I delivered the testimony below on September 9th, 2015, before the Budget Committee of the U.S. House of Representatives.
For years I wanted to be you. I ran for City Council (but lost). I worked at DC think tanks and as a legislative aide in Congress. I believed that public policy was the best avenue for social change. I no longer believe that. Thank you to Chairman Price for inviting me here to share why.
I met a man named Peter Thiel, who taught me it is precisely the people who want to “change the world” that should start companies instead of work for government or nonprofits. Peter brought this spirit to bear on many major public problems — and for each he created a company.
- Wrangle in the FED? PayPal.
- Get to Mars? Space-X.
- Combat terrorism? Palantir.
The good news is that this spirit is alive among my generation. According to the Reason-Rupe Millennial Survey, 55% of millennials want to start a business… and not merely for financial gain, but also to improve the world around them.
When we are asked what factors lead to our ability to pull this off, we respond: hard work (61%), ambition (39%), and self-discipline (36%). At the bottom of that list — literally the lowest ranked option — was government programs. In fact, 53% say Social Security unlikely to even exist when we retire.
So largely this means we are a go-it-alone generation. AngelList, LegalZoom, Amazon Web Services, Code Academy and others have all democratized innovation in important ways. But here’s the problem: it isn’t just that government doesn’t get it, it’s that government stops many of us who do.
There are burgeoning tech industries such as genomics, mobile health, quantified self, bitcoin, 3D printing, MOOCs, and self driving cars that could dramatically lower costs and improve services that have bearing on many entitlement programs — but are caught in Washington’s crosshairs.
Coursera and Udacity set out to enable everyone the world to access the best professors. The State Department banned the export of their content.
23andMe set out to enable every person to map their genetic code. The FDA, has effectively shut them down.
My previous company, Outbox, set out to reduce wasted paper and transportation costs with an alternative to the US Postal Service. In an infamous meeting with the leadership team of USPS, we were told by the head of digital innovation: “Digital is a fad; it will only work in Europe.”
What used to be a benign incompetence — like Senator John McCain’s references to FaceSpace and MyBook — has turned into an active malevolence.
What do Burundi, Afghanistan, and Mongolia have in common? They are all rated by the World Bank as better places for starting a business than the U.S.. In fact, we rank a paltry #46.
This makes sense when we think about contrast between tech and government:
- We set up websites and web applications with no permission, whereas you need pre-market review.
- We have freedom of speech and marketing, whereas you have quiet periods and off-label marketing bans.
- We drive early adoption, whereas you require licenses.
To summarize: If our motto is “move fast, break things,” yours might as well be: “If you move too fast, we break you.”
But there is a new strategy driving companies such as Uber, Airbnb, and my new company, Able.
When we encounter broken systems, we use technology — and in particular mobile, geo-aware, and socially enabled capabilities — to organize people around a new, high-potential product.
In the case of my current company Able, Washington has tightened restrictions on banks so that they are much less likely to lend money to small businesses. Facing this, we built the world’s first collaborative lending platform so that the Fortune Five Million — those who create two thirds of all jobs and employ half of the workforce — can access the capital they deserve. Small businesses in 40 states can get funded today at http://www.ablelending.com.
The companies we support so often express the the spirit I have been describing to you.
A passion for outdoor adventure and love for helping people led Greg McEvily to create a Kammok, a premium outdoor gear brand, whose hammocks and sleeping bags equip and inspire thousands to be more active.
An undiagnosed illness led Kelly Love and Allison Evans on a quest to rid homes of toxic cleaning products. Branch Basics now has over 25,000 fans who get to clean free of toxic chemicals.
What grew from the aftermath post-Katrina New Orleans has become Michael McDaniel’s Reaction, inc. — whose modular emergency Exo housing system stacks like a set of coffee cups so it can be rapidly transported down any US interstate highway and light weight enough that four men can unload enough housing for 100 people in one hour.
These millennial entrepreneurs seek to transform the world they live in through a for profit company that delights its customers, honors its employees and suppliers, and returns a profit to its investors.
In advance of this hearing we asked our community what they thought you should do. I’ve included those statements in the full testimony and wanted to share that of business owner Joseph Malchow especially.
Joe told us:
Americans are learning, every day, that when government regulates people, prices, and technology, the people lose. What’s the price of regulation? Take the cost and convenience of an Uber ride, and subtract it from the cost and inconvenience of a taxi ride. The American people feel the benefits of the idea of creative destruction every day. And they love it. Silicon Valley is turning shadowy regulated industries into genuine marketplaces. It’s high time rulemakers got on board.
Once Washington gets on board, it is our hope that you move a little faster,
break a few more things, and let us do the same.
You can read the full testimony here.