Pioneer venture capitalist Ann Winblad hails from Minnesota and became a star in Silicon Valley. She was an early investor in many of the country’s most successful startup tech firms, and has dazzled the VC scene ever since. TAI editor-in-chief Jeffrey Gedmin sat down with Ann Winblad outside Lisbon recently, on the margins of a Horasis conference, to ask how she sees our politics from her perch in entrepreneurship and business innovation.
TAI: In 2016, Bernie Sanders and Donald Trump were both the anti-establishment candidates running against, in their own ways, Washington and Wall Street. Our two parties seem to be in turmoil. What can you tell us about how business and technology are affecting and disrupting our politics, for better and worse? What lies still ahead?
Ann Winblad: If you accept that in a matter of a few years roughly 80 percent of the eight billion people on the planet will have a digital identity, then we can estimate there will be one trillion sensors. Those sensors aren’t just devices that we’re holding in our hands; they’re our home appliances, they’re our reading glasses, and they’re ourselves, probably, by that time.
Parts of the world economy have a very strong sense of their past, and so protectionism is very important for their voters. The older economies are having the hardest time with the integration of all this new technology, and with the balance of the need to protect versus looking ahead to some very big issues that could occur with a fully digitized platform. If you look at other economies, like China’s, [the government – ed.] has no qualms about surveillance, that identity is being quantified. They want to surrender everything so they can actually leverage the entire platform.
A related issue: open source, open technology. Take CRISPR, an open technology. Used incorrectly, that could change our entire species. Google, Facebook, Microsoft give away their core technologies, including their core algorithms, so that people will use their platform rather than the other guy’s platform. But that means anybody can use it—both good actors and bad actors. Should we regulate the world and these open technologies based on the bad actors? Or encourage even more openness and light regulation to facilitate innovation, already happening at breakneck speed?
TAI: In the United States, how do we allow the flourishing and innovation I think you want without leaving behind a significant number of our fellow citizens?
AW: In a recent television interview, Warren Buffett said that our economy is still the richest economy in the world, but it’s impossible not to leave some people behind. What do we do with people who have reached the end of the line? What obligation do we have to bring them along? But for us, in the United States, we’ve got many problems that are not associated with technology. We have a brittle K-12 education system in our public schools and a very diverse level of quality across the states. We have an enormously expensive health care system that breaks the bank for many people, especially people who are transitioning from a safe career to a riskier one. If they’re unlucky enough to have a health problem during that time, then that could be the end of the line for them.
There are other issues, too: About 1 percent of our GDP gets siphoned off by litigation. These are not technology problems at all. In fact, we have technology groups trying to work on health care. I would bet that if you start looking at the macro issues in all sorts of other economies, you’ll find similar existing big issues that have just been hauled along and piled on top of us and aren’t about technology. But I will say that it is now requiring a higher and higher level of education just to participate in the “better” economy. We also have issues of the cost of education. It’s not just “Here’s $120,000, go educate yourself,” it’s “Here’s $120,000, and if you take these particular classes from these reputable schools that we picked and you aim yourself at these career areas, then you’re likely to get an upwardly mobile job.”
TAI: We Americans love freedom and free media and choice. We seem to adore technology. And now we have a market that is largely unregulated. Are we not losing judiciousness, restraint, and responsibility?
AW: I think it was a bad idea to eliminate the fairness doctrine [introduced in 1949 and requiring broadcasters to present honest and balanced views of controversial issues – ed.]. Powerful people use the media to serve their own interests, and it’s not that this has unknown, unintended consequences; we know it has horrible consequences.
But I don’t want censorship. If I had the magic bullet for this, I would tell you right now what it is. In some ways this goes back to balancing between overdoing protectionism and the need to guard against unintended consequences. I remember being at a conference around the time of the Arab Spring, when all of these people were freeing themselves using the Facebook platform or other social media platforms. But as soon as a social media venue becomes a platform like that, you are inviting the bad actors to use it too. And, by the way, the bad actors seem to know how to use this platform better than Facebook itself knows how to run it, and this is interesting because it’s something social media companies like Facebook never anticipated.
Even Facebook, in their attempts to regulate themselves, to decide what is good content and bad content, to have all of these poorly paid people sitting there in front of screens monitoring people’s posts to decide if that’s really going to be a suicide so we need to pull it down, or hey is this is violating the censorship rules of the country we’re operating in? That’s not scalable. Can the government handle that any better than Facebook? I don’t think so.
TAI: Privacy today means something different than it meant yesterday, and the train is speeding very fast down the rails. We believe in free enterprise and free trade, but there are questions about how American innovation and technology abroad can enable authoritarian regimes that do not share our values.
I do worry about our own Federal government and our own agencies keeping up with this. They’re competing for the same talent as Amazon, Google, Microsoft, and the new hot startups. Are the best and brightest going to work for the U.S. government on these issues? I don’t know but I think it’s a talent race that we’re probably losing at the government level.
TAI: Let me ask you a question about higher education. If one were starting from scratch and looking for a template, for the ideal American university that affords students the right sort of education and opportunity for tomorrow’s economy, what would it look like?
AW: First of all, all universities should have quite a bit of diversity in their faculty.
TAI: Diversity in what respect?
AW: Diversity in race, gender, and age to really represent what the population is looking like coming to these universities now. America has a very diverse population. Universities are still struggling on their diversity quotients. We’re not talking about the MITs or the Stanfords and whatever, but there are hundreds and hundreds of universities that are nationally ranked that really if they took everybody that just wanted to come there, they probably wouldn’t be as a diverse as they want to be.
Second, one of the deans at the University of St. Thomas, where I’m on the board of trustees, is now working with Stanford University on an ethics course. Unbelievably, there was not an ethics course offered in the engineering school at Stanford. The two of them, the Stanford professor and the professor from St. Thomas, which has a strong ethics course, have been going to all these collegiate meetings talking about how to teach ethics and how to bring ethics into not just the general curriculum, but the engineering curriculum specifically, and also into other curriculums, especially in the STEM areas. Ethics, based on a really deep understanding of mission, not just markets.
I think that’s really, really important for companies. If you look at Salesforce in San Francisco, it has been one of Marc Benioff’s hallmarks that, since the beginning, the company has taken a small percentage of its revenue and put it in a foundation. Benioff is a significant civic voice and civic leader in a very complex city, San Francisco. But no matter what role you play in a company now, from the CEO on down, you’re not just a rank-and-file employee anymore. Everybody is a participant, one way or another. So it’s really important to understand mission, understand ethics, and not lose sight of the humanities.
TAI: What do you say to those people who say “We’ve got to get on top of our game in science and mathematics. History and literature, philosophy and religion, all those things are lovely, but guess what? In a tough competitive world where we’re establishing priorities, they don’t make the cut.”
AW: Well how do you even think about things like human behavior, which is what artificial intelligence is supposed to be mimicking? Is that STEM, or is that humanities? What about communication skills as a leader? Is that STEM, or is that humanities? I was a double major in math and business, with all the computer science classes. But they didn’t have a way to graduate early, so I had to take one last class, and I took an acting class. I petitioned to be let in because they only wanted the acting majors, and they sadly, mostly unwillingly, took me.
Later, a year out of college in Minneapolis, I had just left my job as a systems programmer at the Federal Reserve Bank, and I was a good little programmer, and at my young company we had written this great little business plan, but I had to get some money. There were ten banks in Minneapolis and St. Paul at that time, a big banking headquarters in the mid 1970s. By the time I got to the ninth bank, I knew that the gentleman sitting in front of me would start lowering his eyes and just say, “Well, you know, you have no collateral, and what is this stuff you’re talking about. . . . software?” Remember this was 1975, the same year Microsoft started. Before I went to the ninth bank I said, “I’ve got to do this, I’ve got to do this.” It was my acting class that saved me. Not my computer science class, not my business class, not my math class. I practiced crying in front of a mirror, which we had to do for the acting class. And when that ninth banker got ready to lower his eyes and say no, I burst into tears.
I left the bank with that check in hand. So I will always have great love for the humanities.
TAI: You must have advice that you like to give to people who are thinking about their careers within a framework of values and purpose.
AW: I’m the oldest of six kids. My dad was a high school basketball coach in Minnesota, my mom a nurse. My dad made $38,000 his highest paying year. We were a good, solid, middle-class family in Minnesota, right on the edge of not being middle-class. There are really three things I tell people that I need to do my job every day: First, I have to see uncertainty and complexity as opportunity. Life is much more fun if you see complexity and uncertainty as opportunity versus fear them.
Second, especially if you consider yourself an innovator and a real entrepreneur, no one is going to give you the answers to your questions, because no one has done it before. I was fortunate when I was growing up. I was the oldest of six. When I got to be a teenager, I started hearing all these rules from my friends about being home by a certain time. But my dad said to me, we don’t have any rules here, Ann. You should just trust your own good judgment. So what I say to people is, you’re going to have to trust your own good judgment. The word “Good” is important to hear as well as “judgment.” You’re going to have to make decisions about what you’re doing. Will it have a ripple effect out into the world and into the future that you’ll be proud of?
If you have a strong moral compass, you’re able to trust your own good judgment. If you have a strong moral compass, you are also able to lean into this complexity and uncertainty. But realistically, the noise level around us growing up was much lower. The amount of data we had to take in was less, and we had a lot of time to be thoughtful. There’s a lot of pressure and a lot of needles pushing on your skin right now. Getting the centeredness and finding any point of where you feel that you can trust anything is hard. It’s really easy to just say, I’m just going to go toward the noise. This is really what is the gift of the great entrepreneur. The entrepreneur walks into the loudest noise field you’ve ever heard, where everyone and everything is telling them to make different decisions, but they can actually find a space of trust where they can make decisions, and make them frequently—where they can build frameworks around themselves of assumption sets that tell them who their customer is, what value they’ll buy the products for, and who their competitors will be.
Finally, entrepreneurs need luck. Some of us, God blessed with luck.