What Is Founder Narrative Fit and How to Detect and Invest In It

Thanks so much for having me, Harry.

Well, I’ve definitely had a circuitous path to venture. I began my career as a general assignment reporter in the feature section of The Washington Post. And really, the only requirement for that job is just that you have to be extremely curious about everything and be able to write on deadline. So I begin my week by doing an investigative deep dive into the finances of the Smithsonian Institution, Institution, and I end it by hopping on a plane and going to California to write a 5,000 word piece on Carol Burnett, who’s the godmother of sketch comedy.

So it required sort of this rabid curiosity about everything in the world and really a love of the adrenaline rush of having a new assignment every few days. So I probably would have been a journalist the rest of my life had it not been for just a terrible business model when I was at the Post. So I was there from 2010 to 2014, and it was really dire Straits. It was before Jeff Bezos bought the paper. And I actually had an editor pull me aside and say, Katherine, you’re young enough.

You can do something else with your life. You should probably leave. And I was really somewhat despondent about that, but I had a good friend who was at the Post, and her husband had just gotten out of the Navy. And she said, my husband just left the navy, and he’s going to Stanford Business School. You don’t have to know anything about business. You should apply there. So that sounded great to me. It sounded like a nice life raft. And so I applied and was was fortunate enough to get accepted and moved out to California.

And I quickly became somewhat bored by the business school experience, so I just started reading as many books as I could about technology in Silicon Valley and everything that was happening in this world. And I stumbled upon a book called Zero to One by Peter Thiel, had just come out. And that book changed everything for me because I was used to these airport business books, and that book is truly a philosophy book. So I emailed Peter, and he responded, he put me in touch with Trae Stephens, who was a partner at Founders Fund at the time.

And we got to having many conversations about the meaning of venture and what startups mean. And after every conversation, I sort of asked him, can I work at Founders Fund this summer? And he said, absolutely not. We have no idea what we would do with you. But after, I think, multiple conversations and me prodding everyone on the team, they finally said yes. So I worked at Founders Fund for seven months, and it was really the ultimate kind of experience and venture. I was a true outsider at the time, knew very little about it meant to be a venture capitalist, and it was really the ultimate gift to kind of see their thinking and be immersed in that world.

And when my internship ended, I was sort of convinced that I had to be a venture capitalist, and I couldn’t do anything else. So I talked to 45 different firms in Silicon Valley and had a lot of figurative doors slammed in my face. It was quite a trying time. But then I met Heymantir and Nico Benazoo at GC, and it was so striking because it quickly became clear that they were really interested in my quality of thought. And they weren’t interested in was I investment banker or did I come from the right company.

They were very interested in how journalism would actually help me in this career. And so I was really lucky again. Joined as an associate in 2016, and I’ve been there ever since.

He’s wonderful like that. Absolutely.

Yeah. Well, I always joke that they’re the exact same job, except in journalism, you write a story, and in venture, you write a check. But you really are hunting for the same things. So the three components of a great story are strong protagonists, a contrarian hook or thesis that really makes people’s eyes light up, and sort of this why now question or the macro change that’s happening that’s leading for the story to be relevant. And that’s exactly what we look for as early stage venture capitalists.

Beyond that, the day to day is actually pretty similar too. You have sources that are on rotation that you’re constantly texting, trying to get the scoop from. You’re competing against hundreds of other people who are trying to usually get into the same story. You’re doing diligence, and you’re making snap judgments based on very limited data. I’d say the biggest thing I took away from journalism that has helped me in my investing career is this understanding of what conviction looks like. I very much believe that investing is this unique combination of reason and revelation, and that understanding that mix is sort of the key to being a great investor, and I think it’s also the key to being a great journalist.

So I definitely feel like that was something that I got my journalism training. But there’s also a lot of differences. I mean, I’d say the biggest difference is the probabilistic thinking that you have to have as an investor. That’s definitely not something that journalists think about in terms of looking at upside or looking at opportunity. So that was probably the big shift that had to happen in my kind of mental framework.

Sure. It’s kind of wonky, but I studied political philosophy for a very long time, and that was what I studied in college. There’s this one great philosopher named Leo Strauss who talks about sort of human beings being this combination of reason, which is very much defined by Athens, the city. And Jerusalem is where we define ourselves in terms revelations. There’s sort of these gifts and secrets that we try to look for in the world that we don’t know where they come from, but they’re insights that all of humanity feels.

And I do think that that is early stage investing to a t. It’s this rare human combination of you look for as much data as you can and you try to build these logic trees, but at the end of the day, you’re making these instinctual choices based on sort of revelation. And I think, you know, other investors will call it secrets or they’ll say they’re looking for a hook that other people don’t see or or sort of contrarian narrative. But I really think it comes down to just this weird balance of what makes us human.

How do you think about that? It is probably the hardest part of the job because once you have to constantly be optimistic and be thinking about, okay. Do I actually believe what I’m hearing is true? But you also have to be kind of practicing skepticism and questioning your own assumptions. And I think that’s what’s really interesting about investing is that you are doing this sort of as a solo practitioner. You have to have sort of this internal dialogue of, is what I’m hearing true in the same way that a journalist would sort of say, okay.

Are these facts correct? Is it checking out? But you have to also be able to sort of dream the big picture and really do you believe. And that’s more of a faith question. And that’s where I think the partnership model really helps because the people that you spend the most time with and venture are really gonna press you on. Do you actually believe what you say you believe? Are you falling into biases or traps about what you tend to prefer to see in a founder or a company?

So I think it’s definitely an art, but in terms of building conviction, for me at least, it’s a very personal thing, and it’s very much this balance of faith and reason. And then I love having my partners who can test me on whether I actually believe what I’m saying.

It’s interesting because I think the biggest takeaway for me from Founders Fund is also something that I really love about GC, and it’s that they both believe as firms that there’s no one right way to practice venture. Everyone at these firms takes pride in the fact that they allow different strategies and styles of investing to prevail among their investors, and I think that’s so important. I’ll give you a few examples because I think I’ve worked with two of some of the best investors that are practicing right now in the valley, and they practice very different.

So I’d say, Hey, Monteneja is the best proactive investor in the business. He’s someone who can see the future ten years out and build companies from scratch as a cofounder with them and see them come to fruition. I think Livongo is a perfect example of that, that you saw the future ten years ago, and now you’re seeing this incredible health company at a time where no one could have predicted what we’re going through. I put Trae Stephens in that bucket as well as the cofounder of Anduril as someone who really understands how to see the future and build companies.

The flip side of that is someone like Brian Singerman, who I think is one of the best reactive investors in the Valley, where he has no theses, doesn’t think about the future, and just listens to the founder and the story and uses his own frameworks and is able to invest across a wide array of sectors. And so I think the big takeaway from my thinking there is that, you know, he was the first person to tell me that investing is much more like a multiplayer strategy game than it is like any other asset class.

And so you really have to be wedded to your own strategy and really focused on making sure that you practice in a way that’s gonna make you successful.

Yeah. I mean, it’s a great question. And I think part of being an investor is that you get to experiment with all sides of that. I’m probably more on the reactive side, to be honest. I love thinking about thesis and love thinking about the future, but at the same time, I’ve never built a company. I’m not a builder, and I’m not the sort of person who is going to partner with the founder side by side and kind of I don’t have that sort of experience that I think people like Trae and Haymont have.

But I’d say in terms of the reactive model, you’re really listening. And I’d say that the core superpower of a former journalist or the core superpower of many investors is to just listen to the story and actually decide whether you believe the story to be true. And then be kind of a helpful, almost Socratic guide to the founder on their journey to make sure that you’re pressure testing their belief in their own conviction throughout the ten year journey that you’re on together.

So that’s sort of the role that I like to play, and I think it’s much more natural for me given the fact that I’ve always been the sort of person who’s much more of a chronicler in life than the sort of person who’s gonna go out and be kind of front and center and build the future in the way that we see so many great founders do.

That is, like, the most Jeff question. Because I probably know more about Jeff’s strategy than I do about Mike Moritz. But, actually, I had a conversation with Mike Moritz maybe a year before I became a venture capitalist, and I asked him whether he thought that journalists could still become great investors given the kind of change in technology. And he was very honest. He said no. He said it’s too competitive. It’s too technical a field, and that too much a changed. And, of course, I told him that I fundamentally disagreed, and he said something that really stuck with me.

He said, no one took me seriously for the first seven years of my career because I was different. And if you go into venture capital, you have to be ready for the fact that very few people will take you seriously. And to me, that was some of the most liberating advice that I had received because this field is so mimetic, and so many young people start at their careers wanting to impress other investors. And they’re desperate to get into the hot deals because other people say they’re hot.

And when you let all of that go and you invest on your own conviction, you get to invest in things that other people overlook. And I’d say, like, in 2017, Anduril was a perfect example of that. There were very few traditional firms that were looking at defense or looking at a company with that big of a vision. And so I actually think it’s a true competitive advantage if you can kind of let go of what are other investors doing, what are sort of the hot sectors that we should be in, and really focus on your own conviction.

Yeah. I mean, I think I have a pretty strong framework for what I’m looking for in terms of I invest almost solely in what I call founder narrative fit, where I’m really, really focused on kind of certain traits in a founder. And I spent a lot of time kind of digging into that. And what’s interesting is that I’ve seen a pattern in my own thinking where the founders that I’m really impressed by, whether it’s Palmer and Brian at Anduril or Misha Nova Credit or Rachel at Guild, they’re people who are so obsessed with a sector that the deeper you dive into it with them, the more questions you ask them, it’s like going down a rabbit hole together.

And I’d say there’s very few founders that have that quality. So I haven’t had a hard time kind of straying from my own conviction that that’s exactly what I’m looking for in people. But I think it’s hard. I think it means that I don’t spend that much time with other investors. I have a small group of people that I spend time with, and I really look for founders who have sort of a deep understanding of the problem they’re solving. They may not have the solution yet, but they’re obsessed with the problem.

And I’d say that’s sort of what kept me really focused on sort of a framework that I have. Can

I ask a lot of how questions. I think often the questions that we ask in sort of a thirty minute pitch meeting are, tell me about the problem, tell me about the solution, the what, how are you thinking about metrics. I think there’s nothing more valuable than time in this business, and the more time you can spend with founders really digging into how. How are you going to do this? How have you thought about this? Have you thought about the chessboard? What is the strategy? What does six months from now look like?

A lot of those how questions are more revelatory on how deep the founder has gotten into their own thesis. Usually, if a founder has a really compelling thesis, it’s something that you haven’t heard before. It usually goes against a dominant narrative or kind of a dominant belief, and they usually have so much data or so many examples that back up that sort of contrarian narrative because they’ve had to defend it so much. So I think those are the things that I really look for in sort of the founder story.

And the way it manifests itself in a lot of the companies I work with often that leads people to build in spaces that other people just aren’t building in. Often, these are very n of one companies. With Nova Credit and Misha, there really isn’t another credit reporting agency built for immigrants. No one else is building in that sector. There are very few companies, and particularly in 2017 when Anduril was founded, there wasn’t anyone in Silicon Valley building a new defense contractor that wanted to compete with Raytheon and Lockheed Martin.

And you’re right. Like, the thing about being a generalist investor is you’re probably going to learn so much from these founders. Like, if you’re investing in the right teams, they know a lot more about the space than you do. And I think that’s a good thing, but you can still test them on how they think about things. And I kind of see it in my own excitement when I feel like I’m really deeply learning from a founder. That’s a really good sign.

It certainly does, but I also think the graciousness of founders to give you their time is part of the dance of fundraising. So whether you’ve met the founder years before or a few months before or even a week before, being able to ask the founder for their time and to ask the questions that let the founder continue to teach you, I think that is so much part of the strategy now. Because founders know when there’s deep interest and when they’re not wasting their time, just having diligence call after diligence call.

Like, there’s a huge difference between, let’s just go through your numbers or teach me the sector that you’re excited about. And I actually think that’s somewhat of the audition that investors are going on. Even if it’s only a three day sprint with the founder, the more that you can demonstrate that you are learning and the more that the founder is willing to teach you, to me, that is probably the most important part of the fundraising process.

You know, I think market timing risk is very difficult, but I think it’s different than sort of these macro tailwinds or secrets that I look for. With macro tailwinds, there’s a real force accelerating a trend that might have been there all along, and I’ll give you an example of this. I think we’re seeing and I think every person with children right now is seeing this that, like, there is a huge change happening in k through 12 education because of COVID. And the two things that I think have really changed are parents are now aware of how their kids are learning, but they’re also aware of what their kids are learning.

I think that’s actually the biggest kind of shock that’s happened to parents during this five month process. And it’s not that devolution of k through 12 education wasn’t happening six or twelve months ago. I think if you invested in a company twelve months ago that was building infrastructure for k through 12 education, you could have built a massive business despite what happened with COVID. But the macro tailwind actually just accelerated a trend that was already in existence and sort of illuminated it for us and sort of raised different questions about it.

So I think there’s a difference between pure market timing risk, which is will we be able to see autonomous vehicles on the street within the next five years? Or the trend of we’re building infrastructure for a trend that’s a cultural trend that people care about and that’s actually emerging in society, but there might be some sort of market change or sort of macro event that leads to an acceleration of a trend.

Yeah. I mean, the reason I love regulation, to be frank, is that I think it’s a proxy for market size. But I think you have to look at the right regulated markets. So oftentimes, see Silicon Valley investors putting a lot of money into a company where they’re expecting a regulatory change to happen, and that goes to your question about market timing. That can be terrifying. You can totally misread Washington. But I actually like these markets like aerospace and defense where the board is set, the regulation is set, and there is a massive, massive market on the opposite end of that regulation that’s been in place for fifty years.

And if you can get through the regulatory hurdles or the procurement hurdles and see that market on the other side, you are competing against the slowest moving incumbents because they have had an effective monopoly for decades. That’s true of education. That’s true of defense. It’s true of credit reporting. And so I love companies that are really, really focused on these stodgy industries where, yes, there’s a lot of regulation in the front end, but no one has really tried to get through it recently. And if you can get through that front end regulation, there’s a massive market waiting for you at the back end of it.

I like to use example in deep tech. A lot of people were investing in autonomous vehicles a few years ago, and they were making this prediction that there’s going to be some sort of regulatory approval. Same thing with drones. There’s going to be changes in the FAA that allow for markets to open up. I think that’s really, really hard. But I think there’s a huge difference between the drones and the autonomous vehicles of the world and the SpaceXs of the world where all of the regulations were set that SpaceX went through.

They really just had to win procurement, and that’s more of a sales problem than it is we are waiting for government to approve this type of regulatory change so that we can operate. So I tend to look for markets like that. Anduril certainly are operating in a regulated market, but the rules of procurement have been set, and they’re an incredibly effective team in terms of being able to give customer what the customer wants within the confines of a highly regulated system. So I tend to look for companies like that where a regulatory approval process isn’t going to be the binary make or break of a company.

There are companies that have been successful off of pure regulatory change, but I think that often leads to a lot of people running towards a regulatory change, and that’s not sort of the way that I invest.

I love that you brought up Anduril because Anduril was a very special case and that this team is so excellent. I mean, it really is. I think everyone’s watching the last dance, and it really is the 98 Chicago bulls. I mean, this is such an extraordinary team that had worked together before. Everyone operating at a level of excellence that you really just never see. The real need for a company that’s going after such a big space, that really is a company that’s gonna follow in line with the Palantirs and SpaceXs of the world, is capital.

And so even at seed, I’m not sure how beneficial a seed fund would have been to Anduril in terms of really being able to help them sort of achieve this mission. But the second point, even on Anduril, for seed founders that I’m constantly stressing is that you really need to find someone who’s mission aligned. I think one of the things that founders do is they sometimes optimize for brand or they’re optimizing for round dynamics in a way that can be harmful if you find someone who’s at a certain firm that is really mission aligned with you.

And I think the biggest thing that I’m predicting will happen in the next ten years to founders is that if you plan on being a successful founder, you are going to have a target on your back. It doesn’t matter whether you are building a defense company or whether you are building a d two c shoe company. You are going to have a target, and you are going to need a board and particularly investors around you who have your back, who will run to the fire with you.

And I think that’s something that if that person happens to be at a seed fund, fantastic. If that person happens to be at a multistage firm, great. But you should really, really optimize for someone who’s mission aligned because you are putting that person on your board, and they are with you for a very, very long time. So the thing that I think founders should really focus on is who are the investors who have courage, and who’s mission aligned to stay with me for the long haul?

Oh, no. Totally. Those are all valid things that a founder should weigh. The the argument that I always make, though, is that I don’t think founders think enough about these issues of personality and courage and mission alignment. I think that’s something that really needs to be clear to a founder from day one. And the good thing about a multistage firm, and I’m not saying that founders shouldn’t work with seed firms. We’re very collaborative with seed firms, particularly at Theorelists of Stages because we see the value they can bring.

And I think that there’s many great seed investors and seed firms that we love working with, but you should always be also focusing on the long term. In a lot of cases, there’s benefits to taking capital from multistage firms because they’re aligned with you throughout the journey. They’re going to be able to continue capitalizing you, especially if you’re in a capital intensive field. That’s something where I invest in a number of companies that are pretty capital intensive, and that’s been a helpful thing that a firm like GC can bring to the table.

But I definitely think that the thing that founders should most focus on is finding the partner or the person who is really mission aligned with you and has the courage to have your back should anything go wrong. Because I think these ten year journeys, they are hard to predict, and that is what you really, really want when you’re choosing a board member.

Yeah. No. So it depends on the company. So I’ll say, like, mean, this is a great example, but with Anduril, we invest in the seed. We also invested in the a, but we didn’t lead around until the series b when we co led with Founders Fund. And so I think the benefit there of being flexible as a multistage firm is knowing that you can build ownership over time and being flexible with the founders about what they are looking for. So I think that’s a perfect example of when you have a multistage firm and when you’re looking at companies that are capital intensive, you can be more flexible as to their needs.

I often say in the fields that I work in, it’s a lot easier to invest in seed and series b than it is to invest in a, and there’s a reason for that. And that’s because a lot of the companies I work with are deep tech companies or they’re engineering driven, and there is little traction at the a. So the company will look very similar at a series a versus a seed when you’re really betting on team and story. And so it’s hard to make that series a bet.

But at series b, usually, a lot of these companies that are either selling to government or that are working in highly regulated spaces have a significant amount of revenue where you can actually make the investment based on company traction. Traction. And so I think the benefit of being a seed through series b investor is that you can really think about when is the right time to invest. And founders also have to think about that as well, where if you are building a company that’s going to take more capital, it makes sense to raise a larger seed because you know that it’s going to take you much longer to get those series a milestones and those series b milestones.

It’s a great question. And I think if you look at interest rates and the $4,000,000,000,000 cash infusion we just had and where investors are parking their money, it’s very clear to me that that private market prices are what they are, and we can’t sort of long for the good old days anymore. I’m focused on early stage. So in this environment, I think you have to be very confident that you’re picking the right companies. It’s hard to have a lot of price sensitivity at seed or series a in this environment.

That said, I’m always amazed at investors who mock other investors for paying up for companies. And I think there’s far more shame in losing on price than winning on price. And no one really wants to say that. But I think if you are going to have that sort of mantra of, okay. This is how the world is. There are macro events that are happening that make it very difficult for us to have some price discipline. You have to be very selective, and you have to pick the right companies and be very thoughtful in your conviction.

I think founders often set that tenor for investors, and I I usually like to put the ball in the founder’s court. I personally become obsessed with companies, I think, long before they’re raising, and I like to prove myself to the founder before working with them. And I think that’s an important part of sort of the auditioning process, if you will. But I think it’s company dependent. And if you get to know a founder really well and you have conviction before the process begins, great, especially if the founder is excited about that.

But if not, then I think they’re sort of respecting the process and respecting the founder’s wishes. So it’s very much a founder driven decision.

I’m very mindful that you’re the twenty minute VC, and we don’t have much time to

Yeah. No. I I’d be on that one, but I’d be happy to talk about media. The broader thesis that I have is that we are watching this incredible global decline of institutional trust. And it’s not just media. It’s the US government. It’s Brexit. It’s university education, the Catholic church. It’s any institution that used to hold power where transparency has crept in and led people to distrust it. And I really think that this has been the summer of a grand media devolution that’s been happening for a while, but it’s sort of finally bubbled up.

And I think there’s three causes for it. The first is this movement away from institutional credibility to personality driven news. And this has been driven by Twitter. I mean, if you are a journalist today, the most valuable thing that you can have is Twitter followers and prove to your employer that you have a following so that you can get book deals, so that you can appear on MSNBC. This is basically the massive change that’s happened to reporters. And I think that that’s had a great shift on how people think of their brand and people think of their personality.

And then second, there’s been a massive business model shift over the last fifty years. I mean, when you think about how a newsroom is built, it was built to deliver a paper. So you have people on staff who are very good at laying out page one of a paper. There’s tons of middle managers who are just looking at copy. There’s people over them who are deciding editorial decisions. I mean, when I was in it and even when I’m outside of it now, all I see is bloat.

Because the real product that people are buying is the stories. And there’s so much that goes into putting those stories together that I think is antiquated sort of business that really doesn’t make sense for the twenty first century. And so we’ve really seen sort of the devolution of that. And then the third is this amazing cultural tailwind that happened this summer that I really think is driving adoption of new media, which is the fear that you cannot write what you believe. There is so much preference falsification among reporters right now, and we’re seeing it across reporters, opinion writers.

This summer, a number of very, very smart and thoughtful people have left the New York Times or New York Magazine like Andrew Sullivan and Barry Weiss, and they’ve said, we’re going to Substack because we can say what we believe, and we can monetize this independent following on infrastructure that makes a lot more sense for the twenty first century. And so when you combine those sort of three facets of what’s happening both culturally and also from a business model perspective, you get amazing companies like Substack and Patreon and other creator led companies that allow the creator to make more money than they could in these bloated institutions.

So I just think we are going to see so much infrastructure built for this devolution trend. And finally, you’re giving tools to creators, and you know this better than anyone, Harry. I mean, look at what you’ve built. You don’t need a radio station in order to put out something that’s really captured people’s imaginations. So I think we’re just going to see more of this, and it’s a great trend for creators.

It’s interesting that the question of whether we ever lived in a real democracy is is a good question. There’s a great book called Why Liberalism Failed by Patrick Deneen that I’ve been reading during quarantine and a number of books about sort of what we’re experiencing in this moment. And I think the big question that people have to ask themselves is whether we were ever really living in a society that valued free speech, and what are sort of the factors that have led people to really reframe how they’re thinking because they’re worried about sort of this authoritarian backlash.

There’s another great book about preference falsification called Private Troops, Public Lies, which is about authoritarian regimes and basically how people can’t say what they believe if they’re in a dictatorship or if they’re in a place where they have to fear that if they say something, they’ll lose their livelihood or their life. And we’ve seen sort of that current that was really in existence under the former Soviet Union move to what we call democratic countries. But instead of that being influenced from kind of the state, it’s been influenced from companies and from other people and from Twitter.

And so I very much believe that we’ve entered a time where it’s very difficult to say what you believe. And that’s why these narrow communities and these you know, whether it’s a substack newsletter or whether it’s a signal channel where you can talk to a small group of people, we’re seeing the narrowing because it’s become harder and harder to say what you believe in a broad audience.

I do think that we’ll see the middle fallout first. I mean, we’ve already seen the middle fallout in terms of sort of small metro papers, and so 100%, I do think we’re going to see that trend. But what has been shocking this summer is to see the number of very famous writers who used to have their brand in their cache from the New York Times or from the universities that they’re working with. And when you look at this population, this population actually makes its money from being the chair of a journalism department and from being an op ed writer.

And those are the two institutions that I think have really fundamentally changed. One, because of COVID with the university education, and then two, the news media, just many readers and many people that used to have great trust in these institutions just no longer trusting them. So I do think you can see a shift even at the top, even at The Washington Post and The New York Times where people will opt out of those premier institutions because they value the freedom to monetize their following, and they also value the freedom to say what they think.

Yes and no. To me, it’s probably the natural order of things that institutions become very large. And in some ways, think that people just misunderstood what was going to happen with transparency. Most of these institutions, it’s incredible to watch whether you’re talking about media or universities or even US government, sort of the use of responding directly to your consumer or responding directly to your constituent through Twitter. Sort of this transparency that we were all looking forward to over the last decade to make things just much more elucidated to us.

And I think what we’re seeing is that, actually, that transparency breeds a lot of mistrust. These institutions only have their power when there really isn’t real transparency into what they’re doing. And so I think it’s sort of a natural order of things that you would see a lot of these institutions fail or crumble and that you would rebuild new institutions for a different time period. You know, I talk a lot about the privatization of government, and that is certainly a trend that I’ve been investing on for a very long time and that a lot of institutions in government can’t actually perform civic functions anymore.

And it’s important that we have incentive structures like venture capital and like start ups that can rebuild for a new society in a much more robust way and actually provide civic services that are needed to people.

In the case of government, I mean, I think the markets are huge. I mean, you could talk about education, health care, defense and security. These are massive markets, and it’s actually pretty easy to size these markets because the federal government or the budget is public. So you could see how much the government is spending, and you can see, okay. If we add technology to this, how large will the market actually be, and will people actually pay? The big question for me is not necessarily market size because I think these are civic services that people will pay for.

The the big question is, can you deliver a product that makes the experience much more delightful and that people will pay for it? And what is that entry point? So in the education, I mean, you look at something like Guild Education and Rachel’s company. I mean, we’ve been talking about upskilling the American workforce for decades since offshoring has become the way that we’ve built. And it took a company in Denver that’s five years old to actually figure out how you align the incentives so that you can upskill the next generation of the American workforce, of the adult workforce.

And so to me, these markets are so large. It’s just figuring out how to align the incentives and how to make sure that you’re delivering a good service. Same thing with creating new defense companies like Anduril. For thirty years, the government has not been able to figure out how do we build new technology and how do we incentivize Silicon Valley to work with us. And Anduril has figured out how to align the incentives and make sure that the best technology is getting in the hands of our men and women in uniform.

These are really big markets. They’re really important missions, and you really can’t expect government to be able to do it alone. It has to work with technology.

I think there’s books you read and there’s books you study. So my favorite book is actually one that you study, which is Plato’s Republic. But I’ll give you one that I haven’t mentioned today that I think everyone should read. I mentioned Denis’ why liberalism failed, and this is sort of the flip side of that. It’s a book that I really love by Ross Douthat called the Decadent Society, and it came out during quarantine. And it’s really about stagnation, being a robust affluent society with no meaning, and how you get out of that stagnation.

And it sort of takes the Peter Thiel approach that you have to invest in technology and you have to kind of get society excited about building for the future again. And when you compare it to the Indeed book, which is much more Alexis de Tocqueville, we have to go into the woods and create these small communities that are aligned in terms of their values. I think those are two prescriptions and two solutions that we’re actually going to see coming out of COVID. We’re going to see people building these intense infrastructure projects, I hope we do, you know, sort of the Mark Andreessen, it’s time to build.

But we’re also going to see people going into small communities and kind of rebuilding communities and living community together in a way that’s really beneficial for people, and that’s aided by remote work. That’s aided by the technology that you and I have been invested in for the last five years. And so I’m really excited to see what comes out of COVID, and I think that there are solutions that both philosophers and technologists are putting forward.

Oh gosh. I think the hardest moment right now is just that we’re quarantined in our houses. We’ve talked a lot about finding ground truth today, and it is really, really difficult to be a great investor when you’re only listening to mononarratives and things happening online. I actually think you have to get out and speak to people and really know what’s going on on the ground. I actually flew to my hometown in Northern Florida a couple months ago and spent about six weeks there with my family and just really did it because I wanted to find out what’s actually going on in the rest of the country.

And I think that’s so important for investors. So the thing that keeps me up at night is that we’re gonna be quarantined for a lot longer and not be able to get to this sort of ground truth because we are stuck in our homes.

I have been. Trust me.

It goes back to what we’ve discussed. I think people optimize too much for brand and price and sort of short term effects, and they’re not looking solely for mission driven people who are mission aligned with them, who will have their back and have courage when things get tough.

I actually think venture is actually a very great ecosystem. It gets a lot flack, but I think when you look at stagnation over the last fifty years, venture has actually been one of the few asset classes that has led to productivity and growth and new technology. So I think most of the things about venture are great. The thing that I would change slightly is the incentives are really great for software. It’s really hard to build large projects with large time horizons in the venture asset class.

And so I think that there are some changes that could be made, actually small changes in the incentive system that would probably have to be made either through tax changes or government doing some sort of incentive system that would make it better for companies that are really solving civic needs of government or building infrastructure that’s very much needed for American renewal.

And I know that that’s probably a lot to ask of government that they might add some incentives or change some sort of tax structure to make that possible, but I think that that would be the thing that I would change the most is just allowing for these large infrastructure projects or companies that are building hardware and software to be able to operate in the venture ecosystem.

The time element is one play, but I also think whenever you are doing the analysis of whether it’s more advantageous to invest in software or hardware, you’re always going to come out saying or nine times out of 10, you’re going to say we need to invest in software. So I think that there are more tax incentives actually that I would add on that or something where the government could say, here are the five areas of interest where we know we have to work with with technologists, and we’re going to make incentive structures that allow for the returns to look somewhat similar to software.

But I think it’s hard for venture capitalists to do it alone. I actually think that this is gonna have to come from government. And I’m I’m not hopeful that that will happen anytime soon, but if I were queen of The US, that’s what I would do.

So publicly announced is a company called Ophelia Health, and they are building a telehealth platform for medication assisted treatment for patients who are suffering with opioid addiction. And this is a space I read a book that I recommend to everyone called Dreamland about the opioid epidemic in this country and and sort of the origins of it. And I looked for two years for a company that was solving this problem in a way that I thought could actually help people get access to Suboxone treatment, which is the only treatment that we know works most effectively for people who have long term opioid abuse disorder.

And there’s a number of companies working on it, but the difference between Zach Gray’s thesis at Ophelia was so many people focused on the assisted of MAT, which is medication assisted treatment. He was focusing on the medication. How do we get Suboxone in the hands of the most people because we know it’s effective? And so I am so excited. They’re doing incredibly well and performing a very important service during COVID, and I’m really excited to be part their story.

Thanks so much, Harry.