Rob Lalka
Professor, Tulane University
Executive Director, Albert Lepage Center for Entrepreneurship and Innovation
Author, The Venture Alchemists: How Big Tech Turned Profits Into Power
Technology is not destined to make the world unbearably worse, nor will it automatically make things almost perfect. The path of history will be determined by choices, just as it always has.
Summary
This week, Alan was joined by an accomplished public servant, private sector leader and and a dedicated professor. Rob Lalka is the Professor of Practice in Management of the Albert Lepage Center for Entrepreneurship and Innovation, and is the executive director of the Albert Lepage Center for Entrepreneurship and Innovation at Tulane University.
During their conversation, Alan and Rob discuss Rob’s upbringing in a family of teachers, his early career at the U.S. Department of State and across the nonprofit and private sectors and how he uses his experiences to educate the next generation of problem solvers. They also discussed Rob’s new book, The Venture Alchemists: How Big Tech Turned Profits into Power, where Rob chronicles how known technologists and founders scaled their businesses into some of the most notable tech companies of today, and how they are wielding their power to broadly influence society.
Mentions & Resources in this Episode
The Venture Alchemists: How Big Tech Turned Profits Into Power
Surgeon General Advisory on Social Media’s Impact on Youth Mental Health
Guest Bio
Rob Lalka is a business school professor, entrepreneur, author, and board director. His new book, The Venture Alchemists, will be published by Columbia University Press in 2024.
He was previously an American diplomat, serving in both Republican and Democratic administrations as a Presidential Management Fellow. He served in the U.S. Department of State’s Office of Global Partnerships and was on the Secretary of State’s Policy Planning Staff. For his work advancing global entrepreneurship, he was recognized with the State Department’s Superior Honor Award and its Meritorious Honor Award; he also received the State Department’s Group Award and USAID’s Superior Group Award during his career in government.
He then became a director at one of the world’s most active venture capital groups, which has supported more than 1,100 entrepreneurs in 28 countries over the past decade. He was also a senior advisor at a foundation with one of the world’s largest annual grantmaking budgets, which provides over $150 million each year to philanthropic causes, journalists, and activists in 40 countries. In 2012, he co-founded a consulting firm that supported leading impact investors, social enterprises, and corporations to grow their businesses while measuring and maximizing their impact. It was acquired in 2019.
Lalka is currently Professor of Practice in Management, the Albert R. Lepage Professor in Business at Tulane University’s A.B. Freeman School of Business, and Executive Director of the Albert Lepage Center for Entrepreneurship and Innovation. He has twice received the A.B. Freeman School’s Excellence in Intellectual Contributions Award.
Lalka is an advisor to CNBC for the Disruptor 50, its annual list of the innovative companies best able to disrupt established industries and public companies, and is a founding member and advisor to Nieux, a community formed to make a positive impact on New Orleans through technology and innovation.
Lalka serves on the boards of Public Democracy, Inc., Blue Cross and Blue Shield of Louisiana, and Venture For America in New Orleans. He is chairman of the board of Public Democracy, and at Blue Cross and Blue Shield of Louisiana, he is the founding chairman of the cybersecurity committee, is the secretary of the governance committee, serves on the investment and finance committee, and has served on the audit committee.
He graduated from Yale University, cum laude with distinction in both history and English, holds his master’s degree in public policy from Duke University, and earned executive education certificates from Harvard Business School.
Episode Transcript
Alan Fleischmann
I'm joined today by an experienced entrepreneur, convener and professor who's sharing what he has learned with the next generation. Rob Lalka is the Professor of Practice in Management and the Albert R. Lepage Professor in Business at Tulane University's A.B. Freeman School of Business. He's also the executive director of the Albert Lepage Center for Entrepreneurship and Innovation at Tulane. Over his inspiring career, Rob has worked as a public servant in the US Department of State under both Republican and Democratic administrations. He's also spent time working at nonprofit organizations and in the private sector building transformational partnerships, and supporting building and budding and creating opportunities for entrepreneurs in order to help tackle some of the most pressing challenges society faces.
Rob is also the author of a new book, an exciting new book, The Venture Alchemists: How Big Tech Turned Profits Into Power. It's a book that is available for purchase as of May 14, and throughout the book, Rob chronicles how entrepreneurs behind some of the most recognizable and known tech companies turned their businesses into empires. I’m excited to have Rob on the show today to discuss his fascinating background, his incredible career journey, the Venture Alchemist and the lessons in leadership he has learned along the way.
Rob, welcome to leadership matters. It's such a pleasure to have you on.
Rob Lalka
Alan, it's really great to be with you. Thanks for having me.
Alan Fleischmann
And I have had wonderful memories of being with you and during those days that you were in public service in Washington in the Department of State, and I'm really excited to reconnect with you here.
Let's get started with a little bit about your early life, your upbringing. Tell us a little bit about where you're from, where you were raised, what life was around the house, what your parents do and did, any brothers and sisters – anything else that was special about the community grew up?
Rob Lalka
And yeah, it's a great, great way to start because I mean, for your listeners, knowing sort of who they are hearing from, it's the same reason why I begin my book with the acknowledgments. And so I actually purposefully began the book with an acknowledgments about who my family are, who they've been to me how they've helped to raise me. And then other mentors, coaches and teachers, and those have sort of been there for me. Usually acknowledgements are sort of buried in the back, right. It's like the author's sort of privilege to sort of say a few nice words to people that matter to them. But I actually used it to sort of introduce myself and the sort of narrative voice of why should you even care about reading this book and why should you maybe even trust this person. And I think trust is really important. It's really important to me personally to be honest and factual. And one of the themes in the book is to shed more light than heat. And I think that's important these days now more than ever, and I get all that from my family.
I was raised by a single mom. And she was first a high school and an elementary school art teacher, an only child. And it really, it did take a village to raise me. It was my mom, my grandmother and my grandfather, amazingly important people in my life, and their lives were just so invested in and just making sure that I had a really great upbringing. Again, even though I never really knew my dad and I was I was being raised by single mom. And so it went beyond that. I mean, it was people in our churches, our community.
My background really was like, it's a pretty beautiful boyhood where I got to actually sort of grow up in a really, really sweet way. You know, I really I really had a good boyhood. And I know that all the people who I just mentioned.
Alan Fleischmann
Amazing. And any cousins and big family like that in the family? Your family was all the community around you.
Rob Lalka
Yeah, that's the way I look at it. I was raised by public school teachers. And so my mom taught art, again in high school and an elementary school. My grandmother taught English for 50 years. I mean, she was someone who, the way I put in the acknowledgement is she went to a one room, whites only education, Alabama classroom growing up. And then she taught in Virginia's first integrated classrooms for most of her life and was chair of the English department at the high school where she taught when they integrated. And so, you know, my godmother was a civics and history teacher, my aunt was a math teacher. And I really do think the reason why I'm so intellectually curious is because I had tutors, essentially, across the board who I could turn to and ask for advice as I was learning and growing and exploring.
And and I'm, I still am very intellectually curious. And I think that part of this book comes out of that I got really curious about who these people are and what they were thinking. And it really did matter to me to delve in deeply to the stories of these entrepreneurs and investors as real human beings. So that's what I tried to do.
Alan Fleischmann
And technology has played a big role in your life, hasn't it?
Rob Lalka
So I won my first computer in an art contest. It's an amazing story, I was 12-13 years old, and WSLS channel 10, the local TV station, had an art contest. And I did a painting about, actually it was about the Persian Gulf War, if I'm remembering correctly, and it was about, you know, resolving the war. I guess my first war protests in some sense. But I won a computer. And that changed my life, because I not only then got on the internet pretty early compared to when I would have been able to, again, without the resources to afford it. But also, when I was here, I was the type of kid who was taking that thing apart and putting it back together, you know, like, I was adding more RAM to it. And, you know, installing it on the motherboard myself, and I just loved – my mom would come in, and it would be all in pieces and be trying to figure out how to put it back together. And we'd have to go to the computer shop just to figure it out. So yeah, I trace a lot about of my interest in technology and my passion for it back to those moments.
Alan Fleischmann
And are there, it sounds like you said it earlier which I love and I love when we have guests on who both value and attribute so much of their life and journey not only to their family, which is often a very important part, or absence of family which can be a big part of someone's journey, but also the mentorship, the mentors along the way that sounds like even at a very young age you had mentors as well that played a role. Tell us a little about that at the young age, I want to get to the ones professionally later, but the ones that the very young age.
Rob Lalka
Yeah, so I mean for me, I think it's important to look at how do I live my life now and what do I prioritize. I dedicate this book to my sons and to my students. And it's because I really care about being a great dad. And I also just love being in the lives of these young people. I teach mostly undergraduates, and they're at that inflection point where they can make choices that will change the rest of their lives. And they're actually open to doing like, that's the amazing thing about those undergraduate years, those are the moments where they actually can make decisions that will change them.
Alan Fleischmann
I'm sure that the fact that you went to Yale, which was extraordinary and I think I recall it was an amazing experience for you, I'm sure that plays a role in how you look at university life today at Tulane. I'm just curious a little bit about the Yale experience and what made you go to Yale? What made you study English and history? And you know, a little bit about that experience and how that actually plays a role in your life today.
Rob Lalka
Yeah, I went to Yale because I got in. That's the answer that question. I was the first kid in my high school to go there, I think. And, you know, it was – Alan, I was the kind of kid who didn't know that you were supposed to practice for the SATs before I took them the first time. And then I talked to my guidance counselor. And one of the things I remember that she had said, again, for all the good influences I'm describing there were also some that were doubting me and my ambition and my dreams, who said, my guidance counselor said, well, you know, I think you're setting your sights too high, I don't think you can do it, essentially, with that LSAT score. Like, there's no reason for you to even try. And that fueled me because then I was like, well, I'm going to find a way. And I would go to, sorry, Barnes and Noble, but I would go to Barnes and Noble and I would just read the SAT books without buying them just sit there in the coffee shop and read them. I didn't, you know, we didn't have the money to pay for it so I would just do that sort of thing. And my score improved enough to get me into Yale.
And still even when I got there, I felt so, so much like an admissions mistake. I felt like I didn't belong there. You know, these students had read so much more than I had, and they were so much more polished. And this was more like a finishing school for the kids in Andover or Exeter, right. And here I was, you know, wearing my Beatles, raggedy t-shirts thinking that playing guitar on an old campus was going to be like my future and it was but then I also had to find my way through that world. And it was, it opened my eyes to so much about the world. And it was it was a really incredible time in life, I relished every minute of it.
And like you said, I majored in English and history. And the reason why was because I just loved reading, I loved learning about why things happen the world and how things are connected. You know, English taught me how to be a writer and a great critical thinker. History likewise taught me how to analyze problems from multiple sides, and how to test your assumptions. I mean, all these things, looking back on it taught me how to be an entrepreneur and entrepreneurship professor.
But you know, back in the day, I would have never told you that I would be where I would end up, I just was exploring what I was passionate about.
Alan Fleischmann
You spent some time abroad while you were at Yale as well, right? You went and spent some time in Oxford?
Rob Lalka
Yeah, it was great.
Alan Fleischmann
Tell us a little about that. Was it your first time abroad?
Rob Lalka
So, actually I had gotten to go abroad because I interned for the U.S. State Department. And I, like money is a big factor through all of this, I mean, it's one thing I want to sort of make sure to raise in the conversation is that, you know, we didn't have the money to send me to Yale. And so, I applied for, like, every little scholarship I could find on the internet and just sort of cobbled them together. I think I had like, almost $30,000 in little scholarships, you know, Wives Club and Rotary Club, but also like little essay contests that I've found. And, you know, that's because of technology. Like I was, I was an early adopter to the internet. And so, I was able to find those, and that worked really well. I wouldn't have gotten to go abroad with the U.S. State Department if not for a scholarship that I got through Yale. And then that really lit a fire in me to want to see more of the world. Because I was just, you know, doing the cheap Eurorail thing around Europe during that summer. I would intern in Frankfurt, Germany for State, and, you know, I just wanted to learn more and more and more. And so I did, I studied abroad at Oxford and made some friends that I still cherish to this day, some relationships that are just so profoundly important to me.
And I learned a lot about myself, because all of a sudden, I wasn't the southerner who had gone north to school. I wasn't the, you know, the kid who didn't belong, I was the American all of a sudden, right? They call me was American Rob, right. And so here I was, in some ways, representing my country, both through an internship at State and then when I was overseas, studying abroad. And that was when I was like, this is one of the things I want to do with my life, if not nothing, which was to work at the State Department.
Alan Fleischmann
It's amazing, very prescient, the world that you were living in at that point.
And I know you worked at Wells Fargo, you joined CityYear, you really have lived the intersection of public, private, and civil society in your journey. Which is such an important thing. It's a big part of my life. And now to speak those different languages and they different languages is such an important thing. And nowadays, I would argue, where you see how it has shifted, those languages are as important and essential as ever. But you worked at Wells Fargo, then you went to CityYear, right, anything you want to highlight from that? And I know that there was a need for you, ironically, you know, I think Hurricane Katrina played a role in your life at that point as well. You're back in the same town in many ways, so I’m curious about all that as well.
Rob Lalka
Yeah, that's where I'm at, it's where I fell in love with New Orleans. I moved to New Orleans right after Katrina. And what I would say about that is the lesson in that moment of my career is, it doesn't have to actually be a career, like, doesn’t have to be a path. I teach my students that instead of a career ladder, like those just do not exist in the same way anymore, it's better to think of it like a career lattice, where you start somewhere, and then you can go up and you can go over, you can even go diagonal, from one sector to the next. And all of those experiences enrich your perspectives on the way that the world works, it enhances your network so that people get to know you and trust you over time. And then over time that builds, because then you can have amazing things to talk about when you're in a job interview, you have this great portfolio of different experiences, good stories to tell, but then you also start to learn how different people see similar problems, or maybe even the same problems and how you can build those cross sector partnerships. And now more than ever, that's really important that we get right. Because if we don't, you see how, in the worst possible way that money corrupts government or other things that I talked about my book, it gets a little scary. And so, we need really good people doing the doing the good work and that requires cross sector efforts.
Alan Fleischmann
And then you went to Duke, when did Duke become a part of your life?
Rob Lalka
Yeah, so I was in New Orleans and got into Duke for graduate school. And so, went and I went pretty young. I advise most of my students these days, like spend a couple of years if not several outside of an academic environment, because graduate schools are different than undergrad. Undergrad is a very clear, direct process. Graduate school is a professional school. And so, if you don't know exactly what you're going to do and who you're going to be, you can figure it out there but it's very – at least have some work experience to know what it's like to be a professional. And so, the best things that are sort of a part of my life at that moment were the people that I was surrounded with. One of whom was Tom Taylor. Tom became like a father figure to me. And he actually named our second son Taylor after him, and he is someone who has been there for me through the darkest hours, and somebody who I really admire. And here's an amazing public servant who spent an entire career in the army. When he retired, he was the head civilian attorney for the U.S. Army at the Pentagon. And also someone that has amazing experiences, really inspiring experiences. He was there on 9/11. And I learned a lot, I still do.
And likewise, you know, in undergrad I failed to mention, I had an advisor there who was named Glenda Gilmore. And Glenda really took me under her wing and helped me to understand how to have a lot of energy, how to how to focus that energy and how to put it towards real intellectual clarity. And that's something that I try and teach my students these days, too. And so, I’ve had these amazing mentors throughout my life. And that's something that I think is really important is that finding people who you can trust, and who can speak truth into your life, and who can help you to understand some of your blind spots, even when those blind spots are coming because you were overly excited, or you're moving too fast, or you're too passionate about something and not understanding how you may be coming across. Those are all mistakes that I've been making throughout my life that each of them have been able to sort of very gracefully help me to understand ways to be better.
Alan Fleischmann
That's amazing. And I guess that's how I met you is when you went to work with Howard at the Howard G. Buffett Foundation, where you focused on the ideas of partnership, or maybe I met you before that when you in the State Department before you went there, I'm trying to remember.
Rob Lalka
Yeah, our relationship really deepened when I was with the Buffett Foundation, but we did have some interactions when I was at state.
Alan Fleischmann
It was after we did the Partners for a New Beginning and other things around that.
Rob Lalka
That’s exactly right.
Alan Fleischmann
Yeah, that's right. Yeah. So, tell us a little bit about that, your work at the State Department where you served as a global partnerships liaison. You worked in the policy planning staff, you became a global partnerships advisor. I think you had four years there, maybe almost four years at the State Department. I remember when we worked in Partners for a New Beginnings with Madeleine Albright and others, you were at the Office of Global Partnerships and really working on that as a major thrust, the idea that, truly, how do you establish and create cross sector partnerships that are meaningful? How do you make it so that their win-win? And how do you make them so that they're scalable? Curious what that experience was, like we all are, and sharing the highlights you'd like to share, but also how you were there during the Arab Spring. And that's really when you and I started to get to know one another. And any reflections from that period that would be interesting when you think about it. We need more of that today than ever. And I'm just curious with your point of view on that as well.
Rob Lalka
Yes. So, I joined the State Department as a presidential management fellow Under Secretary Rice. And so, I had an amazing opportunity to work at state across three different secretaries. Secretary Powell, when I was interning, Secretary Rice at the very beginning of my PMF and then Secretary Clinton throughout her entire tenure. And you know, it's a very different moment now, in the way the world is compared to then. It's hard to almost even remember, because it's 15 years ago now this summer when Obama gave the Cairo speech on June 4 of 2009, and, you know, that speech was something. That was, it was truly a soaring inspirational speech. I mean, I would argue part of the reason he won the Nobel Prize was because of a speech. It was a speech where he talked about wanting a new beginning between the U.S. and Muslim communities around the world around mutual interest and mutual respect, around issue areas that mattered to us and to them, ways of being productively focused on what we can collaborate on, not just focused around all the issues that divide us.
I'm looking back on that speech and that moment. I mean, the inside scoop is we put things in that speech that we weren't even sure we're gonna end up there. And then all of a sudden, he says them, and we turned to each other. And we say, wait a second – he just said, “I will host a presidential summit on entrepreneurship this year.” And we turned to each other. We said, does he mean like 12 months? Like, do we have 12 months? Or is it this calendar year? Like what do we, how do we find our way to get this thing done?
Alan Fleischmann
I was involved with you at that point. It was this calendar year.
Rob Lalka
That's right. Yeah, we yeah, we had to work really hard on that. We actually tried the calendar year. And then we ended up pushing it back, actually, Alan.
Alan Fleischmann
I remember that. I remember that.
Rob Lalka
April 24th, 25th of the next year, 2010. And that we brought entrepreneurs from all around the world. I remember, that was the moment that Muhammad Yunus met Jacqueline Novogratz, because I watched them exchange business cards. It was just so cool to be there with all these really inspirational people who had lived amazing lives, entrepreneurs that our missions had found, our embassies and counselors had found that were doing amazing work. Especially female entrepreneurs in places that were, that was not something that was celebrated as much as we were going to celebrate that. And we lifted that up. And I do think that looking back on it, there were a lot of really beautiful untold stories from that moment, that really made a difference in people's lives, inspiring the next generation, helping them sort of see what's possible.
And I think that there was a lot of hope that we had that went unfulfilled, and I think especially around social media. That's if I look back on my scholarship around the way I think about tech titans as being either heroes or villains, that dichotomy is very much it's dominated our public narrative, our sort of cultural understanding of technologists is that they're either heroes out to fulfill some destiny, or they're villains who have ruined society. It's this either-or, this one or zero, if you want to think of it in that term.
And for me, I look back, I'm like, wow, I was buying into the idea that social media with the Arab Spring was going to be something that would not only overthrow dictators, like which we did see, think of Tunisia, but also that would then lead to the type of organizing and democratizing that we were hoping for in that moment. And I think that, you know, there are a lot of other factors at play, including especially actually economics, and making sure that those promises are fulfilled through good work and investment and entrepreneurship. And I think that's something that we still have a lot of work to do, especially these days as things continue to become more chaotic because of social media. More negative, the algorithms driving content are so much more extreme than it used to be. And I think they're a little dangerous there, especially when we think about, kind of like Tik Tok and the way it's making us see ourselves but also see a conflict, like what's happening with Israel-Palestine right now. And so, I think we're in a very different moment now than we were. But I look back on the moment and, you know, I learned a lot through that, but I hope it's reflected in the scholarship in this book.
Alan Fleischmann
And when the book, you know, you're talking and you obviously, you've drawn all your experiences of the Foundation when you went there and Village Capital, when you were focused on early stage or seed stage, startups. And you know, technology is playing a different role here today, it can unite us and divide us, it’s doing both and I guess you capture that in your book. I mean, it can be extraordinarily manipulative, or it can actually be our sources of truth. And unfortunately, it's becoming less of the latter and more of the former in so many situations where there's a divide.
And when you think about this country, but frankly, you're an internationalist, right, when you think about almost any country in the world, right now, they're all dealing with the same phenomena, almost every election, and we have so many this year, globally almost every election is 50/50. So, when you think about, you know, and it's not just a 50/50 where we're almost, you know, amicable one party versus an amicable next party where our hands are embraced for friendship. It's fist to fist, its combative. We live in a completely divisive and hateful way in which they're looking at tomorrow.
And I believe, and tell us a little bit, we can get into your book now, keep talking about your life, but I think they're a little bit of both in your case because the journey led to the to where you are now and then to your services trying to educate the next generation of, hopefully, an army of people who want to break down barriers and want to build coalitions. They want to do what you spent your lifetime doing, which is to build partnerships across sectors. So, by only thinking about all those divides, the very technology that divides us can also help us. You know, if we break down these algorithms, we could create uncommon tables. But since people don't realize they’re talking to the same people, and they're actually, you know, in some cases, alarmed by the news that they are being fed, some of its real, some of its not, that's a terrible thing. So, just a little bit about that, I don't know how you want to handle this, we want to get right into the book, do you want to talk a little bit more, because, honestly, you know, your journey at Propeller, your journey at the Howard Buffett foundation, you know, so much of what you did as a partner in Medora, all has led you to Tulane and then to this book. So I don’t want to make the mistake of not letting you mention a few things on the journey, but let's not forget to really focus on the book. How’s that?
Rob Lalka
I appreciate it. You know, everything you're just saying was really, it's a stew. And I think there's a lot to unpack there. So I'm looking forward to telephoning with you. These are those good conversations that I haven't had with you a long time that I remember very fondly, Alan.
So, I couldn't have written this book until right now in my journey. It took everything you just described for me to be the person who could think about the topics in here with as much clarity and as much confidence as I do. So, a couple of threads to pull on. One, there are 1,902 citations in this book. It is deeply researched. And so, anybody wants to delve deeper, I've got receipts. And I went into the archives, I went into the archives at Stanford, especially to really delve into who were these people, what were they saying at the time when they're building these companies and I unearthed some things that that either no one else had found or that others were pulling punches on and didn't want to discuss as openly as I do. And so that will be interesting, because I think that as many of the endorsements on this book, Walter Isaacson's endorsement and Anne Marie-Slaughter’s endorsement, people who might deeply respect all of them are saying, you know, this is jaw dropping. That was Anne-Marie's phrase. But you know, she also said it will be controversial, but it's not mean spirited. And that was the way she approached it, which I really appreciate. Because I think that's exactly what I'm trying to do with this book is to shed light on who these technologists were and what they were saying at the time, what they were doing. I try and look at them as humans, complex humans who made tradeoffs, who sometimes had moral clarity that then they lost, sometimes didn't have that more clarity and wanted to be exploitative, and then did it.
And you're exactly right, these technologies are tools. And tools are not evil or good in and of themselves, tools are amoral. Some tools are designed for certain purposes, though. One of the analogies that a friend of mine likes to use is like, if you look at a hammer, you know, a hammer has a particular purpose. You could use it to kill someone, right. Or you could use it productively to do a habitat house. That is a particular purpose, and it is it is designed better as a tool intentionally for the habitat house work. And yet, you could see what happens when someone attacks someone like Paul Pelosi, for instance, is one that comes to mind. And so, you know, there is a thought about, okay, what are these tools designed for? How are they built? How are they functioning now. And my point in the book is that decisions have been made by leaders to make the tools into what they have become, which all too often is hurting our children, especially young girls, and they know it. And that's where I begin the book, chapter one is what Frances Haugen’s files said, and not just what was reported on them, but I actually went through the screenshots and reported things like Facebook was building tools to basically encourage our children to be on devices during playdates. That's something that I don't think has been reported broadly.
Alan Fleischmann
Say that again so people really hear that, that's important.
Rob Lalka
Yeah. And so, they were building tools that were for children six and under. And what they wanted was the children to be on devices instead of playing on playgrounds like my kids do. I have kids that are, Taylor turns four this weekend and Tyson is seven. instead of their upbringing where they’re just playing and enjoying and being present, Facebook wanted them to be on digital devices. They actually said that they had a responsibility to do that.
And so that's where I begin is I go through the Haugen files where I really delve into, like, what did they know, what choices were they making and why were they doing that. And the answer is growth. It's not even profits early on, it's growth. They want world domination, they want to be ubiquitous. And you see that in the way they built these tools, how often people were checking them, and how fast they grew. And that's a unique phenomenon of our age, capitalism is usually about profits. It's about revenues and costs and profits. But this technology allows scale and speed, and acceleration in such a phenomenal way that they were able to build without having to be profitable for a long, long time. And that scale, because of the power of technology, allow them to almost reach ubiquity, and sort of market domination in a really powerful way. And domination of our attention and our data over many, many, many years.
And that's changed capitalism. That's one of my arguments in the book is that capitalism is not about the way we understand profits and revenues and the business basics. It's altered it with these companies to be about scale and growth and world domination, and power. And it's created a sense of being able to wield that power that I think we need to be very concerned about, when we think about what it's doing to our children, especially.
So that's one topic I begin with, I mean, I, I begin with the Haugen files, and I begin with other documents that are that are more recent, including the Surgeon General's warnings about social media. And that's where I start, and I start with Zuckerberg’s origin story, and what was he doing at Harvard in those days, and what were people saying about it, and then we go from there, and I go through all the origin stories of Facebook and then Google. I go through Uber’s origin story. I go through first PayPal and then Palantir, and how David Sacks and Peter Thiel and Keith Rabois are involved in those companies. And then I go through other companies as well, because then others emerge, like the surveillance company, ClearView AI, Anduril, which is another company that Peter Thiel invested in. A number of other businesses that are, again, working in that cross sector where we begin with, but one of the things I try and shed light on is that they're creating incredible amounts of data in a surveillance capitalist system that most people don't fully understand. And so, I try and tell these stories in a really accessible and human way so that you don't have to be a business student or even understand business fully to be able to pick it up and understand who these people are.
Alan Fleischmann
Do you have you have examples, obviously, where technology and venture do well, that has done well?
Rob Lalka
Yeah, I absolutely do. Because I mean, I quote Steve Case’s quote. Steve had invested in the Village Capital fund, and he's someone who I really admire with all the work he's doing with The Rise of the Rest and people there. David Hall is someone I admire a great deal. James Barley is actually a former student who's working with David now. And so that's always a beautiful thing, when the people that you've coached and mentored and seen grow up are now contributing in a really meaningful way to things you care about.
So yeah, I look at I look at that work, and I'm really inspired by it. And so that definitely has its place in the book, too. I talked about how all net new jobs are created by startups by new startups. all net new jobs. That means large companies are creating jobs and cutting jobs. Startups create all net new jobs. But here's the thing. Facebook now Meta, Google now alphabet, Uber, any of these companies are the giant conglomerates these days. They're not startups. We can't think of them as startups anymore, and the way that they're wielding power, and the way that they that they are especially involved in politics, and the people who are behind these companies are putting so much money behind, say, Prop 22, which was the ballot initiative in California that Uber led the charge to support. They put over $200 million behind that ballot initiative in California. And that's an incredible sum of money.
Peter Thiel put over $15 million into J.D. Vance's campaign, Blake Masters’ campaign for U.S. Senate. Each. That's incredible money. That was more than anyone had ever spent on a U.S. Senate campaign before and it if you compare it to what to put behind Donald Trump in 2016, he put 1.25 million behind Trump after the Access Hollywood tapes come out. So, think about that. He took a bet. Last minute bet. And that paid off. It was a $1.25 million political donation through a super PAC in 2016. He's now giving 15 million plus to US Senate candidates. And according to pop news, there was just a dinner that Thiel and David Sacks and former Secretary of Treasury Mnuchin all these people were attending Travis Kalanick, just last week, and they're deciding what they want to do in this next election.
And so point being, you know, there's a lot of money that is flowing now. And these people all have very clear interests in outcomes based upon the way that they're able to then impact policy. And because of Citizens United, they're allowed to be able to put as much into it as they wish. And I think that's something that we need to just reckon with right now. To handle some of the issues that we're talking about earlier, about what happens with our democracy in this election year I think we need to look that squarely.
Alan Fleischmann
Tell me, who do you highlight mainly, how did you organize the book for those who bought it?
Rob Lalka
Yeah. So um, this was one that actually Cathy and Walter Isaacson were hugely helpful to help me think through. I had several good conversations with both of them together, and also with each of them separately about storytelling.
Alan Fleischmann
We've had Walter on the show here.
Rob Lalka
Oh, awesome. That's great. Yeah, he is an inspiration, for sure. And someone who, with him teaching at Tulane, it's a real blessing to him, to have them around all the time. And Cathy as well. And
Cathy is someone who I deeply admire, and she, she has a clarity of thought around leadership that is something that I've learned a lot from. But one of the things I sort of worked on as I was sort of workshopping, how do I tell these stories, it actually sort of went back to my English major part of this I structure is as a three act play.
And so, act one is Silicon, which is where we talk about how venture capital works, and how these businesses were built, and sort of how they got their start.
Act two is Gold. So, gold being how they were then able to profit off of our attention and our data and our time. And just a lot of that being through terms of service agreement that we never read. And so, we're essentially data illiterate, and we don't even understand what we're signing up for and yet we do it anyways. I talk about deception a lot. There's one we talked about earlier, the ways that we don't know what's true or false, we don't know what's fact or fiction, what's deep fake or what's real. Some of that comes from the fact that we've been lying to the internet every single day by clicking terms of service agreements that we say we read that we don't. And that's not our fault, necessarily, because the lawyers make it really hard for us to read through them but that's a reality. We live view it every day. And so, there's deception happening there all the time. And so that's the second act.
And then the third act is Power. And so then how did they wield this power, especially during the Trump administration, but also people like David Plouffe working for Uber, I go through both parties, that people who are who have been political and very active on both sides of the aisle, they've been doing this. And so, I just want to look at that squarely. And look at that honestly, and say, is this really the democracy that we want, Is this healthy for our democracy? Does this actually allow for more people to have a voice or does it actually consolidate power within the hands of the few? And I would ultimately make the argument that this is not what we want.
And so, it's a three act play. And that's where the title came from, is it took me structuring it to think through how do you tell these stories in a compelling way, hopefully a beautiful way, but also a really deeply researched and fact based way. And then that's where Venture Alchemists came from, because they turned silicon into gold and gold the power, right. And so, it's how they turned all of the money that they were making into that power, and really how they were able to get that get those resources because of amazing technologies that never existed before.
Alan Fleischmann
That’s amazing. Does it give you hope and faith a little bit too, because this technology, you bring up the mental health issues in there in the book, if I recall, and I think in the book you talked about how technology can be a friend there too, right? But obviously, we know that technology, and I was just on a meeting earlier today, can often be the great, great alienator. I mean, it makes people feel even less of a community and there's some people whose only contact with human beings now, it seems almost because of the drawing in of the technology, and they're not even getting involved in their community. They don't really see people in person like they used to. That's a mistake. But it also could be a wonderful app, partner, when it comes to some of these things that you need in life too that would be maybe inaccessible, whether that’s to costs or whether it's due to distance and location. How do you address that in the book?
Rob Lalka
Yeah, I really addressed that near the end. And I address it a couple of ways. One, I think that we need to learn lessons from what happened on social media. It is very important for me that we don't just sort of accept that that's what happened, that they are profiting from all of our data in such an incredible way and we just sort of accept that's the way it's going to be. I don't think we have to. I think that we can look at that very, very clearly and say, no, we should share the value of the data that we create. And that's something that to me is very big idea, But I think it's a very important idea. Because if data is the new oil, if data is the most valuable asset in this modern era, then why in the world would only a few tech companies benefit from that? And that makes sense for companies like Meta with Facebook and Instagram, it makes even more sense to me for a company like Uber, where the driver feels like they're getting all the value out of a transaction, or at least most of it. But they're sharing not the value that the data is creating, which is actually really benefiting Uber. And of course, the largest shareholder of Uber is the Saudi PIF. It's the Saudi public investment fund.
And so, when we think about that, maybe we have a second thoughts about how do you look at that company and who is it benefiting? Not the American Board and the American executives, but the Saudis. And so, you know, I think just being honest about that, that is the reality that long before the PGA Tour-LIV golf deal that got everyone up in arms last summer, long before that, the Saudis had had invested $3.5 billion in Uber. And they had sort of taken a board seat with the PIF. And again, David Plouffe was the one who struck that deal. And so looking at that, honestly, I think it's very important for us when we then try and understand how business is operating, and how it's working in our world.
Near the end, though, I do want to make sure that I both ground us in the fact that, especially with artificial intelligence, and how powerful it's going to be, we need to learn these lessons, and we need to be honest about where things are gonna go. And then we need to be
Alan Fleischmann
Talk about that a little bit, talk about AI right now and what it means, the implications of it. It sounds like there you are talking about it in a positive way. Tell us a little bit about that.
Rob Lalka
I think it could be, I think it certainly could be I mean, I use it in my classroom all the time. And I love it, because –
Alan Fleischmann
How do you use it?
Rob Lalka
Yeah, it's a co-pilot for my students. We had one of my classes, the student venture accelerator, it's a two semester class where they work in teams to build companies. And day one now, they come in, and I say, there aren't four people on this team, there's a fifth, and it's Chet GPT Four. And you're going to rely on that team member just like you would rely on a fifth team member. That means you are not having it do the work for you. Because you wouldn't do that with another team member, you are not seeking all the answers and not questioning what that team members coming back with. But this team member will get smarter over the entire course of this year about the problems that you're trying to solve with your business. And you should absolutely rely on it except for a few moments where I want to make sure that they're thinking on their own, they're sort of writing essays, and thinking critically, I do tell them when not to use it.
But overall, it has been a very valuable asset in the classroom. The way I think about this is that when I was growing up, you know, we had a TI-82, TI-83 calculator. What did that mean? It didn't mean we stopped, we stopped, we're not doing math anymore. It means you're doing better math, you're doing more advanced calculus. And that's important for us to be able to sort of think back on how you use technologies to actually make us smarter and better and push the envelope on what's possible.
Alan Fleischmann
And do you that Chat GPT sometimes writes better in that circle or not?
Rob Lalka
I find that the students who are my star students that are willing to think critically, that are doing the work themselves, they're delving into the research, they can use the tool to speed up some of their processes like outlining and to think of ideas that they may not have thought of, because it can provide certain perspectives, especially if you train it to be a good copilot to think through sort of certain issue areas or large documents, you build your own sort of pool of documents that then the LLM is relying on. So yeah, the smartest students are doing it. But the sad thing is the student, same students who used to think that I could just go into Google search for something and it give me an answer and that answer is all I need, are turning to this as if it is an answering machine. And it's not. It's a chat tool, and you need to be able to train it as you would chatting back and forth with it.
So, you know, I think that in the classroom, it's something that I've seen a lot of promise for. And as it gets more and more advanced, I think it has a lot of opportunities for solving problems in one generation that we would have thought would have taken two or three generations to figure out. Having said that, I think we want to be very thoughtful about which problems we're solving, how we're solving them, how should we go about this.
So the example I sort of use in the book is I talk about CRISPR. And when you think about AI, or even if we get anywhere near it, AGI, and CRISPR, gene editing is really a powerful concept that we would be able to do that, especially in an inherited way. Germline gene editing is really powerful. I mean, Walter talks about this quite a deal with Jennifer Doudna.
Alan Fleischmann
He wrote about it.
Rob Lalka
Yeah, I'm right in that camp. And this is an incredible breakthrough that we have to be very careful with. But I don't think we just stop, I don't think we just stop with AI or CRISPR, or AI plus CRISPR And the power that would wield. I don't think we just stop, I think we need to be very thoughtful about how America leads right now. Because if we just stop, then the Chinese will do it. Or the Russians will do it, or others will do it that we are not comfortable with. And that's what I say in the book is that we have to make sure we're leading right now our in our best values. And if we're not learning from what happened with social media companies that came from Silicon Valley, right, that were born in America, you know, and came from the internet that the US government helped to create, if we aren't thinking about what happened with that, and the way that our data is used, the way that our privacy is gone, and we're not weighing some of those costs, then we then we will be in deep trouble because the price of progress will be too much.
And so that's the leadership I'm trying to show on these topics is, I want more people talking about this thinking about this understanding what happened, and then being a part of the conversation to figure out where it goes, because if it's not discussed, if we don't even know, then the powerful and the rich will be the ones that do it. I mean, Sam Altman, you know, he was the minister in Keith Rabois and Jacob Helberg’s wedding. I mean, these people are close, they all work together. And I don't want them to be the only ones who have a voice.
Alan Fleischmann
But who do you think is the right, who do you cite that, who do you think we should be looking to as a great technologists? Who is looking for the good?
Rob Lalka
Alan you’re going to make me give away the end of the book! I’ll do it.
So, to the English major in me that looked at how do you tell these stories, there are background characters, you would call them minor characters, names on the page that have one line or two lines that are not Elon and Zuckerberg and Kalanick and Paige and Brin, these titans that everyone recognizes right? I went through the college newspapers. So I went to the Harvard Crimson, the Yale Daily News, I went to these college newspapers when they were getting Facebook and I looked at who was who was warning us about things, what were they saying then, who thought this was going to be great, who thought that this was creepy, who thought this was an invasion of privacy, who thought this was stalkerish. And I have all those quotes in there. And so, I tell some really fascinating stories about what's going on in that moment. And then here's the end of the book, I interviewed those same people, I reached out to them. And I viewed it almost like an oral history project. So, there's the history major in me looking at it, and the English major thinking about those background characters that were actually the most important voices all along. So both of those, those perspectives are coming into play and how I chose to end the book.
And it leads to really, to me, a really important ending, where we listen to the people who saw things way early on that, that we should have all been recognizing more. And I asked them, what would you do and how do you approach these technologies? And how do we ensure that democracy prevails and not tyranny and not oligarchy? And not a system where people are openly talking about now wanting to fire 30,000 Civil Servants through Project 2025 and Schedule F. That to me is really deeply troubling because we already had a spoil system, we already had a king earlier before that, we didn't like it much. That's not who we are as Americans. And I think it's important that we, we really try and understand the consequences of something like Schedule F. And what it would mean to public service and to our country.
Alan Fleischmann
Tell us a little bit more. The challenge is huge, the uncertainty is enormous. You know, I think we all rally when we hear about AI and technology when it comes to the advancement of science, or, you know, to believe in medicine, you know, and, and then we can do so much more to get closer to the cures for cancers and other debilitating disease, obviously, put it privacy aside, and there's issues that you brought up, which are huge. But we, you know, I don't want to be overly positive with knowing the book, obviously, distilling some really critical things. Are there solutions that you think, I mean, government tends to be slow. So the idea that we create some kind of a regulatory authority that's necessary, but how do you make sure that it's nimble and quick as the technology is advancing? Because we're not going to have the greatest minds, if you will, you know, on any of those regulatory authority boards. So what is it that we need to do in order not only to keep up but keep ahead, set direction that's not going to limit us, as you pointed out some of the geopolitical dynamics that we say no and others say, yes, what have we done to ourselves? But how do we do it in a way that is focused on first and foremost, being our best selves to advance civilization not prevent progress? But what would you say?
Rob Lalka
I think we need to remember who we are as Americans. we pledge allegiance, you know, for liberty and justice for all. Right? And I thought a lot about those words. And, you know, another way of putting is freedom and fairness, right, liberty and justice, freedom and fairness. And when you think about free and fair elections, or free and fair enterprise, like, what has started to happen in our country, is that people have moved so much more towards freedom where they're only thinking about themselves. And I think a lot of that's because of social media, a lot of that's because of technology, that they're not think about other people. And that's the difference here is freedom. You only have to think about one person, yourself, you're free. Fairness, you have to think about least one other person in that equation, right.
And so, if we were actually going to be true to who we are as Americans, like, what the founders wanted us to be at our very best. They didn't want a super powerful king or oligarchs. They didn't want concentration of wealth, and the way that it was then wielded to then erode democracy. What they wanted was liberty and justice for all. And they didn't always live up to it. Let's be clear, like neither have we. But that's what I conclude in the book. I mean, this is in the epilogue, I say: Personal vices like greed, at scale, don't spontaneously become public virtues. And that's something where I'm riffing on the idea that, you know, greed is good, something that a lot of these people say over and over again. And so I say personal vices like greed, at scale, don't spontaneously become public virtues. Business leadership should be about the wisdom to make prudent and decent decisions that affect people not benefiting from your disregard of others suffering.
And I think that's very true to what America is supposed to be. You know, when our nation was a startup, that was what we were trying to fight against was power being concentrated and people not having a voice. And when we think about where the internet's gone, Alan, like you think about where we are today, these platforms are controlling what we're seeing, they’re shadow banning. And, you know, again, to look at from every perspective, they banned a sitting president. I mean, without any clear policies that how or when that was going to happen. And Peter Thiel was the head of governance when Facebook did that. So you know, and then ClearView AI, the other company he invested in, helped to find the people from January 6, which I address clearly in the book. I go deeply into why January 6 is a moment that we need to really think long and hard about in terms of technology.
And, you know, I think that part of the conversation is that freedom alone is not going to do anymore. We actually need to think about fairness. If we think about fairness in terms of our lives online or the ways that we spend time together in person. That's what's great about America, because we can change things, we can vote. And voting to me is not just about what happens on one day a year, or one day every four years. Voting is every choice we make. It's how you vote with your time, it’s how you vote with your feet, it's where you choose to show up, It's how you choose to show up.
And for me, as someone who's trying to lead in this moment, with the things that I address in the book, I'm trying to be at my very best, because I think America needs it. I think our country is at a particular moment right now, where if we don't have people who are willing to speak out, and tell truth, at least seek truth, and then try and tell it, then very powerful technologies, with deep fakes, will scramble our understanding and prevent us from really being able to know fact from fiction, and I think this year, in particular with this election will be a really important year. And so that's why I worked really hard to get this book out.
Alan Fleischmann
And the importance of technology to, to empower us and to give us truth, and use it to advance society, we all need to embrace technology to the answer to so many things, but it's also the tool that can be used against us and divide us and, you know, create, as you said, you know, fake news and deep fakes and also become so noisy that people don't want to speak up. And what we need to do is give the tools, the language, the experience, the opportunity for people to know what to say, and how to say it in order to speak up, so that the good guys win and the bad guys don't. And that's really what this is about.
You're all about technology, you’re all about entrepreneurship, your whole career has been about disrupting. So it's not like your book is, from what I understand, it's not like your take is this, you know, we're against venture, we're against technology. it's that you're against capitalism that actually promotes that divide and that sanctity of civilization that we all need to preserve. In capitalism that we need to create access for people with, that what you mentioned. Some others who are actually all about creating an opportunity, but where there's not, and where there is that knife, and where it is that they go through to divide, you're giving us a fair warning in that book, that it's not just those of the past that there's always those are the present, who were doing things and using tools that actually divide us and that don’t unite us in a way that, frankly, has very, very big and very, very difficult, large scale implications for us going forward.
Rob Lalka
That's it. That's it. And people will by the Venture Alchemists because they want to know the stories of these titans, either because they, they want to learn how to do it themselves just like they did, or because they're so appalled by it. But really, the story is about us. I mean, the way I conclude, as I say, you know the way the world is today, because the decisions that others have made is not the way it has to be because of decisions you can make. And I say that technology is not destined to make the world unbearably worse, nor will it automatically make things almost perfect. The path of history will be determined by choices, just as it always has. We can be both pro technology and skeptical of big tech by demanding that silicon age tools benefit more of us and harm us all less. Likewise, we can be both staunchly pro-business and advocate for responsible innovations by pursuing enterprise that is free and fair. It's not only possible to do both, to pursue both, it's imperative.
Alan Fleischmann
Well, you've been listening to Leadership Matters. I'm your host, Alan Fleischmann. We have spent the last hour with Rob Lalka, professor of Practice in Management, and the Albert R Lepage Professor in Business at Tulane University, and he is the executive director of the Albert Lepage Center for Entrepreneurship and Innovation. It has been such a pleasure to have Rob on the show today to discuss his career, his thoughts on power, the power of partnerships and entrepreneurship, and his concerns and his warnings, as well as hopefully you'll see the solutions as well in the new book that he just is publishing now, the Venture Alchemists, which will be available on May 14. It's a fascinating story about how we got to the moment that we are in now with big tech, the opportunities and challenges it presents and how leaders should be thinking about the impacts across society.
Rob, thanks for you joining us today. It's been an absolute pleasure. Good luck with the book. I'm sure many of our listeners are buying in now or preordering it now. And I wish you luck with that and I look forward to spending more time with you in the near future.
Rob Lalka
Thank you so much. Real pleasure.