Venture capitalists have been welcomed into the Donald Trump administration, and their presence is growing. People who’ve been in the business of backing startups have been tapped to run the Office of Personnel Management and the Commodity Futures Trading Commission. Another, David Sacks, is the White House artificial intelligence and cryptocurrency czar.
Even the vice president, JD Vance, spent time making venture deals before he moved into politics.
Sarah Kunst, founder and managing director at Cleo Capital, says that in venture capital, you have to be good at saying no and comfortable taking risks knowing they likely won’t pan out. Marketplace’s Stephanie Hughes asked Kunst what it means to bring these qualities to the federal government.
The following is an edited transcript of their conversation.
Sarah Kunst: I think that that’s probably going to be a bit of a culture clash. The government and the people in America shouldn’t sort of be treated to a culture where it’s fine if 90%-plus fail as long as one or two does incredibly well. And regardless of political leanings, I do think that you ignore your base at your peril, and I don’t think that the average American wants to feel like it’s fine that they’re worse off, as long as one or two Americans are doing better than ever.
Stephanie Hughes: I want to ask just sort of about technology generally. You know, in Silicon Valley, there is this mindset of, why do with a person what you could do with technology? I don’t think they mean that meanly. It’s just kind of their jobs, to a certain extent. But if we have more venture capitalists working in the federal government, what do you think that will mean for the workforce and the amount of technology that we see?
Kunst: I mean, the idea that you always want people over technology is demonstrably not true. And we know that every time we get in a car and choose to drive somewhere versus walk. And so it’s not that all technology is bad and you always want people powering things. That being said, there needs to be a thought of, what are the checks and balances here? What are we giving up when we’re bringing in automation or when we’re bringing in technology? And then, more importantly, and I think this is the hard part for tech, is the technology ready to be responsible for the lives or the salaries or the well-being of hundreds of millions of our fellow Americans? That piece of it, I think, is the hardest for tech.
Way back in the day, far before Elon Musk, Twitter used to have this thing called a fail whale, which was when too many people would be on. [For example], it was the Super Bowl, it was whatever, and you would see this fail whale, which meant that the system was overloaded and it couldn’t work. And that is fine. It was sort of a meme. It was a startup. They were early days, you didn’t pay for it. Things happen, it’s OK if it breaks regularly. It is less OK if that same sort of build-fast, scale-fast, hope-it-all-works-out mentality, that works pretty well when you’re early-stage Twitter, starts to get applied to things like veterans benefits, where you can’t just give somebody a fail whale and say, “Sorry, you can’t get dialysis today and we don’t know what tomorrow is going to look like either because we’re doing something experimental, and that tech broke.”
And so I think that the balance here is going to be this sense of, how do you take being able to just sort of try things and if they don’t work, pivot, and iterate that into institutions where that doesn’t really serve the greater good, at least in the short term? And you’re often talking about real people’s money and lives. And so you can’t be quite as cavalier as you can about, “Oh no, the micro-messenger service that I use to tweet about my sandwich didn’t work for a couple hours today.”
Hughes: We’ve definitely seen the Silicon Valley ethos of “move fast and break things” in action in the last few weeks in Washington with the dismantling of whole agencies. How much more of that approach do you think we’ll see?
Kunst: I don’t think that they’re done. Elon Musk and his child in the Oval Office recently made it clear that he feels that he has the mandate and that there is a lot of dismantling to do. And I think different groups within the government right now have different feelings about how much needs to be dismantled, what needs to be dismantled and why. But there doesn’t seem to be much pushback inside the government on the executive level to the idea that more change is going to come. I think the question mark is does the Senate agree? Does Congress agree? Do the American people agree? And does the Supreme Court agree? But I think it’s clear to me, at least, that certainly the executive branch and a lot of the tech people who work in it now feel that they’re just getting started.
Hughes: You’ve been working in tech for a long time. You know a lot of people taking these jobs personally. What do you hope people who work in venture take the time to learn as they step into these new jobs?
Kunst: It’ll be interesting to see them learn how hard running a government is. You can’t sell a country, and you can’t have an IPO. There is no exit, you don’t wind it down, ideally. So you have to figure out this sort of perpetual motion machine of meeting the moment, meeting the technology. Just the sheer complexity of that, compared to in the tech world, where we tend to say, pick one thing and do it well. The government is not one thing. It can’t be one thing. It has to be everything. And so how do you even begin to do that? And so I think that a lot of their challenge is just going to be the sheer firehose that they’re drinking from that is the American experiment.
