a16z Podcast - a16z Podcast: The Art of the Regulatory Hack

Episode Date: May 17, 2016

If the next 20 years of startup-led tech innovation are going to be about addressing massive problems -- like health, energy, transportation, cities, education, and more -- it will mean more directly confronting (instead of stealthily bypassing) regulatory barriers and incumbent-driven regulatory capture challenges. So how can startups "growth hack" in a highly regulated sector? In this episode of the a16z Podcast -- the second of our podcasts from our most recent on-the-road trip in Washington, D.C. -- Evan Burfield, the co-founder and co-CEO of D.C.-based global incubator 1776, outlines the techniques (really, an art form) of "regulatory hacking". It's not just a way to enter a market, but a way to create a market ... much like Elon Musk did with Tesla: using the very system that drops lemons to make lemonade. The technique begins by understanding informal and formal power; "power mapping" the influencers all across the chessboard (from the top down and bottom up); telling your startup brand/product story in a particular way; and then making your moves. Just as there's a playbook for navigating Silicon Valley, there's one for navigating D.C., argues Burfield; and while many entrepreneurs instinctively just want to get regulations out of the way, sometimes, you just need to know how to play the game.

Hi, everyone. Welcome to the A6 and Z podcast. I'm Sonal. And today, Michael and I are continuing our D.C. on the road podcast trip. And our guest today is Evan Burfield, who's the co-founder and co-CEO 1776, which is a global innovation network. What exactly is that, Evan? You know, we do, at 1776, we do a variety of things. We do support and incubate startups through our startup network. So you are also an incubator? Yep. Yep. So we have curriculum. We have mentor networks. We have expert networks. And we have a venture fund. But we also do a lot of work with corporations and institutions and municipal governments that are sort of trying to drive their innovation strategies. And then we do a lot of policy work. We really try to work with governments in that sense. Yeah, I actually really want to dive a little bit on the unique view you have being based out here in D.C.

And especially working in highly regulated sectors. But before we deep dive on that, I want to ask you, could you help us paint the difference between an incubator, an accelerator? I think at this point we sort of hate both terms because they create like this, the, He's very iconic. You know, in general, particularly when you're looking at it globally, accelerator programs tend to be someone writes a small check. It's a structured 90-day program usually. At the end, you have a demo day, you graduate, you move on, and there may be some sort of alumni support. By common it would be the archetypal accelerator.

You know, incubators, particularly in Europe or parts of Asia, tend to be much more about sort of a physical space. and it's a physical space with some community and some value add and some elements to it. You know, so we don't really refer to ourselves as either because an awful lot of what we do is virtual. We have members all over the world. But you do have a physical space as well. We have physical space four blocks from the White House. We have a physical space just down from the Pentagon. We actually have one in San Francisco.

And our members take advantage of that. But the primary experience is actually much more access to mentors, access to experts, curriculum, really trying to teach them how do you validate and scale ideas in these really nasty complex sectors we focus on and helping them make connections for them. I wonder if you have the same problems that companies that are building a workforce that's both remote and local have where you try to figure out how to build that community and connect. The thing I've heard is that it's better to have like 50-50 where like half your members are local and half are than to have maybe two people because then it's harder to integrate them

in other culture. Where do you guys sort of fall on that mix? For us, almost half of our members are fully virtual. They don't work from one of our physical spaces. Because that element's grown, it's continually forcing us to put more and more of the community building and the interaction through virtual platforms. And so at this point, like, even if you're on one of our campuses, your primary experience is as much online as it is offline.

One of the local accelerators we had on our podcast was a woman who represented IHUB in Kenya. And it's interesting because in that case, there's a dearth of other things available. That's obviously changing as information, you know, mooks are online. There's unprecedented information available for people to start startups. How do you see yourself playing out in this sort of crowded space? Or have you guys carved that unique niche because you're in D.C.? Yeah, well, and also because you said the nasty sectors that you play in,

and I would think that easier would be better than nasty sectors. But still, what are those sectors in? Is that what differentiates? We actually have a network that we built globally called the Startup Federation, of which I have as a member. And so for us, IEBS filling an incredibly important centralized role in helping to organize and create energy and celebrate and deliver that content to Entrepreneurs in Africa. We shouldn't be doing that. We want to be finding really promising early stage companies that we think we can offer really unique help to and then supplement what IHB is doing and support them through the 1776 network.

And that is back to your question, Michael. So, you know, our number one thesis is that the giant investment opportunities of the next 20 years are not going to look at all like the last. 20, right? It's not going to be nearly as much lightweight social. And maybe someone's going to invent the next best way after Snapchat and Instagram to share photos. But at a certain point, it feels like you're getting into really incremental improvements. And you've got to be so sharp on your game if you want to be doing that. Whereas you walk around a city, you go into a doctor's office, you know, you interact in your life as a citizen. And it's not hard to identify giant, massive problems that need to be solved.

So when you say the next 20 years are going to be about, you know, these new set of problems, you mean like the massive things in our day-to-day lives or what else you think? So we think about how are we educating, not just our children, but what do you do with that 35-year-old who, frankly, went through, got a college degree, suddenly finds that their skill set, everything they learned is just no longer appropriate to a radically and rapidly changing economy. The delivery of health care is massive and probably the most active sector we see. And, you know, there's the far out science fiction stuff, but just go to your doctor's office. It's insane. It is insane. It's insane what you still have. I mean, I have a million things that

bug me, but like, what are someone that things I beg you guys? I could go on. She's got a million and one thing. I know. Like, seriously, like, I could list her at the list. Oh, I mean, like, it's amazing to me. I fell on my bicycle and split my eyebrow open. I went to the same urgent care place I go to whenever I'm sick, which is like once a year. And I went there and I have like blood flowing down my face. And they're like, great, could you fill out this form with your name and information? I'm like, I've been here like 10 times before. Like, why can you just check in?

And like every step in the process, I'm looking, and it's still on paper and it's still asking me all the same questions. And it's like, do you have any, you know, drug complications? I'm like, how the hell do I know? Shouldn't you by this point know that stuff? And that's not even, we can dig deep into health care. But those are just the surface level issues we see. Oh, totally. Much more broadly.

We're not really even at the point yet where we can start to apply all these amazing advances and AI and all this kind of stuff to health care because we still haven't really created that decision layer on top of the billions that have been spent on New Mars. So it's health care, it's energy, water, food, all of the sort of ways in which we use resources and apply those cities and transportation. You know, you look at Lyft, you look at Uber, and those are just sort of the tip of the iceberg around how we have to really transform the way cities operate. And when you say cities, are we talking about U.S. cities?

Like, what do you start to see globally? So we can give an example of a startup that won our Challenge Cup program or a big global competition last year, which is Twiga. So I'll describe the problem in a pretty generic way. 80% of all fresh fruits and vegetables and fast-moving consumer goods in sub-Sart and Africa go through informal markets. To put that into context that... I mean like black markets, basically. No, like the person on the street corner with a little... Oh, like peer-to-peer natural kind of market.

Like, yeah, it's a blanket on a street. And they're selling... Yeah. I've seen in India all the time. Yeah, totally. India's another example of that. And so that is many, many, many, many tens of billions of dollars in commerce. But it's extremely fragmented.

There is no data on it. And it's incredibly inefficient supply chains. So if you are the little vendor that's selling stuff on the street corner, you literally have to wake up at four in the morning with a sack, and you want a bunch of your friends, either rent a taxi or you get in these informal bus networks, you go to the wholesale market, you fill your bag up with as many things that you think you can sell that day, you drag your back back, you open your stand at seven in the morning, and you sell what you can sell during that day. And by the way, you're carrying cash through the whole time.

And if you get robbed, you're host. So that's a massive market giant problem. So what Tweek is doing, the co-founders actually came out of, like, logistics and supply chain, and they studied this problem. And so they are literally implementing a hub and spoke distribution model. They're going to freehold farmers in Africa. They're doing long-term supply contracts. They're shipping overnight because you don't want to ship during the day on African highway shipping overnight. They have depots. They're putting shipping containers in every little estate.

They, again, ship overnight. And so now that little microvender has. an app. Microvender, that's interesting. He sits there, and that's, again, and they're trying to formalize it. They're saying these are actually entrepreneurs. They're micro vendors. They need access to all the same services.

So they can sit there now at, you know, seven o'clock the night before and go, I need 10 bushels of bananas. I need some more AA batteries. I need some tissue paper and I need more onions. Inventory on demand. It's, I love, what I love about that anecdote is that I feel like there's a lot of amazing learnings people have about logistics and infrastructure, but you can't completely translate them internationally. So to build that bottom up is just fascinating.

Well, and so, you know, absolutely massive market. But the crazy thing is the, you know, they are able to deliver for a much lower price at the point of sale. They're cutting out a whole bunch of inefficient distribution so they can pay the farmer more and still maintain great margins. But you're right. You want to do that in Africa. You have to be prepared to roll your sleeves up. And one of my favorite stories when I was last with them was they were talking about the first time they went to go negotiate for the first purchase of bananas. And they're like, so we showed up with our gang of youths. And some of the other brokers had their gang of youths.

And so we, you know, we worked through the negotiation. Everybody kept their machetes at hand. And then we ended up arriving at a good equilibrium that we were comfortable with. And so we supply some fire relationships. I'm sorry. I'm trying to imagine like a startup sitting in Palo Alto like I had my gang of machete. They looked at me then and they're like, no, it's not like that. Like, if you go to buy bananas, you negotiate the deal, you cut them off the tree,

you load them and you buy them on the spot. So when you go to buy bananas, you bring a gang of use with machetes. And like, everybody else has their gang of use with machetes. And they're like, no, we don't mean like we were going to war. We just mean, like, okay, there you go. This is interesting. How did it, like, behaviorally, so it seems like that old logistics system, the thing that was super inefficient, you know, it was just the way things were done.

How quickly were they able to gain the trust and shift over to this kind of app-based thing? And were other parts of their lives already app-based and so it was easy? Or how did they build that trust and then change that motion? Yeah. In a lot of cases, you know, you talk about you want to find problems you can solve that have at least 10x value creation. This is like 100x value creation for these microvengers. So it's like no brand. Because they were able to offer overnight microcredit.

Now they're able to just say, great. You've done 10 transactions with us. We'll just start extending you more. credit. You don't have to carry cash. They can sleep in later. They're getting better prices. And so the major issue with Twiga is really supply constraint. Like as fast as they can build out depots, as fast as they can put more tucktucks on the street. Because if you're that microvender, you ordered on your app and the next morning a tucktuck just pulls up. Here's your crate. That seems a lot better already. That's a. You look at problems like that and you're going,

you're taking so many of the learnings from on demand and supply chain logistics and and and microcredit and all that stuff. But you're solving a problem that drives massive, massive social value, but also can become a gigantic business. I mean, so that's the thing. You sort of began this at, like, the next 20 years are going to be these really nasty problems. However, they are borrowing from these far less nasty solutions. Exactly.

I was going to add the whole reason we even have the type of AI and potential deep learning advances is because of cat pictures and things around that. But I get your point on that. Based in D.C., what made you guys decide to even consider Tuega? We are based in D.C., but our mission is not supporting startups in D.C. Our mission really is how do we accelerate innovation in areas of essential human need? And so we think about that in terms of supporting startups anywhere in the world that are tackling these kinds of challenges. We think about that in terms of how do you support municipal governments, giant health systems, utilities, government agencies that are trying to innovate faster.

and often struggle with it. We think about that in terms of how do you address giant, irritating, frustrating regulatory, barriers and challenges, often ones that aren't, you know, people have enough of this idea that there's this giant conspiracy of evil entrenched interest in a Machiavellian way erecting barriers. There is some of that. There's regulatory capture. But in a lot of cases, it's like policymakers are trying to achieve an objective and they have no idea. One of our partners, Ted Elliott said the same thing that, you know, regulatory capture sometimes

has this nefarious thing. But in reality, there's one group of people who have a much more who do have entrenched income and interest, but just know the hallways and the conversations and the people much better. In fairness, that is tougher for like new people to compete with. In terms of our DNA, we talk a tremendous amount to our entrepreneurs all around the world through our Challenge Cup program, through our incubator program. We talk all the time about regulatory hacking. How do you growth hack in a highly regulated sector? And that's a really D.C. thing is what you're sort of... Well, so here's the thing, right? Like growth hacking in general, if you're in New York or the Valley or Austin and you come up with a cool new growth hack,

the first thing you're going to do after you implement it works is you're going to write a blog post about it. That is the DNA of the startup role. You're going to Snapchat it, right? If some large automobile manufacturer very carefully gets a rule change that helps them open up more market at less cost and maybe even potentially erects a bit of a barrier for one of their competitors, they are never going to talk about that. Right. Never. And so this entire sort of world of they know how to walk the halls, they know the right

people, but it's an art form. It's a technique. It's just like, you know, Silicon Valley style growth hacking. It's just something nobody talks about. It's like the reverse of a growth hack. It is. But no, I mean, you can absolutely use a lot of these techniques. So we talk all the time about, like, the case study of why do we all have carbon monoxide

alarms in all of our homes. And how did the company, Kitty, that originated that, how did they actually get that to happen in short or so fast? And like, this is tons of regulatory hacking to create a marketplace, which is, you know, step one. Well, maybe you try and you go talk to the building code groups in cities around the country. Well, it turns out the building code groups are kind of regulatory captured by the big developers who don't want more mansibate things. they ended up partnering with a lot of the pediatric nursing and pediatric groups and said, in fact, kids all across the country are dying from carbon monoxide poisoning. And this is a public health issue. And they used that to ultimately get mandates in place that said all new housing had to have them. They went first to the cities, particularly ones in the north, that had really high rates of carbon monoxide poisoning. And they were like, your cities have a giant health crisis killing your kids. Then they went to all the other cities. They're like, these, These cities have implemented this world. They're doing the right thing. Do you not care about your kids?

It's completely different than how when I've heard the phrase regulatory hacks. It's almost a reverse in a certain way in a way that's like creating, it's sort of using exactly the regulatory hack to create the market. It feels like a very fragile thing to do, though, because those regulations, I mean, it seems like a very like a weak foundation to build your business on. But if it works, it works. But take a step back. Like, think right now, like who is the most iconic entrepreneur in Silicon Valley? The one, all the kids these days are aspiring. Probably Elon Musk.

It's Elon Musk. Yeah. Every one of his businesses is based on a regulatory hack. That's how he built Tesla. He uses subsidies. And people talk about that sort of 1% innovation that he does where he started for the most expensive, the richest. And now just recently he's able to like take it upper middle class and then potentially middle class. You look at SpaceX.

You look at Solar City. You look at Tesla. You look at all of these. Tremendous, tremendous leveraging of what we would call regulatory hack. I spend a lot of time in the Valley, and I spend a lot of time in D.C. and it's a lot of time around the world. But there's a sort of mindset and assumption that, like, to the extent that the Valley is often thinking about regulation, it's often from a how do I keep it out of my life. And sometimes, sometimes you do need to play that game, right? There are times when there are a set of entrenched interests that are just not going to let you get market entry and we'll do everything they possibly can, at which point you have to deploy some form of beg forgiveness strategy. but in a lot of cases, there are very creative ways.

And I would argue in a lot of sectors like energy or water, you're not going to get market entry without some form of regulatory hacking. Why is that just because of the entrenched interest or? No, because of the nature of the. So if you think about it in the sense that there are certain areas of the economy that have such a large sort of social welfare to them, that it is simply the case that government is not going to allow the provisioning of those services without a significant level of oversight. In the extreme case, you get into the provisioning of national security,

right? Like, there's government not going to let, like, alternative new interesting models of national security. That's why my chain of nuclear energy plants didn't take off. No, sorry. But you think about, like, the energy space, almost every startup. So Opower, which is a local company. Yeah, and they've scaled up and gone public. And they very, very carefully are aware of the fact that, you know, utility companies buy their service in large part to meet regulatory mandates. Right. And so in some cases, those mandates already existed and might not have been enforced. In other cases, you had to create that mandate.

But they'll talk a lot about the fact that they have a two-prong strategy. One is erect and enforce mandates that say utility should be helping their rate payers to reduce electricity consumption. And then they're helping utility firms in a very cost-effective way. to meet that mandate. By giving them the data back, right. Because if I remember correctly, what they do is behavioral modification for consumers to understand their energy consumption in order to, and they're using, like, best practices from the world of persuasive psychology to help people reduce their energy usage.

Right. And it's like your neighbor used less than you did. And you should be sort of like that. Exactly. Like those little tricks of like the anchoring and benchmarking and super interesting. But you have a, you know, if you use a local example or a recent, a timely example, right, were investors in Hopskip Drive. Child care on demand. They hire certified nannies, nurses, anyone who's had at least a certain number of years of child care experience. They fingerprint them.

They do detailed background checks. They do the whole deal. They're trying to solve that issue of you get off at work. You get home from work at 630 or 7. Your kid gets out of school at 3. And you don't really want some random 16-year-old driving your kid around. Yeah, exactly. And by the way, by Uber and Lyft's own terms of services, right, you can't have kids under 18 driving these cars. But almost immediately after Hobskip Drive launched, California took a big interest in driving kids around. And what was the interest that they took? What did California do? There needs to be a level of regulation around how you do this and who the drivers are and what happens in the same way that there's regulations around who can work in daycares. Or there's regulation

around who can work at a pediatric doctor's office. Sure. Okay. And so the interesting part was that that founding team immediately viewed this as an opportunity for collaboration and an opportunity to work with California to put in place a set of structures so that they could reassure their customer base that it's a safe service because the founders are three moms. They recognize that this isn't just an efficiency lifestyle thing. You are not going to take advantage of this service as a parent until you are very, very, very confident that it is safe and that it's secure and that your kids will be taken care of. This is fascinating to me, this whole notion of a regulatory act.

Tell us more about the art of the regulatory hack. What are some of the things that you can kind of generalize about it? We talk an awful lot about sort of the standard toolkit. There is no one... Of course. It's not one size fits all. It depends on the industry. It's like growth hacking just in regular sense.

I hate the term growth hacking, but I get it. I get it's a real thing. It just hate it because it feels like marketing with another name. Yes. You know, I get it. Machete is one thing in the tool care, right? Yeah, a machete. No, that's only when growth hacking and it.

Rule number one. Come to the first meeting with the machete. So the very first thing we talk about is you have to understand the power map in your sector. The power map. In every sector in which one of our startups operate, there is formal and informal power. And there are people who influence other people and there are people who make rules and there are people who know those people. And there are interests and there are interests that align, interests that diverge. And that forms a chess board. If you are operating in one of these sectors and you don't know that there's a chess board and a game of chess being played, you are at a very significant.

significant strategic disadvantage. Right. And that's, that's sort of like a lot of tech companies from Silicon Valley will just step into things with that sort of attitude. That's interesting. I mean, it's a very naivety that suggests is almost like the type of person that needs to do the business in the first place. Because it's almost like you know too much. You're just like, I'm never going to do anything. Yeah, totally. But that's where we talk an awful lot about, like what we try to do, you know, as through our startup network, through our fund is find oftentimes really, really smart, disruptive people. They're often outsiders. They have great ideas and go, that's wonderful, but let's get you connected up with a level of sophistication

about how you play this game you want to play. Okay, so step one is the power map. It's mapping out both the formal and informal, the un-explicitly stated power. And who's playing what games? And then you got to start figuring out, like, you should be moving your own chess pieces on that board. Right, right. So first figuring that out and then figuring out the moves. Then you start getting into how do you make moves? What are the moves you make? And you've get into things like understanding the grass tops, right? Who are the actual people with power? The what?

The grass tops? Very D.C. Grass tops would be, like, so you've heard the term grassroots. Yes. Grassroots is activating the city. The grass tops are who makes the decision. I've never heard that word. Have you heard that word?

Is that a made-up word? No, no, no. Maybe at a juice bar I've heard that word. Grassroots is activating citizens. Grass tops is engaging the actual decision makers. Then there's influencers. Who are the people who influence the grass tops? And that can be think tanks.

It can be corporations. It can be associations or unions or other venture for it. It can be anybody who has influence and has relationships and access who shares your interests or is opposed to your interests. And so when we went back to that example of getting carbon dioxide alarms deployed across the country, it turns out that builders didn't share their interest initially. Of course, right. But health groups did. Right. health groups have great access. They're a wonderful, like everybody cares about the health of their kids, right? They're operating from a position of strength in that standpoint. But they're often looking for an issue, right? They need something to go and show that they're making progress to their members. So if you can go, hey, here's a really easy, low-hanging fruit issue you can champion, which is we would have to deal with less public health issues if you just put carbon dioxide alarms and homes. And so lift an Uber,

famously deployed a grassroots strategy, which is they go into a city. City council tries to shut them down, and they've already built a group of their consumers who can immediately activate a grassroots lobbying. You get into obviously building your brand and public relations, right? And so we talk an awful lot with a lot of our startups about make sure you are crafting your brand and a story in a way that puts you, aligns you with issues that the grass tops are going to care about and puts you into an endearing story. So, you know, tell the why of your business. It's like the Simon Sinek TED Talk idea of start with why. Yeah, exactly.

Yeah. But in like the case of Hop Skip Drive, don't start talking about how you fingerprint and start talking about this, this, for whatever reason, the way we've structured our society is such that parents are expected to work incredibly long hours. Kids get out at 3 o'clock. And this is expensive. And it's stressful for the parents. People can really relate to that. Yeah. Like, how do you, like, this is a big issue. we want to help you. I started a company called Walk, Walk, Walk, Walk, to make my kids come home. That's your version. So you look at this whole sort of toolkit and you're like, okay, so you've got to figure out who are your allies, who's not likely to be your allies,

how do you put that together? Who do you go to? This is incredibly interesting. Just one quick note on the moose and the story and starting with why. It occurs to me that it's incredibly biased towards consumer-centric companies because people can relate to a story where it's something they experience personally. It's like this whole joke about you can never get rid of ride sharing because half the congressmen would freak the fuck out. Oh, my God. You can't do that.

We use it every day. It's way better than what we had before. But that's not necessarily true of enterprise products that are invisible. You're right. And so if you're an enterprise product, you're not likely to employ a grassroots strategy. You're likely to employ a different strategy to get there. One of our portfolio companies is a company out of New York called Seamless Stocks. So in the simplest way possible, they allow, I always use an example of, like, you live in a city and you want to, like, camp out with your kid in the local park.

We've all had some issue like this where you have to go onto their website and dig around and find the form. It's a PDF. You download the PDF. You print it out. Antiquated. You're lucky if you can get that far. You might be able to scan it and email it, but then, like, they send you something in the mail. Then you have to, like, write a check, send it back to them.

And then, like, four weeks later. And most people probably don't object to the idea of, like, maybe there should be rules about who can camp out. in parks or not. What they object about is it the user experience of government and trying to interact in a city like that is so frustrating. Sealless stocks allows you to take government to take all those forms. You can upload the PDF into their system. It automatically takes the PDF, reads it, scans, it turns into responsive Webble Mobile app. I've got the permit right on my phone. That would be an example where you're not likely to activate the citizens to rise up and go, you, my government should deploy seamless stocks. But that would be where, understand.

and grass tops and influencers around different networks to be able to get directly to mayors. We are massive fans of mayors. Because actually, mayors, in our entire political system, in the U.S. context, in our political system, mayors are pretty much the perfect blend of very, very powerful and yet incredibly responsive to very immediate citizen, yes. Wow, Adrienne Fenty would love to hear that. It just means that the most interesting unit of analysis in this ecosystem is this city. No longer the state, no longer the country, it's the city. Exactly right. And that mayor has

direct things they can control, but they also are very, very likely to be at least an influencer over the health system in their city and the utility and their CISD and the universities in their city. I mean, all of that sort of civic infrastructure that is just in the early phases of going through a radical 20-year reinvention. But the interesting thing about mayors is they all talk to each other and they're connected and they have their own network effects. And they're all looking to be a hero, and they're in a certain sense competitive. They're collaborative, they're competitive. Well, you want to play that up because then you can compete like Google Fiber did when it was trying to make cities bid. And mayors have the full discretion to say, hey,

I'm going to make my conditions very favorable for you. So come over here. I mean, Mark describes this as like regulatory arbitrage. Yeah. And that is exactly the kind of element that we play with a lot, which is how do you go and give a mayor a like totally pre-packaged, here's how you be a hero. Because for a lot of mayors, like there's big, giant long-term structural things that they're trying to solve that, frankly, aren't ever going to come to fruition

until they're out of office anyway. But I made it much, much easier for you to do all the stuff you have to do in my city with less frustration. Like, that's a easy, quick-win thing that they can show their constituents that they did. And so, you know, yes, in some cases, it's easier when you can leverage grassroots

and you can get the citizens to rise up. But in a lot of cases, It's just being real smart about what people's interests are and how you help them get to where they want to get to. We started this in some ways about talking about the nastiest problems, the nastiest sectors. But the way you keep describing this, it sounds like this regulatory hack approach, this applies to everything. And that your discipline and your kind of view of the world is not to be afraid of government. Right. But that innovation is coming closer and closer to your world is what I'm saying.

And that more and more everyone's going to need. need these skill sets. Yes. Yes. And we would very strongly take that perspective. I mean, we focus on the areas that we focus on because we think those are, we think we're playing Wingretti, right? We're putting the, we're sending the puck to where we think everything's moving towards. So everything I talked about, there's tons of people in DC who just probably couldn't even articulate everything we just laid out because it's so obvious to them. In the same way that there's a whole bunch of stuff that's totally obvious and instinct to a bunch of people in the Valley that is utterly foreign and baffling. And I'm sure every time you have a mayor or a governor

or a congressman or some think tank person for DC who comes to the valley and they're blown away and they're like, what's going? It's the same problem. And so we think we think very, very much about the fact that DC and Silicon Valley are inevitably smashing together in a whole bunch of different ways. But one of them is actually methodologically. And that's in this knowledge that people that have been walking the halls for years in DC know that you're codifying into this mindset about regulatory hacks. How does the Valley solve a problem think about it? How does D.C. solve a problem think about it? How do you put those two together and how do you help startups, the best startups, anywhere in the world, leverage that, and bring the networks.

Pre-series A, pre-series B. Startups, they don't have the resources and the time and the runway to be going around going, I'm going to build a giant global network of mayors just to be able to launch my product. That's what we do. So you build that network. We view what we do at A6 and Z as being sort of a network of networks. And this is a different way of thinking about it. it, which is just incredible. This is really interesting. The art of the regulatory hack, you start with a power map. I mean, it doesn't have to be sequential.

There's the moves, which can include grass roots and grass tops, bottom up, top down, navigating, brand story, and then figuring out which players in order to figure out what moves to make. And then is there anything final stuff? And one of the interesting points in all of this is nowhere in there. Did we ever talk about lobbying? Like in a... I was waiting for that, honestly.

Almost never. Does this actually involve lobby? Is that because lobbying is for old school energy companies? Yeah, to some extent. I mean, like lobbying is a very long- Defense contractors? I mean, what? Particularly at the federal level.

Lobbying is a very, very long-term game. It's hugely resource-intensive. You chip a little bit away, your opponents chip a little bit away, to get something interesting done. This is much more about being able to understand the networks of power, the regulations, how you deal with stuff, to actually get things done. in these kinds of sectors. And in some cases, yes,

part of your regulatory hacking strategy is maybe you need to go lobby, but that is exceptionally rare. Yeah, I mean, Ted always talks about our thing. He always says we're never going to ever do. I think the point is that there's existing, established systems for doing things. When you're trying to do something new,

you have to go about a different way, but you can't also ignore the existing structures. And this is how you navigate that. You have to know there is a chess board. We've been here for a couple of days, but I'm always struck by we're in a gathering of people, and you start to see the chessboard and realize you really have no idea how it's played. I mean, I'm like, wow, we are in D.C. Because all these people are like, okay, you should go talk to them.

I'm like, who are they? Here's the thing. Here's the thing. D.C. feels the same way when it goes to Silicon Valley. Oftentimes, it's almost become sort of ideological. In the Valley, everything is pure and libertarian. And you're like, as wonderfully collaborative as the Valley is, it still matters who you have a relationship with. And people still have, like, they're just, they're both relationship businesses.

Of course they are. It's actually more similarities. They're just different networks and they're different languages. I agree. It's useful to outline that, which you've helped us do. All right. I'm a fan of the United States and it's birth, but why 1776? You know, it's interesting because, again, we do stuff all around the world, and it isn't so much about the United States, actually. There were four things that happened in the year 1776 between March and July. The first was that the first steam engine was put into production in the north of England, kind of kicking off the industrial revolution and transforming every aspect of society, economy, politics.

The second was that James Cook left on the last of the major voyages of discovery. We like to call him Captain Cook. Captain Cook, right, mapping out, basically finishing out, mapping out the globe, right? Connecting the globe together. The third is that Adam Smith published the wealth of nations in Edinburgh. laying out the sort of philosophical underpinnings of markets and capitalism and entrepreneurship. And Thomas Jefferson wrote the Declaration Independence. And paraphrasing, right, essentially he says in there when institutions no longer serve the needs of the people, the people need to rise up and create new institutions.

So you put those four things together. We think we are at a similar inflection point in history. And if you sat there in 1776 and you were in August of 1776 and you knew that all four of those events happened, you'd probably think, wow, our world has changed beyond imagination. and you would have no idea what was coming, right? Like just how early in that process you were. So that's why 1776. That's so awesome. And what I also love is because you talked about how DC,

you talked about how you're really global. We tell that story all around the world. The great one was we had David Cameron come for a visit to talk about cybersecurity. But he's the only person. We handed him a 1776 shirt. And he goes, I don't think I will be wearing that. But we have British phone boots.

So we have a British phone booth in our campus in D.C. So instead, he walks over and he signs the side of the British phone book. He goes, I think this is the only thing I can leave my mark on here. That's a really good appropriation of his accent. That's pretty good. Thank you, Evan, for joining the A6th and the podcast. My pleasure.