AI transcript
0:00:02 The Olympics just ended,
0:00:05 but that doesn’t mean our coverage has.
0:00:08 Because building a strong nationwide athletics program
0:00:11 is a bit like trying to build a strong innovation hub.
0:00:13 In that, you know what ingredients might help,
0:00:16 but it’s not always clear what moves the needle.
0:00:18 And just like in athletics,
0:00:20 where countries double down on their best sports,
0:00:23 like the approximately $50 million grand system
0:00:25 the Team USA allocates more to gymnastics
0:00:27 so we’re handballed,
0:00:29 countries also make strategic decisions
0:00:30 on where they invest,
0:00:33 hoping to create thriving innovation hubs.
0:00:34 So in today’s episode,
0:00:37 we direct our attention to the UK
0:00:40 and try to break down which ingredients matter most.
0:00:42 This episode was originally published
0:00:45 on our sister podcast, Web3 with A16Z.
0:00:47 So if you’re excited about the next generation
0:00:50 of the internet, find Web3 with A16Z
0:00:52 wherever you get your podcasts.
0:00:53 For now, over to Sonal
0:00:56 to properly introduce this episode and guest.
0:00:59 (upbeat music)
0:01:05 – Welcome to Web3 with A6Z.
0:01:07 I’m Sonal Chuxi and today’s episode
0:01:09 is all about innovation around the world
0:01:11 at both a systems and at a people level.
0:01:14 So we discuss not only what does and doesn’t work
0:01:17 in making certain places become hubs of innovation
0:01:19 and economic growth,
0:01:22 but also discuss what makes entrepreneurial talent,
0:01:24 the nature of ambition and helping people find their path
0:01:28 and more broadly navigating risk, reward and dynamism
0:01:30 in different regions, including London and Europe.
0:01:32 My special guest is Matt Clifford,
0:01:33 who’s played an important role
0:01:36 in the London entrepreneurial ecosystem.
0:01:39 I actually had Matt on the OG A6Z podcast back in 2015.
0:01:43 So we also discuss what’s changed since then to now,
0:01:46 as well as new ways of funding breakthrough R&D,
0:01:48 tech trends of interest and more.
0:01:49 For more context,
0:01:51 Matt is the chair of Entrepreneur First,
0:01:54 which he co-founded with Alice Bentink over a decade ago.
0:01:56 He’s also the chair of the UK’s Advanced Research
0:01:58 and Invention Agency, or ARIA.
0:02:00 And before this episode is recorded,
0:02:02 Matt was also the prime minister’s representative
0:02:04 for the AI Safety Summit,
0:02:06 which he helped organize at Bletchley Park,
0:02:08 the historic home of computing in the UK.
0:02:10 And then after this episode was recorded,
0:02:13 Matt was appointed by the UK Secretary of Science
0:02:15 to deliver an AI Opportunities Action Plan
0:02:17 to the UK government.
0:02:18 This was just announced a few days ago.
0:02:20 Anyway, it’s all fitting and exciting
0:02:22 because we recorded this episode live
0:02:25 from Andreessen Horowitz’s first international office
0:02:27 in London, which we opened late last year.
0:02:29 For more on our efforts and other content
0:02:31 from and about there,
0:02:34 go to asixnzcrypto.com/uk.
0:02:35 As a reminder,
0:02:37 none of the following should be taken
0:02:39 as investment, legal, business, or tax advice.
0:02:41 Please see asixnz.com/disclosures
0:02:43 for more important information,
0:02:45 including a link to a list of our investments.
0:02:47 Now onto the episode.
0:02:50 Matt, welcome.
0:02:51 – It’s great to be here.
0:02:52 It was great to be back.
0:02:53 – We were just saying.
0:02:54 – Yes, I was about to say.
0:02:56 You, we did a podcast together.
0:02:59 You were on this podcast on our last run in roadshow,
0:03:02 which was 2015.
0:03:03 And you were one of,
0:03:05 that was the very first time we met in person.
0:03:06 – It was, it was.
0:03:07 I mean, we’ve been going a while now
0:03:08 and we’ll probably talk about
0:03:10 is how the London ecosystem has grown.
0:03:12 But our initial thesis,
0:03:15 which we’re, you know, remain very dedicated to
0:03:16 is that the world’s missing out
0:03:18 on some of its best founders.
0:03:19 You know, in Silicon Valley,
0:03:20 if you’re ambitious and smart,
0:03:21 it’s the most obvious thing in the world
0:03:22 to start a company.
0:03:23 – Right.
0:03:25 – In Europe, that’s still not true.
0:03:27 If you go around Oxford or Cambridge
0:03:28 or Imperial College,
0:03:29 any of these great universities
0:03:30 and you say like, you know,
0:03:32 what are the smartest, most ambitious people want to do?
0:03:35 Yeah, more and more, it’s on the agenda,
0:03:37 but it’s still probably banking, consulting.
0:03:38 – Yeah.
0:03:39 – You know, big companies.
0:03:41 – I don’t know how you describe EF
0:03:42 or entrepreneur first as an orc.
0:03:45 – We call ourselves the thing we’ve layered on
0:03:46 after a long thought of iteration is
0:03:48 we’re a talent investor.
0:03:50 We invest in people before they have companies
0:03:53 and help them go through that like zero to one journey.
0:03:56 We’re taking people who purely on the basis of who they are,
0:03:58 we think we want to make a better.
0:03:58 – I like that you’re saying
0:03:59 that you’re a talent investor.
0:04:01 I mean, VCs and other,
0:04:03 and actually creatives, anyone would say
0:04:05 that’s their job is investing in talent
0:04:07 and that’s an art, not a science.
0:04:08 – Yeah, yeah.
0:04:09 Well, I know that Mark and Ben have taken a lot
0:04:12 of inspiration in building your firm from talent agencies.
0:04:15 – Yes, the CAA that was inspired by Michael Ovid.
0:04:16 – Exactly.
0:04:17 – He was an advisor early on.
0:04:19 – And you know, we have a sort of similar view
0:04:22 that almost like the world’s most talented and ambitious people
0:04:23 need agents.
0:04:25 I mean, that’s not quite how we frame it.
0:04:26 – It’s really fascinating
0:04:29 because you said you’re not an agency, neither are we,
0:04:32 because actually the model obviously was talent focused,
0:04:34 but it was more about a network and network of networks,
0:04:36 which is how we used to think a little bit.
0:04:37 I mean, I don’t know if that was ever formally
0:04:38 how it was described,
0:04:40 but at least from my perspective,
0:04:43 I used to think of A6 and C when I joined in the early days,
0:04:46 which is now a decade ago as a network of networks.
0:04:48 And that was where the Ovid’s model came in,
0:04:50 which is how do you sort of, you know,
0:04:53 kind of give back, like continue cultivating talent.
0:04:54 So in that way growing people,
0:04:55 even before they want the thing
0:04:58 or even helping them so it’s not transactional.
0:04:58 – Exactly.
0:05:01 And a lot of what we talk about is our team’s job
0:05:04 is to go out and find extraordinary people
0:05:06 who are still figuring out what to do with their lives.
0:05:08 My co-founder, Alice and I, you know,
0:05:10 we started our career as management consultants.
0:05:12 We were McKinsey and in many ways,
0:05:13 it was a really great experience.
0:05:16 But like if you say like, why did you end up there?
0:05:17 It wasn’t because at six years old,
0:05:18 I was running around the kitchen and being like,
0:05:20 “Mommy, I want to be a management consultant.”
0:05:21 You know, it’s just like, it was the path.
0:05:24 It was what people did in whatever it was, 2008,
0:05:25 when I graduated.
0:05:27 And so, you know, our view was,
0:05:29 if you really want to move the needle
0:05:33 on like increasing the supply of great founders,
0:05:36 you can’t wait for them to figure out that like,
0:05:37 that’s the obvious path.
0:05:39 You have to create a path.
0:05:40 And that’s what entrepreneurs have been about
0:05:41 from the beginning.
0:05:43 One of the things that we think about a lot
0:05:45 is like the nature of ambition
0:05:47 and how it’s very culturally determined.
0:05:49 Ooh, let’s talk about that.
0:05:50 What I mean by that is like, you know,
0:05:54 it’s not like all ambitious people have the same like vision
0:05:56 of how to realize their ambition.
0:05:57 That’s absolutely true.
0:05:59 And so, it would be the craziest thing in the world
0:06:01 to try and force people to be entrepreneurs.
0:06:03 You know, we have quite a big team now around the world
0:06:04 and they go out and they find people
0:06:05 who are clearly extraordinarily talented.
0:06:06 But at the very start of their journey,
0:06:08 we typically focus on people early in their career,
0:06:10 sometimes like, you know,
0:06:12 while they’re at university or equivalent.
0:06:15 And, you know, their job, yes, obviously,
0:06:17 is to help them think about startups.
0:06:18 And, you know, if they want to be able to stop
0:06:20 bringing them into our community and help them do that.
0:06:23 But their job is not to push where it’s not right.
0:06:26 It’s to genuinely be almost like a career counselor,
0:06:29 like an actual, like someone whose interest
0:06:31 is shared with the person.
0:06:34 And so, you know, one of the things that we believe,
0:06:36 like, you know, if you like our theory of change
0:06:38 is that if you can like actually intervene
0:06:41 at a point where people are trying to figure out like,
0:06:42 how do I have this talent?
0:06:45 How do I maximize my impact in the world?
0:06:46 And you can show them this path of entrepreneurship
0:06:48 and show what’s possible.
0:06:50 Then actually that will increase the supply of great founders
0:06:51 and then great companies in the world.
0:06:53 – So I do want to pick up a little bit on two threads.
0:06:56 One about this, what you said about the nature of ambition,
0:06:57 something you think about a lot,
0:06:58 but also what you said about
0:07:00 this culturally determined aspect of it.
0:07:04 And that to me suggests some of the structural context,
0:07:06 the surrounding context that supports entrepreneurship
0:07:07 beyond the individual.
0:07:09 So let’s split it up into the people
0:07:12 and then the surrounding kind of context and ecosystem.
0:07:15 So on the surrounding context and ecosystem,
0:07:16 one kind of obvious thing,
0:07:17 this is something we talked about a lot
0:07:19 in the “Early Day in the A6SZ” podcast,
0:07:22 I recorded a lot of episodes with like Iranian entrepreneurs
0:07:24 and various people around the world.
0:07:28 And it was really fascinating how the risk tolerance
0:07:30 is very different culturally in different regions.
0:07:33 And one thing that I think is, it’s so cliche,
0:07:35 but it is true for a reason,
0:07:36 is unique about Silicon Valley,
0:07:39 is there is a tremendous tolerance.
0:07:40 I don’t wanna say the word failure
0:07:42 because I hate veering into failure porn.
0:07:45 I think that’s the wrong way to, it’s like actually-
0:07:46 – Failure sucks always.
0:07:47 – Oh my God.
0:07:49 Well, I hate when people like failure Friday and failure this.
0:07:52 Like, yes, of course, normalize talking about it,
0:07:54 recovering, repairing,
0:07:56 but don’t like glorify failure for God’s sake.
0:07:58 Everyone wants to succeed.
0:08:00 But what’s really interesting about it
0:08:03 is that there is like this forgiveness
0:08:05 and recovery and resilience
0:08:09 that whereas in certain cultural regions and areas,
0:08:11 there’s almost like a punishment
0:08:14 or a feeling of self-hatred if you don’t succeed.
0:08:16 This is even beyond individual level.
0:08:17 I’m talking about like culturally.
0:08:18 – Yeah, totally.
0:08:19 So I think there’s two things.
0:08:21 One is attitudes to failure.
0:08:23 But I think it’s also like, what is valued?
0:08:25 Like, what is esteemed?
0:08:27 And you know, I think the really special thing
0:08:32 about Silicon Valley is this idea that if you’re in Silicon
0:08:34 Valley and you tell someone you’re a founder,
0:08:36 that immediately has a set of connotations
0:08:39 that are almost exclusively positive.
0:08:40 It’s very legible.
0:08:41 People know what you mean.
0:08:44 People can read that as a sign that you are ambitious.
0:08:45 – That’s right.
0:08:46 – When we saw an entrepreneur of us,
0:08:48 there was this slight sense
0:08:49 that if you said you were a founder,
0:08:51 those are euphemism for you were unemployed.
0:08:55 And so actually, I think the cultural meaning
0:08:57 of entrepreneurship is one of the biggest sources
0:08:59 of leverage you have, just like making it like,
0:09:04 this is a thing that smart, capable, ambitious people do.
0:09:06 And it’s a vehicle for changing the world.
0:09:09 It’s such a powerful idea.
0:09:11 And you know, to give you a really concrete example,
0:09:14 ’cause I think like, you know, from the UK and the US,
0:09:15 like, you know, similar enough systems
0:09:17 that it really resonates.
0:09:19 But, you know, the first international office
0:09:20 we opened was in Singapore.
0:09:24 And in Singapore, the number one career path
0:09:27 for the most ambitious people is to go be a civil servant.
0:09:28 As a result, the government of Singapore
0:09:30 is probably one of the most effective and efficient.
0:09:31 – That’s so interesting.
0:09:33 I didn’t know that because it’s actually the opposite
0:09:34 of so many other places.
0:09:35 – I’ve just been serving in government.
0:09:36 – Right.
0:09:37 – And actually the people have been amazing.
0:09:38 – Right.
0:09:41 – But I would say like, as a result,
0:09:43 the cultural value of entrepreneurship in Singapore,
0:09:47 it’s just been very, I think it’s been harder that
0:09:50 to sort of like create this sense that like,
0:09:52 if you say you’re a founder,
0:09:54 you’re doing something that’s as like legitimate,
0:09:57 as prestigious as your friends that have gone off to be.
0:09:59 – Yes, you know, we should talk for a second
0:10:01 about why entrepreneurship for a minute,
0:10:03 because it seems like an obvious thing.
0:10:04 Like, what are we talking about?
0:10:05 This is a show, the startup focus.
0:10:07 We’re both startup focused cultures,
0:10:08 but actually it’s not obvious.
0:10:09 – It’s not obvious.
0:10:10 – I mean, if I were telling a policymaker,
0:10:12 I think they know this, but like the reality is,
0:10:14 like startups represent innovation.
0:10:16 They’re an engine of growth.
0:10:17 They create jobs.
0:10:20 They create their generative.
0:10:21 They’re not extractive.
0:10:23 They’re not just taking the stable what you already have
0:10:24 that’s established.
0:10:26 They set you up for the future.
0:10:27 I mean, there’s so many,
0:10:28 there’s layers and layers of why this matters.
0:10:30 So just to kind of hit on that.
0:10:33 But to your point, so I have to ask you this then.
0:10:35 I don’t want to be stereotypical,
0:10:36 but of course there’s going to be some generalizations
0:10:37 just to kind of understand this.
0:10:40 But my impression of London,
0:10:41 I’m born and raised in the United States,
0:10:43 but my grandparents settled in London.
0:10:46 This is in the 70s before I was born.
0:10:49 And the impression I got from culturally
0:10:50 is that there’s kind of like,
0:10:51 not always a classes,
0:10:54 but very much a credentialist society.
0:10:57 Like you care very much about what school you went to.
0:10:58 And I think that could be true in some ways
0:10:59 in Silicon Valley,
0:11:01 but people kind of don’t really care
0:11:03 what school you went to or what you did.
0:11:05 Would you say that is true today?
0:11:07 Do you think that’s evolving?
0:11:08 And I’m bringing this up
0:11:10 because you mentioned this point about what value
0:11:13 that certain words and these concepts signal.
0:11:15 So I’m curious for your perspective there.
0:11:19 – You know, I wanted the essays that I wrote
0:11:20 when we’re early on in EF
0:11:22 that was trying to talk to this.
0:11:24 I called Don’t Be a Badge Collector.
0:11:25 I think I probably wrote that
0:11:26 about the time I was first on the podcast.
0:11:28 But I think it’s held up pretty well.
0:11:29 And you know, what I was saying is like,
0:11:32 I think there is a cultural temptation,
0:11:33 let’s call it in the UK,
0:11:36 to be like, I’m going to work really hard
0:11:37 to get into the best university I can.
0:11:39 So I can get the best graduate job I can.
0:11:40 So I can,
0:11:42 one of the biggest risks for smart people, I think,
0:11:45 is that you get into a mode where success
0:11:47 is measured by whether you make your boss look good.
0:11:49 And their success is measured
0:11:50 by whether they make their boss look good
0:11:52 and seeing like all the way up,
0:11:53 what you’re actually doing.
0:11:54 To your point about, you know,
0:11:56 you mentioned like some sort of positive some game,
0:12:00 there’s a risk in a lot of career tracks.
0:12:01 I’m not saying you’re not creating value,
0:12:05 but like your actual goal is to win
0:12:06 the like upward political battle
0:12:09 within whatever bureaucratic structure you’re in, right?
0:12:11 And that’s not, I don’t want to say political,
0:12:13 I mean, small, I mean, this can be in big corporates,
0:12:15 it can be in, you know, whatever.
0:12:17 I think what’s beautiful about startups
0:12:18 and the reason I, you know,
0:12:21 I’ve spent more or less my entire career
0:12:24 helping people build them is that they’re ultimately
0:12:27 all about what you can do for other people.
0:12:29 – That’s fantastic where you’re framing it.
0:12:32 – You only succeed if you build something
0:12:36 that is so valuable that someone else will pay for it.
0:12:37 You cannot win in any other way.
0:12:40 There is no boss to look good, to make it look good.
0:12:42 There is no like grading scheme
0:12:44 that some teacher is going to tell you got an AR.
0:12:47 It’s like comes down to this very starting,
0:12:49 did you do something for someone else
0:12:51 that they thought was so great, they wrote you a chat.
0:12:52 – That’s right.
0:12:53 And it is not people pleasing
0:12:57 because often you’re going against established convention.
0:12:58 You’re often budding your head
0:12:59 or punching through an industry
0:13:02 that is not accepting a new way of doing things.
0:13:04 I’m just thinking of my former partner,
0:13:07 Martin Casado and the enterprise team
0:13:09 when he was doing software defined networking,
0:13:11 he was punching against very established
0:13:14 old school methods for what networking looked like.
0:13:15 That was very hard word based.
0:13:17 And so it’s like, you have to literally punch,
0:13:20 like you’re completely going against all conventions.
0:13:22 – The bar is so high to actually prove
0:13:23 that that value is there.
0:13:25 And I do think, I sometimes think,
0:13:28 one of the challenges we face today
0:13:30 is that if you are smart and ambitious,
0:13:34 it’s now so easy in some senses
0:13:37 to find a comfortable path
0:13:40 that is about making your boss look good
0:13:41 all the way through a career
0:13:45 and acquiring like money and influence and prestige,
0:13:50 but actually maybe never really doing something
0:13:52 that creates enormous amount of value.
0:13:53 I mean, it seems, now that you say it,
0:13:57 it seems so obvious, but it’s really not.
0:13:59 Like just a pause on the idea.
0:14:00 When you’re doing a startup,
0:14:03 you’re building something that other people want and need.
0:14:06 That’s a really profound idea.
0:14:08 On that note, it’s also very fascinating
0:14:10 because of the economics of startups
0:14:12 because usually if you’re working for a company,
0:14:15 you were talking about you and Alice being at McKinsey,
0:14:18 consulting, people think they’re making good money,
0:14:20 but you’re really captive to your salary.
0:14:22 You’re not actually, the wealth is not generative.
0:14:25 And one thing that I find really powerful about startups
0:14:28 is that startups are the ones that innovated
0:14:31 on the idea that employees can have a share
0:14:32 of the returns on the work they do.
0:14:34 So even though you might be building a product
0:14:36 for customers and consumers that people want,
0:14:40 if you succeed, it can also go to nothing obviously.
0:14:42 That’s the very real risk.
0:14:45 But if you succeed, there can be very real gains
0:14:46 for the people who put things in,
0:14:48 especially for those that took a risk early on.
0:14:51 I don’t know how the options and economics work
0:14:54 in UK startups, but that is I think a defining feature
0:14:56 of Silicon Valley in the early days.
0:14:57 And so I just wanted to point that out
0:14:59 because it’s actually resonant to what you said
0:15:02 about not only pleasing people and being captive,
0:15:04 but you’re also helping other people
0:15:07 and then actually creating value that for the employees too,
0:15:09 they’re always increasing the size of the pie
0:15:10 for everyone in some form.
0:15:13 So I mean, not to be cliche, but that’s very true.
0:15:14 – You know, in a way, I think there’s like,
0:15:17 there’s a really important sort of ethical point here,
0:15:21 which is that founders, yeah, they can make a lot of money,
0:15:23 but they only get to capture value that they create.
0:15:24 – That’s right.
0:15:26 – And I think that that is actually
0:15:28 a really important idea.
0:15:31 And I find, again, we focus mainly on people early
0:15:34 in their career when we’re working with founders.
0:15:37 And I just think that idea really resonates with people
0:15:40 that they, yeah, of course they would like to be successful,
0:15:41 but they want to do it within a framework
0:15:43 where they feel they like create something.
0:15:44 – Of course.
0:15:46 I mean, it’s like, otherwise it’s just gambling.
0:15:47 – Or extraction.
0:15:48 – Extraction, exactly.
0:15:51 It’s like value adverse is value extraction, exactly.
0:15:53 You know, it’s funny because it’s also,
0:15:55 you know, I want to get like, at all political,
0:15:57 but just like in terms of capitalism, stakeholders,
0:16:00 people having a voice and empowerment.
0:16:04 I saw this list, it periodically makes us round on Twitter
0:16:08 of like people, like the most wealthy families in Europe,
0:16:09 and that list of the top five
0:16:12 has not changed over centuries.
0:16:13 Which is crazy because that just means
0:16:16 this generational wealth passing along,
0:16:18 whereas in the United States, that list is,
0:16:20 I mean, granted, it’s a younger country,
0:16:22 but at the same time, like,
0:16:25 it’s like the list is changing constantly.
0:16:28 Like the top 10 wealthy people, the top five wealthy people,
0:16:29 and again, it’s not about the money,
0:16:30 I don’t want to make that the focus,
0:16:33 but just pointing out that when you think of this dynamism,
0:16:36 this thing that a culture can change, be advanced,
0:16:39 add new value, startups can be generative.
0:16:40 It’s just really interesting to me
0:16:42 because a lot of the people are startup made,
0:16:45 like most of those people are not access to old money.
0:16:48 – Right, and I think, again, not wanting to be political,
0:16:51 but actually the thing that I think is non-partisan
0:16:54 and everyone can agree on is that,
0:16:57 actually, the thing we need is positive sum games.
0:16:58 – Oh, 100%.
0:17:01 – The thing, like different people have different views
0:17:03 on how we tax wealth,
0:17:06 and the bit that everyone can agree on is,
0:17:09 if people, what we want to reward in society
0:17:10 is people that are creating valuable things.
0:17:12 We don’t want to reward extraction,
0:17:14 and one of the beautiful things about Stopsis,
0:17:16 they can’t extract, they got to create,
0:17:18 and I think it’s just something very valuable about that,
0:17:20 and very powerful that actually I see people
0:17:24 across the political spectrum sort of get in behind.
0:17:25 – Yes, I agree.
0:17:28 – Hey, it’s Steph.
0:17:31 You might know that before my time at A16Z,
0:17:33 I used to work at a company called The Hustle,
0:17:35 and then we were acquired by HubSpot,
0:17:38 where I helped build their podcast network.
0:17:39 While I’m not there anymore,
0:17:42 I’m still a big fan of HubSpot podcasts,
0:17:44 especially My First Million.
0:17:47 In fact, I’ve listened to pretty much all 600
0:17:48 of their episodes.
0:17:50 My First Million is perfect for those of you
0:17:52 who are always trying to stay ahead of the curve,
0:17:55 or in some cases, take matters into your own hands
0:17:57 by building the future yourself.
0:18:00 Hosted by my friends, Sam Parr and Sean Purry,
0:18:02 who have each built and sold eight-figure businesses
0:18:04 to Amazon and HubSpot,
0:18:05 the show explores business ideas
0:18:07 that you can start tomorrow.
0:18:11 Plus, Sam and Sean jam alongside guests like Mr. Beast,
0:18:14 Bob Durdeck, Tim Ferriss, and, every so often,
0:18:15 you’ll even find me there.
0:18:17 From gas station pizza and egg carton businesses
0:18:20 doing millions, all the way up to several guests
0:18:22 making their first billion.
0:18:24 Go check out My First Million
0:18:25 wherever you get your podcasts.
0:18:33 – On this note, though,
0:18:36 we’re talking about the structural context right now
0:18:37 before we move to the individual.
0:18:41 So let’s add a little rigor to what does an ecosystem mean,
0:18:42 ’cause I know that can be very buzzword.
0:18:44 I’ve studied entrepreneurial ecosystems
0:18:45 for a very long time.
0:18:46 Cover them for a very long time, as you know.
0:18:49 And including interviewing all these different people
0:18:51 throughout the world who are experts in this,
0:18:52 like what an ecosystem means.
0:18:54 And a couple of themes emerge.
0:18:56 One, you obviously need talent.
0:18:58 You need really strong universities
0:19:00 and research ecosystem.
0:19:02 You also need, for the people that hate to admit this,
0:19:03 government support.
0:19:06 So the other thing is there’s a really important balance
0:19:09 between top-down and bottom-up.
0:19:10 And on the bottom-up side,
0:19:11 you obviously need communities of entrepreneurs
0:19:14 because there’ve been, as you know, many experiments,
0:19:16 including planned cities, planned innovations,
0:19:18 like where people are trying to do these centrally planned
0:19:20 top-down innovation initiatives,
0:19:22 they never work, ever.
0:19:24 There’ve been many, many, many over the years
0:19:25 and not one has worked.
0:19:26 Some argue Singapore,
0:19:28 that’s a different unique complex case.
0:19:30 And I don’t know if it’s as, quote, entrepreneurial.
0:19:32 It’s a successful nation-state,
0:19:33 but that’s a tougher thing.
0:19:35 So that’s one aspect.
0:19:36 Secondly, on the top-down side,
0:19:38 you obviously need enabling conditions,
0:19:39 like respect for property.
0:19:42 Like in the US, we talk about respect for property rights.
0:19:45 It can include respect for intellectual property.
0:19:47 It can include support, such as funding,
0:19:49 like DARPA in the United States,
0:19:51 which funded the internet, things like that,
0:19:54 supportive pro-innovation policies.
0:19:55 That’s what the bottom-up side is a community,
0:19:57 the top-down, and then obviously the talent
0:19:59 that comes in the form of universities
0:20:03 because universities are drivers of research and innovation.
0:20:06 So now on your point about the science and technology side,
0:20:09 talk to me about what you think is happening
0:20:11 uniquely in London, ’cause we’re sitting here.
0:20:13 – Yeah, yeah, I mean, so you mentioned DARPA,
0:20:15 you know, my sort of side hustle,
0:20:18 a side entrepreneur first is I’m the non-executive chair
0:20:22 of ARIA, which is a new government-backed,
0:20:25 well, government-funded R&D funding agencies
0:20:26 based on DARPA, basically.
0:20:27 – So what is ARIA stands for?
0:20:30 – ARIA stands for the Advanced Research and Invention Agency.
0:20:31 – I know what you’re talking about, okay, yeah.
0:20:33 – Yeah, so it’s been given, I guess,
0:20:35 in US terms about a billion dollars
0:20:37 to basically fund breakthrough R&D
0:20:39 that might otherwise not get funded.
0:20:43 So really trying to take some of what worked at DARPA,
0:20:47 in particular this idea of this program manager led model,
0:20:50 empowering brilliant scientists with visions
0:20:52 to just go out and build the networks
0:20:56 and coalitions of researchers to realize that vision
0:20:59 in a way that’s like all about,
0:21:00 actually a lot of things we’ve already been talking about,
0:21:03 it’s about ambition, it’s about incentives,
0:21:05 it’s about alignment, all these things.
0:21:08 And one of the things that’s been really striking to me
0:21:11 in the sort of roughly year that we’ve been up and running
0:21:14 is, one, just the depth of the scientific talent
0:21:16 across the whole UK, so not just London
0:21:17 or not just Austin and Cambridge,
0:21:20 but truly across the whole country.
0:21:23 Two, it’s almost like two stronger word,
0:21:26 but like the yearning for something like this.
0:21:29 – Wow. – Well, when you look up,
0:21:32 why does ARIA need to exist?
0:21:33 We do a ton of great science in the UK
0:21:36 and actually, I’m lucky to have been involved
0:21:40 in a lot of the science funding organizations that exist,
0:21:43 but I think one of the challenges is that with scale,
0:21:48 comes sort of more bureaucratic approach, right?
0:21:50 So if you’re trying to run science funding
0:21:53 for a whole country, of course you need to show value
0:21:55 for money for taxpayers and you need to sort of have
0:21:58 a lot of process, but the consequence of that
0:22:00 isn’t our UK thing, this is a global thing
0:22:02 and people like Patrick Collison and others
0:22:04 have written about the challenges
0:22:05 of where science has got to.
0:22:08 I think of it as a career ambition and incentive problem.
0:22:12 So if you go talk to like incredible postdocs
0:22:15 across the UK, across the US, and you say,
0:22:17 like, what’s your most ambitious idea?
0:22:18 And they tell you, and then you say,
0:22:20 cool, and so you’re working on that?
0:22:22 They’re like, no, you’re like, why not?
0:22:23 Like, you know, if they’re, and you’re like,
0:22:28 well, because I need to get this next publication,
0:22:29 which needs to get this many citations,
0:22:31 ’cause then I’ll be able to get my next grant.
0:22:33 And if I do that, then one day I’ll be able,
0:22:35 in 10 years, to get my own lab.
0:22:37 And then you’re like, wow, this is crazy.
0:22:40 We have some of the greatest minds of their generation
0:22:42 playing a bit like the making your boss look good game.
0:22:44 This is the making the grant makers happy game.
0:22:46 That’s exactly the same thing.
0:22:48 I’m so glad you brought that up because this is important.
0:22:49 So I want to break down a little bit more
0:22:51 about what you’re saying because, you know,
0:22:52 a lot of people have tried different forms
0:22:55 of like how to fund R&D and do it in a way,
0:22:57 an industrial R&D is what you’re talking about.
0:22:58 And in a way that’s efficient.
0:23:00 And a lot of the lessons learned here,
0:23:00 which I think are fascinating.
0:23:03 So one, you mentioned the concept of a program manager.
0:23:04 For those that don’t know,
0:23:06 like DARPA had these famous model
0:23:08 where they had program managers.
0:23:09 And it’s quite fascinating
0:23:11 ’cause like one example is Regina George, you know,
0:23:12 and she went to Google later on.
0:23:15 But I remember being at Xerox Park when her group funded,
0:23:18 and this is public advanced manufacturing initiative
0:23:19 and like reconfiguring manufacturing
0:23:20 and all these different things.
0:23:23 And there’s so many different interesting things about it
0:23:25 because one, there’s, first of all,
0:23:27 many of these initiatives can be very multidisciplinary,
0:23:29 which universities are not well set up to do
0:23:32 where people are very siloed in their departments.
0:23:34 And so having these grants can sometimes be like,
0:23:37 kind of these umbrellas for different disciplines
0:23:38 to come together,
0:23:39 including across multiple universities.
0:23:41 – Yeah, I was gonna say multiple universities
0:23:42 and sometimes even different sectors.
0:23:44 So like universities and start-ups.
0:23:45 – That’s right, that’s right.
0:23:46 – And non-profits.
0:23:47 – That’s right, totally.
0:23:48 Like one example was back in the day,
0:23:50 we did like content-centric networking.
0:23:52 Like it was like, you know, various types of things.
0:23:54 So that’s one interesting thing.
0:23:56 The second thing, this is a very little known fact
0:23:58 that people don’t know about this model is,
0:24:00 and I remember being fascinated by this
0:24:01 when I was working with my colleagues,
0:24:04 like helping them out with some stuff at SRI,
0:24:05 who were thinking about this,
0:24:06 which is Stanford Research International.
0:24:10 And they’re very famous for getting lots of research grants
0:24:11 and different things.
0:24:13 It’s fascinating ’cause most people,
0:24:15 when they think of government funding and program managers,
0:24:17 they think of it as being as a one-way model
0:24:19 where government gives money,
0:24:20 program manager allocates it.
0:24:23 Someone has a strong point of view and it goes A, B, C, D.
0:24:27 It’s actually much more non-linear and interactive than that,
0:24:30 where you actually have smart scientists
0:24:32 informing the program managers
0:24:34 for what proposals they wanna see.
0:24:38 Because actually the word in the grant-making business is,
0:24:41 if you’re bidding on an RFP request for proposal,
0:24:43 by the time it comes out, you’re too late.
0:24:45 You should be shaping what proposals
0:24:46 are coming out in the first place.
0:24:48 And that is a two-way dialogue
0:24:49 between government and universities.
0:24:52 – And that’s a big part of how ARIA is working
0:24:55 and planning to work is that…
0:24:58 But hopefully in an extremely transparent way,
0:25:00 which is say, here is an area that we’re excited about
0:25:02 where we think there is a thesis.
0:25:05 Before we make grants, before we do an RFP,
0:25:07 we wanna workshop this with people
0:25:10 that have a really broad range of views on it.
0:25:11 – That’s right.
0:25:13 – So that we know what are the things
0:25:14 we should be looking out for.
0:25:16 I mean, again, there’s a risk of a cliche,
0:25:19 but so much of the challenge of this stuff
0:25:20 is you don’t know what you don’t know.
0:25:25 And particularly across into disciplinary boundaries.
0:25:27 There’s a lot of academic literature
0:25:29 that suggests that surprise is the key
0:25:31 to scientific breakthrough.
0:25:34 Surprise comes when you have a different
0:25:35 knowledge base or perspective.
0:25:36 – Oh, yeah, yeah.
0:25:38 At Xerox Park, JSB, who is John Sealy Brown,
0:25:40 you used to manage it back in the day.
0:25:42 Used to always say it’s at the interstitials,
0:25:45 like at the edges and like it’s kind of in between industries.
0:25:47 I mean, I do think that surprise or serendipity
0:25:50 is very important, but I wanna be careful
0:25:52 that we don’t glorify like innovation
0:25:54 as like this “Aha, Eureka” moment
0:25:56 when it’s many little things
0:25:58 that can come together incrementally.
0:26:00 And I actually think, but tell me if I’m wrong,
0:26:01 when you say surprise,
0:26:03 you also mean this emergent quality
0:26:05 that you don’t know what you said,
0:26:06 what you don’t know, what you don’t know.
0:26:07 And it can actually come up, bottom up
0:26:09 because you’re not top down saying,
0:26:12 like you can say, we know this is an interesting area.
0:26:15 You may even have a loose hypothesis, thesis,
0:26:17 but you don’t have it so opinionated and targeted
0:26:20 that you’re literally veering into central planning,
0:26:22 which is where I would say places like China fail.
0:26:23 – Toe, when I’m too much surprise,
0:26:26 I’m talking about almost exclusively a bottom up phenomenon.
0:26:29 Like what happens when the biologist talks
0:26:32 to the computer scientist about a problem
0:26:34 that has a rough with the same contours
0:26:36 and they never realized before the biologist,
0:26:37 and then you’re like, oh,
0:26:40 and that can be an incredibly productive thing.
0:26:42 – You’re appreciating the choir
0:26:44 because whenever I used to give tours, that wasn’t my job,
0:26:47 but because I was the head of editorial at PARC,
0:26:49 I did give like these muckety mucks,
0:26:50 like the tours every now and then.
0:26:52 And it was funny ’cause one of the messages,
0:26:54 it’s so true ’cause they had always asked like,
0:26:57 how did this one place, not just once,
0:27:00 not a one hit wonder repeatedly create one innovation.
0:27:03 And these were talking world-changing innovations.
0:27:03 – Absolutely.
0:27:04 Absolutely.
0:27:05 – You know, like I can’t even say the gooey,
0:27:08 like there was endless lists of things that they did, lasers,
0:27:10 like, and the big part of it had to do
0:27:12 with this multidisciplinary thing
0:27:13 and putting them in the same thing.
0:27:15 But here’s the other thing that people don’t know.
0:27:17 And this ties what we’re talking about.
0:27:19 It wasn’t just you put a bunch of smart people
0:27:20 from different disciplines and one building
0:27:22 and go, hey, collaborate.
0:27:26 The founder of Xerox PARC gave them a mission.
0:27:29 And the mission was to build the office of the future.
0:27:32 So very simple mission,
0:27:35 broad enough to enable all kinds of innovation,
0:27:37 yet specific enough to provide a funnel.
0:27:40 So it’s not like crazy town where people are like,
0:27:42 oh, I want to build a sneaker that like rolls down the hallways
0:27:46 and I can skate through the, you know, blah, blah, blah, you know.
0:27:47 – Yeah, totally, 100%.
0:27:49 I think that idea of mission,
0:27:51 I mean, that’s the other bit that, you know,
0:27:53 Ilan, our CEO, Arya has,
0:27:57 I think one of the reasons I’m so happy he’s doing that job
0:27:59 is that just the sense of mission he has
0:28:02 about what we’re trying to do is just so palpable.
0:28:03 – That’s powerful.
0:28:04 How did Arya come about?
0:28:06 Like, did the government approach you guys?
0:28:07 Did you guys approach the government?
0:28:08 How did this come about?
0:28:11 – Yeah, the government created this by acts of parliament
0:28:14 early in 2022 and then ran an open process
0:28:16 to hire a CEO and a chair.
0:28:19 And, you know, I had been probably because of my,
0:28:22 because, well, mainly because of the work I’ve done at EF,
0:28:24 I’d been very interested in this idea of like,
0:28:27 how do you do institutional innovation?
0:28:29 ‘Cause it’s not the same as VC.
0:28:30 It’s not the same, it’s not the same.
0:28:32 So, you know, I’ve always been interested in this like,
0:28:33 how do you do institutional innovation
0:28:37 to increase the supply of things that you want?
0:28:39 And in a way, you know, EF is like trying to increase
0:28:41 the supply of great founders.
0:28:43 Arya is trying to increase the supply of, you know,
0:28:46 scientific breakthroughs through this sort of
0:28:47 institutional innovation.
0:28:50 And so, you know, I was, I just applied.
0:28:54 And slightly to my surprise, I got the job.
0:28:55 – I’m not surprised.
0:28:59 – I mean, Alan was in, based over near a home for you,
0:29:02 who’s in Berkeley and he was running this incredible thing
0:29:04 called the Activate Fellowship,
0:29:06 which is like a deep, sort of for deep tech entrepreneurs
0:29:08 out of academia.
0:29:11 – What I think is very fascinating about you being involved
0:29:12 is the other part of having these,
0:29:14 when you said their goal was to increase
0:29:16 the number of scientific breakthroughs.
0:29:17 The other part, half of it is,
0:29:19 how do you then actually take those breakthroughs
0:29:21 and make something of them?
0:29:23 Because as you know, there’s no shortage
0:29:24 of brilliant ideas and things coming out,
0:29:27 but there has to be like a system that can absorb
0:29:30 and help support and nurture it.
0:29:32 And so, I think it’s fascinating that you’re involved
0:29:33 because then it’s also like, wait,
0:29:35 you don’t only have to start,
0:29:37 go through like this classic linear model
0:29:40 of university funding X.
0:29:41 You may also be able to do a startup.
0:29:44 You may collaborate with a big company.
0:29:45 You could go here.
0:29:47 You could, a big company can acquire the patent.
0:29:48 There’s such a variety.
0:29:49 – Yeah, it’s interesting that you landed on that
0:29:51 ’cause I would say like,
0:29:55 probably the most important structural strategic question
0:29:58 we’ve had to answer for Ariya so far is, who’s the customer?
0:30:01 So, if you think about DARPA, the D is defense.
0:30:03 It’s pretty important.
0:30:06 I mean, every, I mean, they’ve done a good job
0:30:09 of doing the sort of bottom-up side of it,
0:30:11 but there is a big, you know,
0:30:13 like they are building things
0:30:14 that the Department of Defense ultimately
0:30:15 wants to be the customer.
0:30:16 – I mean, the internet was originally invented
0:30:19 to be resilient in the case of a disaster, right?
0:30:20 And of course it became something else,
0:30:22 but as is the case, but yeah.
0:30:24 – Yeah, and we, you know, we are not Daria.
0:30:25 We are Ariya.
0:30:27 We don’t have a big customer, you know?
0:30:28 And that was a big, important decision.
0:30:29 – Interesting.
0:30:32 – Not to be, you know, we are of government,
0:30:34 but we’re very independent of it.
0:30:35 We’re what we call in the UK,
0:30:36 non-departmental public body,
0:30:38 which basically means we’re outside government.
0:30:39 – Got it.
0:30:42 – You know, the question that Alan rightly asked
0:30:43 right at the beginning is,
0:30:44 we’re not going to have a customer.
0:30:47 So like, what is the exit path?
0:30:49 Like we find something great.
0:30:50 What do we do with it?
0:30:52 And the answer, it’s probably not surprising
0:30:54 given that they appointed an entrepreneur as CEO
0:30:56 and entrepreneur as chair is,
0:30:58 we think the answer is scientific entrepreneurship.
0:31:00 And Alan’s answer to this is,
0:31:04 we need to make sure that the interface between Ariya
0:31:08 and the ecosystem, the entrepreneurial ecosystem,
0:31:10 is really porous in both directions.
0:31:12 – I agree, both directions is a keyword.
0:31:15 I love that you guys say scientific entrepreneurship
0:31:18 because our tagline, I’ve said this publicly in talks,
0:31:23 our two-word phrase at Xerox PARC was entrepreneurial scientists.
0:31:25 So scientists who are entrepreneurial,
0:31:27 but are not actually starting startups.
0:31:29 And they have this kind of entrepreneurial mindset.
0:31:31 There’s a reason they’re not in academia.
0:31:32 There’s a reason they’re not in industry.
0:31:33 They’re in between.
0:31:35 They’re really unique interface.
0:31:36 So I think that’s fascinating.
0:31:37 We don’t have to talk about this right now,
0:31:41 but just one other quick note is there’s also important
0:31:43 to make sure process doesn’t get in the way,
0:31:46 ’cause one piece I did edit was Patrick Sue and Tyler Cohen
0:31:50 on the FAST grants and one key insight,
0:31:52 and this obviously came out of the pandemic,
0:31:54 is that sometimes you also have to deploy capital quickly.
0:31:57 And sometimes in government, process,
0:31:59 and not for, there’s a good reason for it,
0:32:02 can get in the way of doing that from allocating funding.
0:32:05 – I mean, that’s been like cool to how we think about this,
0:32:06 like how do we get out of the way?
0:32:09 And one of the reasons I think DARPA has succeeded
0:32:11 is like there’s very few veto points.
0:32:14 It’s not like you have to get like 12 people to say yes,
0:32:17 and we’ve done something very similar, Aria,
0:32:21 you the program directors have to convince the land basically.
0:32:23 And my job as the chair of the board
0:32:27 is to scrutinize the whole, but not get into the weeds,
0:32:28 not be another veto point.
0:32:29 – That’s fantastic.
0:32:30 I’m glad you guys are aware of that.
0:32:33 So now let’s shift back to the individual.
0:32:34 We’ve talked about the structural.
0:32:37 You said something incredibly fascinating earlier,
0:32:39 which is how you’re obsessed with ambition
0:32:40 and this question of ambition.
0:32:42 You also said another really beautiful,
0:32:44 profound, powerful word, which is yearning,
0:32:46 this idea that people have this yearning.
0:32:48 And the reason that struck me is because when you talk
0:32:50 about how you guys are actually trying to support people
0:32:53 early in the pipeline to become entrepreneurs
0:32:55 and know that’s a path for them,
0:32:56 what really struck me is it’s fascinating
0:32:58 that you even have to do that,
0:33:00 that we should even have to do that culturally and societally.
0:33:02 Because if you really think about it,
0:33:06 children are born creative and are born entrepreneurial.
0:33:08 X, Y, and Z, or let’s trade on the school thing.
0:33:09 Let’s trade lunches.
0:33:12 I’ll give you two pretzels for one Kit Kat, whatever it is.
0:33:13 It’s commerce.
0:33:15 Sometimes it’s about building things together
0:33:16 on the playground.
0:33:18 So I think there’s something kind of sad
0:33:20 that people lose that impetus.
0:33:22 And one question I have for you from your unique vantage point
0:33:25 at Entrepreneur First is when you say you try
0:33:27 to get people early, what is a sweet spot
0:33:29 that when you say like earlier in their career,
0:33:33 like is it right as they’re in their high school, college?
0:33:36 Well, in London, we have two tracks.
0:33:39 And actually it’s the same in Paris.
0:33:43 So we operate in London, in Paris, in Bangalore, in New York.
0:33:46 And the two tracks we have is we have a track for people
0:33:48 as they graduate from university.
0:33:50 And then we have a track for people in,
0:33:51 we don’t put a hard limit on it,
0:33:53 but you know the first five years of their career.
0:33:55 So you’ve got a little bit of work experience going on.
0:33:58 I think like those two moments are quite special moments,
0:34:01 like as well as yearning and ambition.
0:34:03 Another word we think about a lot is becoming.
0:34:05 Oh, becoming, look at you, I love that.
0:34:08 As I’m very influenced by my colleague, Arne Schenk,
0:34:11 who’s a brilliant guy who runs a program for school, Polaris.
0:34:13 He’s on our chat group with us.
0:34:14 Yeah, he is, exactly.
0:34:17 And Soloni and some others, yeah.
0:34:20 And he’s really convinced me of this,
0:34:24 that like ambitious people have a sense of who they want to become,
0:34:26 but often less of a sense of how.
0:34:28 Ah, so they know who, but not how.
0:34:30 And so like a big part of ESRoll
0:34:33 is to try and help people become the person they want to be.
0:34:34 That’s so interesting.
0:34:36 So Mark used to always say in the early days
0:34:40 when people would ask him, like there are three pools for a startup.
0:34:42 It’s product, it’s market, it’s people.
0:34:46 And he would always say that people is the one you met on the most
0:34:49 because product can change, market can change,
0:34:51 and that can actually sometimes be a lagging
0:34:53 versus a leading indicator.
0:34:56 But people are where you can really find that sort of,
0:34:58 you know, true north that sort of cutting forward,
0:35:02 which differential that you’re looking for in that kind of a business.
0:35:03 That’s really interesting.
0:35:05 So what I like about what you’re saying,
0:35:07 because my question, you’ve answered it, is very precise,
0:35:11 which is at what point do you kind of intervene, so to speak?
0:35:14 And what you’re saying is by doing it in college
0:35:19 and the early five years of their first job, that is the how.
0:35:20 It is the how.
0:35:21 Because they have a sense of what.
0:35:24 Because my argument was going to be like, why not do it sooner?
0:35:28 Like crypto, for instance, we’re actually seeing high schoolers,
0:35:30 they’re obsessed, like they want to learn.
0:35:31 And it’s not for financial reasons.
0:35:34 It’s building, it’s creativity, it’s like expression.
0:35:35 We’re the same.
0:35:38 We want to engage with people early.
0:35:43 And you know, the thing that keeps it very grounded is that it’s really about like,
0:35:44 what is the community?
0:35:48 What is the infrastructure that you can provide to people
0:35:50 that helps them figure this out for themselves?
0:35:51 You know, we’re not a cult.
0:35:53 We’re not trying to tell you who to become.
0:35:59 But you know, it’s like, how can we, you know, how can we sort of provide a peer group
0:36:03 that makes people say, actually the way I don’t want to be a banker.
0:36:08 I don’t want to go be working a 100,000 person big tech company.
0:36:09 And now I’ve found my people.
0:36:14 I’ve found the people that not only validate that sense,
0:36:15 but actually can help me get there.
0:36:18 You also need like support if you’re struggling with trying to figure something out
0:36:19 because you’re not alone.
0:36:22 And it’s the feeling that your choices are valid.
0:36:24 I mean, it sounds so basic.
0:36:25 There’s so much to figure out, right?
0:36:28 Because you don’t have the structure of like a classic top-down company, bottom-up thing.
0:36:31 The other quick thing is that this reminds me again of childhood development
0:36:35 because there’s a body of work that says that it’s not the parents,
0:36:37 it’s nature, nurture, debates, but it’s actually the peer group
0:36:39 that defines your development the most.
0:36:42 This is a very controversial and very important body of work from Judith Harris
0:36:44 in like the odds.
0:36:48 And it was a very important movement in child psychology and development.
0:36:51 So just on this note, so as you do this work,
0:36:54 and we were talking about how hard it is to have this like, you know,
0:36:59 when a harness people’s ambition, are there any icons you think that people need?
0:37:02 Because in the U.S., the social network movie was a moment for like-
0:37:03 I think it made a huge difference.
0:37:05 Right, like the zucks.
0:37:07 And because the other thing is this capital gap early on
0:37:10 where people can get angel funding, but not like the next phase.
0:37:12 I would argue that’s a similar thing.
0:37:15 I’m a talent game for building a company where you can find like the early employees,
0:37:17 but not the people who can scale it.
0:37:18 I think that’s still a gap.
0:37:19 That’s still a gap there?
0:37:22 And I think it’s closing, but it’s closing more slowly
0:37:27 because it just takes longer because you need those companies to have matured and exist.
0:37:32 But, you know, I think this is also why this like idea of ambition should be global from day one.
0:37:36 Like, yes, we want this to be a great ecosystem in London, but we’re not nationalists.
0:37:37 That’s a great point.
0:37:40 You know, when I think about EF’s best companies, the ones that scale fast,
0:37:45 they’re the ones that are embraced, having to be U.S. companies as well as British companies.
0:37:47 Yes, I totally agree.
0:37:49 So, going back to the structural conduct, before we go more into people,
0:37:52 because I do want to drill with you on the talent side more,
0:37:54 but on the more structural ecosystem context.
0:37:58 So, you know, we talked like, again, over seven years ago, very exciting.
0:38:00 You’ve come a very long way, very proud of the work that you and Alice and your team
0:38:02 have done at Entrepreneur First.
0:38:06 But like, you also have a unique vantage point given your work into the London ecosystem
0:38:07 and the tech ecosystem.
0:38:12 So, what are your views on what’s working, what’s not working at a high level?
0:38:14 And then what’s really changed?
0:38:15 I mean, think about it.
0:38:17 It’s kind of fun that we’re doing this again after seven years.
0:38:17 It is.
0:38:23 Well, it’s so funny because, and I think this is a thing that a lot of entrepreneurs wrestle with.
0:38:26 I remember when we started, we were so convinced we were too late.
0:38:28 We left our jobs in 2011.
0:38:31 I mean, it took a little bit of iteration for EF to become what it is now.
0:38:34 But, you know, I remember in 2011, we were like, maybe we just, you know,
0:38:36 like maybe this ecosystem is saturated.
0:38:36 Yeah.
0:38:37 And I just love it back now.
0:38:41 And I’m like, I think there was like one organization describing itself as a seed fund.
0:38:44 When we do demo days today, you know, you get like 2000 people or, you know,
0:38:47 it’s like, so the ecosystem has grown massively.
0:38:52 And, you know, I think that’s true at like every layer of the stack.
0:38:54 If you like, you know, I think the town, you know,
0:38:59 we already talked a little bit about how our attitude is about young town has changed,
0:39:03 but also the proliferation of angel investors seed funds.
0:39:07 And then the bit that I’m excited about more recently, and I guess this is sort of a,
0:39:12 sort of you guys coming here and everything in office is a good example for us is that
0:39:17 for a long, long time people talked about like the capital gap in the UK ecosystem that,
0:39:21 yeah, you could raise a seed round, maybe a series A, but you know, series B was really hard.
0:39:28 And you’re like, there’s a way to go, but both in terms of like local firms growing up and,
0:39:33 you know, kind of building reputations and track records, but also, you know,
0:39:37 the sort of most famous and storied American firms coming here.
0:39:39 I think that’s a huge net positive for the ecosystem.
0:39:43 Yeah. So that’s more a difference of degree though than kind.
0:39:46 Like in terms of, you’re saying there’s more investors, more capital available,
0:39:50 more people doing things, more entrepreneurs.
0:39:52 Would you say there’s any differences in kind?
0:39:55 I think that the difference in kind I would most point to, and it’s going to seem like
0:39:57 I’m obsessed with this thing, but it’s just about ambition.
0:40:00 I love it. I like that obsession. I’m on board with that theme.
0:40:04 I remember when we got started in 2011, one of the things we heard,
0:40:07 there were some really ambitious stops, you know, back then, you know,
0:40:11 in fact, I remember that when we recorded our podcast seven years ago,
0:40:18 or whenever it was one of my fellow guests on that was Michelle Yu,
0:40:20 who’s one of the fans of Songcake.
0:40:25 Now that was, that was one of the first, like real first generation London startups.
0:40:28 I was super ambitious, but they were unusual.
0:40:33 You know, like most 2011 London startups arguably were sort of like trying to get bought.
0:40:39 That was their exit strategy was to be quiet, not really grow big and massive.
0:40:41 Yeah. Now, and that’s not a criticism of those founders.
0:40:45 I think it’s a lot about like what, what sort of ambition will the ecosystem support?
0:40:46 That’s right.
0:40:50 And so the difference of kind that I would point out is that I think we now have people
0:40:56 who are truly trying to build the global category winner from London, from the UK.
0:40:59 Now we’re not there yet, you know, like, you know, we’re still, you know,
0:41:03 it’s amazing what, you know, Daniel has done at Spotify and, you know,
0:41:05 I’m sorry, but, you know, in general, we’re still, oh, add yen, you know,
0:41:09 like there’s, there are some really extraordinary European success stories.
0:41:13 But, you know, I think there’s still, we’re still sort of pointing to things that,
0:41:15 that happened a little while ago.
0:41:15 Yeah.
0:41:21 I do get the sense and, you know, maybe, you know, crypto is an area where this might happen,
0:41:26 where, you know, you, I do think that 10 years from now, we’ll look back and say,
0:41:29 you know, the early 2020s was actually a pretty special time
0:41:32 to build globally ambitious companies from Europe.
0:41:35 I’m so glad you brought up crypto, because when I think of crypto,
0:41:38 this goes back to the earlier point about the positive sum game and the incentives.
0:41:42 It’s really about incentive mechanisms and incentive alignment.
0:41:46 And that’s actually the beautiful thing about crypto is it bakes these things in structurally.
0:41:50 So there’s a lot of ways to align different parties of people together to build things.
0:41:52 So I kind of agree with you that this could be a very unique time.
0:41:56 One of the exciting things about crypto, from a geographic perspective,
0:41:59 is that it is, it is sort of like natively global.
0:42:03 It’s not one of those things where you look to a domestic market and then expand.
0:42:04 That’s exactly right.
0:42:08 And, you know, when I think about two of the crypto companies that we’ve invested in together,
0:42:13 Andreessen Horowitz Entrepreneur first, Jensen and Aztec, I think what you see is like,
0:42:15 these are people trying to build infrastructure for a different world.
0:42:16 Yes.
0:42:19 But they’re not building it for London or the UK or for Europe.
0:42:22 It is inherently, you know, global.
0:42:25 Yes, we had an MC later, COO of Uniswap on,
0:42:30 and she was saying how this is a really unique type of product launch because you’re instantly
0:42:33 global when you, like most other times you used to have, like you’re saying,
0:42:37 these regions, you would land and expand in this market, in that market.
0:42:39 Bro, in this market, it does not go that way.
0:42:42 I think it also plays to London’s strengths in a lot of ways.
0:42:46 And the other thing that I observe now, you know, we’ve been investing in crypto companies
0:42:52 that, yeah, for a long time, I think we started the like London Bitcoin meetup in like 2014
0:42:55 or something with Imperial College.
0:42:59 But, you know, we, one of the things, I’m sure you have seen this, you know,
0:43:02 with probably a better vantage point than almost anyone.
0:43:07 But, you know, when you go through these like hype cycles and then winters,
0:43:10 it’s easy to get discouraged.
0:43:15 But, you know, one thing that I find so like exciting and moving from a talent investor
0:43:19 point of view is when I look at like, what are the investments we’ve made and founders
0:43:25 that build in this space that have worked, they’re actually all the ones that we’re just
0:43:28 trying to fundamentally build real technology.
0:43:29 Oh, interesting.
0:43:30 As opposed to…
0:43:33 Well, what I mean is like, you know, I think at the height of a boom,
0:43:35 you do get a lot of thrust.
0:43:38 And I have to say, like some of that felt pretty extractive, you know.
0:43:39 Yes, of course it did.
0:43:43 But, you know, I look at Jensen, I look at Aztec, and I’m like,
0:43:45 these are like engineering-led companies.
0:43:49 You know, like they’re building incredibly hard products, and that’s what gives them the
0:43:50 right to win.
0:43:51 Yes.
0:43:55 And I do think like Europe’s not that good or hasn’t been that good at the hype, frankly.
0:43:59 And so in some categories, hype helps a lot.
0:44:03 But what I’m really excited about is like, I think one of the things that we are really
0:44:07 good at in London, in the UK, is like science and technology.
0:44:10 You know, like actually doing hard engineering tasks.
0:44:14 And I think that for me, when I think about the future of crypto, I think like,
0:44:18 we just still need a lot of fundamental new technology to make this work.
0:44:19 This is why I’m in the space.
0:44:22 This is actually a big reason why I came to the crypto team full-time,
0:44:25 because of our R&D and like research and development side.
0:44:29 It’s so technological, the depth, that expertise, like for those inside,
0:44:31 it’s phenomenally engineering focus.
0:44:33 And I love that kind of building.
0:44:34 And I agree with you.
0:44:37 Like, and there is, as you said, there’s always a frothiness in every cycle.
0:44:38 And that’s, that’s okay.
0:44:41 Because sometimes that creates the buzz that then brings the people that-
0:44:42 The crowds in talent, crowds in capital.
0:44:46 And then the few people stay through every cycle and more and more people build.
0:44:49 And we’re in a phase right now where the building and the product things
0:44:51 that are happening are phenomenal.
0:44:54 So my last question for you is, what would you say,
0:44:56 given that this is an art, not a science,
0:44:58 but I’m going to make it a little scientific for a moment,
0:45:03 are the qualities that you see that make someone a good entrepreneur?
0:45:05 Or what, what kind of, in your talent game,
0:45:09 like what is the quote formula or filter that you use?
0:45:16 I don’t think there is a formula, but I think that being exceptional
0:45:18 is more of a habit than sometimes we admit.
0:45:22 And what I look for when I’m in,
0:45:24 if I’m interviewing like a 21 year old who’s like,
0:45:26 never worked anywhere, never, yeah.
0:45:29 And what I’m always asking is, what have they done,
0:45:33 however unrelated to starting a startup,
0:45:39 that they had to do on their own volition without anyone telling them.
0:45:40 Yes.
0:45:44 Where they went above and beyond and something happened.
0:45:46 Like that idea of agency in the world.
0:45:47 That’s pretty powerful.
0:45:48 I think it’s probably the single most important thing.
0:45:50 I think that’s a fantastic note to end on.
0:45:54 It’s ambition, yearning, becoming.
0:45:57 And I love the line you said about ambition as global
0:46:01 because we’re here in the UK, I’m from Silicon Valley,
0:46:03 but we’re talking about a global phenomenon.
0:46:04 Thank you so much for joining us.
0:46:05 Thanks so much for having me again.
0:46:06 It’s so great to have you back.
0:46:07 It’s great to be here.
0:46:17 [MUSIC]
0:46:27 [MUSIC]
0:46:37 [MUSIC]
0:46:45 [MUSIC]
0:46:55 [MUSIC]
0:00:05 but that doesn’t mean our coverage has.
0:00:08 Because building a strong nationwide athletics program
0:00:11 is a bit like trying to build a strong innovation hub.
0:00:13 In that, you know what ingredients might help,
0:00:16 but it’s not always clear what moves the needle.
0:00:18 And just like in athletics,
0:00:20 where countries double down on their best sports,
0:00:23 like the approximately $50 million grand system
0:00:25 the Team USA allocates more to gymnastics
0:00:27 so we’re handballed,
0:00:29 countries also make strategic decisions
0:00:30 on where they invest,
0:00:33 hoping to create thriving innovation hubs.
0:00:34 So in today’s episode,
0:00:37 we direct our attention to the UK
0:00:40 and try to break down which ingredients matter most.
0:00:42 This episode was originally published
0:00:45 on our sister podcast, Web3 with A16Z.
0:00:47 So if you’re excited about the next generation
0:00:50 of the internet, find Web3 with A16Z
0:00:52 wherever you get your podcasts.
0:00:53 For now, over to Sonal
0:00:56 to properly introduce this episode and guest.
0:00:59 (upbeat music)
0:01:05 – Welcome to Web3 with A6Z.
0:01:07 I’m Sonal Chuxi and today’s episode
0:01:09 is all about innovation around the world
0:01:11 at both a systems and at a people level.
0:01:14 So we discuss not only what does and doesn’t work
0:01:17 in making certain places become hubs of innovation
0:01:19 and economic growth,
0:01:22 but also discuss what makes entrepreneurial talent,
0:01:24 the nature of ambition and helping people find their path
0:01:28 and more broadly navigating risk, reward and dynamism
0:01:30 in different regions, including London and Europe.
0:01:32 My special guest is Matt Clifford,
0:01:33 who’s played an important role
0:01:36 in the London entrepreneurial ecosystem.
0:01:39 I actually had Matt on the OG A6Z podcast back in 2015.
0:01:43 So we also discuss what’s changed since then to now,
0:01:46 as well as new ways of funding breakthrough R&D,
0:01:48 tech trends of interest and more.
0:01:49 For more context,
0:01:51 Matt is the chair of Entrepreneur First,
0:01:54 which he co-founded with Alice Bentink over a decade ago.
0:01:56 He’s also the chair of the UK’s Advanced Research
0:01:58 and Invention Agency, or ARIA.
0:02:00 And before this episode is recorded,
0:02:02 Matt was also the prime minister’s representative
0:02:04 for the AI Safety Summit,
0:02:06 which he helped organize at Bletchley Park,
0:02:08 the historic home of computing in the UK.
0:02:10 And then after this episode was recorded,
0:02:13 Matt was appointed by the UK Secretary of Science
0:02:15 to deliver an AI Opportunities Action Plan
0:02:17 to the UK government.
0:02:18 This was just announced a few days ago.
0:02:20 Anyway, it’s all fitting and exciting
0:02:22 because we recorded this episode live
0:02:25 from Andreessen Horowitz’s first international office
0:02:27 in London, which we opened late last year.
0:02:29 For more on our efforts and other content
0:02:31 from and about there,
0:02:34 go to asixnzcrypto.com/uk.
0:02:35 As a reminder,
0:02:37 none of the following should be taken
0:02:39 as investment, legal, business, or tax advice.
0:02:41 Please see asixnz.com/disclosures
0:02:43 for more important information,
0:02:45 including a link to a list of our investments.
0:02:47 Now onto the episode.
0:02:50 Matt, welcome.
0:02:51 – It’s great to be here.
0:02:52 It was great to be back.
0:02:53 – We were just saying.
0:02:54 – Yes, I was about to say.
0:02:56 You, we did a podcast together.
0:02:59 You were on this podcast on our last run in roadshow,
0:03:02 which was 2015.
0:03:03 And you were one of,
0:03:05 that was the very first time we met in person.
0:03:06 – It was, it was.
0:03:07 I mean, we’ve been going a while now
0:03:08 and we’ll probably talk about
0:03:10 is how the London ecosystem has grown.
0:03:12 But our initial thesis,
0:03:15 which we’re, you know, remain very dedicated to
0:03:16 is that the world’s missing out
0:03:18 on some of its best founders.
0:03:19 You know, in Silicon Valley,
0:03:20 if you’re ambitious and smart,
0:03:21 it’s the most obvious thing in the world
0:03:22 to start a company.
0:03:23 – Right.
0:03:25 – In Europe, that’s still not true.
0:03:27 If you go around Oxford or Cambridge
0:03:28 or Imperial College,
0:03:29 any of these great universities
0:03:30 and you say like, you know,
0:03:32 what are the smartest, most ambitious people want to do?
0:03:35 Yeah, more and more, it’s on the agenda,
0:03:37 but it’s still probably banking, consulting.
0:03:38 – Yeah.
0:03:39 – You know, big companies.
0:03:41 – I don’t know how you describe EF
0:03:42 or entrepreneur first as an orc.
0:03:45 – We call ourselves the thing we’ve layered on
0:03:46 after a long thought of iteration is
0:03:48 we’re a talent investor.
0:03:50 We invest in people before they have companies
0:03:53 and help them go through that like zero to one journey.
0:03:56 We’re taking people who purely on the basis of who they are,
0:03:58 we think we want to make a better.
0:03:58 – I like that you’re saying
0:03:59 that you’re a talent investor.
0:04:01 I mean, VCs and other,
0:04:03 and actually creatives, anyone would say
0:04:05 that’s their job is investing in talent
0:04:07 and that’s an art, not a science.
0:04:08 – Yeah, yeah.
0:04:09 Well, I know that Mark and Ben have taken a lot
0:04:12 of inspiration in building your firm from talent agencies.
0:04:15 – Yes, the CAA that was inspired by Michael Ovid.
0:04:16 – Exactly.
0:04:17 – He was an advisor early on.
0:04:19 – And you know, we have a sort of similar view
0:04:22 that almost like the world’s most talented and ambitious people
0:04:23 need agents.
0:04:25 I mean, that’s not quite how we frame it.
0:04:26 – It’s really fascinating
0:04:29 because you said you’re not an agency, neither are we,
0:04:32 because actually the model obviously was talent focused,
0:04:34 but it was more about a network and network of networks,
0:04:36 which is how we used to think a little bit.
0:04:37 I mean, I don’t know if that was ever formally
0:04:38 how it was described,
0:04:40 but at least from my perspective,
0:04:43 I used to think of A6 and C when I joined in the early days,
0:04:46 which is now a decade ago as a network of networks.
0:04:48 And that was where the Ovid’s model came in,
0:04:50 which is how do you sort of, you know,
0:04:53 kind of give back, like continue cultivating talent.
0:04:54 So in that way growing people,
0:04:55 even before they want the thing
0:04:58 or even helping them so it’s not transactional.
0:04:58 – Exactly.
0:05:01 And a lot of what we talk about is our team’s job
0:05:04 is to go out and find extraordinary people
0:05:06 who are still figuring out what to do with their lives.
0:05:08 My co-founder, Alice and I, you know,
0:05:10 we started our career as management consultants.
0:05:12 We were McKinsey and in many ways,
0:05:13 it was a really great experience.
0:05:16 But like if you say like, why did you end up there?
0:05:17 It wasn’t because at six years old,
0:05:18 I was running around the kitchen and being like,
0:05:20 “Mommy, I want to be a management consultant.”
0:05:21 You know, it’s just like, it was the path.
0:05:24 It was what people did in whatever it was, 2008,
0:05:25 when I graduated.
0:05:27 And so, you know, our view was,
0:05:29 if you really want to move the needle
0:05:33 on like increasing the supply of great founders,
0:05:36 you can’t wait for them to figure out that like,
0:05:37 that’s the obvious path.
0:05:39 You have to create a path.
0:05:40 And that’s what entrepreneurs have been about
0:05:41 from the beginning.
0:05:43 One of the things that we think about a lot
0:05:45 is like the nature of ambition
0:05:47 and how it’s very culturally determined.
0:05:49 Ooh, let’s talk about that.
0:05:50 What I mean by that is like, you know,
0:05:54 it’s not like all ambitious people have the same like vision
0:05:56 of how to realize their ambition.
0:05:57 That’s absolutely true.
0:05:59 And so, it would be the craziest thing in the world
0:06:01 to try and force people to be entrepreneurs.
0:06:03 You know, we have quite a big team now around the world
0:06:04 and they go out and they find people
0:06:05 who are clearly extraordinarily talented.
0:06:06 But at the very start of their journey,
0:06:08 we typically focus on people early in their career,
0:06:10 sometimes like, you know,
0:06:12 while they’re at university or equivalent.
0:06:15 And, you know, their job, yes, obviously,
0:06:17 is to help them think about startups.
0:06:18 And, you know, if they want to be able to stop
0:06:20 bringing them into our community and help them do that.
0:06:23 But their job is not to push where it’s not right.
0:06:26 It’s to genuinely be almost like a career counselor,
0:06:29 like an actual, like someone whose interest
0:06:31 is shared with the person.
0:06:34 And so, you know, one of the things that we believe,
0:06:36 like, you know, if you like our theory of change
0:06:38 is that if you can like actually intervene
0:06:41 at a point where people are trying to figure out like,
0:06:42 how do I have this talent?
0:06:45 How do I maximize my impact in the world?
0:06:46 And you can show them this path of entrepreneurship
0:06:48 and show what’s possible.
0:06:50 Then actually that will increase the supply of great founders
0:06:51 and then great companies in the world.
0:06:53 – So I do want to pick up a little bit on two threads.
0:06:56 One about this, what you said about the nature of ambition,
0:06:57 something you think about a lot,
0:06:58 but also what you said about
0:07:00 this culturally determined aspect of it.
0:07:04 And that to me suggests some of the structural context,
0:07:06 the surrounding context that supports entrepreneurship
0:07:07 beyond the individual.
0:07:09 So let’s split it up into the people
0:07:12 and then the surrounding kind of context and ecosystem.
0:07:15 So on the surrounding context and ecosystem,
0:07:16 one kind of obvious thing,
0:07:17 this is something we talked about a lot
0:07:19 in the “Early Day in the A6SZ” podcast,
0:07:22 I recorded a lot of episodes with like Iranian entrepreneurs
0:07:24 and various people around the world.
0:07:28 And it was really fascinating how the risk tolerance
0:07:30 is very different culturally in different regions.
0:07:33 And one thing that I think is, it’s so cliche,
0:07:35 but it is true for a reason,
0:07:36 is unique about Silicon Valley,
0:07:39 is there is a tremendous tolerance.
0:07:40 I don’t wanna say the word failure
0:07:42 because I hate veering into failure porn.
0:07:45 I think that’s the wrong way to, it’s like actually-
0:07:46 – Failure sucks always.
0:07:47 – Oh my God.
0:07:49 Well, I hate when people like failure Friday and failure this.
0:07:52 Like, yes, of course, normalize talking about it,
0:07:54 recovering, repairing,
0:07:56 but don’t like glorify failure for God’s sake.
0:07:58 Everyone wants to succeed.
0:08:00 But what’s really interesting about it
0:08:03 is that there is like this forgiveness
0:08:05 and recovery and resilience
0:08:09 that whereas in certain cultural regions and areas,
0:08:11 there’s almost like a punishment
0:08:14 or a feeling of self-hatred if you don’t succeed.
0:08:16 This is even beyond individual level.
0:08:17 I’m talking about like culturally.
0:08:18 – Yeah, totally.
0:08:19 So I think there’s two things.
0:08:21 One is attitudes to failure.
0:08:23 But I think it’s also like, what is valued?
0:08:25 Like, what is esteemed?
0:08:27 And you know, I think the really special thing
0:08:32 about Silicon Valley is this idea that if you’re in Silicon
0:08:34 Valley and you tell someone you’re a founder,
0:08:36 that immediately has a set of connotations
0:08:39 that are almost exclusively positive.
0:08:40 It’s very legible.
0:08:41 People know what you mean.
0:08:44 People can read that as a sign that you are ambitious.
0:08:45 – That’s right.
0:08:46 – When we saw an entrepreneur of us,
0:08:48 there was this slight sense
0:08:49 that if you said you were a founder,
0:08:51 those are euphemism for you were unemployed.
0:08:55 And so actually, I think the cultural meaning
0:08:57 of entrepreneurship is one of the biggest sources
0:08:59 of leverage you have, just like making it like,
0:09:04 this is a thing that smart, capable, ambitious people do.
0:09:06 And it’s a vehicle for changing the world.
0:09:09 It’s such a powerful idea.
0:09:11 And you know, to give you a really concrete example,
0:09:14 ’cause I think like, you know, from the UK and the US,
0:09:15 like, you know, similar enough systems
0:09:17 that it really resonates.
0:09:19 But, you know, the first international office
0:09:20 we opened was in Singapore.
0:09:24 And in Singapore, the number one career path
0:09:27 for the most ambitious people is to go be a civil servant.
0:09:28 As a result, the government of Singapore
0:09:30 is probably one of the most effective and efficient.
0:09:31 – That’s so interesting.
0:09:33 I didn’t know that because it’s actually the opposite
0:09:34 of so many other places.
0:09:35 – I’ve just been serving in government.
0:09:36 – Right.
0:09:37 – And actually the people have been amazing.
0:09:38 – Right.
0:09:41 – But I would say like, as a result,
0:09:43 the cultural value of entrepreneurship in Singapore,
0:09:47 it’s just been very, I think it’s been harder that
0:09:50 to sort of like create this sense that like,
0:09:52 if you say you’re a founder,
0:09:54 you’re doing something that’s as like legitimate,
0:09:57 as prestigious as your friends that have gone off to be.
0:09:59 – Yes, you know, we should talk for a second
0:10:01 about why entrepreneurship for a minute,
0:10:03 because it seems like an obvious thing.
0:10:04 Like, what are we talking about?
0:10:05 This is a show, the startup focus.
0:10:07 We’re both startup focused cultures,
0:10:08 but actually it’s not obvious.
0:10:09 – It’s not obvious.
0:10:10 – I mean, if I were telling a policymaker,
0:10:12 I think they know this, but like the reality is,
0:10:14 like startups represent innovation.
0:10:16 They’re an engine of growth.
0:10:17 They create jobs.
0:10:20 They create their generative.
0:10:21 They’re not extractive.
0:10:23 They’re not just taking the stable what you already have
0:10:24 that’s established.
0:10:26 They set you up for the future.
0:10:27 I mean, there’s so many,
0:10:28 there’s layers and layers of why this matters.
0:10:30 So just to kind of hit on that.
0:10:33 But to your point, so I have to ask you this then.
0:10:35 I don’t want to be stereotypical,
0:10:36 but of course there’s going to be some generalizations
0:10:37 just to kind of understand this.
0:10:40 But my impression of London,
0:10:41 I’m born and raised in the United States,
0:10:43 but my grandparents settled in London.
0:10:46 This is in the 70s before I was born.
0:10:49 And the impression I got from culturally
0:10:50 is that there’s kind of like,
0:10:51 not always a classes,
0:10:54 but very much a credentialist society.
0:10:57 Like you care very much about what school you went to.
0:10:58 And I think that could be true in some ways
0:10:59 in Silicon Valley,
0:11:01 but people kind of don’t really care
0:11:03 what school you went to or what you did.
0:11:05 Would you say that is true today?
0:11:07 Do you think that’s evolving?
0:11:08 And I’m bringing this up
0:11:10 because you mentioned this point about what value
0:11:13 that certain words and these concepts signal.
0:11:15 So I’m curious for your perspective there.
0:11:19 – You know, I wanted the essays that I wrote
0:11:20 when we’re early on in EF
0:11:22 that was trying to talk to this.
0:11:24 I called Don’t Be a Badge Collector.
0:11:25 I think I probably wrote that
0:11:26 about the time I was first on the podcast.
0:11:28 But I think it’s held up pretty well.
0:11:29 And you know, what I was saying is like,
0:11:32 I think there is a cultural temptation,
0:11:33 let’s call it in the UK,
0:11:36 to be like, I’m going to work really hard
0:11:37 to get into the best university I can.
0:11:39 So I can get the best graduate job I can.
0:11:40 So I can,
0:11:42 one of the biggest risks for smart people, I think,
0:11:45 is that you get into a mode where success
0:11:47 is measured by whether you make your boss look good.
0:11:49 And their success is measured
0:11:50 by whether they make their boss look good
0:11:52 and seeing like all the way up,
0:11:53 what you’re actually doing.
0:11:54 To your point about, you know,
0:11:56 you mentioned like some sort of positive some game,
0:12:00 there’s a risk in a lot of career tracks.
0:12:01 I’m not saying you’re not creating value,
0:12:05 but like your actual goal is to win
0:12:06 the like upward political battle
0:12:09 within whatever bureaucratic structure you’re in, right?
0:12:11 And that’s not, I don’t want to say political,
0:12:13 I mean, small, I mean, this can be in big corporates,
0:12:15 it can be in, you know, whatever.
0:12:17 I think what’s beautiful about startups
0:12:18 and the reason I, you know,
0:12:21 I’ve spent more or less my entire career
0:12:24 helping people build them is that they’re ultimately
0:12:27 all about what you can do for other people.
0:12:29 – That’s fantastic where you’re framing it.
0:12:32 – You only succeed if you build something
0:12:36 that is so valuable that someone else will pay for it.
0:12:37 You cannot win in any other way.
0:12:40 There is no boss to look good, to make it look good.
0:12:42 There is no like grading scheme
0:12:44 that some teacher is going to tell you got an AR.
0:12:47 It’s like comes down to this very starting,
0:12:49 did you do something for someone else
0:12:51 that they thought was so great, they wrote you a chat.
0:12:52 – That’s right.
0:12:53 And it is not people pleasing
0:12:57 because often you’re going against established convention.
0:12:58 You’re often budding your head
0:12:59 or punching through an industry
0:13:02 that is not accepting a new way of doing things.
0:13:04 I’m just thinking of my former partner,
0:13:07 Martin Casado and the enterprise team
0:13:09 when he was doing software defined networking,
0:13:11 he was punching against very established
0:13:14 old school methods for what networking looked like.
0:13:15 That was very hard word based.
0:13:17 And so it’s like, you have to literally punch,
0:13:20 like you’re completely going against all conventions.
0:13:22 – The bar is so high to actually prove
0:13:23 that that value is there.
0:13:25 And I do think, I sometimes think,
0:13:28 one of the challenges we face today
0:13:30 is that if you are smart and ambitious,
0:13:34 it’s now so easy in some senses
0:13:37 to find a comfortable path
0:13:40 that is about making your boss look good
0:13:41 all the way through a career
0:13:45 and acquiring like money and influence and prestige,
0:13:50 but actually maybe never really doing something
0:13:52 that creates enormous amount of value.
0:13:53 I mean, it seems, now that you say it,
0:13:57 it seems so obvious, but it’s really not.
0:13:59 Like just a pause on the idea.
0:14:00 When you’re doing a startup,
0:14:03 you’re building something that other people want and need.
0:14:06 That’s a really profound idea.
0:14:08 On that note, it’s also very fascinating
0:14:10 because of the economics of startups
0:14:12 because usually if you’re working for a company,
0:14:15 you were talking about you and Alice being at McKinsey,
0:14:18 consulting, people think they’re making good money,
0:14:20 but you’re really captive to your salary.
0:14:22 You’re not actually, the wealth is not generative.
0:14:25 And one thing that I find really powerful about startups
0:14:28 is that startups are the ones that innovated
0:14:31 on the idea that employees can have a share
0:14:32 of the returns on the work they do.
0:14:34 So even though you might be building a product
0:14:36 for customers and consumers that people want,
0:14:40 if you succeed, it can also go to nothing obviously.
0:14:42 That’s the very real risk.
0:14:45 But if you succeed, there can be very real gains
0:14:46 for the people who put things in,
0:14:48 especially for those that took a risk early on.
0:14:51 I don’t know how the options and economics work
0:14:54 in UK startups, but that is I think a defining feature
0:14:56 of Silicon Valley in the early days.
0:14:57 And so I just wanted to point that out
0:14:59 because it’s actually resonant to what you said
0:15:02 about not only pleasing people and being captive,
0:15:04 but you’re also helping other people
0:15:07 and then actually creating value that for the employees too,
0:15:09 they’re always increasing the size of the pie
0:15:10 for everyone in some form.
0:15:13 So I mean, not to be cliche, but that’s very true.
0:15:14 – You know, in a way, I think there’s like,
0:15:17 there’s a really important sort of ethical point here,
0:15:21 which is that founders, yeah, they can make a lot of money,
0:15:23 but they only get to capture value that they create.
0:15:24 – That’s right.
0:15:26 – And I think that that is actually
0:15:28 a really important idea.
0:15:31 And I find, again, we focus mainly on people early
0:15:34 in their career when we’re working with founders.
0:15:37 And I just think that idea really resonates with people
0:15:40 that they, yeah, of course they would like to be successful,
0:15:41 but they want to do it within a framework
0:15:43 where they feel they like create something.
0:15:44 – Of course.
0:15:46 I mean, it’s like, otherwise it’s just gambling.
0:15:47 – Or extraction.
0:15:48 – Extraction, exactly.
0:15:51 It’s like value adverse is value extraction, exactly.
0:15:53 You know, it’s funny because it’s also,
0:15:55 you know, I want to get like, at all political,
0:15:57 but just like in terms of capitalism, stakeholders,
0:16:00 people having a voice and empowerment.
0:16:04 I saw this list, it periodically makes us round on Twitter
0:16:08 of like people, like the most wealthy families in Europe,
0:16:09 and that list of the top five
0:16:12 has not changed over centuries.
0:16:13 Which is crazy because that just means
0:16:16 this generational wealth passing along,
0:16:18 whereas in the United States, that list is,
0:16:20 I mean, granted, it’s a younger country,
0:16:22 but at the same time, like,
0:16:25 it’s like the list is changing constantly.
0:16:28 Like the top 10 wealthy people, the top five wealthy people,
0:16:29 and again, it’s not about the money,
0:16:30 I don’t want to make that the focus,
0:16:33 but just pointing out that when you think of this dynamism,
0:16:36 this thing that a culture can change, be advanced,
0:16:39 add new value, startups can be generative.
0:16:40 It’s just really interesting to me
0:16:42 because a lot of the people are startup made,
0:16:45 like most of those people are not access to old money.
0:16:48 – Right, and I think, again, not wanting to be political,
0:16:51 but actually the thing that I think is non-partisan
0:16:54 and everyone can agree on is that,
0:16:57 actually, the thing we need is positive sum games.
0:16:58 – Oh, 100%.
0:17:01 – The thing, like different people have different views
0:17:03 on how we tax wealth,
0:17:06 and the bit that everyone can agree on is,
0:17:09 if people, what we want to reward in society
0:17:10 is people that are creating valuable things.
0:17:12 We don’t want to reward extraction,
0:17:14 and one of the beautiful things about Stopsis,
0:17:16 they can’t extract, they got to create,
0:17:18 and I think it’s just something very valuable about that,
0:17:20 and very powerful that actually I see people
0:17:24 across the political spectrum sort of get in behind.
0:17:25 – Yes, I agree.
0:17:28 – Hey, it’s Steph.
0:17:31 You might know that before my time at A16Z,
0:17:33 I used to work at a company called The Hustle,
0:17:35 and then we were acquired by HubSpot,
0:17:38 where I helped build their podcast network.
0:17:39 While I’m not there anymore,
0:17:42 I’m still a big fan of HubSpot podcasts,
0:17:44 especially My First Million.
0:17:47 In fact, I’ve listened to pretty much all 600
0:17:48 of their episodes.
0:17:50 My First Million is perfect for those of you
0:17:52 who are always trying to stay ahead of the curve,
0:17:55 or in some cases, take matters into your own hands
0:17:57 by building the future yourself.
0:18:00 Hosted by my friends, Sam Parr and Sean Purry,
0:18:02 who have each built and sold eight-figure businesses
0:18:04 to Amazon and HubSpot,
0:18:05 the show explores business ideas
0:18:07 that you can start tomorrow.
0:18:11 Plus, Sam and Sean jam alongside guests like Mr. Beast,
0:18:14 Bob Durdeck, Tim Ferriss, and, every so often,
0:18:15 you’ll even find me there.
0:18:17 From gas station pizza and egg carton businesses
0:18:20 doing millions, all the way up to several guests
0:18:22 making their first billion.
0:18:24 Go check out My First Million
0:18:25 wherever you get your podcasts.
0:18:33 – On this note, though,
0:18:36 we’re talking about the structural context right now
0:18:37 before we move to the individual.
0:18:41 So let’s add a little rigor to what does an ecosystem mean,
0:18:42 ’cause I know that can be very buzzword.
0:18:44 I’ve studied entrepreneurial ecosystems
0:18:45 for a very long time.
0:18:46 Cover them for a very long time, as you know.
0:18:49 And including interviewing all these different people
0:18:51 throughout the world who are experts in this,
0:18:52 like what an ecosystem means.
0:18:54 And a couple of themes emerge.
0:18:56 One, you obviously need talent.
0:18:58 You need really strong universities
0:19:00 and research ecosystem.
0:19:02 You also need, for the people that hate to admit this,
0:19:03 government support.
0:19:06 So the other thing is there’s a really important balance
0:19:09 between top-down and bottom-up.
0:19:10 And on the bottom-up side,
0:19:11 you obviously need communities of entrepreneurs
0:19:14 because there’ve been, as you know, many experiments,
0:19:16 including planned cities, planned innovations,
0:19:18 like where people are trying to do these centrally planned
0:19:20 top-down innovation initiatives,
0:19:22 they never work, ever.
0:19:24 There’ve been many, many, many over the years
0:19:25 and not one has worked.
0:19:26 Some argue Singapore,
0:19:28 that’s a different unique complex case.
0:19:30 And I don’t know if it’s as, quote, entrepreneurial.
0:19:32 It’s a successful nation-state,
0:19:33 but that’s a tougher thing.
0:19:35 So that’s one aspect.
0:19:36 Secondly, on the top-down side,
0:19:38 you obviously need enabling conditions,
0:19:39 like respect for property.
0:19:42 Like in the US, we talk about respect for property rights.
0:19:45 It can include respect for intellectual property.
0:19:47 It can include support, such as funding,
0:19:49 like DARPA in the United States,
0:19:51 which funded the internet, things like that,
0:19:54 supportive pro-innovation policies.
0:19:55 That’s what the bottom-up side is a community,
0:19:57 the top-down, and then obviously the talent
0:19:59 that comes in the form of universities
0:20:03 because universities are drivers of research and innovation.
0:20:06 So now on your point about the science and technology side,
0:20:09 talk to me about what you think is happening
0:20:11 uniquely in London, ’cause we’re sitting here.
0:20:13 – Yeah, yeah, I mean, so you mentioned DARPA,
0:20:15 you know, my sort of side hustle,
0:20:18 a side entrepreneur first is I’m the non-executive chair
0:20:22 of ARIA, which is a new government-backed,
0:20:25 well, government-funded R&D funding agencies
0:20:26 based on DARPA, basically.
0:20:27 – So what is ARIA stands for?
0:20:30 – ARIA stands for the Advanced Research and Invention Agency.
0:20:31 – I know what you’re talking about, okay, yeah.
0:20:33 – Yeah, so it’s been given, I guess,
0:20:35 in US terms about a billion dollars
0:20:37 to basically fund breakthrough R&D
0:20:39 that might otherwise not get funded.
0:20:43 So really trying to take some of what worked at DARPA,
0:20:47 in particular this idea of this program manager led model,
0:20:50 empowering brilliant scientists with visions
0:20:52 to just go out and build the networks
0:20:56 and coalitions of researchers to realize that vision
0:20:59 in a way that’s like all about,
0:21:00 actually a lot of things we’ve already been talking about,
0:21:03 it’s about ambition, it’s about incentives,
0:21:05 it’s about alignment, all these things.
0:21:08 And one of the things that’s been really striking to me
0:21:11 in the sort of roughly year that we’ve been up and running
0:21:14 is, one, just the depth of the scientific talent
0:21:16 across the whole UK, so not just London
0:21:17 or not just Austin and Cambridge,
0:21:20 but truly across the whole country.
0:21:23 Two, it’s almost like two stronger word,
0:21:26 but like the yearning for something like this.
0:21:29 – Wow. – Well, when you look up,
0:21:32 why does ARIA need to exist?
0:21:33 We do a ton of great science in the UK
0:21:36 and actually, I’m lucky to have been involved
0:21:40 in a lot of the science funding organizations that exist,
0:21:43 but I think one of the challenges is that with scale,
0:21:48 comes sort of more bureaucratic approach, right?
0:21:50 So if you’re trying to run science funding
0:21:53 for a whole country, of course you need to show value
0:21:55 for money for taxpayers and you need to sort of have
0:21:58 a lot of process, but the consequence of that
0:22:00 isn’t our UK thing, this is a global thing
0:22:02 and people like Patrick Collison and others
0:22:04 have written about the challenges
0:22:05 of where science has got to.
0:22:08 I think of it as a career ambition and incentive problem.
0:22:12 So if you go talk to like incredible postdocs
0:22:15 across the UK, across the US, and you say,
0:22:17 like, what’s your most ambitious idea?
0:22:18 And they tell you, and then you say,
0:22:20 cool, and so you’re working on that?
0:22:22 They’re like, no, you’re like, why not?
0:22:23 Like, you know, if they’re, and you’re like,
0:22:28 well, because I need to get this next publication,
0:22:29 which needs to get this many citations,
0:22:31 ’cause then I’ll be able to get my next grant.
0:22:33 And if I do that, then one day I’ll be able,
0:22:35 in 10 years, to get my own lab.
0:22:37 And then you’re like, wow, this is crazy.
0:22:40 We have some of the greatest minds of their generation
0:22:42 playing a bit like the making your boss look good game.
0:22:44 This is the making the grant makers happy game.
0:22:46 That’s exactly the same thing.
0:22:48 I’m so glad you brought that up because this is important.
0:22:49 So I want to break down a little bit more
0:22:51 about what you’re saying because, you know,
0:22:52 a lot of people have tried different forms
0:22:55 of like how to fund R&D and do it in a way,
0:22:57 an industrial R&D is what you’re talking about.
0:22:58 And in a way that’s efficient.
0:23:00 And a lot of the lessons learned here,
0:23:00 which I think are fascinating.
0:23:03 So one, you mentioned the concept of a program manager.
0:23:04 For those that don’t know,
0:23:06 like DARPA had these famous model
0:23:08 where they had program managers.
0:23:09 And it’s quite fascinating
0:23:11 ’cause like one example is Regina George, you know,
0:23:12 and she went to Google later on.
0:23:15 But I remember being at Xerox Park when her group funded,
0:23:18 and this is public advanced manufacturing initiative
0:23:19 and like reconfiguring manufacturing
0:23:20 and all these different things.
0:23:23 And there’s so many different interesting things about it
0:23:25 because one, there’s, first of all,
0:23:27 many of these initiatives can be very multidisciplinary,
0:23:29 which universities are not well set up to do
0:23:32 where people are very siloed in their departments.
0:23:34 And so having these grants can sometimes be like,
0:23:37 kind of these umbrellas for different disciplines
0:23:38 to come together,
0:23:39 including across multiple universities.
0:23:41 – Yeah, I was gonna say multiple universities
0:23:42 and sometimes even different sectors.
0:23:44 So like universities and start-ups.
0:23:45 – That’s right, that’s right.
0:23:46 – And non-profits.
0:23:47 – That’s right, totally.
0:23:48 Like one example was back in the day,
0:23:50 we did like content-centric networking.
0:23:52 Like it was like, you know, various types of things.
0:23:54 So that’s one interesting thing.
0:23:56 The second thing, this is a very little known fact
0:23:58 that people don’t know about this model is,
0:24:00 and I remember being fascinated by this
0:24:01 when I was working with my colleagues,
0:24:04 like helping them out with some stuff at SRI,
0:24:05 who were thinking about this,
0:24:06 which is Stanford Research International.
0:24:10 And they’re very famous for getting lots of research grants
0:24:11 and different things.
0:24:13 It’s fascinating ’cause most people,
0:24:15 when they think of government funding and program managers,
0:24:17 they think of it as being as a one-way model
0:24:19 where government gives money,
0:24:20 program manager allocates it.
0:24:23 Someone has a strong point of view and it goes A, B, C, D.
0:24:27 It’s actually much more non-linear and interactive than that,
0:24:30 where you actually have smart scientists
0:24:32 informing the program managers
0:24:34 for what proposals they wanna see.
0:24:38 Because actually the word in the grant-making business is,
0:24:41 if you’re bidding on an RFP request for proposal,
0:24:43 by the time it comes out, you’re too late.
0:24:45 You should be shaping what proposals
0:24:46 are coming out in the first place.
0:24:48 And that is a two-way dialogue
0:24:49 between government and universities.
0:24:52 – And that’s a big part of how ARIA is working
0:24:55 and planning to work is that…
0:24:58 But hopefully in an extremely transparent way,
0:25:00 which is say, here is an area that we’re excited about
0:25:02 where we think there is a thesis.
0:25:05 Before we make grants, before we do an RFP,
0:25:07 we wanna workshop this with people
0:25:10 that have a really broad range of views on it.
0:25:11 – That’s right.
0:25:13 – So that we know what are the things
0:25:14 we should be looking out for.
0:25:16 I mean, again, there’s a risk of a cliche,
0:25:19 but so much of the challenge of this stuff
0:25:20 is you don’t know what you don’t know.
0:25:25 And particularly across into disciplinary boundaries.
0:25:27 There’s a lot of academic literature
0:25:29 that suggests that surprise is the key
0:25:31 to scientific breakthrough.
0:25:34 Surprise comes when you have a different
0:25:35 knowledge base or perspective.
0:25:36 – Oh, yeah, yeah.
0:25:38 At Xerox Park, JSB, who is John Sealy Brown,
0:25:40 you used to manage it back in the day.
0:25:42 Used to always say it’s at the interstitials,
0:25:45 like at the edges and like it’s kind of in between industries.
0:25:47 I mean, I do think that surprise or serendipity
0:25:50 is very important, but I wanna be careful
0:25:52 that we don’t glorify like innovation
0:25:54 as like this “Aha, Eureka” moment
0:25:56 when it’s many little things
0:25:58 that can come together incrementally.
0:26:00 And I actually think, but tell me if I’m wrong,
0:26:01 when you say surprise,
0:26:03 you also mean this emergent quality
0:26:05 that you don’t know what you said,
0:26:06 what you don’t know, what you don’t know.
0:26:07 And it can actually come up, bottom up
0:26:09 because you’re not top down saying,
0:26:12 like you can say, we know this is an interesting area.
0:26:15 You may even have a loose hypothesis, thesis,
0:26:17 but you don’t have it so opinionated and targeted
0:26:20 that you’re literally veering into central planning,
0:26:22 which is where I would say places like China fail.
0:26:23 – Toe, when I’m too much surprise,
0:26:26 I’m talking about almost exclusively a bottom up phenomenon.
0:26:29 Like what happens when the biologist talks
0:26:32 to the computer scientist about a problem
0:26:34 that has a rough with the same contours
0:26:36 and they never realized before the biologist,
0:26:37 and then you’re like, oh,
0:26:40 and that can be an incredibly productive thing.
0:26:42 – You’re appreciating the choir
0:26:44 because whenever I used to give tours, that wasn’t my job,
0:26:47 but because I was the head of editorial at PARC,
0:26:49 I did give like these muckety mucks,
0:26:50 like the tours every now and then.
0:26:52 And it was funny ’cause one of the messages,
0:26:54 it’s so true ’cause they had always asked like,
0:26:57 how did this one place, not just once,
0:27:00 not a one hit wonder repeatedly create one innovation.
0:27:03 And these were talking world-changing innovations.
0:27:03 – Absolutely.
0:27:04 Absolutely.
0:27:05 – You know, like I can’t even say the gooey,
0:27:08 like there was endless lists of things that they did, lasers,
0:27:10 like, and the big part of it had to do
0:27:12 with this multidisciplinary thing
0:27:13 and putting them in the same thing.
0:27:15 But here’s the other thing that people don’t know.
0:27:17 And this ties what we’re talking about.
0:27:19 It wasn’t just you put a bunch of smart people
0:27:20 from different disciplines and one building
0:27:22 and go, hey, collaborate.
0:27:26 The founder of Xerox PARC gave them a mission.
0:27:29 And the mission was to build the office of the future.
0:27:32 So very simple mission,
0:27:35 broad enough to enable all kinds of innovation,
0:27:37 yet specific enough to provide a funnel.
0:27:40 So it’s not like crazy town where people are like,
0:27:42 oh, I want to build a sneaker that like rolls down the hallways
0:27:46 and I can skate through the, you know, blah, blah, blah, you know.
0:27:47 – Yeah, totally, 100%.
0:27:49 I think that idea of mission,
0:27:51 I mean, that’s the other bit that, you know,
0:27:53 Ilan, our CEO, Arya has,
0:27:57 I think one of the reasons I’m so happy he’s doing that job
0:27:59 is that just the sense of mission he has
0:28:02 about what we’re trying to do is just so palpable.
0:28:03 – That’s powerful.
0:28:04 How did Arya come about?
0:28:06 Like, did the government approach you guys?
0:28:07 Did you guys approach the government?
0:28:08 How did this come about?
0:28:11 – Yeah, the government created this by acts of parliament
0:28:14 early in 2022 and then ran an open process
0:28:16 to hire a CEO and a chair.
0:28:19 And, you know, I had been probably because of my,
0:28:22 because, well, mainly because of the work I’ve done at EF,
0:28:24 I’d been very interested in this idea of like,
0:28:27 how do you do institutional innovation?
0:28:29 ‘Cause it’s not the same as VC.
0:28:30 It’s not the same, it’s not the same.
0:28:32 So, you know, I’ve always been interested in this like,
0:28:33 how do you do institutional innovation
0:28:37 to increase the supply of things that you want?
0:28:39 And in a way, you know, EF is like trying to increase
0:28:41 the supply of great founders.
0:28:43 Arya is trying to increase the supply of, you know,
0:28:46 scientific breakthroughs through this sort of
0:28:47 institutional innovation.
0:28:50 And so, you know, I was, I just applied.
0:28:54 And slightly to my surprise, I got the job.
0:28:55 – I’m not surprised.
0:28:59 – I mean, Alan was in, based over near a home for you,
0:29:02 who’s in Berkeley and he was running this incredible thing
0:29:04 called the Activate Fellowship,
0:29:06 which is like a deep, sort of for deep tech entrepreneurs
0:29:08 out of academia.
0:29:11 – What I think is very fascinating about you being involved
0:29:12 is the other part of having these,
0:29:14 when you said their goal was to increase
0:29:16 the number of scientific breakthroughs.
0:29:17 The other part, half of it is,
0:29:19 how do you then actually take those breakthroughs
0:29:21 and make something of them?
0:29:23 Because as you know, there’s no shortage
0:29:24 of brilliant ideas and things coming out,
0:29:27 but there has to be like a system that can absorb
0:29:30 and help support and nurture it.
0:29:32 And so, I think it’s fascinating that you’re involved
0:29:33 because then it’s also like, wait,
0:29:35 you don’t only have to start,
0:29:37 go through like this classic linear model
0:29:40 of university funding X.
0:29:41 You may also be able to do a startup.
0:29:44 You may collaborate with a big company.
0:29:45 You could go here.
0:29:47 You could, a big company can acquire the patent.
0:29:48 There’s such a variety.
0:29:49 – Yeah, it’s interesting that you landed on that
0:29:51 ’cause I would say like,
0:29:55 probably the most important structural strategic question
0:29:58 we’ve had to answer for Ariya so far is, who’s the customer?
0:30:01 So, if you think about DARPA, the D is defense.
0:30:03 It’s pretty important.
0:30:06 I mean, every, I mean, they’ve done a good job
0:30:09 of doing the sort of bottom-up side of it,
0:30:11 but there is a big, you know,
0:30:13 like they are building things
0:30:14 that the Department of Defense ultimately
0:30:15 wants to be the customer.
0:30:16 – I mean, the internet was originally invented
0:30:19 to be resilient in the case of a disaster, right?
0:30:20 And of course it became something else,
0:30:22 but as is the case, but yeah.
0:30:24 – Yeah, and we, you know, we are not Daria.
0:30:25 We are Ariya.
0:30:27 We don’t have a big customer, you know?
0:30:28 And that was a big, important decision.
0:30:29 – Interesting.
0:30:32 – Not to be, you know, we are of government,
0:30:34 but we’re very independent of it.
0:30:35 We’re what we call in the UK,
0:30:36 non-departmental public body,
0:30:38 which basically means we’re outside government.
0:30:39 – Got it.
0:30:42 – You know, the question that Alan rightly asked
0:30:43 right at the beginning is,
0:30:44 we’re not going to have a customer.
0:30:47 So like, what is the exit path?
0:30:49 Like we find something great.
0:30:50 What do we do with it?
0:30:52 And the answer, it’s probably not surprising
0:30:54 given that they appointed an entrepreneur as CEO
0:30:56 and entrepreneur as chair is,
0:30:58 we think the answer is scientific entrepreneurship.
0:31:00 And Alan’s answer to this is,
0:31:04 we need to make sure that the interface between Ariya
0:31:08 and the ecosystem, the entrepreneurial ecosystem,
0:31:10 is really porous in both directions.
0:31:12 – I agree, both directions is a keyword.
0:31:15 I love that you guys say scientific entrepreneurship
0:31:18 because our tagline, I’ve said this publicly in talks,
0:31:23 our two-word phrase at Xerox PARC was entrepreneurial scientists.
0:31:25 So scientists who are entrepreneurial,
0:31:27 but are not actually starting startups.
0:31:29 And they have this kind of entrepreneurial mindset.
0:31:31 There’s a reason they’re not in academia.
0:31:32 There’s a reason they’re not in industry.
0:31:33 They’re in between.
0:31:35 They’re really unique interface.
0:31:36 So I think that’s fascinating.
0:31:37 We don’t have to talk about this right now,
0:31:41 but just one other quick note is there’s also important
0:31:43 to make sure process doesn’t get in the way,
0:31:46 ’cause one piece I did edit was Patrick Sue and Tyler Cohen
0:31:50 on the FAST grants and one key insight,
0:31:52 and this obviously came out of the pandemic,
0:31:54 is that sometimes you also have to deploy capital quickly.
0:31:57 And sometimes in government, process,
0:31:59 and not for, there’s a good reason for it,
0:32:02 can get in the way of doing that from allocating funding.
0:32:05 – I mean, that’s been like cool to how we think about this,
0:32:06 like how do we get out of the way?
0:32:09 And one of the reasons I think DARPA has succeeded
0:32:11 is like there’s very few veto points.
0:32:14 It’s not like you have to get like 12 people to say yes,
0:32:17 and we’ve done something very similar, Aria,
0:32:21 you the program directors have to convince the land basically.
0:32:23 And my job as the chair of the board
0:32:27 is to scrutinize the whole, but not get into the weeds,
0:32:28 not be another veto point.
0:32:29 – That’s fantastic.
0:32:30 I’m glad you guys are aware of that.
0:32:33 So now let’s shift back to the individual.
0:32:34 We’ve talked about the structural.
0:32:37 You said something incredibly fascinating earlier,
0:32:39 which is how you’re obsessed with ambition
0:32:40 and this question of ambition.
0:32:42 You also said another really beautiful,
0:32:44 profound, powerful word, which is yearning,
0:32:46 this idea that people have this yearning.
0:32:48 And the reason that struck me is because when you talk
0:32:50 about how you guys are actually trying to support people
0:32:53 early in the pipeline to become entrepreneurs
0:32:55 and know that’s a path for them,
0:32:56 what really struck me is it’s fascinating
0:32:58 that you even have to do that,
0:33:00 that we should even have to do that culturally and societally.
0:33:02 Because if you really think about it,
0:33:06 children are born creative and are born entrepreneurial.
0:33:08 X, Y, and Z, or let’s trade on the school thing.
0:33:09 Let’s trade lunches.
0:33:12 I’ll give you two pretzels for one Kit Kat, whatever it is.
0:33:13 It’s commerce.
0:33:15 Sometimes it’s about building things together
0:33:16 on the playground.
0:33:18 So I think there’s something kind of sad
0:33:20 that people lose that impetus.
0:33:22 And one question I have for you from your unique vantage point
0:33:25 at Entrepreneur First is when you say you try
0:33:27 to get people early, what is a sweet spot
0:33:29 that when you say like earlier in their career,
0:33:33 like is it right as they’re in their high school, college?
0:33:36 Well, in London, we have two tracks.
0:33:39 And actually it’s the same in Paris.
0:33:43 So we operate in London, in Paris, in Bangalore, in New York.
0:33:46 And the two tracks we have is we have a track for people
0:33:48 as they graduate from university.
0:33:50 And then we have a track for people in,
0:33:51 we don’t put a hard limit on it,
0:33:53 but you know the first five years of their career.
0:33:55 So you’ve got a little bit of work experience going on.
0:33:58 I think like those two moments are quite special moments,
0:34:01 like as well as yearning and ambition.
0:34:03 Another word we think about a lot is becoming.
0:34:05 Oh, becoming, look at you, I love that.
0:34:08 As I’m very influenced by my colleague, Arne Schenk,
0:34:11 who’s a brilliant guy who runs a program for school, Polaris.
0:34:13 He’s on our chat group with us.
0:34:14 Yeah, he is, exactly.
0:34:17 And Soloni and some others, yeah.
0:34:20 And he’s really convinced me of this,
0:34:24 that like ambitious people have a sense of who they want to become,
0:34:26 but often less of a sense of how.
0:34:28 Ah, so they know who, but not how.
0:34:30 And so like a big part of ESRoll
0:34:33 is to try and help people become the person they want to be.
0:34:34 That’s so interesting.
0:34:36 So Mark used to always say in the early days
0:34:40 when people would ask him, like there are three pools for a startup.
0:34:42 It’s product, it’s market, it’s people.
0:34:46 And he would always say that people is the one you met on the most
0:34:49 because product can change, market can change,
0:34:51 and that can actually sometimes be a lagging
0:34:53 versus a leading indicator.
0:34:56 But people are where you can really find that sort of,
0:34:58 you know, true north that sort of cutting forward,
0:35:02 which differential that you’re looking for in that kind of a business.
0:35:03 That’s really interesting.
0:35:05 So what I like about what you’re saying,
0:35:07 because my question, you’ve answered it, is very precise,
0:35:11 which is at what point do you kind of intervene, so to speak?
0:35:14 And what you’re saying is by doing it in college
0:35:19 and the early five years of their first job, that is the how.
0:35:20 It is the how.
0:35:21 Because they have a sense of what.
0:35:24 Because my argument was going to be like, why not do it sooner?
0:35:28 Like crypto, for instance, we’re actually seeing high schoolers,
0:35:30 they’re obsessed, like they want to learn.
0:35:31 And it’s not for financial reasons.
0:35:34 It’s building, it’s creativity, it’s like expression.
0:35:35 We’re the same.
0:35:38 We want to engage with people early.
0:35:43 And you know, the thing that keeps it very grounded is that it’s really about like,
0:35:44 what is the community?
0:35:48 What is the infrastructure that you can provide to people
0:35:50 that helps them figure this out for themselves?
0:35:51 You know, we’re not a cult.
0:35:53 We’re not trying to tell you who to become.
0:35:59 But you know, it’s like, how can we, you know, how can we sort of provide a peer group
0:36:03 that makes people say, actually the way I don’t want to be a banker.
0:36:08 I don’t want to go be working a 100,000 person big tech company.
0:36:09 And now I’ve found my people.
0:36:14 I’ve found the people that not only validate that sense,
0:36:15 but actually can help me get there.
0:36:18 You also need like support if you’re struggling with trying to figure something out
0:36:19 because you’re not alone.
0:36:22 And it’s the feeling that your choices are valid.
0:36:24 I mean, it sounds so basic.
0:36:25 There’s so much to figure out, right?
0:36:28 Because you don’t have the structure of like a classic top-down company, bottom-up thing.
0:36:31 The other quick thing is that this reminds me again of childhood development
0:36:35 because there’s a body of work that says that it’s not the parents,
0:36:37 it’s nature, nurture, debates, but it’s actually the peer group
0:36:39 that defines your development the most.
0:36:42 This is a very controversial and very important body of work from Judith Harris
0:36:44 in like the odds.
0:36:48 And it was a very important movement in child psychology and development.
0:36:51 So just on this note, so as you do this work,
0:36:54 and we were talking about how hard it is to have this like, you know,
0:36:59 when a harness people’s ambition, are there any icons you think that people need?
0:37:02 Because in the U.S., the social network movie was a moment for like-
0:37:03 I think it made a huge difference.
0:37:05 Right, like the zucks.
0:37:07 And because the other thing is this capital gap early on
0:37:10 where people can get angel funding, but not like the next phase.
0:37:12 I would argue that’s a similar thing.
0:37:15 I’m a talent game for building a company where you can find like the early employees,
0:37:17 but not the people who can scale it.
0:37:18 I think that’s still a gap.
0:37:19 That’s still a gap there?
0:37:22 And I think it’s closing, but it’s closing more slowly
0:37:27 because it just takes longer because you need those companies to have matured and exist.
0:37:32 But, you know, I think this is also why this like idea of ambition should be global from day one.
0:37:36 Like, yes, we want this to be a great ecosystem in London, but we’re not nationalists.
0:37:37 That’s a great point.
0:37:40 You know, when I think about EF’s best companies, the ones that scale fast,
0:37:45 they’re the ones that are embraced, having to be U.S. companies as well as British companies.
0:37:47 Yes, I totally agree.
0:37:49 So, going back to the structural conduct, before we go more into people,
0:37:52 because I do want to drill with you on the talent side more,
0:37:54 but on the more structural ecosystem context.
0:37:58 So, you know, we talked like, again, over seven years ago, very exciting.
0:38:00 You’ve come a very long way, very proud of the work that you and Alice and your team
0:38:02 have done at Entrepreneur First.
0:38:06 But like, you also have a unique vantage point given your work into the London ecosystem
0:38:07 and the tech ecosystem.
0:38:12 So, what are your views on what’s working, what’s not working at a high level?
0:38:14 And then what’s really changed?
0:38:15 I mean, think about it.
0:38:17 It’s kind of fun that we’re doing this again after seven years.
0:38:17 It is.
0:38:23 Well, it’s so funny because, and I think this is a thing that a lot of entrepreneurs wrestle with.
0:38:26 I remember when we started, we were so convinced we were too late.
0:38:28 We left our jobs in 2011.
0:38:31 I mean, it took a little bit of iteration for EF to become what it is now.
0:38:34 But, you know, I remember in 2011, we were like, maybe we just, you know,
0:38:36 like maybe this ecosystem is saturated.
0:38:36 Yeah.
0:38:37 And I just love it back now.
0:38:41 And I’m like, I think there was like one organization describing itself as a seed fund.
0:38:44 When we do demo days today, you know, you get like 2000 people or, you know,
0:38:47 it’s like, so the ecosystem has grown massively.
0:38:52 And, you know, I think that’s true at like every layer of the stack.
0:38:54 If you like, you know, I think the town, you know,
0:38:59 we already talked a little bit about how our attitude is about young town has changed,
0:39:03 but also the proliferation of angel investors seed funds.
0:39:07 And then the bit that I’m excited about more recently, and I guess this is sort of a,
0:39:12 sort of you guys coming here and everything in office is a good example for us is that
0:39:17 for a long, long time people talked about like the capital gap in the UK ecosystem that,
0:39:21 yeah, you could raise a seed round, maybe a series A, but you know, series B was really hard.
0:39:28 And you’re like, there’s a way to go, but both in terms of like local firms growing up and,
0:39:33 you know, kind of building reputations and track records, but also, you know,
0:39:37 the sort of most famous and storied American firms coming here.
0:39:39 I think that’s a huge net positive for the ecosystem.
0:39:43 Yeah. So that’s more a difference of degree though than kind.
0:39:46 Like in terms of, you’re saying there’s more investors, more capital available,
0:39:50 more people doing things, more entrepreneurs.
0:39:52 Would you say there’s any differences in kind?
0:39:55 I think that the difference in kind I would most point to, and it’s going to seem like
0:39:57 I’m obsessed with this thing, but it’s just about ambition.
0:40:00 I love it. I like that obsession. I’m on board with that theme.
0:40:04 I remember when we got started in 2011, one of the things we heard,
0:40:07 there were some really ambitious stops, you know, back then, you know,
0:40:11 in fact, I remember that when we recorded our podcast seven years ago,
0:40:18 or whenever it was one of my fellow guests on that was Michelle Yu,
0:40:20 who’s one of the fans of Songcake.
0:40:25 Now that was, that was one of the first, like real first generation London startups.
0:40:28 I was super ambitious, but they were unusual.
0:40:33 You know, like most 2011 London startups arguably were sort of like trying to get bought.
0:40:39 That was their exit strategy was to be quiet, not really grow big and massive.
0:40:41 Yeah. Now, and that’s not a criticism of those founders.
0:40:45 I think it’s a lot about like what, what sort of ambition will the ecosystem support?
0:40:46 That’s right.
0:40:50 And so the difference of kind that I would point out is that I think we now have people
0:40:56 who are truly trying to build the global category winner from London, from the UK.
0:40:59 Now we’re not there yet, you know, like, you know, we’re still, you know,
0:41:03 it’s amazing what, you know, Daniel has done at Spotify and, you know,
0:41:05 I’m sorry, but, you know, in general, we’re still, oh, add yen, you know,
0:41:09 like there’s, there are some really extraordinary European success stories.
0:41:13 But, you know, I think there’s still, we’re still sort of pointing to things that,
0:41:15 that happened a little while ago.
0:41:15 Yeah.
0:41:21 I do get the sense and, you know, maybe, you know, crypto is an area where this might happen,
0:41:26 where, you know, you, I do think that 10 years from now, we’ll look back and say,
0:41:29 you know, the early 2020s was actually a pretty special time
0:41:32 to build globally ambitious companies from Europe.
0:41:35 I’m so glad you brought up crypto, because when I think of crypto,
0:41:38 this goes back to the earlier point about the positive sum game and the incentives.
0:41:42 It’s really about incentive mechanisms and incentive alignment.
0:41:46 And that’s actually the beautiful thing about crypto is it bakes these things in structurally.
0:41:50 So there’s a lot of ways to align different parties of people together to build things.
0:41:52 So I kind of agree with you that this could be a very unique time.
0:41:56 One of the exciting things about crypto, from a geographic perspective,
0:41:59 is that it is, it is sort of like natively global.
0:42:03 It’s not one of those things where you look to a domestic market and then expand.
0:42:04 That’s exactly right.
0:42:08 And, you know, when I think about two of the crypto companies that we’ve invested in together,
0:42:13 Andreessen Horowitz Entrepreneur first, Jensen and Aztec, I think what you see is like,
0:42:15 these are people trying to build infrastructure for a different world.
0:42:16 Yes.
0:42:19 But they’re not building it for London or the UK or for Europe.
0:42:22 It is inherently, you know, global.
0:42:25 Yes, we had an MC later, COO of Uniswap on,
0:42:30 and she was saying how this is a really unique type of product launch because you’re instantly
0:42:33 global when you, like most other times you used to have, like you’re saying,
0:42:37 these regions, you would land and expand in this market, in that market.
0:42:39 Bro, in this market, it does not go that way.
0:42:42 I think it also plays to London’s strengths in a lot of ways.
0:42:46 And the other thing that I observe now, you know, we’ve been investing in crypto companies
0:42:52 that, yeah, for a long time, I think we started the like London Bitcoin meetup in like 2014
0:42:55 or something with Imperial College.
0:42:59 But, you know, we, one of the things, I’m sure you have seen this, you know,
0:43:02 with probably a better vantage point than almost anyone.
0:43:07 But, you know, when you go through these like hype cycles and then winters,
0:43:10 it’s easy to get discouraged.
0:43:15 But, you know, one thing that I find so like exciting and moving from a talent investor
0:43:19 point of view is when I look at like, what are the investments we’ve made and founders
0:43:25 that build in this space that have worked, they’re actually all the ones that we’re just
0:43:28 trying to fundamentally build real technology.
0:43:29 Oh, interesting.
0:43:30 As opposed to…
0:43:33 Well, what I mean is like, you know, I think at the height of a boom,
0:43:35 you do get a lot of thrust.
0:43:38 And I have to say, like some of that felt pretty extractive, you know.
0:43:39 Yes, of course it did.
0:43:43 But, you know, I look at Jensen, I look at Aztec, and I’m like,
0:43:45 these are like engineering-led companies.
0:43:49 You know, like they’re building incredibly hard products, and that’s what gives them the
0:43:50 right to win.
0:43:51 Yes.
0:43:55 And I do think like Europe’s not that good or hasn’t been that good at the hype, frankly.
0:43:59 And so in some categories, hype helps a lot.
0:44:03 But what I’m really excited about is like, I think one of the things that we are really
0:44:07 good at in London, in the UK, is like science and technology.
0:44:10 You know, like actually doing hard engineering tasks.
0:44:14 And I think that for me, when I think about the future of crypto, I think like,
0:44:18 we just still need a lot of fundamental new technology to make this work.
0:44:19 This is why I’m in the space.
0:44:22 This is actually a big reason why I came to the crypto team full-time,
0:44:25 because of our R&D and like research and development side.
0:44:29 It’s so technological, the depth, that expertise, like for those inside,
0:44:31 it’s phenomenally engineering focus.
0:44:33 And I love that kind of building.
0:44:34 And I agree with you.
0:44:37 Like, and there is, as you said, there’s always a frothiness in every cycle.
0:44:38 And that’s, that’s okay.
0:44:41 Because sometimes that creates the buzz that then brings the people that-
0:44:42 The crowds in talent, crowds in capital.
0:44:46 And then the few people stay through every cycle and more and more people build.
0:44:49 And we’re in a phase right now where the building and the product things
0:44:51 that are happening are phenomenal.
0:44:54 So my last question for you is, what would you say,
0:44:56 given that this is an art, not a science,
0:44:58 but I’m going to make it a little scientific for a moment,
0:45:03 are the qualities that you see that make someone a good entrepreneur?
0:45:05 Or what, what kind of, in your talent game,
0:45:09 like what is the quote formula or filter that you use?
0:45:16 I don’t think there is a formula, but I think that being exceptional
0:45:18 is more of a habit than sometimes we admit.
0:45:22 And what I look for when I’m in,
0:45:24 if I’m interviewing like a 21 year old who’s like,
0:45:26 never worked anywhere, never, yeah.
0:45:29 And what I’m always asking is, what have they done,
0:45:33 however unrelated to starting a startup,
0:45:39 that they had to do on their own volition without anyone telling them.
0:45:40 Yes.
0:45:44 Where they went above and beyond and something happened.
0:45:46 Like that idea of agency in the world.
0:45:47 That’s pretty powerful.
0:45:48 I think it’s probably the single most important thing.
0:45:50 I think that’s a fantastic note to end on.
0:45:54 It’s ambition, yearning, becoming.
0:45:57 And I love the line you said about ambition as global
0:46:01 because we’re here in the UK, I’m from Silicon Valley,
0:46:03 but we’re talking about a global phenomenon.
0:46:04 Thank you so much for joining us.
0:46:05 Thanks so much for having me again.
0:46:06 It’s so great to have you back.
0:46:07 It’s great to be here.
0:46:17 [MUSIC]
0:46:27 [MUSIC]
0:46:37 [MUSIC]
0:46:45 [MUSIC]
0:46:55 [MUSIC]
This episode from Web3 with a16z Crypto, is all about innovation on a global scale, exploring both ecosystem and individual talent levels. We examine what works and what doesn’t, how certain regions evolve into startup hubs and economic powerhouses, and what constitutes entrepreneurial talent. We also discuss the nature of ambition, the journey to finding one’s path, and broader mindsets for navigating risk, reward, and dynamism across various regions, with a particular focus on London and Europe.
Joining us is Matt Clifford, who played a pivotal role in the London entrepreneurial and tech ecosystem since 2011, is the Chair of Entrepreneur First and the UK’s Advanced Research and Invention Agency (ARIA). Before this episode was recorded, Matt served as the Prime Minister’s representative for the AI Safety Summit at Bletchley Park. Recently, he was appointed by the UK Secretary of Science to deliver an “AI Opportunities Action Plan” to the UK government.
This episode was recorded live from Andreessen Horowitz’s first international office in London. For more on our efforts and additional content, visit a16zcrypto.com/uk.
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