
Yeah.
Lucas Bagno:
Nobody wants to work in government anymore. Is this about to change? Why now?
Katherine Boyle:
Yeah, no, I think it’s a great question. I actually don’t think that we’re going to see a renaissance of people wanting to work as bureaucrats in Washington. I think part of the reason why we’re so excited about investing in companies is that, what we’re seeing is that people who want to solve these important civic problems, they go to the private sector and they build. They consider themselves builders, they’re technologists. They know that a group of people who have a vision can get something done much faster than trying to go through the process of getting elected and arguing in Washington over policy.
What I think is interesting is there was such an aversion to backing these companies, maybe 20 years, 10 years ago. There was such a view actually like there’s so much to build in pure enterprise software. There’s so much to build in consumer. We’re not going to touch government. What is exciting about what we’re doing in American dynamism and with Andreessen Horowitz is we’re saying, “Actually we love these problems,” because these are massive markets that have been ignored for the last 20 years and they’re the things that the people of America care about. People care about building more housing. They care about making sure that transportation and roads are functioning.
They care about solid infrastructure. They care about agriculture. They care about public safety. They care about aerospace and defense. These are massive markets, and when you look at just how big companies have gotten in these sectors, I mean, SpaceX is a perfect example of talent begets talent, contracts with the government begets contracts and that the government, once learns to trust a new customer, ultimately will continue working with that customer. So these are great sectors. It’s just the messy middle of trying to get through the graveyard, which the DOD is well aware of, to be able to build these things.
It’s one of these things that once you move through the hard part, you earn the trust of the customer and you get to continue building. So I think there’s enough use cases and enough examples of success over the last 10 years, where the reason why this is such a great time is because the founders are telling us that they want to go after these big problems.
Lucas Bagno:
The topic of institutional decadence has been a hot one or especially over the last couple years, especially since the pandemic. We have Martin Gurri with The Revolt of the Public and then The Decadent Society and a couple of others. You’ve certainly seen … and I’ve heard you talk about some of this yourself, given your prior background in media. Do you think that some of this deterioration that we’re seeing is somehow self inflicted as a reaction to fight change? Is that a good framework to think about what we see?
Katherine Boyle:
Yeah, no, it’s interesting. I mean, the causes of decline and trust in public trust and sentiment, I mean, in some ways it’s like the causes, it’s been going on for a while, but it just accelerated during COVID. So, I think people far smarter than me will look back and say, “Okay, why did this happen and who inflicted it?” The more important thing for us to realize, and this is like the pragmatist to me is, it’s not changing. All public institutions have lost trust and this is the Pew Research forum I’m talking, when it does its surveys every year, newspapers, it’s something like 25% of people actually trust mainstream newspapers.
Public education, trust has just declined over the last two years. Public safety, trust has declined over the last two years. Pretty much every major category and government itself, if you look at Congress, I mean, the trust levels, of actually trusting the federal government is just extraordinarily low. So when you think that, like all of these important public institutions have lost trust, it’s a good time for companies to step into that void and say, “Okay, we are going to make trusted systems. We are going to make sure that things are working. That we’re solving the needs of society and building new institutions.”
So I do think there are people who worry about kind of, “Okay, yes, if there’s mistrust and there’s this malaise of people not wanting to believe that their existing institutions are working, then something will fill the void.” I don’t think that there’s ever been a better time to build a company that’s trying to solve these problems, and what you see is you see founders who are very transparent about their missions. I think Andrew and Flock are great examples of just mission driven founders, who say here’s a problem and we’re solving it. You see it in education as well.
There’s founders like Rachel Carlson of Guild Education, who I think is a perfect example of someone who wanted to upskill the American workforce and is doing it through private means with companies and solving a critical policy issue using private dollars. So I think that’s something where people are always skeptical of new institutions, but when things are working and when people are very transparent and building great companies with great cultures, that’s something we should celebrate and more and more founders are seeing examples of success and realizing that they too can do it.
Lucas Bagno:
Perhaps related to this we’ve seen the rise of nihilism in our country over the last couple years.
Katherine Boyle:
Yeah.
Lucas Bagno:
Some people think that the world is going to end in a few decades. Some people don’t want to have kids because they think that the world is too bad, we have young people falling in love with socialism again. How do you think that these are related to the sort of institutional decline that we’ve seen?
Katherine Boyle:
Yeah. I mean, this is a broader worry and a broader conversation, but I think there was a Pew Research forum, again, that asked Americans who … it’s sort of the famous political question. How do you see yourself better? Do you see yourself as better off than your parents’ generation? It was something like 68% of people think that they are worse off than their parents, that their children will be worse off than them. When that high of a percentage of Americans feel that the future is going to be worse than the present, especially when we’re in the middle of a global pandemic, that is problematic. That is an attitude that really has to shift.
If we’re going to see major changes in this country and the belief that I have, and I think the belief that a lot of builders have is that the only way you combat disbelief, a generation that saw 20 years of war in Afghanistan and Iraq, it’s a generation in extraordinary student debt. It’s a generation that’s worried about climate change. It’s worried about all of these issues and sort of the fear that is really front and center of our media every day. So the only way that you combat that is by building things that work and by solving these big problems and doing it as fast as possible. So in my mind, we say it’s time to build. That’s a political philosophy. That is a belief that’s neither red nor blue.
It’s believing that solving the problems in this country that people are worried about, that make people say that they’re going to be worse off than their parents. If you solve those problems, you can fundamentally change how people view the future. So, to me, this is one of the most important missions that we can take on and every founder I talk to that’s building in this category, believes that they can change the course of this feeling. So, I’m actually very optimistic. I’m very hopeful that founders are going to be the answer to this problem we have,
Anne Dwane:
Is the way that founders can earn trust is just through ROI, like you were talking about Rachel Carlson at Guild Education or are there other suggestions that you might have?
Katherine Boyle:
Yeah. I mean, I think one of the things that we’ve learned with companies like Anduril is just being super transparent about the mission. This is the thing that … there’s sort of a generation of companies, I won’t name them, but don’t be evil is a pretty evasive term, like who knows what that means. This generation of founders, I think is very forward thinking about this is what we are building, and these are the ethics, it’s like Anduril has an ethics memo that it’s posted publicly about, “This is how we think about working with the Department of Defense.”
Every recruit goes through ethics training and understands like, this is what we will do. This is what we won’t do. These are how we make decisions in the company. So I think that that is one of the things that instills trust is when you have leadership that is very transparent about where it stands, that communicates publicly. I mean, the other trend that I am extremely excited about and encourage all the founders I work with to do is to go public and go direct, tell your own story. If you have something to say … and in some ways Elon Musk has pioneered this. If you have something to say about what you’re building, and if you want the public to know what’s going on, you should just say it directly and not rely on anyone to tell your story for you.
So I think that that has led to greater trust among startups or trust among the public looking at startups saying, “Okay, well, at least we know where this person stands. At least we know what they’re building and why they’re building it.” So the more that we see of that, the founder is just being very authentic, telling their story and building in public. I think we will feel that the public trust these companies a lot more
Lucas Bagno:
Katherine on the topic of how founders can actually help us break through this institutional malaise that we’ve seen of over the last few years, you’ve written an article recently about how Starlink can save the American mother.
Katherine Boyle:
Yeah.
Lucas Bagno:
And how the future of cities could look very different than what we have today.
Katherine Boyle:
Yes.
Lucas Bagno:
How did these topics relate?
Katherine Boyle:
Yeah. No, I’m so glad you brought up this piece, because this is something that’s like very personal to me because a year ago I was about to have my first child. I was living in San Francisco. Gavin Newsom had announced an actual curfew. It was 20 … I guess, yeah, a little over a year ago, 2020. I said, I’m just going to go to Florida temporarily. Spend some time with family. Welcome my first son. Then I’ll be back in California. In that short period of time, what I realized was there was no one that was … it wasn’t like I needed to go back, that I was completely productive in terms of supporting my founders, that I was able to have this kind of extremely, I would say rich life on the internet that I think is the future of knowledge work.
I don’t think we fully realized how COVID has transformed knowledge workers in that way and what it means when the entire world has instant access to the internet, and this is something I think a lot of people in Silicon Valley don’t realize because it’s like they have access to internet, but there are people who are going to McDonald’s parking lots or Walmart parking lots, or Burger King parking lots, and they are trying to get internet. There are people in rural communities that do not have access in the same way that someone living in a city does. So Starlink changes everything when there is reliable internet in all corners of the world, for people to say, if I’m working online, if my lively is predominantly done via Zoom as you and I are talking right now, if I can work in that way, what does it mean for how I live my life?
I think it has extraordinary repercussions, not only for federalism, which I can talk a little bit about, but more for the family, because when I talk to working mothers about the thing that makes it very difficult for them to think about having larger families or even to think about starting a family, it’s the fact that childcare is so expensive. It’s the fact that they have a one room apartment. It’s the fact that they believed this myth, that if you go to a fantastic school and take out $253,000 of debt, that somehow magically that debt goes away and it doesn’t. They’re in a point where it’s very difficult to think about, having children, building a family, if you’re, if you’re stuck in a San Francisco apartment.
So, everything I think changes for this generation and for future generations, when we say, actually you don’t necessarily have to leave home. You don’t have to take out that debt. You can learn in different ways. You can live in different ways. You don’t have to move to a really expensive city. You can live in a rural community or you can live in an exurban environment and you can have the life that you want and the city that you want and have more space and save for the life that our parents and our grandparents had, when things were not as expensive. So, I think that the more of our life that we moved to the internet, and this is sort of where people accuse me of being a techno optimist in many ways, but I think it’s the only path and way forward, The more of our life that can move to the internet and our work life, the more of our personal and private life can exist in the physical world.
We can shape that with a lot more intention. So, I’m doing that and I realized I’m one of the very fortunate people that can start doing it, but I think this trend is going to continue for 10, 20 years and that more and more of us are going to see that the office culture, the mad men, boardroom culture, where people lived in the suburbs and went to the city or lived in the city to be close to the boardroom, it’s built for the 20th century. It was built before the internet existed. So, I think the most important technology for this is going to be just worldwide internet ever everywhere, and a cultural shift where people intentionally say, if we care about mothers, if we care about families, if we care about our community, we’re not going to force people to leave their homes and live in one room apartments.
I mean, the impact that Starlink will have on federalism is also very interesting because what you’re already seeing in COVID is that you used to have to live in the city where you worked. And when everything moved to Zoom, the cities that benefited were second tier cities across America, and when you look at just the inflows during COVID the cities or the states that have grown the most are Texas and Florida and the states that has lost the most is California. Yeah, California and second to New York. So, what is interesting about that is at a broader scale, when people can move anywhere and when it is normalized to work from anywhere and when it is possible to work from anywhere, because there’s internet accessibility everywhere, you’re going to see just this mass migration to communities where, where people have like values.
That was always the spirit of America. We were always a Federalist nation. You were supposed to live around people who agreed with you on the things that were very local, like education, which is decided at the local level. So, I think that will be an extraordinary thing, when talented Americans don’t have to make the decision, if I want to do something, if I want to work for a company, I have to leave my home and I have to leave my community, and I have to go a place where I don’t necessarily believe the values of the people who are in that city or state.
Lucas Bagno:
What does that mean for the future of communities? I think it’s interesting because sometimes … sometimes I think that tech is, have killed the meaning of the world community, because now we think that 20 people on a Discord channel is a community, but it sounds like you think that internet, the internet is going to enable a very different type of community, that we don’t hear a lot of people talking about anymore.
Katherine Boyle:
Yeah, and I think we’ll, we’ll see a greater divide between our private lives and our public lives, and I think our public lives will very much be lived on the internet. We’re already seeing this. I mean, and this like dovetails into web three world too, where it’s people are avatars now and that’s great, people can be who they want on the internet. They can have their lives. They can work on the internet. They can socialize on the internet, but you have your physical life as well. And that can be different. It doesn’t have to be tied to a city. They don’t have to be as tied together. I actually think that’ll be very liberating for families and liberating for physical communities, because if you look at what’s happened over the last 70 years it’s been a brain drain across the United States where the most talented individuals were told, we will give you government subsidized loans to leave your state, to go to whatever private university or public university that charges a lot of money, but you should leave. That was the message that the last regenerations was given. I think that that can change, and if that changes, you’ll see a return to rural environments, you’ll see a return to exurban environments where maybe there isn’t a sort of concentration of talent in capital, in five cities. We’re already seeing, I think the Miami movement Lucas, which you and I are a part of. That’s a perfect example of this, which is that people can live where they want to live.
They can congregate where they want to live. They can choose to be closer to family if their families are there, and I think we’ll just see more and more of that and the best part about this … and I’m sorry, I’m ranting here but the best part about this, is this is the promise of technology. This is what we said tech would do. We said it would decentralize everything and give equal access to people. We said that it was going to be a democratizing force and now it’s happening. So I think it’s super exciting, and we’re just seeing kind of the early days of the transformation that tech is having on work and life.
Anne Dwane:
Let’s shift gears a little bit. You’ve talked a bit about seriousness and you’ve written about this topic. Can you say more about what’s on your mind?
Katherine Boyle:
Yeah, and it’s interesting because I think seriousness … when I say seriousness people often think that I’m saying people can’t be funny, and I wrote a piece called On Seriousness and I talk about how South Park is actually one of the most serious programs on television. The reason why it’s lasted something like 27 now … it’s over 20 seasons is because it’s so serious. It takes itself. So seriously, it takes the art of making fun of everything very seriously to the point where they’ve had death threats. I mean, these are extraordinary creators that have seen … mocked everyone and probably tried to get canceled by everyone, and physically harmed or had threats of physical harm. I think that’s a perfect example of what seriousness is and it’s what founders should learn from.
It’s taking your mission so seriously that you do not let irony and nihilism creep in. You don’t let these ideas of people saying, “Okay, if things can’t be done …” The thing that I said in the piece is that you’ll know you’re serious. If people are laughing at you, I mean, look at how people treat Web3. Look at how people treat Bitcoin. Bitcoin has been around for 13 years at this point and it’s still considered, “Oh, is it actually a thing?” It’s mocked mercilessly. Usually you see this sort of like mocking cycle that happens with technology where it’s like Airbnb, for example, where it’s like, people are like, “That will never happen.” People will never deal with strangers. People laugh at it. They make jokes about it, and then, attitudes start shifting and then, it’s like, well no one laughs anymore. Some of the most serious founders, people are still laughing at them.
I use Elon Musk as a perfect example. People are still laughing at Elon trying to get to Mars and look at what Elon has achieved. People still mock Tesla. They still mock SpaceX. So to me, you will know if you are serious and you’re taking … you’re being intentional about your mission. You’re not being ironic. You’re allowing humor but you’re not allowing irony to seep into your mission. If people are laughing at you and mocking you and really trying to, in some ways, put a target on your back. So, seriousness is something I look for in founders. I think like it, we need more of it in this world. We need more people to take their mission and their intentions and their actions very seriously, and to know that they have big things ahead of them.
Anne Dwane:
Shifting gears one more time, Andreessen Horowitz seems like trying to be in the vanguard of having a conversation publicly with government around policy shifts. Can you give us any insights into the thinking there?
Katherine Boyle:
Yeah, I mean, the thing that I’ve said about American dynamism is that build is a political philosophy, and I feel very strongly about this. We’re not coming in and saying, “Okay, we’re taking like a side of the Republicans or a side of the Democrats. We’re really trying to have a conversation about what will transform this country, and that is building that is solve big problems. So in terms of like how we have conversations with Washington, it’s always in the service of educating on what we know, which is technology. When I come and talk to the Department of Defense, I’m not talking about military strategy. I’m not giving my views on potentially what should go on with Ukraine. I’m not talking about policy.
I’m talking about this is how technology works and I’m educating them on how I do my jobs, they can make better decisions to work with us. The reason I think that is so important is the government is actually like … and I will say specifically, the DOD is filled with very smart people and they understand what they need to do to get the job done, but they often do not know how we think. So many people who are serve in the military. They know how the military works. They don’t know how private sector works. So a lot of my role is to educate them. This is how investors make decisions. This is what founders are thinking through and if we can find common ground, we can work together.
So I think that is ultimately … that’s the vision of how we work with Washington, how David and myself work with was Washington when we’re talking about American dynamism is what can we share with you about how startups work and about how these founders work that can help you make decisions of how technology can support you and your goals.
Lucas Bagno:
Katherine, it’s very common for us within tech to talk about what we think the government doesn’t understand about technology, but what about the flip question? What doesn’t people in tech understand about government?
Katherine Boyle:
I love this question because they really are antithetical ecosystems in many ways. It’s not that there aren’t amazing people on both sides, it’s that they’re very different people with different incentive structures. So the biggest difference between Washington and Silicon Valley is that they played very different games. So Silicon Valley is a positive sum game. Anyone who … it’s one of these things where like, when I came to the valley, I emailed a bunch of people and a bunch of people who were successful and smart, answered my email and wanted to have coffee with me. And the reason they did that is because they didn’t know whether I was going to be the next Mark Zuckerberg. That is like the mentality of Silicon Valley is that all these really interesting young people come in, you support them.
You have this positive sum. There could be many winners. Even the way the venture firms work. There’s many winners often. So, there’s just this idea that abundance is a good thing, and that more is good. The game in Washington is the opposite of that. It is zero sum. There are elections every two years. There’s a presidential election every four years. Because of that, one party is in power. One party is out of power. People actually lose their jobs every two years. This is something we can’t even fathom. It’s like, if you lose an election, you lose your staff and a lot of that staff will go into a think tank and they’ll wait until the next time. That is how Washington works, and because it is zero sum, it can’t possibly understand why tech operates the way it does.
We have a hard time understanding the incentive structures of games that are played every two to four years, where there is a winner and a loser. So, I actually think we need to be a little bit more empathetic to how Washington works, because there is a rationality to why people act the way they do. There’s a reason why the government procures the way it does and why it’s skeptical of tech and this sort of abundance mentality that I think the more we can talk to each other and educate each other on this is how Silicon Valley works. This is how early stage startup works, and that has been happening in the DOD. That’s a great thing. There are a lot of misunderstandings, and I think there are going to be things that just never are able to work together because the incentive structures are so vastly different.
Lucas Bagno:
Katherine, one of the things you talked about is how the role of government has been privatized to a degree over the last couple of decades.
Katherine Boyle:
Yes.
Lucas Bagno:
I think you would agree, conversations around the role of government can get very tribal. It feels like young generations today, lack a sort of Milton Friedman or Friedrich August Hayek who made such a compelling case for private enterprise decades ago. How do we get those conversations started? Is that in some ways, were you and a16z are trying to do with American dynamism?
Katherine Boyle:
So it’s an interesting question. I think like the companies speak for themselves. We can say, yeah, there aren’t, political philosophers or economists that have really made a compelling case, but there’s people like Elon Musk who I think have inspired a generation of young people to build. So, I just think it’s different. One of the things that I’ve been really struck by is, I was at a conference for heretics recently. At that conference, I asked everyone that I met, would you run for office? These are mostly tech people. It’s supposed to be a conference where people disagree with each other, right. They can say whatever they’re thinking. Everyone agreed on this one point. They said, “I would never on for office.”
I think that’s what’s striking is there’s a population of builders and they do not want to work in theory. They don’t necessarily want to run for office and get involved in politics. In some ways, I think that’s a bad thing. I think we need people of different perspectives and builders to think about engaging in politics at some point, but it’s just antithetical to how people think. So, I think like the most we can hope for at this moment is that the builders themselves, the political philosophy they have of building and solving problems is enough … it speaks for itself and I think it’s true of many great startups. So I think that is something that we’re going to just see more of is just that there’s a reason why people follow Elon Musk.
There’s a reason why people follow Palmer Luckey and it’s because they have strong political philosophies that are lived in the products of what they are building and in the mission of what they’re building.
Lucas Bagno:
So just maybe sum up the conversation, let’s finish with the quote that I know means a lot to you, which is JFK. We choose to go to the moon. What does it mean to you and how does that relate to what you’re doing now and what can people take away from it?
Katherine Boyle:
Yeah. I actually think one of the things that we’re missing the most in society is that we had a generation … the greatest generation that fought in World War II, never expected life to be hard. They never expected life to be easy. They knew that life would be hard. So that was the generation of, we choose to go to the moon, not because it is easy but because it is hard. There was sort of an understanding that there are missions, and particularly public missions that are more important than the citizen and more important than what’s hard on you. I think we had this change of, a lot of people point in the 70s and it was definitely the rise of therapeutic and a number of sort of movements towards interiority and movements towards finding oneself.
That is sort of, I’d say the predominant view of American society now is that the individual matters more than the collective. So, the reason I love that quote, why do we choose to go to the moon, it’s because it’s a hard thing and societies can do very hard things together, but you have to have the will to do hard things. So I think the closest we come today to doing those things happens in building startups. It is a revolutionary act. These sort of important missions aren’t necessarily done at the government scale anymore, but they are done by people moving boulders at uphills, and those founders of companies and the people they bring on the team. So I do think that spirit is alive and we need to see more of it and we need to expose it. We need to talk about it and we need people to see that that is actually the meaning of life.
Anne Dwane:
Well, we couldn’t end on a better note than that, so thank you for that inspiration, Katherine.
Katherine Boyle:
Thanks so much for having me. This is great.
