July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Eight-time entrepreneur Steve Blank is out of the startup game — which means he’s now free to speak his mind.

One of the things on his mind: How venture capital is failing to set a responsible national tech agenda.

I called on the serial entrepreneur and father of the “Lean startup” movement for a dose of perspective in the wake of President Obama’s tech-centric State of the Union (SOTU) address. Arguably, the theme of the President’s speech was innovation, which is also core to Blank’s teachings about the business of entrepreneurship.

During SOTU, the President brought Silicon Valley’s agenda to national attention with references to 3D printing, immigration reform, and teaching the next generation of kids to code. It appeared to millions of viewers that the tech agenda has truly gone mainstream.

Is Silicon Valley no longer a bubble?

Blank said SOTU was a step in the right direction, but that government isn’t adequately supporting entrepreneurship.

“We are getting our asses handed to us by the Chinese,” he said. “Almost irrationally we have decided not to have a National Industrial policy — leaving that to private capital.”

This is a topic Blank has discussed in a series of blog posts, in which he argues that the U.S. government has not set investment policy, so venture capitalists have undue power to determine which new industries receive funding.

Blank has recently been making moves in public policy. He recently got involved with the National Science Foundation, and is a senior advisor for innovation at the Department of Veterans Affairs (the VA).

But he is best known for teaching at universities like Stanford, Berkeley, and Columbia on how entrepreneurs can build innovative tech companies with a small budget, and quick and dirty engineering skills. This kind of thinking, which he describes as his “contribution of the last five years,” was coined “Lean startup” by his most promising student from Berkeley, Eric Ries.

Lean thinking has subsequently trickled into a number of industries, including manufacturing. But Blank isn’t convinced that Congress will adopt the practices and ethos of Silicon Valley — “not just in words, but in deeds.”

Still, he argues, Congress has traditionally been a stumbling block to innovation, and we shouldn’t be overly optimistic.

“New initiatives threaten existing incumbents that have enormous amounts of resources to prevent innovation,” he said. “Lobbyists are there to protect the status quo.”

Continuous innovation: Even Silicon Valley is struggling

Blank believes that the leading tech companies are in a particularly vulnerable spot. Tech behemoths — Oracle, SAP, Cisco, even Google — are facing serious threats from smaller players, who can push new products into the market at a faster rate.

He fears that many companies are “screwed and scrambling,” and the current approach to invest huge resources in corporate development and M&A simply isn’t working. Blank believes that the late Steve Jobs got it right: He would put highly successful Apple products out of business so fast “it would make your head spin,” and competitors didn’t stand a chance.

I mentioned a recent conversation with Scott David Cook, founder and former CEO of Intuit, who often refers to his 30-year-old software company as a “startup.” According to Blank, this isn’t misguided — “Scott has nailed it,” he said.

“The real problem is that these organizations are solving 20th-century problems,” he said. To discern whether a company will survive, he recommended that I ask CEOs whether their compensation plan has changed to provide funding for innovative new products.

“CEOs who aren’t making wrenching decisions about the organization of the company won’t last more than five years on the job,” he said. ”Every certainty we had about customers, marketing, technology is changing.”

Related: I caught up with Blank last August, and we blazed through myriad controversial topics, including the “embarrassing” treatment of women in venture capital (the Ellen Pao — Kleiner Perkins case was still fresh news) and his advice on bouncing back from failure. 

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

During Tuesday’s State of the Union addresses before Congress, President Obama repeatedly stressed the importance of new “research and technology.”

Arguably the overarching theme for tonight’s address was innovation: the President applauded Apple for its plans to manufacture Macs in America, referenced new technologies like 3D printing, and called for levels of research and development on par with the 1960s during the “Space Race.”

“Our first priority is making America a magnet for new jobs and manufacturing,” the President said. “If we want to make the best products, we also have to invest in the best ideas,” he continued.

There are things we can do, right now, to accelerate this trend. Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything….Now is the time to reach a level of research and development not seen since the height of the Space Race.” (President Barack Obama, State of the Union ’13)

The State of the Union (#SOTU) address touched on a variety of important issues, including bi-partisanship and the relationship with Congress, alternative energy, the War, and gun control. But we pulled out the key moments that are most relevant to the tech community:

Teaching kids to code

The President said that our children aren’t being educated with the requisite skills to fill the high-tech jobs of the future. He stressed that schools that worked with employers and colleges to create classes focused on science, technology, engineering, and math, would be rewarded. Obama referenced schools like P-Tech in Brooklyn, which collaborated with New York Public Schools, the City University of New York, and IBM, to ensure students graduated with a high school diploma and an associate degree in computers or engineering.

Obama stressed that college is over-priced and out of reach for millions of students and families. He said that taxpayers could not subsidize the rising cost of higher-ed and asked that colleges do their part to keep costs down. He asked Congress to alter the Higher Education Act so that “affordability and value” determine which colleges receive federal aid.

Key quotes:

• Tonight, I’m announcing a new challenge to redesign America’s high schools so they better equip graduates for the demands of a high-tech economy.”
• “Every dollar we invest in high-quality early education can save more than seven dollars later on — by boosting graduation rates, reducing teen pregnancy, even reducing violent crime.”

The President’s proposed solutions: 

• Working with states to make high-quality preschool available to every child in America.
• A new “College Scorecard” that parents and students can use to compare schools based on simple criteria: where they can get the most bang for your educational buck.

Encouraging foreign-born entrepreneurs

Obama stressed that immigration reform would help technology companies to attract skilled entrepreneurs and engineers to the U.S. He said that “real reform” involves cutting wait periods and reducing bureaucracy.

But commentators pointed out shortly after the speech that the President didn’t offer concrete solutions to this issue, beyond a vague call for “comprehensive immigration reform.”

Key quote:

• “Send me a comprehensive immigration reform bill in the next few months, and I will sign it right away.”
  

The President’s proposed solution:

• Comprehensive immigration reform and stronger border security.

Bolstering our cyber defenses

Obama said that America faces a growing threat from cyber attacks; “hackers” who are stealing people’s online identities and accessing sensitive information behind firewalls. The President referenced the executive order signed today that would strengthen cyber defenses through the development of a set of best practices.

The President stressed that we need to protect our infrastructure, especially with the recent rash of hacker attacks against major U.S. newspapers, banks and federal agencies. Just a few weeks ago, the Washington Post joined the growing list of publications whose computers were penetrated by Chinese hackers.

Key quotes:

• “We know foreign countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, and our air traffic control systems.
• “We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy.”

The President’s proposed solution: 

• Obama called for Congress to pass legislation to give government “greater capacity to secure our networks and deter attacks.”

The indomitable rise of healthcare-technology

The President was particularly strong when making an appeal for affordable healthcare. He repeatedly referenced the Affordable Care Act, and said that one of the biggest drivers of long-term debt is the rising cost of healthcare for the aging population.

Med-tech entrepreneurship received a boost last year when Todd Park, cofounder of Athenahealth and Castlight was was promoted from CTO of the Department of Health and Human Services to CTO of the United States. Already, Park has been instrumental in launching a Presidential Innovation Fellows program, which invites innovators from outside government to work with the powers that be to solve socio-economic problems, particularly those facing health providers and hospitals.

On the topic of Medicaid, Obama proposed reforms that would “achieve the same amount of healthcare savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission.”

Key quote: 

• “Already, the Affordable Care Act is helping to slow the growth of healthcare costs.”

The President’s proposed solution: 

• Obama proposed reducing taxpayer subsidies to prescription drug companies and asking more from the wealthiest seniors. He said medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital — “they should be based on the quality of care that our seniors receive.”

Read the full text of the State of the Union address here. 

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

In her final press conference last week, Hillary Clinton made a brief reference to the Alliance for Affordable Internet. This initiative seeks to expand affordable internet access to people in developing countries where a minority of the population is online and there is a strong need to create economic opportunities. It represents a public-private partnership between the State Department, the World Wide Web Foundation, and large tech companies such as Cisco, Google, Microsoft, Yahoo, and Intel.

As Secretary of State, Clinton focused heavily on creating programs that promote international commerce. The theme of the conference was to celebrate the global impact of the many public-private partnerships formed under her tenure and to celebrate the launch of four new initiatives, including the Alliance for Affordable Internet, which collectively are valued at around $86.5 million.

“In the 21st century, diplomacy and development is not in any way confined to government-to-government relations,” she said. “Those have to be tended, those have to be respected, those have to be nurtured and grown, but at the same time, in this increasingly inner connected networked world, we wanted to reach out people to people […] Many of the challenges we face extend beyond traditional political and geographic divisions. How do we grow the global economy and give those hundreds of millions of young people, men and women a chance at a decent job?”

Access to the internet and digital literacy skills are vital for securing gainful employment, both at home and abroad. Clinton stated that only 25% of people in developing countries are online, as opposed to 75% in the developed world. A “key element” of economic growth and innovation is to lessen this gap and “help the next billion people come online.” Making the internet more accessible and affordable is a stepping stone towards economic independence and empowerment.

In an article this morning, Bloomberg reporter Elizabeth Dwoskin delved deeper into the story surrounding the Alliance and its implications. “If successful, the project could end up helping many people in poor countries get onto the Web. It could also cement long-term ties between the State Department and the companies- while opening new markets and reaching new customers for Silicon Valley.”

Dwoskin interviewed Ann Mei Chang, a “25-year veteran of Silicon Valley” who left her job as  senior engineering director at Google to join the State Department in November of 2011. Chang moved to Nairobi, Kenya which many have pegged as Africa’s emerging tech hub, and began investing why Kenya has had greater technological success than its neighbors. She said that in most developing countries, an entry-level internet connections can cost as much as an individual’s monthly income. This is primarily due to high taxes on equipment like computers, mobile phones, and modems; a lack of the physical infrastructure (IXPs) to support the Web; and telecommunications monopolies that limit access to infrastructure or make it prohibitively expensive to set up.

Addressing these barriers is a critical part of making the internet accessible to underserved populations.

“The idea behind the Alliance is to use corporate and diplomatic power to push foreign governments to change was and policies- in this case, the obstacles that governments put up to wider Internet penetration.”

There is a lot of excitement right now about emerging technology hubs around the world and the potential for online educational, health, and social companies to create meaningful change. Change, as I learned as a Peace Corps volunteer, is most significant when it comes from within. Internet access may not be a basic human right, but the right to work for fair pay, the right to a standard of living adequate for health and well-being, and the right to education are. Without shaping policies and infrastructure at a foundational/national level that promote equal access and digital literacy, the ability of the internet to transform the whole world is restricted.

If that doesn’t sell you, just think of the impact a billion new users will have on the growth prospects for U.S. tech companies.

Watch video of the press conference.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

A West Wing watching-spree may not be the best reason to choose a company for Startup Spotlight, but it has my head swimming with ways that the internet can improve democracy.

BlastRoots was founded by Washington D.C. mover-and-shaker Chris Hull. Hull spent his career working in politics. He has worked for state and national legislatures, as well as for a national party committee, public policy think tanks, lobbying groups, and public affairs firms. His primary role was to advise organizations of all sizes, from grassroots campaigns to global corporations, on how to best achieve their political aims. He is also an adjunct assistant professor at Georgetown University.

A few years ago, Hull’s attention began to wander away from from serving special interest groups and towards creating a system where a majority of the population is not unhappy with the way government works. A Gallup poll conducted last year found that satisfaction with the government was at a record low of nearly 30%. Hull believes that these numbers would go up if voters felt they had a greater impact on policy.

“I felt for a long time that someone should automate me out of existence,” Hull said in an interview with VentureBeat. “Suddenly, a lightbulb went off in my head and I realized this was made possible by the social networking revolution. It is undeniable that the internet has changed politics by making it easier for people to organize online.”

He left his public affairs job and set out to create a platform that combined the knowledge, resources, and tools of political insiders with the capabilities of internet technology. Hull’s cofounder John Merz previously served as the Director of Technology for the AOL Greenhouse. The men combined their political and technical expertise to create what they believe is the ultimate grassroots lobbying platform.

“In my judgement, there was not a company that took the know-how of Washington and how things actually work, and applied these new lessons of technology to it, opening it up to the public. What we really need is a transparent and open marketplace where people can access these services and use them to participate in the political process.”

Hull said BlastRoots bridges the gap between platforms like Change.org and Causes which are entirely focused on grassroots momentum, and the “enormous but completely subterranean” industry in Washington that influences public affairs for a very high price.

BlastRoots is now in beta. Visitors to the site can create their own campaign using a step-by-step guide, browse existing campaigns to join, or blast out an idea to their social network to incite action. The dashboard offers tools to create a grassroots lobbying campaign, including a customized petition template, a database of email addresses and Twitter handles for directly contacting the members of Congress, customized print-and-send letter templates, and recruitment features. There are also analytical features to track progress, measure impact, and follow up as needed.

The idea is to help people without a lot of expertise, connections or money, change the world. According to an analysis BlastRoots conducted on the political advocacy market, $17.2 billion was spent on federal lobbying, non-profit advocacy, political contributions, and campaigns in 2012. However, while these numbers are high and climbing, the increase is partly driven by relatively small online donations.

“Our view is that spending not only on politics, but on policy – advocacy and lobbying – will eventually flow more and more from ordinary citizens, much of it gathered online,” Hull said in a discussion on Politico. “That’s a promising trend.”

BlastRoots is based in Washington DC. It’s core team consists of 6 people, all dedicated to the goal of a more democratic lobbying system, and the ideal of a more democratic America.

Startup Spotlight is a weekly series that features a company with a unique idea or story to tell. If your company would like to be considered, please submit an application at http://venturebeat.com/news-tips/.