Today I have Adrian Fenty on the show.

Adrian is a founder managing partner at Mac Ventures, and previously the mayor of Washington DC. I associate him with "Waiting for Superman" because he led a huge school reform. After leaving office, Adrian started working with a16Z as a special advisor, and then started his own firm, M Ventures, and then merged that into MaC Venture Capital.

Adrian, thanks for coming on the show.

I'm super, super excited. I've listened to your show for a long time. I didn't think I was qualified since I live in Northern California. But here I am and let's talk!

Yeah, you have a big presence though in LA. MaC is a big part of the LA ecosystem.

No, that is 100% true. Two thirds of our GPs are there. And then of course, one of our founders, Charles King, who's a more of a venture partner with us, he's been an LA fixture for decades.

Yeah. So I've had Marlon and Mike on the show, but with you, I mean, you have such a unique background. I wanted to start with, You being mayor I'm sure there's a lot that we can learn from it. So, guess first, can you just give me a little bit of like the scope of the job of being mayor

Yeah. So great question. So it's, kind of like a public CEO. So, a strong mayor, which I was meaning that you, appoint all the cabinet members. They all report directly to you. You can, fire them, et cetera. Chief of police, fire chief, et cetera. You really are a CEO. You, you hire and fire, you manage, you hold people accountable to high standards.

And in a city like Washington, D. C., a lot of that is transportation, infrastructure, economic development, parks and recs, uh, et cetera. There's two interesting things about being mayor of Washington, D. C. One, Washington, D. C. is the only city state in the entire country, really in the entire world.

Meaning that we are a city but we're not part of any of the 50 states. So, as mayor, what that means is you actually have state functions. So, I had a state education office. I had a department of motor vehicles. I had a state health agency and others all reporting under me, which meant more funding, more people, more management, more responsibility.

The second thing is that there are only three cities where the mayor is, in control of the school system prior to me being in office, that was Chicago and New York City. In my first year in office, I sent legislation to the city council to take over the school system, which is, which is how we ended up in Davis Guggenheim's documentary, Waiting for Superman, because we are so aggressive about school reform.

So, so now there's three cities, Chicago, New York, and Washington, D. C., where the mayor not only has. Chief of police, fire chief, all these other things, but also in charge of the school system instead of a school board.

That movie did make me cry. I even just re watched the trailer and it made me cry again. It was so good. So, and it's a multi billion dollar budget, right?

Yeah, so when I was in office, the operating budget, the operating budget was about 11 or billion dollars. Our capital budget, which you used to build schools, parks and recs, et cetera was much more it's probably almost 20 billion at this point


So one of my questions is like, what gave you the courage to, I mean, you are incredible, but like at the same time, it's not like, you know, your dad was the mayor before you or something,

Yeah, great question. So, I think you're saying what, gave me the courage or what gave me the energy to want to run? So it's kind of a couple of things coming together. One, I'm a political junkie, like ever since high school, I always was interested in. politics and policymaking and legislation.

And then, you know, I went to tons of internships on the Hill, et cetera, and then went to law school. So my goal was always to be a legislative lawyer, but something happened in 1997 and that was that I bought a house and when I bought a house. I just felt like, okay, now I'm an equity stakeholder in my community.

Now I'm super interested in everything from signs to education. So I started going to the community meetings with no goal, just to go and find out what was going on and to, participate and contribute. And what I, what happened was, Oh, I got in, went to the community meetings and started getting involved in every, there was a lot of people who were kind of more senior citizens.

There weren't that many young people who were going. So they love the idea of kind of like a young homeowner coming to the community meetings. And so I quickly became like, president of that. And then I ran for this unpaid position called advisory neighborhood commissioner and 1 that, and then I started working as a lawyer on the city council's education committee.

And I worked on a couple of campaigns and all of that come in together in a few short years. When the election for my district for my ward and for city council came up there was a really long term incumbent who had been in office. And I just kind of am. Anti long term politician. And I was even, this was 20 years ago.

And so I just, by default, I was like, well, she's been around 21 years. That's too long. It's too long for anybody being politics as a teacher in economics, she's long past diminishing marginal returns. If no one else is going to run against her, I'm going to run against her. And because otherwise I won't be able to sleep at night.

And that's literally my decision making process. I just wanted to be able to sleep, at night for the rest of my life. And I didn't care whether I won or lost. And so then I ran for city council.

but that I want to stay there because I feel like I have a lot of people who like, they want to start companies, but they're afraid to, or something like, especially when you're running for office, like you're kind of winning and losing in public.


So, know, you become the mayor. You do this amazing school reform. You then decide somehow, I mean, it's a huge career transition for you then you know, what was that transition like?

Yeah. So the transition started with me losing my re

I was going to say that, but I didn't want to say it.

No, it's fine. Because I want to say is because politicians have to become comfortable moving on from politics, right? can, if you're not comfortable moving on from politics. Then you won't take any chances in politics. You'll just do the careful thing.

the politically expedient thing to get reelected. So I did not do that. I was very, very controversial. A kind of famous and infamous statement, you know, move fast and break things. that is how I ran Washington DC. And I was unabashedly unafraid to do it.

So I lost a very contested, very close reelection. But I was also very young to be an ex politician. I was, I had just turned 40.

What did you do? What did you say then when you lost like

Oh, I remember what I said in the post quoted. I said, that I have spent a quarter of my life in politics, 10 out of 40 years half of my adult life, 10 out of 20 years, and that was enough. And then I'm going to move on and the city will continue to move forward. And all of that has been true.

I moved on and I've started a private sector career that I'm very excited about

one question? I feel like maybe it's Congress, but I feel like political system tends to not get along well with tech and maybe sort of vice versa. And so, it's a strange transition you made. I mean, do you feel that same sort of almost disdain or distrust in either direction?

Well, I have a gazillion thoughts on this. And so I'll just throw out

a few.

a few. So one thing is in Washington, DC, people think they know a lot more about tech than they do, but in Silicon Valley, I'll just say. Or the tech ecosystem. People think they know a lot more about politics and policymaking than they do, and it becomes very clear when you go to either place.

And I go back and forth between both quite often that it's not even close. I mean, so, I think some of the you, I think you used the word disdain, some of it, most of it is just, What you find an ecosystem. So like this, I'm in Menlo Park talking to you. So I'm in an ecosystem and everywhere I go.

People are in tech in some way or fashion, my neighbors, the people who are at the coffee shop, if I go to the cleaners, everybody, and you just can't help but become very, very good at something if everybody, if you're doing it all the time, and everybody around is, and that's true of politics on the East Coast.

So think part of it is just what's going to happen in ecosystems. And then I think what would be great is if both. Ecosystems kind of acknowledge. Wow. These are the experts I can learn from them. There's things I could pull from them and into my ecosystem. There's things that they should pull from my ecosystem.

And specifically, you know, I would love for governments to be run more like tech companies. Yeah, I would love for them to be focused on results On. Standards on hiring the best person and be disruptive oriented. And then, of course, I would love for the tech ecosystem to really understand that the only way you're ever going to make a difference in society.

by scale is through government and that's why we, as Kennedy said, you need the best and brightest in government. And so those are just some of the thoughts on the off the top of my head, but two amazing ecosystems. It's been an honor to be a part of both of them.

Do you think, let's just say on the government side of things, do you think government is getting better? Because I'm not sure I see it. Like you talked about, you need to leave at some points. Like it looks like government is old for the most part. I don't know. Is it getting more innovative? I don't necessarily know that I see it, but again, I sit essentially in Silicon Valley, not even though I'm in LA.

Yeah, well, I mean, it depends on which government you're talking about, right? So the federal government, no, the federal government is too slow. doesn't work at all like the private sector. You know, unfortunately, that manifests itself most in areas that affect poor people, like education or health care.

Or small businesses. the best running agencies in government are probably like the defense agencies, which work very closely with the private sector. we have a number of startups that are in kind of the, defense space or the aerospace and they. Very frequently get contracts from the Air Force or Space Force, and that's because those agencies move very fast, you know, companies that we've looked at that do like ed tech or health tech.

They never get any contracts with the Department of Education or health and human services agencies because those. agencies are much too distance from the private sector, the federal government. No, but some state and local governments have made a lot of progress.


And then there's some really great young politicians who are coming up. the national media is all a talk about, you know, Biden That's all they want to talk about. But they don't talk about like great young politicians like Westmore, the new governor of Maryland.

You know, who's in his early 40s and could be a presidential And that's, both our fault as citizens, but also the media's fault.

And then what you said for the tech side of things is tech needs to understand that to actually solve problems at scale, it needs to work with government. Did you say something like that?

I did. So one of the things that had struck me from the minute I moved to Silicon Valley was how few people really get involved in politics and campaigning. And it's Even more surprising when you think about the fact that, some of the best and innovative managers in the entire world, maybe in the history of the world, are right in the tech ecosystem, be it Silicon Valley or be it LA or Austin or wherever,

But what's , not just striking, but shocking is that none of them ever run for office.


You just get the same old politicians, and it's no wonder that. San Francisco is the managerial disaster that it is, and that LA is, not doing as well as it should be, you know, I think, those cities would do so much better if they had a lot more involvement from the private sector,

Not just taking their complaints to Twitter all the time, but actually going to city hall, testifying. and what I, tell people is, listen, you're spending half of your money in, to the government anyway your taxpayer dollars, you know, are being spent by someone else.

, why should you have more stake in the expenditure of your taxpayer dollars?

Maybe it's a tangent but like sometimes I go to city hall meetings or something like you and it's, a lot of retirees sort of complaining. I mean, it's hard like I'm used to like a move fast. And like I go to those and like, sometimes I want to roll my eyes because it's a different environment.

I don't know if you have thoughts on like how to actually get people to want to participate in those meetings because it isn't all of the managers at the top of their game as you say,

It's not, yeah, it's the exact, it's the exact opposite. And so I've, I've heard people say this. But listen, you know, Anything worthwhile is going to be tough. And if you really want your community to do better and to be a better place, then you're going to have to work hard to make it happen.

I'm going to put my own career on hold and...

And go do something about it. And the good thing about LA. And then we can move on is at least had a couple of really good mayors.

Bill Argosa was really good. Eric was really good. Hopefully Mayor Bass, you know, follows in their, footsteps, San Francisco hasn't had, a really standout mayor in a while now.

In a row and like New York or Denver stand out for me, then you start to see a lot of progress and that's what, these West coast cities need 

So, so it's back to your career, but tying it together here, which is so you go to a 16 C and you're helping companies like Lyft and Airbnb work with cities. And so 1 of my questions is, like, what do we all need to know if we've got companies like Lyft, like Airbnb working with cities and interfacing with government.

Yeah. I mean, the ride sharing was a huge, maybe the biggest success for if you think about the public sector and the private sector working together because education is like a disaster aerospace is actually like a success. but ride sharing was a struggle when we invested in Lyft, meaning at Andreessen when I was there, they were only in San Francisco and I don't think Uber was in very many cities, maybe LA and San Francisco, and they were just coming into Washington, D.

C., and every time you went in, you either had regulators, the taxi cab industry, or someone else pushing back against you. But because the taxi cab industry is kind of quasi government, then it was a little bit easier for the tech industry disrupt it. Like it's hard to disrupt education. It's hard to disrupt healthcare because these are kind of almost like a hundred percent, government, but the tax gap industry was fragmented, so there was a lot of pushback, but if you pushed hard enough and you could disrupt it.

And that's what, was so great about having, you know, Adresin lead lift and all the venture capitalists who led Uber. Is they could pour a lot of money into it. To be able to push back against the taxicab pushback and listen, what's happened has been nothing short of like remarkable And so I really love that example private sector able to disrupt. The government and the government eventually coming around because now most governments are really supportive and do whatever they can to set up, you know, ride sharing locations at airports and et cetera, et cetera.

I mean, what are other good examples? I see a lot of like, you know, Amazon sort of taking over the U. S. Postal Service in a way. But what works, I mean, other than in the Uber and Lyft case, just pouring billions and billions of dollars at the problem, how does tech better interface with government?

Yeah. Well, that's the question. So, so the other two examples I use, which are at different extremes though. So, so, you know, I guess that we have done some deep tech investing

what you see is the aerospace and defense industries have long said private sector will do this better. In the D. C. area, there's a whole court or, well, the I 66 corridor, which is filled with headquarters of government contractors, and they're all mainly in either TAC, aerospace defense. so there's a great example of the government saying the private sector can do this better.

We're going to contract that with the private sector better. What other places that you would want that to happen? Well, the number one place is in education because education is that a disaster level

So you would want, for example, you would want the department. The education department, Department of Education in Washington, D. C. to be as innovative as Space Force Airface Department of Defense. You'd want them almost to be a granting agency, if you will, and to always have these challenges. Barack Obama did it in one out of his eight years.

Uh, it's called the Race of Top where he incentivized cities to come up with innovative policies to reform education. Unfortunately, after his first year, the teachers union was so, enraged about it that he and the other Democrats didn't do it anymore, which was a huge mistake and a huge loss, and nothing's really happened since, and that was 2009.

But if they did that, if the Department of Education said, we are going to give out. You know, millions and millions of dollars in grants to school systems that adopt the most aggressive technology and the most aggressive way to use hours and teachers. Well, then I believe that all of the engineers you see, a lot of engineers you see focusing on blockchain, a lot of engineers you see focusing on.

On AI, or even deep tech, some of those engineers will then go over to, uh, found education technology companies because they know, one, there's a ready source of revenue available, and two, that governments are serious about changing and disrupting. There certainly is the amount of money. And when I was mayor of Washington, D. C., we spent 1. 1 billion dollars. On the operating budget of the school system alone, and that's just a school system for I think it was about 50, 000 kids, you know, imagine l.

A. S. your guys system is at least, six times that big. So that's a lot of money that could be spent on educational reform but the government has to show that it really wants the technology improvements.

Because right now, I think it's not a very popular VC area. I don't know. Do you look at EdTech at all at, Mac or?

I mean, almost never

Right.


you have a very unique knowledge and background in being able to understand it. It's

Right.

How do you think, you know, we really affect the change in society? Like what's your view of private sector versus public sector and where the real leverage comes from?

Well, I mean, the scale is in government, and this is why, what Jack Kennedy did as, president is still, the best way to do it.

And that's, you want to bring the best of the private sector into government. He said, I'm I'm going to bring the best and brightest to Washington because that's where all the money is. You know, if you hear a, a Zuckberg or any, big philanthropists say they're going to do tens or a hundred million dollars, you know, that's great.

But you know, again, like I said, my budget in DC was, is 20 billion now that the LA budget is probably, I don't know, you got a budget for 80 billion and that's just for one year. So if you really want to make a change, you have to make it through government. And if you don't change government.

Then the lives of poor people will never change.

And yet here you are, you're a VC.
So tell me what you're doing now. What, what gets you excited?

yeah, so again, so when I left Politics I had no idea what I was going to do, but I really fell in love with the energy around tech startups and venture capital. I really fell in love with how willing people were to fail, people were to fail, how much people even backed people being willing to fail And so every year I've been involved and I've gotten more and more excited.

And so having worked, then I worked in Andreessen for four and a half years. I wasn't on the front lines of the deal team. As you mentioned, I was. Hired as an advisor to help out on with some of their investments that touched on government, that was definitely Airbnb and Lyft and a couple of others, which were obvious, but it was also enterprise software companies that were going to scale. So they had, kind of mastered selling to the private sector, but they were getting big enough. That governments wanted to use their enterprise software too, and so I could be helpful along with the market development team thinking about how you sell to a state and local government, how you sell to the federal government.

And so I did that for four and a half years, but wanted to be on the front lines, so decided to start my own fund. And that's when I partnered with, Charles King and Mike Palant, who were both based in la.

Charles and I had gone to law school together. uh, Mike was his head of digital strategy. They've been in LA the whole time. We did that 2017, 2018. And then in 2019, we merged with Marlin's fund, Cross Culture Ventures.

Which was finishing up their first fund and we decided to raise a much bigger fund

Tell me about Marlon and Mike and yourself. Like, give me a little insight into like everyone's personality. Like, who are you versus who are they?

Yeah. Great question. So I would say from an investing standpoint that Mike is the scientist, meaning like, if venture capital is an art and a science, which it is. You know, you have all your metrics, which is a science and you want to get to see that the company is meeting all those, but then it's also an art, you know, you want to get a feel for, you know, that this person's just the fire in the belly.

as it might probably does the most analytical research before you invest. And I probably do the most kind of investing from the gut, if you will. And I would say Marlon is the Goldilocks of the 3. He's probably the perfect balance between the 2 and probably every question you ask me is probably going to.

Follow same way.

And, okay, I like that. I like knowing your personalities a little bit. And then within the, said you do consumer, you do B2B, are there any other thesis areas, things that you've been particularly excited by?

I would say so. most of our deals are actually enterprise software. We have some great consumer standouts. Uh, and we have some great deep tech standouts, but if we're at 80 deals or so, I think probably 60 of those. Minimum are just straight enterprise software companies where the, customer of our company is another business of some sort.

but if you're a true generalist and all three of us are, and we have a terrific younger team, you want to make sure that you're keeping an open mind towards any great entrepreneur coming from anywhere. half of our companies are in California and half of those half are in Silicon Valley and the other half are LA.

So like a quarter of our companies are in LA quarter in Silicon Valley. The other half is distributed. 

And can you explain what a good go to market strategy is for a company that wants to sell the government? Or just a good example?

it would probably be an enterprise software company that could be, cloud based solution to say a local department of transportation if you will or, a local police force is also a really good example because they tend to use lots of different technology.

Like, for instance, When I was in office, my police chief, her favorite technology was, Palantir. And you don't actually think of Palantir as being, you think of it being more a federal agency solution,

But they first had to, have a solution. That worked in the private sector and then in the federal government and they sold to the state and local and I think that's the model it's very hard to look at a company where where they start out selling to government because the sales cycle is just going to be so long.

But if you start out selling a private sector near the private sector, and you establish your product market fit there, then I think. Yeah, absolutely. Government can and should be a customer because they have such great spend. , once you, they become a customer, they're extremely reliable.

They will usually renew the contract in subsequent years, but you just don't want to be a hundred percent reliant on them because then even if you're a good business, you're not really a venture business, you're just not growing fast enough.

Interesting. Yeah. Any big like lessons learned for you as you sort of went up the learning curve of, first starting your own firm and then building out Mac?

so from the very onset, you just try to invest in really technical founders. And what I found is kind of when you, you know, you want to have exceptions to your main rules, but if you do too many exceptions, that's when you're going to start to mess up.

If we do too many deals that aren't enterprise software, then that's when we're going to start to mess up. If we do too many deals that, you know, we could do one or two deals where say the person is just amazing, but they're non technical. But we do it anyway. But if you started to do too many of those, it's not going to work out well, And the one thing that we've tried to do from day one is just continue to build out your entrepreneur network. I would watch Mark and Ben.

Invest in people who they had known since the loud cloud days, you know what I mean? And so that gave them a competitive advantage and other venture capitalists have the same thing.

Yeah, for sure. Anything else big to cover with Mac?

I know you guys have a lot of diversity in your portfolio. you have a very diverse partnership. You know, do you think things are getting better?

Because numbers don't really show it. What's been your experience?

So, yeah, so when I started, which would have been 10 years ago, there were not as many black led firms. There certainly were not as many. Black led firms are raising, 100Million dollars. 200 million and now three or 400 million funds. And like a six, four, five, or like a base 10 or us, or kindred ventures, Kirby has his own fun now, Charles Hudson's fun precursor is doing very well.

I mean, you could get to 10, I think DC funds that are real players have real. and, are investing alongside some of the best VCs and into some of the best companies. So that's a lot of growth, but I like to start out with the glass half full, but obviously, you know what I mean? If you added all of us together, we probably would be like.

You know what? Sequoia is 3 billion fund was or less than that. You know what I mean? So we're still just scratching the surface, but you have to start somewhere.

So one of us, will cross the 500 million fund stage. And then hopefully the next five, 10 years, one of us will cross, you know, the first billion dollar fund. And then hopefully there'll be multiple ones. Because it is important for people who are coming out of business school or undergrad or high school or starting high school to have every avenue of business or government or whatever available to them.



How do you personally think about your legacy?

Well, as a venture capitalist, just what we described, that's it is, you know, It will not solve poverty.

It will not solve poverty. Homelessness that will not solve the deep problems in health care and education system. We need to be very clear about that. But it is important to have every avenue of the private sector open to anybody who gets a great education and is interested in getting into that. But as a personal legacy, I've always thought that you can only have 1 personal legacy and that is how many people you helped while you were here on Earth.

And that's it. That's what all of us should strive for. And because at the end of the day, when you're on your deathbed, you can only, the only thing that will really look back and make you happy besides your own family is how many people you were able to change their lives in the time you were here.

That's amazing. I love that. Well, congratulations. I know you've touched many, many lives. And thanks for coming on the pod.

I love your pod. I'm very honored to have been asked to come on. So thank you. And I'll see you in LA.