#6 - You're The Weak Link

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Welcome to the 6th episode of the Tech Optimist Podcast. On the show, we cover the intersection of technology, venture capital, and entrepreneurship. Episode 6, our best show yet. Thanks for joining. We have 3 blocks for you today. In block 1, we have a conversation with David DelaPelle. He's co-founder and CEO of Dune Security, a company using AI in the cybersecurity space. Dune's interesting because they really take a strong look at kind of the human factors, which if you read the news, this is where one of the weak links is in all kinds of cybersecurity defense. Fascinating conversation. Hope you enjoy it. Then in block 2, we have AV partner Pete Mathias. He interviews Matthew White, who's co-founder and CEO of Multitude Insights. This company is doing work in the area of law enforcement. A lot of VCs kind of shy away from anything that works with kind of government agencies. We think this is a really interesting story, really interesting team. I hope you enjoy it. Finally, in Block 3, I talk with AV Senior Associate Drew Wonsalak. Drew and I are talking about space, what's going on, learn a little bit about areas we think are investable, areas we're shying away from. If you find space as interesting as I do, I think you're going to find it as an investable area, super interesting. As a reminder, the Tech Optimist podcast is for informational purposes only. It is not personalized financial advice, and it is not an offer to buy or sell securities. For additional important details, please see the text description accompanying this episode. Okay, let's get into block 1 with David DeLapelle, co-founder and CEO of Dune Security. Tell us a little bit about Dune Security.

Great. Thanks, Mike, for having me today. Super excited to join the Tech Optimist podcast. So I'm the co-founder and CEO of Dune Security. Dune Security is, it's really a paradigm shift in enterprise cybersecurity. For too long, there's been, you know, endpoint-centric or network-centric approaches to cybersecurity. And, you know, 80% of breaches start with employee error. And so what we do is we take in all of the relevant data and we pinpoint in any company who's creating risk, to what extent and how, and in doing so, reduce the attack surface, right, for the biggest risk to enterprises.

Where are you in your journey? It's a pretty early-stage company, right?

Yeah, actually, we're de jure less than a year into Our journey. Yeah, we incorporated on May 16th of last year, but of course, had a great first year working with some of the biggest companies and enterprise security teams, really just some of the biggest brand names. We have the best investors like Alumni Ventures, of course, Craft Ventures, Sequoia Scout Fund, and Firestreak Ventures, Antler. And yeah, no, it's been pretty Pretty fun so far.

Yeah. Great.

Yeah.

The, um, my sense is, is like a lot of what you're doing is, you know, addressing kind of the human side of cybersecurity, right? The, you know, you read about all of these things that, like the MGM breach that started with, you know, human error, I think is unfair. I mean, we're all, you know, subjects and I think it comes with a lot of humility about psychology and biases and heuristics and the whole, you know, Danny Kahneman world of like, yep, how our brains are wired. And people that understand that prey on it, that leads to vulnerability. So sounds— do I have some of that right?

Yeah, I think, I think that's spot on. Right. And there's been, there's been— so really the way the market has optimized for this problem, which Which again, I think this is the biggest problem in cybersecurity, right? And I think the data backs it up, but you're completely spot on. The behavioral piece is a massive, massive problem. And prey is the right word, right? And we're seeing it's typically employees in companies that maybe are a little bit more prone to falling for these types of social engineering attacks. Sometimes it's older people as well, even on the consumer front. Oftentimes you'll have hackers that specifically target people's grandmothers or grandfathers. So it's a really tough situation. And I think candidly, there are all these amazing castle wall solutions, I call them, right?

Mm-hmm.

Network security, endpoint security, you name it, right? Identity, lots of great innovation, but there really hasn't candidly been good innovation in our space.

Mm-hmm.

The company that's called Elevate Security that led the charge, and they started taking in all of the, what I call the business-as-usual data, right? So data that's specific to actual levels of access permissions and anomalous behavior. And they had an excellent vision and a really great approach. But I think there's something much bigger here, right? Being agnostic to the data sources and taking in all of the relevant data about employee risk, which is only possible using AI. And then using AI also to analyze those disparate data sources to truly pinpoint who's creating risk, to what extent, and how contextualized to the user's risk within the company. So their title, their level, et cetera. Yeah. So really not being beholden to any— Yeah. individual data source, but being agnostic to all of them.

And give our listeners a sense of the engagement and the experience you would have with a typical client. I know it's super early, but do you have a sense and kind of how you get started? What's that journey like? You know, what, who are you selling to? You know, what's the decision-making, all of that side of it?

Yeah, we kicked off with one of the largest investment management companies, and I really think about the user, right? I think our first and foremost concern is really delighting the user. And we talk about creating this 10-star experience for every single one of our enterprise customers. That's not my original thinking. Brian Chesky talks about it all the time.

Yeah.

You don't want to just have the 5-star experience with the great Airbnb and it's clean, but you want to pick them up from the airport and give them a bottle of champagne and really build that 10-star experience. So to answer your question, we kicked off with this investment management firm, and what we found is that there are newer companies that are being built in this security awareness training space, which is the first space that we're really going after and really trying to, I think, successfully differentiating ourselves in. Thus far, there's— in those tools, there's a lack of ability for CISOs, for GRC teams, security awareness folks to actually hold high-risk users accountable. And in our platform, the data is very transparent and clear. Users go in and they see their risk profile, and it's clear as day to them, and it actually goes viral within the company. So we talk about this like shared responsibility of security awareness. That's something that's talked about all the time. Nobody's really done it. And I think we actually did it, which is— so it's— we've really delighted our, especially our admins.

Yeah, no, it's the psychology there is at work too, right? Where if you share data and information, kind of best practices and worst practices, The system oftentimes will manage itself pretty well as opposed to kind of command and control. So, very interesting approach. I mean, this is kind of the arms race, which is you have—

Yeah.

The hackers and the exploiters using the human psychology and biases, but we have to use that ourselves. business leaders with our own team and with our own solutions to kind of stay ahead of that, understanding how competitiveness works or aspirations or fear and all that kind of stuff. Yeah.

And, it's that piece, Mike, but it's also the AI piece is massive. It's like when you said arms race, I was just thinking about Candidly, standardized testing and training of users, these kind of old-school manual back-office systems are, in my opinion, all going to be replaced by AI that can automate these legacy back-office workflows, right?

100%.

Yeah. With a lot of these, and what's amazing is the professionals in the back office, in our case, the governance, risk, and compliance folks who are really the power users of our platform going up to the CISO. They're amazing. I mean, they've created amazing security awareness programs, but the technology is so lacking. And so they just have to manually configure everything. So that's, you know, we're able to help them by, we can automatically train people at what they're bad at, not what they're good at, plus what they need for compliance. And then we provide the data for the 3 to 5% of people who are careless or maybe ignorant as to the risks and, you know, the CISOs and teams, security operations centers, can start restricting access to those people or turning email filters higher for those people. So it's really exciting and effective. But then on the other side, on the offensive side, yeah, the hackers are using AI to specifically target thousands of companies in the same amount of time they could previously only target 10. So it's like you can't fight, you know, it's like when It's

like a drone swarm, right? I mean, it's like an asynchronous battle.

You need to fight, you know, the AI threat with AI security. And it sounds cliché, but it's really just necessary.

No, what is it? You don't want to bring a knife to a gunfight.

Exactly.

Right? Yeah. You

don't want to bring a knife to a gunfight. That's the right way to put

it. Because it's relatively recent, our audience is always interested in kind of your genesis story. I mean, you know, starting a business is always a big step. You had— I think I had a co-founder, David. What was, you know, what came together to kind of decide to, you know, make this plunge and how did that go down?

Yeah, I think some people and I have many friends who have started businesses and had a very intentional path. My path just kind of in a way found me, Mike. It really did. I I always felt very uncomfortable in my early 20s being very junior in organizations, and I realized I needed a lot of experience. So, I did everything, right? I was doing 2 full-time jobs at once. I was getting my MBA while I was helping to build this network security company and 20X'd into a unicorn during that time. And I worked in VC. I was doing all these different things. So, I helped build AI and cybersecurity companies from pre-seed through post-Series D and some great success stories like AppA and Perimeter 81 and Waycare, which was this AI shop in Israel I was at 8 years ago. But yeah, I was most recently at AppA, which is a cyber insurance company. I was running their security product strategy, and I saw that this human issue was really not being solved by

You

can buy the solutions on the market. So, when I left that company, it was pretty clear to me what to do for my next steps. And again, there was no direct path. It was kind of just I'd learned as I went and found this great opportunity. Quick, I should mention our founder, co-founder meet story because it's pretty unique. I was flying out to the Portuguese island of Madeira on vacation. Mm-hmm. And my co-founder, Michael, was also on that flight. There was a 4-hour delay initially at JFK due to a cybersecurity issue. So, all the computers were down, they were manually checking in people. And, Michael and I got on the plane and we're really the only people in Comfort Plus, right? And so, we get to chatting. We land the next morning, we think we're Madeira but we're in the Azores. The plane was empty, so I think they saved some money because of the capacity issue. And so, I actually pitched him this idea while we were in that Azores Ponte Delgada airport. And it turned out he had been building data science platforms all on AWS for Fortune 50s for 12 years at Accenture. So, it was like the perfect technical skillset to pair with my business expertise.

Yeah. I mean, this is one of the realities of life and entrepreneurship. There's serendipity and timing and luck and It's not, oh, I have this idea, go to a hotel room and write a business plan for 2 months. It is an organic, living, breathing, serendipitous situation. And I think that really brings it home perfectly.

And one last point there. I'm sorry to— I'm sure we have a bunch of questions here. I'll stop doing this. But yeah, I think the other point there is our initial idea was, hey, let's just build a better you know, security awareness training platform. Let's just train people what they're bad at and not what they're good at and save a lot of time in the process. And it's evolved from there, right? It's like even the vision of what we're doing has evolved so dramatically. It has been a linear evolution. We haven't really pivoted much, but yeah, sorry.

No, no, but it's like that is the organic model of how these things go. You know, if you look at, again, everybody knows things evolve, they get refined, they grow. You find, I mean, I always say to people, being an entrepreneur is having 10 ideas, moving quickly, and hopefully 4 or 5 of them are right. And you do more of that and you rinse and repeat 1,000 times, and that's how you build a business. So, that's, you know, that is, that's the way it works. So.

Yep.

So, what's, you know, we have a large investor network, we have a huge community. If you had an ask, what would your ask be? How can people help you?

Yeah, I mean, I think really what we're— and I've been thinking about this pretty deeply. I do think that, and it's really, I think a lot of the changes in how business is done were brought about during COVID When I was at Primer 81, which is the company we scaled to, when I left, it was a unicorn valuation, recently exited to Check Point. It's a great success story there for those founders and that team, amazing team there at Brimmer 81. But yeah, I think one thing we talked about was the new corporate network is the public internet. And with that, I think it's impossible to try to build the castle walls and plug the holes. At the end of the day, the hackers are coming and they're going to— They're going to find you. Win, and they find themselves coming in through the weak links. And I think especially with AI, I know there's malware that's writing itself and other types of offensive threats, but we're in this situation where the humans are the weakest link. And so I guess my ask is, if anyone does feel similarly that there needs to be a user-centric or human-centric model to enterprise cybersecurity, please reach out because It's all I do all day is just strategize through this stuff.

Great. Yeah, we'll put contact information in the show notes. And again, if you're in that kind of position and want to learn more about the great work that, you know, Dune is doing, um, please reach out for sure. I mean, this is one of those things you do not want to wait and fix it too late, right?

It's funny, Mike, we're, we're, when we, we work with, uh, we've had a lot of success early on, but we, We also have found ourselves if there's certain customers and they're like, they want to delay it, that's totally fine. We'll talk to you later. And I know almost for certain that they're going to come back within 6 to 12 months because they need our solution. Yeah.

On a personal note, I ask our founders one personal productivity hack or one thing as a CEO or founder that you have just found really helpful to you to share with other founders and CEOs that are listening in?

Yeah, I would say sacrifice is everything, right? And there's a lot of different cliché pieces of advice I could give, but I think for us, what my co-founder Michael and I have done is really just put the business first time and time again. And, of course, you always want to prioritize your health and your family, right? These are critical things. And, without your health and your family, perhaps it's impossible to even be successful in business generally. But yeah, I think ultimately I stopped drinking alcohol, I work out 5, 6 days a week to keep myself centered. I made plenty of sacrifices to really achieve this vision. And, I think Once you find that vision, I guess the other piece too is once you find the vision that's right for you, it won't be hard to make the sacrifices. Once you have the long-term vision in mind, I remember Idan, who was the CTO of Waycare about 8 years ago. I was in Israel at Waycare Technologies and he said, look, David, once you have the long-term vision, the short-term decisions become easy. And so, I think that's really what we have here with this mission.

No, I can relate to that, which is You know, this opportunity of Alumni Ventures kind of found me again and frankly found me later in life. You know, I think I was 49 or something when I started the business, but I will tell you, when you know it is right for you personally and that there's a market, you know, I think one of the best decisions I ever made was to go all in.

Yep.

Because I was involved in boards and 6 projects and things. And, you know, it is an all-consuming— being an entrepreneur and a founder is all in. All in. And yeah, family, health, all that stuff. But the list gets very narrow and very deep. And it is a matter of, you know, incredible focus and commitments, kind of going all in is really— you look back 10 years later and you go, the hardest decision, but the best decision was not to hedge.

Yep.

And to spread yourself too thin, but to say, you know, I have an opportunity to build a company here and I am going all in. And yeah, so I think the sacrifice that comes with it is absolutely about the trimming. Um, which is for sure, but it's, it, it is also the most rewarding when you do that. So yeah, very insightful, David.

I think there's that, there's that correlation, Mike, between the how hard something is and how good it is, right? The harder something is and the more responsibility you take on, in my opinion, the more fulfilled you'll be in your life.

Yeah, no, and listen, I've got kids and this is one thing that You know, I stress to them, which is the really good things, the really rewarding things are really hard and take a really long time. And, and yes, professionally, but also personally. I mean, you know, relationships, if you have a partner, that's hard and it is a long-term thing, but it's like really rewarding, but it's really hard. Yeah. And so, it's like this, everything looks easy on Instagram and fast and—

Yep.

But, the really good stuff is really hard and takes a really long time. So— 100%. You're mature to think that. So, David, thanks for your time. Keep up the great work with Dune. Again, really important area. Do not wait until it's too late. And, we all know You know, it's the humans in the system that are a huge vulnerability, and, and Dune can help. So please reach out. So thank you, David. That was perfect. Appreciate it.

Thanks so much, Mike.

All right, we'll talk soon. Thank you.

Sounds good.

Yeah.

Bye. Bye.

Hey everyone, just taking a quick break so I can tell you about the Deep Tech Fund from Alumni Ventures. AV is one of the only VC firms focused on making venture capital accessible to individual investors like you. In fact, AV is one of the most active and best-performing VCs in the US, and we co-invest alongside renowned lead investors. With our Deep Tech Fund, you'll have the opportunity to invest in innovative solutions to major technical and scientific challenges, which can have a hugely positive effect on society. Companies that have the potential to redefine industries and create a more sustainable future and deliver significant financial returns. So if you're interested, visit us at av.vcfunds/deep-tech. Now back to the show.

Next up in Block 2 is Pete's conversation with Matthew White, co-founder and CEO of Multitude Insights.

Hello everyone. Welcome to this series on great founders, industries, and technologies taking place here in the United States. Absolutely thrilled today that we have Matt White, the CEO and the co-founder of Multitude Insights. Multitude is, in a word, a game changer for law enforcement. They are reimagining public safety from the ground up, and we are really, really lucky that we have snagged a little bit of time from Matt's busy schedule to hear more about Multitude and what they are building. So Matt, you're center stage. Let's start with you. You're an entrepreneur. You are focused on a space that that not too many are really laser-focused on. So tell us a little bit about what motivates you and why you're building Multitude.

Yeah, well, first of all, Pete, thank you for having me on. Excited to have the conversation today. You know, like you said, law enforcement technology, civic tech, gov tech is not particularly sexy all the time. It's not a particularly high focus area, although recently the dual-use space is heating up a little bit. But in law enforcement, there hasn't been a lot of application of unique, novel, interesting, advanced technologies. There's a lot of reasons for that, but, you know, chief among them is I think it just hasn't attracted that many people. You know, my background is as a naval flight officer. I come from a kind of duty or service-oriented mindset. And to me, this felt like a space where I could build a business that would be successful because it's underserved, but also a place where that business would have real impact on the men and women in uniform that go out on the line every day. So, for me, it's a pretty exciting place to be building and, you know, one that we think has real impact.

Let's talk. about public safety. You have had at this point a front row seat into some of the biggest challenges that law enforcement is facing from the street to the city and beyond. What are some of the big challenges that you see that tech like Multitude might solve?

Yeah, so I think the biggest challenge is not necessarily unique to law enforcement, but it's communication and information sharing, right? If you think about a police agency in your town or your state or your region, right, it could be one of maybe 15 different agencies as you walk down the street that might have jurisdiction over a given area, right? So you walk from city to city, there's 2 police departments there. You walk onto a college campus, now there's a campus police element involved. You cross a particular line that isn't a part of any city, and now you're in a sheriff's office jurisdiction, question mark, right? So you see how it starts getting complex right away. And so you have about 18,000 of these agencies around the United States. It's both the beauty and the worst part of a federalized system is that getting all of them to talk to each other is quite difficult. And so that is a place where our technology, which is specifically around helping agencies share data, share casework, share information. That is where— that's why we're kind of focused in that area, is it's a massive, massive problem. And we're kind of going after it using artificial intelligence and a few other tricks borrowing from, you know, social media and a few other platforms out there that do a good job of this kind of thing. So I'm pretty excited about that part of the world.

Let's talk more Multitude. You've got these 18,000 agencies, an extraordinary number of potential users. Tell us about what you, you're building. Any anecdotes that you can share too about how some of these departments are receiving Multitude so, so far?

Yeah, so we are building an information sharing platform that's called BLTN. We spell it BLTN because if you're a tech company, you have to remove letters to make things exciting and interesting. Um, but we started with the humble bulletin. And for those of the people listening that are not familiar with this concept, um, it's that in an old Western movie, it's that wanted poster up on the wall that's got a guy with a large mustache and says $15,000 reward. Well, that is a bulletin or a flyer, and that is something that agencies put out hundreds of times a week all across the country. And so they're generating a lot of these pieces of information. That is a massive pool of data that's untapped. And that is kind of what Multitude has gone after. We started there because this is something that is by its nature designed to be shared, right? You're designed to post that bulletin up on the wall and get other people to look at it and have comments and maybe be able to help you out as you're trying to close a case. Whereas other parts of the data, if you think about the lifecycle of data in law enforcement, Other parts of that data lifecycle are very, um, you know, maybe stuff you want to keep back. Oh, only my agency wants to have this data, right? And so we started with a piece of data that is designed to be shared in order to encourage, um, you know, encourage the, the natural sharing tendencies between these agencies and, uh, and, and actually build a platform that could work. So we leverage a UI that looks, uh, almost like Twitter, right? It has a feed That feed is algorithmically generated to help users sort through the types of law enforcement information that are relevant to them at the user level. Um, we make the post form extremely easy to use rather than the manual processes they're currently using. We have a mobile app that lets you do all the same stuff. People call it Instagram for cops. They're out there flipping through it, looking at it. Um, but then in the background behind this relatively simple user face User interface is a really, really robust and proprietary artificial intelligence tool that we call SmartLink, which is kind of like having a detective in your pocket. And so, you know, without me going on forever and ever about it, it is a system that links crimes based on our database and some of the other linked databases that we have. And it will actually reach out to the officer and say, hey, Officer Pete, right? Here's this thing I've got for you. There's 4 other similar cases. Here's who you should be reaching out to, and does a lot of that initial work for the officer. And so how has it been received? The short answer is extremely well. We're saving officers time, gets them out from behind their desk, gets them back out into the community engaging with the public, right? And, you know, at the administrative level, they can just get through more cases, right? So yeah, it's going well. There's obviously a lot to learn every time you're building a new product, but So far, so good.

You've started to give us a tiny glimpse into how Multitude is using AI. You've also been a thought leader standing in front of thousands of officers, agencies. What are the big messages that you're telling these audiences on how AI can transform the police beat?

Yeah. So You know, I've given a number of courses around the country, uh, for training courses and various other speaking events, and I always come kind of down to a couple different rules, uh, for law enforcement leaders. And the first is that you can't do nothing about this, right? AI, like any industry, is coming for law enforcement, coming for public safety. Um, and so that means educating yourself. Um, you know, I'll say, you know, come to my course, of course. Um, but educating yourself around the technology— how does it work, what are its limitations, which are many, At this point, what are its capabilities and how can you incorporate it throughout the various workflows resident in a police agency? The other thing is they need to train their people, right? So leaders got to get smart on it, but then they have to actually translate that down to the street cop, right? The street cop's got a lot of tools thrown at him or her, right? They're always— they got a chief with a good idea, right? That says, I want to buy this for my people. Well, you actually need to spend the time teaching these folks what to do. And the other is, you know, hey, there's, there's really a, a shift going on, like demographically inside of law enforcement, right? And I always say, hey, you need to be listening to your young folks, right? You're a police chief. I get it. You're the decision maker, right? But you need to be listening to your young folks who are engaged, who probably log into ChatGPT every morning and try something out in there. And are kind of, you know, inculcated in that community, you need to have them have a seat at the table because these are the people that are going to take over the industry as you age out of the leadership positions. So, spend a lot of time talking about that kind of stuff. I also try to educate a lot on like ways that AI can improve training, right? Ways that can improve recruiting and retention. And then of course, I'll often talk about the intelligence and the data game because Maybe the principal problem in law enforcement and data is that there's too much data. And so systems that can collate and neck that down are really valuable.

Let's scroll forward a decade. When you think public safety on that timeline, what's the biggest change and what is still the same?

Yeah. It's tough to answer the question in a short period of time, because there's a lot to think about technologically, but also like policy-wise, I think. And so maybe that's actually the— if I can, I'll lean on my public policy hat a little bit. I think that's where we'll see a lot of really impactful change. One is that as the industry becomes more comfortable with and understands AI in law enforcement, how they interface, you'll see one of two things happen. One, a proliferation of surveillance ordinances that are extremely restrictive on what technology law enforcement can use. That could be a knee-jerk reaction to any type of technology adoption by law enforcement that uses the words AI for fear of a surveillance problem. The other side of the coin, and the more hopeful side of the coin that I am on, is that as more technically savvy folks move into the city councils of every city out there and state, we start getting a class of legislators that understand that this technology can help keep communities safer, right? That we can catch the guy, the bad guy that goes from town A to town B to town Z. And normally would get away with it, but because we have linking technologies that can actually look across these things, maybe we can actually put somebody behind bars that needs to be behind bars, right? And so, um, I'm very hopeful. I'm a tech optimist. I, uh, I spend a lot of time thinking about, hey, how AI can be used for good in my industry, um, and I'm hopeful that it will be, uh, but, uh, there are, there are another group of folks that if you fast forward 10 years might see it

Matt, thank you for being on the hopeful side of the coin. Thank you for building something that is in, in every sense to bring out the best and the brightest in public safety and beyond. And thank you for being with us today. We are rooting for Multitude Insights.

Thanks, Pete. Happy to be here.

Everyone, Just taking a quick break so we can tell you about the U.S. Strategic Tech Fund from Alumni Ventures.

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Okay, last up today is my conversation with Drew Wonsalack and our conversation regarding about space. Enjoy. How would you describe that haircut you're rocking today?

I would describe it as I went back to the side part after a quick audience survey of my previous middle part hairstyle.

Yeah, I noticed you look a little different. I've had this hairstyle about 27 years, so

Tried and true.

Tried and true. I try to eliminate as many decisions from my life as possible.

Well, that's a big thing, right? I mean, your, I think, mental capacity, not you specifically, but just people in general can make a certain number of decisions a day.

Yeah. I mean, that was the whole Steve Jobs wearing the same turtleneck every day. It's like one less thing to think about, right? Or, you know,

I, my, my strategy there is when I go out to eat, I've gotten very big on the, what does the chef recommend? Or, what's the special?

Yeah.

Cool, I'm in.

That has the additional benefit of variety in your life and in your food choices.

Yeah.

And, there's a good documentary on Netflix about kind of your gut biome. And, one of the kind of simple hacks is just eat different foods. And, people just like, oh, I know I've worked with people who literally had the same thing for lunch 5 days a week. And yeah, don't be that person. So, why don't we tell our audience who I'm talking to today?

Yeah. I'm Drew Wansalak. I'm a senior associate here at Alumni Ventures. I support our, uh, on our green team. So supporting our Dartmouth Green D Ventures community, our Harvard Yard Ventures community, our women's fund, as well as our US Strategic Technology Fund.

Yeah, big team, big remit. So I want to talk about space today because I know you've looked at that a bit. You've done a deal or two, your team, and It's obviously an area that I think is really interesting. What do you think people don't understand about it from an investing standpoint?

Yeah, I think people are slowly realizing just how big of a market this is and is going to be. And so, the World Economic Forum just released a report just last week that they think this is going to be nearly $2 trillion of value in the next 10 years. And I think—

I think those reports are bullshit, you know?

Yeah.

The kind of top-down ones.

Yeah.

Like from some big, you know, McKinsey report or something. So, you're going to have to do a better job selling me than that. Like, give me why. Why, what applications, you know, yeah, I read billionaires are building rockets that are really cool. And we're gonna, you know, we're all gonna have our grandkids living on Mars. But, you know, if I'm gonna invest a dollar today, why does it make sense to put some of it in space?

Yeah, let me, let me put some of this in perspective. And there was a great article by an investor at Andreesen Horowitz, so, you know, one of the premier venture shops, um, by a guy named Ryan McIntosh. And he does a lot of their kind of strategic tech, like we do with our strategic tech fund, their investments. And he talks about the history of space, I think, in a really compelling way that's, that's understandable. And he compares it to early kind of Old World, New World exploration. Um, and there's a lot of really powerful analogies between, you know, what happened in history with the development of America And what we're seeing in space, because at the end of the day, we're exploring kind of this new domain that has no infrastructure and trying to figure out, you know, how much value is there for us as venture investors. And so I just want—

And how soon is it, right? I think the issue always is not, yeah, is it going to happen? Sure. You know, as venture investors, we have a long time horizon compared to perhaps public stockholders. But, you know, we have 10-year funds. So, you know, we're looking at things that are like right on the edge of really creating value. And, you know, my sense is like, it's the infrastructure story, meaning, you know, the cost of getting a kilogram in space. On a chart is dropping really fast. And so it seems like, you know, some of the, you know, the internet didn't happen, the iPhone didn't take off until, you know, some of these foundational technologies had been put in place so that you could kind of build at a different layer. Isn't the analogy, you know, more You know, this is the internet and, you know, there's 10 or 20 years that is, you know, in this case with space, there's been the last 25 years that there's really now starting to put some infrastructure in space. So, now, we can kind of build upon that with, you know, 2 guys in Palo Alto can create something that changes the world?

Absolutely. Absolutely. I mean, that's, that's really the high level here. And I want to give credit where credit's due. I mean, I think a lot of that trajectory is because of SpaceX and private investment in space. But, but that all started with, I think, the, you know, the strategy and the funding of NASA and the US government and roots back to, you know, the space race and the Cold War. Very similar to those early, like, Christopher Columbus voyages, right? Like, it was the Spanish monarchy that was funding those. Yeah.

Yeah.

And there was kind of an ideological benefit to doing that, right? It wasn't, you know, how much value can we extract from this exploration? It was, we're going to explore because we can, and it shows kind of our prowess. We wanted to get to the moon, not to, you know, get water from, you know, beneath the lunar surface. We wanted to get to the moon to show that we could.

Yeah.

And that's that first phase. And I think a lot of people think about—

And usually government-sponsored, right? Government-sponsored. You can also, because the payback is so far out and it's so abstract and it's, you know, this is really where our government many times over and probably does not get enough credit, you know, with the tech bros like, oh, it was all me, right? But it's like, oh, by the way, the government did some foundational research or these research organizations were doing a bunch of stuff.

Yeah.

With the computer user interface or the mouse or DARPA and things like that, that then entrepreneurs can come on and still incredibly risky and still incredible hard work and engineering and luck and timing. But they don't exist, you know, SpaceX does not exist probably without NASA, right? And, and I, and I think now that really strong innovators are like, you know, dramatically dropping costs, which is really, you know, the big driver here, I think. But let's talk about the next 10 years. Where do you think Where do you think there's activity? Communications, clearly one, you know, military is another. Where else do you think there's innovation and investment opportunity?

Yeah, it is, I think, still building that infrastructure that will allow us to do more. And I'll drill into the more. The more is better connectivity, right? Better research, better science, stuff that we can do specifically in space. I think it's important to get to that point of like, whether it's fiber optics or drug development, things that work better or only work in kind of low to zero gravity. Um, but the infrastructure is not quite there yet.

Yeah. So it's still an infrastructure play.

It's still an infrastructure play. And it's what SpaceX was able to do was important. We touched on this, right? The government's great thinking in 50, 60, 70, 100-year timelines. They weren't so great thinking about how can we make—

Or they're just so unaccountable that they end up can get away with 50, 60-year timelines if you want to be a cynic about it, right? Right. NASA can take its time because they have no competition, right?

Exactly. And I think that's where they stagnated a bit kind of in the late '80s and '90s is, you know, they're not built to go, how can we pull as much, you know, money from this environment. It was how do we explore, how do we expand this market. They did their job, and then I think they tried to do that repeatability— how can we have these like recurring voyages, early infrastructure with the space shuttle— but they're just not fundamentally not built to do something like that. Yeah. And so you touched on it, I mean, that's the power of SpaceX over the last kind of couple decades here— dramatic, dramatic, dramatic decrease in the launch costs. This was, you know, early 2000s. If you wanted to put something into space, you had to, you know, go build the rocket yourself. Um, and that's why it's known as this kind of billionaire's playground. You had to spend billions of dollars to build the launch infrastructure, the rocket, the, you know, whatever you're going to use in orbit or in space. Um, and now it's practically like booking an Uber, you know, a couple million dollars, you can put, you know, half a thousand kilograms up into— Yeah. up into orbit. Um, but that's, that's phase 1, right? And so like kind of going back to this analogy of like New World exploration, what SpaceX has done is allowed us to put a lot of stuff into LEO. So that kind of low Earth orbit, um, it's where all our like GPS satellites are, it's where we're getting wireless connectivity. Starlink is being put in LEO. It's the coastline of, of space, right? Like, yeah, I think that for me, that framing is like, how much left we have to go. We still have to build the railroads and the roads and— Yeah. The settlements across the rest of the US, right? We've got the coastline, we're here, we're starting to build some settlements. So exactly that, it's the infrastructure for the next phase. It's, you know, can we continue to bring launch costs down? That opens up space to new markets, new companies. Can we move stuff in space once it's there? This has become a big perspective of the DOD. They're thinking about situational readiness. You know, there's potential kind of Russian nuclear satellites that could disable connectivity networks. And frankly, our unclassified response to that as a country is zero. Right. How do we respond to something like that? Right. Can we maneuver satellites You know, over a specific theater? Can we deploy goods or materials? Um, but we're still kind of in this low Earth orbit world. And so we start talking about Mars. Can we get precious, you know, minerals and materials from asteroids or the lunar surface? Um, we need kind of repeatable infrastructure to get us there and get us back. Um, and then I think there's, there's also going to be some realm of like space tourism, some more permanent— Like space station. We have some companies in the portfolio that are building towards that. But yeah, largely infrastructure, right? Think like gas stations in space. You know, you need your tractor-trailers. You need just kind of basic levels of logistics and infrastructure to support the next 10, 20 years.

Yeah, no, I agree with this. And what I really like about this for you, Drew, is, you know, you're at the beginning of your career and Again, I think the— here's the thing about it. This is the potential here. This wave of space is infinite, effectively. And, you know, so starting out for somebody in their 20s that wants to kind of be a venture capitalist and have a wave, this is one to get in. Because again, we are There's going to be venture funds created 25, 30, 50 years from now to invest in space. So yes, going back to where you started, this goes back to, you know, venture capital funding, you know, a merchant vessel crossing the ocean, right?

Yeah.

And to manage risk, because 1 out of 10 of them will come back and pay for the 9 that sink. Right. And so, you know, yes, we are going to have, we are going to have founders that, you know, AV is going to back who haven't been born yet in this area. So I think you getting in on this vertical now is, is, is great and it's smart.

And I want to emphasize that it's not— I truly believe, though, we're talking about this at the right time because I think this is a market that has finally become venture-backable.

Yeah.

Um, and not necessarily based on the risk profile, but just the timelines, like you mentioned.

Yeah.

Right? Uh, if you were a seed investor in SpaceX, I mean, there's opportunities to get out of that, but I mean, they're still a private company 20-plus years later. These are long timelines. And what they've done is kind of constricted, I think, you know, what is a venture-backable opportunity in the market. So there's going to be a ton of development over the next 50 years, but there's going to be some kind of really powerful innovations that I think are—

Yeah. And Starlink, obviously hugely successful. You know, there, there is unicorns galore going to happen in this over the next 10, 20 years for sure. Well, it's related, but, you know, there's also been— we talked a little bit about Strategic Tech, right? And this is a new fund you're involved with, Pete, your team is involved with. Talk a little bit about the Strategic Tech Fund. And I know one of the investable areas behind that is space, but introduce the idea of that, the idea behind that fund.

Yeah. And so, Let me touch to the origin first, and then I can kind of describe how we're thinking about structure. Yeah. And so origin is really, there's this underpinning of, I think, DOD support into innovation. We talked about kind of the government connect, how they're really great at spurring innovation. I think what they've figured out, and I'll speak of kind of the government really broadly, you know, DOD, NASA, et cetera, is they're really good at funding innovation now. Right. They have kind of huge checkbooks. And so there's a lot of startups that are taking advantage of capital sources that haven't always been there. And these are founders that are working to strengthen the, you know, not just the American industrial base, but also, you know, directly for security applications. And so we want to take advantage of that. We want to be a part of that growth. Where people are starting to have this mind of there's conflict internationally, there's conflict internally, and are we set up to support that? Are— is our supply chain resilient? Is our infrastructure built to where it needs to be, including, you know, water access and energy? But then also stuff like space, right? Are we taking advantage of these new domains? Do we have, you know, proper domain awareness and security and strength in new markets. And these are things that are top of mind, not just for the government, but corporations alike. And so there's these kind of these massive tailwinds that are coming together here and why, candidly, we thought it'd be a good idea to start the fund.

I also think there's been a public tipping point that has taken place over the past year, um, broadly, where I think, uh, I think society— I think American society has decided that, uh, there are technologies. And this, I think, goes from the highest levels of, you know, government to folks on Main Street. And folks on Wall Street and academia, which is, um, America needs to be a leader and in the game on certain foundational technologies. And whether that be chips, which today are, you know, largely manufactured in Taiwan, which is a little dicey. Yep. To, you know, um, what's going on with kind of asynchronous warfare where you have a $1,000 drone having to be shot down by a $2 million, you know, missile from a— from an aircraft carrier to, you know, the risk of, uh, You know, cyber hacking and cyber attacks. You know, the concern around, you know, international ownership of things like TikTok and media where, you know, you're influencing kind of what people are reading and watching with not always their best interests at heart. that there are space— you mentioned, you know, uh, potential, you know, international, uh, bad actors.

Yep.

That— so, you know, that we as a country need to, um, take something that frankly we're not behind on, right? AI. I mean, that these are areas that it's not just, oh, this is nice, this will be, you know, creating great new companies, that's good for the economy. But as patriots and Americans, that we, we have to be strong in these areas. And, and I think that, again, I think we have reached a tipping point. As a society and as a country. And, and, and I speak broadly about kind of Western democracies that, you know, we, um, this is not just economic, this is strategic for, you know, our way of life and independence. And, um, it is more than just we need the biggest army because it may, you know, The future of power is a much broader range of technologies than that. You can have the biggest battleships, but if the chips— you can't get chips, you know, things break down pretty quickly. So, um,

and, and, and, and candidly, I mean, the government and government agencies have recognized that.

Yes.

Whether it's, you know, the infrastructure bill, whether it's the JOBS Act, Sure. There is this wave of like, how can we rebuild American infrastructure?

Yeah.

And I say that like, you know, broadly, right? It's like, it's roads, it's bridges, it's energy systems, it's water systems, you know, it is cybersecurity. And as venture capitalists in our job, you know, we're constantly thinking about milestones. How are you going to get here? How much is it going to cost you to get there? And so when we can look at the market and see these like multi-billion dollar pools of capital that in many cases are non-dilutive, so they're more of a grant structure because the government, very similar to how, you know, they've spurred early exploration or the, you know, early developments of NASA, there's a lot more capital out there available for these startups in a profile that is really attractive to us as venture investors.

Yeah. And I think the partnership, if this is going to work, if the United States is going to continue to lead like it is leading in many, many of those categories that we knocked down the list, you know, if we're not at the head of the pack, we're in the shortlist, right, of gold medal contenders when it comes to AI and space and energy and those kinds of things. But it's a lot more competitive than it was 25 years ago. But I think that the key to us staying there is there does— there has to be a marriage between government and what I'm going to call Silicon Valley, which means our American entrepreneurial ecosystem, which is entrepreneurs, VCs, limited partners. And, you know, some of those, some of those have been a little siloed before. And I think it is encouraging that we're starting to see, you know, you mentioned kind of the military stuff and space. I think, I think we, we could see more coordination and again, mutual support in other areas that are also super strategic where entrepreneurs want to build great new AI companies. They want to build great new chip companies. Yeah. And we're investors in some of those. But I think there's more to be done with bridging the gap between DC and Silicon Valley. And when I say Silicon Valley, Silicon Valley is everywhere in the United States right right now, but it's metaphorically that that needs to happen. And just this area of, you know, entrepreneurs are fundamentally problem solvers. Yep. Okay, we need to figure out, you know, in a world of drones, how do we play in that space, right? Um, in an area where space is going to become more competitive. And we need not just top-down government do this for us. We need entrepreneurs to say, huh, with this foundational technology, I can solve this problem that has never been solved before. So, I think I'm, again, tech optimist.

Yeah.

I think there's a lot of a lot of promise there. And I think, I think we're ready as a society to kind of lean into that, that there's a lot more support for, you know, the— take another, take another one. I did an interview with carbon capture just a few days ago. Right. Mm-hmm. Which is like, okay, through the Industrial Revolution, We've put way too much damn carbon in our atmosphere. Are we going to go back to, you know, horse and buggy? No way. That's not happening. So how do we solve that problem? Well, let's unleash Silicon Valley and brilliant engineers and entrepreneurs and, you know, invest in some of them and Capitalism works, markets work. Not every company succeeds. Things sometimes take longer. Sometimes, you know, you're 10 years too early on a bet. But in the big picture, that's how problems get solved and that's how society moves forward.

And that's exactly the— I always like to tie some of this back to like the why now, right? Because a lot of these themes, have been true for decades or centuries, right? It's like, yeah, we need a really strong, you know, industrial base infrastructure, and government needs to support that. But I think, you know, the team was down in DC a couple of months ago. We're gonna head out to a national lab next week. Um, we're having these conversations, and I think the why now is the government is, is kind of finally at a large scale realizing the point that you just mentioned.

Yeah.

And it's like capitalism works, Entrepreneurs are problem solvers and it's shifted, right? Like

they're— And we don't have to make it all. And you see this with NASA and working with SpaceX and some of our portfolio companies, you know, taking over the International Space Station. You know, that again, to their credit, you know, everybody loves running down the government all the time. But, you know, to their credit, they're, you know, in, in these sectors, there's— they're recognizing here's our role and here's the role of the private sector and entrepreneurs and risk capital. And, um, if we're going to compete, let's use what we as a society are the best in the world at, and that's the entrepreneurial ecosystem. So as Americans, let's lean into that. Absolutely. Cool. All right. Good chatting with you today, Drew. And any final thoughts?

No, this was, this was great, Mike. Thanks for having me on.

Good. We'll talk again soon. See you, Drew.

Great.

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