Standing Up For Startups - YC Goes To D.C.

I'm so excited that you're here, Gary. It's because y c is in DC now, and we are advocating for founders and making sure that founders have a seat at the table. Washington for so long has just been guided by the interest of some of the largest players, particularly in the technology sector.

And so we're trying to really fill that vacuum and make sure that the authentic voices of founders, get heard by our policymakers.

So for those of you who haven't met Luther yet, he's the new head of public policy for Y Combinator, and he spent many years, both in DC and tech policy,.

most recently for Yelp, which is how I met you first. Like, you know, I I think it was a couple years ago, and you were, one of the first people to take me down the, the hallways of power, as it were. I'll never forget going to the White House with you and sitting in a meeting with Tim Wu and hearing for the first time the term little tech. And I that always registered with me.

I think that that's a great way to think about it. Because it's not like we want everybody to be little forever. It's it's really but it it it tees up a nice dichotomy of what we're really talking about in terms of who has a voice in Washington.

And and thus far, you know, little tech really has not been present, and it's really by little tech, we mean kind of this emergent tech and the tech with the most potential to, you know, make people's lives better. What are some of the things that we're fighting for?

The biggest one probably is, you know, access to talent, making sure that high skilled individuals can actually get into our country and build build companies. And that is depressingly not as easy and straightforward as it should be as many in our audience know.

Another theme on access to talent is related to certain noncompetes, like where there was recently a rule that the FTC put out doing a blanket ban on national ban on noncompetes. It's working through the courts or some of the congress that think that should be led by congress. I'm kind of indifferent to who leads it. I think we, need a national noncompetes ban in California.

There's a de facto ban, and I think that's unlocked a lot of great innovation. Connected to noncompete ban and gets into sort of the next high level thing as sort of access to markets. How do we make sure that the emergent technology is able to build without fear of facing a choke point or some arbitrary self preferencing that ensures that consumers aren't able to see this innovation.

And so promoting legislation like the American Innovation and Choice Online Act or the Open Apps Market Act, these legislation that would effectively make it a lot tougher if you were one of the biggest companies, biggest Internet platforms in the world to egregiously self preference.

Like, if you have a, you know, a monopoly business like search or, you know, smartphones or whatever, good for you, but you can't then parlay that dominance into these, like, downstream markets in a way that snuffs out competition. And then finally, AI.

I mean, that's, like, what everybody's talking about, not just in San Francisco, but in DC, and ensuring that we don't inadvertently create conditions that squelch entrepreneurship in that. So ensuring, for example, that open source tools and open source foundation models are safe from just getting.

Regulated. Criminalized. Yeah. Yeah. Legalized math. Legalized math. And then one of the crazier things that I think both of us I I certainly discovered coming to DC with you a couple years ago, but probably dawned on you fairly quickly was that, you know, there are a lot of people who talk about tech. There are a lot of people who have big stakes in what the government does having to do with tech.

But those things are sort of separate from what might actually be great for the people or even great for startups and little tech. One of the reasons that people get so fed up with Washington is that it's just overrun with special interest.

And there's actually a great book out right now I'm reading called The Wolves of K Street, which is all about the history of the lobbying industry and just how it didn't used to be this way. It used to be really just, like, consumer advocates and citizens.

But the idea is that when it comes to technology, it seems like the last fifteen years, at least, have been dominated by only a handful of players. They're the ones who really have a seat at the table. They're the ones that get invited to the White House state dinners. They're the ones that are driving a lot of the policy. Sometimes that's fine for startups.

If on issues, for example, like high school immigration, you know, we're pretty aligned with a take a Microsoft as an example in terms of we want more high school immigrants to this country. But sometimes you're not gonna necessarily agree on all these issues, and so that's why it's important to have an authentic voice.

There's a perception from certainly outside of DC that, like, you know, is this how much of it is driven by money?

And then there's this term astroturf. In your experience, like, what is the thing that overcomes astroturf?

Well, astroturf is basically when you have a a special interest or maybe a a a pool of companies or maybe a single large company that they want to kill a bill that would maybe reform their industry, or they wanna get something passed that would give them some kind of special permission to do something.

And they know that, like, it would not fly if it were sort of up for a democratic vote, and everybody were, like, highly informed about what was going on. And so they essentially prop up, you know, fake advocacy. They gen up letters or they just kind of do people the around the issue and drive people to to write in. But Astraturf really just is it is kind of like the opposite of grassroots.

It's it's this it's it's fake. It's it's it's creating a perception that people care about something when really it's just this, like, you know, invisible often invisible interest that's that's really pushing the issue. And so because Washington is so overrun with astroturf, it really, like, pours gasoline on an already kind of cynical partisan system.

However, the antidote to that is authentic stories.

And because Y Combinator has 11,000 founders that, you know, presumably touch virtually all congressional districts, there are so many incredible stories in our community that being able to to directly interface and and tell those stories with members of congress, with folks at the White House, with agencies, that is actually what I think gets us to sensible policymaking is because they finally have a resource where they can, you know,.

get some education about, like, how is this actually gonna affect, like, the the, you know, small three person team that's building something. I think the most interesting history that I think is a little bit even forgotten both to tech people and people in DC is that fifteen, twenty years ago, tech was, like, sort of this thing that happened in California. It was like a fringe thing.

Like, the max market caps on a lot of these companies was, like, you know, $50,000,000,000, a hundred billion dollars. That was, like, the the largest you would get. And today, you know, the S and P 500 is, you know, half companies worth a trillion dollars or more Right. And, by market value.

So, you know, basically, over the past ten to fifteen years, tech went from a very fringe thing to now big tech. And so when you come to DC, like, they're almost like, what's this? Like, you you know, they'd heard of Y Combinator. Like, maybe their their kids or their aides had, like, applied to YC or had gone through it before. Like, that's sort of the extent of it.

And so that's why I felt like little tech was sort of the perfect counter positioning to big tech because I am, I mean, in a lot of conversations, fairly surprised at the amount of ire that big tech has, you know, sort of gained day to day. Definitely.

Yeah. I mean, we definitely even even though big tech has has sort of a head start in this conversation, has really been playing the game for fifteen years plus, there still remains sort of bridges that need to be built between Silicon Valley and Washington because, frankly, a lot of the, you know, a lot of the people who are are leaders are not. You you get you get rank the longer you stay.

You know, I think a lot of the younger staff get these technology issues more than people would appreciate. I think people often point to this exchange between Sitter, Orrin Hatch, and Mark Zuckerberg where he says How do you sustain a business model in which users don't pay for your service? Senator, we run ads. I would bet a kidney.

I'm almost positive that that was like a staged kind of tongue in cheek moment that a lot but I think people outside DC don't understand that some of this stuff is actually choreographed behind the scenes. I'm not saying it's not totally untrue that there are definitely situations where senators themselves don't understand the issues. The Internet is a series of two. Yeah. That's a great example.

But it it the the staff, especially the younger staff, are surprisingly sophisticated. But if we don't show up and we're not having those conversations and forming those relationships, then it becomes a the only folks that they hear from are representing through the the largest, most powerful interests. And sometimes, they don't those don't align with, like, the little tech folks.

Well, if it's anything I've learned, it's a very different thing to read something on x versus meet someone in person, shake their hand, and have a real honest to God conversation.

And that's what we're here to do. So we'll see you guys next time.