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We expected that there would be more infrastructure, we expected flying cars, we expected a Jetsons sort of future, and instead we got a communications future and an Internet future and a computer revolution. Great companies and great stories all share similar themes in perfect protagonists and an important mission that simply must be achieved.

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Those are the words of today's guest, Catherine Boyle, a partner at General Catalyst, which is a global investment firm that recently announced it had raised two point three billion dollars across three new funds. Catherine has backed a number of notable companies you've probably heard of like Stripe. She's also about companies like Andrle, a new type of defense company working hard to keep American service members and civilians safe.

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In her words, the best CEOs and founders are able to look at data, synthesize it, process it quickly, and then mobilize a team to rally around a mission.

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In today's episode, we talk about that, plus some of our favorite philosophers like Leo Strauss and Rene Girard.

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We talk about the mass migration of movement of people that's happening right now in the US. We talk about the new ways of working and thinking and where we're headed in the new normal. Let's jump into today's conversation with Katherine Boyle.

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This season of Hidden in Plain Sight is brought to you exclusively by our friends at Splunk. The Data to Everything platform. Splunk helps organizations worldwide turn data into doing its time for data to be more than a record of what happened.

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It's time to make things happen, learn more its function or by clicking the link in our show notes.

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Catherine, welcome to the show. Thanks so much for having me. I'm excited to talk to you. You just polished off a chocolate croissant. Sorry to tip your hand there. That is a great way to stay.

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The way I it's the secret to success is a chocolate croissant every morning hit 12 other early stage VCs just bought chocolate croissants.

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Now, if there's anything there, metro area. Yes, for sure. So tell us a little bit about yourself in your work. Our listeners might not be familiar with you, but what do you do? Sure.

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So I am an early stage investor at a venture capital firm called General Catullus, where we are a sector and stage agnostic venture capital firm that's been around for about 20 years. And the headline is we invest in category defining companies, companies that are building the future that we don't see and we invest at the earliest stages. So so because I am so early in sort of the life cycle of these companies, these are often 10, 15, 20 year journeys that where the company looks very different when when I invest then than what it looks like when it goes public and even beyond.

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So I think that the high level is that we're where investors. But I think beyond that, I look at this job as as much more than investing. I look at it as a way to look at where the future is headed, a way to back people who are radical in their beliefs. Often they're protesting the current status quo and they're thinking about things in a very different way. So it's a true privilege to to be a supporter to those types of people and the era that we're living in.

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I love to unpack one thing you said, which is category defining. I think that's very interesting. The best companies often create new categories, new markets, and then tend to dominate them. So when it comes to that, how do you think about like category design and what does that really mean?

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It's a it's a great question because I actually think investors really struggle with this. What happens when you're a successful investor? Say you invest in a great defense company in early in your career immediately people, because there are mimetic and they like to draw patterns, will say, oh, you're really good at understanding what's happening in defense. You should invest in twenty five other companies in the defense world. But but that's not actually what happens in markets and that's not what happens in venture.

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There's usually one company that dominates the market and in finance where an investor and a company called Stripe that the mission is to grow the GDP of the Internet. What an extraordinary mission that is. But but it's a category defining company. And we invest in all sorts of different categories with the belief that there will be a market leader and we want to be in that company. And what's interesting from the investment perspective is that a lot of investors will stay in, they'll stay in their lane.

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They'll call it like, OK, like once they make an investment in cybersecurity, I'm going to do a lot of other investments in cybersecurity. And I'm what's known as a generalist investor. And that once they make an investment in a space where things are doing quite well, I immediately say, oh, gosh, what's next? Maybe I should look at journalism, maybe I should look at health care, maybe I should look at longevity and areas that are so disparate from each other.

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I consider it a credible privilege to to be in a career where I'm constantly learning. I am often the dumbest person in the room because I'm starting at a learning journey again and again and again. And I have to fight against the kind of human impulse to want to be an expert and to want to be someone who who considers themselves to be kind of a titan of a certain field.

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Sure. I think that earlier approach you mentioned is a bit problematic because inherently the investor that you chose to be an expert in something and continue to invest again and again in similar companies or products or services, they tend to compete with their prior investments. Right. They're not all in and in terms of thinking, OK, this is going to be the category defining investment. How do you think about avoiding Lambesis and this desire to imitate others, especially in a world when we're inundated with messages, whether it's on social or from our peers?

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Is this something you consciously try to avoid or how do you think about it?

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I love this question because it has absolutely nothing to do with investing. There's a lot to do with belief and practice and habits. And I think it is it is human nature to to mine each other. It is human nature to want to be like the people that we see succeeding and to imitate each other. And this is this is Stralsund view is already in view. There's many philosophers who've written about that. This is something that is innate within us and we have to fight against it.

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And I think success begets success in a way where when people start feeling like they're going down the path of success, they think they're doing things right. I'm going to certainly in investing, there's there's many examples of people who stay in their lane, make many good investments, have wonderful careers and and who kind of build off of that sort of expertise. And that's one strategy. But I think what often happens and I think this is the. Old story of investing, but also the untold story of company building is that we see someone doing something successfully and we try to match that person's behavior.

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And if it's not your core strategy, if it's not who you are and if it's not original to who you are, you'll likely fail. This goes counter to sort of like human behavior early in our lives. You know, it's like all babies learn from their parents and that's actually how you learn the fastest. And that's that's fine. That's innate within us that we learn from each other. But the outlier scenarios and everything in life come from doing something differently that other people don't see, which is, of course, the title of your of your podcasts.

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And so I very much believe that you kind of have to constantly be asking yourself, like, why am I doing something? How am I going to get to where I'm going to go? And that's much more of an internal conversation than an external conversation with your peers. I think that peer groups can be wonderful as support networks, particularly for founders, particularly as we move along in our life, but ultimately this sort of individual journey and staying true to who you are and really questioning your own lies to yourself and your own narratives to yourself is the way to avoid that kind of money.

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And it's a practice. It's an ancient practice in many ways to to remain stoic when we get emotional or excited about what's happening in our own lives.

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Very cool. And, you know, you mentioned Strauss and Gerard. Let's start with Strauss. You're a little bit so many people might be familiar with persecution in the art of writing. What drew you to Strauss? How did you become aware of him and what did you take away from him?

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Yeah, I already I already love your listenership. If they're familiar with the art of writing, it's funny. That's a that's a piece that I was introduced to in college, actually is like the first piece I read by Strauss. And I was very fortunate. I had a different kind of upbringing than most. My my father was was formerly in the Jesuit priesthood for ten years before he had me. And so, of course, Strauss and sort of the ancient philosophers were something that he sort of understood.

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And so I kind of grew up with that. And then when I got to college, I was introduced to Strauss, which, of course, is one of the one of the people who really said we should go back to the ancient texts and we should read them in a different way. We should read them in the context of the fact that people who are saying contrarian things or people who are speaking truth throughout history have mostly been doing it in authoritarian regimes or places where it is unpopular to say truth or popular to say what you believe.

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And so you have to couch things and sort of different linguistic, linguistic ways. And he talks. I can get deeper into it in terms of like esoteric and esoteric writing. But the thing to really understand from that piece is it is very difficult to say what you believe in a straight on fashion. Even in this podcast, we'll probably couch many of the things that we believe and other analogies and we'll try to soften things because we want to reach the broadest audience.

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And that's sort of a natural human thing. And so when you read a lot of Strauss's work and then a lot of the books that he tells us to go back to, which is platonic, the platonic dialogues, you're looking for sort of these hidden trips that that maybe other people missed. When people read the republic, oftentimes they think that Plato was arguing that all children should be owned by the state. And I think Strauss would argue that that was not actually the case.

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And so how does this actually how is this relevant to our daily lives? Because these are works that were written a very long time ago. What it says about our daily life is, you know, it's very difficult to stand up for what you believe. It's very difficult to say things head on. I actually think there's an opportunity to do that more now because we are yes, we are living in times where it's where it's hard to say what you believe, but we're not an authoritarian regime in terms of someone coming to your house and pulling you away in the United States.

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If you say something that is goes against the status quo, if you say something that goes against sort of what we believe in business to be true or what we believe in in our in our daily lives to be true. So I actually think there's a great opportunity to kind of move away from the same instinctive we must protect ourselves and to say things that that we believe and actually have real conversations and dialogues about what's going on in the world.

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And for the first time in history, too, there's opportunities to say those things through anonymous pseudonyms and things of that nature. And there's also economic opportunities kind of on both sides of the spectrum where you can still earn a living even if you're ostracized in some digital sphere. There's other spheres that you can go to where you might find you might find your people more quickly that way.

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The whole story of social media is just sort of beginning. And I'm very excited about new media properties and companies like Substract, which I think is for sure. In my world, people have been talking about a lot because it's allowing journalists and people with alternative voices to have a broader reach. And I think that's sort of the story of social media, is that for so long, if you wanted to get your opinion out to the world, you had to go out.

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A paper newspaper, and we spent decades building these massive distribution platforms that were incredibly important to society from the fifties onwards to allow people to get news, or you had to be on one of the three channels on television if you wanted to get your voice heard. And there was sort of this gatekeeper mentality of there are editors who are going to decide whether your voice is strong enough. And I think the biggest shift that we're seeing is that everyone has a voice now.

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And in the early years, there's obviously repercussions to that. And there's a cacophony around people arguing with each other and trying to kind of gain readership and followings. But I think that changes in sort of this next generation of companies where people can be more nuanced and more thoughtful and can and can build careers and actually monetize their voices and their ideas in a way that that allows for more people to be known. So I think there are a lot of opportunity to be yourself and to have a unique voice in this new influencer economy, which I completely agree.

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And shifting gears to Jarrard for a little bit. So if people aren't familiar, Rene Girard, the French philosopher who taught at Stanford, has written a number of fascinating books. My personal favorite is Job, but I would love to get into that. So how did you hear about Darod and what have you taken away from some of his works?

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It's so funny because I know a lot more about Strauss than I know about Shara'a, and I've been talking about this for a while. I did not know who it was until I moved to the West Coast. And I think that says a lot about sort of East Coast, West Coast dynamics, where Strauss was this professor at the University of Chicago, very influential and mid 20th century visual art is sort of this. He was a Stanford professor that I think what I interpret him as someone who sort of reinterprets the Christian story in a twenty first century mentality, almost in a scientific way or an anthropological, I guess is a better way of culture.

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If he was an anthropologist, he was a theologian. He was he was someone who sort of merged a lot of views. And I think his his primary thesis is that my thesis and this sort of desire that humans have to to each have these sort of scarce resources leads can lead to violence and lead to scapegoating. And the two greatest scapegoats that but that I mean, he talks about Jesus Christ is the greatest example of scapegoating someone for various beliefs. Socrates is also someone who was scapegoated.

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But it's it's these people who say things that society scapegoats because because they can and that that comes from a desire and it comes from scarce resources. And so I think there's a lot of people who believe that abundance is the best way to move out of that out of that sort of human instinct to scapegoat. And what's interesting is I think that's been adopted by a lot of technologists as technology to building new technologies, building new companies leads to abundance. It's not a Zero-Sum game.

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If you're if you're building new societies in your and you're improving quality of life, which I would argue that Silicon Valley has done more than any other asset class or any other part of the US economy over the last 50 years, that that's a good thing. And that that actually kind of rails against this society of scarce resources and Zero-Sum games. But there's a lot of interpretations, and I'm not a charity and scholar by themes that I sort of came to in pretty late, but I think is his work is really interesting in that it does explain a lot of social media culture, a lot of the fights that we see on Twitter, which is people arguing for airtime, but also scapegoating people for various beliefs at different times, sort of haphazardly.

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And so I hope that the next generation of products kind of take into account this theory of abundance versus versus scarce resources.

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Yeah, I think that I think they are. And that's a debate. That's one where many people want to come to the table when you start talking about abundance as opposed to who gets what and dividing up a pie, that's already not big enough.

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As we think about venture and investing in the world of hedge funds and private equity and everything, it's been a struggle over the years for these asset classes, I think, to prove themselves. But in terms of ROIC and IRR, however, at the same time you have, you know, just a rush of people trying to get in. There's ten thousand hedge funds in the US. There are more people becoming venture investors than ever before. Where do you see these spaces?

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And do you see this is becoming like the new normal? Is our most technologists and business owners going to become angel investors in the future? What trends do you see happening here?

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Yeah, it's a it's a very good question. I would argue that the macro reason is just that interest rates have remained so low and you have 12 years of quantitative easing and a four trillion dollar stimulus that was just injected into the economy. That's having a radical effect on the stock market. And we'll probably see another 10 years of just rampant innovation because of that and because interest rates are so low, there's really no where to park your money and. Technology has been the dominant sector over the last 15, 20 years, believe, even if you just look at the IPOs of the last six months, mean it's been extraordinary to watch these tech companies have the demand from retail investors.

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But but but I'd also say, like that is a function of if you're looking at it historically, like where is it easiest to company build? I actually think it's broader than just a financial reason. I think it's we have used technology to build companies faster, cheaper. You can start a global company from one room. Now, you don't need to go down to a store and buy a ton of servers. You don't need to find 20 people to start working on on coding because the the abilities and the ability kind of piecemeal something together in terms of infrastructure in order to start building a company is an order of magnitude cheaper in order of magnitude easier than it was even 10 years ago.

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And so in that case, it means we're going to have a lot more people experimenting with entrepreneurship. We've seen those numbers rise and that's a good thing. But we also have a lot more capital of people who are using that capital to be early stage and growth stage investors. And so I think it's a a very good thing, because when we look at sort of productivity over the last few decades, we can measure productivity in different ways. But where have we actually seen tremendous gains?

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It's the computer revolution, not not the revolutions that we predicted in the nineteen fifties and sixties. People talk about. We expected that there would be more infrastructure. We expected flying cars. We expected a Jetsons sort of future, and instead we got a communications future and an Internet future and a computer revolution. And we can argue about the pros and cons of that. But I think that that's just going to continue. And the financial system has certainly evolved in order to support that kind of the kind of change.

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And we finally have the infrastructure, I think, in place and the common link shared language now about this to build the Jetsons type future. So thinking about defense, you know, you brought that up earlier and one of your investments and role is fascinating. Let's talk about the United States and the defense industry for a moment, because it's something that has been almost taboo in Silicon Valley and amongst intellectuals. They want to turn their heads and pretend that this doesn't exist or that it's something inherently wrong with it.

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So tell us about defense and how did you get involved with this company?

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Yeah, so so I can I can share sort of my initial reactions to diving into this market because I didn't know much about it. I lived in Washington for ten years. I've always been a student of history and I have a lot of friends that work with the DOD and intelligence agencies. So it wasn't something that was foreign to me in any way. But the sort of business of the primes was actually very unknown to me until I started looking at this category.

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And what I'll say is you mentioned that working in defense was taboo in Silicon Valley. And I think the media narrative around that has long been, oh, well, it's an ethics issue or people just don't understand military anymore. And in particular, a lot of engineers in Silicon Valley have no exposure to it. And so they don't understand how the DOD works. And I'd say that that is largely a myth. I actually everyone that I encounter in my work, people are excited to work on hard problems.

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And if you're someone who's excited about robotics or excited about hard engineering problems, some of the first places you can experiment with those problems are working with DOD customers. So I actually I don't think that's the reason why Silicon Valley has stayed away. There's three core reasons that have caused Silicon Valley to stay away. And then now why we're re-evaluating it, which I'll get into, and I boil them down to merger's margins and interest rates. So if you look at what happened post-Cold War post the fall of the Berlin Wall, there was an extraordinary amount of merger of activity in terms of mergers from the five crimes that have existed since the nineteen twenties.

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If you look at the five prime contractors, these are the Lockheed Martin's of the world that have been around for a long time. They all started in the nineteen twenties after World War One and they solidified their dominance after World War Two. So these are very old companies that have been around a long time and they specialized in the technologies that we had in the nineteen forties and fifties. So that is one of the big problems and they sort of soul after the fall of the Soviet Union, what was going to be the biggest threat to them, which was spending cuts.

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Everyone predicted in the nineties that there would be large spending cuts and so they became very acquisitive. And something like eighteen thousand companies that used to be independent defense contractors left the industry or were acquired during that decade. So that sort of mergers of these these companies made made these large five prime contractors much more dominant. The second thing that I think happened that made it very difficult for for Silicon Valley to invest is just the. Advent of software, so Silicon Valley was built on we're investing chipsets for invest in hardware and then the computer revolution really made it easier to make far more money, far more effectively through investing in pure software businesses.

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And so a lot of firms like mine. But but firms across Silicon Valley are generalist firms. And if you're looking at a company that's going to have 50 to 60 percent margins because there's a hardware component and you're looking at another company that has software margins nine times out of 10, the software margin company is going to be a better investment. So it became sort of a question of why why would we invest in all of these hard things when we can make money off of investing things that are just as important but are pure software businesses?

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So that was definitely a trend that happened. And then as we've talked about, interest rates have really been one of the catalysts of Silicon Valley, but they've also caused a function of the venture ecosystem to change. They think a lot of people don't understand in Washington and that changes that fund sizes in Silicon Valley have gotten much larger. So, for example, my my firm started out as a two hundred million dollar fund and two thousand when I joined my firm, we were investing out of an eight hundred million dollar fund.

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Now we're investing out of a two point three dollars billion fund. And I've been at my firm for four years. So that's an extraordinary change in terms of what you're expecting companies to be able to achieve. The way that venture math works is that it's usually one or two companies that return an entire fund. It's it's a power loss theory. And so you're trying to invest in companies that can become 10, 20, 30 billion dollar companies. And if you look at the history of defense investing, the only companies in the last twenty five years that have met that threshold are SpaceX and Palantir in terms of being government companies.

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And Palantir isn't even a full blown government company when they sell the commercial as well. So when you look at that history, I think the third I can't even remember the name of the third company, but it was acquired by, I think, Raytheon for something like four hundred million dollars, which is a lot of money. And it's and it's a good company, but for an interest rate time where money or I should say money is cheap and people can raise funds very, very quickly and raise large funds at that, the economics of venture make it very difficult for someone to say we're going to invest in a company that's going to be able to be the size of Raytheon and getting to Andrle, which is an incredible company that we're lucky to be.

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Investors in the thesis on is actually we can build the next Lockheed Martin, we can build the next Raytheon, because there's been a fundamental change in how technology is built. And with very strong engineers and very strong business minded people, now is the right time to start building for the Department of Defense in this next generation technology that we need. So we very much believe that now is a good time to be invested in this, despite all of the things that I just said were wrong with the industry.

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But but I do think that those are the underlying factors that investors are thinking about when they're when they're investing in defense.

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You mentioned fund sizes and power laws. And I think this is very interesting because it can sound cold and callous from the outside, but it's also the best way for firms to provide a return to investors and create something new that helps a lot of people. So, you know, when you're doing this is just each investment have to return the fund. How are you thinking about making investments? How big do they have to become? And is this the thing where General Calice is looking to back up the truck into winners?

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What are your philosophies are? Yeah, and I like that you called out that. It sounds cold and callous because I actually do think it's hard. You know, we have these conversations where we talk about the math, and I always have to remind people that we're all here for the same mission, particularly around defense, that there's a number of investors who are committed to investing in American renewal. And that is at the top of every decision that we are making.

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Responsible innovation is something that we care deeply about at my firm. It's not just a talking point. We talk the reason I love my job and being someone who loves political philosophy is that I get to talk about ethics and I get to talk about ethics with the founders. I get to talk about ethics with my partners. So that is something that is so embedded in the job. I don't want it to make it sound like all investors think about his math.

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But the best companies merge mission with margin. And that's something that one of my my favorite founders, Rachel Carlson at Guild Education, who's helping to upscale American workers who work wage jobs. That company is an extraordinary company. It's in Denver. It works with Walmart, it works with Chipotle. They're working with extraordinary companies, helping them send people back to school so that they can improve their lives. And the thing that I feel most strongly about is that right now, government is so ineffectual that we have to depend on these radical founders to build companies with.

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On missions, so I never want it to sound like it's being cold and callous, I don't think that investing in companies that are already winning is a callous thing. I think it's a good strategy. There's a reason why cultures emerge the way that they do. I spend a lot of time thinking about organizational behavior and culture, and there are certain cultures that just allow for scale where people feel empowered to stay at a company for 15 years. I mean, the Amazon story is certainly that where you look at the number of people who've spent their entire career at Amazon since the beginning is extraordinary.

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And that says something about the culture that has been built from day one of independent thinking of how do we build new products, how do we please and delight the customer. Those are important questions. And and so our belief is that, yes, we like to we we like to invest in category defining companies, because usually the story of innovation is that one culture will emerge in the same way that extraordinary countries emerge throughout history. One culture will emerge and it will be so dominant for a period of time, and it will be because it has a unique thesis or because it's gone into a sector other people won't go into, because the people who are there believe in the mission.

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And so you can't really replicate that. I'd say like one company, one or two companies that are dominant in the sector is probably more powerful and probably building more for productivity than, say, 20 companies that are that are somewhat middling and maybe not able to kind of keep talent and be able to keep vision for a long period of time.

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And often these companies to you know, from the outside, we can think of them as, oh, it's just a product or service or thing, but it's often a portfolio of businesses, of varying maturities that are all working towards a similar shared goal. So when you think about cultures that are innovative, how do you get that balance right between focus but also radical innovation and making a lot of small bets?

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As an outsider, I have to have a lot of frameworks for how I think about the best cultures. I think the best cultures are people make decisions very quickly and they understand that you're constantly running experiments, you're constantly questioning. You have a culture where people can question each other, where people where there's high trust, where there's not OK, there's one dictator and everyone fears the dictator. That's bad culture. You want people who are who are contributing in their best work, people who are asking a lot of questions, but who are also very decisive.

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You know, a lot of what is undervalued in Silicon Valley or what people don't talk about is speed is speed is very important. But the reason why speed is important is because it is a proxy for decisiveness. It is a proxy for people who can take data, all disparate, synthesize it and make a decision very quickly. And most people like to have a lot of data when they're making big decisions or when they're making decisions that they think are consequential for their life.

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I think the best CEOs and the best founders are able to look at data and and to look at the upside of the decisions they make very quickly and make those decisions and then move people around a mission. And and that's one thing where I think when people talk about innovation broadly in the media and move fast and break things has been shared as something that was horrible for society. But there's a reason why the move fast part of it is so important.

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And that's because the the people who ultimately create important companies are important missions or political movements. I it doesn't have we can talk we can talk about this outside of Silicon Valley as well, are able to organize people very quickly around a mission and make decisions very, very quickly in an election season. I think that's one of the things that's most undervalued. I think there's a lot in common between the standing up a campaign and standing up a startup. And the decisiveness factor is probably the one that people don't talk about enough.

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Very, very interesting. And when you think about your work that you do with companies now and the work that you'd like to do in the future, how do you want to see your job grow and progress? Tell us a little bit about what does your job entail now and what would you like it to become in the future?

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What's great about my job is that it never there's never a dull moment. There is always an interesting, I think of this job is so I was a journalist in a past life and there's nothing I love more than story. And so I think of investing as a storytelling job. I think of it as I get to meet a person that I know very little about. And I listen to that person's story for thirty minutes to an hour and I get to make a decision about whether that is the future of the world.

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I hope that never changes about my job. Like, to me that is the greatest privilege. And to be able to see such radical thinkers come into our system, I should say, come into our office because they're in a different world now, come into our little portal and share their view of how the world is going to look. That is that is something I hope. I never lose one of the things that I've noticed in venture capital is that you can do this job for so long that you can start believing as a venture capitalist that you know the future better than the founder.

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And I am adamant that I will never have a view of the future that's more accurate or more well reasoned than the theories that the founders put forth. I'm a listener. I'm not a company builder. I will build a company alongside a founder and be their partner and be their thought partner and sort of their Socratic guide. But the idea that there's a lot I think we've seen this movement in Silicon Valley because there's a lot of former founders to become investors, that you have to have been a builder to be successful at this job, to have empathy.

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And I fundamentally disagree with that. I think having been a storyteller, having been someone who is just radically obsessed with these sorts of heroic figures that really believe that they can change the future. I want to be the person in the shadows helping them. I do not want to be the person in the forefront that is very adamant about where the future is going. So I hope that never changes what I hope changes about my job. I think we're in a period right now where there's so much skepticism about the types of people that come into this industry.

[00:32:56]

And that to me is is sad because I'm a I'm a tech optimist. I'm an optimist by nature. And I believe that the people America is built on small business. And you could say, what's the difference between startups and small business? Startups are small businesses. They just grow faster. And I think that American ethos of there's something wrong with society, it can be better and I'm going to go build it is what makes this country extraordinary. And it's what it's why people from all around the world come to Silicon Valley and want to start companies.

[00:33:29]

And so I hope that the sentiment outside of Silicon Valley, because Silicon Valley is an idea now, it's not a place. But I hope that the sentiment of people who are anti tech, anti growth anti company really start to to rethink why people decide to give up everything and found a company on a radical belief, because those people are the history of our country. They're change makers, the people that we should we should be betting the future on for sure.

[00:33:59]

Yeah. And I think that there does seem to be this tailwind now that is coming behind entrepreneurs. You mentioned something very interesting about small businesses which create the majority of American jobs. And I'd like to just unpack that and talk a little bit about it, because small business lending has really taken a hit recently. So there's many small businesses that are talking about lending dried up. You have different lenders sharing anonymous threads on Twitter, just about all the details of how they see funds to small businesses drying up.

[00:34:31]

So in this new world, I think many, many small business owners are beginning to view themselves as a startup, for better or for worse. So in this new American economy, does every small business owner need to try to be more like a technology company? Do they need to think think about doing more with less, getting investors, things like that? What do you think needs to change here in order to have more successful businesses?

[00:34:58]

Yeah, so I, I said that they are similar in terms of how they start out with. They're very different in practice and very different in terms of how, how you want to to build for the future. I was reading today actually the US Census Bureau said that 90 percent of American businesses are family owned businesses where the family is going to pass the business down to another family member or family members are working together. That is the backbone of the American economy.

[00:35:22]

I think it is incredibly important to support family owned businesses. And I don't think that someone who wants to run a restaurant in my hometown of Gainesville, Florida, needs to aspire to be a 10, 20, 30 billion dollar company built off technology. Those are fundamentally different aspirations, their different versions of the American dream. And so I certainly don't think that that's necessary. But I do think is really interesting is that there is this new sort of angel investors universe to only invest in technology and now they're investing in belief.

[00:35:57]

So so my firm, for example, the reason why we have to be so obsessed with with category of defining companies is because we get our money from pension funds, endowments, universities, hospital systems, and the money that we return to our limited partners, our investors goes to help people get scholarships to universities across America. It goes to fund incredible science. People who are one of our elkies is actively looking for a good vaccine, like we have to be good at our jobs and we have to return as much capital as possible because those are incredibly important missions.

[00:36:34]

But angel investors, there's a lot of people who are pillars of their community around the country and they want to support mission. They care about and they're not necessarily looking to maximize their return because they have people on the other side, we're looking at covid vaccines, they're looking to support people who are who are building important things for the community. And so that is something that I think I wish was more widespread. And I think it's becoming more widespread.

[00:37:00]

I think pillars of the community that we used to have this culture where if you became a successful person in your community, you would support the local ballet. And I'm not saying I'm a huge supporter of ballet and arts in general. It's a passion of mine. So I'm not saying that that's not important, but it was sort of like this organized philanthropy that if you are successful, you have to give to these groups and that nonprofit giving and investing in arts and different things like that were the only ways that you could get back.

[00:37:30]

And I think there's another way that we're seeing, which is you can give back by supporting the American dream, you can give back by supporting a local restaurant. But being an investor in a local restaurant, you can support the local brewery. You can support people who have radically different ways of educating. You can support an experimental school. You can support people who are working on civic missions that go against the grain. And I think we're going to see more and more angel investors do that and pillars of the community doing that.

[00:37:57]

And I think that will lead to an extraordinary American revival.

[00:38:01]

I think so, too. And we have this mass migration now that's happening where people are flooding out of large cities. And many of these people that are flooding out are remote workers. Right. They have a small amount of that Silicon Valley idea or ethos with them that they're taking to tier two, tier three cities and other small cities all around the US right now. What are you seeing in terms of this movement and what type of opportunities or things do you think this is going to catalyze in the future for America?

[00:38:30]

I think it's a great trend. Like I think we're going to see sort of two visions for what I think is happening. And the one vision is it's time to build it. We need to aggregate around certain hubs of innovation and really build for the future because we're we're we're seeing this year has been just an example of what can happen when you live in a decadent society or society that's sort of taking its growth for granted or taken. It's the wondrous parts of it for granted.

[00:38:59]

So I very much I'm sympathetic with it's time to build. And if that building means that we're anchored in San Francisco right now, I have not left. I'm still working and still building. Try to help the builders. I think that's one path and that's a path that's important. But for a long time, we've been talking about brain drain from many states. I'm from a small town in Florida and I left. And when I went back this summer, because I was escaping wildfires and all of the craziness in California, you know, those cities are incredibly they're incredibly vibrant.

[00:39:33]

There's there's a lot of renewal happening in those cities. There's a lot of young people moving back to the suburbs, moving back to smaller towns because they want a community. And that's like there's there's this view that, like Alexis de Tocqueville said, like these small towns with common values is very much the sort of American dream that that people kind of aggregate around common beliefs and they build their society. But these are small ecosystems of people who really care about each other.

[00:40:01]

And there's sort of a communal mentality to it. Where I know my neighbor's name, I help my neighbor, and there's a lot more buy into the community. And that is another part of the ecosystem that we need to see. And it is enabled by remote work. If you can work anywhere and you want to move back to your hometown, but you can also work for a great company that gives you good benefits and that that makes you feel like you're part of two worlds.

[00:40:24]

That's extraordinary. And that's my biggest hope coming out of covid is that we're going to see just a much more experimental model with companies allowing people to to live in the communities they want to live in, that it's going to have incredible advantages for for women, especially who are who are thinking about how do I get child care. If you can move back to be close to your family and kind of live in this more communal nature, then I think people are going to be really excited about the new family models and the new work models and the opportunities that open up.

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And that's going to lead to a revival of cities that that had seen this brain drain for the last twenty, thirty years.

[00:41:02]

Yeah, and I think, too, it's combating one of the most dangerous trends that we see globally, which is this thing that happens in more educated and affluent countries where people have fewer children, like people are much more amenable to the idea now of having a large family if it's sustainable and fun, instead of being cramped into a small, smoke filled California place. So. When it comes to, you know, what you see on the landscape in terms of the US and China, I say a softball for last.

[00:41:32]

Don't worry about China.

[00:41:36]

I know, but but this is such such an important subject right now because there's there's so much fear. There's so much propaganda. There's also some very disturbing things happening. We're kind of in the midst of this Cold War. We have been for a while in terms of like cyber warfare, in terms of political ideologies and things like that. How do we get through this time in a peaceful and prosperous way? Any ideas or are there any thinkers that you follow that you think are balanced and not going to strike some incendiary powder keg of problems?

[00:42:13]

How do we get through this smoothly?

[00:42:15]

Yeah, I agree with you that I think that we have entered into this Cold War. And I think what's important for people to understand is that we have very different governing models. So when we talk about what's what's wrong with China, it's not the Chinese people. It's the Communist Party of China and how they operate government. And one of the benefits of how they operate is that they are centrally planned. They tell any company in China that we have access to your technology.

[00:42:43]

We can use you for dual use purposes. We can use you for military and government purposes, and we could use you for commercial purposes. That is very different than how the US operates, where we have a capitalist system, where if the government wants to work with any company, they have to pay that company. And the company gets to choose whether or not they work and say these are these are the fundamental differences between the the Chinese type of innovation or China, China innovation and companies that have been built in the last 10 years, especially using technology versus the US and how technology has evolved here.

[00:43:16]

I think it says something that the ecosystem for tech innovation is on the West Coast and Washington's on the East Coast. And I actually think that's a fundamental hurdle that we have to get over because it makes it harder to compromise and harder to come together when you're three thousand miles away. And the centrally planned government, but also sort of tech ecosystem in China, it's it's a totally different way of working between commerce and government. And so we have to understand that and we have to get over sort of that because it's much easier to be centrally planned when you're entering a period of turmoil, turmoil against other countries.

[00:43:53]

What I would say is that I think the biggest opportunity that the US has during this new time is an opportunity for American renewal and an opportunity to bring the types of innovation that we have outsourced back to the US to to to shore up semiconductors, to shore up, I think something like. Ninety five percent of the rare earth elements are based in China. We have mines that used to exist in the US that that have gone out of business. So there's there's many different ways that we can ensure the industrial future of America and that we need to invest in it.

[00:44:31]

And that is going to be not just that's not something Silicon Valley can solve. We're not equipped to solve it. That's something that government also has to solve. And we have to work together on the best practices to do that very quickly, because, like you said, I think people are waking up to the fact that this is this is a different time in twenty twelve. I said this a lot. Investors in twenty twelve, like there was a there was a hopefulness that that China was a market and that we would actually find ways to work together, that there would be American tech companies operating in China and vice versa.

[00:45:03]

And that did not happen. And so now that that did not happen, we have to figure out ways to to make sure that American innovation can continue and that it can be self sufficient. Yeah, and I think the example of America in the Middle East interacting in terms of oil is one that gives me a lot of hope where it's like, OK, the US, I think last year over the last two years became self-sufficient. They became the world's leading exporter of oil and natural gas and or else we're pretty close to that.

[00:45:32]

So this is a pretty promising thing.

[00:45:34]

I think hopefully we can replicate something similar without war or conflict. You mentioned people who I think are really good on this topic. So I think there's a lot of academics, particularly westcoast academics and people who are who are working at Stanford who have thought a lot more heavily about this than me from the academic perspective. So Amy Zegart is one professor who I think is extraordinary on this issue and was sort of an early warning of what was happening in terms of the divide between China and the US.

[00:46:02]

And then Jacob Helberg, who believes that the Cyber Policy Center at Stanford University has written a number of pieces of foreign policy and elsewhere about sort of this need for American reindustrialization and can talk far more. His writings are far more in depth than what I just said. So I'd say like very much if you're if you're interested in this idea. Those two academics have been very thoughtful about about these issues, Catherine, this has been awesome. Thanks for being generous with your time.

[00:46:30]

Are there any final thoughts you have for listeners? You generously mentioned the show's called Hidden in Plain Sight, and we love to figure out what's out there that's obvious to you. That's not obvious to everyone else. So if there's something that's hidden in plain sight or that you have on your mind, the microphone is yours.

[00:46:47]

Well, it's this has been such a terrible year in many ways, 20, 20 historically bad in terms of what's happened to the country, in terms of what's happened to jobs. And I sit in a very fortunate position. And so I realize that. And so it's it's easy to to say we need to remain optimistic when when I have this perch. But I genuinely believe if if you go back through history, these these moments in time, not just in the US history, but just throughout history in general, these sort of sea changes that happen lead to incredible revivals.

[00:47:24]

And whether that's an innovation revival, whether that's a spiritual revival, good things often come out of bad. And so what I think is hidden in plain sight right now is that we're all cloistered in our homes, worried about a pandemic in San Francisco. A couple of weeks ago, we had orange skies that literally looked like the apocalypse was coming. And I do think it's darkest before the dawn. And so I am very excited about what I think is going to be just a decade of American innovation and American renewal that we have not seen yet.

[00:47:54]

And again, I realize it's really easy to say this from from my perch having getting to spend so much time talking to extraordinary people. But from what I see in terms of the young people who are coming forward and saying it's time to build, I want to build, I think we are on the precipice of something big and I am excited about that. And to me, it's hidden right now because we're all in our homes and reading the news.

[00:48:20]

But I'm incredibly hopeful about where we are and where this country's future is headed. Completely agree.

[00:48:25]

Hopefully a golden age is on the horizon and origins of the word apocalypse just means lifting the veil, I think, in Greek. So it's exciting time. Catherine, thanks so much.

[00:48:34]

Thanks so much for having me. I'm Sophia Bush, and you've been listening to Hidden in Plain Sight from Mission Dawg. This podcast is sponsored by our friends at Splunk, the data to Everything platform in today's data driven world. Every company, big or small, Newar old, is sitting on terabytes of unused, untapped and unknown data.

[00:48:59]

Splunk helps turn all that data into action. Using cutting edge AI and machine learning, Splunk delivers Real-Time predictive insights that will help you on your mission to change the world.

[00:49:10]

With solutions for I.T. security, Internet of Things and business operations, Splunk empowers people to make faster, better decisions and take action to get things done. It's time for our data to be more than a record of what happened. It's time to make things happen.

[00:49:25]

Check it out. It's buncombe.