Will Obama Engage Entrepreneurs?

During the past 9 months (no doubt because of the immensely intense election cycle), I have observed a new level of political engagement among our industry intellectuals.  Tim O’Reilly, Fred Wilson, Om Malik, Mike Arrington, have periodically written about how we, as an industry, can use market opportunities to advance a progressive political agenda to reduce the cost of government and reduce the inequities within our society.

Yesterday, Fred posted a Sunday must-read  essay entitled Hacking Education.  Fred argues that the system is badly broken and that we can create value by tearing it down.  Here’s an excerpt:

The existing large institutions in the world of education are the public and private schools, the colleges and universities, the testing institutions that inform them, and the unions and political system that support them. I want to help take all of them down and build something better in its place. I am not a fan of home schooling, but I understand it’s appeal. I do not think I can teach my kids better than others. But I do think my kids and my wife and I need more choice of who educates them.

Few institutions are more entrenched in our society than the education system.   My 8-year-old son has been learning how to bubble in scan-tron sheets with a number 2 pencil.  Healthcare might be the only other industry within our society that suffers from such inefficiency.  In 99 out of 100 hospitals or clinics in this country you can probably use that same number 2 pencil to write down your medical history for the 500th time just to have a splint put on a broken finger.

Progressives seek to correct these inefficiencies with new approaches that try to avoid the loaded,  20th century terminology of liberal and conservative.  We believe in the power of regulated markets to fix many of our society’s greatest challenges.  Progressives embrace technology and put their faith in entrepreneurs (for-profit and non-profit) to deploy innovation and technology to rectify systemic problems.  Progressives understand that any truly wealthy society needs a thriving middle class to create a growing and stable economy.

Vinod Khosla and John Doerr, two of Silicon Valley’s more prominent venture capitalists are busily placing bets across some of the progressive landscape.  They led a wave of  greentech fund formation to combat the energy crisis and Khosla has a real commitment to innovative micro-finance ideas.

But with the exception of medical devices, we have not witnessed the same attention and capital deployment find its way to healthcare and education.  Why? I think in large part because society moved the venture investors towards these initiatives and not the other way around.  Consider Sevin Motors this relatively early entry into alternative energy by legendary invetstor/executive Ben Rosen.  Rosen was a founder of Compaq computers a company that remains the fastest company to a $1bn revenue in history (4 years).  Rosen was a legend, but our society had little interest in reducing fossil fuels 10 years ago.  Then Toyota released the Prius, Al Gore made a film, and the country started to shift.   After that Kleiner Perkins created a greentech fund.

Tech investors find the burden of the bureaucratic and highly regulated healthcare and education industries stifling.  They fear the inability of the marketplace to win out because of systemic problems that they cannot fix.  This must be rectified by an Obama administration.  Tax breaks for small-businesses is not an imaginative enough policy.  Obama needs to use the government’s investing power and, more importantly, bully pulpit to create much more private investment in healthcare and education.

This is no easy task.  Entrenched interest groups like the Teachers Union, the American Medical Association and HMO lobby will bring many weapons to this fight.   Ask the Clintons how they remember 1992-3 and the fight to reform healthcare.

So the underlying issue is creating a culture that welcomes innovation in all three industries and gears up for a true political battle with entrenched institutions.  That cultural change must be lead by a government that relies on entrepreneurs to invigorate these industries  fresh thinking, relentless energy, and unbreakable determination to really deliver on “change we can believe in.”

Meetup CEO Scott Heiferman linked to this thoughtful  blog post from  Harvard Professor David Lazer about America’s political future.  He ponders the future of the Obama infused grassroots rennaisance.  I’m skeptical that this energy will continue to be volunteered.  We need government and the markets to lead a reinvention of our energy, healthcare, and education industries and we need to start Wedensday.


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