What It Takes to Build a Startup | Andrew Chen & Matt Perault

a16z’s Matt Perault sits down with General Partner and Speedrun lead Andrew Chen on the a16z AI Policy Brief to explore what “Little Tech” actually looks like at the earliest stages, and why the realities of building a two- or three-person startup are often missing from policy debates. Andrew takes us inside Speedrun, where founders are often starting companies from kitchen tables, working with tiny teams, and trying to determine in a matter of months whether their idea can become a viable business. He explains why these founders rarely have the time or resources to engage with policymakers, even as regulation can have an outsized impact on whether and where they build. Matt and Andrew also discuss how regulatory burdens accumulate for young companies, why startups can choose where to put down roots, the role of ecosystems like Tech Week, and what policymakers can do to hear directly from the founders who may otherwise be absent from the conversation. This episode originally appeared on the a16z AI Policy Brief.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This is truly little tech. The average team is two to three people. They're running their companies not in their office, not in a coworking space. They're running it at the kitchen table. For these founders, they are so mission focused, trying to survive as a business. They just don't have time to participate. They don't have lobbyists. They're not really represented. It's a choice whether or not each state or each city wants to have startups or not.

• 0:25Erik Torenberg?

  What does it actually look like to build a startup from day one? In this episode, Matt Pearl sits down with A16Z General Partner and Speedrun Lead Andrew Chen to talk about little tech, the tiny teams at the very beginning of building a company. Andrew shares what life looks like for founders who are often just two or three people building from a kitchen table, focused on getting a product to work and finding their first customers. They rarely have lobbyists, policy teams, or even the time to participate in debates about rules that could directly affect them. Matt and Andrew discuss how regulation can influence where startups choose to build, what policymakers can learn by hearing directly from founders, and what it takes to create an environment where the next generation of companies can get started.

• 1:12Speaker 02

  Andrew, welcome to the A16Z AI Policy Brief.

• 1:16Speaker 00

  Thank you for having me.

• 1:17Speaker 02

  So you lead our Speedrun program. So can you tell us a little bit about what Speedrun is?

• 1:22Speaker 00

  Yeah, so many folks in the audience will know that startups have to come from somewhere. And so our job is to try to find them on day one when the founders are just starting to think about their companies. And so what's great is we host a program based in the San Francisco office, where we will announce to the broader internet and through our marketing channels and podcasts and Substack these letters and everything else. That will be investing up to $1 million into brand new startups. And the ones that we really focus on are the ones where folks are just getting going, folks that maybe have full-time jobs and they're starting to come up with a new idea

• 2:06Speaker 00

  with their best friend and they want to go start something. It could be folks that have already left their roles or they just graduated from school and they are coming up with something new. And so what we do is we spend 12 weeks with them. They get the full force and power of the firm and all of our relationships and all of that great stuff. And then after we invest, then we share them with the broader ecosystem. We host a Speedrun Demo Day, where we have over 1,000 angel investors and seed funds and many others come and invest. And then we go from there and kind of release them off in the world. And hopefully, we have the opportunity to invest more in the future and to work with founders as kind of the beginning of a lifelong relationship with them. That's the idea.

• 2:47Speaker 02

  How do you decide what looks like a company that you want to have as part of the Speedrun program?

• 2:52Speaker 00

  At its core, in the earliest days, there are just so many famous examples of the ideas changing all the time. Many of you guys know that a product we use every day, Slack, originally started out as a browser-based video game company, or many, many other examples down the line. And so what we try to do at its core is to really just invest in the best people. And so we're looking for folks that have had some really unique experience in their past. And that could be anything from enormous athletic accomplishments

• 3:36Speaker 00

  on their way to a career in tech, or it could be that they started a GitHub repo that has now thousands of stars and it's grown incredibly fast. Or it could be some of the traditional markers where they have gone to elite universities and had sort of learned elite, like incredible, unique insights at some of our best AI companies. And then they're ready to use that in a new company as well. I think we're very open-minded. And so we actually have mostly folks out of the Bay Area, actually all over America, a little slice from other places in the world, mostly focused on the US. And it's amazing to watch founders that are from, whether it's New York, or Texas, or Florida,

• 4:21Speaker 00

  or Midwest, or any of these other places, actually come to San Francisco, get to experience kind of what it's like to be in the Bay Area. We work with them, of course. And a lot of them go back to their home communities and continue to build their companies. And of course, quite a few of them stay in the Bay Area as well to build the next generation of tech companies here. We're very happy when either of those happen.

• 4:41Speaker 02

  So what is, I'm kind of interested in the range of types of sizes of companies that might participate in Speedrun. It sounds like on the small side, it might be a couple of people who just decided to, who just have an idea, like really the smallest of the small. How large do the companies get?

• 4:57Speaker 00

  Yeah, this is truly little tech. When we talk about little tech, this is it. This is, I think the average team is two to three people. They're running their companies not in their office, not in a coworking space. They're running it at the kitchen table. It's really sort of the source of a lot of the success that we've seen in the overall American industry has been, really starts in these very small places. And then, yeah, we invest up to $1 million and then hopefully they raise more at Demo Day and hopefully they keep going. And eventually, they become incredible employers and pillars of the industry.

• 5:42Speaker 00

  And we want to be with them from that journey from day one.

• 5:46Speaker 02

  And what are organizations that would be too large to apply for the Speedrun? Like what's the upper bound?

• 5:53Speaker 00

  Yeah, the upper bound. I mean, honestly, for us, we would say as soon as you've taken capital elsewhere, we would consider that, maybe not disqualifying, but it would be sort of like, maybe. So you're kind of at a point where the question is, well, how many folks can you get to bootstrap the company together? So if you have a group of five friends that all went to college and they trust each other a lot and they want to spend six months like on their own dime, working on something, like of course, we would love to back a team like that, especially one with that much trust. But very rarely would we see a team above three, four, or five people at that point. At some point, you don't want to divide

• 6:37Speaker 00

  the company's ownership to be too small, especially because people come and go. You probably need to, some people's life situations will be such that you'll need to actually pay them. And so, yeah, so we, again, really, it's like a two or three person thing typically.

• 6:54Speaker 02

  So we invest at different phases of company life cycles. We have a growth team. That's when companies tend to get larger. We have a venture team when companies are smaller. Speedrun, as you're describing it, is like the littlest of the little tech. Why did we as a firm, and why did you decide that this was an important part of the lifecycle to support?

• 7:10Speaker 00

  Yeah, I think that the way I see the mission for A16Z Speedrun is that we're in the, we want to get as close as possible to the moment that founders are actually created and new companies are created. My first couple of years at the firm, I spent more in Series A, Series B. And so you're writing checks there where these are mature businesses, or there's at least a glimmer of a business there. And so you're investing $10, $15, $20 million. And so by that point, yeah, you have customers, you have metrics to look at, you have a team, et cetera. And that's a wonderful place to invest.

• 7:54Speaker 00

  And historically, it's been maybe the best place to invest. For us, one of the really magical things, something that I take a lot of just personal pride and excitement in, is the idea that we are not just waiting for entrepreneurs to show up at our doorstep at A16Z, but we're actually helping create the companies in the first place. So for example, in the last Speedrun bash, there were 70 companies. And of the 70, there was probably a dozen where, you know, these were folks that had full-time jobs and they had to turn in the laptops and their badges. And we couldn't even wire the money over because they didn't have a company to even incorporate. And so we sort of helped incept these, the idea of like, hey, like, let's create

• 8:35Speaker 00

  the most powerful and best path to starting a company. And I think a lot of those founders eventually would have eventually started businesses. When you're a founder, sometimes you just can't get that bug out of your ear. But I would like to think that we maybe hold some of that activity forward. And so many folks that maybe would have waited for another five or 10 years of work experience and financial stability, maybe they would have taken that jump. And what an amazing time in the AI era to encourage them to jump in at the right moment.

• 9:14Speaker 02

  Can you give a little texture to what a day in the life looks like for a Speedrun company? Like when they're part of the program? What does their day to day look like, both as part of the program? And then I assume you see, you know, again, there's like high, high levels of variance, I'm sure. But like, what are the kind of the common things that you see about founders who are operating at this stage?

• 9:32Speaker 00

  Yeah, yeah, definitely. So, you know, if you could kind of picture in your head, you might have, um, you know, two founders that are originally, you know, they're based in Austin, Texas, they're based in Chicago, they're based in, you know, Pick Your, Pick Your City. We also have had teams, teams from, um, you know, from Utah, we've had teams from, from, from all of, all over the US. Quite a few from New York, quite a few from, from, um, Pacific Northwest as well. So kind of imagine you have, you have two people, they get accepted to this program, they're very excited. They, they, they have to incorporate the company, they get the money, it gets wired in. They've never seen that much money in their life, right? Like they're, they're, they're excited, right?

• 10:14Speaker 00

  So, so they buy, they buy, they buy plane tickets, they come to San Francisco. And they typically, you know, what we'll do is we have a, we literally have a welcome to SF guide. That is, he, these are the neighborhoods we recommend. Here's how you go on Airbnb and, you know, pick the right ones. And so they do that and, and we try to, try to create a community. And so, um, so we have all these Slack instances and email lists and, you know, and you're meeting other founders. And so, you know, back to your, your kind of, um, a day in the life of you, you kind of imagine a founder.

• 10:46Speaker 00

  You know, waking up, they're often, you know, for the duration of the program, they're roommates with their, with their co-founder. So you're, you're, you are spending 24/7 together, like truly. You know, you're not, you're not living somewhere fancy, you're, you're, you're somewhere, um, uh, you know, typically like maybe close to the A16Z office. A lot of these folks are either, uh, working together, um, at their, at their homes. And we also offer access to the A16Z offices. So sometimes they'll, um, you know, uh, end up walking in or, or taking an Uber in, uh, taking a Waymo, um, into the office. And, uh, and then they end up in, we have a couple of co-working spaces where they'll, where, where you'll spend time. And, and the only thing that they should be spending time on really is just to figure out, um, is, is this business going to work?

• 11:31Speaker 00

  Like, how do we, they got to build the product and they got to sell the product. And, and they got it, and they, they got to do it in a short period of time. And so, so typically you'll have maybe, uh, two co-founders, one will be more of a business co-founder. One will be more of a, you know, technology and product co-founder. The technology and product co-founder is typically using a lot of AI right now, a lot of AI coding. So rather than, you know, going out and needing to, um, add a lot of cost and, and, you know, maybe outsourcing, you know, parts of your, your coding or hiring a bunch of, you know, young people to, to, to, to do coding. You can just focus on just, you know, hey, how effective can one or two people be, you know, right now? And like, let's just make this business stable and survive. Let's, then let's go hire a bunch of folks.

• 12:14Speaker 00

  Then the business co-founder is often out there interviewing customers, talking to customers, trying to make deals happen. And so there's, there's often this dichotomy that we see of kind of like the, the, the outward facing business co-founder and then the inwards facing product and technology founder as well. What we do with Speedrun is once per week, we end up having some formal programming. So we want to make sure the companies have as much time to work as possible. But we will call them in once per week, they come to the A16Z office. We'll typically have a speaker, um, who is, uh, you know, we've had, uh, some amazing, amazing founders, you know, the founder of, um, uh, you know, Zynga or, you know, Vercel, um, we've had the, you know, C-level folks from OpenAI.

• 12:56Speaker 00

  We've had, um, uh, you know, we've had, of course, Marc Andreessen and Ben Horowitz with us many times as well. You know, that, that's always fantastic. And then we do these office hours where they will, uh, sit in a group of 20, 30 companies and, um, and, uh, you know, they will, they will talk to each other about, uh, solve problems they're trying to solve. So we run these office hours, we talk about everything from hiring your first, um, you know, your, your first employees to signing your first customers, how do you launch on social media? How do you, what's the difference between selling into a large enterprise versus selling into SMB? And all, all the things that you do. And of course, how, how is everyone using AI? You know, you know, what are all the new tools that everybody's using? We spend a lot of time on that as well.

• 13:39Speaker 00

  And then, uh, and then, yeah, and then, and then hopefully the rest of the week, they are, they're out and about working and they're being immersed in kind of the milieu of, um, the, the SF tech ecosystem. So they're meeting a ton of people, meeting a ton of investors, learning all of that. And, and, uh, and so, yeah, so we're, we're very excited about, um, uh, just everything that can happen in, in just, in, in just a couple of weeks.

• 14:01Speaker 02

  So I know, like, obviously, the most exciting thing to talk about is success, the success part of the ecosystem. But in venture, like, there's a lot of not success, right? It's like sort of the nature of the business and I assume.

• 14:11Speaker 00

  The majority of the business, yeah.

• 14:13Speaker 02

  And, and, and the earlier you go in the lifecycle, the more true that is, the more companies don't succeed. So what does that look like for Speedrun? For instance, like when companies come through the program and then they're not able to launch a successful business, at least the one that, that, that we funded as part of the program, what does that pathway look like?

• 14:31Speaker 00

  Yeah, that's right. Yeah, I think historically in, in the venture capital business overall, um, you often, you know, the, the, the colloquial description is something like half the companies, uh, you know, don't, don't work out at all, right? They just kind of outright, um, uh, you know, fold. Then you'll have another, you know, if, if that's, if that's like five in 10 companies, you'll have another, you know, two or three where you make a little money. And then all, all, all the money is made in that kind of top, top decile, you know, the, the one, the one out of 10 that really where you get, where you get the grand slam. And that just seems to be true mathematically, which is, which is, you know, just amazing. It's been very consistent over many decades.

• 15:12Speaker 00

  So, you know, to, to, to your question that on, on, you know, what happens to the, to the ones that fold? Well, a bunch of great things happen, right? I mean, first, like, we, we think that even though, um, we as a firm make the money on the, you know, on, on, on the power law kind of exceptional companies that break through, um, you know, we make our reputations with how we work with all the founders that are, um, you know, working hard, working a hundred hours a week. They're, um, you know, they're, they're, they're completely plugged in, they're working weekends, like the whole thing. And, and it just doesn't work out, you know? And sometimes it's to no fault of their own, sometimes there's just a market downturn, you know, they're starting a pre-AI company.

• 15:55Speaker 00

  When everybody's going AI, um, it's because they are, uh, you know, their, their, the co-founder got sick. You know, it's because of, of all these kind of, you know, like many, many different potential things that could happen. And so as a result, um, the, the best thing we can do for those companies is number one, um, should we back the founders again? You know, that's, that's like one, I think, very special thing about, about kind of that Silicon Valley mentality is like, okay, great. You've already, you've, you've just spent, you know, a million bucks educating these founders, um, about how to start a company. Hopefully they can start another company. And by the way, like, whether you're talking about, um, Uber or Slack or, um, you know, Microsoft or OpenAI

• 16:37Speaker 00

  or any of these companies, and when you look at the, the CEO and the founders involved, it very frequently, more than, more often than not, they have been involved in many other things along the way. And so we often love the idea of, uh, and we just did actually, just like, well, just, just actually last week, we, we just funded a founder again on a better idea, um, than, than his first idea, even though, even though he, he ended up just returning a little bit of the capital, um, that, that he spent. So, so I think, I think, I think that's great. The other version is some, sometimes, um, you know, these founders, they need a little bit of a recharge, right? And what that means is they are, um, they, they, they went at it like completely just 150%.

• 17:17Speaker 00

  And what they need is they need a little bit of time to, you know, rebuild their finances, they need to, you know, they probably weren't paying themselves that well, uh, they probably weren't, uh, you know, they need to, some time to focus on their health. You know, we find that a lot of these founders become very hot commodities, uh, because that means that you can get somebody that works hard, you know, works on unstructured problems, is completely current on all of the newest technology. And you can get them, you know, at your company. And so what we've been seeing is a lot of, a lot of teams will end up hiring, hiring each other. Uh, you know, if one doesn't work out, you kind of like, but you respect the founder, like, great, you, you hire them. And then maybe they spend, you know, two or three years with you, maybe they'll lead some new initiatives, some new products in your, in your business.

• 18:00Speaker 00

  And then a few years later, they spin out and they're ready to start a new company. And then hopefully we as A16Z get another shot at them, uh, you know, to, to, to work together. So, yeah, so that, that's sort of all by design. And I think it's, uh, perfectly, perfectly expected, um, you know, as outcomes. And we, we just want to partner with these founders for their, for their whole professional career.

• 18:19Speaker 02

  So I, I'd love to turn to policy now, since we're, this is a policy sub stack.

• 18:25Speaker 00

  This is the policy, yes, yeah.

• 18:26Speaker 02

  Yeah, it's a policy brief.

• 18:27Speaker 00

  Let's do it.

• 18:28Speaker 02

  And so I'd love to like, understand more about how the companies you work with think about policy issues. This is something that we. We obviously do to some extent, but you're like living and breathing the founder side of it on a daily basis. And we've tried to kind of channel the concept in different ways. Like, we recently wrote this piece called Greetings from a Garage about what it looks like from a policy perspective, if a couple of people go into a garage to build the next great tech tool in California, what is the regulatory landscape that they have to deal with? And it was a really helpful exercise, because often, policy teams, legal teams, will think about just incremental burden. Like, if we pass, there's a new law that's

• 19:11Speaker 02

  been proposed, what happens if we pass this new law? How onerous or not is it going to be? How helpful is it going to be? And I think the insight that our, the head of our state team, Kevin, had in, when we were thinking about this piece is like, it's not just the, it's not just the incremental burden, it's all the things that a, that a founder has to face from the moment they're building with the technology. So like, in California, that doesn't just mean SB 53, which was passed last year, it means all these data providence requirements from the session before, it means privacy law in California that was passed several years before, it's all cumulative. And the moment that you start building the tool, you have to comply with all these things. And so, really, the, the policy picture is the composite of all those things, it's not any individual one of them. So I'm curious

• 19:55Speaker 02

  what you, like, you know, when you're at the stage, like, you're literally at the, like, we just met in the coffee shop, where, you know, we're, we're in the garage, we're roommates, um, we're, you know, we're, we're in the shared Waymo on the way to the A16Z office. Um, at that phase, how do the people that you work with think about policy issues?

• 20:12Speaker 00

  For these founders, uh, they are so mission focused, right, at, at, to, to just make their, make their company, make their product. I mean, it's not, it's not even a company at that point. It might, it's like, they might even think of that as a project or as a product. You know, there's no, there's no company, because it's just the two, it's just the two guys or gals, like, trying to, trying to make things work. And so, for them, from a policy perspective, look, I think every, every obstacle that is put in front of them, um, along the way for them to, to just prove that their initial product can even work, just adds friction, you know, for the most part. So I think, I think most of the founders, when you, when you talk to them, they really see all that stuff as like, oh, wow, I've incorporated, I'm doing this thing, I'm hiring these people, okay,

• 20:56Speaker 00

  you get the stack of paperwork this big. And, you know, a lot of these laws, a lot of the paperwork is designed for companies that are much, much larger than them, right? And have the ability to comply, because they have teams of lawyers and teams of, you know, people, experts, you know, that, that are, that are in there. And of course, we, we as A16Z try to, try to help them. Um, but from, for, for, for most of these folks, all they're trying to do is they're just trying to, to, to get going at all, and, um, and to survive as, as a business. And so, um, generally, um, uh, their, their interaction on, on kind of the regulatory, you know, side of the world is usually negative, because these are things that are, you know, that actually create protections often for either

• 21:40Speaker 00

  big tech or for, you know, other, other parts of the industry that they, that they, um, you know, end up, and end up trying to disrupt. So I'd say that, that's kind of one major part. The other part is, is that, um, you know, for many of these founders, they, uh, they just don't have time to participate, right? They don't, like, these guys, like, don't have, you know, they, they don't, they don't have lobbyists, they don't have, you know, they're not, they're not, they're not involved in the political process, they're not really represented in, in, in, in all these ways, because frankly, they just don't have time. You know, they're, they, they may not even have time to shower, or to, you know, like, have, have, have, have a nice dinner for themselves. Uh, they're working, you know, that hard, much less to, to do things that are kind of, uh, sit, sit outside,

• 22:24Speaker 00

  um, you know, they're kind of just day to day of just survival, you know, at, at that point.

• 22:28Speaker 02

  And that's a compounding thing. I mean, I think, that's a dynamic that we encounter all the time, because we, you know, we show up, we, we represent little tech, but we're not, or I'm not, a founder. And so, when, when we show up, people are like, well, we would, we'd rather talk to the startup, we don't want to talk to the investor in the startup. But the challenge is, the, like, as you're saying, like, the startups are not showering, working 100-hour weeks, like, doing, they're, they're, they're not going to go and, like, make the drive to Sacramento, or the flight to Washington, or flight to Brussels, and represent what it's like for them to try to build under the, in, in the current regulatory environment.

• 23:06Speaker 00

  That's right. Yeah, well, and, and, and their timeline, a startup, a two-person startups timeline, not only is it not a year, like, you may not know if you have a company in a year, right? It may not even be six months, it may not even be three months, you know, you, you might, like, be working on really small time, time schedules. And so, to make the investment to, yeah, to fly to one of these places and to, you know, kind of be involved, um, I, I do, I do think it's really hard to, to carve out time and do it, which is why I think, um, both, it's really important to have some mechanism to represent these people, because, you know, like, these are the future job creators, like, these are the companies that are going to be employing folks and driving, you know,

• 23:47Speaker 00

  continuing America's, um, you know, success on the technology, you know, field. But also, you know, on top of that, um, you know, the, the folks that maybe, uh, do show up, and, and, you know, in, in all these places, and do advocate for tech, um, you get a very skewed view, because you, you don't hear from little tech, but you might hear a lot from big tech. You know, you might hear a lot about, a lot from, you know, the industries that are getting disrupted, um, and very little from the, you know, the 30-year-olds that are, you know, that are, that are spending night and day trying to, to make that happen.

• 24:23Speaker 02

  So it's always, we actually get hostile reactions from policymakers when we raise that point. Like, they'll say, well, all of industry agrees on this. And when they say all of industry, what they means is, big tech companies, or sometimes it might be big financial services companies, like, large organizations, and they say, you have a different view, and we need you to get on board. And we'll say, in the policy conversation, like, it's sort of by design, at least some percent of the time. Like, there's, there's lots of time where we agree with big tech companies, but, well, like, when we disagree, we'll say, like, it's by design, we're representing a different part of the ecosystem, so of course we don't agree on everything.

• 24:55Speaker 00

  That's right. That's right. Absolutely. Absolutely. Yeah, it's just from an ROI, time ROI standpoint, it just doesn't, doesn't make any sense. I, I think there's also a really unique thing, because these teams are so small, and they're kind of at the, their inception, which is, they get to pick where they start the company from, right? And, um, you know, I, I, I was, uh, you know, I moved to the Bay Area in, in 2007, and in 2007, the world revolved around, you know, Palo Alto and Mountain View, and kind of the peninsula, you know, what we, what we think of as Silicon Valley. But, you know, I think, but, but folks, I think, are familiar with this now, that, um, we saw a, you know, whole-scale migration of the startup, the center of the startup ecosystem being from,

• 25:40Speaker 00

  uh, the peninsula to, to, to San Francisco proper. And then, you know, subsequently, we've seen it now spread where, um, you know, New York is one of now, one of the, of huge, you know, startup hubs that's emerged. Um, and, you know, all, all the, over the last couple of years, all the major venture capital firms, and had opened offices in, um, you know, in, in, in, in various places, in, in London, and, and in Europe, there's been, there's been other kind of, you know, major hubs that have created. And, and so I think, I think there is also an interesting thing where that almost becomes part of one of the most important choices that you can make as a startup, which is where are you gonna plant roots, where are you gonna hire people from, where are you gonna do

• 26:20Speaker 00

  that? And if you end up working on an AI company, and you know from day one, that, uh, there's going to be a bunch of extra rules about how you can use AI, uh, you know, the, the, the two guys, two gals, you know, startup, uh, you know, they're very mobile, you know, they can, they can, they can pick and choose where they want to go, and, and they do. And so, um, and, and historically, the Bay Area has benefited from, from that mobility. I think, I think, uh, there's some interesting stats about how, um, nearly 50% of, uh, venture-backed startups are first-generation immigrants, for example, you know, people who, who relocate in order to do it. Um, and I doubt you, if you were to say, okay, well, the other 50%, how many of them are actually native San Franciscans versus

• 27:04Speaker 00

  people who, you know, move here? Uh, the answer would be, you know, it's probably, probably approaching 100% at that point. I think the important note there is, like, the Bay Area has certainly benefited from this. You know, it's, it's not, it's not certain that it'll last forever. It's not certain that, you know, that, that, uh, California will always be the best place to, to, to start companies. And so, I, I think, I think it's important for us to preserve this ecosystem, because it is, it is very, very special. It is something that is, like, unique, not just in the world, but even, even within the US, um, you know, in, in, in, in order to have this, this fertile of an ecosystem for, for startups and new technology.

• 27:38Speaker 02

  Are, are you hearing founders talk about regulatory issues as one factor that they consider in where they end up starting the business?

• 27:45Speaker 00

  Yeah, I, I think that, uh, it is sometimes indirect.

• 27:50Speaker 00

  I think, for example, just, you know, like, cost of living is a great, you know, is a really simple one. Or if you're building a deep tech company, if you're building the next generation of manufacturing, you have to go somewhere where people are building, you know, building large, that there's large-scale lab and warehouse space at reasonable prices. And so I think you're seeing these pockets like El Segundo in LA, you're seeing, you know, folks building things in Texas for many of those, you know, reasons. I think the Bay Area has hugely benefited from just the AI wave, you know, really centered here. So I think that's really extended the life of this ecosystem in a big way. A lot of people

• 28:34Speaker 00

  have been coming back to the Bay Area since the sort of COVID dispersal. And then, and then I do think that, you know, the ability for, again, another indirect kind of, you know, force is that the startups have to really move where there's investors. It turns out, it's a lot easier to code, and it's a lot easier to get your first dollar revenue, and it's a lot easier to hire your first employee. You can kind of do that anywhere. But, but actually getting capital to really scale your business requires the ability for, for investors to be there. And so, so when you, so, you know, I think that's why when you, when you look around the world, a lot of the biggest startup hubs happen to be kind of where you have great universities co-located with customers, co-located with

• 29:17Speaker 00

  investors, kind of all in, all, all in one spot. And I wonder, and I worry about things like, you know, the, the wealth tax that that are currently under discussion, in its ability to potentially relocate a bunch of family offices and investors that are currently contributing in a big way, moving them to other geographies as one of the potential, you know, negatives for sort of, sort of, you know, making the Silicon Valley thing like less, less dynamic and less powerful as a result.

• 29:47Speaker 02

  So we've been talking a lot about the one-to-one relationships that you've developed as part of the Speedrun program, but you've also been really invested in trying to create ecosystems through the Tech Week program. What was the idea behind that program?

• 30:00Speaker 00

  So we started Tech Week, and, and it's a program that, that sits in our team here within, within the Speedrun umbrella. And, and what, what Tech Week really does is it's really a celebration of, of startups and technology and progress in, in all the major cities. And so we host it in San Francisco, we host it in LA, we host it in New York. And then for the first time this year, we're actually hosting it in Boston as well.

• 30:26Speaker 02

  How do you discover a founder before they know if they're a founder?

• 30:30Speaker 00

  Well, we, we just feel like if you are, if you're the, if you're a type of person with certain kinds of work experience, certain, certain resume, and you're finding yourself attending a bunch of startup events, you know, like, the probability of you starting something, like, you're probably startup curious, but you're, you're probably gonna, gonna get there, like, sometime in the next few years. So that, that's, that's what we found, which, which has been, which has been fantastic.

• 30:56Speaker 02

  Our policy, is policy showing up at Tech Weeks? Like, are you seeing it in the various different local ecosystems that you're tapping into?

• 31:04Speaker 00

  Yeah, so we would love to do more. We're, we're, it's definitely exciting to see more and more of, of an ecosystem around policy. So for example, I think across all of the Tech Weeks last year, we had 4,000 attendees attending various policy-related events, and that includes over 1,000 folks from government, over 1,000 policy professionals. And then oftentimes, we've had events where, you know, local government will come together. So I know, you know, whether, whether that's, you know, in the mayor's office, or, or, you know, folks that work on the, on the national sphere. We also have had a bunch of the consulates, you know, involved as well, because, you know, they're all very

• 31:48Speaker 00

  interested in kind of building that bridge between their countries and, and, and the, and this particularly the San Francisco, you know, system. So, you know, the British consulate's been super involved on, on, on tons of stuff. And then, you know, many other countries as well. So yeah, so it's all, it's, it's been, it's been great to have that as a, a burgeoning part of the, the Tech Week ecosystem.

• 32:10Speaker 02

  So if you see a local policymaker or a representative from a consulate or member of Congress at a Tech Week event, and you're chatting with them on the sidelines, what would you relay to them about the realities of building a competitive company, given what you know about what the early, early stage really looks like?

• 32:28Speaker 00

  Yeah, yeah. Well, I, I think, I think, I, I'd say a couple of things. I think the first is to just have them, you know, understand that it's a choice whether or not each state or each city wants to have startups or not. You know, if you want to have startups, you have to do things to make it conducive to, to having startups. And, and, and there's, and there's a long, long list of things that, you know, might be involved in there. And it's not just for the founders, it's for the angel investors, it's for the, it's for the employees, it's for all, all these things that kind of surround, surround that, you know, whole group. The second thing is, is, you know, as we were just talking

• 33:10Speaker 00

  about a couple of minutes ago, I think a lot of policymakers are not having real conversations with little tech. You know, it's, it takes a little, there's a little bit more friction. You have to kind of put in a little bit more time into it. But again, you know, if you, if we want to have, if we decide, you know, hey, the, we, we want to have more startups in America, we want more innovation in America, or we, or, or we're talking about that kind of at, at the city level, you know, we, we have to figure out, like, what are the things that we can unblock for, for a lot of these companies? And those things change, you know, a software company will tell you something different than a AI-native company, which will tell you something different than a hardware company and a robotics company. You know, it's very dynamic. You know, one year, you know, for example, this year, we

• 33:54Speaker 00

  are seeing way more robotics companies than in any year past. And they have very different needs compared to, you know, they have supply chain needs, they have, you know, real estate needs, they have a different set of investors, they have potentially a different set of partners. And, and, and so, you know, we have, we have to, we have to actually, you know, dig, dig into that in, in, in a real way. And then, and then maybe, you know, thirdly, to just maybe talk our book, I think, I think working with folks like A16Z and other venture capital firms and other ecosystem kind of players, you know, what we can do is we can certainly help open the door to, to creating those conversations. And so,

• 34:38Speaker 00

  you know, like, open offer to the policy folks that are, that are, you know, listening to this. Anybody that wants to come and, you know, spend time with five or 10 really curated, you know, little tech startups that are, you know, two, three people and just kind of hear, like, okay, what do you, what do you need to, to be successful? Like, like, we're very happy to arrange that. Also, a lot of these companies are very interested to, to, you know, like, certain sectors are, are particularly interested in, in partnering, you know, with government. So I think, I think that's all great.

• 35:07Speaker 02

  I'm a policy person who's interested in doing that. I'm actually coming out to talk to the Speedrun, talk to the Speedrun cohort next week. So I'm, I'm looking forward to it. It's, it's been fun doing that in the past, because like you said, you really see in those conversations, like, when you talk through various different policy issues, sometimes they're not that relevant necessarily to people in the room, and then others really are. We've had conversations in the past where we're talking about various different policy initiatives that are moving, and then you see like a panic look on someone's face where they're like, I'm building, I'm building in a way that I think, I'm, I'm building into a use case that might face regulatory headwinds. But I think use case is really compelling, and I don't think policymakers understand what we're trying to do. And so it's like interesting to see that delta. And we've engaged with the Speedrun team in the past to make sure policymakers also appreciate that delta.

• 35:52Speaker 00

  Yes, I think that's right. And I think it's, you know, it's such, it is a wonderful thing to spend time with these teams, because they're often, you know, very much young people. You know, we, we have a lot of folks that are in their early twenties. I think we even have a team that's all 18 and 19-year-olds, for example, in the, in the current batch, who decided to, to forego college and, and instead start, start the dream company. We also have folks that are co-founders of billion-dollar companies that, that have, you know, that are, that are now in the current batch of Speedrun as well. But because these guys are all getting started, like, like, there's, if the conversations are so genuine, they're just full of optimism, they're so fun to talk, they're all on the cutting edge. You

• 36:33Speaker 00

  know, they're not at a point where, you know, they, they, they are at the risk of, you know, you know, hitting, hitting into a lot of laws and hitting into a lot of, you know, different things. Like, it's, it's often like a, just a really fantastic, you know, set of conversations just based on what these guys are.

• 36:53Speaker 02

  Andrew, thanks so much for joining the AI Policy Brief.

• 36:55Speaker 00

  Awesome. Thank you for having me.

• 36:57Erik Torenberg?

  Thanks for listening to this episode of the A16Z Podcast. If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X at A16Z and subscribe to our Substack at a16z.substack.com. Thanks again for listening, and I'll see you in the next episode. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note

• 37:39Erik Torenberg?

  that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com/disclosures.