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Tue, 02 Aug 2022 00:35
This episode is a first for Acquired: we’re joined by a sitting US Congressman (from Ben’s home state of Ohio!), Republican House Representative Anthony Gonzalez. Anthony serves on the House Financial Services Committee and is deeply involved in crypto and Web3 regulation, as well as on the Climate and Science, Space & Technology Committee where he oversees NASA among many other agencies. His also has an absolutely incredible story — his family immigrated from Cuba to Ohio, he played in the NFL, he was COO of an Investment Group of Santa Barbara backed startup, and he was one of a small number of Republican congresspeople who voted to impeach former President Donald Trump after the events January 6th.
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I can make it so you can't see her if I just hold her. She's all wound up right now. We've got all the creatures here. I got the baby on the monitor. I got my fluffy dog. You get your fluffy dog. Keep her off camera to get never happened. Do you? Who got the truth? Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I'm the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures. And I'm David Rosenthal and I am an angel investor based in San Francisco. And we are your hosts. Today we have a first ever for Acquired. Our guest is a United States congressman serving from my home state of Ohio, representative Anthony Gonzalez. David, Anthony has an incredible story. The original motivation was Anthony's on the House Financial Services Committee and is probably one of if not the foremost member of Congress working on understanding and regulating Web 3, crypto, everything that's happening. And beyond that too, the broader economy, the Fed, GameStop, Robin Hood, we get into all of it. Yes, the House Financial Services Committee had a broad mandate well before crypto came around. Anthony is one of the handful of folks as we talk about that really actually use and understand this stuff in Congress. Yeah. And not just because he's actually played around with it himself, but he ran a venture backed startup before serving in Congress. He went to Stanford GSB for grad school with David. That's where Anthony and I first intersected. And you know, that's the who we talk about at all through this episode. His story is just incredible. His family immigrated from Cuba after the revolution. His dad was a steel entrepreneur in Cleveland and Anthony ended up playing football at Ohio State. I remember in high school watching him on TV. He went to the NFL. He played for the cults. He caught touchdowns from Peyton Manning and he went to business school and now is a US Congressman. It's just incredible. Yep. All right. Excited to get into it. Listeners, if you want to discuss this episode after we wrap up here, join us in the acquired Slack at acquired.fm slash slack. Now we are very excited to welcome back to acquired our presenting sponsor, Vanta, the leader in automated security and compliance. We are huge fans of Vanta and their approach to the whole compliance process, sock to hip a GDPR and more. And we've got CEO and co founder Christina Casio bow back with us today. Christina, a lot has happened since we last recorded, right? A lot has. Thank you so much for having me back. One of the biggest things is you have raised probably the best round of 2022 so far, a $110 million series B at a $1.6 billion valuation from craft Sequoia and a whole host of other great folks, including Ben and myself. Tell us about what raising this round in this environment was like. Right. Round raised at the end of April 2022, which was different than the last round, which was raised in call it like January, February 2021. To give you back a little bit to April ice was definitely melting. People were certain to get real skittish and you would see that because all of the questions were around the efficiency of growth. And so it was very clear at the bar exchange. If you had to pick one metric for this round, it was burn multiple. So for every dollar revenue you earn, what did you spend to get that dollar? And I think 2021, right? It was all just revenue growth. It is like, what is that compounded growth rate go? I think that actually those two metrics sort of speak to just what a different funding environment it was, what it differences there were in diligence, what investors really wanted to see and what they would stomach and not stomach. So obviously you navigated that incredibly well. What about how you had set up the company going back to the very beginning kind of allowed you to be so successful in both of these two very different environments? We got to basically $10 million of revenue on a couple million dollar seed round. And that was by sort of just doing the basics well, charging annual contracts, doing so upfront, having something people wanted and we're willing to pay for annually upfront. And I think that installed a lot of discipline early on to this day. Actually, I still get the cash balance in my inbox every single Monday. You see the impact of your decisions on a weekly basis. Having worked in VCs, you're actually best bet for getting venture funding is to have a business that doesn't need venture funding. And if that playbook and then realizing we could pull it off and then honestly a little bit of like, oh, huh. What a long way to push this. Can we get to two million dollars in revenue? What about five? And you're like, 10? That kind of DNA was set really early on in culture too. And then took to the adjustment for us more with 2021 when it was like, okay, does not matter. Like spend, market share, revenue growth, go. And so we did, you know, kind of like everyone else staff up and change pretty quickly. And I think that actually helped us kind of shift again in 2022. And it was for us, it was like shifting back to a motion we knew, whereas I don't know if that was particularly true across the board. Obviously, one of the great benefits of now having raised this round in 2022 is you are now a highly resilient company. And of course, the DNA that you've had all along. How is that shown up so far this year in your interactions with customers? Because we serve other technology companies and often high-growth companies, right? So they're facing the same stuff. They're playing the same game on the field. And so they can sort of appreciate it. And they're like, oh, you guys will be around for a while, right? And not just kind of the business continuity thing, but given what you've raised, you're able to make decisions for the long term. And it's funny, I think it's just because the customers are from, you know, the same milieu as we are, they get it, they appreciate it. We have to don't even need to say it. They'll say it to us. Our thanks to Vanta, the leader in automated security compliance software. If you're looking to join Vanta's 3000, now 3000 plus customers to get compliance certified in weeks instead of months and build deeper trusted relationships with your customers and partners, you can click the link in the show notes or go to vanta.com slash acquired to get a 10% discount. Now onto our interview with Congressman Anthony Gonzalez. And remember, this show is not investment advice. David, myself and any guests may have investments in the companies we discuss. And this show is for informational entertainment purposes. Anthony, welcome to acquired. This is pretty surreal, given that, you know, we were classmates just a few years ago. And now here we are again, reunited on the podcast. So real for that reason, it's real because I've heard you make that intro before, but never for me because I listen to the show. So it is an honor to be here. And thank you for having me. When you say here, where is here right now for you? Because it looks like a very official setting behind you. So it is. I'm currently in my congressional office in Washington. I'm not sure when the episode will air, but we just had a series of votes and we're done for the week. So got a couple hours and before I head out, figured we'd jump on and have a little chat. That's great. And where is the congressional office building wise? It's basically across the street from the Capitol building. My son when he comes to work, he says, you know, that's the Dolemore daddy works. So just across the street on, you know, one side of the street are the house office buildings. And then on the other side of the street are the senate office buildings. There's of course much nicer and much bigger, but aren't bad either. But you guys do the real work. We like to think so. They treat us like little children like, oh, that's cute, little house member. The senate's going to really solve this problem. I'm not sure that the country would agree with it. I don't think the country thinks either of us solve many problems. But that tends to be the dynamic around here. Well, we'll get into all that. But speaking of problems, things that you are highly involved in that are relevant to, I think all acquired listeners, you're on three committees in Congress, right? The House Financial Services Committee, which oversees all financial services in the country. And in particular, you're very involved with crypto, web three, all of that regulation, the SBF testimony, all of that fun stuff. You're also on the Science Space and Technology Committee, which oversees NASA among many other things. And the climate committee. So we're going to touch on all three of those here. Great. Yeah. All fun committees. One of the fun things about being a house member is it's sort of a choose your own adventure, where you can kind of pick whatever you want to work on and what you think is interesting and relevant to your district. I've found myself on three great committees that certainly will be relevant in the near and long term. It's been an interesting few years to say the least. Yeah. Well, because you teased it of things that are interesting to you and relevant to your district, let's take that thread and extrapolate on it. So how did those things become interesting to you? And let's start all the way with sort of your family story and dating back to Cuba. Yeah. So I'm the son of Cuban immigrants. My father immigrated here from Cuba. My mother was born and raised in Cincinnati and her family. And our sort of path to Ohio is interesting in a sense. My grandparents, my Cuban grandparents, were honeymooning and trying to go from basically New York City to Miami through driving. The legend is that they ran out of money in Ohio. And so they had to stop for a little bit, figure out how to get home and finish out their trip. And so they made some friends and made a little money and then came back to Cuba and never thought they'd come back. My grandfather always wanted to have some sort of an American experience because he always admired the US, particularly our democracy. You know, even pre Castro, it wasn't a beacon of democracy and freedom. It was known primarily for corruption. Both Ben and I just rewatched the Godfather movies and forgot that Godfather Part 2 happened right before the revolution. Totally. And there's a book called Havana, nocturna, which is really interesting and sort of graphic description of how the mob and Frank Sinatra and all those folks spent a lot of time down in Cuba. But anyway, once Castro took over, my family was driven into exile. My grandfather was part of a pro-democracy movement. There were sort of a handful of movements, disparate movements, but he was part of a pro-democracy movement. Once Castro took over, he, not directly, but through one of his lieutenants, offered my grandfather a position to run one of the courts. It's basically like a district court in Cuba. My grandfather turned him down because he kind of saw Castro for who he was, and that was the end. You don't turn Castro down back then. Anybody who did was getting killed or put in prison. So they went into exile and basically kind of hit out in the jungles and around Havana until they got their visa processed. And then ultimately, once the visas came through, flew here to the US, did that legally, obviously. Came to Miami for a couple of days and then called the old school back that my grandfather worked at. This was in Cincinnati and he said, hey, can we have our jobs back? This is sure. Come on up. And so they got a small little house in a neighborhood called Sailor Park. It was working class, primarily minority neighborhood at the time. And that's where my father was raised. This where he met my mother. They went to Brother Sister Schools, Catholic Schools in Cincinnati and got married. Father went to Michigan. Oh, wow. Oh, wow. I didn't know that part of your history. Yeah, that was more contentious than I would have thought. When I was getting recruited, it was interesting. Because I ended up playing at Ohio State. He played at Michigan. So he went to Michigan, but he played for Bo Shem Bechler. Whoa, not too many father son combos in that club. No, a small handful. But he was great once I told him where I wanted to go. Luckily, he knew Coach Trussell. But in any event, we've lived there and he started a steel company maybe the year before I was born, I think, that he runs to this day. And so that's kind of what I grew up in. I grew up in Northeast Ohio, which is the place I feel most comfortable in the world. That's kind of where my people are if you will. Did a lot of sports and hung out at the office with him. You know, like most founders, he was working 12, 14 hour days. So if you wanted to see Dad a lot, you had to go into the office. I'd see him in the mornings. I wake up early, he woke up early, but otherwise you seem in the office. You know, it's like hard work and sort of hard scrabble kind of community that we take a lot of pride in and that I'm honored to represent to this day. Listeners as everyone knows, I grew up in the Cleveland Akron area in Northeast Ohio too. My uncle David is very involved in the city with the Greater Cleveland Sports Commission and the Convention of Visitors Bureau in the way that they sort of described the area as sophisticated grit. So now that you've said that, I know exactly who you're talking about. It's so funny. I never put it together that Ben Gilbert and David Gilbert might be related in the sort of circle of Cleveland area folks. You're not going to be more than a connection or two away. Yeah, no, for sure. Part of what I love about it is you feel like you kind of know everybody. And you know, if you're from there, it can be great. I always just been really proud of being from Northeast Ohio and it's sort of who I am culturally and the things I'm interested in and so that's how I've always been and part of what has been so fun about Congress is you get to represent a community that you love and that you're from and that from my perspective, welcome to my family because we aren't from here. My father's not from this country. My mother's not from Cleveland. Big move for them and ultimately we've made it home and it's been incredible for all of us. And we were talking about you being the son of Cuban immigrants and this sort of unorthodox path to being a member of Congress. You had an even more unorthodox stop along the way playing D1 college football and then playing in the NFL. How did that transpire? I always say when I look at my own back, I'm like, didn't none of this makes any sense. It's certainly not linear. So growing up, I love football. My father played football. He played at Michigan. I was actually a Michigan fan growing up until we went on a recruiting visit and Lloyd Carr was the head coach at the time and thought I was a kicker. I was not a kicker. Your dad must have been pissed about that. I was a wide receiver. He wasn't with me. My mom was and now that I have kids, I can understand how heartbreaking that must have been. I grew up a huge Michigan fan and my dream would have been to go there. I go with my mother. We make the drive up from Cleveland. It's not far to 1,5 hours. I'd been there for games before and like, oh my gosh, this is it. I get to finally maybe be a part of this if they'll have me and just completely ignored. They paid attention to and really focused on four people from Cleveland in particular who I knew who I had just played against at my position. I'm like, y'all didn't watch the game clearly. If you did, you maybe would at least say hello. We were an hour and a half in and I turned to my mom and I was like, I think I'm ready to go and I was 16 at the time and she's like, okay, that must have been heartbreaking. Yeah. Again, now that I'm a parent, I'm like, oh my gosh, how did she not burst into tears? I'd be mortified just for my kid, right? The next week was Ohio State. Same thing. They were things called junior days. This was before recruiting got crazy. I went to Ohio State and it could not have been more different. We walked in, coach Tressel grabbed us. The second we got in, pulled us into his office. We had a private meeting. He kind of went through. This is only a second year on staff. Went through sort of his priorities for the program, how he saw it, how he could see me fitting into it, all those sorts of things. Like exactly what you would do if you're trying to sell somebody. I walked out, I said, well, that felt a little bit better. It was an impressionable 16 year old. We'll consider it. I know this is a tech and business podcast, but you got to make it about the glory of Ohio State football for a minute here. I think what you're explaining is a microcosm that really outlines why the next decade plus went the way that it did. I think that's probably right. Tressel lost, I think, once to Michigan in his second year and then never again. They haven't won much until last year. If we want to look at causes, I think coach Tressel was definitely on the short list of reasons why the tide turned on that rivalry. I get home from that junior day and my dad, I wasn't sure how to tell him because he went to Michigan. I just played it cool. I was like, okay, yeah, it was nice. They hadn't offered me a scholarship yet. A couple of weeks later, there was this banquet in Maseline, Ohio, so big football town. Right near the football hall of fame. Yeah, right down the street from football hall of fame. We had played Maseline. They do a dinner every year where they have a keynote speaker and they invite the MVP from the opposing team for each game. I was the invitee from our team. Before I go, my dad says, this is easy, son. If he offered you a scholarship, you just say thanks, but no thanks. We're going to Michigan and that's that. I'm going to go great. But I knew how I was feeling inside. I get there, I go see coach Tressel and he was the keynote and he comes up and he says, Anthony, we're going to offer you a scholarship. I said, I'd be honored to play for you coach. Whoops. I botched the line. Were you planning on saying that or was it spare of the moment? No. I was actually planning to do what my dad said and maybe see if Michigan came around. I rushed back before the dinner. I was like, I really do need to think about it, but that is a generous offer. I loved my time at Ohio State, so we'll see. Then eventually, obviously, I won. My grandfather was an attorney, as I mentioned, and so was his wife, Maya Weila. I was as close to them as anybody I've ever been close to in my life, especially my grandmother. She lived with us after he passed away and her and I spoke daily until the day she died. He always said, if you're going to be an attorney, you should major in philosophy in English. I thought I wanted to be an attorney and I felt like English would be a little boring, but I really liked philosophy. I took a couple of classes and loved it. My plan was, I'm going to major in that. If I play in the NFL, great, but then I'll go to law school. I didn't change my mind until business school until I got to the NFL in my third year. I was hurt my entire third year. It's fast forward. I got drafted in the first round. The two years was fine. MVP or anything, but played well and was slated to take over for Marvin Harrison, who's a Hall of Fame wide receiver. In playing for the Colts, Catching Pass is from Peyton Manning. Yeah. I always say, if Peyton Manning's your quarterback and you can stay on the field for 16 games, you're probably going to have a good year. Unfortunately, I got hurt in the first game and just never came back and really never came back period. I just kept getting hurt. I never got hurt my entire life and then that third year in the NFL, I got hurt and I got hurt every time I stepped down the football field thereafter pretty much. Between my third and fourth years, HBS did a program, like a little business program, that they used the case method on and sort of be a business school student for one week. After the first day, I remember I called my mom and I was like, I know exactly what I'm going to do when I'm done with this game. I'm going to go to business school. At that point, I started studying for the GMAT because I hadn't taken a math class in like a decade. I took the test later that year, put it to bed until my career ended and when it was pretty obvious that was going to happen, I finally applied to Stanford. I did it actually from the locker room of my final preseason game, which is sort of weird. I went out for the game and I felt like I just knew my body wasn't right. I don't think I'm going to play much longer. So you went back to the locker room and you started typing up an answer to what matters to you most and why? Exactly. I'm going to need an hour and a half here, folks. I'm not playing. I'm just going to bang out this essay. You were with the Patriots at that point, right? No, I was with the Colts. I had the application finished, but I wasn't sure I was going to submit it. It was right before the deadline for the first round. So anyway, so I submitted and got in and I still wasn't sure. So I signed with the Patriots. I went to New England. It was hurt again. I think I had three surgeries in like six weeks when I was there. And Bill Belichick actually was the one who, on ceremony, honestly fired me. He called me in and he said, he said, I like you, but you're hurt. And I can't have hurt people. And it's like, that makes sense. So he said, if you get healthy, have your agent call me. We would like to have you. And I was actually smiling when you're saying this. He said, you're smiling. That doesn't normally happen. I said, well, I think I'm going to retire and go to business school. He said, where are you going? I said, I'm going to go to Stanford. He goes, it's a good school. Good luck. That was, he was the first person I told. Wow. Wow. And then I didn't tell anybody for like three weeks. So I still wasn't sure. But eventually I got around to it and, you know, go to decision as I possibly could have made. That's for sure. So at this point in your life, did you have public office in mind or were you thinking, I'll also go to law school and be a lawyer? So my aspirations in college, like if you were to ask Troy Smith, who was our, our Heizm and Trophy went in quarterback, who had the locker next to me. He was number 10. I was, I was number 11, one of my best friends. If you were to ask Troy what I'm going to do, he would say, oh, he's going to be Mara Cleveland. Because we used to talk about that. I wanted to be Mara Cleveland. I'd be the coolest job in the whole world would be Mara Cleveland. And so I've always sort of had this thought in my head of public service admittedly, you know, as life moved on, I thought I would do it after my NFL career or after a long business career. And then I went to GSP was running a tech company before I got into Congress. And my thought was, you know, play that out for a long time. Run that out, have a family, make some decent money, take care of them. And then once the kids are grown, then go into public service. That was sort of my plan. What upended that was honestly the 2016 election was probably the biggest thing that upended that where I saw a situation where I just stopped recognizing politics in our country. It didn't make any sense to me anymore. It seemed to me like we were headed down a pretty dangerous path politically. And so I really started thinking about, okay, what's the best way that I can be of use to the country in a moment like this? And ultimately came to the conclusion that I should just run for Congress, which is sort of a weird realization. But I thought if I did the right things that I could probably win, and I felt the urgency from the standpoint of the country. And so that's ultimately, you know, after a lot of back and forth with my wife, because this wasn't our plan when we got married at all, you know, was, hey, look, let's really talk about this and see if it's for us and if it's something that we should pursue. And again, I don't know that we were 100% like, yeah, this is definitely the right thing for us. But we did feel the urgency that the country was in a spot. And my community was in a spot where going into service seemed like the right thing to do. And so we jumped in. And there were lots of people around that time were feeling like, gosh, the direction things are headed might be dangerous. Polarization, the sort of lack of respect for institutions that we hold sacred, the seeming shift away from democracy is the most important thing to, you know, my own power is the most important thing. Most people probably couldn't say, you know, what I think I should do, I should run for office. And then most people who do say that don't have a prayer. So what were some of the things that set you apart where you started being like, okay, I met with this person and that went well. And I think I can start to coalition build in the Republican Party this way here locally. How did that transpire? Also, we should say probably most people who are thinking that we're not Republicans at that point in time, right? Yeah. So I came to like a sort of interesting conclusion on that. But in terms of sort of how you get started, right? Like I had never done anything like this. I had been running a startup in San Francisco that are good friends at IGSP who David knows and would love to have on this show at some point if you can beg them on. The highly secretive investment group of Santa Barbara. We've been begging for years. Now we're making a public appeal here. Come on guys. Yeah, I know. Come on, Reese and Tim and Alex get on here. So I was working with them and running a startup that they were an investor in. You know, so I knew the startup game and I had kind of been in that world. So I felt like, well, this is somewhat like a startup. I've never run for anything. And I don't know how politics works. But I'll try to figure it out. And so I honestly used a lot of the principles that I learned from them in terms of how to company build around how to build a campaign and how to build an apparatus around it. And it started with doing a bunch of what I would call customer interviews. So I probably had 15, 20 conversations before I decided to run with people in and around politics in my district. Just to understand, you know, one, you know, what are the motivations, what are people care about, you know, all those things. I thought I knew, but you have to test those hypotheses, right? And then to figure out whether my message would work. And so I went through that process and ultimately thought I understood my district in a very powerful way. And I thought I could craft a message that would work. But that's not enough either, right? Like you can have the best message in the world, but if you have no team and no ability to get it out, you're not going to go anywhere. What was the message that you landed on that you thought would work? Well, mine was primarily to focus on economic issues. So I think the takeaway that you saw nationally from the 2016 election was, oh my gosh, the country is embracing this terrible politics and this attitude and the nastiness and the vitriol and the anger and the division. And, you know, that's what people want right now. And my view was at least what happened in Northeast Ohio was fundamentally an economic story. And I knew that story very, very well. My father has been building a steel company in Northeast Ohio for my entire life. And I know that when he started it, there were, I don't know, something like five or six car manufacturing plants within 90 miles. And now there's one. And I know where they all went. And I know what happened to those jobs and I know how the people feel about it. I remember the day LTV steel shut down that factory. Absolutely. Quick story on LTV. So LTV steel had this massive factory just south of the city, massive. Right off the highway, it was a big like you drive by and it has a presence. Yeah. And I just like just part of the city. And my dad always used to say when we were little, he would point at the smoke stacks and say, as long as there's smoke coming out of there, everything's going to be okay in Northeast Ohio. Just don't worry about it. Because that means people are working. And I think, you know, time, it was like 20,000 people working there. It's not precisely correct, but directly correct. That things changed. And multiple times gone through multiple bankruptcies. I think that's fewer than 500 people working there today. And so that kind of transformation is what I felt the real takeaway of 2016 was. And I wasn't seeing enough understanding of that or nuance on that. And so I ran on primarily an economic message and a unity message in 2018, which is when I ran around, hey, look, we've got to work together from Northeast Ohio. We should know that the way you solve problems is together. We're actually like a purple part of the state, typically. And so let's put all this chaos aside. Let's start working together and let's start building our economy in a way that works for all of us. That was essentially my message. Actually there were sort of nuance in there and specifics, but that worked. But the second part of it, so that you get that message, right? And then the advice I was getting from people who'd been in politics forever was, you have to do two things. You have to build a great team and you have to raise money. And if you can do those two things, you can probably have some success. And so I said, all right, well, I've run sales teams before and I've, you know, I know how to manage revenue. That's not rocket science. And I think I can build teams. So my current chief of staff was campaign manager at the time. I went and found him. I basically sat. We sat at a bar together for about three and a half hours until I got him to say yes. I just got a warm down, but he still hasn't left. So I think he's somewhat happy. But my message was look like I said view this as a partnership. Sure, my name will be the one on the door, but we're partners in this. And that means a lot of things to me. And so we've had a good run together and a lot of fun. But like I said on the revenue side, I built a custom Salesforce dashboard. Which I don't think is common for congressional members. And probably not the candidate themselves doing that. Right. Yeah. No. And so I like Salesforce and I've used it in my previous company. So I built a little dashboard and had the contacts loaded in and tracked it the same way I tracked sales and ultimately hit the fundraising targets. We built the team and then you just work like mad. I mean, you're just everywhere. You don't stop until you win. Then that was that. Who's the budget for that first campaign? I was told I needed two million for the primary. And that's a lot. So I was told I needed two million and I was told I needed to make a big splash in the first month. And so I think we ended up raising roughly 600,000 in the first month, which was good. You can only raise it in 5,000, well, 2700 chunks. Two million is a lot when you have to add a lot of little numbers together. Like, it's not very much when you could just find a billionaire and be like here, just fund the whole thing. Yeah. But you know, for a whole host of reasons, we've decided that that's probably not the best way to run our country. We've spent like seven episodes on campaign finance, but the goal there is let's not let like all the rich folks band together and buy elections essentially. So you got to build support at a grassroots level and ultimately we're able to do it at a ton of work, but unbelievably rewarding. And from a professional standpoint, it's probably as much fun as I've ever had to be honest. But I would assume there's a power lot of campaign contributions there. But you know, even if let's assume all the top and you need a thousand people to give you that max campaign contribution, right? Yeah. But you also don't want your average number to be too high, right? Like you want broad support. So it is important to not only have the sort of high donors, but also grassroots support. So I forget what our average campaign contribution was, but I think the goal should be to get that number actually is pretty low because it means your support is beyond just sort of wealthy folks in your area. But there is something that happens in politics where people want to back the winner and they want momentum, right? And so part of the goal with the advice on, you know, you need to raise a lot of money quickly is you're sending a signal to the market. Strength leads to strength. Right. It's like startups. Absolutely. So I need to signal to people, hey, this isn't just some jock who thinks he can trade on his football name. Like, there's some substance here. And so that the thought was, okay, well, let's raise as much as humanly possible quickly. And then once we did that, those first dollars are the easiest in some ways because it's friends and family. I put some in myself, you know, it feels more controllable. After you get that first slug in, that's when the real work begins because now people are looking, okay, who is that and what is, what is he all about? And so then you're just continuously selling nonstop. We were leaving the house every morning at 7 a.m. I was finishing my follow up emails around 11 p.m. and that was the schedule per like a year. But it was fun because you get to, first off, I'm just a competition junkie. So like I just love competing. It's just hardwired in there. Wish I could get it out sometimes, but that's just where it is. So there's that element to it. But the other part, and this is the more rewarding part, is you're connecting with the people that you're ultimately hoping to represent. And it's hard to explain this, but you learn so much from them. Like an unbelievable amount. One of the things that always bothers me is when people say, well, voters are dumb. I'm like, I haven't met a dumb voter. My voters are really smart. They're smart on a handful of issues that really matter to them. And when you talk to them about those issues, they know more than anybody. They certainly know more than me. And they educate. And that's how you learn. Now are they experts on every policy issue? No, of course not. But the ones they care the most about, and people are really smart on those issues. And they taught so much. And so that's where the reward comes from. I was feeling like, oh my gosh, I better do a good job for these people because they care so deeply about these issues. And I have to deliver form. And so that was part of the reward and continues to be part of the reward, frankly, of doing this job. Yes. So there's sort of this dual responsibility as an elected official specifically to those people that you represent and you raise money from and you are inspired by and you understand their plight in a big way. But also, you know, you sit on committees. And what those committees need to do is think in the best interest of everyone, not just the specific group that you represent. And as we transition here and talking about some of the specific topics of your committees, I want to open with that question of, do those things ever come at odds or do you usually feel like representing your specific group and the broad American public is something that basically always works out? Yes. So the way I think I was like to how closely do your values align with your voters' values. And for me, the answer is most of the time. So it's not hard, right? There are occasional moments when those things are at odds. And at that point, you have a choice. And your choice is do I rely on my own judgment, which may cause me some problems back home, or do you just sort of do the politically expedient thing? And there's different schools of thought on that, honestly. But you know, the way that I handled it was to the extent that I thought I could do it. I always relied on my own instincts over political expedience. I will admit, nobody can do that 100% of the time, or at least I didn't feel like I could, because you only have so much political capital. And I think you need to be careful about how you spend it. And it doesn't mean you never spend it. Some people never spend it, by the way. And it's a really good way to keep getting reelected. Everybody handles it a little bit differently. But the good news on that for me is, I guess, for the most part, 99% of votes, then never really felt like I was making that choice. You're making decisions on a lot of very important things right now. But I do think it's worth giving listeners context of what your term has been like. And if you're willing, take us through that second impeachment vote and how you thought about it. And just so we don't bury the lead here, Anthony voted in favor of impeachment of the president at the second vote. So just quick rewind. So the 2020 election happens, right? And from the time it ended until, say, January 6th, I had a deeply uneasy feeling and felt like things were going to get pretty crazy. Because I was seeing the rhetoric that was coming out of the White House. I was seeing how it was being reported and I was hearing from my constituents how they were feeling. And to me, it was pretty clear. And I personally think anybody who's in this business who knows how elections work should have known it was clear. And so, you know, to me, I was thinking, man, hopefully people aren't buying this because this is crazy. I remember talking to somebody very close to me and they said, gosh, this thing was stolen. And I said, what country do you think you've lived in? This thing wasn't stolen. So tell me where you think it was. And they would give me this, some of these explanations that you'd be hearing on these Q and on boards and on Twitter and whatnot. And you could usually dispel them. But these were people close to me. But like your average person, they didn't have full access to me and I could barely get our message out. So I remember grabbing my chief establishes. Just find me a camera. Just get me in front of a camera. I need to start talking to people and telling them because otherwise we're going to have a problem. There's going to be something terrible is going to happen if people think this thing was stolen. I mean, this is the United States. If half the country believes the election was stolen, you're working to have a real violent outcome here. I was hoping to be wrong, but that's what I thought was coming. And lo and behold, you sort of fast forward as we get closer and closer to January 6th, the pressure build. And on the morning of January 6th, they told us. I said, hey, you got to come in early. You know, just get here early. There's going to be a big protest and we, you know, it'll be easier for you if you're here early. So, okay. So early to me, I wake up at four. So early to me is like, I'll go, you know, 4.35 o'clock and I'll get in. And this was during the pandemic when nobody was ever on the streets. Normally from where I live to get to the Capitol, it takes like 15 minutes. This time it's a 45 minutes because they were buses and buses and buses from all over the country and the mall was already pretty well filled, impact with people and energy and activity. And signs, you know, you can read the signs as you're going in. Signs I've never seen before that didn't make any sense to me. And I thought, okay, this is actually going to be a lot worse than an even thought. And so I tried to send my staff home, but they stay. They insisted. And we had already pre-released what I was going to do, which was to certify the election. And so, you know, fast forward a little bit and we're in the house chamber and I'm up in the balcony. I wanted to see a couple things. First I wanted to make sure Pence did the right thing. I don't know what my plan was going to be if he didn't, but I just wanted to make sure. And then the second thing, I just wanted to see if they would actually go through with these objections. So I thought it was crazy. That was the most anti-democratic thing I've ever seen in my life. Still feel that way. And so, you know, I'm sitting there, Pence does the right thing, okay, good. And then Ted Cruz stands up and objects. And I was just disgusted. I was just completely disgusted. And so I said, I got to get out of here. So I started walking out of the chamber and I was going to go back to my office. And then I could see the people start to breach on, I looked out one of the windows. Oh my God. And you see the people start to go and then I flipped on my Twitter and you could see, oh my, they've already gotten through the Senate. And so, you know, at that point, I thought, okay, I got, it's the best thing for me to do is just get into my office. So they get into the elevator, you know, go through the tunnels, boom. And by the time I get back, the folks were already in the house. The riders were already in the house. And they were trying to evacuate people. And basically the session had been canceled. And so now you're sitting there going, okay, I don't know what's going to happen. But it's not good. I know that much. And the basic instructions we got were if you're not with the other members, they had hidden the other members in a sort of a bunker, if you will. If you're not with them, shut off all the lights and be dead silent because we don't want, you know, we don't want you making any noise. It's like, okay. So I, you know, but I'm like sitting in my office and thinking, okay, you know, I should probably change out of these clothes so I don't look like a member of Congress in case they bust through the door. So I threw on jeans and running shoes and I'm thinking of myself, well, you know, I can still run a little bit. So if they get in here, I guess I'll just jump over them and sprint. And that's, you know, maybe that's my plan. And so we did all that. And then, you know, periodically, the queue would hear screams and yells and stuff. And I, I called down at one point and I said, hey, there's somebody making a lot of noise in our hallway. You know, can you send somebody up? I don't know. And that this patch was like, sorry, we are completely overwhelmed. Just like do the best you can. I'm like, okay, that doesn't sound so good. So then I started trying to get ahold of folks at the White House and just anybody I knew who might be there said, hey, he's got to call this off. Like this is, this has gone way too far. And he wouldn't do it. And it took him hours. I think we're almost three hours, maybe a little more than that. But when you're in a situation like that, three hours feels like 15 hours. I mean, you're just hoping to God that somebody does something responsible and it just wasn't happening. And so, you know, my view remains that it's an unforgivable assault on the country. And it was led by the former president who was inspired by him. And ultimately, my view, which I think is coming out in this January 6th commission is that he kind of liked it and kind of liked what was going on. And I spoke to a number of people who were around him that day and came to that conclusion. And so at that point, you know, you have to ask yourself, are you willing to make that vote, that impeachment vote? And to be clear, there was previously an impeachment vote that you would not have been in favor of. But this specific event is sort of what changed your mind to say, yes, I'm one of, I believe it was six Republicans to vote to impeach. I think we were 10. I mean, it may have been six senators, but in the House, they were 10 of us. The first one, let's go back to it, but certainly didn't condone the behavior, but it just didn't hit my bar for impeachable. That was the rest of the stuff, right? That was the, yeah, it was actually Ukraine, right? It tried to. Right. It was a bribe, uh, Zelensky back to this current vote. As that was unfolding admittedly on January 6, I thought to myself, I think they're going to impeach them again. Um, Democrats control the House so they control what goes to the floors. I just, where I think they're going to do it again. So I've been start thinking about this. And I kind of went back and forth, not because I didn't think it was wrong or impeachable. I certainly did. The thing I was kicking around in my head was what he did was clearly impeachable, but you know, he has whatever six days left by the time, you know, the vote comes or three days. So I guess, is that really the right thing to do? Should we, should we censure him? Should we do something else? And ultimately, I came to the conclusion that not only was the right thing to do, but we actually had to do it for a whole host of reasons. But one of the main ones is because I think it's important that we send a message to every future president forever that if you think for one second, you can concoct this ridiculous plan and secure supporters on Congress and the Capitol, resulting in a bunch of deaths and total embarrassment of our country in a grave wound on the country on the democracy itself, then you are going to get impeached and everybody needs to know that. And so that was ultimately the decision I came to, but admittedly, it was the hardest decision I've ever had to make professionally, for sure. Well, this is one of those where potentially your own interests are misaligned from what you believed was the right thing to do. I mean, did you know that in casting this vote, that would be the end of your ability to service subsequent term? No, you know, honestly, I planned to fight it. So I knew it was going to be hard, but ultimately, look, at the end of the day, I've made two oaths in my entire life. Okay. I've made one oath to my wife, and I've made an oath to the Constitution. Those are the only two oaths to my knowledge that I've ever taken, and I don't plan to break either one. It really came down to that for me. It's like, I feel like I owe this to the country. I feel like I have to do this. And it's going to be brutal. And it's going to be terrible for me. And it was. But you got to do it. And then you got to fight for your political life. And ultimately, that was the plan. And that's what I intended to do. But admittedly, after many months of sort of going through that process and really trying to figure out independent of the politics, trying to figure out what kind of life do my wife and I want? Like, what do we want for our kids? What do we want for us? What do we want to be? What kind of jobs do we want? It was pretty obvious as our kids are getting older that politics probably isn't the best place. And so, made a very difficult decision again, which was to drop out of the campaign, and I'll finish my term out here in January. And we'll see what happens. You really have to live these two lives, right, Lake? With your constituents back home in Ohio, but like you're also in DC. Yeah. Those places are not contiguously either geographically connected. No, and one of them is pretty expensive. So from a family perspective, it's just a really hard life. I think this is why originally I planned to get into politics much later when my kids were grown. The reality is to do this job correctly and to serve your constituents in the way that I think they deserve to be served. You probably have to be on the road north of 100 days a year for sure. What you're probably looking at 150, maybe close to 200 in terms of days that you should be out. And so, we as a family talked about, okay, what do we want for our kids and what do we want for our marriage? Ultimately, we decided that the best thing to do is to just step away and I'll focus on my committee work, which I love working on my committees, making whatever difference I can in my last couple months before setting sail on the next journey. Well, it's not like the work you're doing in your committees is some like afterthought. That's the craziest thing is you had this very crucible moment in your term and of course that dominates a lot of the sort of conversations I'm sure that you have, but you still have the rest of your term here to serve and you're doing things like proposing regulation for the future of crypto and Web 3 and potentially the next generation of technology. So I'd love to talk a little bit about that if you're open to it and what on earth a committee actually does. Yeah, what I say is like committees are where the real work happens. So you follow on Twitter, you see the votes and all that, all that's fine and good, but like real work actually happens in committee. That's where we have hearings and we have real dialogue and debate and you really talk policy. And in terms of crypto, so when I got here in 2018, what early 2019, crypto was a topic. It was definitely something we were talking about, but it really didn't go into overdrive really until the pandemic when folks were at home and markets were straight vertical. You can all thank Jay Powell for that. Jay should slow down a little sooner. Do you see my favorite, I think this is going to be my favorite like lasting moment of the pandemic was somebody did a deep fake auto tune video of Jay Powell, Janet Yellen, Ben Bernanke, and somebody else too. Rick rolling, like singing, like never going to give you up and like dancing around. Yeah, you know, we have similar friends, so I get the same memes that come to me. As Elon Musk said, I got a good meme guy. It sounds like you both share the same meme tender. Yes, very similar meme vendors. So you know, people really started paying attention to it, congressionally in a sort of thoughtful way. I would say in 2020 as the markets were going a little haywire. Frankly, when I got into it, I was on a family vacation with my wife's family. They do an annual trip to Nantucket over here. And so we were there and I was listening to Modern Finance, which is Kevin Rose's podcast. I know he's been a guest for this show. Yeah, of course. And he had something on Flamingo Dow, which like I had never heard of a Dow period, certainly to know what Flamingo Dow was. And after that hour or however long it was, I thought, oh my gosh, I feel like, you know, it's about like getting red pill or whatever, or orange pill. That was my moment where I thought to myself, okay, I think I've just learned something or stumbled on to something that can be unbelievably impactful for society and helpful and solving a lot of problems that I currently see in with the internet and in our capital markets and with access to financial products and all these sorts of things. It was really my aha moment. And you were on the Financial Services Committee at this point. I was. I went through the paces on crypto to make sure I wasn't ignorant, but I hadn't really gone deep on crypto. And then I spent a good chunk of the next few months going as deep as humanly possible and just learning about the different L1s and what an L2 is and what's the difference between these tokens and how are these applications working? And you were actually like participating in DeFi and like, yeah, so the way that I did it was, you know, I'm on the committee and I, there's no rule against this, but I don't necessarily think I should be, you know, investing in crypto assets while I'm thinking about regulating them. Shocking. Shocking. There should be a, probably should be a rule against it, but there isn't. Well, there's just no regulation at this point, right? Like, back then. Well, yeah, it's the whole host of things that don't make sense. That's probably one of them. I kept reading these white papers and coming to a conclusion, which is, man, I can only, I feel like I can only learn so much. Like, I need to actually play with this stuff a little bit so I can figure out how these things work. If I'm going to be knowledgeable on the space, like I should at least have some sort of feel for it. I mean, it would almost be like asking somebody to, I don't know, like regulate cell phone companies, but you're not allowed to use a cell phone. You know, so in my head, I thought, okay, well, I don't think I should be investing, but I do want to play around with it. So I took like a little margin, a couple hundred bucks or something and started playing around in DeFi and quickly realized I couldn't do anything with my ETH because the gas fees would destroy it. I did that for like a couple of weeks and then in my plan, which I ended up doing was, I'll just give it all the United Way when it's over. The United Way accepts crypto donations. And so I did that for a couple of weeks. I forget how long it was, not too long, but ultimately learned a probably more playing around with it than I ever could have just reading. And so from that, not only did I feel like I understood it better, but I also felt like I could, I could legislate in a more thoughtful way. And so from there, we've kind of been going deep on it ever since and it's been interesting and we're getting to a point as a Congress, which is really nice, where I feel like we're getting close to finally legislating on it specifically around stablecoins. We'll see if we get there, but I think that's sort of the first bite of the apple coming off the Terra Luna crash. Do you feel like there's critical mass now of enough people in Congress and maybe specifically on the financial services committee who have done network who really understand it now or like, you know, or is it still in the people legislating on cell phone service without using a cell phone? So we're past that on financial services. Take a step back for a second. If you were to just think Congress broadly, I would say 90% of members don't understand it at all. They've heard about it, but they don't know it, right? Maybe their kids use it, grandkids, whatever, but they don't know much about it beyond that. The next 5% are people on my committee who are getting up to speed, who understand the basics and the building blocks. We've had a couple hearings now that have been really productive, I think, and had some great witnesses. And they want to be thoughtful in the space, but maybe they feel a little hesitant because it's complicated. If you've not really gone deep, it's hard to understand it. And then the final 5% are folks like me who have spent a ton of time on it and are now coming to some pretty clear views on what the right regulatory framework should be. And that may sound daunting, like you got 90% you don't know anything about it. But the truth is that's how most issues are around here. So I say that's where the real work happens. The committees lead because these are difficult complex issues and you need real expertise. And then if it's the right set of members and it's the right policy, they can pull the other 90% with them. I think we're getting to that point where that 5% is comfortable on both sides of the aisle to really engage in a thoughtful way. This is reasonably bipartisan and it's the support or lack of support. It's not sort of split left right. It's kind of split on age or demographic lines. Yeah, so that's what I've noticed. I'll say this, like going in, right, like just walking into the debate for the first time, Republicans tended to be more supportive than Democrats. I'm not sure entirely why that is, but as a general rule, Republicans were more supportive than Democrats. And I think said that within those two bands, the bigger break was on demographics. So the more senior member, the more skeptical they're likely to be, and this makes sense, right? If you look at how crypto is used and the more junior the member, and mostly by age, as opposed to tenure, the more likely they're going to engage in it and try to understand it. And that's largely played out. But as the weeks and months have gone on, even the more senior members have realized, hey, this is something we really, we really need to tackle. I think the president's working group, they put out a paper, which some of it I grew with some of it I don't. The most meaningful aspect is that the White House signaled, hey, this is important and we need to work on it. And I think that's really jump started everybody because we've had a whole bunch of hearings as a result. And now there's real legislation being debated. Yeah, so let's zoom in on legislation being debated. We're going to go schoolhouse rock here a little bit, but how does something go from a vague concept of we probably need legislation in this space to becoming law? And what is the committee's role in that versus a general member? So you'd be shocked at how many members seem to completely forget about schoolhouse rocks when they come in. I can just like unilateralize. I know how to fix this. But it's like, yeah, do you have a co-sponsor? Is it bipartisan? No. Okay, sit down please. For our international listeners, you may not have been exposed to this. This was a, it was on PBS, right? Or I feel like it was all over the TV when we were growing up. Where was schoolhouse rocks? I don't know. Everybody pause this, go to YouTube, search, I'm just a bill, and then come back. That's exactly right. To summarize the video, y'all are about to just watch. The way something like a crypto bill would work, okay, is Congress sort of gets it in their head that, hey, we need to, we need to legislate in this space. A whole bunch catalyst for crypto in particular, but that's sort of a conclusion we've all come to. And at that point, the committees will hold hearings. And usually, they're on a number of different topics related to the main, if you will. So we had one specifically on stablecoins. We had one specifically on CBDC. We had one on crypto markets just sort of broadly. And you go through that process, and it's a pretty in-depth process. And every time you, if you're smart, you know, you're preparing for these hearings, it's multiple hours, you and your staff are trading questions back and forth. And as you develop your understanding, you start to come to some conclusions around what you want to do. My view is the best legislation is durable. And in order for something to be durable, it needs to be bipartisan. And it should be by camera, by camera meeting house and senate. So my perspective is always, you got to give yourself a chance by starting with some democratic counterpart. So if I'm legislating on a bill, what I'll do is I'll find, and I'll base this on committee comments. So I'm listening, not just to my own questions, but I'm listening to how other people are processing the information. And I'll say, okay, so these two people over here, I think I can work with on this. So then you just literally go tap them and say, hey, you want to do something on this? I think it sounds like we're in a similar place. And from there, you know, your staffs get together and you all trade notes and legislation back and forth. And then ultimately, hopefully you've come to some good texts. You propose it. It will get a vote in committee if the committee chair wants it to. Once it goes through committee, it goes to the house floor, passes the house floor. Now it gets kicked over to the senate. They can take it or not. Most of the time, senate ignores us, but sometimes they listen. And then in the senate, they have to beat the filibuster. So they need to get 60 votes over there. We're just simple majority in the house. And so a little harder to get things through that. But then from there, it goes to the White House and present signs in the law and away we go. As simple as that sounds, it's the most frustrating chaotic process you can imagine. Things that should take like, I don't know, six months, take like six years. Well, you were in explaining to us last time we had it in preparing for this, like, no bill ever is like pure of scope. It's the Christmas trees, right? And stuff gets hung on and it all starts to see. You may be wanting to regulate stable coins. And like, oh, there's totally unrelated stuff that gets added on it. Yeah, totally. So that actually happened to crypto in particular on the infrastructure bill. So there was a big infrastructure bill that was passed not terribly long ago. One I worked on a lot is bipartisan by camera. It started in this group called the Problem Solvers Caucus, which is a group I'm a part of. It's great group for most people who are frustrated by Congress and being encouraged by this. It's 50 Republicans, 50 Democrats. Everything we do is bipartisan. It's a great group. It's all the members who you've never heard of, but are actually very productive and stay off cable news, but work hard. So Prime Service Caucus put the infrastructure bill forward, at least the principles, the Senate worked out the details. And then this is also frustrating. You get the bill like four seconds before it's voted on. It's not like you get the bill a week ahead of time. Oh, I've been a part of companies closing financing. Yeah, you get it four seconds before the deal is done. Yeah, exactly. So politics is in the only place with this issue. So the infrastructure bill gets through the Senate and all of a sudden, you know, people are high five and it's like, oh, wait a minute. There's a crypto provision in there in the infrastructure bill. Why is there a crypto provision in the infrastructure bill? Well, because we have to pay for the infrastructure, of course. And so somebody slipped in a little tax without really telling anybody. And ultimately it came into the infrastructure bill and was signed into law. And that's sort of the Christmas tree version of how legislating works. And admittedly, the person who crafted that provision didn't intend it to be as wide sweeping as it was. There was a thought that basically we were going to label any developer working in crypto a broker, which would kill the industry, you know, if everybody has to register as a broker. And what is the tax? Well, it would have been if you are a broker, then you have to do XYZ, which would involve you registering paying taxes, et cetera. You know, that was part of it. And the goal is to get at something real, which is, you know, if you don't have good tax compliance in crypto, you know, that's another thing I probably realized when I was playing around with it a little bit. It's like, if you're not careful, you can break tax law pretty easily in this space. Oh, yeah. Like the default is, do you do? Yeah, the default is, right? And so like one of the first things it does, like I need a software like this is all on chain. So surely there's a way for this to automate and track for me. And I won't name the product, because I can't endorse a product. But I found a particular software that I liked that I used and helped me track all that stuff. But the motivation was a sincere one, which is, hey, we want to make sure that people aren't evading taxes. And actually, that's what it was. It was going to require, it wasn't a tax on the broker. It was going to require anybody who was defined as a broker to provide tax information to the IRS. So it would, it would have required developers to all of a sudden provide tax information, which makes sense if you're not familiar with crypto, because that is the way that our USD based infrastructure works, where if you have a brokerage account somewhere, you can just count on the fact that it's calculating all your taxes for you, it'll tell the IRS and it'll send you a copy so that you know what to pay. And of course, or at least you know what to include in your tax return. And because that's not mandatory in crypto, none of the brokerages do it. So it's actually a little bit difficult in many ways. Well, especially in DeFi, to figure out what your taxes are. But you face this other problem where it may not be what we think of as like a brokerage or an exchange that is generating these taxable events for you. And so you would need every application developer to be spitting these things out too, which is as you mentioned, pretty untenable. Right. And so the, the Senator who proposed that had to like go down to the well of the Senate and basically say, I did not intend for it to sweep in all these developers and wrote letters and those sorts of things. And that's, that's actually important to do because that way if anything ever goes to court, they could refer to that as, you know, hey, this was actually congressional intent. It wasn't to sweep up all the developers, but was to actually, you know, after legitimate brokerage. And so, you know, that was a, in a ha moment, I think for all of us, but certainly for the crypto community, was that infrastructure bill. And so, you know, that's unfortunately how things do get legislated around here a lot. I am hopeful that with respect to crypto, though, that going forward will be more thoughtful and do things like what I think is appropriate, which is to take sort of little bite-sized chunks as we understand them. Because the last thing you want to do is put something forward that you only sort of understand. And then ultimately you cause a heck of a lot more problems than you intend to. And so that's the direction we seem to be going in crypto. And that's actually really encouraging and not normally how we operate around here. What do you think is like the writer, the directionally rate framework for regulation that should exist for crypto given here we are in summer 2022? And then the second question is like, what do you predict the coming months of regulation is going to look like to the extent it's different? Yeah. So what do I think it should be? I actually think we should look to the Clinton administration for how they handled the early internet. And they orchestrated around the phrase do no harm. So Bill Clinton, rightfully I think, came to the conclusion that, hey, look, there's a lot of weird stuff happening with this new internet thing and like these chat rooms are weird. I mean, they're like, oh yeah. Remember, those were nasty places. They're all teenagers in the mid the time, I think. Barely teenagers, yeah. I think my first AOL chat room was in. I was definitely not a teenager and shouldn't have been in there. But having said that, you know, there's some pretty terrible things happening online. And you could have made an argument that the right thing to do is to shut it down and tamp it down and control it and regulate it to death basically. Oh, and this was the era I remember right where like a bunch of people in Congress wanted to like end video games. Yeah. This was not a crazy sentiment in the country at the time. No, this was kind of how people felt. And Bill Clinton actually provided the right leadership there where he said, you know, first do no harm. Let's let this thing breathe. Let's see where it goes. And then once we understand it better, then we can propose a set of regulations that make sense for the space given what it's becoming. It won't always be nasty chat rooms. And he was right. So, you know, slowly but surely we worked up on the regulatory apparatus. Do we get a perfect? No, of course not. Congress is infinitely fallible. We never get everything perfect. But I think that was ultimately the right playbook for that time and space. I would argue the same mantra should exist today, which is, yes, are there things that are bad that happen in crypto? Absolutely. We talked on one tax evasion. Does that happen? Certainly it happens. Of course it happens. You said it's probably the default, you have to decide that you're going to pay taxes. And so that's something we need to work on. And there's other areas as well. But should the response be to destroy the entire industry before most people understand it and before it's even had a chance to really develop into anything? Certainly not. My view is the mantra should be do no harm and take bite size pieces as they become obvious. But don't overreach. And I suspect that's how Congress will behave. I do fear that the administration will take a more heavy handed path, mainly because the SEC chair is pretty hostile at times in its public comments on crypto. That's I think where the given take will be. But that's also why it's so important that Congress actually puts laws forward, even if they don't pass. But just by showing there's bipartisan support for a set of principles, that in and of itself will send a message to the regulators that, hey, we're actually pretty far away from where Congress is and that's not a good place to be. Because the last thing you want to do is regulate, you propose a set of regulations and then Congress just puts them on you. My hope is that the energy we're seeing, which is becoming more and more bipartisan by the day, will ultimately lead us more down that do no harm path as opposed to the heavy handed path. So what do you think the bite-sized early regulation will be, sort of on the steps to getting a more complete regulatory framework? My view is stablecoins are probably the most straightforward to figure out. And part of it comes from the Terrelluna issue, right? And I think what that did was, wanted awakened members of Congress to what can happen when things go wrong, right? But and this was a happy surprise. It also forced members to confront, okay, what is this algorithmic stablecoin thing and how is it different from a feedback stablecoin? And what if anything should we do about that distinction? And so I've been really encouraged by how well members have articulated that distinction and have grasped that distinction. And so what I think you'll probably see is some sort of law that enshrines a quote, payment stablecoin that language has been used in a couple of different bills, a payment stable coin as essentially a feedback stablecoin. And then my preference would be that we're silent on algorithmic stablecoins and we'll figure out what exactly that is later. Is it a security? Is it something else? Is it a commodity? I don't think there's actually a clear answer to that because they're all different, right? And they all have different properties and they don't all work the same. I would say let's focus on feedback stablecoins because I think we all actually agree on that and intellectually that's not that difficult. Fiat back stablecoins, you're really talking about what's the reserves, what are the reserve qualities, what are the auditing requirements, what sort of attestations do they need and what sort of redemption and consumer protection things do you want to build into that? If you can answer those questions, you can probably define something that looks like a feedback stablecoin. Algos are much harder. Yeah, and in my mind, there's sort of two high level purposes that regulation in this space could serve. And I'm curious if you think that I'm sort of describing this right or thinking about it right. One is protection for the American consumer or the American investor. When something goes dramatically wrong, we look at it and we go, we don't want that to happen again. We pass a lot of the makes that thing illegal. Two is giving comfort to developers that they can innovate without doing something illegal and is that sort of how Congress thinks about it too or are those actually the same thing? I think they're the same thing. I think they're heavily correlated for sure. The overwhelming majority of the innovation happening, folks want to do it responsibly. Very few people are out there building these amazing products and services with the goal of stealing. There are some criminals out there and pump and dump schemes and nasty things and we should go after them with the full force of law. There are laws on the books that exist that give the authority to do it. Most innovators in this space want to build transformative, amazing products and they want to do it at scale. They're scared to do it in the US because our regulatory environment is so uncertain. So many examples. FTX being the obvious one. FTX is the best example. And he's building a tech company outside the US. It's like the craziest thing. That never would have happened in Web 2 or Web 1 or whatever. If you're in Silicon Valley, that's where you want to build this tech company. Today he's going everywhere but here to build that company. We hope to get him back. Which obviously like, there's nuance of course. But pretty clear that's not in America's best interest. We want that company here. No, of course not. That's my interest in it. I believe fundamentally in the innovation and I believe that it's powerful and it's going to create a ton of jobs and economic might and power and it's going to be important technologies for the world. For every technology like that, not just crypto, I want that here. I want that developed here. That's going to create jobs. It's going to provide opportunity. It's going to do all sorts of things that most Americans think are positive for our country and our democracy. So that's my primary motivation. Part of how you protect consumers and provide that clarity on regulation is by proposing things that hit both sides of it and do things like defining what a stablecoin is, what a payment stablecoin is. Essentially you provide that definition because, from my vantage point, in a world where these are proliferating around the entire country, I need to know that if my farmers get paid in stablecoins, that they're solid. I can't have my farmer getting paid in Teriluna and all the sudden the thing goes to zero. If these are going to be hitting the payment rails and people are going to be relying on them to pay their bills, feed their families, etc. We need to know that they're solid and that's consumer protection but it's also pro-innovation. So it's happening. Angel lists, you can invest via stablecoins now. We have LPs and kindergarten ventures that make their capital contributions in stablecoins. We need that to be actual money to go into startups. Yeah. Same thing, I can't say he was in Washington not terribly long ago and he said they've done acquisitions using stablecoins. They said when they buy companies, they use crypto. For the reasons you would think, because it's quicker and easier and the cost is lower. But when it's done right, I think we'll see more and more and more of that. But if we drop the ball on this or we're too heavy-handed or we go way further than if we're capable from an understanding standpoint, we're more likely to get it wrong than right. That's why, in my view, first thing, let's just do feedback stablecoins because we can pretty much figure that out. We have all the benefits of the instant settlement, no need for a trusted intermediary. There's going to be less fees, all this stuff. We understand what the value is tied to and we have a lot of other things that depend on that system of what that specific one USD denomination is tied to. There's a lot of comfort that can come from that well getting all the benefits of the innovation. Yeah, totally. 100%. The way I think about some of the other stuff, like the Algos, I'm not hopefully people aren't saying, oh, he hates all Algos, I don't. To me, it's not clear what that's going to turn into and what the right response is. If I don't feel like I understand something from a policy standpoint, my reaction is I should be silent on it from a regulatory and policy standpoint. Until I understand it, I probably shouldn't be regulating it unless it's hurting people or destroying people, right? That's why I say I think we largely understand Fiat Backstabletcoins. Let's start there. We can take our bite-sized pieces as we develop. For our next sponsor, we have Brex. Brex is a company you've definitely heard of, but you may not fully understand. Brex brings together smarter corporate cards, spend management software, and banking alternatives in one mobile first solution. They make it easy to manage every aspect of your company's spending from the tiniest purchases to big, massive, pro-curements, so you have total visibility and ownership over everything your company spends on end-to-end. We're going to be sharing with you this season all the cool stuff Brex can do for you and why it's really unlike anything else out there. I've been seeing more and more of my portfolio companies using them recently and having really great experiences. 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So what does this actually mean? Brex is helping companies create a culture of financial discipline that accelerates their business. So like you, Brex's founders love the trust, teamwork, and ownership mentality that startups embody. For example, David and I, just a high trust working relationship. There's not a ton of bureaucracy. But Brex noticed that as companies scale and get big, including their own, those things can kind of fade away, which means new policies get implemented that are really blunt instruments and create inefficiency. Oh, man. We're about to record our Amazon episode that this was like a core tenant of Amazon as a group. Jeff had to be like, no, we are throwing out corporate infrastructure. Two pizza teams. Nothing can be bigger. It's just natural, like, law of gravity as a company skills. And unless you fight it, that bureaucracy is going to creep in. Totally. 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That's the list of one of those things where you just like, it's 2022. Why do I need this receipt? There should be data exhaust. This should all be done automatically. And Brex is doing it. It's great. Yep. Well, our huge thanks to Brex. To learn more, you can go to Brex.com slash acquired or click the link in the show notes. All right. Let's stay in committee but move on from crypto. What percentage of your time on the House Financial Services Committee is spent on crypto? Let's say it over the whole course of your term. Over the whole course of my term. It would take probably a third. I've done a ton of China work and that was like the bulk of my first year in Congress was doing things to fix our international financial institutions like the World Bank and the IMF, which had been largely overrun by China. And so I did a ton of stuff for reforms there and that took a lot of time and energy. But the areas I focused the most on China, cap markets. So I did like a lot of different things around the game stop, you know, meme stock craze, which was interesting and fun, especially following it on Wall Street bets and then crypto. Those are probably the three areas that I spend my most time. Has there been legislation that came out of the meme stock, Mania? No. You know, I was actually disappointed in that because we did a ton of hearings on it and the Democrats proposed some things. I don't say this as a partisan comment, by the way, it's just the reality. Republicans do the same junk. So we could have done some things maybe in a bipartisan way that I think would have been smart. The main thing we could have done is passed a bill to shorten the settlement time from two days to one day. That would reduce the risk in the system overall. And probably would have prevented what Robinhood ultimately had to do, which was halt trading. But rather than do that, what they ended up doing was they took a whole bunch of things that they had wanted to do for the last decade and they put them into a bill and passed the House. It'll never go anywhere in the Senate and so nothing changed. Again, that sounds like a hit on the Democrats. I'm not trying to hit Democrats. I'm sure if and when we retake the House majority will do the same thing. It's just kind of the frustration of Washington. It became a political casualty. It did. That happens, unfortunately, with a lot of issues. The reason that one was so frustrating is because we actually did real work on it. I think we had four hearings on it. So we spent a lot of time trying to understand it. And there was national media attention. I mean, I think I watched those hearings like live. Yeah, that was probably the most fun hearing. They're interesting hearings. So like, I had two computers up. We did it remote. I had two computers up. I had my personal computer up which had the Wall Street bets for him. And then I had the hearing. And every single member who spoke, they just absolutely eviscerated. I love it. You're just like, what reading a real time? And they were getting me to like the guy from Hitman, the show or the video game in the movie. They're like, who let this guy in? He looked at it like whatever his name is. They were comparing you to the guy from Hitman. That's so great. Yeah. I'm like, who let Hitman in? This guy is an idiot. And then I started asking questions like, wait a minute. He's got it. Okay. Yeah, this is your career after Congress. You can go play Hitman in the next video game. Yeah. Play Hitman and be a meme stalker. You've got a built in audience. All right. Let's move out of financial services. I don't want to make you bash on J-PAL even more than he's already, you know, poor guy. He's already in the depths right now. He's a very nice man, but I've got some inflation issues. Yes. Seriously. We've been in the sidebar before we move on to science, space, and technology and American dynamism, but it is a sort of related, you given your background. I've been highly involved with the revolution really that's happening in the NCAA right now in college athletics and the name, image, and likeness bill for college athletes can now take sponsorships. The repercussions that have been wild. It tells us a little bit about what's going on there. So it's pretty messy right now. You know, my view on name, image, and likeness, and this goes back to my time at Ohio State, was it never made sense to me why college athletes were the only people in America who couldn't do anything with their name, image, and likeness. Literally everyone else in the country can do it that I'm aware of. Maybe some military officers can't have no idea, but I think even they can. But college athletes, far as I knew were the only ones, didn't make sense to me, then still doesn't make sense to me. And did you and your teammates like, did you resent this back in the day? A little bit, not in like a negative way necessarily. I mean, look, like I always say college athletics was one of the greatest experiences of my life. I got way more out of Ohio State than they ever got out of me. I did the best I could while I was there. And I hope I contributed admirably, but that experience was invaluable. And I wouldn't trade it for anything in the world. Having said that, there is something that happens to when you see a bunch of people wearing your jersey in the stands and you see your autographs on eBay selling for whatever amount of money. And you're thinking to yourself, well, two things, one like, I'm not getting any of that. But that's my jersey. And that's a picture of me with my signature. And so that does affect people. And again, not in a way that to cheapen the experience, not to say, hey, this is BS, I didn't get anything out of this. We all had an amazing experience. But that doesn't mean that everything was perfect. And so this was always something that I thought, you know, it makes sense for people to be able to do. And not just for the football players, by the way. So my wife was a swimmer at Stanford. She's a college swimmer. Stanford is one of the most expensive places in the country to go to school and to live. She's on the swimming team. She's not allowed to teach swimming lessons to help pay bills. It's like literally the number one person I'd want to take swimming lessons from. Right. Exactly. And so my family's an attitant that would pay a lot of money for a Stanford swimmer to teach their kids out of swim. Exactly. And they probably did, despite the rules. But the rules for forever said you couldn't do anything with this. Nothing with name, image, and likeness. So whether you're a star football player, Ohio State, or a star swimmer at Stanford, or a backup long snapper at pick your college anywhere, you just can't do anything with this. And didn't make sense to make a thought you could monetize it. And so a couple years ago, the state of California passed a bill that would legalize it in the state of California. And that set off a whole chain reaction where states all over the country started passing laws, but they were all different. And to me, that was chaos. You know, you want a whole host of things, but at minimum, you want an even playing field for everybody across the country. Right. Because you get into a situation where like, let's just stick in football for a moment. Like quarterback goes to USC, well, now that that person can make a lot of money by doing that. Quarterback goes to Ohio State. They can't make any money by doing that. Like that. That's a market distortion. Exactly. I think it's an awkward way to make a college decision is like which state has passed the law that I like the most with respect to marketing rights. And so what we propose was, hey, let's do a national standard. Let's have one standard and legalize it, provide the economic right for the athlete, no matter who you are, but build in some guardrails around inducements and recruiting and those sorts of things. And so that was that was our intent. That's what we've proposed now for two congresses have it bipartisan. And just so people understand the history of this, it's not like there was something federally making it illegal. It was that the NCAA said that you can't do this and be a part of one of our programs, which are all the biggest programs. And so with Congress passing regulations, it's basically super seating and saying, look, like you can't prohibit these people from doing this thing. Exactly. And so we've been pushing that legislation for a few years now. Ultimately what happened is the NCAA lost a court case at the Supreme Court last year, it was about a year ago today. And since then they just said we'll make name image and likeness legal, but we won't enforce it. And so we'll stay completely out of it, essentially. And so that's set off what to me looks like the Wild West. So now what you're seeing are these things called collectives and what a collective is, is it's a group of boosters that don't have an official affiliation with the university. And they are raising quote marketing dollars to go buy players on behalf of the team. Yeah. It's insane. This is crazy. Yeah, it's nuts. And you're seeing it in the recruiting. You're seeing in a quarterbacks sign these quote NIL deals for $8 million. And with that, a couple of the one, I've not seen any of these deals and nobody has, but here's what you should look for if you were to look at one of those deals. Number one, what commission is the person who brokered the deal taking? My guess is they're taking a big commission. So if you sign an NFL contract, the most your agent can make us 3%. That's via collective bargaining and the rules of the union. Marketing deals have unlimited cuts, but normally it's around 20%. My guess is these NIL deals are coming with pretty big haircuts that look more like 20% than 3%. But there's no way to know because there's no transparency and everything's just sort of happening in this chaotic situation. On top of that, it's just goofy for the team, right? Like if you're the coach, now you're hoping that the collective that you have no association with buys the right players. It really handicaps the coach. Like the coach can't go and convince a player and say, I know for sure I have this thing for you, they're like at the mercy of a collective and gotta make a call and say, do you think you could go up to this number for this player? Exactly. To me, the model is in a place where if Congress doesn't step in and find some sort of way to stabilize this, the whole thing will probably just go professional, which maybe like a lot of people think it should. And that's maybe an argument for another day. But in that world, here's the trade-off that you make if it goes full professional. In that world, the way most schools would react, I suspect, is they would cut every single sport that doesn't make money except for the ones they would have to keep for Title IX purposes. And so these athletic departments would shrink dramatically. Right. You'd probably have like six to 10 programs for school at most, right? Yeah. I mean, you'd probably, you know, you'd have a football team and a basketball team and you'd have a women's basketball team. And then you'd probably have field hockey. I think there's a lot of people on that team. I think synchronized swimming has big numbers. Like you just, you'd be making choices that I would argue aren't the best interest of your entire student athlete body. And so a lot of opportunity would go away. And for folks who don't know, like I'm pretty sure when I was at Ohio State, I remember the stat that us in the University of Oregon, by virtue of Nike using it as their testing ground and the incredible rabbit fanhood for the university, I think the football program paid for every other sport thus making the athletic department itself profitable and could contribute back to other things in the university. But I think us in the University of Oregon were the only countries in the nation at that time that actually could do that. Yeah. I think there's more that are profitable now. But the general structure is football and men's basketball make the money and they pay for everything else is generally how it works. Maybe we should have that discussion. But there is a trade off. Like there is in everything, right? And the trade off is the opportunity for the men's track and the women's track and the softball team and the field hockey team and my wife's swimming team and all these things. Like all of a sudden those are on the chopping block. And when you talk about how do we expand opportunity in our society and how do we make sure that institutions are more receptive to people from all different backgrounds in particular really difficult backgrounds and particular minority backgrounds. One of the best ways is through sports. And so if you're going to kill the college model, you're going to kill that opportunity right alongside of it. That is the trade off. And again, like people can come down wherever they want on that issue. But I think we need to be eyes wide open as we think through this. And for me, the conclusion has always been, look, like I don't know what the answer to that question is. I do know that NIL is pretty straightforward. And I know that people should be able to market themselves. And if a college swimmer anywhere in the country wants to teach swim lessons to help pay for school because by the way, they're not on scholarship. So they're taking on student debt just like everyone else. If that's true, then we should let them market themselves. And I don't think that's controversial. It's crazy the amount of dollars that are involved. I mean, the most crazy thing to me from all of it is that like it's almost like college programs are like half pregnant right now. And that like it's got all of the money and structure of like professionally owned, you know, for-profit sports organization. Right. But you know, like these collectives and boosters like they don't own equity in Ohio State. You know, like they're just, like it's a while that they're putting up this money for I don't know. Yeah. I also don't think it's sustainable, right? Like what do you get? You don't, there's no economic return to it for them. Exactly. It's a psychological return and the notion that you get to be more connected to your team and you're going to win more games. And that's wonderful. But the people paying that money don't make anything off of that. As far as I can tell, maybe they do. I don't think they do. Maybe they're cutting on the deals that there's such a large commission or something. No, I think the collectives are set up all as nonprofits. I think the people who are making money off the deals are the agents would be my guess. And that's where I think having some visibility on what those commissions look like would be helpful to the players, frankly, because you would know, hey, what the heck, you took 30% of me, but only 5% of him. You know, what's going on here? So. That's a broken market. Well, speaking of opportunity in America, let's talk about science, space and technology and kind of, you know, American dynamism in Catherine Boyle's terms. You mentioned China, competitiveness that you were involved in actually in the financial services committee. But yeah, I'd love to hear from you. You know, maybe the right way to start is, you know, you've said this before, you know, plenty elsewhere. You know, kind of what you see is the great political battle of our time and how it's not Republican versus Democrat. I don't think it is though the activists inside of both parties think that's what it is. So to me, I think we're at a crossroads in our country, but also globally. And I think the breakdown is, do you believe in American democracy or not? And that's not a question of do you believe that the democracy is working perfectly? I clearly the answer to that is no. There are almost no people I know who think our government's working exactly the way that it should. And so we should fight for meaningful reforms to make sure it's more reflective of the people we serve. Absolutely. When I say there are people who have lost faith in America and why I think that real divide is who believes in American democracy and not is I think on both sides what I've seen increasingly is people inside the parties when things don't go their way when they don't get the outcome they like. Their immediate reaction is to destroy and tear down something. Maybe a building could be law could be the court could be anything, right? It's sort of the take your ball and go home. This thing's totally broken. We need to burn it down and start over with something else. I see that on the left and I see it on the right. I think that's poison. It's poison for a whole host of reasons. One of which is I think we need to take a step back and remember how incredible the American idea and American democracy has been for the entire world. Prior to our founding, governments were not of buy and for the people. Friends were of buy and for the government. Like Obamac. Yeah, outside of a handful of like Greek city states back in the day, democracy was a new idea and was an experiment. And for the first time ever we placed the sovereignty of the individual at the center of society and government's job, if you go back to the founding, was basically to protect the rights of the individual. The individual was sovereign. The government was beholden to the individual. That's a beautiful, beautiful and powerful idea. And by the way, we don't just believe that for people inside our own country. The belief is that all people have dignity, all people have these rights. And as a result, we need to lead with those values globally. And if you believe that, then of course you have self-government. Of course you have a democracy. You wouldn't have an arbitrary monarch ruling over you because the people are sovereign. And from that, look, we've created more wealth, more prosperity, lifted more people out of poverty, freed more people, and oversaw the longest sustainable peace in world history. And it's not to say we're perfect. Again, of course we're not. And of course the founding wasn't perfect, right? We have the three-fist compromise. I think it's the original center of the country. Whole host of things that we've gotten wrong. But compare that to the alternative, which is sort of authoritarianism and Chinese communism and the sort of divides there. And I think it's a pretty clear answer as to what the right path forward is. And so when I see people tear down our democracy, whether it's, again, right or left, I think that's a dead giveaway to China. It emboldens the rushes in the China's of the world and you hear it in the rhetoric. You see it from their propaganda arms. And all it does is cheap in democracy and our leadership in the world globally. And so to me, that's the real divide. You know, look, like faith in democracy isn't given, it's earned. And so people in positions like mine need to do a much better job of fighting for things that are relevant for our people and ignoring the most extreme voices and take the necessary political risk to bring us back. But it's also not just on us, right? So like the beauty, but also the burden of democracy is it's a participation sport. So you actually have to show up as an American. You have to vote and not just once every four years. Right. And not only do I have the right to vote, but like I kind of should know what I'm voting on. So like I kind of need to do some work to make informed choices. Yeah. The one question people ask me a lot is, hey, you know, how do we fix this? The first question I ask is how many of you have voted in primaries? And usually like one hand goes up. The numbers are around 20% around 20% of voters vote in primaries. Well, the primaries where the battle is for most races, most congressional districts certainly in this country are heavily gerrymandered. And you know, a lot of these Senate races are really come down to, you know, who who's going to win that primary. I mean, you were saying in your own journey, like it was all focused on the primary right, all the fundraising that that was the battle. Yeah. And you run hard and you fight hard for every vote and you represent every constituent, not just, you know, Republican primary voters. But ultimately, you have to appeal to the people who vote if you want to get elected. And if we could move our primary electorate participation from like 20 to 50, I actually think our politics would moderate and they would improve dramatically more so than most people realize. Why is it that they're one are lost in the primary versus the general? Well, in congressional districts, because they're so gerrymandered, so they're all ranked. My district's like an R plus nine, which means generic Republican versus generic Democrat, the Republican has a nine point lead. You know, every district has it. Mine's actually a nine point lead is a lot. Mine's one of the least gerrymandered in the country. Right. You actually see a lot in like the teens and 20s and 40s, where it's, you know, an R plus 57. It's like, like nobody can win. So that's the argument of like whoever then wins the Republican nomination and the primary is paved. The path is paved from there. Right. If you think about it in general elections, the media is making such a big deal about XYZ, House, C, their Senate, C. And it's like, well, you're talking about like three or four seats in the entire country. What does that mean for the rest of the seats? Like, there's your Gibbons. Right. And, you know, what else just happened? We all just got our maps redrawn. And what happened is fewer districts are now toss ups. So there's basically fewer at play. And the existing districts are now more extreme. And so it's like the worst of all worlds. So we have fewer competitive seats and the ones that we have are going to have more extreme candidates. Unless, and here's the hack, unless people actually show up and vote. This one little trick. Yeah, this one thing that you need to do, like get engaged, actually follow the primary and look, it's like, do I like this candidate or not? They mail you a booklet. It's right there. Everything you need to know is right there. Yeah. And like, everybody's on Twitter, get on there, look at the things. It's really easy, I think, to figure out, like I resonate more with this person or that person. And nobody's going to be 100% the way you want, of course. But I think you'll be able to quickly figure out, okay, who's going to be a productive representative and who maybe has other motives. And so that would be my biggest solution for individuals who are frustrated. I just got to vote more. Now for our next sponsor, we have our good friends at Tiny. And they've got something new to share with us today. As long time listeners know, Tiny is the Berkshire Hathaway of the internet and has built and acquired a collection of truly wonderful internet businesses. Their story is just incredible. Andrew Wilkinson started the design agency, Metalab in Victoria, BC, and they became one of the premier design firms in the world, building UIs for Slack, Coinbase, Tinder, Headspace, Patreon, you name it. At the same time that they were having all the success building that business, Andrew and his partners Chris and Jeremy started to think about investing and became totally obsessed with Warren, Charlie, and Berkshire. They thought, wait a minute, we know there are a whole bunch of businesses out there just like Metalab that are wonderful internet businesses doing 5 million or more in recurring revenue at something like 30 to 40% operating margins, but don't make sense for venture capital because there aren't M&A buyers for them and they can't get to the scale required for an IPO. If you put aside the VC approach of needing to play for that exit, who wouldn't want to own a portfolio of businesses just like that? And that's exactly what Tiny went out and did over the past 15 years. There's just incredible successes, dribble, pixel union, creative market, 80-20, girl boss, arrow press, which I used this morning. All of these are now tiny businesses run by their own independent managers just like say Brooks running within Berkshire Hathaway and producing incredible cash flow for tiny and the managers themselves. So what's new? Well it turns out over the past decade long bull run that a lot of wonderful internet businesses that should have been tiny type companies mistakenly took venture capital instead because it was so easy to get. And now have a proverbial monkey on their back looking for an exit. Well, Tiny has realized that they're actually in a great position to fix this situation for everybody. I mean, I've thought about so many people have talked about this. This has always been like the problem in venture capital is 30-ish percent of the portfolio of any VC firm or companies like this that end up being good companies but just aren't going to get to scale for an exit. So what do you do with them? And they just don't fit that venture return profile. I think they might when you make the investment but it turns out that's not how it plays out. Well, enter tiny. So tiny's figured out they are in the perfect position to solve this. They can come in, acquire the company, VCs get their money back and founders get to take control back. Tiny has no interest in running your company. They want you to do that. You go back to running it profitably for the long term and then together you and tiny both take big dividends out of it and they have no interest in actually exiting the business. So they've done this now with several companies so far this year where a VC backed company was doing that, you know, kind of over 5 million in recurring revenue, 30-40% operating margin or potential to have 30-40% operating margin. Tiny can come in, acquire a business like that, make the VCs whole and just reset the capital structure. And then management, if you like, you know, founders or whoever's currently running the business, you continue running it profitably and with totally aligned incentives. Like this is exactly what Berkshire does when they acquire a company or like Walmart did that we talked about with the early stores where they were partnerships, tiny owns the business, but they set up structures that make it fully aligned and worthwhile for you as a management team and employees to stay and continue running the company profitably. So if you're running a business like that, which we know many of you out there in the acquired community actually are or say you're a VC board member of one, we know there are a bunch of you out there as well, or even if you just know a business like this, think it would be great for tiny, shoot them a note at high at tiny.com and just tell them Ben and David sent you. Our thanks to Tiny. So maybe let's now bring it to American industrial policy. I mean over the time you've been in Congress, the viewers shifted so much of globalism is an unfettered good to holy crap, we may have some issues with our supply chain and like American industrialism and offshoring. You've lived all this. What's your journey been? Yeah, so again, I come from a maybe a slightly different perspective because of my father's background, my family's background building a steel company in Northeast Ohio and seeing what has happened to the industrial base in the Midwest and what that's meant for our communities. You've seen poverty creep into places, you've seen what were once very vibrant neighborhood start to decay and a lot of hopelessness and opioids and all kinds of terrible things come in their place. And so when you see that, I think it forces you to take a step back and say, okay, what should we really be doing here? And you know, to me, I think there's sort of three buckets that I think are most important. One is to build a sustainable economy, one a dynamic economy and then also a resilient economy. And I would say sustainability gets probably the most publicity right now and that's obviously important. But the dynamism is absolutely critical and by that, I mean, basically, I think the US should lead in every critical technology from now until eternity. So like I want the best AI systems and machine learning systems. Dynamic literally meaning changing. So whatever the next big wave is that we are leading that big wave. Yeah, because that's where the economic value is going to be created and that's also where the jobs are going to be created for the most part, right? Like FTX being based in the Bahamas is not good. Yeah, drives me crazy. And they're not the only one, right? And so whatever we need to do to attract builders and founders and engineers and talent to be in this country, to be educated and to build the most critical technologies of the future and the supply chains that underpin them, I think is massively important. And then on the resiliency side, I think this is where, you know, sort of the goal was efficiency forever. And I think COVID more than anything probably highlighted to the world what maybe Northeast Ohio realized a long time ago, which is if you just optimize for efficiency, you're going to hit a trade off at some point for us. It was jobs during the pandemic. It was supplies and PPE. Yes, the more you squeeze margin and the more you make it so that you can get every last drop out of the towel, the less resilient you are to any sort of shock in the system. Absolutely. And, you know, we're dealing with it again on the inflation side, which I think is still largely a holdover from sort of COVID disruptions. But, you know, so what should we do going forward? Do I think we should reshore everything? No, I don't. But, you know, in this world where I believe it's us versus China and Russia and sort of US values norms and ideas versus the Chinese Communist Party values and ideas, I want as many critical technologies and supply chains domestic or with our friends as possible. So, like, I'm happy to offshore, I don't know, t-shirt manufacturing. You know, if we run out of t-shirts, that would be unfortunate. But if a war broke out, we would probably survive. And you're identifying that like, it's not mission critical. Whereas like, semiconductors, for example, mission critical. TSMC is like pretty freaking important. Yeah, absolutely. And by the way, like if China moves on Taiwan, that's a big problem for us. Especially if we have a national security issue. You know, those are the sorts of things, but on top of that, I think, you know, we have to get some of these raw materials going here as well. And that can be uncomfortable because there's environmental impacts. But, you know, what I would say to my folks who are more concerned about that is, buy in large is in 100% true, but buy in large, the United States has higher standards around our manufacturing and the cleanliness and sustainability of our manufacturing than other parts of the world. It's like a ton of steel made in the United States is going to be made with less energy intensity than most parts of the world, not all, but most. And certainly China. There's no silver bullet, but I think you solve a variety of your goals if you want a dynamic, resilient and sustainable economy by bringing a lot of this production in particular of the most critical pieces back home or with our most trusted allies. It's such a prisoner's dilemma on the sustainability versus dynamism front because, okay, let's just simplify the problem and say the US spends more money to make steel, the very same steel, but does weigh less pollution. Well, China does weigh more pollution to make cheaper steel of the same quality. And I know those things aren't necessarily true, but let's just assume that it's a clean boxed problem. Right. Well, we all live in the same atmosphere. And so if you take it as a given that they're going to keep doing that as long as we're willing to keep buying it, then like, are we actually helping the sustainability goals by saying, hey, let's not produce here because that would be a way to contribute to solving the problem by being the leader in the first mover. Yeah. So that's why I think from a policy standpoint, it's so important that we, at the government level, invest in the R&D necessary to literally invent the answer to that question. So like, at my belief is the answer to the prisoner's dilemma is we have to invent the answer. Like, it doesn't exist today. There's no obvious answer to that. You are literally in a prisoner's dilemma. Unless we find a way to develop cheap, but also sustainable steel, we're going to forever be in that particular box. And so some legislation that I hope will pass very, very soon that I'm working on would basically fund demonstration projects for clean steel to do literally exactly this problem. And I think steel is one thing, but that's on the manufacturing side, but you could also look at agriculture, transportation, energy generation. Most of those sectors have similar trade-offs to what you just described. And my view is the only way we can really do it on a global scale is if we make the green alternatives so cheap and reliable that everyone everywhere would say, hey, this is the best thing to do for all sorts of reasons. Now that's way into the future. What I just described, that's probably a 20 to 50 year journey, but I don't know how to solve the sustainability goals otherwise because there's a stat. I think something like 50% of the people born in the world in the next 50 years will be born in Africa. Wow. Well, how do those economies power themselves? They power themselves largely on fossil fuels. Right. And they're developing economies. So what are you going to tell them, hey, sorry, you have to take this really expensive steel and your people have to stay impoverished? Absolutely not. And it's deeply oppressive to say like we spent the last 100 years expounding unbelievable amounts of energy to build this incredible nation that we live in. But sorry, the atmosphere is super polluted now. So none of you are allowed to do that and we're going to use military muscle to make sure that's true. That's impressive. If you need to innovate your way through this problem. That's my personal view. Yeah. You said it better than me. My view is that the answer to this is it's a market design question, but it's also an innovation question. And I think our responsibility, again, at the governmental level is to make sure we're funding that R&D so that we get there. No private enterprise can underwrite a 50 year R&D project. The payoffs not there. Well, this is our argument on the TSMC episode is that only government scale investment actually could have a prayer of succeeding and creating the next TSMC elsewhere. And TSMC was a government-seated, you know, company. Yeah. And Congress were about to pass this chips act, which is a bit controversial, but its goal is to reassure semiconductor manufacturing here in the US by providing subsidies and grants and all kinds of incentives to get folks to build fabs here. Happens to be that Intel has announced a massive investment in Ohio, so I'm pretty excited about that. I want to see that get done. Totally agree. And you know, that's what we've always done is an innovative our way out of problems. Exactly. I don't know if it's the American way, I think it is, but it's the acquired way. At least let's put it that way. It's definitely the human way. Like human beings are unbelievably good at growing and surviving. And so like I think humanity will sort of like continue to bump up against the edges of its environment until it innovates a way to continue to like spread and prosper. Yeah. And I'm totally bullish on our ability as it species to do that. And I mean, particularly bullish that America is going to lead the way because I think we have the best system for it. The free enterprise systems, unbelievable. If you want evidence, think about how awful our politics are, but how strong our economy is on a relative basis. You know, we should be in a much better position than we are politically, but you know, that's the power of free enterprise is you set the incentives up and you turn people loose and that creates some unbelievable things. So my question is, when do you want to put yours in investors like do? Like if you agree that reshoring the dynamism part of the American economy needs to be reinvigorated, let's take Ohio. Like are new steel startups going to get started in Ohio? Like what's the right way to approach this? Or is it legacy companies? Is it a combination of both? I think it's all the above. So like, you know, governors all over this country want their states to be more dynamic and want their economies to be stronger. They want to attract more people generally. You know, in Ohio, I always think the way to approach it is to leverage the existing assets that you have. And you know, most people don't know this, but Columbus, Ohio in particular is starting to develop a pretty nice tech scene. So there's a company called Drive Capital, which was started by Mark Kavami, who some of y'all might know. And his fund is doing incredibly well. And they've had a handful of IPOs in the last few years and some solid acquisitions. And as a result, you're seeing this burgeoning tech scene more on the software side in Columbus, Ohio. And a lot of it's in the insurance space. We happen to have an incredible insurance industry in Ohio as well. Turns out nationwide people know a lot about how to create new insurance products. Exactly. So you have this sort of nice little flywheel building around software and insurance and technology. And then the capital and expertise is there with Drive Capital. Layer the Intel investment on top of that. And so we'll have some giant fabs and investment happening right outside of Columbus. It's a trite term, but you can see sort of a Silicon Heartland sort of dynamic taking place. What we'll need to do is find a way to become great at advanced manufacturing and chip manufacturing and all those sorts of things. And we're going to actually have to build the facilities and the support services around them. That's going to happen in Ohio. And that's really exciting. That's just the Columbus area. Northeast Ohio, but as you know, Cleveland Clinic and University Hospital are two of the most innovative medical facilities in the world. And so I think we need to do a much better job as a region connecting the innovations that are happening inside the walls of those two great institutions out to the broader ecosystem. But I think if you sort of look at the pockets throughout states and see, okay, what assets do I already have and how can I leverage them and what's fast growing, high growing. I think you can start to piece together a strategy. Make a step up as sort of a national level and I think you need to have the incentives put in place such that, you know, as we transition away from fossil fuels and towards more clean energy that we're doing as much of that development and manufacturing here as possible that we're mining the minerals here and that we're building sustainable supply chains around that. That could be anywhere. That's sort of how I think about the economic challenges that we have. It's interesting. This dynamic has always been true, but now that Silicon Valley mindset is really a diaspora at this point across the country and the world, obviously, one of the things I always thought and then when I Anthony were there, lived firsthand was that Stanford really got this from a policy perspective right in a way that no other university ever has, which is just to my mind, I always build it down as the simple idea that like, if you push the innovation out of the university, let people make money on it. You will do better as a university than if you try and hold it within. Right. And that to me is a big part of the story of Silicon Valley. I mean, famously Stanford only took 1% of Google when it was a Stanford graduate research project when most universities want 25, 50 plus percent of anything that they call it tech transfer. That it's not even like, oh, it was your idea in the first place and we'd like to piece of it so it was developed here. It's like, oh, we're transferring it out into a company. It's right there in the language. Right. Jensen Huang was a grad student at Stanford as we talked about while he was starting in video. And like, there's a Jensen Huang building at Stanford and it's not because Stanford took equity in Nvidia in the early days, you know? The inertia behind some of these really good, important early decisions is incredible. Once you get it right, these flywills develop and they're just so powerful. They're powerful for your community. They're powerful for the country. We use much of it as we can get. Anthony, on a closing note, let's bring it back to you personally a little bit. You're not running in the next election. So what do you think the future holds for you as you focus on the next chapter? Your life. There's a good question. Admittedly, my primary focus is finishing strong. I have a handful of pieces of legislation that I'm still pushing that I'm hopeful we can get across the finish line. That's the primary focus. But I am starting to kind of go through my notes again and reread my business school notebooks and I'm going to go through experiences. I keep notebooks at all times. So it's kind of fun to go through and relive some of those experiences, building businesses but also in business school. And I think I'm still trying to work through, do I want to be an investor or do I want to be an operator? I've done operating and I enjoy it. I enjoy the heck out of building our campaign team which is sort of like a startup in a way and I enjoy the investment side. And for me, what I'm trying to figure out is who in my life do I admire and what kind of businesses do I want to build? I think of the IGSB model and I just think it's fundamentally an incredible model. The success is outrageous. For those of you who listen to the Alto's acquired episode, it's probably most similar to that. It's a truly incredible story. It came out of, it's called the Investment Group of Santa Barbara, but it also came out of Stanford DSB and really just two folks in a very small handful of people over 50 years have compounded at numbers that are, you did unbelievable. Yeah, and it's crazy. And basically by sort of doing the Buffett model but with high growth companies, right? Be super concentrated. Don't get outside your circle of competence and focus on the underlying economics of the business and what they would say is we also only work with people we like and admire. That is probably my top priority as I move forward. Is I want to be in a position where I love the people I work with, I admire the people I work with and for and I'm working on exciting new challenges. That's sort of where I think I'll be the most effective and again, whether it's operating or investing, I guess time will tell. I guess we're also all just a little bit of both at the end of the day, right? Yeah. Capital allocation is the number one most important skill of a CEO for many people would argue. Yeah, yeah. That's certainly the Will Thorn Deic perspective, right? Absolutely. Oh, we should plug Will's new thing here. Oh, yeah. If you like the outsiders and you like our book club with Will back in the day, he's got a new podcast called 50X. That's the first episode I think is with the CEO of TransTime, which is a great episode. David and I got an early sneak peek. Yeah. That's part of our friends over at the Colossus Empire. That's good for me. I got to pick that up. Oh, yeah. It's really good. It's unbelievable how they've grown a truly excellent manufacturing company both organically and by acquisition over the years. It's an impressive story. TransTime is Nikali's company. Yep. I know Nick Well. Oh, nice. Yeah, it's Will interviewing Nick. We have a very vocal. It's a small minority, but a very vocal small minority of acquired listeners who are just like campaigning for a trans-diamy episode. Nick would be great on the podcast. I don't have you ever heard Nick speak, but Nick is incredible. He's super fun and entertaining and like gregarious. He's a Cleveland guy. Yeah. He's awesome. He'd be a good guest. He'd be better than me. You should just should get home. Ha, ha, ha. This has been pretty good. Well, we'll add it to the list and listeners. Go check out 50X. All right. So, we won't make you answer what you're going to do next though, but I am curious. Where would you steer founders? I think there are a lot of people out there right now who always who are listening, who want to found companies, but I think especially, you know, if these ideas that we've been talking about with Catherine, with you, of American dynamism, you know, resonate, where do you think founders should go poke around and dig to start companies? It's a great question. I mean, admittedly, I'm kind of thinking of the same thing. Don't give away your best ideas. Maybe your second best. Yeah. Well, I mean, this isn't going to be that profound, but to me, like, I look for industries that have enormous tailwinds and like, where is the growth going to be? And then where can I fit inside of that, if at all? So like, there's probably going to be enormous growth in vaccine development and pharmaceuticals. I know nothing about it. I hope everybody does phenomenally well in that space. It's just not going to be for me. Okay. So outside my circle of competence, I love everyone in it, not for me. But, you know, are there ways to marry my experiences on decentralized systems and, I don't know, sports or entertainment? Probably. Is that what I'm going to do? I have no idea. But I do think there's some interesting tailwinds on the decentralization side. There's certainly interesting tailwinds on the climate movement. Right? And how do we decarbonize the economy and do it in a way that's responsible, not just for our people, but for the entire world? It's probably the biggest theme, frankly, that, you know, I think it's probably a 50-year theme. Definitely for the rest of my career, I think we'll be working on that. And so where are your skills going to be the most valuable and where do you have the ability to do the best job, which is sort of an obvious point, but I think it's important one. I think a lot of times people think, oh, there's a lot of money to be made over there. I'll go over there. If you're not a good fit for that, you're just going to be, you know, fighting up hill. That's what I would tell founders, you know, focus on the things that you can be the best in the world at that have a bunch of tailwinds behind them. And surround yourself with people you love and admire. The times that I've gotten it wrong in my life is when I put myself in positions where I'm not with people I love and admire. When you're in that position, things can break down and they break down quickly. Amen. I 100% agree with that. That is true. Good wisdom from the ideas, be folks, and many others. For sure. The most fun times I have in my career and the most meaningful are always with people I love. And it's not even like-minded people. It's like people from all different backgrounds and creeds and colors. And you come together in these interesting environments and you build something amazing. And it's so fun and interesting and you've learned so much. That to me is where the development is. It's in those uncomfortable moments. Anybody can go be comfortable. It's sort of where can you push your own limits and do it with people you love that I think that the growth comes. And that's what I enjoy the most. Well, Anthony, it's a bummer that we're all going to lose you as someone representing us, but I got to say it's going to be nice to have you back building stuff again. Yeah. I'm excited to finish it out, but I'm excited to get back out. It's a great big world out there. I just got to find my place in it. Anthony, thank you so much. Oh, thank you. This has been fun and an honor and I appreciate you having me on. With that, listeners, I thank you to Vanta, Brex and Tiny. If you are interested in any of these sweet, sweet discounts that they are offering or to sell your business to Tiny or explore even what that could look at, the links for all of those things are in the show notes. So you finished this episode, come discuss it with the other 12,000 smart members of the acquired community at acquired.fm slash slack. Many of you know this, but we have something called an LP show. If you want more, you can go to any podcast player in search acquired LP show. Our next episode is an interview in partnership with the Solana Foundation. We had long time listener, seriously long time listener like 2016 Austin Federa joined us for a primer on the state of the crypto and web three ecosystem today. It's actually going to be a great companion episode to this episode. Totally. I mean, it's frankly very helpful just to understand what is the terminology that everyone's using. What does it mean today? How are all of us sort of sharpening our pencils on better understanding what this landscape looks like? What's useful? What did we think was going to be useful, but didn't really play out? So that will be live soon in the public LP feed that you can find at any podcast player. If you want that episode early, it is already live for paid acquired LPs at acquired.fm slash LP or by clicking the link in the show notes. Lastly, if you are looking for that next great move in your career, check out acquired.fm slash jobs. Those are all curated by us here at team acquired. We hope to hook you up with an opportunity that frankly we think is really interesting. So with that listeners, we will see you next time. Who got the truth?