Episode 324

Arun Gupta On Mission-Driven Leadership

The Elevate Podcast | Arun Gupta | Mission-Driven Leadership


Arun Gupta is a mission-driven leader. He is the CEO of NobleReach, a venture capitalist active in the emerging technology, entrepreneurship, public policy and venture finance communities. He is also a lecturer at Stanford University and a professor Georgetown University, where he inspires students to pursue mission-oriented entrepreneurial careers. Arun is also the co-author a new book, Venture Meets Mission, which is now available wherever books are sold.

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Arun Gupta On Mission-Driven Leadership

Our quote is from Arnold Glasgow. “Make your life a mission, not an intermission.” My guest, Arun Gupta, is a mission-driven leader. He’s the CEO of NobleReach, a venture capitalist active in the emerging technology, entrepreneurship, public policy and venture finance communities. He’s also a lecturer at Stanford University and a Georgetown University professor who inspires students to pursue mission-driven entrepreneurial endeavors.

Arun is the co-author of a new book, Venture Meets Mission, which is now available wherever books are sold. On a personal note, Arun was actually my first boss outside of college and an incredible mentor to me. We’ll let him share some of those not-so-glamorous stories. Arun, welcome. It’s great to have you join us.

Bob, it’s great to be with you and to come full circle, having collaborated with you many years ago.

Career Path

Now, I’m quoting things in decades. It’s somewhat sad. As I said, we met at a company called Arthur D. Little. It was my first job outside of school. We never talked a lot about what you did before ADL, and I’ve often found that it can be a source of passion. Growing up, were there experiences that led to your passion for mission-oriented leadership and entrepreneurship?

Thanks, Bob. I think for myself, it starts out with the first generation here. My dad immigrated from India. I think the act of immigrating is a fairly entrepreneurial exercise in itself. He was a civilian and is still working many years later in the US Navy. Government has always been in our family and has shaped thinking about ways to serve.


The Elevate Podcast | Arun Gupta | Mission-Driven Leadership


I went away to school and joined Arthur D. Little after undergrad. When I went to business school, I went with Arthur D. Little to open up their office in India. I think for me, even though I was at a consulting firm, at the time, it was my first foray into doing something entrepreneurial, landing in a different land. Although it was my heritage, I grew up in the US and it helped you reconcile who you are.

Many times, I would have that dual identity sense of when I’m here, am I more Indian or am I more American? I think living in India for a couple of years highlighted for me that at the core, as far as my values and the way I viewed the world and how I wanted to raise my kids, I was very American in those values.

When I came back in ’97, after having been out there for a couple of years and been married, I think it’s a very clarifying experience on the idea of both the desire of wanting to have entrepreneurship play some role in my life going forward, being here in the US and then being able to tie that to what my father was doing as far as government service goes in some way, shape or form.

Cultural Environment

It’s like Steve Jobs talks about the dots come together later on even if you don’t realize it. As you mentioned, you and I met at Arthur D. Little in in 1998. At the time, ADL was a top-tier strategy consulting firm. I remember this interesting dichotomy. I think there was a group of people, maybe a manager or someone below, that we worked with, and they all went on to do amazing things at the same time, and the management of the management consulting firm ran it into the ground. We got to watch that during our time and after. I took some lessons from that.

One of the things I saw was I think there were some people who focused on having high internal values but had very low external values, like master the politics and that’ll keep me in a job forever. That drove out all the people who had high external value. What did you learn from the irony, I guess, of working at this strategy consulting firm that probably needed some real strategy consulting at the time?

What you take away from it is the environment instructors that you’re put in matter. It’s not the people that you’re with, but what incentive systems are put in place? I felt like some of the people I’ve worked with, yourself included, Bob, or some of the most talented people that I’ve had the pleasure of working with.

Having said that, I think we were put in an environment and a cultural environment that was not necessarily incentivizing innovation and not rewarding it. Without that, it becomes tough to retain those folks and continue to have that vigor to want to test and try new things. That cultural dynamic is what I take away from that experience. It speaks loudly when you look at our cohort of folks above us, our cohort or even those younger than us, how well they’ve done when they’ve gone and been put themselves in the environments they’re in.

There’s a broader comment there, too. I think the systems that you are placed in matter. Going back to my own father, it’s why I think there’s a deep gratitude for this country. I think the system, the life that we’re able to lead, and the things that we’re able to accomplish are, yes, hard work. Yes, it’s all of those things, but it’s also a system that’s been established here that allowed us to try new things and flourish accordingly.

People Vs. Tech

Recruiting great people is half the equation. If you can’t keep them motivated, give them things interesting to work on, and have them move up, they will leave, which is what a lot of our contemporaries did at the time. Somehow, the company did a great job recruiting, but if you were super innovative, it probably wasn’t the place to stay, which is the other half of the equation. There were a couple of other lessons I learned during that time.

The last thing we worked on was this incubator and I remember working with this company. I don’t remember the name. This company had such an early lead on this technology in the internet and we had taken some equity in them and they wouldn’t launch. I remember the product was never perfect, it was engineering led and again, because this was the dot-com boom. They’d gotten it out, probably worth hundreds of millions of dollars, but it was never perfect until the end. I’m sure that’s something you’ve seen throughout your career as well.

I think that was the first foray, having not been a VC yet, appreciating that people matter more than tech. We get enamored many times by technology and one of my friends has a saying and we actually use it in the book that technology is easy. People are the hard part. That was a great example. We were all enamored with the tech. The tech was phenomenal. It was way ahead of its time. The hard part was working with a founder that didn’t want to launch and wasn’t thinking about taking feedback and wasn’t thinking about go to market. All those things deeply matter and people matter. I teach an entrepreneurial finance class and I say, “It’s finance for the lowercase F because entrepreneurial finance is more about people than it is about finance.” I think that carries forward with tech as well.

I think mentors who give tough love are more effective mentors. I was very ambitious coming out of school, worked together on a project. You called me into your office and gave me a whole lecture. I don’t even remember this. I can remember exactly where I was sitting. I remember the office and you were like, “I appreciate that you’re ambitious, but you tell me that something’s going to be done on Wednesday and then you get it done on Thursday. Frankly, I wasn’t expecting it until Friday, so just tell me you’re going to get it done on Friday and give it to me on Thursday and then I’ll be happy and not annoyed.” That was my first lesson on expectation setting in the real world.

I think life is all about expectation management. Under-promise and overdeliver. We say that to our CEOs as well. It’s the best ones. It’s the ones that overpromise and then underdeliver. As long as someone has visibility and clarity around when something’s going to happen, people are usually fine with it. It’s the surprises that tend to untether things.

[easy-tweet tweet=”Life is all about expectation management. Strive to under-promise and over-deliver.” via=”no” usehashtags=”no”]

Getting Into Investing

There’s a baseline set of expectations that would be too low for anyone to be excited about. It’s finding that sweet spot. Yes, overpromising. I have never seen any positive outcome. From ADL, you shifted, went into investing for several decades, particularly on software, right through the dot-com boom. I’m curious. I’m sure there was a lot of ups and downs and pains. You said people, but what was your rubric on whether what was worth investment? Was it the idea, the team, or the industry? Where did you lean on and as you looked at hundreds of investments over the years?

I wish I could say we had it figured out when we started this business and I think that’s why they call venture very much an apprenticeship business and you learn the hard way because someone can tell you what you’re supposed to do would be a lot easier. After ADL, when I got into venture, you are enamored a bit by tech still. You’re still enamored by the idea of big markets and the ease of being able to grow things and you see things multiplying on a month-by-month basis in some cases.

What you underestimate many times is, again, the people and it unfortunately takes being around folks that lead to suboptimal outcomes for you to realize like, “This is what a good VP of sales looks like.” The only way you know what one looks like isn’t by getting characteristics. It’s by having been around ten bad ones and then you can start to pattern match.

I think there’s so much of that in venture now. That was an important lesson and one that took time. We were all young right at the dot-com time, so you don’t have real heuristics to look back to and think about. In those times, it’s easy to get caught up in the moment and also get caught up in basically under-price risk because everything feels like it’s going to go up into the right over time.

Even if things go sideways, you don’t expect 2001 to happen. It’s marginally sideways and things of that sort. Those are career-defining, personally shaping events. One needs to start thinking about how do you incorporate that into your heuristic of what you work towards. The common piece you learn when you go through it is about people.

What you can’t control is the market. What you can’t control is what the environment’s going to be like. What you can control are the characteristics of the people that you’re going to invest in and that they will demonstrate the resilience, the tenacity based on what the environment requires. There’s a lot of lessons learned there, but if I were to simplify it, it would be find great people in great markets and then let the rest figure itself out.

[easy-tweet tweet=”You cannot control what’s happening in the market. What you can control are the characteristics of the people you invest in.” via=”no” usehashtags=”no”]

I think when you’re young, you’re so focused on feeling and wanting to show how smart you’re, and you would’ve figured out the business model and I’ll do the models and the financial cashflows and this, that the other and project out what the next 3 or 4 years look like. Every one of those models was always wrong.

The business shifted. The business is never what it started out to be.

You don’t appreciate that when you’re starting off in the business because you actually think there’s a science to it. As you’re in it, you realize it’s an art. That’s how we started to define what we did. It takes time. It takes time to appreciate that and along the way, there are mistakes made and you’re hopefully fortunate to be around folks that can provide you the training wheel so that you don’t do anything catastrophic.


The Elevate Podcast | Arun Gupta | Mission-Driven Leadership


Core Entrepreneurship Tenets

Related to that, in the last decade, you moved into education as a lecturer and professor. Some people think of business more as a science. It sounds like as you’re teaching, are you teaching more of an art? What are the core tenets you want these aspiring entrepreneurs to come away with?

The answer is exactly that. I want them to realize that this is about people. When I sat through one of the first classes to see how it was being taught, I noticed a professor doing a whack calculation for an investment memo for an early-stage venture firm. All the students put their hand up and you ask them like, “How many of you would do this deal?” Everyone’s hand goes up and they’re like, “Why?” They’re like, “I did the calculation and the calculation show that we’d get a 17.4% IRR over the next five years.” You let them talk for a while about this, and then you realize you ask them the basic question, like, “Who put these financial models together?”

Is this person a criminal in the past?

They were like, “The founder.” I’m like, “What’s the founder’s incentive? Is the founder going to put low numbers or high numbers?” They start peeling it back and you start going like, “What about this year? What numbers does he have in place?” They’re like, “$5 million in revenue.” I’m like, “What time of year are we in?” They’re like, “We’re in the fall.” “Does he have a product out yet?” “No.” You realize, “How much space did that give you in the numbers for this year?” “Not much.” “Does that influence how you think about everything else going forward?”

I give you that example, Bob, because what I realized is that when you focus so much on the numbers and the science of the process, the students lose the big picture. The big picture is to take a step back and ask, “Do you trust this person? What, in this case, gives you an idea of do you trust this person?” If you see enough things there that you feel like you trust them, that’s great. What are those things you should be looking for?

We spend a lot of time, and that’s why I realized even the way we teach doesn’t bring the human element to bear with all these investment decisions. Investment is a psychology. There’s a psychology associated with it. We don’t talk about that piece of it. These students are great at doing very sophisticated models for issues. The first lens needs to be basic behavioral trust.

I can tell you I have not done a lot of direct investing, but I’ve done some private investing in funds, some real estate or private equity or otherwise. I wrote this somewhere. What I noticed particularly, as it’s been a rough thing, is that the correlation between the communication and reporting and the performance is almost 100% across these things where I found that the managers and the people who communicate incredibly well send these detailed reports are thoughtful.

When the whole Silicon Valley bank thing came out, within an hour, all the top people were like, “Here’s our exposure, here’s our risk, here’s what could go wrong.” Other people who I think had serious on Monday might have been out of business were not going to share any of that. A couple of things have gone wrong, it’s always been the integrity of the people or they disappeared or they can’t be found or otherwise.

I’ve seen that movie personally and as much as people say it and I think it is an age thing, falling in love with the idea when people say, “Should I do this job or that job,” if they’re 20 years old, it’s like maybe the idea that’s exciting at 40. I’m like, “I think you should focus on the people and the team and when you want to be in that foxhole, if those are the people that you want to be with.”

That’s the exact advice, Bob, I give my students. I advise them, “At the end of the day, pick your first job not based on that starting salary, not based on what you think you’re going to make in year 2 or 3. Pick it on the people you’re working with. Pick it on the quality of the management team, the quality of the mentor you’re going to have because, ultimately, that’s what will decide your success.”

Venture Meets Mission

Let’s shift to the book, which has come out. Congrats on the early success. Venture Meets Mission. Can you share a little bit about how the book came together and who it’s targeted towards?

The latter half of my career investing was around investing in and mission tech and entrepreneurship. I was investing in the early days of cybersecurity and govtech. What you saw was the magic when you could tie the entrepreneurial ecosystem to solving larger government problems, but you also saw the challenges. It’s hard.

When I retired and started to teach, I was focusing on some of our family philanthropic work class that I started teaching at Stanford, Valley Meets Mission. It was to talk to these students about the idea of ” let’s not use your talent, ” and more importantly, this incredible platform you’ve been given to create Candy Crush 2.0. There are bigger things out there. In fact, you almost have a responsibility not to go do that. Use your talents to go solve big problems.”

The caveat was look in doing that, that doesn’t mean it needs to be a not-for-profit. You can do this in a for-profit way. It’s okay for you to go make money. How do we create for-profit businesses that help solve big problems for the common good? How do you harness the entrepreneurial velocity of innovation but then combine that with the scale of government to help you solve big problems? We’re not solving climate with one company in the valley. We’re not solving national security or cyber or healthcare. It still requires some appreciation of government. That’s a lot of what we try to talk about.

Culture Vs. Money

That’s funny. I had a question to ask you: how do we change the incentives and we don’t get our smartest people working on games, time-wasting app, crypto, NFT, Ponzi schemes and things like that. You listed a couple of those because, to me, that is the problem. We have some brilliant people working on stuff that doesn’t matter.

We have some really difficult problems, like you said, climate change or otherwise, but there’s a lot of money for those problems. Are people going into that? Is it the money or the flex, as my son would probably say? Is it that because what the culture rewards versus it’s the money in terms of the smartest person going to do Candy Crush 3.0?

I think there’s a little bit of both. It’s culturally what we reward. The person that gets rich quick. That has been part of the issue. I do think we’ve been through a generational phase where our values were more about the material things that we gathered and external validation of success. What we write about in the book is we’re seeing a shift. I see it in the students I’m teaching post-COVID, post-Ukraine with the continued climate concerns.

We’re in great power competition with our adversaries. Students are concerned. Students feel like this is a time they want to be doing something purposeful. They want their job to have real impact. Call the spade a spade. They also feel like our generation probably is leaving them with a number of problems and want to be there to start fixing them.

That’s the call to action right now. That’s slightly different than previous generations. I actually think this generation is more mission-oriented. People will highlight many times that they get a bad rap for being wanting to work from home or not wanting to come in and not work hard. The caveat is that they don’t want to work hard on things they don’t feel matter. They’re all in if you can tie it to purpose and mission. They’ll run through a brick wall.

Previous generations would run through a brick wall as long as they got a big bonus check at the other side of it. There’s nothing wrong with that. I’m saying that that’s the change that we’re having right now. Each generation has their moment and there is a generational moment here to inspire these students to think about how they can serve and tie that to entrepreneurship. Entrepreneurship has also gotten much more appealing because there is an immense distrust in institutions. The idea of large institutions always being stable, taking care of you. They’ve lived through the financial crisis. They’ve lived through various episodic periods where that’s not the case.

Entrepreneur-Government Collaboration

There’s so much creative destruction these days that stable can quickly become irrelevant overnight. This gets to the core of what you were saying, but a big emphasis on the book is that collaboration between entrepreneurs and government. These aren’t natural collaborators, historically. I know in some areas, maybe in defense, but where had trust broken down before those two groups and how do you recommend that they come back together? Whether you’re pro or con the vaccine, it’s a great example where the government and private work together in record time got something on the market. We have some cases of some wins, but as you talk about in the book, it’s not the first place that most entrepreneurs think about going.


The Elevate Podcast | Arun Gupta | Mission-Driven Leadership


The trust has been slowly degrading over decades. I don’t think this is an overnight phenomenon. It starts as with a phenomenon of like we want government out of our system. We want governments out of our way. When you ask someone like, “What does government mean to you,” that’s a harder question to answer because the government’s an organization that’s made up of individuals that are arguably trying to do their best.

I noticed this in the class I was teaching. I would bring in former CA director, like a Mike Morell and I’d bring in folks from the defense establishment. I’d have a number of students borderline hostile in some of their questions because they think of them as nefarious actors. I’ll tell you, like to a T, that at the end of every one of those classes, those students left feeling like these are true patriots in a way that it’s a curated list.

These are people who are purposeful. There’s a level of humility. They were willing to admit when they were wrong and they were willing to say, “We don’t always get it right, but understand that our intent was positive and we make mistakes.” A little bit of the light bulb went off with watching that interaction. We talk about this in one of the chapters. The idea of humanizing government for folks. I always say, “It’s easy for people to have biases or discriminate against large groups. It’s harder to do it with individuals.” The more you can humanize it, the more people will start to understand it, and we’ll lose that piece. The flip side is true, too. I’d bring in entrepreneurs and people would feel a level of like, “This is billionaire class folks and these guys are entrepreneurs. They’re greedy pigs.”

You bring in these entrepreneurs that have created these mission-oriented companies that are worth are very valuable. What the students realize is that they actually started with mission in mind. The money followed them, but that wasn’t what they were chasing. The mission of what they were doing was what was important to them. Mike Morell would say it like, “What I love about your class, Arun, is 40% of the class hates government, the other 40% hates entrepreneurial capitalism and you’re trying to land the plane by the end of the course that we’re going to need both if we’re going to solve big problems.”

The other 20% hates everything.

Exactly right. That was it. We try to land a plane. We’re not going to solve big problems without entrepreneurship and an appreciation of government. How do we create a new renewed partnership there? We talk about this in the book. It’s the superpower of this country. Two superpowers of this country  is our abilities to create talent, especially our higher ed system, and our ability to innovate through our entrepreneurial ecosystem.

[easy-tweet tweet=”This country’s superpower is the ability to create talent and the ability to innovate through an entrepreneurial ecosystem.” via=”no” usehashtags=”no”]

There isn’t a place in the world that’s close and you can tell because this is the place that people come to do both. The market speaks about the mindset of letting 1,000 flowers bloom, but if you can start to take those ecosystems and at least create more modern infrastructure to connect them around government and social issues, that’s our differentiator and how we compete over time.

Let me ask you a two-part question, which you can break down however you want. If you double-click on for people who might not see this connection, why do entrepreneurs and government need each other? Why do entrepreneurs need government and why does government need entrepreneurs? Maybe more on the government side. What are some of the things people don’t see, or do the innovations they enjoy on the entrepreneurial side come from government roots, funding, or stuff they may not even realize?

Let’s start with a latter question. Mariana Mazzucato writes in her book that every significant part of the iPhone was rooted back to government research. We don’t realize or forget many times that Silicon Valley was rooted in government research, defense research more specifically. The government has been at the core of a lot of this research and development. Having said that, they basically lost the ability to collaborate in a meaningful way. Some of this is cultural.

Amy Zegart writes about the culture of hoodies versus suits when the valley tries to collaborate with the government. Some of this, again, honestly, Bob gets back to people. It’s having strategic customer empathy, not coming in saying like, “You guys don’t know what you’re doing. Let us tell you how it needs to be done,” without understanding what the folks are doing that you’re trying to sell products to and vice versa, underestimating what new products can be about.

For government, the need to be connected to the entrepreneurial ecosystem is that it is our core engine of innovation. It is where our best and brightest innovate. It’s also because, back to the point we talked about earlier, systems matter. What do I mean by that? I joke around that as a VC, if I was measured like government, I’d never raise another fund because as a VC, if I did 10 deals, 8 of them could go South but if two of them were Google and Airbnb, I’m oversubscribed to my next fund.

In government, you can do 10 deals and 9 of them are okay, but 1 of them is not, you’re carrying that around with you for the next decade. We have systems that have different incentive structures to them. That doesn’t mean you’re going to be able to change the incentive structure completely, but it does then beg the question of how do we create a renewed partnership understanding what those incentive structures are like to harness the best innovation that we have, but also to be able to leverage the scale that government has at the end of the day, going back to the large problems like climate, healthcare and food?

Climate’s a problem, but energy independence, which everyone seems to want given the geopolitical, it seems like a massive multi-trillion-dollar opportunity. It doesn’t seem like nonprofit work in any way.

Not at all. It needs to be thought of that way. I would argue now, having been around the not-for-profit piece, I actually now start and believe that the people who can solve these social problems are the for-profit entrepreneurs. You have to build the muscle to sustain yourself to scale as opposed to feeling like you can always be donor-led and not build that muscle. If you’re going to scale to the size of the problem, there needs to be some self-sustaining business model associated with that.

Rebuilding The Infrastructure

If you could wave a wand, what’s the one thing you could fix right now? Maybe 1 or 2 things that would unleash this torrent of entrepreneurial government activity that would solve all of our big problems or put us on the path to doing that. What’s the thing that’s still broken to? Is it the cultural piece? Is it a perception piece? Are there specific systems, logistics and incentives, or is it both?

There are two aspects to this. As much as I want to bring more innovation into government, you have to recognize this before you even get there; you need to have people inside who can receive that innovation. The first piece would be how we rebuild the infrastructure to get our best talent into government? That starts at our top tech students coming out of school or even our top business students coming out of school.

That’s a bit of what we’re trying to work on with the foundation that we have now at NobleReach. One of the things we write about in the book is that less than 7% of government tech workers are under 30. We have four times as many folks over the age of 60 in tech and government. We’re upside down. The average age of Google’s in the mid-30s yet we want to go compete in what is now and is an increasingly digital battlefield with our adversaries. Even when we’re solving problems, whether it be climate, these are all science and tech problems. We need to start with how we open up the avenues to make it enticing for some of these folks to come in?

How do you get a Harvard or Stanford MBA to be excited about going to take a government job? 

Our theory on the case of this is the following. One could look at that data of less than 7% of people under the age of 30 going into government and think 1 of 2 things. You can either say, “Kids under the age of 30 don’t care. They don’t want to do this,” or you can have the theory on the case that people do care, but the infrastructure to connect them to these opportunities is outdated and needs to be modernized.

Our theory on the case is the latter. How do you get them to care? We galvanize around this notion of why to wow vignette of two CS Stanford students. One was selected to do Kessel Run, a military project, and she goes to her friends and says, “I’m going to go do this.” Her friends go, “Why would you do government when you can do all these other opportunities here in the valley?”

Her other friend says she’s going to go teach third-grade math, but do Teach for America. All her friends go, “That’s amazing. You’re going to serve. You’re going to give back, and then you can do whatever you want.” It’s that paradoxical juxtaposition that we need to get at, which is, it’s not necessarily only about the money. It’s about recreating a sense of prestige, respect around the job you’re doing, and being able to have it be viewed as a career enhancer.

I was going to say, it seems like a learning a special program, people that go into this are recruited for business school or whatever it might be.

It needs to mean something, right now, if you go in, what keeps many people on the sidelines is not knowing how will I be received when I come back out. Will people value that experience? Does it put me behind? Create programs to enable that. That’s what we’re trying to do. There are others that are out there, but doing this at scale. You can create that social movement.

It’s not about the money in this example because a Teach for America person is probably earning half as much as the person starting in government. It’s about something more meaning and deeper. This goes true as well. There’s a marketing exercise here. The way we talk to students and talk this generation needs to change. I say government sells careers where students are buying experiences. The government sells jobs, and students are buying missions. Students want to hear that they’ll do something mission-oriented for a short period of time all day.

[easy-tweet tweet=”The government sells jobs and the students buy missions. Young people want to do something mission-oriented for a short period of time all day long.” via=”no” usehashtags=”no”]

This is not a lifetime commitment.

It doesn’t need to be a lifetime commitment.

I’m thinking about the on-campus recruiting drive so much. You don’t think about the government showing up on-campus recruiting.

You hit the other issue, Bob. On these campuses, there are two dynamics. One, in the engineering schools and the business schools, there’s no faculty that’s ever been in government. No one is telling you, “This was a great experience and formative experience in my life. Here’s why you should at least go do it for a period of time.” The second is what you highlighted, which is these people aren’t showing up on campus.

Every agency can’t show up on 50 campuses. They don’t have the resources. You centralize everybody to something called USAJOBS. For kids who are living in the iPhone 15 world, that’s like sending them back to DOS. They’re not going to do that, so we will lose people. We shouldn’t be surprised at the outcome when we look at the infrastructure we’ve created and are not invested in.

That’s the first part that you have to fix. The second is for later-stage career folks as well. I’m making it easier for folks to be able to come into government and provide their services in some capacity. It can go a long way. You can get into things about clearance processes and things of that sort. There are a lot of tactical things that are important that also need to get fixed.

Before you get into bringing innovation into government, you’ve got to get the right people into the ecosystem because they’re the ones that have to receive that innovation. They’re the ones who have to be able to understand it, appreciate it, and want to interact with it. Actually, that goes a long way to building the bigger question with the entrepreneurial community, which is trust. When you see people that you’ve worked with before now on either side of the table, you implicitly build customer empathy. There’s a shared vernacular. There’s a shared understanding. Even if someone goes into government for a couple of years, Jen Easterly says it very well. She’s like, “I want people coming in here for only 2 or 3 years.”

By the way, no one thinks they’re further than that anyway anymore.

I want them to end up at the big tech firms.

It’s like HBS. They will hire from that program, which makes that program than desirable to get into as a feeder towards something else.

These models exist. Let’s think about it. This is how banks and consulting firms hire. They don’t say like, “Come here and spend the next fifteen years with us.” They say, “Come do a two-year analyst program and then you can go do whatever you want.” You would’ve learned so much.

Do those programs need a rebrand?

Absolutely. They need to be rebranded, but you also need to augment it. The programs you need to provide a level of mentorship you need to provide a level of like hard skills that can take place around the experience. You also want to be able to provide a level of cohort networking. That’s what grad school’s great for. You don’t want to get a top AI student and drop them into an agency by themselves. That’s a recipe for a disaster.

They’re going to probably have a suboptimal experience. They’ll go tell their friend it sucked and then no one wants to go back. You put a cohort in there, and you create a cohort experience where they’re able to interact with peers at other agencies, which becomes a much more interesting experience. You also provide the mentors of people who have been in government who can help them through the good and the hard times. Those mentors then are the folks that set you up for your next thing.

How do these two groups find each other? Let’s say I’m a student reading this, I’m super passionate about climate change and other things, and I want to take something, market it, and commercialize it. Someone in the government has broken some basic research around climate and is like, “This is amazing, but I don’t know how to market it or sell it.” Where do they meet? Where’s the bar where they meet?

You’ve hit on the problem. There isn’t one. There isn’t any natural meeting ploy. It’s a bit of what we’re trying to build and use the NobleReach Foundation to help solve is how do you connect the talent with the innovation to go build it? We had a meeting about building an entrepreneur identification platform at a national level so that when you find deep research in the core areas, you can start to think about who are some of the top entrepreneurs you should be talking to and make that connection to? Likewise, when you’re recruiting students, how do you get onto university campuses and make sure they are aware of these kinds of opportunities? We’re currently doing a lot of commercialization with DARPA and NSF of taking climate tech, AI, bio and commercializing that out.

We would love to be out there telling students, “These are opportunities that are here for you.” The other place that you’re starting to see is some curriculum that’s starting to get created. There’s a program that’s been very popular now called Hacking for Defense and started at Stanford, but they’re now turning expand out into Hacking for Climate and hacking for other areas. The idea is to teach entrepreneurial pedagogy around social problems. Steve Blank’s Lean Startup Methodology and how you get to a solution can all become places where you create the pipeline of students showing an interest around mission-driven problems.

Changing People

Arun, this last question for you. This is multi-variant, so it can be singular, repeated or personal or professional, but what’s a mistake that you’ve made that you’ve learned the most from?

The mistake I’ve made where I’ve learned the most is to think you can change people. As a VC, meeting with ceos, sometimes you find yourself in this confirmation bias that I like this market and this product. Yeah, that doesn’t feel like the right person, but over time we’ll be able to figure it out and we’ll get the right people around them and they’ll want to. What I have come to learn is changing people is hard. My wife’s a psychiatrist so I many times joke around that she’s probably more well equipped for my job as a VC than I was because it was around assessing people. What is someone’s real motivation? Is it to make a lot of money or is it to be like being king of the turf?

Those aren’t necessarily completely aligned all the time. What makes someone tick? What’s their ability to take feedback? Will they take it? If they’re not taking it now, will they take it later? Early on, I would err on the side that you can change people. Through some hard times, you realize that that’s harder to do. The biggest learning for me is if it doesn’t feel right at the beginning, it’s not going to get better. Just cut bait. This is true even in my personal life, social, the friends I pick now as well.

The one asterisk I’d say is that if you people want to change, they can change, but that needs to come from them, not from you.

That’s a good point, Bob. Change is possible, but the agency resides with them. It doesn’t reside with you. If I need to tell them or explain to them or show them how to change, it’s not going to happen. For me, that’s been the biggest and hardest lesson I learned. It’s not easy to do, but I will say, in a weird way, that COVID allowed a lot of people to cleanse some of that. You’re around people who give you positive energy and you the ones who don’t, you let those go by the wayside and keep moving forward. That’s true as well when building companies on the professional side.

[easy-tweet tweet=”If you need to tell and explain to someone how to change, it will not happen.” via=”no” usehashtags=”no”]

Arun, thank you for joining us. As you said, having been a mentor for so many years, this feels like a full-circle moment. I’m super excited for you to take all this dear life’s work over the last decade or two and turn it into this book and sounds like it’s on its way to being a huge success.

Bob, I want to thank you. I couldn’t tell you how proud I am of the stuff that you’ve done since we first worked together at ADL, what you’ve gone on to achieve. It is a privilege and an honor to be on your show to have this discussion. It brings back a lot of memories and fond memories of us collaborating together. I look forward to this as the beginning of a lot of new collaborations.

Closing Words

Likewise, and thank you. All right, to our readers, thanks for tuning into the show. The book is available anywhere books are sold. If you enjoyed this episode, make sure to follow the show to be notified about new episodes. If you’re in Apple Podcasts, simply hit follow on the show overview page or the three little dots in the upper right corner. If you’re on an individual episode page, hit follow. You can also hit follow on Castbox, Spotify, Pandora, or your favorite podcast player. Thanks again for your support and until next time, keep elevated.


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