Venture Meets Mission with Arun Gupta

Lauren Bedula 00:24 Welcome back to Building the Base, Lauren Bedula and Hondo Geurts. Here with today's guest, Arun Gupta. Arun is CEO and board member of noble reach a really interesting organization that we're looking forward to digging into today and has an incredible background in finance, tech, and academia. All topics we enjoy talking about on the show, and then recently released a book called Venture meets mission, which we'll dig into as well. So, Arun, thank you so much for joining us, Arun Gupta 00:50 Lauren. and Hondo, thank you for having me today. Hondo Geurts 00:51 Yeah. So, you've got a really interesting background. And a lot of our discussion is about this. How are these different sectors are coming together in new ways, and you've lived in a bunch of these different sectors? Can you give our kind of listeners a sense of your background? Arun Gupta 01:07 Yeah, absolutely. So just for context, so I grew up in the DC area. My father immigrated from India here but has spent 45 years in the Naval Sea Systems Command. So public service has been in our family, I grew up around it, he's still working there today. And so deeply appreciate all the hard work and commitment people have around public service, I spent my professional career. Then in venture capital, I started at Carlyle, and then was at Columbia capital for the bulk of my career, which was founded by Mark Warner. And there you saw the power of entrepreneurship. And he saw the power of kind of trying to create change. And the second half of that time that I was there, lead our efforts into investing run the intersection of mission tech and entrepreneurship. So Geotech dual purpose tech cybersecurity, one of our company's endgame was led by Nate Fick, who many of you know, it's now our first cybersecurity ambassador here for the US. And in that I saw both the opportunities and the magic when you can get the innovation ecosystem connected to government, but you'll solve the challenges firsthand. And, but I will say one thing is, once you're introduced into that ecosystem, it's hard to kind of go back to just investing without that level of mission and purpose. And it was very addictive. When I retired and started thinking about what to do, what I want to do next, and my next chapter started teaching at Georgetown at Stanford, Georgetown was teaching entrepreneurship. And at Stanford, we created a class called Valley meets mission. So, it was all around really taking that experience from a Columbia run, how do we talk to the Stanford students about like, not wasting their energy on Candy Crush 3.0, but use your entrepreneurial talent and platform to go create meaningful companies that can really impact society in a positive way. But to do that, in the for-profit way. And what you saw in doing that is that, you know, for many students, that was the first time they could see the connection between the two. And we'd bring in speakers like Mike Morel, who you both know very well, when, you know, Michael, had to say, what I love about your classroom is, you know, half the class dislikes government, the other half dislikes entrepreneurial capitalism, and you're trying to land the plane by the end of the course, that we need both to solve big problems. And inevitably, we would, and we did, because people heard stories, you know, they would meet folks like Mike and hear what they have to say. And they realized that some of the biases they had are just ill informed. And you meet someone like that you feel very purposeful, and you feel like that's, you know, purpose of mission, and you meet so many entrepreneurs creating these companies, and you realized, they were actually chasing mission in the money follow them, right. And so, you know, the badge of honor was starting to see these students rescind their banking and consulting offers to go into this world, you know, somewhere coming to tech Congress, and then going into cybersecurity companies. And so, you felt like something was there. This was pre COVID happened, you know, what, then we end you know, we're about to enter geopolitical tensions with the Ukraine war. And you could see students becoming more mission oriented. And that's when we started thinking about writing this book, venture meets mission, to capture some of those thoughts around what we were feeling, which is that there's a generation here that is deeply being shaped in a very short period of time around wanting to do more mission-oriented work. And that shaping is coming from, you know, healthcare, pandemic, you know, geopolitical tensions, and in Europe and the Middle East. Climate tensions, you know, environmental tensions around what's happening with climate, and then great power competition. And so, we started looking at how we could talk in and scale the message. And then in the final piece, I'll say is that while we were writing the book, we had the opportunity to create a foundation, which is called noble reached Put some of what we're doing what we'd write about in the book into work. And so, we now have close to a half a billion-dollar Foundation. And what we're trying to do with that is, you know, at the highest levels, you know, hope modernize the infrastructure to connect our best tech talent and our best innovation with government to solve these big problems. Lauren Bedula 05:17 Incredible story I love hearing about your father sounds like a real patriot. And we often see it's those folks like family or others that set an example for others, like you to really drive into mission. And I like how you talked about the broad framing of mission, we often think about national security as our focus, but the definite definition of national security evolves daily, it seems now and so you've covered that well, Arun Gupta 05:42 Well, Lauren it is interesting, you say that, because that's exactly a big part of what we were even trying to convey to students, right. Like many of them, when they hear national security, they think, a very narrow version of what that can mean. And it's really, you know, I think going through this process, you realize how much words matter. And in helping define those words in a way that's much broader and much more inclusive in that context. Lauren Bedula 06:03 So, let's dig into that a little bit. Because you spend so much time with students, I think there's this perception that we have to do a better job convincing them to get into national security are mission focused work. Is that the sense you're seeing in this work? Arun Gupta 06:17 Yeah, it's interesting, when, you know, we're launching a program. Now we're, like a Teach for America program, we're to bring in our top tech talent into government. And everyone says, Well, how are you going to convince these students to do this? And what we've found is that's, that's not the problem. That's not the gating item. In fact, if we were discussing earlier, I think students have been shaped in a way right now where they're looking for mission and purpose. More so than they are looking, you know, just to make money for money's sake. That's not to say they don't want to create a path for themselves of being financially independent. But, you know, I think what's more important for them is a recognition that, you know, we are interconnected, and they want to be able to show that their work has a meaning and in a lot of the change that's happening today. So, what I've seen to answer your question, Lauren, going out on college campuses, and talking to folks is that convincing them to do this does not is the issue. There are two gating items. One is the words we use, you know, what I say is, you know, government sells careers, but students are buying experiences, you know, government sells jobs, but students are buying mission. So, if you can package the same government job, as a two-year mission, experience, the lines out the door. And that's a lot of what we're trying to do with what we're creating at Noble reach was, is creating a pathway for folks to be able to come in for one to two years and work on important mission-oriented opportunities. And when you talk to them in that context, we've had no shortage of interest. As an example, you know, we were in an intern program this year, our second one and in the first 48 hours with 1200, applicants pretend spots, and we had to shut it down in 2000, honestly, because we just didn't know how to handle it. And then, as we are launching our scholar’s program right now, we were over 12x oversubscribed. And I don't think that speaks to us as a as a brand or anything of that sort, I think it speaks to what students are looking for. Because what we're marketing is mission, tech and entrepreneurship and experience to do all three. And mission means purpose to them. You know, I think tech implies innovation. And entrepreneurship is about building. And I think those are all three things that you know, this generation really deeply cares about. Hondo Geurts 08:38 Thank you, Arun, Back to , your words matter, which I think is actually really important. We talk about revolving doors a negative thing, when in my experience, it's actually a very positive thing. You know, I was lucky enough early on to work in business before I went in the military. Are you sensing that using that language of you don't have to choose to be career government or career entrepreneur, you can actually do both. And it can enhance your ability to do both missions. Is that resonating with students? Arun Gupta 09:09 Absolutely. You know, in fact, it's helping them understand where government can play a role in their career. So, you know, on that point, Hondo, you know, look, I talked to the students about like, unlike, you know, our generation, this generation is going to have four to five careers, you know, over the course of their professional journey, so we don't talk about it in the singularity have a career. And so, when you're even talking to them, you're like, we're not saying become a public servant. We're just saying, like, why not have one of your careers be public service? That's a very different framing. Right? It doesn't make it so daunting. You know, I think the second is helping them understand why starting your career in public service can help you enhance what you do afterwards. Understand the problems understand the networks understand the shared language, being able to solve All these problems, and then you can come out, and that that differentiates you in a way, wherever you might decide to go in a much more meaningful way. And I think students are seeing that. And they're seeing that now because, you know, we have the benefit. And I think this is, you know, speaks to why now, you know, their success stories, you know, you know, 510 years ago, we didn't have these success stories. And so, people see, you know, whether it be a SpaceX, whether it be Palantir, and Anduril and, you know, national resilience and gingko Bioworks. And you can go down the list of companies that, you know, where people have gone in and out. And they've learned from that, and it makes them more valuable. And now, I think even, you know, look, we've been having conversations with large, you know, your typical investment banks, consulting firms, etc. And many of them move in big tech firms, and many of them have even said, Look, if we can actually hire, take our 10% of our analyst’s class and have them go into government and bring them back. We'd be better for it. We can't, but we can support programs that are doing that. But I think everyone's recognizing that we need more people that are you know, we used to language, dual citizens. I was on a panel with NAND Mulchandani, who you both probably know. And you where I was introduced himself as being a dual citizen. And you know, I think because of him being of Indian descent, people thought he meant Indian American. And he actually was saying, like, Look, I've been in the Valley for most of my career, accretive for companies. And I've been around VCs, and that's one family, and I'm a citizen of the valley. But since then, I've now been at the Jake in the helm and CTLT CIA, and I feel like I'm a citizen at DC. And I thought that was a really powerful framing, actually. Because, you know, I think usually when we bring private sector folks in the government, we bring them in as expats, right, they kind of come in, they kind of isolate that kind of looking down at everyone that's in government. And a dual citizen framing brings with it a mutual respect. Right, that brings it in a sense of like, both cultures matter to me, they're both part of my identity. And, you know, I do think as we now talking about this with students, you know, I think that's a little bit of the breakdown and trust we have right now, is that we don't have enough dual citizens, folks that have been on both sides. Hondo Geurts 12:19 Yeah, I think, and I heard an earlier piece where you talked about empathy, right? Because we have this perception, if you're not in government, then you know, everybody in government is bureaucratic and not innovative, or vice versa. Do you sense from the senior levels? We talked a lot about the junior folks, that there's more empathy between the statesman, I would say, in, in public service in the Statesman in, say, venture now that there's more respect and understanding or is that still work to go? Arun Gupta 12:51 There's work to go, but it's better is what I'd say. And, you know, like, a lot of these ecosystems, or even government, it depends on what part of government, you know, the places inside a government that, you know, understand that a bit more in there. They're VCs that understand that bit more. And that's surprisingly, it's usually folks that have been on both sides. Right? You know, you look at someone like a secretary Raimondo, she understands that and she talks that language and she speaks it, you know, you look at a Jen Easterly, she understands that and speaks it and talks about, like, I want students coming in for two to three years, and then going back out, and therefore deployed Cisco folks, you know, that's the way she's thinking about the world. And likewise, you know, there are VCs that, you know, understand the purpose that is actually in the mission. It's associated with government. You know, in the book, we, we talk a little bit about in our second chapter about how do you humanize government? Nothing, this is what you're getting at Hondo, right. Like, it's very easy for, you know, and I think we've gone through multiple decades now, where we just kind of say, we don't need government in the light, you know, like, and this isn't a political statement of more or less, but I think we all have to acknowledge there's a role for government. And, and that, you know, at the end of the day, government is a collective of organizations, and at its most molecular level made up of individuals, so humanizing it to people, you know, and I think it's easy to throw stones at groups that you're not part of, but when you bring it down to individuals, you know, I think, you know, bias does start to dissipate. And, you know, I think that's a little bit of where empathy comes from, right, and how you create more than interaction. Likewise, I think that's true of the entrepreneurial ecosystem. Right. I think, you know, it's very easy for folks that have only been in, you know, outside of the private sector to just think of them as being very, you know, greedy, self-centered doing their thing. And, you know, we, you know, we talked about personalizing entrepreneurship and that entrepreneurship is more, not about the outcome because I think many times people conflate it with like the billionaire class. Right? It's more about a mindset, right? It's about resilience and testing and learning and getting back up. And look, I think it's the superpower this country like, I think it's the American spirit is entrepreneurship. And I think there's no country, in the world that has what we have here. You know, my family has been, you know, the beneficiary of it. You know, I think that's why I think, you know, how do we align those entrepreneurial spirit around this, but, you know, we try to personalize entrepreneurship in the context of even you know, jokingly saying that, look, we're all entrepreneurs, and anyone that's raised a family knows that, like, that's an entrepreneurial endeavor. You know, you've got a co-founder, got a few products, you test and learn, you know, new product market fit for about 18 years, and he launched them, you hope they don't come back, but you know, some mate, and then you know, it. But the point being that, like, you know, we attach too much dissonance around some of these things without really kind of diving deeper in them. But if we humanize what government is, these are still people. I mean, even you both get it, but like, a different thing of politics and government in a civil servant. You know, people conflate the two as being the same, right? Like, they're not. Right, the 90% of 95 99% of people are going in every day, with positive intent, doing the best they can, can they be better, faster, cheaper, probably. But that can be said about any organization. Right. So, I think that's what we're trying to get at. You know, I think there's more understanding that needs to be done there. But I think there's also, I think, a collective understanding Hondo, Lauren, that we need, you know, we need from across all the stakeholders, each other, if we're going to solve these big problems. Lauren Bedula 16:43 I love the concept of humanizing government. And I think it tracks well, with your take on words matter, really, we just have to have these communities that speak different languages come together, collaborate, get on the same page. And there's so much more of that now than there was 10 years ago for programs like yours at the universities, and even looking at the topic of your book and writing this book, it just shows we have come a long way. We like to tell stories of success on our show, because we think it's a good way to replicate. Does anything come to mind for you, as far as maybe a student exploring, getting into government or industry or any stories of success in terms of collaboration between venture government and the entrepreneurial? Community? Arun Gupta 17:30 I mean, when there's so many different success examples to use, whether it be students or companies and ventures, but you know, at a student level, you know, I think the ones that are most striking to me are the ones where you're sitting with them talking about, you know, a program like what we're doing and overreach. This notion of, you know, look, I think our generation has given you an artificial binary choice with the words we've given you. We say public sector, private sector, we say, not for profit for profit, you know, one's about doing good ones about making money, and we haven't given you a language about something in between, where you can do both, you know, like, what is that language, and you know, those terms are very binary. So black and white, we don't give them a gray areas and bucks. And then when you start to articulate that to them, you know, a number of them talked about like that, we're going down the banking route, going, like, you've put words around what I've been feeling, right. And you start to realize how many students are all feeling the same thing. But then the piece of it is that the easy button as they go get a free, you know, cocktail, or lunch or dinner, and their next thing they know, they're in a consulting or banking interview process, and they just get swept up in that current. Right. And so, I think the success stories have been for us, you know, just even looking at the Scholars Program, and our intern program and talking to kids, how many of them said I didn't know something like this existed? And, you know, they had, you know, offers from the top, you know, private equity banks and consulting firms, and said, I want to do this, because it speaks to kind of what I want to go do over time. And so, I think for us, you know, that would be the success story. And in I think it's from, you know, all sorts of campuses, you know, it. And so, you know, I think the diversity of that message resonating I think has been incredibly important, you know, when it when it comes to, you know, success stories around how, you know, government and the private sector collaborate. You know, in ventures, you know, part of what we try to do in the book is say, we need a new vernacular, we know we talked about public private partnerships a lot and that's not a new concept that's been there for decades. But public private partnerships implicit in that assumes large company, you know, so with that is, you know, fully funded profitable resources. The way you collaborate with a company that's got a billion dollars of revenue and you know, 1000s of people, it's very different than the way you collaborate with a venture that's not even fully funded, which is still building out its team and doing product market fit, right. And so, what we tried to say is that we need a new framework for that, you know, one of the things, again, when you think about success stories is we have the capacity to do this, we just do it in terms of crisis, right? And so, example would be, you know, a government we can play for, we're working with small companies that they need capital. And the truth is, the small companies don't need capital, the vendors don't need capital, what they need, it's contracts. And those are two subtle, but important differences. You know, people, you know, ventures things like, you know, government things like we're getting about that super grant and told these folks, and then those folks get the grant, they come to guys like me on the venture side, saying, like, Hey, we got this, can you fund us now? And we're like, that's great. But we're looking for contracts. And the difference is contracts give you demand signal. Right? That's what that's what really kind of catalyzes our community. So, what are examples where we can we've done this? Well, we've done this well, when we've creditors or commercial space industry. Here we were in 2010, struggling, NASA says, We need to go out to the private sector, and put out milestone-based ways for the private sector to galvanize around outcomes. And if so, the problem is, we don't tell that story that way. I think most people in this country don't realize that SpaceX has really government funding. Right? They just think it's, it's an entrepreneur. So one of it's just telling the stories of where we've done this well, you know, look at Madeira, run operation warp speed, again, you know, we put out there to say, you know, any vaccine, you know, that's FDA approved, government will buy X 100 million at these price points, the private sector can, that's where the private sector excels put out a real target of an outcome you're looking for. So, you know, a lot of what we tried to write in the in the book is, is less about theory of like what we could do, but it's more posing like we're already doing it. How do we do more of it? And what's keeping us from doing it more of it? Right? Hondo Geurts 22:32 Yeah, that sense of scale, I think is what we're all thirsting for, of how do we know 10 years ago, we didn't have any examples. Now we have some examples. But institutionally, how do we leverage that American I would say in during competitive advantage of this ecosystem at scale? Any thoughts you have on how do we now take these? You know, we're at the 1.0 stage, we have success stories. I don't read the out take this to the 2.0 stage and scale it. Arun Gupta 23:04 So, it's a great question. Hondo. I think part of actually scaling is getting the stories out there a success. Right, because people have to believe that it's doable. And, you know, I actually still think it we're very early in that process. Hondo Geurts 23:24 It's interesting. It's the first time I've ever heard a venture person the other day, say, go into government first. Because that's the way you can prove your model and get validation, and then go to commercial afterwards. Which five years ago, I You could read rarely her adventure advisors say go to government first. Yeah. No, Arun Gupta 23:43 I look, I was on again, Lauren, to your question. And Hondo on college campuses. And I had, you know, two students, when at Carnegie Mellon and one at Stanford go like, I'm trying to decide whether to go to a startup first or go to government first. So, the first takeaway was, they're actually thinking about wanting to go to government, right. So that that's like, wow, that's a mind shift change. Right? You have to really appreciate that. But then as we started talking through it, we're like, Well, why wouldn't you go to? If you're going to, you know, my recommended? Why would you go to government first and really understand the problem set, understand what you're looking to kind of go do. And then you go into the private sector, right? And then you can kind of go, having built those relationships built the language and vernacular, and a real understanding of the problems that can go out and become someone that can help solve it from a change maker from the outside. In so I think that dynamic is starting to happen, right? So, I think scaling, I actually think we we're at the precipice where we can look to scale the infrastructure to bring students in much like we have people going in for Teach for America, becoming public education. changemakers. We need that for public service on the tech side. We don't have a program like that, and that's what we're hoping to help catalyze. I think that's important because As when you start seeing this next generation wanting to care about this and come in, it really starts to, you know, change perception within those agencies. Right? I like to say within, you know, having been a teacher in academia, but then, you know, a VC before that the common through line with that is optimism. Like, it just brings a different optimism into it, right? When you bring entrepreneurs around a problem, or you bring these young students in around the problem, at the very least, what you're bringing is an optimistic way of tackling the problem, because that's just how they're bent. So that that I think, is one, I think, to look, I think the through line of AI right now in government presents a really interesting opportunity. And I say that it's an opportunity in that, look, I think the Delta mean, you know, of, between needing the higher tenure person with experience in AI, doesn't exist anyways. versus using that as a way to say, we want to get our best AI folks to kind of get selected to come in for a year or two, and then go do what they want, can help not only help while they're in, but more importantly, I think, set a tone where you're starting to change the brand, of what it means to kind of come in, right and select that. So, I think you can do that at scale. On the venture side, you know, I think you're starting to see pockets of this happening. I think Spaceworks is, you know, on the, on the leading edge of this, where you're the know how to give out contracts in a timely, meaningful way, you know, to ventures and so people know how to collaborate more effectively, we need to be doing that at scale. We need more dual citizens, right. And so again, but I think we've made some great progress. I mentioned Nand Mulchandani, but you see someone like Joe easterly, where she is you see someone like a duck back at DUI. Like that, there's a lot that comes with that, because what they're bringing is implicit trust and two big ecosystems that people didn't want to engage in. And now you're seeing real appropriations around that. So, I think that's how you start to scale it. I still think we need to be more outcomes driven. You know, RFPs, where your kind of writing like, this is what we need and who uses the people we need for the project presumes you know, what the solution looks like. And what you should be more focused on, this is what we the outcome we're looking for, and let the private sector figure out what's the most optimal way to pull together capital talent and technology to solve that problem? And, you know, and then how do you use, you know, government as a way to be a force multiplier to attract private capital, I think many times. Right now, around some of these problems, we assume that the problem is that there's no capital out there to go solve it. And so, there's a shortage of capital. And when reality is, it's just we haven't created the conditions for that capital that want to come in. And so, I think there's different ways of doing that, you know, an institution I would, you know, mentioned in the book that we do this actually well internationally. It's with DFC, right, DFC was DFC do internationally is, you know, they'll take first loss on risk projects to attract, you know, capital into these projects. We can do that here in the states, if we don't do it to the level that we can. And, you know, so I think there's, there's, there's tools that we have. And then the other one, obviously, is just, you know, as we try to get some of these larger outcomes out there with large contracts. You know, I think that galvanizes folks in a much more meaningful way. And again, that's what I think we do. It's those are institutions. Lauren Bedula 28:44 Let's talk about the private capital piece a little bit, because I think that's been another area where you've seen significant interest over the past 10 years, you talked about endgame, which I think is a great example of a company that pretty early on disruptive tech venture backed, had a public sector focused business was doing some work with the US government, and actually was acquired by a player in the defense industrial base, I'd say I think was it Accenture. Arun Gupta 29:12 So, the services piece was acquired by Accenture. Okay. Lauren Bedula 29:17 That's right. And you're seeing more and more of that on the entrepreneur and tech side, I think companies that are stepping up and interested in doing business with the national security, really US government community. On the venture side, it's a 10 years ago, you had funds that were focused on cybersecurity, like a Paladin, who I think was also involved with an end game, Andreessen Horowitz who is helping with market development in the US government domain, but now it's like you can hardly go a day in this space without hearing about a new fund that is focused on US government national security. A lot of smaller players seed a round. What's your take on just the changes in that environment? Do you see it continuing? as is, or will we see consolidation from a private capital perspective? Arun Gupta 30:06 So, my take on the capital piece of this is that, like any of these sectors look for context, you know, I entered the business, you know, late 90s. So, I watched 2001 2002 Bust have seen the, you know, 2009 2010 correction, and we in our business and as VCs, you know, when we see something that starts to work, you know, we probably over fund these sectors. And so, I say that as context because there will be losers. That's how our industry is set up. And so, the one caution I would have been that when people say, when we start to see some losers, you know, and there could be some high profile companies that people are, and then there'll be like, Oh, this is dead, this isn't going to happen. I would also caution on thing that the train isn't coming to continue moving in that direction, right? I remember in 2002, when everyone just was like, this.com, things done, like it's not happening, right? It just may, it may take longer, Lauren, right. But I think directionally, this train is leaving the station. And so, we should acknowledge that there will be losers, that will be bets that were made that aren't going to be that aren't going to be fruitful. There'll be early-stage company, you know, funds that probably over time disappear. But I think directionally I think this is an ecosystem that's only going to develop more. And we shouldn't conflate losers with being saying that the sector's done, is what I would say. So, I think that we're going to continue to see more capital coming in, I think we're going to continue to see, you know, people frustrated maybe at the earlier stages, because I think it takes longer, right? So, the seed and a rounds, you know, where you're looking to go get your be, you know, in a year and a half or two years. But the milestone you need to hit might be, you know, a contract, which is taking a little bit longer. You know, and this is where government has an important role. Right? If you really want this ecosystem to develop, you have to be cognizant that like the timing of how you get contracts out there, if you want these companies to stay around, it's important. And how you award that. And so, you know, I think we're going to learn that. I think the other reason I'm optimistic about it, Lauren, is that while there will be failures, I do think on the government side, and this has nothing to do with an RD issue. I think it's just a generational one, you're, we're starting to see that generational change. And you're going to have folks that are decision makers, that in the beauty of this, this isn't an ideological thing. This is like what's good for the country. But you're gonna have people that grew up in the digital age, right? They grew up with, you know, consuming tech in this capacity. And, and they're more apt to, they don't view risk in the same way. Right. It's not like just by IBM, because, you know, they want to find the next, you know, great thing. And so, I see that happening, right, right now. So, I think the confluence both on the hey, we're going to continue to invest and have companies getting created, I think it's on its way, I think the other piece of it is that those companies are going to be stronger, because I think we're gonna see better talent going into them. Right, and they're seeing better talent, not only from universities, but you're starting to see, you know, people that are in that defense industrial base going, like, Oh, I could go do this now. And, you know, I think on top of that, you know, as, as that talent comes in, you know, the ecosystem will develop that more, you will see better collaboration across government, industry and, and academic because the quality of expertise is going to be higher. And so, you know, we close the book with the virtuous cycle piece. Now, you know, I think a lot of this starts with the fact that, you know, we have really large, disruptive industries, right? When you look at what's happening in just defense tech, when you look at what's happening in climate, when you look at what's happening in healthcare, or space. Anytime you see that kind of disruption, you know, that that's where our industry in the venture side gets really excited. Right? Now we get excited, except we always want to see someone else go first and be the winner. And so, you know, the early folks have gone in, in IC some real winners, right? Some of the companies that we talked about before across all those sectors. You see, you see winners then now more capital comes in, more capital comes in better talent comes in better talent comes in the ecosystem gets stronger, and that's the story of the valley right now. That's why I think there's a there's a poetic piece of this whole thing, which is like if you think about how the valley started, it started with government funding. Right like governance started the valley. And so now here we are, you know, on the other side of that, where we're, we're replicating it with the valley being part of like how we thought, these big problems. And so, I think that's where the optimism comes from. But look, I don't want to sugarcoat this and say, you know, anything that's going in, it's going to be any company getting created right now. They're all going to succeed. That's never been the case in our industry. You're gonna see some real outlier returns, though, with the big winners. And then you're gonna see a bunch of losers. I just caution folks of saying as soon as they see losers, that the sector is dead. Hondo Geurts 35:37 What's your, you know, having seen and worked with and interacted with this whole ecosystem? What do you advise young entrepreneurs as they're thinking about coming in? And what do you advise now that you know, your books getting also traction? You've done a lot of work on the government side; what do you advise the government folks you talk to of how to better approach this problem? Arun Gupta 36:01 Yeah, Hondo, you said something early on, which is I think, at the core of it, which is kind of the empathy of how you approach the problem, right? So, with the entrepreneurs, it's very much that, you know, if you haven't been cited government, make sure you're building a team that understands it. Not just for networks and access, but more truly true empathy. Lauren, we know, he talked about end game, you know, it started as a commercial company. And then we were targeting the government sector. And I remember when we were, you know, looking for product management folks, and things of that sort, you know, you would think it would be people around the beltway, and we were getting, you know, tech folks from the valley wanting to play those roles. And the cultural superpower, you know, and I give Nate a lot of credit was, you know, managing a culture of folks that have that valley mindset, but also understand DC really well, right. So, while each individual may not be a dual citizen, the team kind of represented a dual citizen team. And I think those diverse teams are really important. And I say that, because I think usually what we see Hondo are, you know, commercial companies with all commercial pedigree, and they try to add on being government, or only government companies that don't know how to create dual purpose. And it sounds subtle, like, oh, we can do it later. It rarely happens, because you've set culture and culture is really hard to change. So my advice to an entrepreneur would be at the ground stage, focus on creating that dual citizen culture with your team, right, so that you're always kind of having kind of that empathy on both sides, and how you make decisions in mutual respect, because I think a lot of the reasons that commercial companies don't do so well in government is they treated as a second class citizen. Right, here's our public sector group. And they they're kind of somewhere else, and they get compensated differently. For government work. Yeah, exactly. Right. Right. And that comes through, but that just comes through. And, and so in, likewise, you know, when folks are only targeting sometimes government, they're missing? Like, how do we create scale? In replicability that we're going to need if we're going to go into the commercial world. So that would be what I would say, the entrepreneurs, you know, on the government side, I would really be, you know, advising folks to, you know, likewise, bring in folks, um, from the outside, in and be comfortable with them coming in for experiences. You know, it didn't only have to be Junior folks, it can be mid-career, folks. And you're right, you know, we use revolving door and over time, it's interesting, you know, it's become a negative connotation. And I it's interesting for a country where we, we assume your innocent till proven guilty, you know, revolving door kind of, you know, assumes negative intent versus positive intent. In, you know, like, how do we go back to a place where we assume positive intent, with someone coming in, it doesn't mean we don't have guardrails. But when, when being a dual citizen or being you know, is completed with being revolving door, you're saying off the bat that we assume you're going to do something negative. And that's a hard place to innovate. Right. And so, I think some of that cultural change, you're seeing that in certain agencies and groups where they recognize the importance of that, but making that more widespread and you know, creating those crosswalks you know, where folks can come in for a period of time so that we have you know, more back and forth. Lauren Bedula 39:45 You brought something up that we often hear on the show is just culture is a key barrier to entry and your optimistic take care to me is reflective on the slower change it takes to change culture. If you are king for a day this Just last question I have, is there a policy change needed? Or some sort of recommendation in a tangible form? Or is this all culture we're trying to tackle? Arun Gupta 40:10 You know, look, I don't know, a lot of this stuff can be changed with policy by itself. But, you know, one, I would say, is to have each agency have, you know, billets, for lack of a better word that are set aside for people that are coming in for two-year stints, right, as opposed to feeling like they have to be coming in. And, you know, right now the billets are for folks that are coming in and going to be full time employees over time. Right? And, you know, in our program like that, and I would all I would think of those bullets is infrastructure. Right? That's really what those are your funding infrastructure. And, you know, programs like us then can help catalyze and fulfill those roles. And again, it could be coming, right, coming right out of school, but it also could be mid-career. And it also helps, I think, to the notion that we were just chatting about, which is it assumes positive intent, it embraces it. It says, We know, we're having people come in, and you know, we've put in the right guardrails. But this is how we're going to collaborate. And this is how we're going to unleash the, you know, the entrepreneurial creativity and bring it to the scale and reach a government to solve big problems. Hondo Geurts 41:28 So, I want on that to double tap something I heard that each government organization should have to IGS Yeah, can you can you expand on that a little bit to this point? Arun Gupta 41:37 Yeah. So, the idea of two IGS was is attributed to a good friend of mine, Dan Tangherlini, and we were talking about risk culture, right. And the culture of government versus the culture of entrepreneurship in the venture community. Now, you know, I start by saying that, like, look, if I was a VC, I would never raise a fund if I was measured, like government. And I say that because as a VC, I'm measured by my best deal. What does that mean? Like 10? Bets. Six of them could not work. You know, two of them could be okay. But if two of them are blowouts, you know, I'm oversubscribed, on my next fund. If I'm government, I make 10 bets. Nine of them could be okay. You know, one of them could be Solyndra and I'm carrying that around for a decade. I'm measured by my worst deal. And so, part of why we say that is that, like, look, we have to acknowledge why these ecosystems act differently, not just easy to say like, Oh, they're risk averse. There's a reason. That's how we measure. Right? That's the perception. So, there's something we can also do about that as well. And, you know, an example of that is that, you know, every agency has an IG. Right. And so, if every agency has an IG and the IG is job, is to make sure you stick to the playbook. Right. And if you deviate from the playbook, you may, you know, be called in front of a congressional hearing that, you know, will change behavior. No one's gonna want to deviate. And if you think about entrepreneurs, on the other hand, they don't have a playbook. All they know is what's the outcome they're trying to get to. And they're constantly changing the playbook. Like if there was an IG in the entrepreneurial world, they'd all get dragged in front of hearings. So, the answer that, you know, the comment that you're making Hondo to IGS, what Dan was, was positing is like, whatever agency needs to IGS. And you're like, Well, how is that helpful? And he's like, the other IG should be an innovation general, in the innovation General's job, is to be looking at the agency and saying, you know, are you innovating fast enough. And if you're not innovating fast enough, you could also be brought in front of a congressional hearing. And while that will never happen, it's an interesting thought bubble, because that's the tension you need in any organization, you can't always just be all about taking risks, there needs to be some risk management there. But you also have to give them the agency and capacity to make some mistakes, so that they can experiment, because no one's going to want to experiment. If they feel like if the experiment doesn't work, it's going to lead to, you know, negative feedback. So that that was the notion of having two IGS in each agency. Now, while that may not happen, then, you know, what we try to posit in the book is then, you know, how do we create renewed partnership between government entrepreneur, so we can still create that dynamic? Like there's research that government will do needs to do, the private sector will never do. But the commercialization piece where you need to test and learn, that can't happen inside the government for some of the reasons we just talked about once you change culture. And so how do you bring that out and let it Foster and scale or fail in a system that allows it to fail? Right, and that's how we think we can get more dual purpose, opportunities and more bets. Lauren Bedula 44:58 That is a fantastic time. concept, I think something will want to try to create an echo chamber around a room. Thank you for taking the time to write this important book. I think, again, it's a message we want to be reinforcing on our end and for all the important work you're doing at Noble reach, and for coming on to share your story today. Really appreciate it. Arun Gupta 45:15 Lauren and Hondo, thank you very much for having me and I appreciate all you do as well.