Episode Transcript
[00:00:01] Monica: Welcome to UVA Data Points. I'm your host Monica Manney. In this episode we will hear a fireside conversation with Arun Gupta, CEO of the NobleReach Foundation and author of Venture Meets Mission. Drawing from his extensive experience, Gupta shares insights on creating ventures with a mission-driven focus, trends shaping the future of public service innovation, and advice for students aspiring to make a difference in this space.
[00:00:28] Mike: Well, thank you all.
So I get to do the formal introduction of our panel here. It is an honor to be with you all here at the School of Data Science. I'm very excited about the discussion that I think we will be hearing here for a few minutes here. I think there is no more important discussion than how entrepreneurship and innovation can intersect with the public sector to drive meaningful impact and to solve the challenges facing us.
As you probably are aware, this conversation comes at a critical juncture with how people are thinking about universities, how their role in discovery in some ways is under threat.
And, so, thinking about the big questions of how we can leverage research and discovery and entrepreneurship and innovation as outputs to deal with these challenges we face, I think is a wonderful topic.
I can think of no two better people to have this conversation than your Dean, Dean Phil Bourne and Arun Gupta. Arun is the CEO of NobleReach Foundation. He's the author of Venture Meets Mission. He holds degrees from Stanford University in engineering, his Bachelor's and Master's, and an MBA from HBS.
He is a longtime venture capitalist in the D.C. area as particularly working for Columbia Capital. He's an award-winning teacher at both Stanford and Georgetown, I believe teaching a course on this very topic. I'm just going to read a little bit of the blurb from the book because I think this is a wonderful statement here.
In the book he argues if business, government and society could come together, rebuild trust and collaborate, we have a generational opportunity to address societal challenges, climate change, cybersecurity, disease outbreaks, food insecurity and education. The book explains with hope and passion how our existing entrepreneurial ecosystem with the ideals of democracy could be the foundation of a new mission-driven capitalism.
Now I can think of no better person to have this conversation than Dean Phil Bourne here. As you all know, here he is the founding Dean of the School of Data Science, world renowned biomedical and data science research researcher, an entrepreneur that's launched four companies. But personally I've gotten to know Phil well over the last couple years working with him on a number of different projects and I don't think you can find a bolder, more future-oriented thinker. So please join me in a Round of applause in welcoming Arun and of course Phil.
[00:02:48] Phil: Well, thanks for that introduction, Mike. Let me just say the feelings are mutual.
So I think there's two thanks, and Arun, thanks so much for being here. Really appreciate it. And particularly just for the benefit of the audience because I don't think there's anyone here that I see that, well, more or less that was engaged with us as the NobleReach Foundation when it was originally the Data Science Institute, when you were so helpful then and now being such a valid, valuable industrial partner to what we're trying to do today in this new environment. So thank you for that.
These are the folks of tomorrow and I have sort of two ways to approach this. One is to really have you — I don't want to say very much at all — I just want you to really be addressing the audience with respect to everything that you've written in this book and all your other work because they are the future generation. They will be leaving us in a few months, hopefully, to go off and do big and great things.
So I think it would. And then I have then of course a self-serving interest that I wanted to raise with you, which is really as a school to meet the vision that you've put forward in this book and elsewhere, what should we be doing with respect to our education research, our social contracts and our interaction with communities. But we'll get to that. I mean, I see within the book and what other things you've done, there's sort of a three-legged stool with respect to the purpose-driven energy of people, the innovation power of venture, and the scaling potential of government. So with that as a starting point, perhaps you could just give the folks here and me a little more of your vision.
[00:04:37] Arun: Sure. Well, first, thank you for having me. I've grown up in Virginia, so this is home. UVA has always been on, you know, close to our heart.
My sister's a Wahoo, got close family friends who were Wahoos and now their kids are here and are Wahoos as well. So it's great to see them in the audience. Let me at least share the lens of which I approach this from, because it's important, I think, before sharing my thoughts as to the biases that I bring to the table, which are my lived experiences.
So as I said, I grew up in D.C. or in the Virginia area, Northern Virginia. My father, he's been in public service for 42 years. He just retired, he was in the U.S. Navy. So public service has been in our family since I was growing up.
My professional career was as stated was as a venture capitalist. I started at Carlisle, but I was at Columbia Capital, which is founded by Senator Warner. So Mark and I have been partners for 20 years. And so again, Virginia has been a very close to our heart.
But during that time, while I was a VC with Columbia Capital, you saw the power of innovation and entrepreneurs and the optimism that they bring to the table to solve big problems.
And during the latter half of my time there, I was on the tech transition team with the Obama campaign and we started leading our practice into taking a lot of what we were doing on the entrepreneurial side and marrying that with solving problems at the intersection of mission, tech and entrepreneurship. So at that time it was really cybersecurity and looking at how do you find solutions and how do you take advantage of the velocity of innovation in the private sector and combine that with the need and scale that we have in the public sector.
I think that gave me a front row seat at seeing both the opportunity and magic when you got that to work.
And also the challenges when the cultural challenges, velocity of innovation, things of that sort that were there.
But what it did also after doing 10 years of just investing for profit, when you're doing it and still investing for profit, but also having mission tied to it, it's hard to go back because there's a difference of purpose around what you're building and the problems that you're solving.
And so when I retired from venture capital, I started teaching at Georgetown, at Stanford. And so my next lens was really being in academia. So having gone from public service as a kid to venture and then academia.
And I started teaching a class at Stanford called Valley Meets Mission, which is kind of the inspiration for the book. And it was really talking to these Stanford students about how not to waste their entrepreneurial energy and entrepreneurial talents on Candy Crush 3.0.
Everyone was figuring out the next game that they could flip and sell and it's meaningless and not because there's anything wrong with doing that, but that when you have that kind of talent and you've been given the kind of platform that you all are being given to be at a top institution like this, we need the best and brightest focused on not how to optimize an ad server, but on how to solve big problems that benefit society.
And to do that in a for-profit way is okay.
And so what I saw in that class, as Emma and I were talking about this earlier, was that what hit me is that we've given your generation an artificial vernacular to make a binary choice. We say for profit, not for profit. We say private sector, public sector, but we don't give you a language for something in between. So you either think you either make money or you do something good.
And how do you do both becomes kind of the question that you think a lot of people struggle with. And I would see that firsthand in my office hours where students were coming in going like, I really want to do something impactful, but I want to make money. And they felt guilty about saying they want to make money. And I'm like, it's okay, but you shouldn't feel guilt for that.
And I think that was a bit of why we started to gravitate around this vernacular of mission and venture. How do you bring this world together of where people are investing in startups, building new companies that are solving social problems and in a for-profit way?
Somehow we've found ourselves in a world where we think of like, if you're doing good, you have to be not for profit, or if you're doing good, you have to be poor.
And that's not sustainable, right? If you want to create. In fact, I would argue to really scale the size of many of our social problems, you need for profits because they've developed the muscle to scale. Not for profits can only scale so far because you're back out needing to raise money and grants and things of that sort of.
And so that was the inspiration for the book. Right?
And what I saw when we would, what also was highlighted to me was the soft biases and maybe not so soft biases that academic institutions and students and academic institutions and faculty place on each other. What do I mean by that? So, you know, in my class I would have business and engineering students.
And the idea that you would do something with government was like derided. They're slow, they're inefficient, they're not innovative. Without knowing what that meant, that was their perception. That's what their engineering faculty's telling them. That's what their business faculty's telling them.
On the flip side, you would have my government students and public policy students coming in and they're being told not to do anything entrepreneurial or anything that may be making money because you'll be a sellout.
And there's soft terms and those put soft barriers with what students think they can do.
And the beauty of the class, I think, ended up being, not me, it was the people I would bring in. Because when you humanize it and they would meet an entrepreneur that's now running a unicorn, a billion-dollar value company. They realize that that person started that company based on mission and the money followed the mission. They weren't chasing money and then grabbing.
And that was an awakening for them. And when they would meet with folks at government like Senator Warner or Mike Morell and others, they're like, holy smokes. These are really purposeful individuals dealing on the cutting edge of technology, doing really innovative stuff. I just didn't have any idea that this was happening.
And so in sharing some of that with Dean at Georgetown, he was like, have you thought about writing a book? And anyone that knows me, that would be the furthest thing that I thought I would be capable of doing.
But we started embarking on this endeavor of trying to capture the observations from students like yours, like you guys, of what they were seeing. I think the other through line that I was seeing and then I'll get into and it speaks to the why now? Because I think the trends I've talked about have been there for some time. But I think the why now is I think it's your generation.
And I do hardly believe, despite what other people may say, is that your generation is much more mission driven than previous generations.
I see it in my classroom pre Covid to post Covid and today.
And when asked why, I think it's because, look, there's a level of generational trauma that you guys have had to absorb. When you think of you've had to go through Covid and then you come out of that and then you're immediately, there's geopolitical conflict with the Ukraine war, there's Middle East conflict.
There's not much more visible environmental conflict and crises that we're being hit with.
There's great power competition that's really staring us in the face in our autocratic adversaries. And then you take this through line of technology coming in with AI, it's unsettling. For some, it could be empowering for others, it's disempowering.
I think that's a swirl of stuff that makes people feel, when you feel a level of uncertainty, I think it brings a generation to say like, how do we serve and how do we kind of help solve bigger problems?
Pre all of this happening, I felt like people were just rushing to figure out how do I get my consulting job, my banking job or whatever. I think after this, you're thinking about, hey, look, I still want to do well, but I want to have impact. I don't want it to feel hollow.
And so I think that's what we embarked on with the book and feeling that that last leg that I just talked about, which is all of you, is actually the most important leg of the equation.
Because unless you all are kind of empowered and motivated and inspired, none of it matters. But I do feel like there's that groundswell of this happening.
And I'll give you some data points as to why we're seeing that, even with the foundation that we now have called NobleReach and what we're doing there.
But the second is you look at what we're seeing on the venture side today, the amount of capital going into things like national security or defense tech, into climate tech, going into health tech, going into ed tech. These are all capital going into solving problems that actually do have larger social good to it.
We're moving away from that period where we're just investing into the quick flip valley.com thing that is going to be cute and monetizable, but to something that could be much more sustainable and solve larger problems.
The second, though, is that we also have to acknowledge that the problems that we're also trying to solve are much bigger when they're of this size. It's not just going to be a company in the valley solving it. It's going to be companies in the valley coming together. But you still need the size and scale of government in a meaningful way.
This isn't a political statement of more or less government, but that there is a role for government, right?
And one can decide what they feel comfortable for that role to be. But it is one of our superpowers in this country, our democracy.
And that we're not going to solve climate, we're not going to solve national security, we're not going to solve health care, we're not going to solve food, we're not going to solve education without government's involvement as a partner in some collaborator. And I don't mean regulator, but even maybe consumer.
So I think that's really what we were trying to get at, Dean.
And then the final piece of this is industry.
And unlike any other time before, finance folks, industry folks are looking for ways to collaborate with government.
I'll give you an example of a radical change using a company that you're all very familiar with, which is Google.
In '16-'17, they were bidding on a contract with DOD and it's called Project Maven. It may be familiar to some of you. And they won it. And then there was a backlash.
And the backlash came from the employees going like, oh, we don't want to do anything dealing with that kill people or it's doing anything negative because it was just defense was viewed as a very kind of offensive mechanism. And so Google backed out. Fast forward. Head of the Ukraine war.
We talked to Google's team. They've set up their own now separate entity that has its own board that's dealing with public sector and defense, and are very eager to collaborate with us on issues related to national service. And when I chat with Ruth Porat, who's the CFO, as to why you guys would want to do that, and I spoke to you, Ukraine changed everything.
It's like, tell me more. She's like, well, look, you got to understand, all our employees recognized when you look at what's happening in Ukraine, that every one of our products is being used on the battlefield. Whether we like it or not, we're part of this.
And I think these geopolitical conflicts and we're seeing this, they're no longer nation state and nation state. Every major company is affected by it.
And so they feel like they're part of this fight, some more directly than others, but they don't feel like they're isolated and that this is the government's problem.
And so I think that piece of it has brought the private sector to want to engage in a way that I think also wasn't there four or five years ago.
And so you take the private sector's engagement with government in some capacity. Governments need to innovate in recognizing that we can't do this on our own.
The entrepreneurial ecosystem now, having capital flowing into this to solve problems, and most importantly, having success stories.
And then again, the final and most important leg is a generation like yours caring.
Because if you don't care, then it doesn't matter. But having done a lot of these at different campuses and what we're seeing, even with our own scholars program, we've got Nadia here, who's been an intern with us. Elijah is a Noble Roots scholar from UVA, Brady, who works with us at NobleReach, who's also a UVA grad. Like, we're heavy UVA.
You know, you can see that people care, right?
And so I think this is a moment in time for that. And that was kind of the impetus for the book.
[00:18:14] Phil: Actually. I had a thought as you were saying, that I shouldn't feel guilty about making money. And I realized, oh, I'm not guilty. But then I also realized that's because I'm not making any.
But. Well, I shouldn't say that, it's a nice life being a dean.
I'm sort of curious. I spent three years as the chief data officer of National Institutes of Health. So I've worked for the federal government. Now I'm working for state government, essentially, even though we only get 11% of our budget from the state.
But one of the issues that we deal with, and Mike and I struggle with this quite a bit, is the speed, the speed of operation. And I'm just curious about whether that's, you see that as some kind of impediment. So we, when we're trying to do something, we say the university moves at the speed of SCHEV, which is our government, state government body that oversees higher education, which is generally relatively slow at getting things done. And on the other hand, the private sector industry is moving at the speed of light.
And how we reconcile those is something that we've been discussing a fair bit. And I'm curious whether you have any thoughts on what that might look like.
[00:19:29] Arun: Yeah, no. We try to touch on this in the second chapter.
We write about how we need to humanize government and we need to personalize entrepreneurship. And so before you can even get into how do you collaborate? You have to kind of talk about explicitly some of the biases that exist. And so humanizing government, again, I made the comment, and this is true with academic institutions. Oh, they're slow moving, they don't innovate, et cetera. We should just get them out of our lives. And when you start breaking down like, well, what part of government don't you want? People won't have usually good answers to that.
And when you actually also think about. Government is really just at its most molecular level. It's just a group of individuals and organizations making decisions to the best of their capability.
Could they be faster, better? Absolutely. But there's still positive intent there.
Somehow we found ourselves in this land where we assume negative intent when we've always been a country that assumes positive intent. You're innocent until proven guilty. And somehow we've found ourselves in that. You're doing bad until you show me you're doing good.
And we need to unwind that.
The flip side is true too, with entrepreneurship, Right. Like, you know, there's. I would see this in my class, people would be, you know, you bring an entrepreneur, and they'd almost be antagonistic with them, right? Because they viewed them as socially extracting. You know, the billionaire class that's just hoarding for themselves.
And on both extremes, like, that's. But that's not real entrepreneurship. Like, that's the 0.11, you know, 0.0001%, you know, a real entrepreneur. I mean, most of entrepreneurship are folks that are taking risks, creating jobs, trying to do the best they can, expanding the economy.
And look, we talk about, I joke around in personalizing entrepreneurship, one of the most entrepreneurial endeavors that you'll have and many of you will embark on at some point is having a family. And those that have them know, like, it's a pretty entrepreneurial endeavor. I mean, you have a couple, you have a few products, you have 18 years of product market fit. We let you guys go, we hope you don't come back.
And you know, but you're testing and learning the whole way because there's no parent that knows what to do.
You're defining it, and you're always testing and learning. Your parents tested and learned on you guys and they did well.
But that's, you know, that's entrepreneurship. Right?
And so to your question on how do you make these two sectors work? You know, I think then once you understand those biases, you have to look at how those two sectors operate and recognize and understand why they operate the way they do, right? And so I say, for example, as a VC, if I was measured like government, I would never raise another fund.
And what I mean by that is, as a VC, I am measured on my best deal.
I am measured on not my losses, but my biggest wins, right? So as a VC, I can make 10 bets, five of them can go away, three can be average, two can be home runs, and I'm over subscribed to my next fund.
If I'm government, I can make 10 bets. Nine of them could be okay if one of them is Solyndra. I'm carrying that around with me for a decade.
So think about that. What behavior does that incent? You play not to lose, you play not to make a mistake. You become very process driven. We're going to drive processes so that we just make sure we comply with the process.
As long as I comply with the process, that is winning, whereas the other side, winning is about the outcome.
Like, there's no process. In entrepreneurship, the process is to pivot. You're not allowed to pivot if you're inside a government, because that's not in the rule book.
I think you have to understand those biases, but also understand why they're there. It's not like government. People don't want to be able to be innovative and do things, but we've created a structure where we're not allowing them to do that.
In the book, we talk about it. A friend of mine, Dan Tangherlini, who used to run GSA, said, look, part of the reason this is is that every agency has what's called an IG, an inspector general. And the inspector general's job is to make sure you comply with the process.
And so his point was, what we need is two IGs. And you're like, how's that going to help the problem? And his point was the second IG should be called an Innovation General because when you have an inspector general that's making sure that you comply with the process, you need another tension against that, which is something that's making sure you're innovating fast enough. If you felt fear that you were going to be dragged in front of a congressional hearing for breaking the rules, you should also feel fear that if you don't innovate that you could be dragged in front of them.
Now, that's never going to happen. But that's the mindset that I'm trying to just share that's out there. And so in that context, then it really comes down to recognizing that ideally you'd want to change the systems. How do you collaborate then to allow what government can do well within the system it's got, which is somewhat risk averse, but it has large scale to be able to take the bets it can take. And then when you need to take real risk, that's when you need to be collaborating effectively with an ecosystem that knows how to do that really well, which is the innovation ecosystem, the venture ecosystem.
You know, we've been doing this at NobleReach, where we've been taking deep science that DARPA, NSF, government's been investing in, and now we're collaborating with universities.
And look, it's hard for them to take, to invest the resources to be wrong, but if they partner and we can connect them to entrepreneurs and pull it out of the system, it's okay for us to do that and put money around it, because that's what our system's known for.
But we need to think about it holistically.
That's how we're going to kind of get out of this. And how we need to collaborate is find those points of interaction.
[00:25:35] Phil: I guess one of the things that struck me is in reading the book was that government per se, at least as its relationship to higher ed. And I'm interested in your views on relationship to the entrepreneurial ecosystem has clearly changed very recently.
And your thoughts on that with respect to the outcomes that one's trying to achieve that you've described. Do you see it as potentially moving towards a better. How do you see that? Better? Worse?
[00:26:07] Arun: Yeah, no, it's a great question. And look, it's a fluid environment that we're in right now. So I hope I can change whatever I'm about to say based on new information that we made. We may learn over the coming weeks. I think it's mixed. Is the honest answer, is it good or bad? Right.
Personally, I think the two superpowers we have in this country are that we create talent better than anywhere else in the world, which is evident by institutions like this. And we innovate better than anywhere else in the world, which is evident by the entrepreneurial and venture ecosystem.
We just do. And the evidence of that is everyone from around the world comes here to do both.
There isn't another place that people flock to like they do to the U.S. to do that. Now with that, as we're creating this talent and the research we do with these institutions, we also probably don't have a level of accountability on what do we get out of that research.
And so the reason I say it's mixed is I worry about this like flat line, like let's just cut grants and research funding because I do think that's what's made this country special. You can go through every piece of the iPhone and it's come through some kind of government grant. It started that way. Every piece from the microprocessor to GPS, it's all government money. And I think it's important for us to recognize that that government money combined with the science and research that we do as a country has enabled that to happen.
Having said that, we probably also do need some kind of delimiter around what are the outcomes that we're getting for that and how do you measure that?
They don't need to be extreme, but they still do need to. We should have some level of outcomes because otherwise it's just, we just need more money. So do more research, but for what purpose? Right. It's that last piece.
And so I do think there's a little bit of a reckoning there that's happening across the institutions.
What I struggle with is the targeted aspect of that based on is it issue driven or is it policy driven or something else, that I struggle with.
But the notion of having institutions feel a level of accountability for, like if we're giving you $100 million grant, there should be a way to measure what comes out of that over some period of time. Doesn't need to be tomorrow.
And I think this is where again, I think many institutions then feel like they don't need to commercialize their research and tech in a meaningful way because they're not being held accountable to doing that.
And so what do we do? We let the tech and research sit inside these institutions when we should be getting it out there. I'm hoping this will force that a bit and hopefully create more velocity of innovation, because I do think the other superpower we have is that we have an entrepreneurial spirit in this country unlike anywhere else in the world.
There is no other place where you can start a company, fail, start a company again, be given money to start a company again, fail, and then the third time be given even more money to start a company because they feel like you've learned a lot on the way.
In most places you start a company and you fail and you're done.
But there's a real power to that. Right? And that's why I think the way we solve these big things is bringing that entrepreneurial spirit, which for reasons we've talked about, may not exist inside a government because you're not allowed to fail.
It could exist inside a government if you were allowed to fail. And it doesn't get politicized, it doesn't get weaponized, but until we get to that point, it's not going to be there. And so we just need to think about how to collaborate.
[00:30:04] Phil: I actually, you know, looking at this through very much through a higher education lens, there has been, I mean, there's no question that it as a part of the ecosystem has contributed an amazing amount of innovation.
I do wonder whether the efficiencies of doing that are as great as they could be by virtue of the way academia operates, particularly in this current era, where it's clear that research and innovation is becoming more team oriented.
What we've seen traditionally in academia is not that level of teaming, it's working effectively. Two professors down the hall from each other competing for each other for the same pool of money.
That seems to be part of a broken system at this point in history. And I'm actually thinking that out of the ashes of what's being imposed on higher education by now, by the government, that we might actually get something that is actually a significant improvement.
And so it'd be very interesting over time to see whether that actually eventuates. I don't know if that's how you would look at it. I mean, you, you wear both hats here in academia and within an innovative environment.
[00:31:17] Arun: Yeah, no, look, I was in a couple of calls with universities talking about some of the budget cuts and things of that sort are going on.
And one of the questions was posed is like, well, is it just about more headcount? Is it just about more money?
But have you looked at doing things differently? And the answer is no for most institutions, right?
And I do think both from a political standpoint, a fiscal standpoint, now even a technological one with AI, that it's going to be time for the universities to be thinking about — there's an important, like government, there's an important role that universities play.
So despite again being demonized for is it relevant and why do we need it? To me that's undoubtedly yes, it's more the how they play that role that needs to get rethought through. And we now have enabling ways to do that.
And like many of these things, you have people that are going to resist change and then there are going to be people that are going to embrace it. And then when we look out five or 10 years, the folks that are now leading the system are the ones that probably embrace the it.
And that's TBD, that's going to be driven entirely on one thing, and that's leadership. Right? Leadership of the institution.
And some are already embracing it, recognizing that things are going to be different and then others are going to be slow to it.
[00:32:47] Phil: In that vein, I'll turn to the question I had about from your perspective, which seems to resonate very much with what we're trying to do.
So I'll tell you what we're trying to do and what we're aiming to do with it. We're going to have a new building out the back here.
[00:33:02] Arun: Yeah, that's great.
[00:33:03] Phil: And thanks in large part to the Quantitative Foundation, Jaffray Woodriff, who helped us establish this building. But we want to do something different in that building that seems very much in alignment with what you've written in the book. And I just wanted to get your sense of it. So it really is going to be an environment, and Mike's a big part of this, where entrepreneurs, folks from outside of academia, whether it be from the private sector, NGOs, local governments, the public, actually come together in solution labs to actually create specific solutions for problems, or at least try to, which seems to me to be different than what we've traditionally done in academia, which is really, you know, basically do whatever work you need to do to get the next five years of funding from the federal grant. This is actually much more of a community driven kind of enterprise. And it seems to be very much in alignment with what you've written. Is that, do you see that working for us? I mean, you know UVA as well.
[00:34:13] Arun: Yeah. I mean, look, you know, everyone talks about, like, one university, but it always comes down to the people that are running each of those schools and the deans and the faculty members wanting to partner, collaborate, share revenue and things of that sort. And so conceptually, absolutely believe in that. I think the power of that as well. And what I've seen in my own journey has been for all these students. Like, I feel all of you are entering a work period of time now where you're going to have five or six careers over your professional journey. And I do think most institutions still prepare you for a career. You think they're preparing you for one career. None of you are going to have one career, I can guarantee you that now.
And many of you may have multiple careers in the first 10 years of when you're out there. And the reason I say that is because the reason I say that's relevant in the power of what you're doing is that early on, if you can understand how different sectors speak, the language, the vernacular, the customs, whatever it may be, it'll make you more facile and it'll allow you to jump from one place to another.
I actually don't think I bring much to the table, except that I'm trusted in the academic community because I used to teach there. I'm trusted in the public service community because of relationship with Warner and the work we did there. And I'm trusted in the private sector community because of my time in venture capital.
I know how they each speak, and I know how they each think, and I know why they don't trust each other. And then, the more of you that are able to be that, you'll find that that's going to be that currency of trust is what will be really valuable over time.
And so build that. Invest in it, in building those bridges and trust. Because again, all of this sounds great conceptually. The execution of it comes down to people.
It still will always come down to people. No matter how much AI we have, it's going to come down to people. And people come down to collaborating as to. In which the. Why I can't answer the question of what would work at UVA. I just don't know. Do the folks that are going to be needing to collaborate, do they trust each other? Right? You know, and do they, are the incentives there for them to collaborate?
[00:36:38] Phil: I mean, there's no question we operate in silos, or you could say cylinders of excellence, but I think the interesting thing about what we're doing here, and really it's part of, of just how we got established in the first place. We wouldn't have been allowed to have a school if we weren't totally collaborative. So the notion of School Without Walls really applies. The other thing is data science itself of course is so pervasive everywhere, so much need for it. I mean the demand so much outweighs the supply where, you know, it gives us a lot of leverage within this kind of environment. So we'd say we certainly see ourselves being able to do this very much as a university-wide initiative which would, you know, would be desirable. But there's no denying that the university politics comes into it in some ways.
I think we should try and take questions from the audience. Do you have questions?
[00:37:33] Guest: We had a debate yesterday about the innovative benefits of OpenAI versus I guess in the face of the theft of intellectual property that has gone on. I think that both sides of the argument were well supported and they're alive and well. But I wanted to say that maybe for our generation or just lately, it's not just the vernacular for our careers that has been so polarizing, but it's kind of the whole world. Like I'm kind of in the camp where you can do something that's ethically good or you can make money. And typically those two circles don't intersect.
And we see that the morals that some corporations say that they have, those go away as soon as the trend changes. So I wonder what your opinion is of new firms that are coming into the marketplace, how they navigate such a polarizing environment and not just say the right things to get to the right place with everybody else?
[00:38:34] Arun: You said something in that question. I just want to make sure I understood. Did you say you felt that ethical, doing something ethically good and doing something where you make money don't intersect?
[00:38:45] Guest: For the most part it's not — I'm just in that camp.
[00:38:50] Arun: Give me an example of what is something that's ethically good.
[00:38:53] Guest: Cancer research.
[00:38:54] Arun: And so you don't think you can make money doing cancer research?
[00:38:57] Guest: I think you can, but I don't think that you can be aggressive. I think there's a ceiling there.
[00:39:04] Arun: Why is that?
[00:39:05] Guest: Because I'm not in biotech. I guess I don't have the experience there.
[00:39:11] Arun: I think you can pick any one of the things that you think are ethically good. And I think I could show you a for-profit business that's going after trying to solve that. That's all I'm saying, and that's more the point is that I think that's.
[00:39:26] Guest: What we've been missing.
[00:39:27] Arun: What's that?
[00:39:28] Guest: You think that's what we've been missing? Sort of.
[00:39:30] Arun: Well, I think we've. I do think, and look, most of my students would have especially that took my class until they met these folks that were creating these businesses would have thought the same thing. Like, wait, they're making a bunch of money, they can't be good.
And I just think that's an unfair, like again, we're presuming negative intent when someone could have been very much so doing a lot of what we're talking about, right? There's so much going on, building infrastructure for great life sciences work with AI stuff right now there's a ton of companies out there that have raised hundreds of millions of dollars that are going to be on the verge of being able to allow cancer research to actually hopefully in the next five years get resolved.
[00:40:14] Guest: That might have been a bad example. I'm thinking like...
[00:40:18] Arun: I think any example you give may end up being a bad example is where I'm going with it.
[00:40:21] Phil: But I think the issue is that example where cancer research has a spectrum, right? So just thinking about it that way in the sense of exactly what you described, in fact, I'm involved with, I work in cancer research, so I'm involved with co-founding a company that's called Dark Matter Therapeutics, which is actually trying to use AI to design new drugs for cancer treatment.
And you know that we think to be a noble cause and we're doing it to create a company. The problem is at a certain point that will get offloaded to a much larger pharma company which has at least the perception of making enormous amounts of money off those drugs far more than really the market should be charging for them. So, I think you've got this spectrum of belief in what you're describing. And then the other end, when you get into Big Pharma, a disbelief.
[00:41:24] Arun: Yeah, no, look, I'm not trying to say Big Pharma is ethical. Let's just be clear.
That is not my going in salvo.
What I am saying is you can find any cause and find a way to do that ethically and find a for-profit business model around that.
And that's, I think, the challenge for your generation. I actually think that's how you should reframe it. Like what is it that you want to go solve? What is it that you want to go do?
It could be the environment, right? There's plenty of climate tech companies that are out there, that are for profit, that are doing great work, that feel like they're doing good.
There's plenty of things in the national security side and health side and you can just go down the list.
And so rather than feeling like I want to do something good and then how do I not make money doing it is the only way to do that.
All I'm challenging your generation to think about is to say what is it that I want good to have happen and how can I build a business around that?
[00:42:29] Guest: Hi Arun, I just wanted to make a quick comment about. I agree 100% with what you're saying about the false dichotomy that you have to make between your mission and the guilt of making money from it.
Often times the other lenses such as entrepreneurship or public service can be the lens through which you discover your mission.
[00:42:51] Arun: Yeah, totally agree.
[00:42:53] Guest: And if you don't have those skills or that experience, it's a great idea to partner with someone who does just so you might discover your mission.
My mission is developing stakeholder-led AI governance platform to make it trusted and accountable. And I discovered that through the lens of entrepreneurship. My question is what advice would you give to those with a mission-focused venture that can make money in raising early-stage capital?
What advice would you give, you know, for that challenge, to position it and to be successful in that?
[00:43:43] Arun: Yeah, look, I think anytime you're raising capital, it's profit business, the business has to stand on its own.
Just be clear, right? Like this isn't, you know, and I think the hard part of people that try to straddle the two, which is this is why I sometimes tend to be dubious on impact investing, like either your philanthropy or your for profit. Right.
Which are you?
And the person giving you capital just wants to know, are you coming out of my philanthropy bucket? Are you coming out of my investment bucket?
So it's important to not blur those.
So when I talk about mission-driven capitalism, I'm not talking about lesser returns, I'm just talking about the problem you're going solving will have a different benefit to it.
Said another way, this isn't about people were like, well how do you make the trade off between this isn't like, hey, we're going to feel good about ourselves, we're going to do Habitat for Humanity every weekend and then we're going to go back and sell ads, you know, on social media for clicks. Like it's not.
This is about your business model is delivering the mission.
Right. And the more mission you deliver the more profit you make and you scale.
And there's benefits to that, right?
So to your question, I think one is really definitely defining what your target market is. It's a typical thing you'd want to be doing.
And then how the mission part of what you're doing enhances why people will want to buy what you're delivering because you're solving a problem for them, whether it be a corporation, a company, an organization.
But I think the foundations for what you need to do to raise money, whether you're a mission-driven venture or not, are very similar.
And I don't want to leave anyone with the fallacy of people are like, oh, if you just put mission on your thing, there's all this money coming out there, it still needs to stand on its own.
And I just think that's an important distinction to make.
[00:46:03] Guest: So I was really interested in what you were saying about Ukraine. And I am very pro Ukrainian in part because let's just say that my father was a refugee because of the Russians. He left Budapest in 1956 after participating in the Hungarian revolution. My current partner is Ukrainian. I've spent time there.
At the start of the war, the Ukrainians were killing Russians with American artillery shells and others. Now it is mostly drones.
The Ukrainians have been forced to innovate because their lives depend on it.
And what we see in America is an oligopoly of about five big vendors. We used to have a much more diverse number of folks that were doing military tech. And then with the peace dividend, the only way they could make money was to combine. Combine. And now they're not nimble.
On top of that, you've got the federal acquisition regulation and federal procurement is just broken.
And you have DARPA to get around that. And now they're moving away from the far to doing things through OTAs, other transaction authorities. But the reality is that America needs to radically reform our military procurement system and we have to leverage new technologies to do so. I'm just curious what you think we need to do to be as nimble and as innovative as the Ukrainians. Because we're entering into a dangerous period with very poor leadership.
[00:47:34] Arun: I love this.
[00:47:35] Guest: And we need to change.
[00:47:36] Arun: No, I love this question because your observation, I think is really driving a lot of rethink inside of the DoD.
If you look at Steve Feinberg, who's going to be the Deputy Secretary of Defense, he was the CEO of Cerberus, so he's not your typical — Cerberus is a finance company for private equity shop for Those that don't know it, but he brings a very business mindset to the table.
And this is something that's well talked about and at the top of the list because we've spent a lot of time with senior folks in previous, but even more so this administration as well, to fix in a large part why people recognize this as a big problem is exactly what you just said, which is what happened in Ukraine.
What they realized is Ukraine takes an all-of-nation approach, an innovation approach to national security.
When the war started, most of as you just rightfully said, there were zero drones getting manufactured in Ukraine. Ukraine and all the casualties of the adversary were coming from US weapons.
Fast forward two and a half years. They are now manufacturing 2 million drones a year.
They've created an entire ecosystem. In fact, the most innovative drone manufacturing ecosystem in the world is in Ukraine.
And don't let that get lost, that the rest of the world is seeing that and goes like, oh shit, we need to be able to do this. The US is seeing that, EU is seeing that, the UK is seeing that and saying like, we need to figure this out. It's not only about just the technology, it's about the people. I'll give you an example.
So who are the folks manning these drones? Are they Ukrainian military folks?
No, they're 18 to 25 year old gamers, honest to God, that know how to manage and deal with this stuff.
And they figured out a way to say let's get our best gamers with our best drone technologists and now let's go to battle.
So there's a huge rethink that's coming, I think. We're in the midst of some of those discussions.
There's only so much I can say, but there's a notion of changing this from the defense industrial base to the people industrial base.
Because the other part of what we have to do as this country is get over this idea of revolving door.
And what do I mean by that?
We can't think that we're gonna stay on the cutting edge of technology if we think national security is gonna be a techno economic war and hinges then on the best and brightest technologists to be in there, that we can no longer think that those people are just going to stay in the government for 30 years and we'll stay on the cutting edge.
We need a system where people can come in for 10 years or five years and then go back out in the private sector, understand what's happening and come back. We need that fluidity. We have for years on the policy side said that's a bad thing.
We call it revolving door. And again it assumes negative intent.
Whereas we need our best and brightest from these top tech firms coming in.
And so in China they call that fusion, civil fusion of government and their civilians coming together. But we need, beyond that, we need an ability for this talent swap. And I think there's a lot of thinking going on around that on the regulatory piece on FARS and things of that sort. A really good person to listen to on this is a gentleman named Shyam Sankar. Shyam's the CTO over at Palantir.
He does a podcast called the First Breakfast and basically fast forwarding, his theme is that, and you kind of touched on this. In the '90s we had the peace dividend. And so we went through a financial post World War II. What made our country great from national security is we had founders building companies. After the Berlin Wall fell and the fall of the Soviet Union, we went to a financialization.
And so there used to be a Lockheed, there used to be a Martin, there used to be a Northrop, there used to be a Grumman. Now we just combine them all together and in that there was a financialization of national security.
And in that financialization we weren't innovating.
And his point of creating the first and that peace dividend was called the Last Supper. The reason he calls it the First Breakfast is that he's like, we need to get back to where founders are building companies around this stuff. Because founders bring a different mindset and that's what they're galvanizing. And you're seeing companies like Anduril, like Palantir, emerge that didn't exist 20 years ago and they now have market caps greater than Lockheed Martin and Northrop Grumman and things of that sort. So I think we're on the, that train's left the station and you're going to see more of that. You see a scale AI, you see Shield AI. There's company after company now that you'll start to see because that's the only way we compete.
[00:52:49] Phil: We seem to be at a moment like no moment in history with respect to technologies in particular.
I mean having been involved in the early computer revolution and then the Internet revolution and now the AI revolution, to me this is more, more, potentially more game changing than the other two. I don't know if you feel the same way either way. How do you. I mean this seems like it's going to drive a lot of what you've written about in new ways. And I'm just quick comment on that and what those. If you feel the same way or differently, but if the same way, what would those new ways be, do you think?
[00:53:28] Arun: Yeah, look, I am a big believer and I don't want to sound trite. I just think AI is a game changer.
I got into venture in the late '90s, so I saw the Internet wave happen and look, you saw the dot-com bust and everyone says, oh, it was a fad, it's not happening, et cetera. And that will happen here, right? There's a lot of money going in, there'll be some big failures and people will be skeptical and doubtful, et cetera.
I'm just telling you this train is going to be bigger than that was.
That's why I keep telling folks, don't go into banking consulting right now because you're kind of taking yourself off the playing field when all the action's happening in this space in data science and AI and entrepreneurship and put yourself in that arena and learn.
And again, it's okay to fail. If the startup you join doesn't work, there'll be another one.
Base it on the people that you're with. But look, I just think this and go back to the cancer research thing. I think for anyone that's looking for major life science breakthroughs, you're going to see it in the next five years, you're going to see it and it's going to be because what we're able to do with AI and innovate and the tests that we can run and the scale of which we can do that is unlike anything that we've ever been able to do before.
Many of you may have heard Altman has this thing where he believes in the next two years you'll see your first billion-dollar company of less than three employees. I think that's very possible.
Think about that for a second. The idea that if you really understand how to use agents, et cetera, which is why I come back to when you have a transformational technology like this that can provide you the kind of scale and leverage that we haven't seen before, pick the issue you care about and think about how to apply it. And it could be cancer research, it could be the environment, it could be national security, it could be food security.
There's amazing things happening right now on the food side and the agriculture side.
But I just think this is such a, I think those that are in the game are moving so far ahead without even knowing it because things are moving so fast.
Like I feel like I'm really up to speed with stuff. But then I talk to my boys who are in it every day, and I feel like I'm falling further and further behind.
And so that would be the spirit. I just think, look, you guys are graduating with data science degrees from UVA. Like, you should be in it, right? We need your spirit to be in it. And again, I think while you're in it, you'll still do well. I'm not saying do it in, don't feel like, I just want to take that thing off your shoulder about feeling guilty about wanting to be financially independent at some point, it's ok.
People should feel okay about that. We just need to get over that guilt. There's no guilt about it.
[00:56:25] Phil: I think after your discussion that they're all wanting to be one of those three employees in the billion-dollar company.
So we're running out of time. But. But it's been a real pleasure. Thank you for being with us. Thank you for the NobleReach Foundation, for all you do for us and onwards. Thank you.
[00:56:43] Monica: Thanks for listening to this episode of Data Points. More information can be found at datascience.virginia.edu. And if you're enjoying UVA Data Points, be sure to give us a rating and review wherever you listen to podcasts. We'll be back soon with another conversation about the world of data science.
