 Hi, everybody. Good afternoon. Thanks for joining us. We're going to have a conversation about responsible innovation. And when I heard about your work in that space, I was wondering, is there any investor or any company that would say what we're doing is irresponsible innovation? So how do you make sure that there's sort of meat to that promise? Yeah. First of all, I'm actually very excited to be here. I was there, I was telling you backstage, in 2017 launching our first book called Unscaled. And a lot of this work has been a continuation of the thinking from there. Look, responsible innovation for us is a framework for building enduring companies that are built for both growth and good. I think it's rejecting the Milton Friedman philosophy that the sole purpose of corporations is to maximize shareholder value. And I think it's based on the insight that the very best companies are only going to be created at the intersection of financial and societal return. So there's a false choice that are you doing an impact-based business or are you building a financially lucrative system? I don't think that's the way innovation is going to take hold in the future. And so when you decide sort of what to focus on and how to define what is responsible, how do you get input from society, from different communities, or is it all data-driven? How do you measure and choose, basically, to govern for responsibility? I think that's exactly it. It really is about, and I'd like to ask you this question as well, it really is about understanding all the stakeholders that have business impacts. And so for us, it starts first and foremost with intentionality and impact. What is the transformation or the change in the world the business is trying to do? Being intentional about building all the stakeholders and how do you make sure you are creating economic opportunity and inclusion? Sustainability of the planet, right? The privacy and security issues around creating a safe digital community. And then also sort of thinking through workforce transformation. Every time you bring technology in, are you killing jobs, are you creating jobs? And I know you think about this from the policy side a lot, so I don't know if you want to comment on your perspective in terms of how does the regulation play a role in making sure the innovation diaspora is headed towards the responsible side of businesses. Yeah, so I think it's a question of who gets to decide, right? Because for the longest time we heard from Silicon Valley investors, founders, CEOs, that they were creating good for society, more freedoms for more people, the ability to connect and so on and so forth. And unfortunately a lot of very bitter lessons have been learned about unintended consequences, maybe tunnel vision to focus on one thing, could be scale, could be profit, could be the good intentions with which people have built advertising giants, but either in their own communities or on the other end of the world sometimes disasters happened. And the motto was still, oh, we do know evil and we're here for the benign purposes. And so I think what's really key is that one government set parameters within which companies can operate so that there's not hope as a strategy. But also I'm curious to hear whether you think that the way you see this not focusing just on scale, not focusing just on profit, are you swimming against the current or is this the new current? Is there a changing of minds? Yes, look, first of all, let's think about what's actually happening. When I got into business 20 years ago, all of technology investing was about driving efficiency, right? Software was there to make lives efficient for consumers, for supply chain managers, for doctors, and then when you think about what we do today, we actually build banks, we build insurance companies, we build healthcare services, schools. So the sense of responsibility is far greater. And from our standpoint, all these innovations where we're fundamentally transforming these core pillars of the economy are at the intersection of technology, policy, and capital, right? And so I always think about it saying, well, policymakers have to say, here's the frameworks, but then as company builders, we need to have frameworks. We need to have the mindset and the mechanisms that lead to the creation of these companies that are, again, built for growth and good. What are those mechanisms? Those are things like business model choices. Those are things like, are you measuring the use of AI and second order effects through algorithmic canaries on the different stakeholders? Are you building a diverse team and culture so you have an understanding of all the stakeholders? So as investors and company builders, all we can focus on is the inputs. And that really is what responsible innovation is at a core, which is, what are the inputs to building these businesses that can endure for a long time? And I just want to say, I'm a hardcore venture capitalist, care deeply about driving the best returns for our investors. So with my venture capital hat on, the reason this matters is because the very best companies, very best investments compound for a long time. And the companies that get to compound for a long time are the ones that society allows to compound, which means they have to be fundamentally in the interest of society. And that's why this is also important. And so when you look at that triangle of technology, policy and capital, in the United States, which is where your company is based, we see a sort of policy paralysis, right? There's a bit of catching up. Some proposals are being made, but it's not a secret that the U.S. Congress is deeply divided. And you just spoke about company and investor responsibility. How do you foresee the next decade, for example? Do you think there will be movement coming out of the U.S. Congress, out of lawmakers, whether at the state or the national level, in Europe much more is happening? Or do you really think it will fall upon the shoulders of investors and CEOs to sort of take their own values compass, their own governance hat, and to hold themselves to count in some ways as well? I think the productivity of the government, you might have a better answer on. I mean, I personally believe that, in the principle of radical collaboration, that we actually got to have that dialogue between the company builders and the regulators. I feel like we're leaving the regulators behind quite a bit. So when you think about the way the government used to, you know, even manage antitrust policies, like in the Microsoft days, they would go send people on campus and see are they following the right practices or not. Today in the world of software and algorithms, do you send people to stare at the servers in the Facebook data room? So I think there's such a big gap in terms of how tech companies are being built and what the government actually understands that on its own, I don't think the right policies will come about. I think this needs to be a responsibility of the technology folks, and maybe you can comment on just what you think could be those best practices to bring that collaboration together, but we've got to bring the regulators along. They don't understand any of this stuff. Well, I think you're pointing to what is actually a painful truth, is that it's hard for not only regulators, but also politicians, journalists, citizens, civil society leaders to actually not only understand, which requires certain skills, but to also have the right access to information. I think so much of the details of how companies are run, how data is collected, how data is processed, how AI works is hidden from scrutiny at the moment. And it's also fluid. It changes all the time because there's evolution through machine learning and other kinds of mechanisms. So I would imagine actually that regulators are going to have some kind of accounting standards of how to keep track of processes that are happening inside companies in order to then ensure more liability and accountability. Are there one or two ideas emerging there that you feel like have legs that we ought to build on? Well, when I spoke to Vice President Vestager, who is responsible for tech policy for the European Union, but also anti-trust, she actually shared that she foresees technology, regulating technology. So, you know, sort of oversight algorithms for lack of better words to see whether companies are adhering to the law. And I personally fundamentally believe that, you know, non-discrimination principles, access to information, independent oversight, anti-trust, it shouldn't matter whether they are at stake in the automobile sector, for example, in the hospitality business or online, right? Yeah, by the way, it's interesting you say that. I think this was in 2016 when Secretary Pritzker came over to the Bay Area and she said, what should the Commerce Department do? And I basically said, you need to build an AI department in the Commerce Department that actually knows how to measure the consequences of a lot of the AI and technology that's being used in the tech companies because it really does need to be some sort of defined governance model going forward, right? I mean, I think that's a little bit of what you're alluding to. Yeah, but when you're talking about this collaboration, I think we're at a moment where there's very low trust, very low trust between politicians, but also low trust from public officials to tech leaders. I hate to say it, but I think it's true. No argument there. How do you think you and, you know, your peers can contribute to regaining that trust? I think without more transparency, without more accountability, those collaborations will also be prone to fail because it will just be really hard to have a sort of shared understanding of why it matters to have rules and some kind of adherence to those rules for everybody. Yeah, look, the reason I'm here is because I think we need a movement. We need a movement around a fundamentally different practices to company building, and that's this whole framework for responsible innovation as we're talking about it. That's the only way it's going to happen. I think it requires bringing the stakeholders together. It requires upfront being intentional about what we're doing. I think the traditional mindset in technology, before it was building those core services in society, used to be move fast and break things, right? And the reason was because it was an engineering design principle. It's not a societal design principle. And so I think rethinking now that technology is very mainstream and the stakes are really high, what does it mean in terms of intentionality which we should be building? I think if we're not thinking about that, then we're going to end up creating a digital society that's not equitable. And again, there will be no tech if that is how we build companies. We won't be allowed to build companies in the long run because to me that leads down a very ugly path of evolution as opposed to having a harmonious society. And we all know that governments have very expensive IT contracts, right? The procurement and the buying by governments of technologies for tax databases, for smart cities, for healthcare, for all kinds of services is also a big market for tech companies. How do you think governments could sort of create more responsible innovation markets through procurement and through regulation? So not only to say these are the limits of what companies can do, but also this is where we want to see the targets going, society going, and the parameters going through contracts, not only through... So in the U.S., the Department of Energy, when they created ARPA-E, did a little bit of that, which was, hey, to the extent that we want to solve for a clean, affordable, secure energy future, here are some parameters. We want to get certain technologies to certain cost structures, or we want to have, you know, certain emission guidelines and let's go build an innovation in the context of that. So I think that policy frameworks going back to it does help. But I'm also very excited about privatization of a lot of the work in government. I mean, think about the innovations and defense and security and other areas. I do think, and even, you know, things like social security and welfare, the government is leaning on the private sector to say, come solve these problems for us, here's our guidelines, and build businesses within those guidelines for the stakeholders that we care about. So that is starting to happen. I actually think we have a fantastic communicable city block that goes and delivers healthcare services to the Medicaid population. And it's off of CMS contracting with states, and it's all about how do you deliver to these underserved communities, you know, proactive healthcare. And it's a fantastic business being built. So I think there's a lot of proof points like that, which we'll look back in five years and say, that has already begun. I totally agree that the sort of privatization is happening. But I'm curious how it adds up between the notion of a lack of understanding and a greater leaning on the private sector. So let's take, for example, security and defense, right? It's one of the key tasks that states have in their constitutions. States used to have a monopoly on the use of force. Right now, you could argue that risk scans on the network, private companies, defending critical infrastructure, private companies, creating offensive capabilities, private companies. So how do you imagine five, ten years out that the sort of understanding in order to have good oversight and sort of responsibility taken also by those governments who are engaging those private companies, how that gets better aligned? Yeah. So I think the way I think about it is the privatization in the context of policy that exists, the policies go obsolete when society is changed and more technology is adopted and you live differently as a different stakeholders, but the spirit of those policies is actually in some ways the same. So I think the more it's about the intent behind the outcome that the government is trying to drive and goes back to the way you described it, which is what are the frameworks, what are the outcomes they're trying to see. If those are clear and then there's always enough arbitrage in terms of privatizing from an economic perspective because there's just so much waste when you have layers of bureaucracy and procurement in other areas that you're talking about, that you should be able to build prosperous businesses that are very valuable and very consistent with the spirit of the policy. But again, this doesn't happen unless there's a true collaboration. In fact, the example I gave of city block, the reason I think they're very successful is they actually came out of the policy realm into tech and built this amazing sort of company. So the fact that they had a core understanding of the spirit of what was trying to be accomplished. So the more there's that radical collaboration between technology and policy, the more I think these businesses will be better aligned with the spirit of what these new policies are going after in major areas, healthcare or defense and the others we talked about. Where do you see good examples of such radical collaboration are you trying to create it yourself? Have you seen others doing it well? Do you see it in Europe or in the United States? I deeply believe that this is absolutely necessary. I think the technology diaspora is going to say Silicon Valley, but I'm not there in Silicon Valley right now. The technology diaspora is obsessed with the word disruption. And I personally indict the word disruption. So think about what we saw in healthcare with the pandemic in the last couple of years. So many problems that got exposed. You know as tech folks we can say we're just going to not have regard for the existing health system. The same people that put their lives at risk for us over the last two years. We're just going to disrupt it all with some fancy technology. Or you can have empathy for what works, where it's broken and bring technology to make a difference in empowering them. That mindset of radical collaboration I think is starting to happen in healthcare out of necessity over the last couple of years. I actually guess the model which you should be going in transforming education as an example. The goal isn't to go build 150,000 new schools. The goal is to figure how do we really transform the existing infrastructure and train the teachers to think in the world of where we think the 21st century education model sort of literally go institution by institution and have that kind of a mindset versus saying we're going to just disrupt it. No, I appreciate your criticism of this move fast and break things and disruption as the highest order because I think we've all been confronted with so many instances where core principles, whether it's public services like healthcare or our democracy. I mean it's a very serious matter should not be disrupted and where we actually do see major threats also fueled by disinformation manipulation of elections really the sort of core of those values that I had never hoped to see disrupted and how do you prevent successful businesses that have smelled the profit and will probably not be dissuaded from this scaling and disrupting kind of class? Listen, today I was in the board meeting with a company last night and we were talking about the ESG strategy and always every time I hear the word ESG I'm like well it's well in tension. What is ESG for the people who don't know? Environmental sustainability governance as sort of corporate boards do and every time I hear that word I always think about what's too late because you're trying to bolt on a set of outcomes in an organization and a culture that wasn't from the beginning built the way you're describing it and the focus is what are the inputs that go into company building? Let's get it right from the beginning. If you think about the next 10 to 20 years our entire focus is about the next generation. The next generation of companies because think about the Fortune 500 is going to look very different in the next 20 years. If we can get the next set of companies right so that they are building with the right sort of core responsible innovation frameworks we're going to set it on the right path where it's not just about profitful maximization and then in that same vein I think the next generation of entrepreneurs and the students today are also folks that are thinking about this and care a lot about these issues and I know you on campus deal with this maybe you want to talk about what is that movement coming that hopefully can help us set it on the right path? What's interesting is we're actually both teach at Stanford it's kind of a coincidence that we're both on this stage right now but I see a lot of idealism among students and a real desire to build different services different companies and to have a more I would say purpose driven career but there's also a harsh reality of student debts and fantastically lucrative offers from tech companies that there are just few public organizations or civil society or government jobs for that matter that can compete and so I'm wondering is there something to be rebalanced between those excessive profits and those Fortune 500 figures that we now see do you think that more responsible innovation will lead to sort of balancing out of whatever the highest income and the lowest income within a company are or is it going to be so successful as you said you are a venture capitalist you're in it for profit that those companies will be equally more profitable but just with a different societal impact I think they'll be more profitable I really do believe that if you build with the long term interests of society in the core problem that you are solving I think you'll in the end have businesses that are going to grow for a lot longer than others do right and and so I mean I think this next generation implicitly understands that they care about the planet they care about the stakeholders they have a greater sense of purpose and frankly the tools for innovation are available to all of them and are only getting easier so my hope is that this diaspora goes and starts a lot of companies and brings that mindset the mechanisms the intentionality to building these companies because those that's how we build the next set of companies that set us on the right path that harmonize that bring economic opportunity to everybody that take care of the planet you know and that frankly every time we use the word AI we talk about what's going to happen to jobs but that's up to us what's going to happen to jobs this is a workforce transformation opportunity and I think this next generation cares deeply about that as well yeah I hope so I think there needs to be attention on both sides so I don't think we can just rely on people to make the right investments in the most responsible companies I think there's also need to revitalize government and to bring talent in so that there can be a better understanding of how technology impacts all of society and to make sure that there is a proper democratic answer to that disruption whether it's intentional or not so I'm curious when you talk about the next generation when you talk about your focus on responsible innovation what kind of companies are knocking on your door what are they creating you know the last year and a half has been amazing because every part of society every part of the economy out of necessity has had to innovate right so we're big investors in you know companies like Stripe that are sort of index to e-commerce obviously almost all commerce got accelerated online so we've seen lots of innovation there healthcare has been transformative we actually think that's the sector that probably has the biggest transfer of innovation towards what we call health assurance which is reduce the cost of overall health care keep people healthy and also leave nobody behind which obviously is an issue that we saw this time around in pandemic fintech I believe is going to continue to be very interesting in that regard and then you have certain sectors like security where a lot of bad actors gave a certain way and that opportunity is out of necessity fairly deep over the next several years too so it's the best time it's the golden era for innovation I think it's an opportunity for all of us to set it on the right path as well and that's a little bit of why frankly I'm here, you're here just raise awareness that you know we've got a great opportunity but also a great responsibility over this next decade I really appreciate how you're talking about the fact that no one is left behind I think that that is also the billion dollar task of our era to make sure that the use of data doesn't become a class issue access to health care and other public services doesn't become a class issue I mean I'll tell you over the last year every time somebody asks how are things going I always say two things business is amazing well and that is not a harmonious state right I mean that's the reality of this when you think about what has happened the technology industry the venture capital industry has done incredibly well but when you think about many many stakeholders in society they're hurting and so A that's not going to persist, something's going to break and B none of us are going to feel great about our legacy on the other side well I think it's kind of painful that there's so much profit in some areas but that the cost of what is not functioning well like you know the depletion of public resources the lack of good access to health care education infrastructure in many cases questions now that are new about saving the environment and how the cost is going to be equally shared are incredible challenges before us and so you've given me hope that there are people in the investor community and in the business community that actually think that solving these massive problems are an opportunity and maybe we should meet back here in five years and reflect on whether there's a better balance, more inclusion and less people left behind let's hope so thank you so much