The a16z Show - a16z Podcast: Latinos and the Tech Economy -- U.S. Reps. Sanchez and Gallego Talk Bridging the Gaps

Episode Date: July 9, 2015

There is a gap between the technology industry and the fastest growing portion of today’s workforce and the workforce of the future: Latinos -- argue U.S. Representatives Loretta Sanchez (California) and Ruben Gallego (Arizona), both members of Congress. How can we bring more Latinos -- and other underrepresented populations -- into the tech industry, and what roles do both government and fast-moving tech companies have to play? Especially if tech entrepreneurs and government have a hard time working together? “We have the innovators...[but] how do you move that Latino innovator into the mainstream?” asks Sanchez in this episode of the a16z Podcast. Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to the A16Z podcast. I'm Michael Copeland. There is a wide gap between the technology industry and Latinos, the fastest growing portion of today's workforce and the workforce of the future, say Loretta Sanchez and Ruben Gallego, both members of Congress. Sanchez, who represents the central portion of Orange County, California, and Gallego, who represents the Phoenix area of Arizona, join this segment of the pod to discuss how to bring more Latinos and other underwomen represented populations into the tech industry.

We have the innovators. It's just how do you move that Latino innovator into the mainstream of innovation that is what we see here in the Silicon Valley. Finally, why tech entrepreneurs and government have a hard time working together. So a lot of tech companies have really been operating very well without our interference. And so the first time, you know, when we meet, you know, whether it's tech meeting government, there's like a cultural divide. Well, the cultural divide exists because we haven't really needed to interact.

Loretta Sanchez and Ruben Gallego. Welcome. Thanks for joining us. So you guys are out here in the Valley on a sort of fact-finding mission or information-gathering mission. And we had a brief discussion. And one of the things that you guys brought up was this idea that you are and your constituents are this kind of pipeline to the workforce of the future. And I want to unpack that, both kind of how you view the work of the future as it relates to. the people in your home districts, and what we mean by work and how we can get more people involved.

Well, we know that just in a few years, one out of every four Americans will be of Hispanic descent. We know that nine out of ten Hispanics in America are actually born here. We know that it is the youngest population. The Hispanic Americans are median age, the youngest population here in the United States. And in fact, we know that every month, 83,000 Hispanics in our nation turn 18. So we are really looking at the crux of the workforce of today and even more so tomorrow. For certain, we will still have the traditional services. We'll have lawyers and doctors and, you know, car washes if there's water in California and things of that sort.

It's not funny. But we will. more importantly, we know that the future is built on all of this biomed, biotech, infotech industry, in particular that California is so known for. And so what we want to ensure is that all children going through the school system are ready to take on the responsibility of being in that high-tech world, of working, of developing, of creating, if you will. That's what we need.

Rubin, when you hear that description of the workforce of the future and that kind of work, how does technology relate to that? And then, you know, we're in the middle of Silicon Valley right now. Does Silicon Valley need to exist in Arizona? Does Silicon Valley need to exist in Orange County? Or does technology allow for those jobs to kind of be anywhere? Look, Silicon Valley needs to, in the spirit of, Silicon Valley needs to exist everywhere in this country. I mean, it's a very entrepreneurial, innovative

economy that I think is one of the longer-lasting success stories of America. So we want to see this happen everywhere. I mean, as a person from Phoenix, and I'm always trying to get Silicon Valley businesses to move to Arizona, trying to get venture capital to invest more in Arizona. So, you know, obviously we do need to see that. But at the end of the day, it's just a numbers game. And this is what we have to focus on. We have a booming, the boomers are retiring, and they were one of the largest, most well-educated workforces that the world had ever seen, and they need to be replaced by somebody. And the only population that equals that population of the boomers are Latinos and other immigrants, but Latinos are a big portion of that. So if we want this economy to continue growing,

if we want this economy to continue and be innovative and not shipped overseas, then we need to educate the largest work first population that's coming up, and that is Latinos. So there's many ways to do it, and partly it's just your K-12 elementary school education, but some of it's also just connecting Silicon Valley capital to Latino entrepreneurship. We're a very entrepreneurial society. We open up businesses, even in the downturns of the economy. There's these businesses that are very innovative and can grow with some great talent, but we don't have capital. Most Latinos, when they start their first business, they take it out of the equity of their home. Well, that doesn't work as much anymore, especially if you want to move beyond just,

you know, preliminary stages of starting a company. Yeah, a startup. So this is why I advocate, you know, for like relationship linkages, right? If you are a venture capital, I recommend you go out of your way and go to some of these accelerators, some of these startup labs that are known for helping Latinos. please hire more Latinos on your staff because they will be able to introduce you to more, more projects and more and more startups. And then also get involved with the nonprofits that are very important within Latino community.

So just what we're here with, the Congressional Hispanic Caucus Institute. Okay. I was going to say, can you be specific of what are some of those groups that people should pay attention to? Well, the Congressional Hispanic Caucus Institute, which is what me and Loretta help out as most as can, It's really a pipeline training program for young men and women of Latino descent to get into politics and business. And it's a great way for them to get mentorship into fields that most of them were never available to. I come from a background. My mom was a secretary.

I didn't know what was capable and what kind of workforce was out there until basically it was a little too late for me. You know, I did not know the idea of startups that had known anything about venture capital. know anything about investment banking. If I had known about the stuff at a younger age through the kind of mentorship program, such as what we have with CHCI, I think you're opening up the minds of a lot more, you know, thousands of more young men and women. So I really encourage a lot of people to be looking at those kinds of profile of organization. Describe the gap, then, that I think that you guys are talking about that exists between the

Latino community by and large and the sort of innovative technology world that is really, obviously dominant here in Silicon Valley, but I think that our belief is as software eats the world, technology becomes more and more of a part of every industry. So describe the gap and then maybe... It's interesting because if you really take a look at what is happening in the Hispanic or the Latino community, whatever you want to call it, we're fast adapters of technology. Right. I mean, I can go into some of the poorest homes that I represent and it's amazing that their kids have iPhones and that they're working and that they're tech. So we are very good assimilators of the technology that happens.

And even more so, we're probably pretty creative about what's the next step? What do I want? What do I want with a communication device? What do I want when I'm looking at TV or actually not TV anymore, right? When I'm looking at trying to get some sort of content in whatever manner I get it. Probably the Latino community has ideas on that. But somehow, we haven't gotten from being saying, You know, you see, it used to be in the old times, you saw something on TV and you said, oh, I had that idea five years ago.

And I said, oh, I should patent it or whatever. And, you know, I mean, we have the innovators. It's just how do you, how do you move that Latino innovator into the mainstream of innovation that is what we see here in the Silicon Valley? When our fathers and our grandfathers and our moms and stuff haven't been present here. I mean, we haven't been the innovators. So how do we move? How do we move our kids? into this space.

Well, I would argue that more and more are moving to the space. Ribbon, you were... Well, and more and more and moving the space, but if we want, you know, the reason we want more Latinos in startup work and in finance is because it's true wealth creation. And we don't want this generation of Americans to also skip out in wealth creation because it's very important for, you know, the whole American economy that, you know, prosperity shared as wide as possible.

The gap that we have is in two areas, relationship and education. So there's a lot of young men and women that are coming out of college with the wrong degrees that don't put them in the pipeline to be effective in the startup business. So for example, they may not be getting the computer science background or the mathematics background to get them into the pipeline of a really good tech company. And when they're at the tech company, that's where they meet other people that are going to help them innovate. They're going to help them become more disciplined. They're going to help them, you know, think of new grounds. And most of them will, what happens, they break off in their

circle of friends and they leave and they start their company. And they're reaching back to the networks that they use and made through during, you know, during either college or at that company to find their funding and to move on. Now, when a Latino student does not even get into that basic first step, which is that the first job at that Google, the Facebook, whatever company you can think of, that's going to impede almost any other future progress that we would want to induce so they could end up having a very successful startup career. So, you know, what we are looking for and what we're recommending are steps for, you know, startups and the tech company and the tech industry in general to be able to find those

students or find the places where they come from, the feeder schools and making sure those feeder schools are actually training these students to be ready for the modern workforce. Right. Right, because they might not be an Ivy League school, but they're still great universities where they've learned the skill set that they need to be able to compete well in the new tech companies. Yeah, I think you guys are speaking to the Latino community, but globally innovation can happen anywhere. And like you say, technology has this way of, if something's good, if something is popular, it finds a way to find an audience or customers or something. Yeah, but success is never a mistake. people aren't successful by mistake or by chance.

And innovation zones such as, you know, around here in San Francisco, right here in the Bay Area, didn't just pop up overnight. They were created because there was a concentration of education, wealth, and opportunity all at the same time. So even though we are spreading technology and education, you know, across the globe, in order for you to actually fully take a hold of it and make a career out of it and be successful with it in terms of an entrepreneurial business, that is not going to happen by chance and circumstance. That's going to happen by relationship building, educating yourself, and learning from other peers. The reason, you know, this area is so innovative is because they're already innovative people here and they feed off each other. I would agree with all of that.

I think my point is that increasingly, and believe me, Silicon Valley has not done a very good job of this, but that increasingly Silicon Valley is worried about missing out on this fantastic person, this fantastic idea that's happening someplace else. Right. Because it can. And so it's trying to find ways, I think we're trying to find ways to build those relationships better and haven't done a good job. But the best way to build a relationship better is to make sure that you're diversifying who you are talking to. Right. And you can't, you don't have to pot in one place. Right. I mean, and that's the beauty. Exactly the technology. that we have now allow people in South Dakota or people in Orange County to be a part of what's

going on up here or vice versa or around the world. So you don't have to necessarily pot in one place. You can still find all of those innovations. But I would agree with my colleague. I mean, the fact of the matter is where you have creative people gathering, you have more of a quantum leap, if you will, an ability, a platform in which to... move up where you have money possibilities. It's much easier to do. Having the resources available at your fingertips becomes very important. And traditionally, Latinos have not been in that network. They haven't been in that place. They might have been, they're certainly all here. There are plenty of Latinos here in the Silicon Valley. But for some reason, there's this sort of, you know, bridge

they can't walk across to get into the Google. So one of the things that we're advocating is for the future of our country, they need to. We need to. We need to have the innovative companies build those bridges. Right. And I think you're going to see not just Latinos, but plenty of other folks walk across those bridges, like you say. And we'll be all stronger for that. I mean, that's the, you know, I think that's what makes our economy a very vibrant economy

is that, you know, we continue to innovate, but, you know, the people that are going to be doing innovation in the future are going to be a very diverse background that's going to be, you know, reflective of the United States. Yep. Let me, let me shift gears here a bit. You guys obviously spent a lot of time in Washington. Silicon Valley has not a great track record working with Washington. And I think technologists often go to Washington wanting to change government and get things done and

come back, you know, bruised and somewhat disillusioned. what as entrepreneurs do, should they understand or don't they understand about the U.S. government? And how can kind of the tech world and the U.S. government work together better? Well, I think the most important thing and yet just talking to, I have met those tech people. Like, one, government is not the private sector. And it's not supposed to be. We're not supposed to switch quickly on a dime. That's what causes a lot of problems and instability in the world.

Two, we are not the government. We are a representation of people. And it's not up to us a lot of times to make decisions. We are here deciding on behalf of who we represent. We're not CEOs of some corporation, and the government should not run like a corporation. We have liabilities that we have to take care of. We have the Defense Department. And a lot of times I hear tech CEOs like, well, you should run this like a business.

I'm like, okay, well, let me explain to you how this would run if you want to run your business like government. You would have to spend a lot of money to make sure your competitor didn't eventually get strong enough so you could overtake you. You would have to pay the outgoing costs of everybody that already retired from your company and at the same time make sure that you're still putting enough resources into educating the people that are coming into your company. That's what government does. And there's a certain amount of hubris that occurs when, you know, tech companies, CEOs come and talk to us. Now, there are a lot of good things they can learn from, and we can learn from them. But it's not usually as simple, I think, as a lot of people seem to think. But at the end of the day, we're here because we are a customer service organization,

and that is representing the citizens of this country, or at least our localized area. Look, government is supposed to be democratic, right? I mean, that's what we all believe in the United States. So the democratic process is that everybody gets their day in court, everybody gets their chance to petition, that everybody gets their redress of government. Everybody, if you want to participate, you get your ability to participate. So if that's what we believe democracy is, when we end up allowing people in the process

to have their chance to participate, it slows things down. It slows things down. And so it's not efficient. The way our government was created was that everybody, gets their day. It gets the day to come in and say, I don't like that freeway. I don't like how you spend that money towards that country. I don't, you know, and we have to have a process. And that's the process, the process that we have in the federal government. The other reason I think why tech companies haven't been successful because they haven't really

needed government either. And that's something that's a lot of different from a lot of other industries. A lot of tech companies really have been quite successful without the regulation or interference from government. That, you know, that's a good thing. we don't really want to come in and regulate something unless we absolutely have to. And that's usually to protect the consumer or national security. And so a lot of tech companies have really been operating very well without our interference. And so the first time, you know, when we meet, you know, whether it's tech meeting government, there's like a cultural divide. Well, the cultural divide exists because we haven't really needed to interact. And that's not necessarily

bad thing. You know, if companies can continue to innovate and continue to play their workers as well as they do, you know, and continue expanding. And without it causing any problems to consumers or to other citizens, you know, there's no reason why they should, you know, interact with us. It seems that just as an observation that technology and government will interact more and more as, you know, it moves, again, as technology moves into different industries, whether that be Airbnb, right, or Uber and Lyft and transportation, et cetera. And so.

Certainly because you're talking about safety. Now you're talking about regulation. That's where we interact. in regulation. Talking about person's personal safety. So in that spirit, though, what I'm trying to get at, and I think you guys have done a good job of explaining some of it, is like, we are going to be talking to each other and interacting more. So we need to figure out a language and a common ground that works to move forward. Yeah.

And so, I mean, you do see this in the interplay between Uber and cities, Airbnb and cities and B and Cies and regulations. And I think it really is a cultural mismatch. But it doesn't mean that we can't get over it. But it does frustrate, I think, the tech company that we can't move as fast as as innovation. So Uber was basically created a couple years ago and has been able to overtake, you know, some very strong, you know, markets, you know, cab markets. But we've had cab regulations now for more than 70 years. Right. And so we would love to be able to change.

And some of us has, I was involved in some of the changes in Arizona. And some of us are involved in these changes are able to move in that fast. But the fact that, you know, sometimes it doesn't happen. doesn't mean that we're trying to destroy that new innovation. It just means that we're trying to cope with this change in technology. It's disruptive technology. They describe it as disruptive technology. If it's called disruptive technology, it's going to be disruptive to government. And sometimes the technology is changing so quickly on a day-to-day basis. Well, while we're trying to address what happened with technology, you know, just yesterday, I mean, now technologies are

passed to next month. And so we're, you know, a day late in a dollar. And so we're, you know, a day late and a dollar short in having something that actually addresses the new concerns that are popping up every single day. And that's the nature of technology. The technology is changing so quickly that government is trying to catch up to what is happening. The question is that we, as people who want to ensure that things are safe, that new things work in the general order of keeping civilization alive and going, et cetera, national security concerns, privacy concerns in particular hit this industry, this tech valley a lot. We have to address those issues. Unfortunately, the process is slow in addressing them because it's built into the process. But, you know,

we're not here to stymie business. I love it when I see something that works. I love it when someone comes up with an idea and I get to use it and it's wonderful. Speaking of which, you know, here we are. You get to talk to entrepreneurs via the podcast. What could, you know, if you could wave your wand and get something made for you to help you in your job and with your constituents, what kinds of things or what sort of, what do you want more of? Hmm. I would like, a pill invented that would get me over jet lag because I go back and forth every week from Washington, D.C. to California every three to four days. And, you know, that's, that's very, very hard on the body. I was going to be a little more serious. I hope you guys don't mind. I think one of the best things that could happen is that sometimes government across different levels does not share in prosperity whenever there's success. So here I'll give you a good example. If you're a police officer and you continue continually grab something and throw them in jail because they're homeless, you're counting, you're costing taxpayer dollars right to that property to the property tax of that area.

But if you're the federal government and somehow you come up with an innovative program to get that person off the street and they're no longer homeless, you just save the county a lot of money. But actually the only area that's going to show the prosperity of it, which is diminished cost, is going to actually be the feds who actually created the program, if at all. So the feds actually don't receive it. I'm sorry, it's the city that receives it. So that's where you end up seeing a little stronger, I'm sorry,

less innovation when it comes to some areas because even though it'd be in the best interest of the federal government to take care of homeless issues, it doesn't actually at the end of the day bring down the bottom line for some of these agencies. It only ends up helping the local government agency, but they don't somehow share the funds upward down. Well, so it's an interesting thing. We talked a little bit in a podcast about distributed computing, but this idea of big data and how, if you can see that, if you can see these interactions and these kind of, you know,

the input and the output and the cause and the effect. We do see that now. The problem is the funding behind it is the difficult thing. So the big thinkers in politics and policy right now are trying to figure out. We know where the interconnection is. We know how this will affect the future output or the future cost of that particular citizen and the action towards them or against them. But if nobody actually is somehow, you know, somehow emphasized or pushed to do it,

then why would you do it? Yeah, I mean, it would be interesting. Again, we were talking about modeling social kind of science things. And so if you have this, you know, real world and here's the variables and you change them, what happens to homelessness? What happens to the cost? But we see that in every aspect. I mean, you know, again, I go back to water in California.

We're seeing that happen with respect to this fight of somehow, you know, we're down in water and people are saying, well, you know, because of the EP. regulations and the endangered species, we have to worry about the fish and somehow that's against the people or what have you. I mean, there are all these simplistic ideas about what's really happening with the water in California. The reality is that water rights and history and environmental issues and the way people use water and agriculture raising food that actually feeds the rest of us.

It's a very complicated model. And it would be interesting to see if somehow we call it. could actually build a model. I mean, I'm a former model builder, you know, and if we could build an algorithm that would really take into account some of what's going on so that we might have a more mathematical way of looking at this water distribution arena, because I think if we can bring it down to a mathematical equation, we might be able to solve it easier. I want to thank Congresswoman Loretta Sanchez and Congressman Ruben Gallego. Thank you guys so much. Thank you for having this.