Venture Meets Mission with Arun Gupta

You know what I say is government sells careers, but students are buying experiences. Government sells jobs, but students are buying mission. So if you can package the same government job as a two year mission experience, the line's out the door.

Welcome back to Building the Base. Lauren Badula and Hondo Gertz here with today's guest, Arun Gupta. Arun is CEO and board member of Noble Reach, a really interesting organization that we're looking forward to digging into today and has an incredible background in finance, tech and academia. All topics we enjoy talking about on the show. And then recently released a book called Venture Meets Mission, which we'll dig into as well. So Arun, thank you so much for joining us.

Lauren and Hondo, thank you for having me today.

Yeah, so you've got a really interesting background and a lot of our discussion is about this. How are these different sectors are coming together in new ways and you've lived in a bunch of these different sectors. Can you give our kind of listeners a sense of your background and.

Yeah, absolutely. So just for context, so I grew up in the D.C. area. My father immigrated from India here but has spent 45 years in the Naval Sea System Command. So public service has been in our family. I grew up around it. He's still working there today and so deeply appreciate all the hard work and commitment people have around public service. I spent my professional career then in venture capital. I started at Carlisle and then was at Columbia Capital for the bulk of my career, which was founded by Mark Warner. And there you saw the power of entrepreneurship and you saw the power of kind of trying to create change. And the second half of that time that I was there, I led our efforts into investing around the intersection of mission, tech and entrepreneurship. So govtech Dual Purpose Tech Cybersecurity. One of our companies, Endgame, was led by Nate Fick, who many of you know and is now our first cybersecurity ambassador here for the US and in that I saw both the opportunities and the magic when you can get the innovation ecosystem connected to government. But you also saw the challenges firsthand. But I will say one thing is once you're introduced into that ecosystem, it's hard to kind of go back to just investing without that level of mission and purpose. And it was very addictive. When I retired and started thinking about what to do, what I want to do next in my next chapter, I started teaching at Georgetown. At Stanford. At Georgetown is teaching entrepreneurship. And at Stanford we created a class called Valley Meets Mission. So it was all around really taking that experience from Columbia around how do we talking to these Stanford students about not wasting their energy on Candy Crush 3.0, but use their entrepreneurial talent and platform to go create meaningful companies that can really impact society in a positive way, but to do that in a for profit way. And what you saw in doing that is that, you know, for many of these students, it was the first time they could see the connection between the two. And we'd bring in speakers like Mike Morrell, who you both know very well. And you know, Mike would say, what I love about your class, Arun, is, you know, half the class dislikes government, the other half dislikes entrepreneurial capitalism. And you're trying to land the plane by the end of the course that we need both to solve big problems. And inevitably we would, and we did, because people heard stories, you know, they would meet folks like Mike and hear what they have to say and they realized that some of the biases they had are just ill informed. And you meet someone like that and you feel very purposeful and you feel like that's, you know, purpose a mission. And you meet some of the entrepreneurs creating these companies and you realize they were actually chasing mission and the money followed them. Right? And so, you know, the badge of honor was starting to see these students rescind their banking and consulting offers to go into this world. You know, some were coming to tech Congress, some were going into cybersecurity companies. And so you felt like something was there. And this was pre Covid. Covid happened. You know, then we end, you know, we're about to enter geopolitical tensions with the Ukraine war. And you could see students becoming more mission oriented. And that's when we started thinking about writing this book, Venture Meets Mission, to capture some of those thoughts around what we were feeling, which is that there's a generation here that is deeply being shaped in a very short period of time around wanting to do more mission oriented work. And that shaping is coming from, you know, healthcare pandemic, you know, geopolitical tensions in Europe, in the Middle east, climate tensions and environmental tensions around what's happening with climate. And then great power competition. And so we started looking at how we could talk and scale the message. And then in the final piece, I'll say is that while we were writing the book, we had the opportunity to create a foundation which is called Noble Reach, to put some of what we're doing, what we write about in the book, into work. And so we now have close to a half a billion dollar foundation and what we're trying to do with that is at the highest levels, help modernize the infrastructure to connect our best tech talent and our best innovation with government to solve these big problems.

Incredible story. I love hearing about your father. Sounds like a real patriot. And we often see it's those folks like family or others that set an example for others like you to really drive into mission. And I like how you talked about the broad framing of mission. We often think about national security as our focus, but the definite definition of national security evolves daily, it seems now. And so you've covered that well, Lauren.

It'S interesting you say that because that's exactly a big part of what we were even trying to convey to students. Right. Like many of them, when they hear national security, they think a very narrow version of what that can mean. And it's really, you know, I think going through this process, you realize how much words matter and helping define those words in a way that's much broader and much more inclusive in that context.

So let's dig into that a little bit. Because you spend so much time with students, I think there's this perception that we have to do a better job convincing them to get into national security or mission focused work. Is that the sense you're seeing in this work?

Yeah. It's interesting when we're launching a program now where it's like a Teach for America program where to bring in our top tech talent into government and everyone says, well, how are you going to convince these students to do this? And what we have found is that's not the problem, that's not the gating item. In fact, as we were discussing earlier, I think students have been shaped in a way right now where they're looking for mission and purpose more so than they are looking just to make money for money's sake. That's not to say they don't want to create a path for themselves of being financially independent. But I think what's more important for them is a recognition that we are interconnected and they want to be able to show that their work has a meaning in a lot of the change that's happening today. So what I've seen, to answer your question, Lauren, going out in college campuses and talking to folks is that convincing them to do this is not the issue. There are two gating items. One is the words we use. What I say is government sells careers, but students are buying experiences. Government sells jobs, but students are buying mission. If you can package the same government job as a two year mission experience, the line's out the door. That's A lot of what we're trying to do with what we're creating at Noble Ridge is creating a pathway for folks to be able to come in for one to two years and work on important mission oriented opportunities. And when you talk to them in that context, we've had no shortage of interest. As an example, we were in an intern program this year, our second one, and in the first 48 hours we had 1200 applicants for 10 spots. And we had to shut it down at 2000, honestly, because we just didn't know how to handle it. And then as we are launching our scholars program right now, we were over 12x oversubscribed. And I don't think that speaks to us as our, as a brand or anything of that sort. I think it speaks to what students are looking for because what we're marketing is mission, tech and entrepreneurship and experience to do all three. And mission means purpose to them. You know, I think tech implies innovation and entrepreneurship is about building. And I think those are all three things that, you know, this generation really deeply cares about.

Yeah, I think, run back, your words matter, which I think is actually really important. We talk about revolving doors, a negative thing, when in my experience, it's actually a very positive thing. I was lucky enough early on to work in business before I went in the military. Are you sensing that using that language of you don't have to choose to be career government or career entrepreneur, you can actually do both and it can enhance your ability to do both missions, Is that resonating with students?

Absolutely. And in fact, it's helping them understand where government can, can play a role in their career. So on that point, Hondo, look, I talked to these students about, unlike our generation, this generation's gonna have four to five careers over the course of their professional journey. So we don't talk about it in the singularity of a career. And so when you're even talking to them, you're like, we're not saying become a public servant, we're just saying, why not have one of your careers be public service? That's a very different framing, right? It, it doesn't make it so daunting. You know, I think the second is helping them understand why starting your career in public service can help you enhance what you do afterwards. Understand the problems, understand the networks, understand the shared language, being able to solve these problems, and then you can come out and that, that differentiates you in a way, wherever you might decide to go in a much more meaningful way. And I think students are seeing that and they're seeing that now because, you know, we have the. And I think this is, you know, speaks to why now. You know, there's success stories, you know, you know, five, 10 years ago, we didn't have these success stories. And so people see, you know, whether it be a Space X, whether it be Palantir and Anduril and, you know, National Resilience and Ginkgo Bioworks, and you can go down a list of companies that, you know, where people have, have gone in and out and they've learned from that and it makes them more valuable. And now I think even, you know, look, we've been having conversations with the large, you know, your typical investment banks, consulting firms, et cetera, and many of them in big tech firms. And many of them have even said, look, if we could actually hire, take our 10% of our analyst class and have them go into government and bring them back, we would be better for it. We can't, but we can support programs that are doing that. But I think everyone's recognizing that we need more people that are, you know, we used to the language dual citizens. I was on a panel with a non Mochandani who you both probably know, and he introduced himself as being a dual citizen. And I think because of him being of Indian descent, people thought he meant Indian American. And he actually was saying, look, I've been in the Valley for most of my career. I've created four companies and I've been around VCs, and that's one family. And I'm a citizen of the Valley. But since then, I've now been at the Jake, and now I'm in CTO of DCIA and I feel like I'm a citizen of D.C. and I thought that was a really powerful framing, actually, because I think usually when we bring private sector folks into government, we bring them in as expats, right. They kind of come in, they kind of isolate. They're kind of looking down at everyone that's in government. And a dual citizen framing brings with it a mutual respect. Right. That brings in a sense of like, both cultures matter to me. They're both part of my identity. And I do think as we now talking about this with students, I think that's a little bit of the breakdown in trust we have right now is that we don't have enough dual citizens folks that have been on both sides.

Yeah, I think. And I heard an earlier piece where you talked about empathy because we have this perception if you're not in government, then everybody in government is bureaucratic. And not innovative or vice versa. Do you sense from the senior levels, we talked a lot about the junior folks that there is more empathy between the statesmen, I would say in, in public service and the statesman in say venture now that there's more respect and understanding or is that still work to go?

There's work to go, but it's better is what I'd say. And you know, like a lot of these ecosystems or even government, it depends what part of government. There are places inside of government that understand that a bit more and there are VCs that understand that a bit more. And not surprisingly, it's usually folks that have been on both sides. You look at someone like a Secretary Raimondo, she understands that and she talks that language and she speaks it. You look at a Jenn Easterly, she understands that and speaks it and talks about, I want students coming in for two to three years and then going back out and there are four deployed CISA folks. That's the way she's thinking about the world. And likewise there are VCs that understand the purpose that is actually in the mission that is associated with government. In the book, we talk a little bit about, in our second chapter about how do you humanize government? And I think this is what you're getting at, Hondo. It's very easy for, for. And I think we've gone through multiple decades now where we just kind of say we don't need government and this isn't a political statement or more or less. But I think we all have to acknowledge there's a role for government and that at the end of the day, government is a collective of organizations and at its most molecular level made up of individuals. So humanizing it to people and I think it's easy to throw stones at groups that you're not part of. But when you bring it down to individuals, I think biases start to dissipate. And I think that's a little bit of where empathy comes from, how you create more of that interaction. Likewise, I think that's true with the entrepreneurial ecosystem. I think it's very easy for folks that have only been outside of the private sector to just think of them as being very greedy, self centered, doing their thing. And so we talked about personalizing entrepreneurship and that entrepreneurship is more not about the outcome because I think many times people conflate it with the billionaire class. It's more about a mindset. It's about resilience and testing and learning and getting back up. And look, I think it's the superpower of this country, I think it's the American spirit is entrepreneurship. And I think there's no country in the world that has what we have here. You know, my family's been, you know, the beneficiary of it. You know, I think that's why I think, you know, how do we align those entrepreneurial spirit around this? But, you know, we try to personalize entrepreneurship in the context of even, you know, jokingly saying that, look, we're all entrepreneurs and anyone that's raised a family knows that, like that's an entrepreneurial endeavor. You know, you've got a co founder, you've got a few products, you test and learn. You know, you do product market fit for about 18 years and then you launch them. You hope they don't come back, but you know, some mate and then, you know, but the point being that like, you know, we, we attach too much dissonance around some of these things without really kind of diving deeper in them. But if we humanize what government is, these are still people. I mean, even, I mean, you both get it, but like the difference between politics and government and a civil servant, you know, people conflate the two as being the same. Right? Like they're not right. 90% of, you know, 95, 99% of people are going in every day with positive intent, doing the best they can. Can it be better, faster, cheaper? Probably, but that could be said about any organization. Right. So I think that's what we're trying to get at. You know, I think there's more understanding that needs to be done there. But I think there's also, I think, a collective understanding, Hondo and Lauren, that we need from across all these stakeholders, each other if we're going to solve these big problems.

I love the concept of humanizing government and I think it tracks well with your take on words matter. Really. We just have to have these communities that speak different languages, come together, collaborate, get on the same page. And there's so much more of that now than there was 10 years ago for programs like yours at the universities. And even looking at the topic of your book and writing this book just shows we have come a long way. We like to tell stories of success on our show because we think it's a good way to replicate. Does anything come to mind for you as far as maybe a student exploring getting into government or industry or any stories of success in terms of collaboration between venture government and the entrepreneurial community?

Yeah, I mean, when there's so many different success examples to use Whether it be students or companies and ventures. But, you know, at a student level, you know, I think the ones that are most striking to me are the ones where you're sitting with them talking about, you know, a program like what we're doing at Noble Reach, this notion of, you know, look, I think our generation has given you an artificial binary choice with the words we've given you. We say public sector, private sector. We say, not for profit, for profit. You know, one's about doing good, one's about making money. And we haven't given you a language about something in between where you can do both. You know, like, what is that language? And, you know, those terms are very binary. So it's black and white. We don't give them a gray area sandbox. And then when you start to articulate that to them, you know, a number of them have talked about, like, that we're going down the banking route, going like, you've put words around what I've been feeling, right? And you start to realize how many students are all feeling the same thing. But then the piece of it is that the easy button is they go get a free, you know, cocktail or lunch or dinner, and next thing they know, they're in a consulting or banking interview process, and they just get swept up in that current. Right. And so I think the success stories have been. For us, just even looking at the Scholars Program and our intern program and talking to kids, how many of them said, I didn't know something like this existed, and they had offers from the top private equity banks and consulting firms and said, I want to do this because it speaks to kind of what I want to go do over time. And so I think for us, that would be the success story. And I think it's from all sorts of campuses. And so I think the diversity of that message resonating, I think, has been incredibly important when it comes to, you know, success stories around how, you know, government and the private sector collaborate, you know, and ventures. You know, part of what we try to do in the book is say we need a new vernacular. We know we talk about public private partnerships a lot. And that's not a new concept that's been there for decades, but public private partnerships, implicit in that assumes large company, you know, so with that is, you know, fully funded, profitable resources. The way you collaborate with a company that's got a billion dollars of revenue and thousands of people is very different than the way you collaborate with a venture that's not even fully funded, which is still building out its Team and doing product market fit. What we try to say is that we need a new framework for that. One of the things again when you think about success stories is we have the capacity to do this. We just do it in terms of crisis. Example would be at government. We conflate if we're working with small companies that they need capital. And the truth is the small companies don't need capital. The ventures don't need capital. What they need is contracts. And those are two subtle but important differences. Ventures think like government thinks. We're going to give out the Cibra grant and tell these folks and then those folks get the grant and they come to guys like me on the venture side saying, hey, we got this, can you fund us now? And we're like that's great. But we're looking for contracts. And the difference is contracts give you demand signal. Right? That's what really kind of catalyzes our community. So what are examples where we can. We've done this well, we've done this well when we've created our commercial space industry. Here we were in 2010, struggling. NASA says we need to go out to the private sector and put out milestone based ways for the private sector to galvanize around outcomes. And so the problem is we don't tell that story that way. I think most people in this country don't realize that SpaceX is really government funding. Right. They just think it's an entrepreneur. So one of it's just telling the stories of where we've done this. Well, you know, look at modern on Operation Warp Speed again, you know, we put out there to say, you know, any vaccine that's FDA approved, government will buy x hundred million at these price points. The private sector can. That's where the private sector excels. Put out a real target of an outcome you're looking for. So a lot of what we tried to write in the book is less about theory of what we could do, but it's more posing like we're already doing it. How do we do more of it and what's keeping us from doing more of it? Right, yeah.

That sense of scale I think is what we're all thirsting for of how do we. Ten years ago we didn't have any examples. Now we have some examples. But institutionally, how do we leverage that American, I would say enduring competitive advantage of this ecosystem at scale. Any thoughts you have on how do we now take these? You know, we're at the 1.0 stage, we have success stories. How do we now take this to the 2.0 stage and scale it.

So it's a great question. Hondo. I think part of actually scaling is getting these stories out there success, Right. Because people have to believe that it's doable. And you know, I actually still think we're very early in that process.

Yeah, it's interesting. It's the first time I've ever heard a venture person the other day say, go into government first. Because that's the way you can prove your model and get validation and then go to commercial afterwards. Which five years ago you'd rarely hear a venture advisor say, go to government first.

Yeah, no, I. Look, I was on again, Lauren, to your question in Hondo on college campuses and I had, you know, two students, one at Carnegie Mellon and one at Stanford, go like, well, I'm trying to decide whether I go to a startup first or go to government first. So the first takeaway was they're actually thinking about wanting to go to government. Right. So that's like, wow, that's a mind shift change. Right? You have to really appreciate that. But then as we started talking through it, we're like, well, why wouldn't you go to. If you're going to, you know, my recommended, why wouldn't you go to government first and really understand the problem set, understand what you're looking to kind of go do. And then you go into the private sector, right? And then you can kind of go, having built those relationships, built the language and vernacular and a real understanding of the problem set can go out and become someone that can help solve it from a change maker, from the outside. And so I think that dynamic is starting to happen. Right. So I think scaling, I actually think we were at the precipice where we can look to scale the infrastructure to bring students in. Much like we have people going in for Teach for America and becoming public education change makers. We need that for public service. On the tech side, we don't have a program like that and that's what we're hoping to help catalyze. I think that's important because when you start seeing this next generation wanting to care about this and come in, it really starts to change perception within those agencies. Right. I like to say within having been a teacher in academia, but then a VC before that. The common through line with that is optimism. It just brings a different optimism into it. When you bring entrepreneurs around a problem or you bring these young students around the problem, at the very least, what you're bringing is an optimistic way of tackling the problem because that's just how they're bent. So that I think is. Is one, I think two. Look, I think the through line of AI right now in government presents a really interesting opportunity. And I say that as an opportunity in that look, I think the delta, I mean you know, of between needing to hire a 10 year person with experience in AI doesn't exist anyways versus using that as a way to say we want to get our best AI folks to kind of get selected to come in for a year or two and then go do what they want can help. Not only help while they're in, but more importantly, I think set a tone where you're starting to change the brand of what it means to kind of come in. Right. And select that. So I think you can do that at scale. On the venture side, you know, I think you're starting to see pockets of this happening. I think Space Force is on the leading edge of this where you're. They know how to give out contracts in a timely, meaningful way, you know, to ventures. And so people know how to collaborate more effectively. We need to be doing that at scale. We need more dual citizens. Right. And so again but I think we're making great progress. I mentioned Nan Molchandani, but you see someone like a Jenny where she is, you see someone like a Doug Beck at DIU like that, there's a lot that comes with that because what they're bringing is implicit trust into big ecosystems that people then want to engage in. And now you're seeing real appropriations around that. So I think that's how you start to scale it. I still think we need to be more outcome driven. RFPs where you're kind of writing like this is what we need and these are the people we need for the project presumes you know what the solution looks like and what you should be more focused on. This is what we the outcome we're looking for. And let the private sector figure out what's the most optimal way to pull together capital, talent and technology to solve that problem. And then how do you use government as a way to be a force multiplier to attract private capital? I think many times right now around some of these problems, we assume that the problem is that there's no capital out there to go solve it. And so there's a shortage of capital. And when reality is, it's just we haven't created the conditions for that capital to want to come in. And so I think there's different ways of doing that. An institution, I would mention in the Book that we do this actually well, internationally is with dfc. Right? Dfc. What does DFC do internationally is they'll take first loss on risk projects to attract, you know, capital into these projects. We could do that here in the States. We don't do it to the level that we can. And so I think there's tools that we have. And then the other one obviously is just as we try to get some of these larger outcomes out there with large contracts, I think that galvanizes folks in a much more meaningful way. And again, that's what I think we do. Some of those are institutions.

Let's talk about the private capital piece a little bit because I think that's been another area where you've seen significant interest over the past 10 years. You talked about Endgame, which I think is a great example of a company that pretty early on disruptive tech, venture backed, had a public sector focused business, was doing some work with the US Government and actually was acquired by a player in the defense industrial base. I'd say. I think it was Accenture.

So the services piece was acquired by Accenture.

Okay, that's right. And you're seeing more and more of that on the entrepreneur and tech side, I think companies that are stepping up and interested in doing business with the national security, really, U.S. government community. On the venture side, I'd say 10 years ago you had funds that were focused on cybersecurity, like a paladin, who I think was also involved with an end game, Andreessen Horowitz, who is helping with market development in the US government domain. But now it's like you can hardly go a day in this space without hearing about a new fund that is focused on US Government national security. A lot of smaller players seed a round. What's your take on just the changes in that environment? Do you see it continuing as is or will we see consolidation from a private capital perspective?

So my take on the capital piece of this is that like any of these sectors, look for context. I entered the business late 90s, so I watched the 2001, 2002 bust. I've seen the 2009, 2010 correction. And we in our business as VCs, when we see something that starts to work, we probably overfund these sectors. I say that as context because there will be losers. That's how our industry's set up. And so the one caution I would have is that when people say when we start to see some losers and they could be some high profile companies, that people are, and then they'll be like, oh, this is dead, this isn't going to happen. I would also caution on saying that the train isn't going to continue moving in that direction. Right. I remember in 2002 when everyone just was like this.com things done, like it's not happening. It may take longer, Lauren, but I think directionally this train's leaving the station. And so we should acknowledge that there will be losers, there will be bets that were made that aren't going to be fruitful, there will be early stage company funds that probably over time disappear. But I think directionally we, I think this is an ecosystem that's only going to develop more and we shouldn't conflate losers with saying that the sector's done is what I would say. So I think that we're going to continue to see more capital coming in. I think we're going to continue to see people frustrated, maybe at the earlier stages because I think it takes longer. So the seed and A rounds where you're looking to go get your bag in a year and a half or two years, but the milestone you need to hit might be a contract which is taking a little bit longer. And this is where government has an important role. If you really want this ecosystem to develop, you have to be cognizant that the timing of how you get contracts out there, if you want these companies to stay around, is important in how you award that. And so I think we're going to learn that. I think the other reason I'm optimistic about it, Lauren, is that while there'll be failures, I do think on the government side, and this has nothing to do with an RRD issue, I think it's just a generational one. We're starting to see that generational change and you're going to have folks that are decision makers that in the beauty of this, this isn't an ideological thing, this is like what's good for the country. But you're going to have people that grew up in the digital age, they grew up with consuming tech in this capacity and they're more apt to. They don't view risk in the same way. It's not like just buy IBM because they want to find the next great thing. And so I see that happening right now. So I think the confluence both on the, hey, we're going to continue to invest and have companies getting created, I think is on its way. I think the other piece of it is that those companies are going to be stronger because I think we're going to see better Talent going into them, right? And they're seeing better talent, not only from universities, but you're starting to see people that are in that defense industrial base going like, oh, I could go do this now. And I think on top of that, as that talent comes in, the ecosystem will develop a bit more. You'll see better collaboration across government, industry and academia because the quality of expertise is going to be higher. We close the book with the virtuous cycle piece. I think a lot of this starts with the fact that we have really large disruptive industries. When you look at what's happening in just defense tech, when you look at what's happening in climate, when you look at what's happening in healthcare or space, anytime you see that kind of disruption, you know, that's where our industry on the venture side gets really excited. Right now we get excited, except we always want to see someone else go first and be the winner. And so, you know, the early folks have gone in and now you see some real winners, right? Some of the companies that we talked about before, across all those sectors, you see winners that. And now more capital comes in, more capital comes in, better talent comes in, better talent comes in, the ecosystem gets stronger. And that's the story of the Valley, right? That's why I think there's a poetic piece to this whole thing, which is if you think about how the Valley started, it started with government funding, government started the Valley. And so now here we are on the other side of that where we're replicating it with the Valley being part of how we solve these big problems. And so I think that's where the optimism comes from. But look, I don't want to sugarcoat this and say anything that's going in is going to be or any company getting created right now, they're all going to succeed. That's never been the case in our industry. You're going to see some real outlier returns, though, with the big winners, and then you're going to see a bunch of losers. I just caution folks of saying as soon as they see losers that the sector's dead.

What's your, you know, having seen and worked with and interacted with this whole ecosystem, what do you advise young entrepreneurs as they're thinking about coming in? And what do you advise now that, you know, your book's getting all this attraction? You've done a lot of work on the government side. What do you advise the government folks you talk to of how to better approach this problem?

Yeah, Hondo, you know, you said something early on which is I think at the core of it, which is kind of the, the empathy of how you approach the problem. Right. So with the entrepreneurs, it's very much that, you know, if you haven't been inside a government, make sure you're building a team that understands it. Not just for networks and access, but more truly true empathy. Lauren, you know you talked about Endgame. You know, it started as a commercial company and then we were targeting the government sector. And I remember when we were looking for product management folks and things of that sort, you would think it would be people around the beltway and we were getting tech folks from the Valley wanting to play those roles. And the cultural superpower, and I give Nate a lot of credit, was managing a culture of folks that have that Valley mindset, but also understand D.C. really well. While each individual may not be a dual citizen, the team kind of represented a dual citizen team. And I think those diverse teams are really important. And I say that because I think usually what we see, Hondo, are commercial companies with all commercial pedigree and they try to add on being government or only government companies that don't know how to create dual purpose. And it sounds subtle like, oh, we can do it later. It rarely happens because you've set culture and culture is really hard to change. So my advice to an entrepreneur would be at the ground stage, focus on creating that dual citizen culture with your team so that you're always kind of having kind of that empathy on both sides and how you make decisions in mutual respect. Because I think a lot of the reasons that commercial companies don't do so well in government is they treat it as a second class citizen. Here's our public sector group and they're kind of somewhere else and they get compensated differently.

Just good enough for government work.

Yeah, yeah, exactly. Right, right. And that comes through, look, that just comes through. And likewise, when folks are only targeting sometimes government, they're missing like how do we create scale and replicability that we're going to need if we're going to go into the commercial world. So that would be what I would say to entrepreneurs. You know, on the government side, I would really be advising folks to likewise bring in folks from the outside and be comfortable with them coming in for experiences. And they don't only have to be junior folks, they could be mid career folks. And you're right, we use revolving door and over time it's interesting, it's become a negative connotation and I, it's interesting for a country where we, we assume you're innocent till proven guilty. You know, revolving door kind of, you know, assumes negative intent versus positive intent. And you know, like, how do we go back to a place where we assume positive intent with someone coming in? It doesn't mean we don't have guardrails. But when, when being a dual citizen or being, you know, is conflated with being revolving door, you're saying off the bat that we assume you're going to do something negative. And that's a hard place to innovate. Right. And so I think some of that cultural change, you're seeing that in certain agencies and groups where they recognize the importance of that, but making that more widespread and creating those crosswalks where folks can come in for a period of time so that we have, you know, more back and forth and you brought.

Something up that we often hear on the show is just culture is a key barrier to entry. And your optimistic take here to me is reflective on the slower change it takes to, to change culture. If you were king for a day, and this is just the last question I have, is there a policy change needed or some sort of recommendation in a tangible form or is this all culture we're trying to tackle?

You know, look, I don't know if a lot of this stuff can be changed with policy by itself, but you know, one I would say is to have each agency have, you know, billets, for lack of a better word, that are set aside for people that are coming in for two year stints. Right. As opposed to feeling like they have to be coming in. And you know, right now the billets are for folks that are coming in and going to be full time employees over time. Right. In our program. I would think of those billets as infrastructure. That's really what those are. You're funding infrastructure and programs like us then can help catalyze and fulfill those roles. And again, it could be coming right out of school, but it also could be mid career. And it also helps, I think, to the notion that we were just chatting about, which is it assumes positive intent, it embraces, says, we know we're having people come in and we've put in the right guardrails, but this is how we are going to collaborate and this is how we're going to unleash the entrepreneurial creativity and bring it to the scale and reach a government to solve big problems.

I went on that to double tap on something I heard that each government organization should have two IGs.

Yeah.

Can you, can you expand on that a little bit to this point?

Yeah. So the idea of two IGs was attributed to a good friend of mine, Dan Tangolini, and we were talking about risk culture, right? And the culture of government versus the culture of entrepreneurship in the, in the venture community. You know, I start by saying that, like, look, if I was a vc, I would never raise a fund if I was measured like government. And I say that because as a vc, I'm measured by my best deal. What does that mean? You know, I make 10 bets, six of them cannot work. You know, two of them could be okay, but if two of them are blowouts, you know, I'm oversubscribed on my next fund. If I'm government, I make 10 bets, nine of them could be okay. You know, one of them could be Solyndra. And I'm carrying that around for a decade. I'm measured by my worst deal. And so part of why we say that is that, look, we have to acknowledge why these ecosystems act differently. It's not just easy to say like, oh, they're risk averse. There's a reason. That's how we measure them. That's the perception. So there's something we can also do about that as well. And an example of that is that every agency has an IG, right? And so if every agency has an IG, and the IG's job is to make sure you stick to the playbook. And if you deviate from the playbook, you may be called in front of a congressional hearing, that will change behavior. No one's going to want to deviate. And if you think about entrepreneurs, on the other hand, they don't have a playbook. All they know is what's the outcome they're trying to get to. And they're constantly changing the playbook. If there was an IG in the entrepreneurial world, they'd all get dragged in front of hearings. So the answer that the comment that you're making, Hondo, two IGs. What Dan was positing is what every agency needs, two IGs. And you're like, well, how is that helpful? And he's like, the other IG should be an innovation general. And the innovation General's job is to be looking at the agency and saying, are you innovating fast enough? And if you're not innovating fast enough, you could also be brought in front of a congressional hearing. And while that will never happen, it's an interesting thought bubble because that's the tension you need in any organization. You can't always just be all about taking risk. There needs to be some risk management there. But you also have to give them the agency and capacity to make some mistakes so that they can experiment. Because no one's going to want to experiment if they feel like if the experiment doesn't work it's going to lead to negative feedback. So that was the notion of having two IGs in each agency. Now, while that may not happen, then what we try to posit in the book is then how do we create a renewed partnership between government and entrepreneurs so we can still create that dynamic? There's research that government will do that needs to do, that the private sector will never do. But the commercialization piece where you need to test and learn, that can't happen inside a government for some of the reasons we just talked about. Unless you change culture. How do you bring that out and let it foster and scale or fail in a system that allows it to fail? That's how we think we can get more dual purpose opportunities and more bets.

That is a fantastic concept, I think something we'll want to try to create an echo chamber around Arun, thank you for taking the time to write this important book. I think again it's a message message we want to be reinforcing on our end. And for all the important work you're doing at Noble Reach and for coming on to share your story today, we really appreciate it.

Lauren and Hondo, thank you very much for having me and I appreciate all you do as well. You've been listening to Building the Base, a podcast by Lauren Badula and Hondo Gertz. Remember to subscribe and share wherever you're listening. Leave a comment to suggest a guest and for up to date insights on the show, join our newsletter at www.buildingthebase.org.