A Step Ahead Podcast

Could One Of Italy’s Most Beautiful Regions Emulate Next Silicon Valley?

Tourists flock to the region of Liguria in Italy for the area’s natural beauty. Nestled against the Mediterranean at the northern tip of the Italian boot, Liguria boasts the Cinque Terre, a string of five picturesque fishing towns connected by idyllic hiking trails.

But according to Marco Bucci, Liguria is rich in another resource: tech talent. Bucci, who is running for mayor of Liguria’s biggest city, Genova, joined Mike Montgomery and Jeff Capaccio, of counsel at Silicon Valley law firm Carr & Ferrell, a member of CALinnovates’* Advisory Board and the founder of the Silicon Valley Italian Executive Council to talk about the potential for the region.

Bucci believes that by reducing taxes, better marketing Liguria and utilizing best practices from Silicon Valley, he can help turn Genova into an Italian tech hub.

The region has home-grown potential with academic institutions as home to the Italian Institute of Technology and the University of Genova which has an excellent engineering program. The trick will be getting students from those schools to stay in the area and avoid the brain drain that has affected the area for far too long, according to Bucci. Bucci says that will be one of his top priorities if elected.

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*CALinnovates does not endorse candidates.

Paul Rosenzweig On How Trump’s Policies Will Transform Silicon Valley

To some, President Trump’s travel ban is morally questionable and bad for business but according to cybersecurity expert Paul Rosenzweig, there are bigger problems lurking, especially for the tech industry.

Rosenzweig, founder of Red Branch Consulting, a homeland security consultancy, and former policy wonk in the Department of Homeland Security, says the bigger risk is in the ending of premium processing for H-1B visas – which will slow innovation in Silicon Valley. Until now, companies could pay to have a visa for a highly skilled worker processed in just 15 days, rather than wait the typical four to six months. “That’s going to put a significant crimp in the development cycle, because there just aren’t going to be the horses to do it,” Rosenzweig said during an interview for the A Step Ahead podcast.

Another problem weighing on Rosenzweig is the recent WikiLeaks CIA bombshell that showed that the CIA, as well as the Russian and Chinese governments, among others, are working to exploit vulnerabilities in consumer products. That means hardware and software development in the Valley will have to shift focus. Developers will have to use what Rosenzweig calls “defensive developing,” with the expectation that products will be placed under assault.

“It’s a sea change,” Rosenzweig says. “The product cycle has been all about the rush to market and functionality.”

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A Step Ahead: Paul Rosenzweig

Cyber security is on everyone’s mind these days with the release of the news from WikiLeaks about the CIA hacking. Today on A Step Ahead, we spend time talking to an expert who’s worked in the private sector, but also with the Department of Homeland Security post 9/11. He understands the issues and the implications for Silicon Valley. Thanks for tuning in.

Welcome to the A Step Ahead podcast. I’m Mike Montgomery, the Executive Director of CALinnovates. Today I am joined by cyber security expert Paul Rosenzweig, who is the founder of Red Branch Consulting and a contributor at the Lawfare Blog. Paul, thanks for joining us today.

Paul Rosenzweig: Thanks a lot for having me, Mike. It’s great to be here.

Absolutely. Let’s kick this off with some non-controversial issues, like for instance the travel ban. Silicon Valley is probably safe to say about 99.9% against the travel ban. What are your thought on the ban and its affect on innovation?

Answering the second part of that first, as to the affect on innovation, I think the ban is less likely to be significant than something else that happened in the last week or so, which was the end of premium processing of H1B visas. H1B visas are the visas that are extended to experts, things like computer engineers from India, for example. That is the source of much of the talent, not all of it, but a lot of the talent that resides in Silicon Valley, and expedited processing that would bring somebody in in 15 days instead of four months or six months…that’s gone away now as part of revamping the vetting process. That’s going to put a significant crimp in the development cycles in the valley, because they just won’t have the horses to do it.

As to the actual ban itself, the one that’s targeted at six Arab countries now is not going to have a real effect on innovation. I’m sure there were a few engineers from those countries who can’t get here now, but the major effect there is going to be on collateral effects on American business abroad and American image abroad. It’s much harder to sell your product when people don’t like America. People like America a lot less when we’re being mean to the rest of the world. There you go.

Right. Paul Rosenzweig is joining us today, you have standing on this, because you worked at the Department of Homeland Security post 9/11. You understand the politics in the countries that we’re talking about in great depth, right? When you look at this travel ban versus what America has been since its founding, which has been a place of openness and inclusion, and you’re looking at it through a Silicon Valley perspective—which is that different insights and abilities to take risk have driven the innovation cycle, that message that’s being sent out to the rest of the world is not very positive. Is that right?

I think that’s right. As a homeland security guy, I’m all for valuable security, but this is painting with a broad brush. My idea of security is individuated concern and suspicion, developing information about particular people so that we know that Mike has traveled to the FATA and spent six months there. We don’t know what he did, but we can assume he took training. Now he’s back here, and his Facebook posts are all jihad this and jihad that. That’s a good reason to be worried about Mike. This is all hypothetical, by the way, with the hopes…

Thank you. Thank you, Paul. NSA, if you’re listening, this is all hypothetical.

Right. That’s the way to do security. The way to not do security is to pick essentially six countries and paint with a broad brush and tar everybody that wants to come here from there as if they were terrorists, especially when the six countries we’ve picked are not the ones that the greatest terrorist threats originate from. Notable by their absence from the list are Pakistan, Saudi Arabia, where 11 of the 19 9/11 terrorists came from. We have not had a significant influx of terrorists from Yemen. In fact, the Department of Homeland Security’s intelligence analysis unit put out a report that was disavowed by the Trump administration in which it said basically there’s no correlation between these geographic regions and terrorist threats.

What’s driving the creation of these lists? Who’s on it? Who’s off? What’s the thought process there?

It’s hard for me to say, obviously. If I knew president Trump’s thought processes precisely, I’d be making a lot more money than I am right now. They’re small countries that we can essentially bully. We didn’t pick on Saudi Arabia because we need their oil. We didn’t pick on Pakistan, because we need their help in fighting Al Qaeda and other insurgents in the FATA and in Afghanistan. What we did do is we picked on either people we really don’t like at all, like Iran, or people who can’t respond very sensibly like Yemen. That’s my guess.

Yeah. Okay. That probably leaves out the idea of homegrown terrorists as well, correct?

Oh yeah, right. Leave aside the fact that 80% of the attacks that we’ve seen lately in the US are people who are here legally or have been here for years or were born here and self-radicalized or internet radicalized.

Yeah. All of this does have an effect on American society. I know that I think the general feeling in California is that focus and productivity has probably been a little bit down since inauguration. Personal safety fears are up. That has an economic effect on the country as well.

I think that’s right. The psychological effect I’m sure in places that didn’t vote for Trump, people are kind of like me, confused and depressed. On the other hand, we do have to recognize that 60 million of our fellow citizens voted for the man, 61 million. That’s a pretty big number of people who are happy. That reflects their concerns, many of which are tied to this immigration ban not in any real sense of homeland security threats, but in a more broad based sense of kind of loss of identity, loss of jobs, that sort of thing. Again, I can’t speak for them, but their concerns are not any less real simply because you and I can’t relate to them as well as we might.

Got it. Let’s pivot here to talking about the news that broke earlier this week from WikiLeaks regarding the CIA’s programs. Can you tell us for our listeners on A Step Ahead what they should know, what kind of the general synopsis of the issue is? Why is this a big deal? Why did this come out, and what should we know?

It’s a big deal for two reasons. The narrow technical one is that it demonstrates that the CIA, and by inference, lots of other nations are visibly engaged in finding vulnerabilities in consumer products to the advantage of governments. I have no doubt that anything that the CIA learned, probably the Russians and the Chinese learned, plus a number of others that they’ve learned that we haven’t found ourselves yet. The significance there is really that people who are developing hardware and software in the valley are increasingly going to have to engage in what I call defensive development, that is developing products, software, hardware, applications, whatever, with the expectation that outsiders will place them under assault. That’s a sea change change. Product cycles right now are all about rush to market, functionality, minimum functionality sorts of things. Now that may have to change some.

The second broader piece of this is simply a reflection of the fact that American interests, or perhaps more broadly, western interests, are really under assault right now. WikiLeaks is engaged in program of trying to tear down the western governmental system, whether it’s because they’re anarchists or because they’re in the pockets of the Russians I’ll leave for others to decide, but we’re not responding very well. We have not found a way of keeping secrets. We have not found a way of publicly justifying what governments do. Maybe some of your listeners think that it’s unjustifiable, and they’re rooting WikiLeaks on. For me, at least, I think that eroding that kind of governmental trust is going to be bad across the board for all of us.

The idea of information sharing has been one that’s been bandied about, and it seems that the government is in favor of tech companies sharing information. Does it appear to you that this WikiLeaks leak will…you talk about eroding trust. Will it erode trust between private entities and government agencies?

I think that’s inevitable. The WikiLeaks leak, the fact that president Trump has no real friends in the valley, except for Peter Thiel. I don’t know if you saw today, but he named his new cyber security advisor, the national cyber security advisor is a man who used to be head of the Tailored Access Office at the NSA, so a guy whose main job was breaking into systems is now the head of cyber security. That’s not going to play very well in the valley, at least I wouldn’t think it would. I think we’re in for a difficult patch of time where there’s going to be increasingly greater tension between tech developers in California and Washington policy makers.

You don’t like the phrase cyber war. You have a different phrase for it, right? What do you call it?

I prefer conflict, cyber conflict, cyber context.

Cyber conflict.

The reason is simply that if it’s war, that means that it’s also legal to add bombs and tanks and send them in as well. I sort of tend to think that we should limit that description to real incidents where people are getting shot at. If a bunch of baby electrons are dying, that’s not quite the same thing.

I got it. So a virus is not akin to a drone blast, per se.

Not unless the virus blows up the generator at the dam by causing it to overheat or something like that.

Okay.

That’s possible, right?

Yeah. Is cyber conflict the next attack plane? If so, what does that look like for the innovation community?

Oh, I think that’s really what we’re experiencing. The CIA that we were just discussing, the information operations that are being run by Russia in an effort to influence the American election, now the French and the German elect, and the Czech elections as well. Those are all part and parcel of what I call conflict. I don’t want to minimize them. They’re extremely serious and significant incidents. You might even think that they’re more important, because eroding trust in democracy is a lot worse than blowing up a dam in a lot of ways. That’s the plane at which conflict is happening now. It’s much more shadowy. It’s much more difficult to attribute things. It’s got a lot of deniability. One of my favorite things out of the CIA hack, not really favorite in the sense of I like it is that Sean Hannity is now saying that he thinks that this proves that the CIA are the ones who hacked the Democratic National Committee and tried to frame the Russians.

Which is possible.

Let’s start with it would be vastly illegal, because the CIA is not chartered to examine the conduct of any American, much less political opponent, politicians. It’s highly improbable, since of course it means that the Obama CIA was trying to hack Hillary Clinton, Obama’s hand-chosen successor. Then of course it’s nonsensical, because they then released it to ensure the election of Donald Trump, who they apparently hate now. They were working to elect Donald Trump? It makes no sense at all, but there’s enough uncertainty in this domain that some conspiracy theorists on the far right are going to give this credence.

This sounds almost silly to even ask you this question, but can there be ethics for nations around hacking each other?

There might be. The development we call the norms rather than ethics, norms of behavior that governments would abide by, we try and develop them, and I could imagine a few of them maybe taking hold, for example, not destroying the domain name system so that all look-ups couldn’t work. That would be kind of like critical infrastructure for the world that governments might get around to declaring off limits. The major problem with this is not the inability to identify norms with other governments, because at bottom, the Chinese and the Russians are rational. They’re not into blowing up the world.

The problem is that cyber is a democratizing instrument of power so that the norms would also have to be ones that you would be confident that all the small actors, the non-state actors, like the WikiLeaks’s and the Anonymous’s and the LulzSec’s and the Al Qaeda’s and the Earth Liberatin Front’s would also honor. Fundamentally, many of those non-state actors are not rational in the same sense that the nation states are rational. They might just decide that destroying the global financial system would be great, because we could go back to the barter economy when the means of production were in the hands of the working man. I’ve just made that up.

Isn’t that what Mr. Robot tried to do?

Yeah, exactly. You could sort of imagine somebody like that. Imagine a real Mr. Robot with a lot of capability, and ask yourself would he ever abide by norms, even if the US, China, Russia, Germany, Israel, France, Iran, Saudi Arabia, and South Africa agreed to them? The answer is, well, no.

That seems like that’s why it kind of almost sounds like a silly question, because why would you agree to ground rules if this is cyber, if you even escalate it, just for a second escalate it to warfare, why should there be rules? That makes it difficult.

That makes it very, very difficult.

You’re listening to the A Step Ahead podcast. Mike Montgomery here with the founder of Red Branch Consulting, Paul Rosenzweig who is one of the leading cyber security experts in the entire world. We’re lucky to have you on today, Paul. We really are. We’re talking about a guy who is with the Department of Homeland Security, has seen and heard and experienced things that the rest of us will hopefully never have to see or experience, but your role has been to keep people safe, keep the country safe, to keep us safe and secure. There’s this phrase that keeps coming up called the vulnerabilities equities process, the VEP. What is that, and why should Silicon Valley know what that means?

That’s a great question. Silicon Valley knows what vulnerabilities are. There are zero day vulnerabilities in new operating systems or new attack vectors through new applications, all that sort of thing. Sometimes those vulnerabilities are discovered not by malicious actors in Russia, but by the United States government. The question that the vulnerabilities equities process asks is should the US government hoard those vulnerabilities and use them for its own purposes in foreign intelligence, or should it disclose those vulnerabilities to the manufacturers, the tech industry in the valley so that the valley can patch those holes?

Almost all of the CIA’s vulnerability attacks that we just learned about are ones that might have been disclosed back to the original hardware or software manufacturer in the first instance. If they had done that, then the manufacturer might have patched that, in which case the CIA would not have been able to use them to spy on the Russians, for example. The equities process is kind of weighing that in the balance, deciding which ones to disclose back to the manufacturers, which ones to save for a rainy day. According to the Obama White House, about 90% of what we discover we disclose back to the balance. Of course, the flip of that means that there’s 10% we keep.

That 10% is a pretty heavy thumb on the scale, though.

Well, it depends on your viewpoint on how good the government is at measuring that, those equities, whether or not there’s greater utility in them. A famous example is the FBI famously wanted into Apple’s iPhone about a year and a half ago. Apple said no. The FBI bought a vulnerability from somebody, the press says it was an Israeli hacker, and used it to break into the phone, at which point Apple said, “Could you tell us about that so we can fix it and close it up?” The FBI politely said, “Go pound sand.” Actually, they didn’t quite say that, but they said, “You wouldn’t help us, dudes. Yeah, we’re not helping you.” That vulnerability will age out, because it was in the iPhone 4 and 5, and we’re up to the 6 now. It clearly is not going to be a long-term value to the FBI, but that was kind of the equity process that the FBI went through. One of the pieces of the equity process was, “You’re not helping us. Why would we help you?” Which seems a little childish, but also seems understandable.

I guess so. When you think about the vulnerabilities that could be patched by US companies, in some instances these vulnerabilities are threatening to the US economy and US productivity. It seems, in some instances, that the CIA got the espionage part of this right, but perhaps they got a lot of the rest of it wrong. Do you agree with that or not?

I think that’s quite plausible. I certainly know that that was true with a lot of the vulnerabilities that Snowden was famous for releasing. If I were the valley and I had one ask about the vulnerabilities equities process, it would be to make sure that somebody with their interest in mind is at the table pitching. They want in themselves, but they’re never going to get in, because it’s a government thing. It should be the Department of Commerce, NCIA, Office of Science and Technology Policy, there’s a whole bunch of people who are on the technology innovation development side who need to be heard in this process, whose voices need to be part of the discussion.

Are you somebody who can help these companies be heard?

Yes. Send them to me, Red Branch Consulting. Yeah. That’s what I try and do for a living. One of my great frustrations, frankly, with the valley, especially with the small entrepreneurial innovators is that they don’t understand enough about Washington, and they don’t think it matters to them. I get the focus. They’re about getting out version one of the greatest next thing, but the lack of insight into Washington and the lack of concern for it is unfortunately…I have a phrase. I will use it. You know what an alpha predator is?

Sure.

Alpha predator, top of the food chain, the shark. Washington is the alpha predator in the policy world. The small entrepreneurs in the valley spend most of their time believing that Washington is irrelevant to them. Most of the time they’re right until they’re wrong, until Washington cuts off their computer engineers, or mandates backdoors and encryption, or puts together a vulnerability equity process that does not include the equities of small and medium size developers who are trying to break into the market and dearly would love to know about mistakes in their code so that they can make better a product. That’s what the valley is missing, I think.

Yeah, and I think you’re right. Some people get that. The problem is it’s almost like life insurance, right?

Exactly. Nobody wants it or even has insurance. If you’re 25, you don’t go with it, because you figure I’m invulnerable.

Yeah.

Then you die.

Exactly. I think that’s a really good point that you make. You got to have a seat at the table. Some of the challenge is a lot of these smaller companies, the startups, will ride the coattails of larger companies because they can’t afford it, or they don’t have the knowledge base to work with an advocacy group like CALinnovates or an advisory group like Red Branch Consulting. I think we do play a valuable role in bringing those voices to the table.

I think that’s essential, and frankly I get the idea of slipstreaming in the wake of the big boys, but the small innovator and big boys are not always on the same page. They may be sometimes, but encryption is a great example. The big boys don’t want encryption, but if they have to do it, they’ll just change the code when they can afford to. If you’re a small guy who’s been building encryption into the middle of your product and all of a sudden you get a mandate to put in a backdoor, that’s 12 months of runway that you just lost.

Yeah, which is life and death.

Yeah, and so you’re dead. For Microsoft, it’s a pain in the ass. For Apple, it’s a product hit. For your average next startup, it’s the end of life.

What can happen here? Can there be a lawful hacking regime with rules put in place by Congress?

I think there has to be. Whether there should be or not, I don’t know, but there has to be, because if not, there’s only going to be unlawful hacking. We need to find some way of building a system where people who want to be in a position to defend themselves can do so in a way that is lawful without becoming the wrong side of the law right away. That’s an essential part of the puzzle. It might not be necessary if we could find a way to clamp down on hacking altogether, but that’s just not going to happen, right?

Right. Paul, there’s a theory out there that it’s not just the CIA that’s doing work like this, but it’s also the NSA and the Department of Justice. If that is the case, why would the United States have three different agencies spending time and resources doing the same thing three times over?

That’s a great question, but I think that the answer is we believe in separation of functionality as a way of protecting liberty. The FBI operates domestically. The NSA and CIA operate overseas. We hope that we can constrain them to just operating overseas so that we never unleash them. The FBI is focused exclusively on criminal activity, and it’s subject to the restrictions of judges with warrants and probably cause requirements. The NSA and CIA, they don’t have rules. There’s no American law that makes it a crime to hack a Russian Samsung TV. In fact, that’s what we want them to do. We have more than $50 billion in budget to get them to be able to do that. Traditionally, the NSA has been focused on signals intelligence, so they were communications, and the CIA has been focused on personal individual human intelligence. Now with the development of bring your own device, small devices, those two are sort of converging. The CIA and the NSA are starting to have digital overlap. That needs to be worked out, but their separation is historically a valid one as well.

Okay. Then what’s the optimal path forward on cyber from the perspective of the innovation economy?

I think the first step is be informed. Don’t live in your little bubble. I’m about to start a monthly newsletter. If you want in, send me an email. Send it.

Sign me up.

Yeah, okay. I will.

Where can we send that? Where can we find you right now? Let’s talk about that.

Okay, it’s redbranchconsulting.com. All one word. redbranch.consulting.com. It’s Paul.Rosenzweig, R-O-S-E-N-Z-W-E-I-G @redbranchconsulting. Send me an email. Sign up. I’m shooting for monthly now, just bringing Washington to the valley. Right now it’s free. Eventually maybe someday I’ll charge for it, but we’ll see about that. It’s something I just started a little while ago for this very reason, that innovative people don’t know what’s happening.

Right. People want a path forward. They want to know that there is a tactical path forward for them. What does that generally look like? If you could pull out your paintbrush and kind of paint that with words here right now, how would you do that?

After awareness comes action. My action items I think would be engagement with Congress and the executive branch about the issues that are closest to them. If you are interested in encryption because a change in encryption law will destroy your company, what we talk about in the newsletter is there’s a comment period. Put your word in. Say this is what…talk to your congressmen. Write an op-ed for a local newspaper. Write an op-ed for one of the trade magazines that does this. Write an op-ed for the CALinnovates newsletter, right?

There you go.

Something like that. All of those things are eminently plausible and ways of going forward. The most important thing besides awareness and engagement is kind of organization. Right now, the entrepreneur community is diffuse. They don’t do this. They need to, frankly, join CALinnovates or something like that. Sorry, had to do the plug.

Thank you.

It’s true. If you’re a small entrepreneur, you don’t have the wherewithal to do all this yourself, but you need somebody who’s looking at what’s happening in Sacramento and what’s happening in Washington to give you an alert if there’s something that really needs your attention, tracks legislation for you, warns you that a regulation is coming that’s going to destroy your business model. This is how it is. The last step, of course, is eventually when you get big enough to afford it, put your money where your mouth is, and start buying ads, making political contributions, that sort of thing. Eventually that’s where you have to go.

Right. You and I have had a few conversations about agile methods and 18F. I think this is one of your favorite things to talk about lately. Can you tell us about agile methods and 18F and why that matters for the innovation community?

Sure. This is exactly one of the things that people on the west coast ought to be aware of is happening on the east coast. Most of your listeners probably know what agile methods are. They’re a quick agile method of software and hardware development that trots out new functionalities one at a time. We go from version 1.1.1 to 1.1.2. If 1.1.2 doesn’t work, we back up, and then we go to 1.1.3. It doesn’t have 1.2. It’s modular. It’s supple. It changes quickly. It’s short on documentation, long on deploying functionality quickly, and it’s absolutely not how Washington works. Washington works by something we call the waterfall method, where they sit up at the top and they spend two years thinking about their requirements, then they do two more years of design, two more years of development, two more years of implementation and testing, and then eight years later they trot out an entire program that can do everything, but is so out of date that nothing is left on it. Instead of saving the feedback and comments pain for later, they make sure that that’s in there, too, but which time the entire program is dead.

18F was an innovation of the Obama administration to bring Agile methods to software development in the federal government. They were started in the wake of the healthcare.gov website disaster. President Obama sent up a flare to his friends in Silicon Valley and said, “Send me some people with chops here who know what they’re doing and bring them to Washington to help me fix that.” They fixed that, and they did some really good work on the Veteran’s Administration’s website and systems, the US Citizenship and Immigration services, which is in the process of digitizing all of its records that are still paper files from the 1800s. That’s a huge project, and it needs a lot of Agility in its development. They’re working on that. They did some work for FIMA in quicker responses to emergency measures. Great stuff, but along the way, what they did was they used their west coast methodology. They used off-the-shelf technology. They stinted on documentation, frankly.

The General Services Administration, which is the main provider of services through the government came in, and the inspector general just wrote a scathing report in which it said, “You’re using unauthorized software on federal systems.” That really sounds bad, doesn’t it? I wouldn’t want anybody to use unauthorized software on a federal system, because that might be insecure, except that it’s not. What they meant was that they were using common, off-the-shelf technology like Hootsuite and Pingdom, which half the websites in the world use to monitor their performances. That was what they were critiqued for.

Interesting. Let me ask you a quick question.

Yeah, so what’s…sure.

The CIA probably has a way in on many of those programs anyway, and other nation states do as well, right?

That’s true, but I don’t think there’s any evidence that Pingdom is less secure than an in-house developed web program.

It’s likely more secure, right?

Right, because it’s got 700,000 users in 22 countries, including Facebook and Spotify. I happened to look that up the other day. If there was a problem, these guys would have found it. Somebody would have reported it last year, and they’d have fixed it, right?

Yep.

That’s how the real world of development works in California, and frankly in Silicon Valley and the Silicon Corridor in Boston and in Virginia. That’s not how the US government works. The US government is a no-defect, audit everything system that destroys you if you don’t check every box, but checking the box is not security. What is security is what works.

What’s the future of 18F?

In doubt right now, under assault by the GFA Inspector General. A couple of really bad press pieces in the DC Press, which we designed to take them down, more sophisticated people like me are trying to boost them up. This is a precise instance in which people from Silicon Valley who understand this ought to be calling back to anybody they know in Washington and saying, “Look, get real. This is good stuff. Don’t let the federal bureaucracy kill innovation with its rigid checklist methodologies, otherwise these federal IT systems are never going to be up to speed. They’re always going to be two generations behind and incapable of supporting innovative technology. This is precisely one of those things that people need to talk about.

You’re right, the idea of modernization is very important. Being antiquated is bad for the citizenry, it’s probably bad for security, and it’s not very efficient. I think from the sounds of it, we can get behind the 18F movement, and it sounds like something that should continue.

I think so. I have no dog in this fight. I don’t know anybody at 18F. I got a lot of nice notes from people recently because I wrote something about it, but it’s easy to see that if you understand how the valley works, but this is not how Washington works, but it should be.

Yeah, it should be. It seems like there’s a lot of debate about that right now on a number of issues across the country. I think that the products that are being developed and the platforms that are being developed in Silicon Valley affect the country and the world mostly in very positive ways. The thought process is there, and I think that the administration needs to consider the fact that a lot of these products and platforms and services are being developed by immigrants. To come full circle here, Paul, it seems a little bit short-sighted to slam the door when we, at least out here in California, believe that Silicon Valley is one of the strongest aspects of the U.S. economy. We need to do everything we can to help move that forward, whether that’s expedited processing of H1Bs or just simply more H1Bs rather than less or no expediting.

We need to supercharge the innovation economy. We need to supercharge the workforce. We probably need to work on educating the workforce better at a younger age so that we can fill more of those jobs. We should be inclusive. We should be welcoming, and we need to do everything we can at this point in time to support innovation. I think it all really ties together quite nicely with a bow. There is interplay between private sector and government. We get that, but when there are things like what the CIA has done that could affect companies and could affect startups, one vulnerability could ruin a startup. There’s no retribution. There’s nothing. You can’t go sue the CIA for not disclosing or putting this before the VEP. We’ve got a long ways to go, I think.

I agree completely. It really strikes me that at a very fundamental level there’s a lack of understanding of how innovation happens in Washington. That’s something that has to change, or it will never get it right.

Yeah. Those are words of wisdom from Paul Rosenzweig, the founder of Red Branch Consulting. You can also find him on the Lawfare Blog. You write quite often, I think. It looks like maybe even weekly, right?

Yep.

Yeah.

Probably at least. Whenever something happens. Blogging is like that.

Yeah, and something seems to be happening pretty often these days. Paul, thanks for joining us on A Step Ahead. It’s been a pleasure to talk with you, and I hope that we can expect you back when other things happen in the cyber and the security world. Then we can work them out and talk them through and help our listeners understand what’s going on.

I would love to come back any time you invite me.

Good.

Thanks for having me on.

Absolutely. For our listeners, look up Red Branch Consulting and Paul Rosenzweig. He is a cyber security expert, and maybe he can be yours. Thanks for listening, everyone.

Lessons From Augusta: How One Group Is Bringing The Tech Industry To Georgia

Maybe you’ve never thought about visiting, let alone setting up a business, in Augusta, Georgia. Fifteen minutes with Tom Patterson will change your mind. The Chief Trust Officer and VP of Global Security at Unisys, Patterson is working with a group of four other business leaders to transform downtown Augusta into a technology hub.

Dubbed the iZone, Patterson and his friends are converting two blocks of downtown Augusta into an incubator and a place where tech entrepreneurs will want to come to live, play and build new businesses.

“It’s a lovely little town,” says Patterson, who recently moved to Augusta from Northern California. “It’s a beautiful way to live.”

Patterson is focused on Augusta because the town is about to get an influx of cyber security experts. Not only has his company, Unisys, moved to Augusta, but the government is moving its cyber command center from suburban Washington D.C., to Ft. Gordon Air Force Base just outside of Augusta.

“I wanted to be a part of the change that is happening there,” Patterson told CALinnovates director Mike Montgomery during an interview for the A Step Ahead podcast. “Anywhere you go there’s a good chance you’re going to run into someone who is either directly in the cyber business or supports the business.”
Patterson believes that the new industry will create the perfect atmosphere to transform Augusta, a sleepy Georgian town best known for its eponymous golf tournament into a thriving tech community. If his plan works, he hopes other smaller cities will use it to build their own iZones.

 

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Hemant Taneja Asks: How Will We Balance A Future With Fewer Jobs And Longer Lifespans?

Venture capitalist Hemant Taneja sees a huge problem looming for America. Technology is increasingly taking over jobs that were once done by people. As this trend accelerates, there will be fewer and fewer people who need to work.

But at the same time, we are living a lot longer. And while ideas like a universal basic stipend might take care of paying all of those people who no longer have to work — what will they do with their days? Work gives our lives meaning as much as it fills our wallets. Are we destined to be sloths who simply consumer entertainment like the dystopian vision laid out in the movie Wall-E or the book Ready Player One?

Taneja thinks we can do better.

“Are we creating a world of technology that replaces human potential or are we unleashing human potential?” asked Taneja. “What do we want to be as a society?”

Taneja, a managing director at General Catalyst Partners, discussed these issue with CALinnovates Chief Evangelist Kish Rajan during an interview for the A Step Ahead podcast. Taneja believes that technology needs to work harder to include humans in the equation or risk cutting them out altogether. That means thinking about solutions to the unintended consequences of technology before we are faced with them as a society. Social platforms, he argued, should have seen the risk of something like fake news coming and gotten out in front of the problem in a responsible way.

“The right thing would be for the innovation sector to think about responsible innovation and for large tech platforms to handle their power with care and algorithmic accountability,” said Taneja.

If not, the government will eventually come in and impose regulations on the industry that could stifle innovation. Taneja believe that now is the time for Silicon Valley to take a hard look inward and decide how it can innovate more responsibly going forward.

Listen to the rest of the interview here:

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A Step Ahead: Hemant Taneja

Hey, everyone, Kish Rajan, Chief Evangelist at CALinnovates. Welcome to the latest addition of A Step Ahead. We’re really lucky, this time, to talk to Hemant Taneja, who is the managing director of General Catalyst, a venture and investment firm, in the Silicon Valley. Hemant is not just an investor. He is a tremendous thinker about what’s happening with innovation and technology and its impact on reshaping our entire economy and what that means for our country and our society. He’s a very deep thinker that raises wonderful questions and issues that need to be grappled with as we go down this path of a whole new global economy and how we make the right policies to work within it. It was a very, very thoughtful and interesting discussion, and I hope you’ll enjoy the chat that we had. Hemant Taneja, thank you very much for joining us. We appreciate you being on A Step Ahead.

Hemant Taneja: Thanks for having me. It’s a pleasure.

You bet. Hey, listen, there’s lots to talk about here, as we continue to watch…as we’re recording this, we’re just a couple of weeks away from the inauguration of President Trump. We’re in a very interesting time in our country, and technology has played a interesting role in the politics of the election. I’d love to get into that and some of the related issues with you, but I want to start…you recently published a piece on Medium that I thought was tremendous. We’ll make sure our listeners get a link to it so that they can read it in full. In the piece you talk about all the amazing things that seem to be coming true or are on the precipice of coming into reality, all the amazing innovations that have been dreamed about for a long time, and yet there are…I don’t want to say downsides…but there are meaningful considerations to look at as all these innovations come into fruition. You raised some real cautions or, at least, things to think about. Tell us about that piece and why you wanted to write it.

Yeah. I was basically in my year-end reflection mode as to what are the kinds of things that we’ve been doing? What are the things that resonated with me in terms of what we heard from entrepreneurs over the year? It got to a point where the observation that we were making was, gosh, it’s the same set of people that are working on self-driving cars and self-driving trucks. As I wrote in the article, it’s the same people that are working on life extension and figuring out basic income at the same time. When you add all that up, you basically say, “Okay. There’s 3,000,000 plus truck drivers who we’re going to tell, “Now, you don’t have any jobs anymore, and we’re going to help you live forever or for a lot longer than you’re used to, and, by the way, we’ll put you on a stipend, you know. You have no purpose.”

That’s really what catalyzed the reflection thing. Gosh, in some ways we’re in this amazing time, as you said, when it comes to technology and what technology’s unleashing for us. At the same time, it really is about how we channel the innovation that’s going to determine what kind of society we live in. Choices in front of us are, are we trying to create a world that’s essentially using technology to displace human potential, or are we creating a world that unleashes human potential and maximizes it and creates a more fulfilled society just culturally? What do we want to be as a society is a big question. I think as tech is going mainstream, we need to have a greater sense of purpose in the kinds of things we invest in and the kinds of things we want to create for the future. That’s really what got me thinking about and writing that piece.

Yeah. I think the point is so interesting. By the way, when you say the stipend, you’re talking about the proposal or the idea out there for something that’s being called universal basic income, right?

That’s right. There’s this whole theory today, that, gosh, as jobs go away and you move into a post-work era as a society, how are people going to live? Is the idea that, in a world where there’s a lot of automation, do you end up having to give people some basic stipend that they can live off of, and then they can figure out what to do with their time elsewhere? I think that’s what a lot of folks are thinking through as those that have embraced the idea that tech is not only automating jobs like manufacturing, but it’s slowly going to start taking over lots of knowledge, working classifications are about, as well, whether its medicine or what have you.

Sure.

If it’s a pervasive issue, then what are we going to do, as a species, with out time?

Really, it’s a fascinating thing. Just staying on this for one more minute, about the idea of a universal basic income, clearly there’s lots of different approaches, and we’re quite a distance from anything like that becoming real. At it’s basic concept, you’re talking about what would be some new government program that would come in and provide some basic income, create a floor, if you will, for people to have some ability to sustain themselves as we’re going through this major transformation of the economy. Of course, that’s kind of… that presupposes that we are fundamentally going into an era for some foreseeable future, or unforeseeable future, I should say, where jobs are eliminated and functions in the economy can’t be replaced at the rate by which they’re going away right now. Just that, unto itself, is a pretty concerning set of circumstances.

I think that’s right. That is the theory that has some folks worried and planning ahead. In fact, I recently attended a dinner around ideas for universal basic income. Somebody mentioned, which I thought was fascinating, that in 30 years you might have to pay to work because there just isn’t that much work, and work gives you purpose, and then you may have to pay for it. I mean, I know it sounds like a crazy idea today, but the point is that there’s a real concern around, hey, automation applies to not just physical tasks, but also cognitive tasks, as AI becomes more and more mature. When that starts happening, and it’s more cost-effective to do that as opposed to employing people, isn’t that just going to be a pervasive dynamic across the entire economy?

I’m just curious as to your opinion. How real do you think this concern is about permanent elimination of job functions in the economy? As I sort of look at it, certainly we’ve gone through, in human history, major economic shifts, right, from agrarian to industrial, and industrial to mechanical, and into information technology, we had massive shifts. We’ve had huge changes in how the economy functions and, yet, employment has risen, quality of life has risen in places like the United States and all across the world, not universally. I mean, I’m wondering if this is overblown, or if you think this is actually something that we’re going to have to address if these are permanent shifts in how the economy works and the number of jobs that will exist within it?

I struggled with this question quite a bit, as you can imagine. The way I try to answer this question is, are there types of jobs I can think of that, fundamentally, technology just wouldn’t be able to replace? Over there, I always end up coming out that, “No, there’s going to be automated ways to do just about everything that we do today.” Then the question is, “What are the new things that we haven’t been able to envision?”

You could see, as things like AR and VR become pervasive and your alternate reality or your virtual reality becomes just as real as the physical world, you know, people may choose to spend more time sitting on their couch with a next generation VR headset and maybe there’s jobs that get created in there that unleash human potential. I think there are lots of things you can imagine that might happen that can open up new types of jobs as the physical and sort of the more cognitive jobs do head towards automation.

I think some of it is also about… going back to the article you were referencing, how do we want to play the next 30 years as we bring these new technologies to bear? If we embed technology into society with the right mindset, I don’t think it’s going to be a problem, but that, again, goes back to the unleash human potential, build these technologies, develop these technologies to get more out of humans, as opposed to replacing them. It’s not the first time we’ve had to think about irresponsible use of technology and approaching it. Nuclear was a great example, that was a existential issue, and so we figured out how to handle nuclear disarmament, but also be able to use it as a cost-effective and safe source of power for large parts of the world.

Unfortunately, mainstream technology and software, the way we think about it is…doing that right is a little bit like a frog in a boiling pan because there’s no immediate risk, like the existential risk that nuclear presented, and as a society, you know, we’re not very good at long-term thinking. So, you know, one of my big things is, can we actually start to be better long-term thinkers in how we start to define this future role with technology?

Plus, these are huge questions. Alongside that, I would ask, what are the right institutions to help shape how we try to plan for the future, right? That is to say, is government the answer, you know, when you talk about a program with the kind of potential scale and reach as the universal basic income? I mean, presumably, the government would have to have a major role in defining and executing such a program. I wonder about your thoughts on that, or are there ways that the private sector, or other sectors, come together and help to do that longer term thinking and put some of these new structures in place to address some of these major gaps that you’re talking about?

Yeah. I think all mainstream sectors, in some ways, operate at the intersection of technology, policy, and finance so, in some ways, government is always involved. When you think about how the process of technology going mainstream over the past decade, one thing that has happened is you have seen the creation of these platforms that are very monopolistic in nature because they’ve got network effects around them, so they’re going to take our market the way it’s set up, and they’re using a lot of AI in influencing what we see as folks, what we get exposed to, you know, the whole fake news issue that recently surfaced was all around just the algorithms taking hold and sort of attenuating our biases, if you will.

I think the choice in front of the innovation sector is, as these companies become these large platforms, are they going to self regulate? Are they going to embrace algorithm accountability? If they do a good job of it, then I think you’ll have less regulation needed for this next phase. If they’re not as focused on algorithmic accountability and sort of exposing products and services to consumers on top of their platforms, then I think government’s going to step in.

My personal bias is, the more regulation there is, the less innovation happens because the focus of the business starts to be towards catering to regulators as opposed to serving their customer. In fact, that’s why I think the net promoter scores of all the major regulator industries, like utilities and schools and hospitals, you name it, none of them provide great customer service because they’re highly regulated businesses. By the way, when that happens and you can’t innovate, you often get yourselves into large problems, as well. I think climate change is a problem that got created as a result of that. You know, we blame the utilities and anthropogenic sources of carbon for climate change, but the reality is we created these structures where these companies just weren’t intended to adopt new technologies and create new markets.

Wow.

I’m sort of saying all this to say, I do think the right thing would be for the innovation sector, the entrepreneurs, investors alike, is to think about responsible innovation and for the large technology platforms to handle their power with care and with transparency in the algorithmic accountability. Otherwise, you do start to head towards a regulation-led economy, and I don’t think that’s a good place for any of us.

I hear what you’re saying; although, I didn’t quite hear the how, in the sense that, you know, on one hand, what would be the motivation of these businesses to adopt a more thoughtful approach, consider public interest, do that sort of self-regulation, as you’re saying. It seems that what we’ve seen traditionally, and now we’ve elected a new president, I think, in part, on themes of, “We’ve got to get government out of the way. Government is overreaching, it’s an inhibitor to business performance and quality,” as you’ve just sort of suggested with some of the heavily regulated business. It seems that the response would be from tech, “We’ll just do what we’re doing to maximize our profitability, and we’ll just fight regulation, as opposed to trying to embrace it.”

Yeah, but that doesn’t end well in the end. If you look at a tech sector, look at AT&T or look at Microsoft, regulation catches up to you and starves you of innovation eventually. I ponder this question a lot. Gosh, when the Baby Bells were broken up, they were broken up geographically …when AT&T was broken up, I’m sorry… and when you look at utilities in the power sector, they were sort of regulated based on geographies, as well. I’m not even sure how you would sort of regulate the monopolistic behavior in companies that fundamentally thrive on being a monopoly. What would it mean to even regulate a company like Facebook when the entire reason that Facebook works really well is because everybody’s on it.

I do think there’s sort of an interesting set of questions ahead, but rather than go down the path where these issues become significant and there’s constant fight with the regulations and eventually you do get the sector to be over-regulated, it’s better to just be more responsible now. I think you’re seeing indications of that a little bit, but I do, for sure, want to see a lot more done in terms of transparency and in terms of making sure the tech business doesn’t also start to act like big business, where you’ve got four or five companies that have all the data and, therefore, they’ll have all the sophisticated advantages that come from artificial intelligence, and they abuse their power.

I’d rather see a world where new innovations can continue to develop, and you do have a free market, where the small business also has a level playing field, as well. I mean, in fact, this is one of the things that I do think about with the new administration, which seems highly pro-business, but it’s more highly pro-big business than highly pro-business, in general, in, at least, the early moves that I’m seeing. We certainly want to make sure we don’t forget the little guy.

Yeah. It’s a great transition. I wanted to talk a little bit about that, as well, because when you think about innovation and technology, certainly the Silicon Valley, both literally and as a metaphor, for tech, in general, these were things that started off as highly entrepreneurial, and these were famous lead businesses that were started in garages by a couple of people. Then they grew into tremendous enterprises, but, at their nature, they were small businesses that got there.

Again, it was about entrepreneurship, and it was about attracting talent, where folks were educated at a level that they could plug into these thriving tech ecosystems. I wonder, now, is that really where we are? Is that what, today, Silicon Valley looks like? Is it as entrepreneurial? Is it as open of a system to allow new, small businesses an entrance into the market, or do you see it becoming more of a closed system, quite honestly, you know, financially and otherwise?

I think it’s a complex question. I have this thesis that I call “The Economies of Unscale,” and is the driver of a lot of the innovation that’s happened in the last 10 years. The basic thesis is that entrepreneurs that have interesting products and minds, products and services that are great for consumers, can build these companies on little capital, can build these companies using a lot of these platforms that we just referenced, and essentially, rent, scale, and become large fast, and that pervasive behavior happens to be a unbundling scale, if you will.

If you think about why there’s all these companies that are making these…in large numbers, new brands are coming up, building consumer products, apparel, consumer package goods, et cetera. You think about new entrant companies popping up. You think about sort of how a lot of the incumbency that couldn’t be challenged before with entrepreneurial efforts as successful competition from new entrants. It’s all because these platforms have made it easy to acquire or reach customers. It’s made it easy to make things using companies, like electronics, that have popped up in globalization. It’s easy to use logistics platforms. It’s easy to sort of just rent computing from Amazon. You got all these platforms. In some ways, these platforms have actually accelerated the creation of new companies. The fact that these companies can serve small niches that would’ve been otherwise sub-scaled to serve, that has accelerated the creation of the small companies.

Right.

On the other hand, because all the data, all the information, goes to these platforms, as to what’s happening with these companies, the larger incumbents, these platforms do have a lot of power in understanding what’s working, what’s not working, and being able to use that to their own benefit, as opposed to being truly open. The issue is, those decisions are made in software, and it’s not really transparent as to what’s really going on. When that transparency isn’t really there, that’s where I think these troubles start to emerge in terms of, “Hey, are there monopolistic tendencies manifesting themselves, or are we really seeing the little companies getting a fair shot or not?” I think that dynamic is what I’m talking about when I see a sort of responsible innovation by these platforms. I do think if these big tech companies don’t do that, they will face regulation, and I don’t think that’d be good for the entire sector.

Yeah, it’s such a complex point that you’re making. When I try to relate it to, you know, thinking about politics, again, for just a moment, and you look at what happened in the last election, certainly, a part of it, if not a majority of it, was defined by this notion that the economy of the United States just is not working for a large majority of the American public. They look at tech centers like the Silicon Valley, or Austin, or Boston, and they see a small number of people getting extraordinarily wealthy and being in control of a significant part of our nation’s economy and wealth, but they don’t see any pathway for that prosperity and those gains to extend to them in places like the Rust Belt or, frankly, even places like Fresno, California. What do you think about that characterization? Do you agree that that’s essentially the shape of our economy today-

Yeah. Yeah.

or was it oversimplified?

Look, I think those are real issues. First of all, the tech center is bringing a lot of prosperity to our nation as a whole. The fact that Uber gets 15 cents, or 20 cents, of every dollar of the taxi ride in France, or Germany, or anywhere in the world and brings that value back to our economy, when was the last time that was possible? What we’ve been able to do with technology and data …this is why sort of technology or data in the age-old sort of phrase that is going around is quite accurate in my mind, that I actually think we’re able to capture a lot of value from the way these tech companies have been built here in the United States and they’re global and making our economy stronger.

The issue is around job creation, right, and the fact that a lot of this work gets done by not a lot of people, and that’s where the concentration of wealth happens to the few, especially careening this tech sector, if you will. I do think that’s a real issue. I think we have to solve it. I think this new administration needs to focus on that. It needs to focus on that in a way that doesn’t slow down the capability of our technology companies to continue to maintain global dominance that they have been because, honestly, the way the platforms are set up today, if we don’t do that here, other countries will, and that’ll be a huge loss for us. That market leadership, we do not want to lose that.

What do we do about making sure that we do have new, forward-looking jobs created in the US? I do think there are areas where there is a lot of opportunity to migrate out infrastructure to the new-new. When you think about energy, you don’t have to believe in climate change, but you can think of the advanced energy opportunity as a massive job creation opportunity. We should upgrade our infrastructure, our utilities, our gas stations and the charging stations, or putting solar on our roof so that our power infrastructure is migrating to the new-new.

Sure.

That’s a lot more secure and independent and sort of takes advantage of our own resources. I think there is a lot of that that can be done and be invested in to propel us into continued leadership and new job creation in the country. I wish the new administration sort of does things that expands on those kinds of jobs and doesn’t retard the progress the technology sector is making in truly making the US the technical powerhouse that it is with the global platforms.

Yeah, it makes so much sense. We actually had a piece, right now, in TechCrunch, talking about the president elect’s suggestion of doing a massive infrastructure program as one of the key initiatives of his new administration. We urged that if that’s true, to think about how that could work together with technology to innovate and modernize all kinds of aspects of our public infrastructure. You touched on energy. Transportation is obviously another enormous area of opportunity, water, you know, you could go down the line, but it does seem that there’s a big chance to take some of our technological capability and apply them to these basic systems that could have lots of benefits, not the least of which could be the creation of a lot of new jobs.

Exactly, and that is probably a two-decade opportunity in terms of the kinds of jobs and how long, you know, it’ll take to actually migrate our power infrastructure and urbanization to a city infrastructure, and so on, to the next generation technologies, if you will. I do think that could be a huge opportunity for us.

We’ve got just a couple minutes left. I wanted to touch on one other topic, and that is, as we’re talking about how to expand opportunity, create jobs, and welcome people to be able to participate in this new economy, you’ve been very outspoken about education and looking at the way public education works today and what it is, or is not, delivering against real opportunities, I assume that that’s an area that you think absolutely needs to be rethought if we’re ever to expand opportunities to folks that aren’t fully participating now?

Yeah, I do think a lot about that. I’m involved in Khan Academy and ClassDojo, which are run by two incredible entrepreneurs and sort of showing the way in terms of what the education system should be for the 21st century. My core belief is that what we have learned through entrepreneurship in Silicon Valley. We sort of have to apply it to our lives, meaning, there should be this notion of an entrepreneurial life, if you will, and that involves how to learn and take advantage of opportunities in a much more seamless and successful way throughout your life.

Today, what we end up doing is, we’ve got this Prussian-based education system. We put our kids through these factories, where everybody’s the same age, and they’re learning the same things at every hour, as opposed to, again, going back to unleashing human potential, everybody learning based on their own interest, learning at their own pace, and learning things that they want to build on, and they can be great at. Our education system today is not set up to be able to empower us to do that. I do think this is where things have to move so that everybody is, if they’re bought into this personalized learning model, it requires upgrading our classrooms, going back to the infrastructure argument that I was making earlier, upgrading how our school systems operate and moving towards this next generation learning model.

I do think when it comes to training our society and our next generation to survive and thrive in this kind of a technology era that we’re headed in, these are the kinds of skills that are a lot more important than being able to factor polynomials a little quicker than the next guy, which is what we seem to be obsessed with, when you think about the academic learning in our schools today.

Sure. Although, I would say a lot of people are candidly very fearful of the type of innovative and disruptive almost, if you will, models that your touching upon for public education, worried that if we break lose from the existing system, we create a system that becomes uneven, at least in terms of its access to everyday people. How do you respond to that concern that’s out there, that what we have today is something that’s at least trying to protect equal opportunity for people to get public education, that that value might be lost?

I think the model of 20th century was about egalitarian systems. How do we make sure everybody gets equal education? How do we make sure everybody gets good healthcare. What we’ve done in that is actually created lowest common denominators for everybody. I mean, think about education, how even is it really? You have districts that are more prosperous, that can afford to have better schools than not. This is a place a teacher in every school is trying to teach the same concepts differently, with different levels of resources.

The whole point that I’m trying to make is that you want to make this so affordable in using technology, that you do allow everybody to have access to the same set of tools and capabilities and let them traverse the education graph visual based on their own capabilities, so they can create mastery of the things ‘A,’ that are important to them and ‘B,’ in a manner that they learn the best. I think that’s really the opportunity in terms of the future of education, as opposed to saying, “How do we just make sure every school has got the budget to be able to do everything as a baseline level of education.”

It truly should be about how does every kid maximize their own potential by using the same set of tools that are powered by AI and that are sort of designed for self-paced learning and designed for harnessing their particular interest and teaching them in a way that catches their attention, as opposed to some, you know, lowest common denominator, in terms of the pedagogy.

Got it. Last question, and that is that, in your piece that we talked about at the very beginning, where you sort of raised the question about whether we’re in a place now where technology is helping us to either unleash human potential or just replace humans… it is an important question. How hopeful are you that we’re going to get that right?

As a venture capitalist, I live in hope. I do think we are going to get that right. I think there’s a lot of smart minds that are thinking through this issue that I have raised, and this is just part of an industry that’s maturing in understanding how impactful it actually is on society. Most entrepreneurs do what they do because they’ve got great sense of passion and they want to have an impact. I think if we can coalesce on a set of guiding principles around the kind of future we want to create, I do think we’ll end up creating the right future that can be created with the tools that are available to us. Yes, I’m quite optimistic.

That’s great to hear. Hemant Taneja, you’ve been a great voice and a great leader raising these very important topics and be willing to share your wisdom and time with a number of folds, including us, on A Step Ahead. We’re very grateful. Thanks for your time.

Erin Schrode Isn’t Afraid Of Rubber Bullets When She’s Fighting For The Environment

Erin Schrode refers to herself as a young “Eco-Renaissance” woman, and when you look at her list of accomplishments, it’s not hard to see why. When she was still in high school, Schrode co-founded Turning Green, an organization dedicated to helping teenagers advocate for a cleaner environment. She has appeared on ABC and been quoted in The New York Times and was honored by the White House for her dedication to political action.

And late last year, she was shot with a rubber bullet.

Image credit: Erin Schrode via www.erinschrode.com

Schrode was interviewing pipeline protesters at Standing Rock Indian Reservation in North Dakota when she felt a piercing pain in her back. She turned to see an officer who had fired the bullet out of a grenade launcher. The experience only doubled her resolve to continue telling stories of the protesters.

“Any rhetoric of violence from the water protectors was a lie,” Schrode told CALinnovates Chief Evangelist Kish Rajan during an interview for the A Step Ahead podcast. “I saw the power of nonviolent direct action play out again and again there.”

Schrode is someone political watchers should keep an eye on. Last year, at just 25, she ran for Congress in California’s 2nd District. Although she lost to incumbent Jared Huffman, Schrode used her campaign to call attention to important issues involving the environment and education.

Over the next four years, she hopes to fire up her fellow millennials to fight back against the Trump administration through technology and by showing up in person.

“This is the time to organize and advocate and mobilize in a way we never have before,” said Schrode. “Our future depends on it.”

Listen to the rest of the interview here:

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A Step Ahead: Erin Schrode

Hey all, Kish Rajan, Chief Evangelist at CALinnovates, and welcome to this edition of A Step Ahead. This time we’re talking to Erin Schrode, who as you’ll hear, in a really short period of time, has had a remarkable career in politics and in activism. She tells the tremendous story about her time at the Standing Rock Reservation in her efforts to protest the Dakota Access Pipeline, and in that she reveals the true passions she has around energy, around politics, and around innovation. It was an interesting conversation and I hope you’ll agree.

Erin Schrode, thank you so much for joining us and being part of our program A Step Ahead.

Erin Schrode: Thanks for having me. I’m really excited to chat

Well it’s great to have you. There’s lots of stuff that we can get into. You’ve been really really active lately. You’ve been very visible in a number of key things and I want to touch on a few of those. But certainly, most recently, you have been and continue to be a very visible voice in the battle over Standing Rock and the Dakota Access Pipeline. How did you get involved in that and why are you involved in it?

What is happening at Standing Rock is the fight of our lives, in my opinion. It is a convergence of so many of the most important pressing movements of our time around climate and a livable planet, around human rights, around peace and justice. It touches on so many different topics and unites so many diverse stakeholders. I initially got involved… I’m an environmentalist and climate change and the fight against fossil fuels has been paramount in my life for the past decade. And watching this unfold in the past eight months in mostly niche environmental or small media has been really interesting. But I was reticent to show up. I didn’t necessarily think this was quote unquote my fight. And in October I saw a call from the Standing Rock Nation saying, “Come. We need people to not only figuratively stand with Standing Rock but to literally show up to be the numbers, the boots on the ground, to put your body on the line, to get skin in the game.” And I went. I was on the way to North Dakota the next day.

I just wanted to jump in. The call that they made for people to show up physically is a sort of interesting thing in the times that we’re in. Political engagement, now, is so much about digital engagement. We can talk about more about this. I even remember recently in the Standing Rock issue, there was a question about… they were encouraging people all over the world to check in on Facebook at Standing Rock because it was supposedly an effort to help the protestors gain some footing against the local authority who may or may not have been suing Facebook to track what was going on there. I’m wondering how you saw that and then how you compare that to that call that they had for people to actually show up.

That’s a very interesting larger dialogue and issue in our world today. This balance between online and offline. We have these incredible tools at our fingertips, at our disposal, with which to organize, with which to amplify. But the actual work happens offline. It happens in the real world and so it’s fascinating to see how, yes, there was an incredible role, a necessary role that people could play around the country and around the world, be it in this movement to check in or in pressing our legislators, picking up the phone, e-mailing them, in divesting your funds and just raising awareness and just sharing the content about police brutality or illegal land seizure. But then, you had thousands of people there faced with brutal law enforcement and they needed numbers. They needed this critical mass. So we all have roles to play but we can’t think that clicking a button or doing something behind a screen is enough. It’s necessary but that’s not the be all end all.

It really is a fascinating thing to think about. And I want to unpack that a little bit more in the broader sense of political engagement. But I don’t want to lose the thread for just a minute. So when you got there, for those of us who were following online or watching on T.V., give us a couple of minutes about what you did, and what did you experience, and were you glad that you went?

Oh yeah. Absolutely. I arrived there. The first two people that I met, Floris and Nicosse, Floris is a 34-year-old mother of five and Standing Rock Native, Nicosse is a Ponca man from Oklahoma who works on pipeline issues all across the region. And to get this personal, in-depth story from the two of them set the stage in a very unique way. Just two days prior to my arrival, the northernmost camp on the front lines had been raided and 140 some people had been arrested and thrown into dog kennels, had numbers written on their arms. The teepees had been ripped open with the ends of assault rifles. People, human beings, have been ripped out of prayer circle, out of sweat lodge. So this was the psychological and emotionally charged environment to which we were walking.

And we stayed there with them in their yurt at Oceti Sakowin. The camp was built around the sacred fires and it was such a beautiful space. These peaceful, prayerful people have gathered from all across the world. You have representatives from over 300 tribes and the visual of the flags of all of those nations is quite striking. But to see so many people show up, and everyone had their own reason and their own stories, but I saw the power of non-violent direct action play out again and again and again.

And you saw water protectors one day go up, wade across a river in freezing cold conditions, on their sacred land, on their treaty land, and across the river were met with a line of armed militarized police. And I say that because I’ve only seen visuals like this in photos out of Iraq or Afghanistan and maybe in the past couple of years in Baltimore and Ferguson.

It really is striking. And just to be clear, these actions that you were taking, I think you were describing the militarized actions, the disruption of the prayer circles, I had never heard of the idea that people were being put into kennels or cages and numbered. I mean, these are startling observations and who again were the actors that were doing this? Is this local police?

The coalition of about seven states that sent forces. So you have local Morton County. You have North Dakota State and you had other state forces that sent in varying numbers of law enforcement from different divisions, some of whom promptly left, said this is not in line with serving and protecting a population. Floris has photographs of the dog kennels, of the numbers written on her arm. She and Nicosse likened it to Nazi Germany and concentration camps.

Good heavens. That’s a remarkable thing and you may be reluctant to draw more attention to yourself but isn’t it in fact true that in the course of you being there and perhaps doing some live reporting of what was happening there, weren’t you yourself struck by a rubber bullet?

I was. I’ve been very cognizant not to draw attention away from the bravery of the people in the front lines through the power of non-violent action. But I did speak out about it because it was such a blatant example of excessive force. I was conducting an interview on camera with a Native American man, two feet firmly planted on the soil where the police wanted people to retreat to. And I felt a devastating blow to my lower black. And I whipped my head around, completely confused at what had just occurred. And I saw, just offshore in the small tributary, three of these officers and one of them had just fired what we came to see was a thirty-seven, forty millimeter rubber bullet out of a grenade launcher at us, at me, at innocent, unarmed, un-violent people.

It was caught on video by a couple of journalists who went back and pulled it and I posted it. And the next morning I woke up to a lot of people saying, “Well, if you were good at your job you’d have proof.” And I started flipping through the videos that I have been taken that day and I watched myself be shot live on camera, which is nothing I would wish upon anyone. But I decided to share that video for the reasons mentioned before, just to say that this is inexcusable and any rhetoric that the police are speaking about, about incitement, about violence coming form the water protectors is false, is a lie.

What an incredible thing. Well thankfully I’m sure it had and will have a lingering impact. I don’t know how anybody could endure something like that personally and not be impacted by that. Thankfully, you’re able to tell the story.

I am. I’m very lucky.

Well, I’m glad.

Thank you. You know it didn’t hit my spine. It wasn’t a real bullet. Didn’t hit my face. It didn’t permanently maim me in the way that you saw Sophia Wilansky, a water protector there, who had been hit with a compression grenade. One woman lost her eyesight form a canister. So it’s horrific and the way you see police rewriting these narratives is devastating, but thankfully you have a ton of proof because of the power of technology today that’s put into the hands of the people rather than those in power.

It’s incredible. Well, we could talk about this forever and I appreciate you relating these experiences. But to sort of back up and put this in context for just a moment. So we’re talking about the construction of the new pipeline. It’s about continuing to build massive infrastructure and make massive investments and also very clearly marshall state and local forces in the continuation of that oil-based economy. Given how much you’ve done in clean tech to try to help stimulate the development of more renewable and sustainable energy practices, I’m interested in, given what you’ve just endured, your impressions in how we’re doing and how much more needs to happen to address trying to change the economy that we’re clearly so invested in?

It’s absolutely critical and we have to recognize that the fossil fuel economy is one of the past, that clean tech pays, that renewables are not the ways of the future, that they’re the ways of the present. You saw the report that just came out that solar is the most inexpensive source of power without any sort of subsidies needed. I spent time last month at Cop22 in Morocco speaking a lot about climate finance. And I’m not a finance person, that’s not my background. But there are three terms that I shared that really resonated with me which are around addressing the inherent bias, doing real risk-awareness, and flipping the profit motive, and showing people that this is viable.

Also, as we usher in a new administration filled with private sector people largely, we need to talk about how there is profit to be made. And that fossil fuels, oil, fracking, does not make economic sense in addition to the environmental degradation and consequences. So I’m working hard on that at many levels, particularly on this climate finance side, which is a place where maybe we can move the needle with the coming administration.

With that, and yet with the statements that have been made or were made by then candidate Trump as it relates to the whole question, or at least the question that relates to his mind about the reality of climate change, and then people that we see, of course an Exxon Mobile CEO, now our new Secretary of State, assuming confirmations will happen, and other deep investors in the petroleum-based economy, and our Secretary of Commerce plus former governor Rick Perry who is on the board of the company seeking to advance the Dakota Access Pipeline, how are you feeling about the prospects over the next four, perhaps longer years?

Don’t say it, don’t say longer than four. It’s awful. It’s appalling. This is not going to be easy. This is not going to be pleasant. I wrote an article the day that he announced Pruitt as his appointment to lead the EPA that said so much for Ivanka’s meeting with Gore. There were people in the environmental world that were optimistic. “Look! Ivanka Trump is taking on climate change as her issue,” despite being silent about it for the whole campaign trail. “Look, Gore went.” And “Look, Trump took time.” I said it was a smoke screen. Watch what he does next week. And within a couple of days, here he was appointing someone who has sued the EPA on behalf of the coal industry, who has lead coalitions with the attorney general to fight the clean power plan. And here he is putting in Tillerson. Here he is putting in these ghastly appointees.

I don’t think that much will happen on the federal level, truthfully, which is why I’m focusing on financial and legal infrastructures as ways that we can try to circumvent the system and try to put things into place outside of the policy arena. I’m actively working towards city and state legislation that will safeguard environmental and public health. We have no other choice. This is not the time to rest on our laurels. This is not the time to sit down, to shut up, to recoil. This is the time to organize and advocate and mobilize in a way that we never have before because our future, and that of an inhabitable planet, quite literally depends on us.

Well that organization and mobilization is an interesting question and it brings us back to where we were a couple of minutes ago. That is, I’m a Gen Xer, and I’m a bridge person that lived my life before there was mobile phones and Facebook and Twitter and Instagram and now I’ve adapted in that direction. But you and others are digital natives. You’ve always lived with this technology and these powerful tools that certainly lend themselves to all kinds of organizational and mobilization efforts. But this election also raised some real doubts or concerns about how effective and how valid some of these digital mechanisms are for constructive political engagement. But I’m interested in your perspective on what are the most positive ways and affective ways of using these tools to bring, particularly younger people, into the process.

So it’s a very important debate to be having. It’s very important to reach out and to engage my generation. How do you do that? We know how to reach them, but how do you actually translate that reaching into action? How do you convert it? What we saw throughout the selection process is that a lot of people, a lot of young people in particular, get excited by Bernie Sanders’ campaign, take to the streets, mobilize, work for a candidate, a 75-year-old white man representing the youngest, most diverse generation in history. The irony is not lost.

Why do you think that was by the way? Sorry, can I stop you really quickly? What was the appeal, demographically and otherwise? Bernie Sanders would not be your first thought of who would create a following of literally tens of millions of millennials across the country, and yet he did. Why? What did you think the appeal was?

I’ll tell you the things in his messages that resonated with me and people that I’ve spoken with. He’s been saying the same thing for decades. He has stood true to his values, to his beliefs. He’s not a piece of what people see as the establishment or the machine. His views on environment, on education, are very much in line with that of my generation. He had a candor. He was very…I think authenticity is one of the more overused words in recent history, but similarly to our campaign, people were pleasantly surprised that I was willing to answer the questions, that I was willing to speak without talking points, that I was willing to engage on the issues that matter. I think there was something in Bernie Sanders’ message and rhetoric that people said, “Yes. That is real, that is relevant, that is true, and I want to be a part of it.” There was an excitement, there was a palpable energy that people got behind.

What I hope now is that that doesn’t die, that this idea of the need for, truly a revolution, doesn’t stop because that candidate lost, or because Hillary Clinton has suspended her presidential campaign. I fear that though. I fear that it’s easier for people to rally behind a person than having to get people to continue this momentum behind a whole group of people and actually follow through. Perhaps in talking about millennials, as you were asking, how do we activate them? And I think what you hear form many young people now is that, “Well, maybe we have to run. Maybe we have to insert ourselves into what we see as a broken system if we actually want to see any market improvement.”

Well, I think that the idea of getting more people actually running for office is a big deal. But I want to underscore one point that you made again, is that we at CALinnovates are thinking about the role of technology in our public lives, be it campaigns or civic engagement or what have you. I heard something in your answer, or at least I want to make sure that I heard this right, because I think it’s very interesting, when you were talking about Bernie Sanders, is that the appeal for someone like him, it wasn’t technology, it was the authenticity of his message. It was policy-based, it was values-based that was the appeal. Really technology then becomes a way of telling that story, creating infrastructure around organization. Technology is not the end onto itself, right? It’s the means to an end. Again, this is what I think I hear. If you had the right message and the right messengers to bring people into engagement in the first place.

Absolutely. That is definitely what I said and what I believe. But there’s another piece of technology that we spoke about on the campaign trail. To make government more effective, more efficient, and more transparent. And that goes beyond technology being nearly, and I say nearly within quotes, it’s an extraordinary conduit, but actually so much of what Sanders was talking about was holding people accountable, was the need for transparency. Technology there becomes an actual concrete tool to bring that to fruition. So technology definitely has a role to play and you see it creating two-way channels and real accountability, or has the potential to do that for government if they’re willing to be so bold as to put it into practice in that way. I can only hope.

Well I think it’s a great point, and you talk about, as we only have a couple of more minutes left, I’d love to come back and continue this conversation, because there’s so much more. Perhaps we could chat with you again down the road.

I’d love to.

On this last topic that you’re raising, which is actual engagement. Again, me being a Gen Xer spending a lot of time in the private sector and in government, I certainly have seen very clearly the limitations of government in terms of utilization of new technology, creating that transparency, being more effective and responsive in ways that would inspire others to participate. I trust that that part of your message here is that government itself is going to have to be…we’re going to have to renovate it. We have to modernize the way it functions if we expect people to want to be part of it.

Absolutely. During a campaign meeting with many people from Silicon Valley and from Northern California where I live and where I ran, they were asking, “What can we do? What can we tech innovators do?” And there is so much. Let’s just put out the challenge to the powers that be, figure out how to vote online. Figure out how to make that…I find it hard to believe that that can’t be as secure as mailing a ballot through the United States Postal Service. The larger challenge is to actually bring our government into, not perhaps the 21st century but the 20th century. We are lagging so far behind and I want people to consider innovators, movers, shakers that are changing the face of business through disruptive start-up models and economies in tech that are taking media to new heights. They are using non-profits in ways that we have never before seen to not give up on politics. We need you, all of us there as well.

Well, that’s great. So final question is you, not long ago, were one of the youngest people running for Congress. You had in many ways a very successful campaign. You did not win the race, but you created a great brand and platform. What is next for Erin Schrode on the electoral front?

Many things. We launched the campaign seventy days before the primary election and I was quite realistic about the chances of coming out of the top of the polls. I laid out very clear metrics of success around redefining civic engagement, around reinvigorating a culture of public service and expanding the definition on who can be a politician while adding value to society, while talking about the kinds of policy issues we’ve been discussing, and what we achieved was beyond my wildest dreams. We came up six points short of advancing to the June primary. I am so proud of the movement that we built, that we were able to coalesce people with such an urgency, that we were boots on the ground up and down the district, the Northern California coast, while reaching tens or hundreds of millions with our messaging across the country and around the world.

That intersection of media and policy is where I feel we excelled so greatly. Getting people to care about issues they didn’t necessarily know existed within a matter of minutes. And I want to expand upon that, I want to continue to activate and mobilize people that translates to direct policy, lobbying, change, push other government officials. You haven’t seen the last of me. I absolutely want to run again. I don’t think it will be in 2018, we’ll see. But look out 2020. We have a movement to build, a generation, and a nation to take ownership over and lead and create the future that we wish to see.

Well Erin Schrode we appreciate you being in the arena politically and being present in things like Standing Rock and other critical issues. It is obvious that you are one of the people that is inspiring a new generation of participation and for that we’re grateful. And certainly we’re grateful for your time here on A Step Ahead.

Thank you for having me. Thanks for engaging people in these critical conversations. Ir’s going to take all of us for all time so I’m with ya.

Awesome. Thanks again.

What China Can Teach America About Smart Cities

Chelsea Collier is obsessed with smart cities. The Austin resident recently spent several weeks in China visiting different cities to see how they are using technology to work more efficiently. There she discovered things like a smog-sucking high-rise in Beijing and government organizations dedicated to building bridges between industry and government.

“Their process is very deliberate and streamlined,” Collier told Kish Rajan during CALinnovates’ latest A Step Ahead podcast. “But that’s because it’s a single party. They all march to the beat of the same drum.”

While there may be some appeal to that simplicity, the Chinese system obviously comes with its share of problems. But Collier was happy to focus on the positive and see inspiration in the work happening in China.

Her trip was part of her research through an Eisenhower Fellowship which she won last year. She’s looking all over to see what make some cities smarter and publishing her findings at Digi.city.

“I don’t think of some cities as dumb per se,” said Collier. “They’re just not as connected as they could be.”

Collier believes that cities should be using technology to engage citizens and to make services smarter. In San Diego, for example, the city is using an app to let people instantly report problems such as potholes and downed electrical wires. In her hometown of Austin they’ve created an app to help move excess food from restaurants and stores to people who don’t have enough to eat.

“How do we invite smart people in the private sector to help create these kinds of solutions?” asked Collier. “At the end of the day, we’re all in this together.”

Listen to the full interview here:

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A Step Ahead: Chelsea Collier

Hey everybody. Kish Rajen, Chief Evangelist at CALinnovates and welcome to the latest episode of A Step Ahead. We’re talking to Chelsea Collier who is talking about smart cities through her initiative, Digi.City. It’s a fascinating discussion about how innovation and technology can revolutionize the way that communities function. Basic infrastructure, basic civic services, and the way citizens can use technology to get involved in the communities where they live and work. Chelsea here brings a wonderful perspective and we were glad to have her on A Step Ahead. Chelsea Collier, hey, thanks so much for joining us on A Step Ahead, we really appreciate it.

Chelsea Coller: Oh no, it’s great to be here. Thanks for having me.

You and I had a chance to talk and you helped convene a panel in San Diego not long ago. A really great conversation that ensued there, where you brought together the public sector, private sector, people thinking about innovation policy, that was a really informative session.

Glad you enjoyed it, and my hope is to be able to put people in a room who may or may not always find themselves together in conversation. I think smart cities is a great platform to be able to do that.

Well, that certainly worked and it did, it brought very innovative leadership from the city government itself along with people on the business and economic development side. It was a rich conversation about how those public and private interests can align and how we can do important things in places like San Diego and beyond. I gather that’s what your work is, so tell us a little bit about Digi.City and what you’re up to.

Sure. Well, I’ve worked in a variety of different sectors over the course of my career. Public sector in communications, I worked for the governor’s office in Texas so had a little bit of public sector experience. I’ve worked in this tech and startup community, I’ve worked in social impact community, and all of that has felt phonetic over my career but I’m really excited that the topic of smart cities is a chance to bring all of that conversation together. I was really fortunate, I received an Eisenhower Fellowship in January of this year and I chose the topic of my research to be smart cities both across the US and also in China. Really, as a way to study best practices, see what was happening in the fields across both nations, and then use those practices to bring people together to have interesting conversations and to hopefully spur more innovation. I launched Digi.City which is a blog, it’s my personal blog, as a way to foster that conversation. I thought I can publish a Whitepaper in a year that nobody’s going to read or I can talk about it as it’s happening, which might be a little more messy but to me, messy is interesting. That’s the background of where I’ve been and what I’m working on and hopefully being of service to everybody, private sector and public sector, and the smart city spaces, we’re all trying to figure it out.

Well let’s get into that a little bit. Are most of our cities dumb in the United States? Tell us what that means.

I don’t think they’re dumb, per se, but it’s certainly not as connected as it could be. If you look at public sector and private sector, I think cities have really evolved in two different silos and that hasn’t helped anyone. People in the public sector, city staff and city leadership, they’re tasked heavily with serving their community but not always knowing how to engage citizens. Even the whole idea of a city council meeting as a place to involve citizens, most citizens and residents aren’t going to sit through a city council meeting, it doesn’t fit the way that we work and live. On the other side, in the private sector side, technology is moving so fast and it’s enabling this 24/7 connectivity in our lives to where we’re always on, we’re always connected, we’re always creating. I’m really hoping that smart cities is a way to enable technology to connect and bridge those two divided areas. I’m seeing that in some cities.

Are you talking about using technology as a means of reaching the citizenry and enabling them to be more civically engaged, or are you talking about city operations and the way the streets work and the way the water systems work? Help us understand where you see the opportunities for technology to be applied in our civic life.

That’s a perfect question and I’m really grateful that you framed it that way because it gets to the heart of the challenge and to the heart of the promise, I think. In San Diego, I was really impressed to hear about the Get It Done app. This goes to the point of civic engagement, really enabling citizens who are running around their city as a way to connect with how the city operates. The Get It Done app, as I understand it, is basically empowering every citizen and resident with their mobile phone if they see a pothole, if they see an electricity line down, if they see grounds that are unkempt, or something that’s not quite right, or something that’s really wonderful that they want to champion and cheer. They can snap a picture of it, upload it to the app, and then it fosters the conversation between that city department or that city employee and the person who’s recording the issues. That’s an example of smart technology and smart city technology in San Diego that’s doing that citizen engagement piece.

At the same time, your question about how a city operates, smart technology is absolutely critical to that piece of it. I learned a lot about what was happening with street lights and there’s a pilot program where there are sensors connected to the street light that helps them adjust the timing of the traffic lights in accordance to the traffic volumes. A dumb way to operate is somebody shimmying up the street light every two years and clicking how many people go underneath it as opposed to a sensor which communicates in real time what’s happening. If there’s congestion, it can adjust with its current reality.

Yeah, there’s so many great applications you could think of and as you may know, I served on my own city council in a small town in California for four years. I was coming out of the mobile phone industry that I had been in for 10 years and seeing this incredibly rapid evolution of new technologies that were changing everything. We were looking at how city governments function, whether it’s how citizens learn about or report potholes or how traffic flows or how street lights operate from a lighting and safety perspective, to how the trash and recycling gets collected and when and where. You could go on and on and on, all of these seemingly mundane aspects of our daily life in our cities that we take for granted, could and probably should be revolutionized by technology to make them more effective.

That’s exactly right. Yeah and it’s really fun to think about. Having been in the private sector and the public sector, I really appreciate that you have that perspective and can have compassion for both. I live in Austin, Texas, you know, we have such an engaged, super, super intelligent startup community here. Tech entrepreneurs who are priming employees to see a challenge and then fix it. They’re focused on how can we quickly escalate the solutions, and then you apply that to city government, which has been created in the citizen interest, and you can’t experiment in the same way. I think the cities that are unearthing better leaders in the smart city space are finding a way to meet in the middle and to rethink the silos that aren’t about immediate delivery of services, the trash and the potholes and the parks and recreation and those groups. But in thinking cross laterally and especially from a policy perspective, how do we become more nimble, how do we invite smart people in the private sector both in the corporate world and the startup world to help us create these solutions because at the end of the day, we’re all in it together so how does each city want to create the city that it wants to become.

Well, it’s such a great way that you phrased that, how do we invite that kind of talent and entrepreneurship and ingenuity to tackling what again, can often be these mundane but really important public problems. One of the things that we’ve worked on a lot at CALinnovates is around open data and I’m wondering if this is part of your work or the research that you’ve seen in places like San Francisco, San Diego, I’m sure in Austin and Boston and New York and other places. When the city government or the local government will make the data that they possess inside of all of their internal operations, when they’ll expose that and make it available for entrepreneurs to see that data, what often is produced are great new ideas, great applications, great tools that as you said, invite that ingenuity in creating whole new mechanisms around how we deal with important aspects of our daily lives.

Mm-hmm, and the important piece of it for the city is to really message what they’re doing with that data, how they’re managing it, and address the citizen and resident concerns that naturally pop up. It’s easy, I think in the lack of information, for fear to be produced. I think cities that are getting it right are really doing again, that citizen engagement piece where they say wow, I think we have a great opportunity here, we’re going to be capturing all this data because we’re putting sensors on street lights and cameras to make our city safer, all of these sensor, data collection points.

“By the way, here’s the department that’s managing all this data, here’s what was thought about, of course we’re worried about security and privacy and that’s our number one priority. Here’s how we clean the data and here’s how we use it.” Everyone is opting in because as private sector citizens, we exchange privacy for convenience all the time.

Yeah, we check that-

Every single, tiny-

That terms and conditions boxes all the time, right.

Exactly right, every time I try to get from here to there, I’m letting someone know where I’m going and I’m very happy to do that because it helps me live my life more efficiently. I think if the messaging is right and it’s inclusive and there’s a real conversation there, then we can do exactly the same thing on the safe front as well.

Well, it’s a great point you make and again, my experience at government at all levels is that communication is a very difficult thing to do. I think we are entering a very complicated period for government because I think for the reasons that you touched on, one, government is always going to be risk averse, I mean, it should be risk averse. These aren’t startup companies that are inviting risk because failure is part of the process. Failures in government have real consequences and so there’s a natural risk aversion to experimentation and innovation, right? We have to deal with that but the other piece that you mentioned also is that how do you get the citizenry comfortable, let alone participate in new models of engaging their government when the communication channels are old and often are not that effective. These are really vexing challenges right now.

Agreed and I think it’s the tech community that gets it on an entirely different level. In Austin, I think it’s in June, we have the ATX Hack for Change which is a civic hack-a-thon that is sponsored by the city, it’s put on by St. Edward’s University, and it brings all of the people in the tech sector and the broader community, everybody becomes a hacker whether you’re a designer or project manager, a coder, developer, teacher, whatever your role is. It’s this participatory engagement way that you can choose a project and hack the city. Not in a bad way but in a good way, creating an engaging project. That’s one small part of this solution but I think the more that we can talk about it and lovingly challenge cities to be transparent and support them, that they don’t have to have it all figured out and that they can ask for help and that the citizenry can rise up to meet that challenge.

What’s one of your favorite examples that you’ve seen or have you seen anything that really strikes you as a good example of where that kind of hack-a-thon or that engagement between the city and inviting in those entrepreneurs produced some new idea or some new approach that appears to be making a difference in that community?

Yeah, there was a project that came out of the hack-a-thon and I’m playing favorites here, which is a bit unfair. There are literally hundreds of projects that are so cool and we could talk for 10 hours about all of the great stuff but in the early years of the hack-a-thon, I think it’s in its fourth year, coming up on fifth year, there was a project that engaged folks to work with area restaurants around feeding the hungry and handling excess capacity from restaurants and grocery stores. That project was actually recognized by the White House and the leaders of that project went and presented it in front of the White House administration. I think that was two years ago but that’s the one that comes to mind as something that literally was started with a question, like why do we have all this excess capacity and hungry people at the same time? This doesn’t make sense, can technology be some part of the solution to bring people together? The program is still up and running.

Well, that’s a fantastic example. We certainly have seen that if there’s one thing the internet and good applications can do well, it’s find excess supply and demand and put them together in a more efficient way. We see through these new innovations, there’s challenges with home share and with ride share and new types of applications that are doing that really well. Consumers love it but it causes consternation. I think those battles will continue for some time but there you are raising an example of matching supply and demand, it sounds like it’s doing some pretty significant public good.

Yeah and you bring up a great point about the sharing economy policy, that was a big wake up call, I think, for a lot of people that you can’t sit back and wait for the city to unfold the way that you want it. It really requires participation from everyone. In Austin, we’ve had a lot of challenges due to a new city council that’s come on board, and ride sharing and a lot of the home sharing, Airbnb legislation was not what people wanted it to be. It was again, a huge wake up call where people said wait a minute, what do you mean I can’t rent out my home to Airbnb, this is Austin, we’re the founding city of HomeAway. What’s happening? What do you mean Lyft and Uber can’t operate here? It was a rally cry for engagement and that policy doesn’t happen by accident. Another piece that is really top of mind, at least for me right now but doesn’t get a lot of talk, it doesn’t get a lot of air time, is the whole idea around network capacity. We’re seeing all of the IOT, Internet of Things, all the sensors collecting data, that number is proliferating at a speed that none of us are truly conscious of but the numbers are staggering. The capacity for our networks to handle all of that volume is going to be a very, very big issue very soon.

Well, as I mentioned, I spent at least the first part of my career in the mobile industry and I’m old enough that I was around the first go around when we were building out the first generation of what we now take for granted as digital wireless networks. Now that was 1G where now we’re talking about 5G, which is what you’re alluding to, but when you talk to the telecom network providers, they’ll tell you about the amount of physical infrastructure, the number of the repeaters or the mini-towers if you will that need to get deployed. That number is growing dramatically because of the nature of how these more powerful networks need to function in order to accommodate all of the data that you’re talking about. Whether it’s the billions of devices being connected through the Internet of Things or it’s the intensity of video and other varied data intensive services that people really love and want. To your point, it raises a really big challenge at the local level to enable that infrastructure, doesn’t it?

That’s right and to educate the policy makers and also to educate the citizens and residents that this stuff doesn’t happen overnight. One of the things that I’m hoping and attempting to do through Digi.City is really cheerlead and champion cities who are having the right approach to that policy who are creating a streamlined permitting process that really spurs competition and encourages innovation. As opposed to what I hope doesn’t happen in many cities, which is four years down the road, people aren’t getting the connectivity that they want and then all of a sudden, everyone’s mad and not as connected as they could be. Cities will really lose out in that scenario. Trying to raise the profile of that conversation and really get people thinking about it and talking about it and looking at what policies have been successful so far.

Well, no kidding. In the few minutes we have left, you mentioned in your introduction that the work that you’ve been doing or the research is both here and in China. Obviously a very different form of government there where they can move much more deliberately at the government level with things they want to accomplish. I’m wondering, what is your experience in terms of the contract that may be happening there versus what you see in the US?

It’s pretty massive. All of my assumptions were challenged. I was there for four weeks and spent time in five different cities in China and the massive scale at which they think and deploy innovation is absolutely amazing. To your point, which is so well said, it’s very deliberate and it’s very streamlined. It’s a single party system and there’s an edict from the central government to the local government and associations and private sector and citizens, they all march to the beat of the same drum once that vision is communicated. The language that I kept hearing is, “innovation is the way that we will liberate citizens from poverty.” They’re incredibly connected and have I think 298 smart city projects active and another 300 in the works about to be deployed. They’re moving at a rapid, rapid speed and to some that causes fear. I think there’s a lot of hesitation around China but to me, I think it’s incredibly inspiring. We can learn from the advances that they’ve already created and then apply that of course to our system of government and what works here in the US.

Yeah and-

I think if we concentrate on the positive, then we can learn a lot.

Yeah, yeah, you know I mentioned to you when we met that when I worked for governor Brown, we took a ten day trip to China. It was a trade mission but also where the governor was actively working on climate policy with the Chinese government there at the national and at the provincial level. Governor Brown, of course, he’s got a very unique style as you know and he was openly talking about how much he admired at some level the speed and the determination with which big projects and big things could get accomplished in China. No California Environmental Quality act or regulations slowing them down. He of course was a bit tongue in cheek but he was honestly saying here in the United States, we could learn a little bit from them about how, as you said, they get a vision and they make it happen. Of course, they can learn quite a bit from us too in certain ways but he did acknowledge that there’s a lot to look up to in certain ways there.

That’s right and in my experience, again, I’m one person and I was there for four weeks so I’m certainly no expert on Chinese foreign policy or even their rate of technology but what I did understand is that they’re very transparent about the challenges and very determined, to borrow your word about how to leverage technology and innovation to address those challenges. I think it’s definitely something to keep a tab on.

Yeah. Well, back here at home, last question Chelsea, we’ve gone through a national election, we have a new president that’s talked a lot about infrastructure, some policy and potentially investment from the federal level. You’ve been now traveling the United States and seeing examples of what’s possible here. What is your level of optimism and enthusiasm about where we’re headed as a country towards this vision of deploying smarter cities?

In the smart cities space specifically, there has been a very decentralized approach in the US. It’s been every city for themselves, and the private sector has really led that conversation and then tried to apply that to cities. That has some success but I don’t think it’s as efficient as it could be. In June, the Department of Transportation issued a smart cities challenge and chose the winner in June through the Department of Transportation and Secretary Fox chose Columbus, Ohio as that winner. That was really the first time that there was a dialogue between the federal level and the local level of some challenge or even very light policy recommendations about how to go about implementing smart cities, smart city technology. I think we’ll see a lot more of that and that will happen relatively quickly because that conversation can’t happen in isolation.

I was at a conference and I was listening to the chief innovation officer of Chicago talk about when they’re looking at their infrastructure challenges and there are many, whether they were talking about roads or waterways or bridges or you can fill in the blank, whatever big system needs a ton of money to maintain it. They’re looking at smart cities and connected technology as sensors to gather information about what are the most vulnerable, and what’re the most efficient way to go about and deploy resources. They’re using that smart city technology to spend money wiser and more efficiently which in the big picture, means that they save money in the long term. I think that’s perhaps a subcurative answer to your question but I think we’re going to see a lot more collaboration with some vision from the federal level. It can really help to bolster the local level to make decisions smarter.

Well, I think that it’s a hopeful idea that we can find smarter ways to create collaboration at the federal and local level in ways that are also inviting more of that private investment. It certainly seems that that’s going to be the necessary combination to help us to look at all of our legacy infrastructure and the things you touched on before, how do we create a new chapter of civic engagement between the public and their government? Hopefully this vision around what the smart cities can be can stimulate the progress that we’re capable of and that we really need.

Yeah, that’s very well said, great.

Well, listen, Chelsea Collier at Digi.City, thank you so much for the work that you’re doing and we’ll be following your travels and the information that you’re sharing on your blog. We really appreciate you spending time with us here on A Step Ahead.

Thanks for the opportunity and for creating a platform. I mean, these are exactly the conversations that we should all be having and thanks for fostering it.

Alex Wilhelm, Editor in Chief at Mattermark

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A Step Ahead: Alex Wilhelm

Hey everyone. It’s Mike Montgomery here on the A Step Ahead podcast, and today we’re joined by Alex Wilhelm from Mattermark. Hey, Alex.

Alex Wilhelm: Hey. Thanks for having me.

Really glad you’re here. Let’s start by talking about you. Is that okay with you?

I never get bored with myself, so I’ll go ahead and say, “Yes.”

All right. What is Mattermark?

Mattermark is two things. On the business side, it’s a corporation that collects and processes a bunch of data on private corporations, that people like venture capitalists buy from us on a recurring basis, to help them do deals and that sort of thing. It has a history in journalism, the company was actually founded as an add to journalism by accident. Back in the day our CEO, Danielle Morrell, wrote a long series of blog posts over a month long period, and in one of those she ranked a bunch of portfolio companies of the VC firm Andreessen Horowitz. She ranked them by traffic, and Twitter followers, and so forth to come up with kind of a ranking of their portfolio. That became a product, that product became a company, and Mattermark’s been around for three or four years now. That’s kind of one thing. Then my side of the company is the publishing arm. A little old journalism shop that does coverage of the intersection of finance and tech. You want to think about this model in more of the real world sense, Bloomberg is a data company and a media company. We’re like the micro micro micro version of that, if you will.

Got it, so your audience is like VC’s, investors?

About four people and my mom, so a small crowd.

No I think that’s it’s odd to see a niche topic like finance and tech, and kind of their collision point become more mainstream. There’s so much money inside of Silicon Valley in the technology industry right now, it’s quite a broad thing to talk about it. So my audience goes from people that are interested in tech, people that are into tech, to people that fund tech. Also I think a lot of people that may invest into VC portfolios and so forth. I have a relatively savvy audience, if you will. I don’t have to do a lot of re-explaining of issues and topics, which is fun, but it also means that I do write for a more narrow audience. Back when I was at TechCrunch I wrote for a much more mainstream set of people, which means that you have different goals, but over the last, I guess eleven months now, I’ve gotten to focus on kind of one evolving story, which is the state of technology in America, and that’s been a real blast. I really feel like I’ve learned a lot. I hope I’ve done a good job. I can’t really grade myself, but it’s been fun.

I have a question for you. You spend a lot of time as most journalists do, on Twitter.

Yes sir.

How do you get anything else done, because Twitter seems to have the ability to take over people’s lives. How do you balance that?

Well it’s not a subtraction from productivity if you do it correctly. Often I will get off Twitter for an hour or two when I’m working on something that’s creative and I need to focus. If I’m writing or I’m editing I’m not usually on Twitter at the same time because I need to have kind of a singular focus, but a lot of the time I’m news gathering, or I’m reading, or I’m taking part in a conversation, and a lot of the things that I share on Twitter, that I see in Twitter, that I talk about on Twitter, find their way into stuff that I write about. That’s kind of the continuing conversation that feeds and helps me kind of hone what I think. It’s where you get a lot of good ideas, you see a lot of really bad ideas, you see hot takes, cold takes, medium rare takes, whatever.

You’re no different than Donald Trump?

I don’t watch Morning Joe on MSNBC and then tweet about what I saw and tank stocks, so no, not quite Trumpian. Also, his tweets are lame. His tweets are always about him. He’s actually really bad at Twitter. Imagine if he had no followers and tweeting out that same crap. I mean how ridiculous would it be. He’s only famous because he’s famous.

You’re kind of a pot stirrer, you like to throw shit occasionally, right?

I wouldn’t self-describe that way, I just think we’re all very snarky. I think that one fun thing about Twitter, kind of a recurring basis is that it gives us-

Is that-

Go for it, sorry.

I was just going to say, is there any regrets with some of that snark, or is it all just usually in good fun?

Yeah, I think it would be unfair to say none. Not as much as you’d think. There’s a lot of people out there who, either due to their job can’t say much though they want to, a lot of people there have a bias towards positivity, which I find very interesting. They say, they default to the rule that if you don’t have anything nice to say don’t say anything. Which is ridiculous. If you write, as you guys do, at least some, you understand that every sentence you put down is a declaration. If you’re always making judgment calls, why stop at the positive? Why not go on to the negative? I think the PR industry is so big and so powerful in a way, that you need an even more corrective dose of negativity just to get back to even. They’re paid to spin positive about everything. They’re much bigger than journalism, and they’re better funded, and they’re growing more quickly. The negative stuff is stylistic to some extent, I have to admit it’s fun, but it has a purpose too. It’s not just me, you know, I can’t say that in a podcast, what’s a polite way to phrase self-indulgent? I guess that’s a good enough.

That may be a polite way to phrase it.

Yeah I think we’ll just leave it there.

Yeah, your, all right, so you’re pretty young, are you a millennial?

I’m viscerally a millennial, yes.

Uh huh, okay, and you spent some time at The Next Web, right?

Yeah, I did.

What’s changed since your days at The Next Web? Like what, in terms of journalism, what’s different now than it used to be?

Well, I joined The Next Web probably, what, seven years ago, somewhere in there, and so back then I don’t think BuzzFeed was nearly as big as it is now, and BuzzFeed didn’t have the same high quality news team that it does now. BuzzFeed news is actually pretty good. Recode wasn’t born, BI wasn’t spun out and purchased. Washington Post had different owners. The Journal wasn’t doing as many buyouts. Newspapers sold more ads. The one thing about the journalism industry is that it continues to fall apart somehow and still exist. I don’t know how that keeps happening, but it’s strange.

What the future of newspapers?

I mean I was just at Starbucks for my 8:30 a.m., and I was reading the print copy of The Journal, and it only had two main sections to it. Made me kind of sad. It used to be a lot deeper. I don’t know man, there’s a lot of cool companies working on this. There’s a Dutch company that’s doing a lot of great work on micro payments for individual articles that I’ve covered actually for Mattermark, and that’s doing a lot of good work, but it’s a drop in the bucket compared to what’s been lost. I think as we all understand paywalls are not replacing declining ad revenues for papers. To me it’s a bad looking situation that won’t probably get better until the general public decides that it wants to invest in newspapers, or the government does. The government won’t, and people don’t seem to be willing or able to, so I don’t have any good news. Or even good hopes. Okay but same question back to you, what do you think the future of newspapers is, say in the next five years?

I think they’re a lot of smart people in the newspaper industry who are taking a second look at it. We’ve got Jeff Bezos who’s trying to revive The Post, and you’ve got some really smart people running the Times operation, and then I even heard that the Chronicle’s making money now, which is surprising given the fact that it seems like it’s not got a lot of news in it, so-

Well, I like The Chronicle, I have to protest. I have to protest big, my friend Owen Thomas is the Business Editor over at The Chronicle and I think he’s doing a very fine job. At least for in that desk.

That’s great, but it’s not a business newspaper. It’s a multipurpose newspaper. If you get past the great work of Owen, and you try to read the sports page or the front page, or the entertainment section, there’s not a lot left.

Are you a big fan of the entertainment section? Is that your go to?

No, I’m a sports fan.

Ah, okay, fair enough.

Yeah, yeah yeah yeah. But I’ll read it all. I’ve gone through a lot of years sitting on a Muni bus or whatever with some time on my hands, and something to read and I used to be able to fill that time well, and now it’s harder to fill that time because I can just blow right through it.

Yeah.

I guess there’s the beauty of this world that we live in now is that there’s a great mix, right? You can grab a newspaper, you can use your phone or whatever you want to read, anything from Mattermark to Reddit, wherever you get your news. There are more options, but this idea of micro payments per article is great. It may help everybody.

I recall the name of the company, it’s called Blendle.

Blendle.

Blendle, yeah, and they’re a big hit in Europe and they’re just I think in open beta here in the US. I’m hoping, just between us, that it does well, because if there’s a way to get more money from me to newspapers, that’s great. I’m a Post subscriber, which I’m actually pretty happy about, and I founded a company back in the day called Contenture. That was trying to do micro payments for online content, but way before it’s time, so it died. This is a space that I really care about, both intellectually and professionally.

I met somebody at a conference who was trying to do micro payments for porn. What do you think about that?

Well, given that it’s porn, why not do macro payments?

You know what? This is a topic that I find explaining working knowledge of will somehow out myself. I’ll just say that I think that’s there’s a number of online media formats that monetize at different levels, and pornography may be one of the more successful ones. Especially going back in the history of the internet, porn’s been at the forefront of technology. They were the first people to do online payments, video streaming, and so forth. It does matter, jokes aside, but given the advent of free porn, and here I am showing off my knowledge of the industry, I think that cat’s kind of already out of the bag as it were.

Right on. Okay, so let’s talk a little bit about journalistic integrity and direction. When you worked at TechCrunch, TechCrunch was owned by a variety of a different companies. I guess first AOL and Time Warner, maybe now Verizon. Did that limit you in any way shape or form? Did you feel bound by positions that your parent companies had taken?

When I was there it was owned by AOL and then my last six months were the Verizon acquisition. I was there towards the very tail end of AOL’s independence and then the first bit of its non-independence. The short answer is not even slightly. I never had any pushback. I mean really the first thing I did when I got to TechCrunch was cover the implosion of Patch, which was AOL’s micro, sort of hyper local news startup. I was a jerk, because it was a horrible product, and a horrible business, and it lost tons of money.

My wife is offended that you’re saying that. Offended.

I mean Patch is a delectable, delightful, delicious thing that should have been kept going. With Patch, whether you liked it or not, it lost a bunch of money and AOL couldn’t afford it. I joined TC and that was one of the first things I worked on. I’m sure they read it, but they couldn’t do anything about it, because they didn’t control at all the newsroom at TC. This is a pattern that kept going. The only times that I ever really interacted with AOL staff in the editorial sense was when I needed legal backup. If I needed to have something read of mine that was let’s say breaking then about lawsuits, and you want to have your lawyers read it to make sure you’re not over your skis, it’s great to have institutional level resources to lean on. In terms of day-to-day, or even just month-to-month or quarter-to-quarter operations, zero pushback. Which is why TechCrunch works, and that’s why it’s stayed around. If there was any interference from above like that the brand would die, because it would lose all of its voice. TechCrunch really is just a voice. The Times has more reporters, Bloomberg has more reporters, The Journal’s bigger. TC only exists because it still has it’s own, I forget can we swear on this podcast, guys?

Feel free.

Okay, TechCrunch still has that “Fuck you” attitude, and that really does stand out in the mix of relatively milk toast reporting we see. No, it was great, and I’ve got to give them points for keeping the AOL stuff as far out of the TechCrunch world as possible. The only thing that ever really showed up that was AOL was my badge to get in the office and my AOL corporate credit card. Otherwise, there was no real AOL influence whatsoever.

Is that why you’re not there anymore? Because you ran up that bill pretty heavily?

I may have been late on my expenses once or twice. I will confess that paperwork is not my forte. No, actually that’s the thing I miss the most is having, well that’s a different story.

For another time. For another time.

Yeah, I think for the podcast it’s off recording. No I left because I had been doing that job effectively for six years, TechCrunch and I needed a new challenge. Taking over an editor role and doing things like writing style guidelines and ethics policies and hiring freelancers, and schedules and so forth was a whole set of new challenges that made me break out of my writer shell. I think TechCrunch remains the best place to write if you’re covering anything related to technology because it has the most support and the most freedom.

At Mattermark though now you’re going to start covering technology policy, right?

I don’t see a way around it. Yeah.

Is that because of the confluence of the issues you cover, they just kind of make natural sense, or is it because of the craziness that’s happening in Washington and New York right now?

I don’t see a difference between the two answers. The disaster force hurricane that is descending upon DC in the form of the crypto-fascist Donald Trump is the reason I have to write about it. I have a link pulled up right here from Recode from I think yesterday, that reads “Net neutrality faces extinction under Trump.” All right, that’s pretty interesting. That’s a political story that involves regulatory policy that directly impacts everyone here in Silicon Valley. Trump is bringing these stories essentially back into my fold. I haven’t covered tech policy much in the last year, but I don’t see a way that I can possibly talk about the industry without mentioning it and working on those issues.

If Hillary Clinton were President Elect right now you wouldn’t be touching on any tech policy?

Much less. I know Tom Wheeler a little bit, we’ve met a couple times and I interviewed him in New York, and I asked him when we were on stage, I was like “Are you going to stay in your role?” He said “She hasn’t asked me to yet.” His point was that if Hillary won the election and asked him to stay on he might have, and we would have had a continuance at the FCC which would have had a relatively stable regulatory landscape. Now with Pai probably taking over, that’s my guess, thankfully if it isn’t abolished altogether, it’s going to be a disaster. You know and a bunch of people are going to fight against it and it’s going to become again a Silicon Valley story.

Disaster, that’s going pretty far right? I mean it’s not like-

More effective in your life, man, disaster is polite terminology for what I might call it. That’s a two out of ten.

We’ve gone through a really interesting four years with Tom Wheeler. I would argue that what he did was pass a lot of highly partisan issues down three-two party lines where there was no willingness to work with the other side to get to a point where there could be compromise so that if something disastrous like this happened, some of these policies that would be in place wouldn’t be so controversial. Right now it’s very controversial. What we did at CALinnovates is we tried to look for third ways, right?

Yes.

It’s not one way or the other, but let’s find a creative path toward a solution that works for everyone.

That was the first time we spoke, right?

Yep, yep.

Yeah yeah yeah, I recall.

I would argue that Chairman Wheeler didn’t take that path. He took the path of least resistance which is “I’m going to get what I want, and fuck everybody else.” Now what we’ve got instead of taking the CALinnovates way, which was “Hey on net neutrality we need legislation that we can lock into affirmative law. What we have now is a regulation that can be overturned.”

Mm-hmm.

It’s not law anymore. It’s really hard to change a law, right?

Yeah, the term after parliament has a place in our shared language for a reason. I disagree a little bit. I don’t think there was enough political will through the means you’re describing to actually get net neutrality done in any strong capacity other than the way Chairman Wheeler did it. I agree that that would have been a much better option if possible. I just don’t think that that door was actually unlocked, at least in this last cycle. This is going to sound kind of dumb, and I’m not a fan of real politic in the morning, but if Trump’s pick trashes it, it may lead to a response from tech on a submission scale to actually drive legislation. I’m not sure if that’ll happen, tech so far has essentially, as I think we’ll get to, rolled over a bit now that’s Trump’s in charge, but I’m hoping they’ll find some back bones. On this issue, I mean it is cut and dry here, at least among all the investors, entrepreneurs and employees that I talk to. I don’t know a single person in Silicon Valley on a personal basis who’s not if favor of strong net neutrality.

To me the third option is more of a political point as opposed to a functional way to approach the issue. Again, Ajit Pai is not going to pursue a third option either, and I think he will work against that. There’s political will on the other side of the spectrum here, to drive that change forward.

In a perfect world, which we’re pretty well aware we don’t live in-

Sadly.

Yeah, the new Chairman would look for that compromise, would look for four one or five zero, votes, right?

Mm-hmm.

We’re probably looking at another four to eight years of three-two party line votes.

Why do you hold four-one five-zero votes in such high regard?

Because that means that at least the other side is getting closer to what they want, right? It’s not just steamrolling the other side. Let’s look at net neutrality or privacy or any other number of NPRM’s that happened under Wheeler. The controversial ones were all three two votes.

Yeah, sure.

What that meant was that, and again arguments that CALinnovates made, was there’s uncertainty in the future. There’s uncertainty with a new President, how’s it going to all play out? Those three-two votes that were really national stories-

Yeah.

Wouldn’t be as big of an issue today, because they would have been handled differently if they weren’t these three-two highly charged votes. A four one, a five zero, and we’re not talking about net neutrality or privacy any more because every side would have gotten closer to what they wanted. We may be moving on toward different issues. Net neutrality passed, right? All the sudden Netflix backs away from it. Cloudflare says “Whoa, whoa, whoa, be careful what you wish for, we didn’t mean what we just said.” There are groups that have come out and said, companies that have said “Wait a minute, hold on. Strong net neutrality, yeah, define strong and how that works and what that means.” I think we’re getting into a world where we’re going to stop talking about what things mean and how they apply. We’re perhaps entering a world where it doesn’t really matter.

You know I guess your call for-

According to the decision makers. I’m not going to say it doesn’t matter, because obviously all these things do matter.

For sure. I think the argument for centrism which we see a lot among the New York Times columnists, that are always calling for some sort of middle pathway, presumes that the winning group, in this case Tom Wheeler et. al., could’ve found in their opposition, I guess, to use a polite phrase, some willingness to compromise. In my experience talking to the people on the other side of this issue, there was no political will there. Or to use the old joke, there’s no there there. I don’t know.

We saw a long concerted effort by John Thune and Bill Nelson to try to craft legislation.

Inside of the GOP. When Ted Cruz called it Obamacare for the internet, that’s not a position from which you can argue a middle pathway.

That’s also Ted Cruz who didn’t have a lot of fans in congress, right?

Are you saying Ted Cruz is unpopular?

No, I would never suggest such a thing, never.

It’s amazing to me. Ted Cruz actually makes me feel better because at least when I wake up every day, I have at least one friend somewhere. Ted Cruz cannot say that and that’s one up on Ted Cruz every morning before I even have breakfast. I’m still beating Ted Cruz because I have at least one friend. So I smile. That does help on grayer minutes.

That’s true. Okay, so let’s talk about anybody who has ever made more money than everyone in America meeting up with Trump and his transition team to talk tech issues. What are your thoughts on that?

This is one of those moments in which I get to lean on my elders and betters. Kara Swisher, probably the best journalist in technology, she’s writing a column again over on Recode, and the headline, which I’m just going to read for you is “As Trump will thin skin, let’s down his hair for tech, shame on Silicon Valley for climbing the tower in silence.” It’s a great piece, everyone should read it. It’s Recode, there’s no paywall, you can just jump into it. She is taking a harder line against Trump than other people are and she is being as strident as she should be, and she’s doing it in a voice that’s much more authoritative and better spoken than I could ever muster, so I’m kind of enjoying her as my hero, as I’m her acolyte in this.

I think that there is an inherent complicity among big business, which is not a pejorative, to work with administrations. Which is great, and I think that shows a lot of maturity to work with people you disagree with. Then there are certain cases in which any sort of compromise is a form of appeasement. You have to decide is Trump an actual fascist, or is he just an idiot. If he’s an idiot go talk to him. If he’s a fascist and a threat to democracy don’t. It seems that tech is trying to have it both ways, and not discuss the moral applications of their move. For me, I think it’s sad that this is happening, but at the same time I do understand it from the shareholder perspective why they might do it.

Tell me this, what’s the difference between this meeting with these tech leaders and Trump, and the dinner that Trump had with Mitt Romney.

Well I think they’re great analogies. Mitt Romney looked horribly uncomfortable and then got shafted, so what’s the difference?

Right.

I think a better example there would be the discussion he had with media executives a couple weeks ago, that one of the media executives said was like a firing squad. He essentially brought in the media and then shot at them, the whole bunch and called them out for calling him out for lying. If that’s the tone of this meeting, and tech sits there and takes it, then they don’t have the moral fiber that we hoped they did. I think inside this industry there is some optimism that its leaders are in fact creating more than just short term profits. That they’re building technology that will improve lives and drive long-term improvements to human happiness.

That’s a big issue that I think perhaps people out on the West Coast didn’t realize bothered the rest of America. Think about the fact that tech is seen as a bunch of elites creating products and platforms for the elite.

Mm-hmm.

Do you sense that that’s something that the greater tech community is going to focus on and rethink a little bit?

I don’t think you’re ever going to get the arrogance out of tech. I don’t think you actually really want to. Which sounds counterintuitive, but to be an entrepreneur is to be arrogant, because you’re saying “Here’s the world, it’s not good enough, I’m going to make it better. Or at least try.” Which is inherently a non-conservative statement. In a small “c” conservative way, not in a political conservative way. I do very much feel the point you make about how much technology and the industry can seem very odd to outsiders. Especially because all the stories they read are like “These tech kids, they’re on hover boards drinking green juice upside down in the office pool.” Or whatever. Which is not 99.9% of tech.

The hot tub, right? Yeah.

Hot tub, that’s what I was going for, yes. Upside down hot tub with a green smoothie, yes. Which Google has five of out here. I’m kidding. There’s a lot of money here, there’s no way around that. I think that if you look at the quality of life improvement that technology can bring to humans on a short term basis, I mean in the last ten years, smart phones, okay? Ten years before that, broadband internet access. Ten years before that, the internet. These are big things that are going to change the arc of human history, and are changing how politics works around the world and so forth. Yeah, people here can be pretty full of themselves, I just don’t see it changing, or there being really any force to change it.

Right on, okay, let’s talk about a couple issues here. Fake news.

Oh.

Is this real? What should people be thinking about when they hear about fake news?

Oh man. That is a huge question. Let’s start with some facts I guess. Fake news, which I think for this we can define as news stories that are completely constructed to be sharable on social platforms that have no basis in reality and are not designed for a political point but are designed to generate clicks in ads, is an issue. It hit a, I think an apparent peak around the end of the election cycle as we’ve all seen. It’s not as big an issue outside of certain bubbles so far as I can tell, and finally there are some ethical requirements that social networks should answer to involving fake news. I’ll clarify that slightly, because it’s an odd statement.

Facebook is a media company because they filter your news feed and they decide what you see. They’re making editorial choices about the products. While they do that, they are in effect a media company and should have an editor, a public editor, an executive editor or something, to help guide that process. If they just run a straight temporal based news feed, and not make editorial choices, not name trending topics and so forth, then I think they can get away with saying “This is not our problem.” While they’re an active media company that has editorial capacity, I think they have a moral requirement to keep blatantly fake news that is sold as news off their platform. It’s a big topic, it has a lot of different sections to it, but I think that we can’t let tech companies that are also media companies shirk half their responsibility just because they right a whole lot of code.

Let’s break it down. Is fake news an epidemic or an overreaction?

It’s a bad head cold.

You didn’t answer the question. Great, great answer.

It’ll pass, like you like.

Yeah I like that, I appreciate-

That’s the third option.

Okay, I can accept that. All right, so what about the idea of zero rating, or free data, or any variety of names that this zero rating process is given? On the one hand you have the argument that it’s great for consumers because it doesn’t affect their data caps, and they can use, enjoy, listen, as much as they want. On the other hand, you have the argument about competition, and the effect that it has on perhaps startups entering a space dominated by the big players. What do you think about this issue?

I would say especially in the era of increasing mergers among both content and distribution companies, in developed markets zero rating is an abrogation of net neutrality both in spirit and print, and therefore shouldn’t be allowed. The other side of that is, in developing markets where there isn’t capital to build out the same level of access, if zero rating and other forms of bent marketplaces effectively, can help people get online I’m in favor of it. Where internet access is hard, if this is the only way we can get people online, viva. In developed markets where that’s not the same issue, I think it should be privy to the same rules as wire line connections. I want to have my cake and eat it too, but here in the US, to bring it to a local issue, I think zero rating is a bad idea.

You don’t want your Spotify zero rated?

No. No.

At all. Ever?

I do not want Verizon to decide that Spotify over other music providers is the way to go because one, they won’t choose Spotify, they’ll choose Verizon Music. Two, I don’t think I want to see that-

Wait a minute. Wait, hold on, hold on. Who chooses Verizon Music? A show of hands on this podcast. Who even knew that Verizon Music existed?

It doesn’t, I was making a point.

Exactly. Here’s the other piece of this. I think the idea behind zero rating is that it’s offered to all comers at the same price, right?

If they’re zero rating for an entire category of things, so if my mobile provider wanted to say all music services are zero rated equally, that’s slightly different to me. That’s not picking a single service or supplier, that’s taking a genre, and I would have less problem with that, but I’d still be I think intellectually opposed to it. I do think that’s an interesting way to approach the issue.

Okay, that’s fair. All right, so let’s talk a little bit more policy and let’s get into the brain of Alex Wilhelm from Mattermark here a little bit more, which could be equal parts awesome and scary, right?

Okay, yeah, fifty fifty.

Yeah, fifty-fifty, let’s roll the dice here. Do you have any policy predictions for the first hundred days of the new Trump administration?

Oh, man. Well, policy in what sense? Do you mean policy in the technology sense, or policy in-

In tech.

I think that the only thing we’ve really got a good handle on is that he has no idea what to do with the NSA. He’s going to probably appoint people that will end net neutrality. I think those are the only two things we can pretty well know looking at what’s going to happen. He’s very unpredictable. I mean, say whatever you want about him, he does things on a very random basis, so I don’t want to over prognosticate, but I do think we have given control of our national security apparatus to the wrong person. As a privacy advocate in a small way, that terrifies me. Those two things are huge. Even though there’s just two on the list, at least in my mind, I’m scared. Same question to you. Are there things that I’m missing?

I think it’s going to be interesting to see how the Trump administration deals with immigration. I don’t know if that’s a first hundred days issue, but it was a hallmark of his campaign, it talked about immigration in general. I know that most tech immigrants aren’t rapists and murderers. How does that get dealt with? I don’t know the answer, but it’ll be interesting to find out how that-

What’s your stance on H1B, and high school immigration?

My stance on H1B, from a personal perspective is the more the better.

Sure.

I think the US needs to be a magnet for pulling in the best and the brightest minds that we can, because they come here, they work at different tech companies, perhaps they fund a startup. The last thing we want to happen is for them to come over for a short while, create a platform that’s meaningful and creating jobs, and then you know what, they’re done. They’ve got to leave.

Right.

They’ve got to take that company somewhere else, they’ve got to take it to India, China, wherever. This country should be the place for the best and the brightest in tech, and we should open those walls and break down those barriers. Comprehensive immigration reform, I don’t know if that’s ever going to happen in the Trump administration, but I’m hopeful, and perhaps maybe the Peter Thiel principle comes into play. I guess we’ll see how much of a voice he has with the administration.

What is the Peter Thiel principle?

His existence.

Ah yes, it’s Peter Thiel’s corporeal, okay, all right. What’s your take on Peter Thiel by the way, that’s a good segue. What do you think about him?

What do I think of him? He’s obviously very smart.

Mm-hmm. Now who’s not answering the question?

Yeah, right? That’s my answer to the question. He’s obviously very smart, I’d like to go to the horse races with him, he’d pick the right pony. Knowing that he’s a Libertarian, knowing that he’s gay, I think there’s a sense that he’s turned his back on a lot of the people who not only rose up through the ranks with him, but people that he works with, people he invests in, I think there’s probably a lot of distrust right now.

Yeah. Also a lot of confusion, if you will.

Sure.

That’s been a notable thing. It’s also been really interesting to watch, and this is just as an observer. I’m not taking a side here. To watch how Y Combinator, the well known startup incubator and accelerator here in the valley that he is associated with, how they’ve handled this, and how they’ve tried to find a way to make their own individual political beliefs known, especially Sam Altman who’s roughly in charge of it, and also keep Peter Thiel in the fold somewhat. There’s been a lot of fire brand complaints about that, and again, and I’m not taking a side in this paragraph, but I think it’s driven a really interesting conversation among at least my peers around here, about what is an appropriate response. That comes back to what we said earlier which is “Is Trump a normal event,” in which case talking to and with his administration makes sense, or “is he a large enough threat that that will be collusion as opposed to opposition?” I don’t know I’m really excited to see how tech handles the next couple years.

Let’s say you’re walking down a dark alley on Friday night, and you walk past Peter Thiel. What would you say to him?

Can I have some money?

After that.

That would be my first thing.

How much would you ask for?

I don’t know about twenty bucks. I don’t want to owe him anything. It’s a cool question but I mean let’s rephrase it, slightly if I can, if we were having like dinner, so I had a little more time and it wasn’t creepy and rainy in the back alley, I would be really curious to get a better understanding of some of his politics. I would love to get into his mind a little bit and listen to him talk at length in a comfortable setting for him. The speech at the RNC was a bit brief. I’m really trying to get my head around what he thinks. I think that he is very much in a political mindset that I was when I was younger. I don’t say that as a slam, I haven’t been in the more hard core Libertarian head space for a while.

Let’s rephrase the question even a little bit more. If there was one thing you could ask him to do on behalf of the tech community, what would it be?

Ooh, that’s fun. I think I have an answer. This may not be my final answer, but it’s a good one.

Okay.

There’s so many things you could ask him to say. I think on behalf of me and tech in general I would say, “Take the message to the government that there is no middle option on encryption. That if they are forcing back doors and so forth into encryption, it will be inherently weakened, and we will all be under assault from foreign actors. Encryption is binary in how it works, and we must have strong encryption, or the internet as we know it does not work.” I think the internet, ecommerce and all that stuff is very important, and so I’m in favor of strong encryption, and I think that maybe given that he has the ear of Trump, he could pass along that message. That would be, at least a good answer, I don’t know if the best one, but it’s got to be top ten.

I think that’s pretty good. With that Alex, let’s wrap it up. A couple important things for our listeners. One, how do we find you on Twitter?

I’m Twitter.com/Alex. A-L-E-X.

How did you actually get Alex, where you like the first Twitter user of all time?

Nope, I bought it off a guy in Mexico in 2008.

For how much?

All the money I had at the time which was $60 in my PayPal account.

That is really impressive. What should we be looking for from Mattermark here in the coming months, anything exciting that we should be aware of?

Yeah, a couple small things. One, it’s the end of the year so we’re going to be taking a really long look back at all the venture capital cycles we’ve seen this year, where all the money went essentially. All the bets that were laid. We’re going to take a look ahead at the IPO market, and keep reading because we’re going to start doing more posts on tech policy as this all starts. This conversation is effectively preamble to the next four years. If in the first hundred days stuff goes down, as it were, we’ll be covering that too. I hope we do a good job and if we don’t, shoot me an email. It’s in my Twitter bio, and I will hear all your complaints.

Awesome, well Alex thanks for taking the time to join us on A Step Ahead and we look forward to agreeing with you, disagreeing with you and locking horns over the next forever.

It’s going to be a blast. Fries are on me.

All right sounds good. Everybody give Alex a follow on Twitter, and stay tuned for the next A Step Ahead.

VC Tech Insider: Nation Will Thrive When Middle America Gets Its Fair Share

Ronald Klain is executive vice president and general counsel at Washington, D.C.-based venture capital firm Revolution.

Much of Silicon Valley may be mourning Hillary Clinton’s loss to Donald Trump last month, but at least one tech insider believes Silicon Valley itself helped hand Trump his victory.

Economic anxiety outside of the technology centers was a major factor in Trump’s victory, says Ronald Klain, executive vice president and general counsel at Washington, D.C.-based venture capital firm Revolution. When voters heard Clinton talk about adding jobs in clean energy — an industry tied more closely to California and New York than to any part of the Rust Belt — they felt excluded. Their wariness may well be justified, according to Klain. “We bear some responsibility for this in the sense that the tech community has largely been focused on funding companies in just three parts of the country,” Klain said during an interview for CALinnovates’ “A Step Ahead” podcast, adding that those areas — Silicon Valley, New York and Boston — receive an estimated 75% to 80% of all venture capital funding in 2015. “This industry hasn’t done a good job of funding growth and innovation in the other 47 states, and it’s time to change that.”

How? For starters, Revolution has a program called Rise of the Rest, which invests primarily outside of Silicon Valley. Twice a year, the firm rents a bus and visit places such as Ohio, Indiana and Michigan to hunt for promising startups that need money.

“Silicon Valley is a national treasure; it is a global resource,” says Klain. “But we can’t have a country where only one or two or three parts of the country are thriving.

Listen to the full interview here:

Like what you hear? Subscribe to A Step Ahead on iTunes.

A Step Ahead: Ron Klain

Hey, Kish Rajan, Chief Evangelist at CALinnovates, and welcome to this addition of A Step Ahead. We’re so lucky this time to be joined by Ron Klain, who is a long-time veteran of many presidential administrations and presidential campaigns. He is one of the smartest and most respected minds in all of Democratic politics, and now he works for Revolution, a venture capital firm investing in the businesses of tomorrow.

As you’ll hear, Ron has tremendous insights on the outcome of the election. The President-elect’s proposed infrastructure program and some of the pitfalls, and really what the future of tech looks like. It was a tremendous conversation. I hope you’ll enjoy it. Ron Klain. Hey, thanks so much for joining us on A Step Ahead. We really appreciate it.

Ron Klain: Thanks for having me.

As we record this, we’re still looking at the aftermath of the presidential election both in terms of what contributed to that outcome, and now as the new Trump Administration is coming into focus, in terms of its people and priorities. We’re watching very carefully the steps that are being taken, so I’d love to talk about that a little bit with you.

Right off the top, you just recently had an op-ed piece in The Washington Post where you talk specifically about the infrastructure program or at the least the concept that came out in candidate Trump and now President-elect Trump’s discussions of priorities. You warned that program, at least as he’s talking about it, really could be a trap for the country and particularly Democrats. What do you mean by that? How might that be a trap and what is your perspective there?

Well, thanks, Kish. Sure, I think we have great infrastructure needs as a country. We need to rebuild our roads, our bridges. We need to make sure every American has access to broadband. We need to improve our airports. We need to do all of these things. It’s not a question of whether or not we have infrastructure needs. We do. The question is, what has Donald Trump as a candidate for President proposed as the way to address them?

The plan that he put out in the campaign, a plan that was written by Wilbur Ross, the man he nominated to be the Commerce Secretary, now, the Ross plan basically provides a series of tax cuts to private sector investors to invest in for-profit infrastructure projects. The problem with that is this. First of all, the most pressing infrastructure needs we have are not for-profit infrastructure projects. Things like pipelines and utility systems, which are for-profit. Our biggest needs are things like roads, and water systems in places like Flint, and bridges that don’t charge tolls. That’s where we need the help, and the Trump plan does nothing for that.

Secondly, because the tax cuts can be used for projects that have already been planned doesn’t mean necessarily we’ll get any net increase in infrastructure. No net increase in jobs. People could just take the tax breaks that the plan offers and use them to give them even greater profits on the projects they already planned to do. That’s the second problem.

The third problem is when a version of this was proposed in the past it’s been loaded up with anti-labor, anti-environmental provisions that really just splinter Democrats, help some working people hurt other working people. That doesn’t make a lot of sense. I think when you look at the Trump plan, it is addressing a need we have, but it’s addressing it in a way that will not work, that will make the rich even richer and that won’t really deliver the kinds of infrastructure projects the country needs.

Well, that’s a pretty serious indictment. There are a lot of problems in that to be sure. Not to repeat all of that, but certainly the idea that significant tax breaks could be going to projects that are already planned, that wouldn’t stimulate new infrastructure, would not create new jobs, but only would end up being a financial windfall to people that have already committed to investments. That’s obviously quite troubling, and then really the last point that you made, that if it comes at the expense of not only potentially no growth and projects but also creating leverage to inhibit the types of labor protections and environmental protections, boy, that thing really could end up being a bad deal for America.

I think it would be a bad deal for America. Sadly, it would come at the expense of the kind of infrastructure plan that we really need. The kind of infrastructure plan that Secretary Clinton, for example, proposed during the campaign, which was a plan that made the investments we need in roads, and bridges, and infrastructure, and broadband, and the other kinds of basic fundamental needs we have as a society, and did it by actually raising taxes on the wealthy to help fund these projects. That’s the right way to do it. Giving tax breaks to investors is not going to get the job done.

I think the thing that is so troubling, and I guess a real challenge, and I guess, hence, you’re stepping out and wanting to create a warning to not go too quickly to be in support of this program is certainly so much of the campaign was about the state of the economy, and people’s economic anxiety, and a real concern about jobs or a lack of jobs that are out there and growing in places around the country. This plan, I think, is at least at a high level being built as a job creation plan, and you, of course, we’re involved in a real stimulus program that was about building projects and trying to put people to work. This seems like it would stand in real contrast to those efforts.

No question about it. Look, I think that good infrastructure programs can create jobs. I want to come back to that in a second. A program that just simply gives tax breaks to investors for projects that may already be planned, may already be about to launch anyway, will not create net jobs or may create very few net jobs, so I think there’s a big problem with that. The second issue is people need jobs and people live in places. It’s not clear that if you fund for-profit infrastructure projects, that if it even does create jobs, will those jobs be in the places that jobs are needed? The single biggest thing that Trump’s plan would fund would be pipelines probably because those are a kind of for-profit infrastructure project that the plan seems to envision. Pipelines are mentioned several times in the text of the plan.

Think about that. First of all, do we want more pipelines or not? There’s a big debate about that around environmental issues. Secondly, the pipelines are largely built in remote areas that may not be the places where people really need the jobs. In terms of getting jobs to the people who need jobs, building pipelines through wide open spaces may or may not be a great job creation program.

Yeah, no kidding. Well, it’s a really interesting perspective that you’re bringing. At CALinnovates here, we talk a lot about innovation in technology broadly. I’m wondering, one of the things that we certainly aspire or would love to see in any kind of infrastructure program is thinking about how new innovations could work alongside larger infrastructure projects to create 21st-century infrastructure that is smarter about transportation, smarter about utilities, smarter about energy conservation in ways that are both good environmental practices, but good economic stimulus because it’s catalyzing the growth of whole new sectors of the economy. We would love for that to be the case in a large-scale infrastructure program, but I get a sense from you that you have some doubts about whether that would actually be the result of what Donald Trump is talking about?

Well, I do. He was very critical throughout the campaign of a lot of the Obama Administration’s clean energy programs, a lot of the kinds of investments that have been made in wind power, solar power, other forms of clean and renewable power. Donald Trump was very, very critical of all that, so it’ll be curious to see where he winds up as President. We do have a lot of needs in this country. There are a lot of ways to create great jobs, high paying jobs in the clean energy of tomorrow. That was a high priority for secretary Clinton in her campaign, and we just can only hope that it will wind up being a priority of President-elect Trump. It hasn’t been yet, but I guess we can hope for the best.

I would love to talk about job creation broadly for a moment. It does seem, certainly, when you do these election postmortems there’s a lot of things that contributed to the outcome that we got. Clearly, economic anxiety in places that aren’t the innovation and technology centers was one of the major factors. You look at how successful President-elect Trump was in the rust belt where traditional industry has been the backbone of that economy and it’s been waning. They seem to look at places like California, like the Silicon Valley, and feel that type of technology is ivory tower. It’s kind of behind a wall that they can’t reach. It seems that there’s a lack of trust around where so much of innovation and technology’s headed. I’m curious as to your perspective on how pervasive do you see that point of view and what do we do about it? Because it certainly seems that we’re going to have to embrace technology if we are going to grow a new 21st-century economy.

Oh, I think that all of us in the tech community, though I work here at Revolution, we’re a venture capital firm that invests in tech firms. We bear some responsibility for this in the sense that the tech community’s largely been focused on funding companies in just three parts of the country. 75%, 80% of venture capital in startups in venture capital is just in Silicon Valley, New York City, and in the Boston area. This industry hasn’t done a good job of funding growth and innovation in the rest of the country, in the other 47 states, and it’s time to change that.

This is a big program we believe in here at our firm. At Revolution, we have what we call “The Rise of the Rest,” and so almost all of our investments are outside of Silicon Valley. We believe there are a lot of great companies in the rest of the country. In fact, twice a year we rent a bus, drive through places like Ohio and Indiana, Michigan, Wisconsin, and we look for forgotten startups in these areas. We invest in those startups because we think that there are a lot of great people starting great business outside of Silicon Valley. It’s time for the industry, the technology industry, the investment industry, the entire ecosystem that supported the great success of Silicon Valley to look at the other 47 states, and to look for opportunities there, and to help grow the economies there.

Silicon Valley is amazing. It is a national treasure. It is a global resource, but we can’t have a country where only one, or two, or three parts of the country are thriving. We can’t be global leaders with only success in one, or two, or three parts of the country. There are super talented entrepreneurs in the rest of the country. They need investment. They need support. They need help. That’s really where our future lies.

Well, that’s really interesting. Why has it been, that statistic that you cited, 75% to 80% of the venture capital has been concentrated in those three states, those three major tech hubs that you’ve talked about? I’m curious as to what’s driven that deep of a concentration of investment in so few places and then how do we change that? How do you create financial incentives or otherwise to do what you’re talking about, which is to spread it more broadly?

Well, look, I think that these are kind of virtuous cycles, if you will, and highly concentrated cycles. That’s the nature, I guess, of the way we are as people. I think it also contributes, frankly, to a lot of the lack of full inclusion we see in tech and in venture capital. It’s basically people investing in places like them, people like them. It becomes very much of a closed circle. It’s not a surprise to me that someone in the middle part of the country looks at that and says, “That’s not going to create jobs for me. That’s not going to help people like me.”

It’s interesting, when we go and we invest in these cities, we invest in places in North Carolina, and Ohio, and Michigan what we find is a lot of great companies. Because since there isn’t as much capital chasing them from an investment perspective, we are able to do deals with better valuations. It’s often cheaper for the startups to start in these cities. They can hire talent at a more affordable price, and the cost of living is better in these places. We also find more female founders. We find more founders of color who aren’t locked out of the closed ecosystem that Silicon Valley often is. We find more diverse startups in terms of who their founders are to fund in these other places.

I think there’s a lot to be said for…again, I’m not trying to take anything away from Silicon Valley. It’s an amazing place. There’s obviously great companies, but there’s a lot to be said for what’s out there in the rest of country and what it would do both our country, for our economy, for our society, and for the tech VC community to look out there and to see what we can support.

There has to be the fodder for these types of startups all around the country. You’re right, there’s no question that Silicon Valley is sort of the nature of these virtuous cycles, as you’ve said, where talent wants to rush to the Silicon Valley because that’s the only place. I guess it’s the old Willy Sutton line. “You rob banks because that’s where the money was.” Now I would think and would hope that if others follow suit with what you’re saying they can discover that there’s all kinds of brilliant ideas, wonderful new concepts, wonderful ideas for new technologies, new companies all around the country. You don’t have to go to the Silicon Valley to find that stuff.

That’s right. Look, there are people who are graduating every day from colleges and universities all over the country. They want to stay in their communities. They want to start businesses with the people they went to college with who are also in those communities. They can hire teams in those communities. They can use a lot of the recent innovations to build virtual teams, cloud-based services, and sourcing talent from other places over the internet and whatnot to startup companies without moving to Silicon Valley. As I said, if they can get capital they can often build a team less expensively, rent space less expensively. All the things that make business very expensive to do in Silicon Valley can be a little bit easier in other parts of the country.

We just took our “Rise of the Rest” tour to Omaha, Nebraska. We found some great startups in Omaha, Nebraska and some great midsize and growing companies in Omaha, Nebraska where people leave the universities there. In particular, University of Nebraska. Great engineering backgrounds. Very talented people. Start great companies. Want to grow them there. That’s true in a lot of midsize places all over the country.

Finally, on this topic, and then I want to turn to politics maybe for just a couple more minutes before we let you go. It also seems to me, or a hope would be that by encouraging this kind of entrepreneurship and business development in places all around the country, what that could do is apply technology to a whole range of subject areas and not just the development of cool applications or cool gadgets that are driving a lot of what we see in Silicon Valley, which is interesting, and fun, and creating lots of wealth. How do sort of modernize traditional systems? Whether it be agriculture, or energy, or water, or other things that are sort of basic elements of our society that could benefit from refreshing or renewal by the type of folks that you’re seeing in Omaha and other places I would suspect?

Yeah, Kish. I think this is right on. I think it’s right on in two respects. First of all, there are regional specialties where startups can really benefit from that. Saint Louis is a great agricultural hub in the United States for a lot of reasons. Seeing a lot of ag tech and food tech startups in Saint Louis is good in every single way. One, it’s great to start a business in that space in Saint Louis because there’s a lot of expertise in the area. Two, starting such a startup in Saint Louis means you’re going to help revolutionize the incumbents in that area. That’s true for food in Saint Louis.

We did a “Rise of the Rest” stop in Nashville. We found a lot of people trying to use all kinds of technology to change the music industry in Nashville. Every region has these specialties. We’re investors in a company call Shinola, which is trying to bring some new forms of manufacturing to downtown Detroit and put people to work manufacturing things in the heart of Detroit. I think there are these local cultures, local specialties, and I think that matching those up by community can be very helpful in terms of the talent that’s there and the culture that’s there. It can disrupt and improve existing incumbents, make big companies more innovative themselves. There’s a dialog, kind of an interim process between the incumbents and the startups in a community. That can be very helpful, which leads to the second point, which is a lot of this regional-based startup idea centers around having these incumbents be the reference clients for startups. When we talk to people in the startup community, of course, it’s a challenge to find talent. It’s a challenge to build your company. It’s a challenge to find capital, but often, the really critical barrier is, can I make a first big sale? Can I sell my thing to somebody? Can I get someone to buy my thing?

Having startups in communities where there are big incumbents in the same space that often provides that critical, critical customer. Will Monsanto in Saint Louis buy ag tech from ag tech startups? I think that having this kind of regional-based strategy can really be good for all elements of the entrepreneurial ecosystem.

Well, it sounds vital if we’re going to get to a place where we’re truly getting folks all around the country to see, and embrace, and leverage the benefits of technology and not see it as something to be worried about or, frankly, leveraged against, which I think in my view was just too much of what happened in the election. I appreciate your point that folks that are in the technology ecosystem bear some responsibility in helping to change that understanding and that perception in reality of what technology can really mean to us.

Look, I think bearing responsibility may be harsh, but I think the point is we all should understand that we’re all in this together, and that there are opportunities for the tech community if they reach out to the rest of the country. That will also change our politics in a more positive and healthy way.

Turning to politics for just another minute, you’ve been one of the great leaders in the Democratic party in our country now for some time. For those of us that are of that persuasion, thinking critically about what happened here, building this type of economy going forward that you’re talking about, I’m wondering if you see some challenge from within. Things around how organized labor, for instance, which is in such a critical and vital component of the Democratic party, but where is the willingness there to engage in this type of change? I might look at the education sector and ask the same question. I’m curious as to your view of what types of internal changes might have to happen to unleash the type of new economic era that I think you’re touching upon?

Well, look, I think that we have a lot of priorities as a country, and certainly, we need to do a better job on education. I still believe passionately we need immigration reform, even though I know immigration took a hard hit in the campaign. We cannot win the global battle for talent if this country educates hundreds of thousands of young people from around the world and then proceeds to send them home when they want to start jobs and create wealth here in the United States. That’s a mistake.

We need to invest in our infrastructure. That’s a critical need. Both our traditional infrastructure, and as you talked about earlier, give some of the new forms of infrastructure. We should have the best broadband in the world here in this country. We should have the best internet in the world in this country. That’s a critical part of our global competitiveness. Find ways to promote job creating capital formation. I think we have a lot of needs.

I have to say, I was a little disappointed. I know I’m a partisan, so you can take this with a grain of salt, but I was disappointed to see when President-elect Trump named his group of business advisors, his council to advise him on jobs. There wasn’t a single executive from the tech sector on that council. There were executives from Wall Street. There were executives from big industrial companies, but no one from technology, no one from venture capital, no one from social media, and no one from any of these new economy sectors. That sends a bad signal. I think we’ve got to obviously invest in our traditional legacy businesses here in America, but we also have to invest in the things that are creating jobs of tomorrow. Hopefully, the President will listen to people who are from these rising economic sectors in the future.

No kidding. It really begs the question if in his mind making America great again means that we’re going backwards to a time when the economy just looked and behaved differently, or if it actually means renewal, which is to build on what’s good, but to try to modernize it. I think by that measure of who he’s surrounding himself with so far, sadly, it looks like more of a backward looking approach to what the economy can or used to be.

Correct. That just seems to be highly unlikely that’s going to succeed. I don’t think we can go back to the America of the 1950s. I personally don’t want to go back to the America of the 1950s, but even if someone wants to I don’t think it’s possible. I think we have to find a way to really embrace what’s succeeding in our economy and then make sure it’s more widespread, more evenly shared, more evenly distributed, has more people with access to it. That, to me, seems like the best way to create jobs and growth for everyone.

Finally, finally, I always try to end on an optimistic note. Despite these present challenges that we have and the political disagreements and debates that are obviously going to ensue, what are you seeing out there through your work and revolution, and what you’re seeing on the political landscape that never the less gives you hope or makes you optimistic about what’s possible?

To go back to what I said a little while ago, Kish. I think it is interesting to me that as we travel the country of evolution, we go to some of these places that most people in tech don’t think about, midsize cities in the middle of the country, in almost all of them you find really enthusiastic, really energetic entrepreneurs. It’s encouraging in a number of ways because a lot of these entrepreneurs outside of Silicon Valley not only have all the same energy, and intensity, and enthusiasm that they have in Silicon Valley about the products they’re building and the teams they’re assembling, but they also really often have a real dedication to their own communities. To making these a better place to live. To really growing and revitalizing cities in the heartland of the country.

They often have a dedication to focus more on job creation. I think too often in Silicon Valley it’s almost a badge of honor that you can create a billion dollar company and employ no people. I think that you see out in the heartland people are really focused more on startups that create jobs, that growth, and that often real focus on a double bottom line. A real focus on the social impact of what they’re doing. When you talk to these entrepreneurs you hear so much enthusiasm about how their product will make their communities better, how their product will make the world better. How their products help the environment, help with people’s healthcare, help with education, help with these pressing social needs. I see a lot of really energetic and enthusiastic people out there who want to make their communities a better place, who are looking for some help to do that. There’s a lot of great people doing great work out there in the country if we all just give them a hand.

Well, listen, Ron Klain, the work that you have done for some time through politics in the public sector and now the great work that you’re clearly doing at Revolution, you have been and continue to be one of those contributors making a real difference across the U.S. We really appreciate the work that you continue to do, and I’m very grateful that you took a few moments out of your schedule to talk with us here on A Step Ahead.

Great. Thanks, Kish. I appreciate it.

Welcome To The Resistance: Assemblywoman Lorena Gonzalez Prepares To Fight Back Against Trump

Assemblywoman Lorena Gonzalez is not going to take Donald Trump’s presidential victory sitting down. The California state representative has spent her career protecting the rights of the many immigrants who live in her district (the 80th) south of San Diego. She’s not about to let an anti-immigration administration trample on those rights.

“California is a laboratory of the left, and we’ve shown you can move forward with a progressive agenda and it will work,” she told CALinnovates Chief Evangelist Kish Rajan during an interview on the podcast “A Step Ahead.”

Although she views Trump’s plan to build a wall as mostly symbolic, she’s still worried about what his actions will mean for people such as the Dream Act kids, who willingly handed over their parents’ addresses (even though they are here illegally) to secure their own visas. Now the government has that information and may use it to deport people.

“They’re scared the government is going to break up their families,” she said.

Gonzalez also plans to fight for people in the service industry. While she acknowledges that the technical marvels that employ so many people in Silicon Valley are costing jobs in other parts of the state and country, she believes there’s still hope. Automation doesn’t mean an end to human workers — it means people will still need to operate and service machines and provide some human contact in settings such as stores and salons.

“You could have a robot cut your hair, but there is a social aspect to the service economy,” said Gonzalez. “We don’t talk about that a lot.”

To prepare the workforce of the future, Gonzalez believes we also need to rethink education. The idea of everyone going to a four-year college is a lofty one but may not be realistic or necessary, she says. She would like to see more apprentice programs, not just in tech but in industries like child care and health care.

“Going to college and studying sociology might not be the best path for everyone.”

Listen to the full interview below:

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A Step Ahead: Lorena Gonzalez

Hey all! Kish Rajan, Chief Evangelist at CALinnovates, and welcome to this edition of A Step Ahead.

Lorena Gonzalez has become one of the rising stars of the California State Legislature, and as you’ll hear in our conversation, she is a proud progressive leader, part of what now is being viewed as the “California Resistance” to the new incoming Trump administration.

She’s passionate on a whole host of issues, and I hope you’ll enjoy the discussion that we have.

Assemblymember Lorena Gonzalez, thanks for joining us on A Step Ahead. I appreciate it.

Lorena Gonzalez: Thank you for having me.

Yeah, it’s great to be here in beautiful downtown San Diego. Any chance to come down here is always nice.

Yeah, people don’t usually complain about having to come down to visit.

No. No, no, this is not tough duty.

Nope.

So listen…as we record this, we are still in the immediate aftermath of the election of President-Elect Trump. We are seeing him make some very key appointments, or at least indicating who he wants to appoint to important positions.

I’d love to unpack that a little bit, and talk about the reaction that you all have, just in the California State Legislature…is it fair to say that, in California, welcome to the resistance? Is that the way you all are seeing it up there?

I think it’s clear there are two things. One, we’re going to ensure that we protect Californians…every Californian, from any kind of atrocious act by our federal government. You have some, I think, really progressive people who probably never thought that they’d be waving the banner of federalism and state rights…but suddenly it’s become very important.

But you also have California. And it’s, kind of, the laboratory of the left, if you will, and we’ve shown in recent years that you can move things forward, progressive agendas…and it can work.

Right.

We’re doing well in this state. There’s always going to be problems, but we’re doing very well. And I think that you’re going to see us continue to show that it.

It’s going to be more important than ever, because eventually, we’ll get out of this nationally. We’re not going to be stuck in a…kind of a, Trump America…I don’t think, for more than four years.

Yeah.

Definitely not for more than eight.

And we have to provide an example of where America can go. And I think that that’s what we’re trying to do.

I think it’s a good point, although we’ll see about the “eight” limitation, you never know what the ambition may be. I think Steve Bannon said they were going to rule for fifty years after this.

Don’t scare me!

It’s Friday, I wanted to…

Yeah, yeah.

All right. Let’s talk about some of the specifics.

So, immigration…we saw how strident he was during the campaign. He’s appointed an Attorney General who has a track record, personally and through his staff, of being very tough on immigration…the president-elect hasn’t backed off the idea of a deportation force, that he talked about in the campaign. He certainly hasn’t backed off the idea of building the wall. You all took some action this week, talking about those issues, as I saw.

We’re obviously going to push back. We’re going to protect Californians. Quite frankly, the obsession on the wall is…I represent the border. And our border is completely fenced or walled off already.

I think those of us that live along the border, who represent this area, laugh…we know that most of the drugs that come in come in via tunnel. He’s not even talking about a tunnel. We know that a huge portion of those who come to this country, and don’t have documentation, overstay visas…they’re not walking across.

So I guess a symbolic thing…for other parts of the country, they would have to actually create some sort of barrier.

Yeah.

I think it’s much more important and we need to focus on what’s really going to happen.

I always say, “Fine. If you’re going to build a wall, I hope it’s done with union labor…I hope that we can build it under a PLA when we build it up, and under a PLA when we take it down, eventually, because that’s what’s going to happen.”

Right.

So, I think…it’s symbolic though, right? Of kind of, putting a barrier between what we know are families. It’s not just two countries. It’s portions of families that live on the other side of the border. And we need to be cognizant of that.

I represent a community, City Heights, in my district…well, all of my districts…has a large immigrant population. But in City Heights, the small community where I actually live, a third of the folks who live there are foreign-born. We have a huge…one of the biggest Muslim refugee communities in the nation. My district itself is one of the largest, both legal and undocumented immigrants.

And so, a lot of his rhetoric has become very, very scary.

It must be terrifying that people, I trust, are coming to you, and asking you for help, or protection, or support against the kinds of things that he’s suggesting.

The two folks who I feel, I think, the most for, are: One, school age children, who maybe were born here, many of them born here, who know that their parents are subject to deportation.

And the fear that we saw, even coming into this election, I think probably, and I blame all of us, for giving false promises that it was never going to happen.

And I think going back and trying to protect those kids who have never spent a day in Mexico, or another country, who have been born here, who are citizens, but know that, maybe, one or both of their parents are not here legally…that thought of breaking up families is very scary.

It’s amazing. And then, the DREAMers, right? The idea…

The dreamers are the other, I was going to say.

We’ve had interns who are DREAMers…I worked on a DACA bill, and a few of them have said it’s amazing, when you think about the fact that they gave this information to the federal government…not just about themselves, but about their parents. The only way to become a DREAMer officially, or be qualified, was to show consistency in the United States. They gave up the address of their non-documented parents.

I think there’s some fear, yeah. And that’s already in the hands of the federal government. There’s not a lot we can do about that in California.

And, we know, we passed a law in the last few years to allow, of course, every Californian the right to drive, and we’ve collected that information. Where that information goes is very important. We have students, and colleges, and universities, as well as K-12, that need to be protected.

So, yeah, there’s a lot to do. We have to.

It appears there’s a real clash.

How do you feel about the proposed appointment of California Attorney General Xavier Becerra? Because that’s going to be a critical role on immigration and on other things.

Well, I’m really looking to him to show his brilliance. A Stanford grad, a Stanford law grad. There’s bias there.

I knew that had to come out at some point. Go there, but that’s a different podcast.

I was very happy to see Xavier appointed in that position. I think, as Attorney General, it may be the perfect appointment.

I mean, Jerry Brown always surprises us and gets things just right, and I think that this is one of those. Somebody who has shown himself to be a leader nationally on immigration issues…Has shown himself to be able to stand up and articulate why we’re doing things…And I think he’ll lead the way in fighting this administration.

Yeah. Well, I think he’s going to have his hands full. But I think it’ll be interesting.

Switching gears a little bit to climate…of course, California’s prided itself and done so much to be a global leader in the fight against climate change. President Obama’s administration has done a great deal as well.

Now you have a new appointee, or proposed appointee, whose mission as the Attorney General of the state of Oklahoma has been to fight, and to sue the EPA…the organization that now he’s being appointed to lead.

Your thoughts?

Well, you know, the Department of Defense has stated in the past that climate change is the biggest threat facing the United States. It is the biggest threat internationally.

So I think, if…for somebody like the president-elect, who has said he wants to fight terrorism… he should probably look at starting with protecting our environment. Because we know that what comes next, because of the heating of the world, is scary.

It’s almost beyond me to imagine we’re going to go backwards, and I just have to keep having faith in states like California, obviously, Oregon, Washington…some of the states who have really led the way, and will continue to, on ensuring that we’re moving forward.

And not to understate…California still could be its own nation, so…

Right. Well, there’s no doubt.

And you think about everything that’s happened in California, as you say, from a resilient, and a threat perspective to our people, but also to our economy. Here on the coast, the Port of San Diego, the Port of Long Beach, the Port of Los Angeles…obviously, subjected to sea level rise as a result of climate change.

The economic implications of backing out that policy is very big for our state.

I think it’s very big. And that’s our state, where we have the political will, I think, to continue.

But if you look at states like Florida, and you have places in Miami where the water’s just seeping up on the sidewalk. Hey, you know, they’re not going to be able to ignore it either.

And so, I think we’re going to have increased effects. We don’t get the extreme weather that other parts of the country get, and that’s going to continue. And if we make it worse I think at some point, people have to realize.

And I loved seeing even the Pope talking about this as one of the biggest issues facing our world.

Yeah. It’s an economic issue and it’s a social justice issue. There’s just no question about it.

I’ll keep moving through the issues. Labor, which is something that…you, obviously, come out of the labor movement, feel very connected to and remain a leader in the California labor movement.

We have a new designee for the U.S. Department of Labor and I wanted to pull up a quote. So this gentleman is currently the head of the holding company that owns Carl’s Junior and Hardee’s and other fast food restaurants.

He had a quote a couple of months ago talking about automation in those retail establishments, and how important it is to replace workers saying, quote, “Machines are always polite. They always up-sell. They never take a vacation. They never show up late. There’s never a slip and fall, or an age, sex, or race discrimination case.”

He was just celebrating how wonderful machines are from a labor standpoint. Apparently, that’s the philosophy he’ll bring now to the Federal Department of Labor.

Well, it’s going to be a challenge. It’s not exactly what president-elect talked about in his stump speeches, and I think that people are in for a rude awakening.

This is a man who really, as we’ve grown, kind of, the rights of fast food workers, has just pushed back. He has suggested that everything from, the minimum wage shouldn’t exist, no sick day legislation. He’s been opposed to overtime rules.

He’s just not exactly somebody who has ever fought for a worker, or even from the rights perspective, has even looked at the possibility of workers mattering. And so obviously this quote doesn’t surprise me.

We know that the workforce, and that computers, and machines, are going to enter the service industry. That’s been coming. That’s nothing new.

Right. Sure.

You saw Amazon’s PR push this week about this new retail store concept that they’re rolling out. That, it’s a grocery store that’ll have no clerks, no checkout. It’s all automated.

The minute that you wall in with your Amazon account, it detects who you are, your payment mechanism is connected, and you can literally just grab and go all of the items and it will automatically detect…it’s kind of like the old mini-bar concept, right? Where you touch that sucker and it just…

It’s done.

Yeah. They’re building out stores right now. They’re launching one in Seattle in a couple of months, so it’s coming.

Yeah, there’s definitely an automation that’s coming, but, what we’ve seen, And I think that this is true, is it won’t go fully automated. There’s just no way. We have…The fact that the clientele won’t adapt to that.

You try to tell my father that he’s not going to have a person to talk to at a store, and you’re going to have mass chaos. And I know he’s not the only one.

And you have ways around that. In California, obviously, if you want to go checker-less, I suppose, you can’t sell alcohol.

We have laws we’ve already passed to kind of look at some of these issues, because there are protections that are necessary, that human judgment is the only thing that can come into play.

So we’ve known this is coming. Obviously, we’ve got to adapt to some of it.

Right.

The question is, how much? And what all will change, and how quickly, and what we do as a society to help ease the way?

But in the big picture, shouldn’t we be embracing and encouraging this level of innovation and technology? And not holding on to traditional or legacy approaches to labor? I mean, isn’t there attention there that perhaps can be an inhibitor to progress, and stop us from finding ways to employee people in different ways?

So, I think there’s a balance, right? When we saw automation, kind of, in the manufacturing industry?

There wasn’t a lot to be done about it, quite frankly. It was coming. We’ve seen it in agrarian society. It doesn’t completely replace the workforce, but we’ve seen this already happen in different forms.

I think one of the unique things about the service industry is there is a person-person contact that happens. You could have a robot cut your hair. You could. They’d probably figure out a very good way to do it.

Yeah.

But there’s something about people going to their hairdresser, their barbershop, and having that relationship. And I don’t think we can minimize that. I think that there will always be a need for people in the service industry, because it is a social aspect.

And that’s not talked about a lot, because we talk about business as, kind of…supply and demand, and customers, and the product, but that’s a very real portion.

You see, your kids, for those of us who have them, they’re not picking the phone up and calling their friends anymore. They text, they email, but they don’t even email, let’s be honest. They text and they message on whatever thing, or they’re playing a game together, somehow, remotely.

They still go over to each other’s house. They still hang out. We still have organized sports. So, as things change, we’re still human beings. And we’re going to need that, kind of, person-person contact.

On the other hand, look. We’ve got to figure out…where are those new jobs going to be, though? And how do we get people into those new jobs, and productive? Because work matters.

And it doesn’t matter if you’re the person making the hamburger at Wendy’s, or if you’re the person cleaning up after everybody who had been there goes home. That work matters too, and it matters to the individual.

And we can’t just disregard the notion of work for folks.

I think it’s a critically important point. And you’re talking about self-worth and dignity, and it’s always been the anchor of people, and families, and communities. There’s no question.

But we really are in this very complicated time of seeing the advancement of technology. In California, you and I met when I was leading the Governor’s Office of Business and Economic Development.

I traveled all around the state, really saw what was happening, and it doesn’t take you very long to see this bifurcation of the economy, where you have these technology hubs, and innovation, and entrepreneurship that is driving incredible economic wealth.

California, once again, the sixth-largest economy in the world…at the exact same time that we have one in four Californians living in poverty, almost one in three children in southern California living in poverty, and the divergence of those lines widening all the time. It’s a very, very troubling set of circumstances. And no one has a magic wand.

But I guess the question I would ask, though, is, how are you thinking about it from a labor perspective, right? You had a bill that you introduced this week. Tell us what that is and how you think those types of mechanisms are helping to stem the tide that we’re talking about here.

Well, I think a lot of the bills that I try to introduce with labor, and including AB-5, the Opportunity to Work Bill ordinance, is attempt to say, “We understand the world is changing. But that doesn’t mean there’s not a human capacity, or there’s not a human component to it.”

So, the Opportunity to Work…it’s modeled after what the Silicon Valley just passed, San Jose’s Measure E, and it says, basically, if you’re a larger employer, you hire part-time workers…before you continue to hire part-time workers, you offer your part-time workers more hours.

And we heard, from time and time again, part-time workers at a McDonald’s getting eight hours of work a week, and then they’re bringing in new people. Not because they’ve ever asked these folks, “Do you want more hours?”

A lot of this has to do, actually, with automation. And not the kind of automation we’re thinking about. Not the fact that you can order with the computer. They’re still hiring people. The automation that’s happened is that so much scheduling is being done by a computer, and so there’s not that human component.

What we said is, “Hey, you’ve got to still realize you’re relying on human beings. Quite frankly, you’re relying on a human workforce. We live in a society, in a community, where, if you don’t provide for your workers, then our taxpayers still have to.”

So we’re going to make a decision…say, how many millions and millions of dollars do we provide for fast food? It’s funny that we’re talking about fast food workers, because they don’t get enough hours. They’re not paid an adequate minimum wage.

Well, these big employers that are making corporate profits that are still off the charts, let’s make sure that they’re responsible to their workforce as well.

Sure. Yeah. Of course, the argument is, that if California becomes too much of an outlier in these types of rules around wages and hours … That it puts us at this competitive disadvantage, and it’s a disincentive for businesses to start here, or to grow here.

Is that a concern that you think about? And how do we address that part of the equation?

Well, you know, it’s always interesting that we talk in those terms. Because, when we talk about business, there’s a lot of different types of business. Right?

Do big IT companies in Silicon Valley, who are hiring programmers and very well and high-skilled workers? No. The market takes care of that, if you will.

What we’re talking about is really a service industry that can’t be outsourced. If McDonald’s wants to say, “Well, we just won’t allow McDonald’s in California,” all of us would laugh. Because we know that’s just not true.

And it’s not so different, actually, when we said that why we met during the fight about redevelopment at enterprise zones. Right?

That’s right.

Where we were giving millions in tax breaks to people like McDonald’s, who were making a decision, and I don’t mean to pick on McDonald’s, I should use Jack in the Box, or whoever, but making a decision to come to a poor community because people are buying their product, and yet we’re saying, “Oh, we’re attracting business.”

They aren’t coming because of the tax break. That was just money we are giving them.

Right.

It’s the same kind of idea.

If it’s something that can’t leave, and that’s what we’re talking about with a lot of these rules. The mass numbers of people that are affected are in an industry that is coming in ways…the demand is here. They’re going to continue to be here, and quite frankly, are doing just fine.

So I think we should be a model for other places.

Yeah.

And that’s why you see so many of these, kind of, innovative worker ideas coming out of high-density areas. New York, or Chicago, or places…Seattle even, where folks are saying, “Yeah, we know, you’re Starbucks. You’re not going to get up and leave. You’re not. You’re going to build another one. They keep coming, regardless.”

Right?

That’s certainly true with Starbucks. They are gonna…

They keep coming.

Yeah.

Let me turn to a couple of other quick things with the time that we have left.

We’re talking a lot about retail, which is tremendous, and it’s an important place to work, but how do we sort of think about broadening opportunity, and give them pathways up to grow in their careers?

And that certainly turns to education and workforce. I know, another huge topic we could spent a lot of time on.

But, kind of quickly, what are your thoughts? How do we renew an approach to education and to workforce so that we’re giving folks a…more contemporary skills and training that can allow them to capitalize and participate more broadly in this new innovation economy that…clearly, it’s not new, but it’s continuing in a very pronounced way?

Whenever I go down this path I get in trouble, and so I’ll probably get in trouble here, and granted, in all reality, I have three degrees. I’ve benefited from this idea that poor Latino kids should go to college, and then keep going…go to graduate school and go to law school.

I’ve benefited academically. I wouldn’t say, necessarily, I picked the right path to benefit financially.

Yeah?

But something my daughter told me when she was in 8th grade, having been raised around organized labor is, she told her 8th grade English teacher, when he was pushing college for all…she pointed out that, if I’d gone to a union apprenticeship, I’d be making more than I did taking on all that debt in law school.

And she was right. And the fact that we really need to get back to this idea…even if we’re going to go to automation, somebody has to fix those machines. Somebody has to program those machines. Somebody has to build them in the first place. Somebody has to clean them. Right?

And a lot of this work is semi-skilled, or highly skilled. And yet, not necessarily what they’re teaching in college. Right?

You don’t have to be a philosopher, necessarily, to do some of this work. So I really think we have to refocus the way we’re teaching people. I really believe in the apprenticeship program, the joint labor-management, kind of, apprenticeship program, building trades, has created and grown. Especially with people like IBW, like higher skilled. It’s just phenomenal.

And you see other countries really leading the way on apprenticeships, going beyond just construction trades, and I think that’s what we need to look at. And for some of that, it might be more appropriate to go to…after high school, and then directly into a program. Or directly into a program, or start that program in high school.

But we kind of have this academic idea, and it’s beautiful, and lovely, and I think sometimes I say it myself, “Well, of course you have to go to college. You have to go to college.”

Well, going to college and taking sociology may not be the track for everybody. It may not be what’s going to be best for…

Well, I’m with you on this, 100%. I think that we aren’t trying to devalue or diminish the notion of going to a four-year university or graduate school. Those are incredibly important pursuits.

But to have that be the only focus, at the detriment of creating a more robust set of pathways for people to go down and get a more practical…it’s an interesting thing.

I don’t know exactly where your family came from. My father came from India, so I’m sort of that immigrant stock, too, and it’s almost like…we can’t let go of the idea of a four-year university. If we position any other notion, we’re lowering expectations. We’re diminishing these kids’ potential, and it’s really proving that it’s almost opposite…is the way things are playing out at the moment.

I don’t think it’s smart, and I don’t think we’re doing a lot to take care of our society as a whole, to train the next generation of a workforce that we need, and instead, then we’re…of course, we’re going to use work bases to bring people in from other countries, which people get angry about.

But, if we’re not teaching folks to do that here…and how do you do that? And how do you disrupt the status quo in a way that doesn’t? Unfortunately, what I see in politics, and I think one of the frustrating things for me is when people start talking about reforms, and disrupting, even, the status quo in any way, it becomes this question of unionized teachers, you know? And it has nothing to do with that.

Or it becomes this idea of, are we minimizing this community? Well, you know what? I represent a very poor and working class community. You want to bring some apprenticeship? You want to bring the companies that make what’s going to be the service in the future? Okay!

Like, bring it. Let me put some kids in there. Let’s give them a pathway, something interesting. And the other thing we have to be careful about, even going down this route, and I always worry about this, coming out of labor, is, it can’t be just male-focused apprenticeships, quite frankly.

We have a lot of needs that are…and not that we’re categorizing men or women, but I had…I tried hard to get girls into the trades, and a very few number actually want to go.

Yeah.

But there are some fields that are traditionally female, that girls self-select into, that we need more workers in. Childcare, healthcare…

Yeah.

And the apprenticeship kind of model should be extended to that. There is just not enough childcare in California. It is the biggest barrier to employment for all women.

Well, why aren’t we training more childcare providers? Why aren’t we taking folks and actually making them apprentices in childcare, and then having them help take care of other people’s kids so those folks can go on to school or go on to a different job?

That’s a job, and it’s a worthwhile job. So I think our focus is kind of off sometimes.

A great thought.

All right, final question. And that is, one thing that perhaps we could work on, with the Trump administration we’ll see, is this idea of an infrastructure program that he’s talked about. We’ll see how it actually materializes.

But certainly, in California, there’s no question that we need a substantial overhaul of our infrastructure, and in many ways…although, the thing I wanted to ask you about is in infrastructure, we tend to immediately think about roads and bridges…very important, although transportation is totally changing…whole other podcast we could do on transportation.

Yeah, please no more roads.

Yeah, well, you’re…

I mean, we’ve got to fix them, but we’ve got to build some other things.

Well, I think that’s right. I think transit’s critically important. We have to recognize that. And I think that’s good.

But I think about IT infrastructure, right? So broadband, and bridging the digital divide, right? And that’s the last thing I want to ask you about, is…you know, given your district, and given the things that we’re talking about, education, workforce, pathways to opportunity, different career possibilities, all of that depends, it seems to me, on creating real, universal access to the networks that are the prerequisite for participation in all of these things.

I’m curious to see your thoughts on that.

It’s funny you ask. This is something I’ve been talking to a bunch of groups about over this past interim. And it’s not just internet for all, if you will, or broadband for all. It’s quality, access to quality, infrastructure, quite frankly.

I was complaining the other day that I pay the same amount in my very working class neighborhood that, probably, people pay in a different one, and yet, we have the internet go out 12 times in a month.

And if the internet goes out when your child is working on a paper for school, and it goes out for three or four hours, that’s, it’s not true access at that point.

Sure.

And a lot of it is, we have aging infrastructure that was originally put in…we have a need to upgrade, and a constant need to upgrade.

And you talked about jobs. There’s jobs that we could provide for and invest in, and ones that I think that we could do. And that’s just it.

But we, of course, need to train workers for that type of investment. We need to encourage the telecoms and the wireless provideres to actually come in and invest in these neighborhoods, and I think they’re trying to.

At the same time, we’ve got to make sure that our local governments aren’t putting up local land use barriers to having…I mean, talk about, God forbid, a tower, even if it’s a small one.

Wow, you’re not kidding.

Yeah, we did. We did the smart cities panel here as part of what we’re doing in San Diego, and 5G, which is the next generation of wireless.

Yes.

It is going to require a whole new series of smaller cells, smaller repeaters. It’s just the nature of the way that network functions.

And you’re dead right. If you’ve got every municipality that is putting up roadblocks to getting that infrastructure deployed, it just doesn’t work. You don’t get the network you need if you can’t put the physical pieces in place.

And it’s thousands upon thousands that need to go up, and a lot of times, go on our public infrastructure already, on our light posts, and I think there’s room for it. We do.

I think that’s where it’ll take some tough decisions by state legislators to say, “I understand that every local government wants to be able to do x, y, or z, but let’s not go crazy. Let’s not avoid this moving forward.”

And we’re seeing that, like, we can’t be in an internet or wireless, kind of, crisis that we’re in with housing. And that’s what we saw in housing.

Oh boy. Yeah.

And we really should look at what each municipality has done to prevent the kind of high-density, affordable housing that everybody agrees we need…just not here.

This is a whole other podcast too!

We’re going to have to come back, and talk with you more. I can’t keep you all morning. But I really appreciate all of your comments and the thoughtful answers that you’ve given to these questions.

There’s so much that’s on the table in California. It’s got to be a dynamic time. And I trust you’re looking forward to the upcoming session, and where we go from here.

I am.

Just a reminder, though, on that piece. When you’re electing state folks, it’s not always important that they came from local government. Because sometimes, not coming out of local government means you’re more likely to step on their toes and do what’s right for the entire state.

So, I just want to put that out there.

Interesting.

Well, with that, I will say assemblymember Gonzalez, thanks so much for your wonderful insights and for sharing your perspective and time with us on A Step Ahead. Very grateful.

Thank you.

Silicon Valley Rejected Trump. How Will The Industry Work With The New Administration?

Steve Westly moves easily between the worlds of technology and politics. The venture capitalist, who was an early investor in Tesla, served as state controller and chief financial officer of California between 2003 and 2007.

Now, like many in Silicon Valley, he is watching cautiously as President-elect Donald Trump forms his cabinet and starts to signal what his priorities will be over the next four years.

Despite Trump’s rhetoric during the campaign, when he railed against immigrants, called climate change a hoax and threatened to start a trade war with China, Westly believes that when it comes down to making real policy, Trump will back down on some of his most damaging rhetoric.

“I think Silicon Valley will fare just fine,” Westly told CALinnovates Chief Evangelist Kish Rajan. “Silicon Valley is getting bigger, not smaller. It is the tech center of the world, and I don’t think Trump wants to slow that growth for any reason.”

Immigrants have proven to be the secret sauce of Silicon Valley helping build companies that have created thousands of jobs. Renewable energy is quickly getting more affordable than coal and natural gas, and almost every economist agrees that a trade war with China would be a disaster.

But that doesn’t mean the Valley should be complacent. The economic dislocation that swept Trump into office is a growing problem.

“The 800-pound gorilla in the room is that new technology is coming,” says Westly. “But we have to get smarter about re-educating the American workforce. We have not done that nearly well enough in the past.”

Listen to the full interview here:

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