Former Bloomberg’s campaign manager, Schumer’s Communications Director and Deputy Governor of Illinois, now venture capitalist, philanthropist, and a mastermind behind Uber, Bradley Tusk spoke with Chicago News about biggest challenges in the tech industry, mobile voting pilot, AI, and why we should all be prepared for global depression
CN: What are the biggest challenges tech industry is facing right now, in your opinion?
BT: There are a few. The world that I live in is an intersection of technology and politics, so every time a new startup comes along almost by definition no one’s thought of this and covered it in the law before because if they did they’d be the entrepreneurs and not the bureaucrats. So there’s all this confusion of what do you do with rideshare, what do you do with drones, and what do you do with cryptocurrency. It’s not like anyone is really fighting against us, it’s just that everyone is trying to figure out how this should be regulated – federal, state, and how should you treat tokens and securities and properties. So there are a lot of different questions to be answered. I think that there are some really important societal questions that tech has to be thinking about right now. There is clearly a data security problem, as we just saw with all the Facebook issues, and privacy. There is clearly a gender problem in tech that has to be addressed and fixed. Maybe biggest of all, all the advances in AI will probably lead to a lot of job displacement and we’ve got to figure out a solution to that. Now, it’s very possible that just like when we switched from the horse to the car lots and lots of new jobs we never could have thought of were created and it made the world a better place. That might be true, but I don’t think any of us right now could sit here and say once every car is autonomous every Uber driver will now do this instead. That’s going to create a lot of anxiety for a lot of people and I think we need to be proactive in thinking about it.
CN: What’s your personal opinion on AI?
BT: I’m not necessarily worried about our brains being taken over by machines. Generally I’m an optimist and I think that there’s a lot of good things that can be done through AI – ways to make life more efficient, ways to make things more cost-effective, ways to expand the economy into more places. However, I am also concerned for what that means for our economy. People who are agile and nimble and really smart will figure out how to succeed no matter what happens, while there are also a lot of people who are going to struggle and I think we have to be really careful about that so that we don’t ignite a global depression.
CN: Are there any ways to prevent it, in your opinion?
BT: There are a few different ideas. One is a universal basic income that some people in the Valley are pursuing. Finland just ran an experiment on with the idea being that the government would give everyone a stipend whether its $20,000 dollars a year or $30,000 dollars a year, to make up for income loss caused by automation. It’s worth looking at and thinking about that is one way to do it. Another would be really making sure that we can figure out the jobs that we need to fill in 15 years, 20 years, 25 years and really invest in education and job training both for kids and adults who are one profession and going to have to switch to another and giving them the tools they need to do that. I worry right now there are schools in the U.S. that really just aren’t good enough in most cases to prepare people for this kind of change and will be caught unaware. This is where we’re going to have a problem.
CN: Are there any world-changing startups / innovations we should expect emerging into the market soon?
BT: I think with blockchain we are just getting started. At my personal foundation, Tusk Montgomery Philanthropies, we are trying to create mobile voting so that people can vote in elections. The very first mobile vote was cast in the U.S. about 6 weeks ago in West Virginia for the West Virginia primaries so it’s a very small pilot, but I think we’ve gotten some proof of concept. My dream is that everyone one day will be able to vote in whatever election they want by just pressing a button so that instead of having only ten or twelve percent of people turn out in a primary we are at 70 or 80 percent which means instead of reflecting the views of the extremes on both sides our Congress, legislation, and everything else has to reflect the views of the mainstream. That is the one that I’m personally working on and most excited about.
I think crypto generally will bring a lot of smaller economies into the global economy. The U.S. doesn’t need that but there are lots and lots of small countries all over the world that I think would really benefit from that.
Obviously AI, and autonomous vehicles generally, if it’s done right, given that congestion and traffic and emissions are such massive problems in society right now, not only in the U.S. but really any developed part of the world. If you can eliminate all of that because all of the sudden cars are moving at the same speed and they can be a lot more closely together, that would make a really big difference.
You know in health care there are a lot of times when people don’t get the care that they need or doctors make mistakes or hospitals aren’t sanitary and things go wrong. I think automation in a lot of ways is going to really improve the quality of healthcare that we have. I guess, by definition, no one can be a venture capitalist and not be excited by the ways technology is going to change things. I kind of look at every sector of the economy and I can tell you at least why I think it will benefit from a lot of these advances.
CN: Do you have a start date for mobile voting?
BT: So right now it is open in West Virginia to deployed military who are in Afghanistan or Iraq. The first vote was cast on March 23rd. The primary is May 8th, and I think we have already agreed to do them for the general election and my hope is to convince one or two more states to join them whether it’s for military, the disabled or elderly, or other populations that could potentially benefit from this in November. A lot of people are not going to want this to happen because if you’re in power that should make it a lot easier for people to take you out of power, and this is like when we talk about the disruption fights for Uber or Airbnb or FanDuel, those are all tiny compared to how ugly this one is gonna be but that’s also what makes it fun.
CN: Your investment approach is different since you specialize in startups that require changes in policies or regulations and face a lot of challenges – Uber is a perfect example. How did you manage to overcome all of them in major U.S. cities in general and Chicago in particular?
BT: It’s funny because every founder that we invest in or work with says ‘do what you did for Uber for us.’ It doesn’t always work but in Uber’s case you had kind of a unique set of circumstances where you had a product in taxi that had not improved or evolved in decades and really had no fans and no supporters, while Uber is a more predictable cleaner safer and often more economic ride. Juxtaposition was so severe that we would basically have to go into a city, hold off the regulators, build a customer base, and get enough people engaged that when they tried to pass laws that would put us out of business we would get 100,000 of our customers to email their city council members, their legislation, or whatever it was and all of the sudden these politicians who would normally do their bidding from their donors said, ‘Oh no, I’m going to lose my election if I don’t figure out how to make this thing work.’ That strategy has worked really well. We call it Travis’s Law because Travis and I invented in 7 or 8 years ago. In any side of this rule of law where people are democratically elected that can work. The challenge that I have now that we invest in and work with dozens of startups is where can you create that kind of movement and where you can’t. There are apps that people are really passionate about, like fantasy sports, even though it’s a small area – the people who play fantasy sports really love fantasy sports. They will mobilize. That’s really useful. There are other areas that are important, like education and healthcare, that I think the app does well and the business can do well but people aren’t passionate enough that they will advocate for it politically and in that case the strategy that we run has to be different. Whenever we can rely on our customers that’s always the most effective way.
CN: Since we touched Uber, what’s your opinion on their decision not to go public until 2019? There’s an opinion that Uber is becoming less and less attractive every day. What is your opinion on it and where do you see the company in the next five years?
BT: I think we will see a few things. One is that there were some fundamental, structural issues in the company and they couldn’t really have gone public in 2017. Maybe they could have in 2018, but those things are all being addressed. They just hired an CFO, so they have him managing the place. I think Dara is doing a good job getting a handle on everything. I think they were in some parts of the world that didn’t make sense for them to be the primary business end – Southeast Asia, Russia, China. I think selling and partnering with some of the local companies ultimately gets their P&L to a better place. Third, It looks like DiDi is going to go public before Uber. Uber owns 17% of DiDi. It will be a somewhat interesting precursor for the Uber IPO, because if the DiDi IPO soars, which means there’s a lot of investor demand for rideshare apps, and if it’s a $100 billion dollar IPO, whenever you do IPO for Uber you have to factor in $17 billion right there for their stake in DiDi. There’s a lot of moving pieces still. I still have about half of my shares left so I’m eager for an IPO so I can monetize it, hopefully within the next 12 months it will happen.
CN: You work with a lot of challenging startups – is there a common mistake, which most of them are making?
BT: In my world, I sit at a very niche intersection of technology and politics. When you’re trying to disrupt something in a big way, by definition, if you succeed you’re going to get a lot of push-back. No one thanks you for disrupting them, they punch you in the nose. If you don’t anticipate that and plan for that and you don’t handle the government of politics right, you can be put out of business really, really quickly. I think that a lot of startups are so focused on other metrics, on their engineers, on their growth, on their fundraising, and on their customer acquisition. These are things that matter, but they can’t matter at the exclusion of other things that also matter. Startups who are not proactive enough to see that and act on it, to me, are the ones that are going to face the most trouble and have the lowest chances of succeeding. I actually have a book coming out in September specifically about this, because at any given moment we can work with and invest in a dozen startups and there are 17,000 in the U.S., so the idea is to give people a better way to think about how politics works, how the regulators are thinking about it, how you’re thinking about it, how you put it all together, and it’s told through the stories of Uber, Tesla, Lemonade, and all the different campaigns we’ve run over the past couple of years.
CN: Tell us more about the book.
BT: I’ll make a shameless plug. You can preorder it in Barnes and Noble or Amazon today. It’s called The Fixer: Saving Startups from Death by Politics. It’s a memoir being published by Penguin. The first third is my history in politics, as Bloomberg’s campaign manager, Deputy Governor of Illinois, Schumer’s Communications Director, and kind of learning in the trenches. The next third of the book is Uber and creating the strategy around how you make ridesharing legal in every market in the U.S. The final third is creating trust ventures and being the first fund ever really focused on investing in startups and regulated industries and fighting out these battles for all the different companies in our portfolio so they can operate and succeed. I think it’s a fun, funny book so hopefully people will just enjoy reading it. If you are a startup, it gives you a roadmap for how you should think about disruption, and how you should think about politics.