DOERR: THE 'NEW ECONOMY' AND ITS BIGGEST FAN
Venture capitalist John Doerr is famous for launching Silicon Valley startups such as Netscape Communications Corp. These days, however, the Kleiner Perkins Caufield & Byers partner spends a chunk of his time pushing public policy -- in monthly meetings with Vice-President Al Gore and through Technology Network, a nonpartisan group of high-tech CEOs. TechNet's hot buttons: improved public education and securities litigation reform. Doerr shared his views with Business Week correspondent Steve Hamm.
Note: This is an extended, online-only version of the Q&A that appears in the Mar. 16, 1998, issue of Business Week.
Q: What made you jump into politics?
A: It wasn't so much political as it was public policy. That's increasingly important to technology companies and to citizens. Technology is a bigger part of the economy, and the kinds of things we want to do fall under a really important umbrella called the New Economy. And to build the New Economy we can't do it in our garages all by ourselves. It's too much in the warp and woof of Americans' lives for us to not engage in the public-policy process.
Q: What is TechNet's goal?
A: We picked two issues we focus on. One is education reform. The other is legal reform. And more broadly, we said we should be a meeting maker. We've had 100 meetings with elected officials of both political parties. We're developing relationships so they understand that we're not just trying to get special tax breaks for capital gains. We're trying to grow this New Economy faster.
Q: Your group has people of all political persuasions. How does that work?
A: It's everything from neo-Liberals to neo-Libertarians. We focus on a few issues, and we only take positions with a two-thirds vote. There's broad agreement that we want to advance the growth of the New Economy.
Q: What is the New Economy?
A: The old economy, you learn a skill. The New Economy is lifelong learning. The old economy is concerned with security; the new is risk-taking. The New Economy is job creation; the old is job preservation. The old economy is capital equipment. In the new, it's intellectual property that matters. The old economy is about the status quo. The New Economy embraces speed and change. The old economy is top down and highly regulated, and tends to be a zero-sum game: You win, I lose. The New Economy is distributed, and instead of being highly regulated, we form public/private partnerships. If the old economy is zero sum, the New Economy is win-win.
Q: What has TechNet accomplished?
A: Several things. In our first month, we got 300 executives to stand up and call for national education standards in each state to measure if our 8-year-old kids can read and our 12-year-old kids can do math. We brought an enormous amount of attention to bear. And it's now the No. 1 issue in the country: our failing education system. There are some other things I can cite. We got the California Digital High Schools program passed. Last week, we pledged to fund and do what we can do to pass a major charter school initiative in California, put it on the ballot in November of 1998. Also Marc Andreessen of Netscape came up with the idea of the Education Dashboard -- technology for linking parents, teachers, and students. Six companies went off to prototype the thing. IBM is in the process of adopting it and funding it. And we're going to roll it out to schools across the country. One other thing: We joined with other organizations to get federal securities litigation reform passed so companies can use this safe harbor to tell their investors about an uncertain future. [Senate Majority Leader] Trent Lott has said he'll move the bill this year. But the most important thing we've done is to build understanding between policymakers and executives building the New Economy.
Q: How could the government improve the climate for investment in high-tech companies?
A: The first and most important thing they could do would be to adopt uniform national standards for securities litigation reform. Then, for the first time, all these companies that have had really volatile earnings and forecasts can go communicate about it with their investors. And that information will reduce volatility and reduce the cost of capital. Step No. 2 would be more federal funding of basic research in universities. This is me talking -- not TechNet now. We need support in Congress. Netcape didn't happen just because Marc Andreessen was smart. There was federally funded research that led to the whole Web revolution. The third thing they can do is check their damned politics at the schoolhouse door and get serious about public education.
Q: Are you learning to play by Washington rules?
A: I'm still politically naive. I don't understand Washington rules. But I know how to build companies and how to help entrepreneurs build companies. I've thought about TechNet like it's a startup. You get really great people together. You focus them. You listen to your customers. You work hard. And you don't accept the conventional wisdom about what's possible and what isn't possible.
Q: It seems that one of your goals is to gain broad acknowledgement in government of the role that technology companies are playing in the economy. Why is that so important?
A: You've got to remember that all politics is local. So when I talk to politicians about the New Economy, I don't say it's three counties in California. It's a state of mind. It can be everywhere and can be for almost everyone. The two largest employers in North Dakota are Gateway 2000 and a Citicorp fiber-optic call-processing center. What this New Economy has to offer any elected official is a higher standard of living -- the good old American dream that your kids are going to do better than their parents did.
Q: Are government officials really getting it?
A: Yes. Some of them got it earlier than others, and that created a competition and pressure among them to all hop on the airplane and head on out to Silicon Valley.
Q: Has TechNet raised any money for politicians?
A: TechNet per se has not done that. But individual members of TechNet, at TechNet-sponsored fund-raisers, have contributed millions of dollars to both political parties. It probably amounts to $2 million to $4 million, divided evenly between the two political parties.
Q: You have responsibilities to your partners and the companies you've invested in. How do you jam in the political stuff?
A: In my life, family is first. My second priority is my partners. We have a bunch of tiny companies that we have to help finance and recruit management for. My third priority is the new entrepreneurs who are coming to us for attention. My partners said I could invest up to 15% of my time in TechNet as if it was a startup, for a year. I carefully monitor the amount of time I spend on this, and I'm not going to do it for the rest of my life. I'll serve my term and then pass the baton. I'm increasingly confident we'll build a durable organization.
Q: What are TechNet's top priorities right now?
A: Our No. 1 priority is education reform. No. 2 is growing the New Economy through legal reform. Then, after securities litigation reform, assuming it passes, do we broaden our agenda to pick on another issue having to do with economic growth? The education challenge will be with us for years to come.
Q: What singular accomplishment do you hope to achieve here and leave as your legacy?
A: I'd like over the next five years, every year, for the number of 8-year-old kids who can't read to go down by 5%. I think it's just unacceptable that a kid can go to a public school in America and not learn to read. I get angry when I think about this. We're the wealthiest nation in the world. It's not right.
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