Here are excerpts from this Mixing Board Studio Session between Gabe and Sean. Among other things, the two talk about doing business for higher-order goals, how to work with the media if you are a purpose-driven tech company and how Gabe is helping reimagine California’s approach to wildfires.
After leadership roles at Medium, IDEO and CAA, Mixing Board community member Gabe Kleinman joined the early Obvious Ventures team five years ago to run portfolio services and marketing. More profoundly, he was asked how the firm could best take the organization’s founding philosophy of being ‘World Positive’ and, not only apply it in venture capital, but in additional areas that the firm and partners could touch.
SG: Tell us what you are up to at Obvious.
GK: My remit started with how we might build a portfolio services platform for our founders that addresses their unique, maybe not well-articulated needs, and does so in a way that is resonant with our World Positive thesis. What is that special thing that we can create? On the marketing side, yes, it was about helping to build the Obvious brand and spread the gospel, but it was also about movement building. We were trying to change the way that venture capital was viewed in the world, and what the definition of success was for a venture firm. Not only as top-tier returns, but also transforming the way that entrepreneurs do business in service of much higher-order goals. We believed that that would yield higher returns. It seemed quite aligned to me, and I was onboard from the beginning.
SG: How has the World Positive movement moved? Five years ago, if I heard someone say ‘a purpose-driven organization’, I wouldn’t have done a double take. At the same time, it wouldn’t be something I would hear every single day. From your front row seat, how and why has that evolved?
GK: To your question on the movement, I would say the movement is going well. World Positive was a term that we made up to describe the type of venture investing we were doing. I would say we moved that into more modifier than movement, but for good reason, because this idea of purpose-driven business being an anchor for capitalism looking ahead — that’s really the driving narrative. For us it was a success, and we in no way are going to take credit for that.
The world has changed, though, quite considerably over the past five years, as you well know. Looking back to when I joined, this was before the 2016 election. This was before successive, rather vicious fire seasons out West, and a multitude of other climate catastrophes that have really been unfolding. Over that time period, we have seen climate change really come to the fore on people’s attention. We have seen the results of not thoughtfully crafted technology within governance structures, and just the overall impact of just poor governance. At the same time, we also saw bad corporate behavior getting punished. Founders getting kicked out of their companies for creating toxic cultures, for discrimination, for breaking the law. That type of transparency has been great on a host of levels.
The silver lining on all of this is that there has been an urgency, especially within the workforce today, to be a part of businesses that are solving real problems. Not solving the types of problems that we were talking about in 2014 and 2015, which were not real problems. How do we get people’s dry cleaning to them more quickly? No, that is not a problem worth solving for. Maybe it is for someone, I’m not going to be moralistic about it. But you see a pretty big movement of people wanting to work at companies reversing climate change, creating more equitable workforce environments, transforming our food system to be plant-forward, electrifying transportation, building sustainable, more affordable housing, you name it.
SG: All those things you mentioned, they’re obviously incredibly important, and they should have massive long-term payoff. But as you know, many venture-backed startups are typically graded on much faster results and returns by investors. But if you’re talking about completely changing food systems, this is decades of work. How do you balance that and create a shift in mindset? And, how does that impact what you do?
GK: When you zero in on it, the time scales are not that different. Rob Reich and a couple of his Stanford colleagues recently came out with a book called System Error, and it specifically drilled down into one of the main reasons for why we find ourselves in this techno-dystopic moment, if that’s a word, and a lot of it has to do with optimization.
The focus is purely on optimization instead of the higher order question of, is this a problem worth solving? Our thesis is that the problems that are most worth solving are the ones where there is also the greatest opportunity for financial outcomes and impact. There does not have to be a trade-off. Is it going to happen in every instance? No, it is not. But the idea of pursuing a challenge — if you take what Ethan Brown did with Beyond Meat, it took him a little bit of time to get that company off the ground. It took him a little bit of time to convince regional store managers at Kroger, Safeway and Ralphs to actually put their burgers in the meat case next to bovine meat. It took them a little bit of time to get the formula right. But taking that extra time yielded extraordinary returns, and it didn’t take 25 years to make that happen.I don’t think there necessarily has to be that trade-off.
If you look back at the roots of the industry, Don Valentine, Arthur Rock, Tom Perkins, they were not focused on speed to exit. They were focused on the challenges they were solving — where are there opportunities for technology to have a transformative impact? There’s a famous Tom Perkins quote, “Isn’t it great if you can make money and change the world for the better at the same time?” They were funding companies like Genentech, Apple and extraordinary companies that were harnessing technology responsibly to make people’s lives better, and to make the planet better. We don’t see a trade-off. Sometimes if you invest more up front, in time, with the right kind of founders between the right kind of problems, you’ll see bigger exits down the road.
SG: I’m sure you have a lot of founders who are coming to you and saying, “How do we even think about communications and marketing? How should we think about our first steps?” Is there anything different about how your founders approach communications and marketing as opposed to others who are doing more classic enterprise or consumer technology work?
GK: We invest in companies across quite a diverse set of sectors, and, because of this, there’s not one singular thing that we uniquely advise. However, we do emphasize to them quite vocally to live by their values, because internal brand and external brand have merged in many ways. It used to be different. Now everything is an open book. As far as an operational practice and how you operate as a company, we do encourage them to live by their values and to not necessarily stand up on a soapbox and shout from the rooftops about what they’re doing publicly.
I will say, we do have a number of technical founders and technical teams. Recursion is deep tech drug discovery, we have four or five computational biology companies, three or four robotics companies and electrification of transportation companies. These are founders that have a really unique challenge before them, which is to convince quite a wide diversity of stakeholders that what they are building from the earliest stages is something visionary and transformative, without overselling, without the fake it til you make it. Some type of truthful storytelling — and they have to do it with employees, potential employees, investors, media, industry partners.
If you’re Recursion Pharma, you’re trying to convince a Big Pharma company like Bayer to partner with you early on. To completely transform the drug discovery process using basically very large computers and very large high-throughput biology machines. This is when Recursion had their Series A. You also have to convince both machine learning software developers and computational chemists to join your team in Utah, you have to convince investors to actually pony up money for a seriously capital-intensive business, and on top of that, talk to reporters. There are different resolutions of the story that you need to tell to different audiences at different times.
We’re very much advising them to take a scalpel to all of that. Almost without exception, it is so valuable to work with positioning firms. I know a lot of founders and a lot of people have a tough time paying people for words. They say, “No, I want you to build me the website,” or, “I want you to build me the collateral.” When it comes down to it, there are people, many of whom are Mixing Board members like Kate Mason at Hedgehog + Fox, who I worked with at Medium, who are so talented at nailing those words. So that you can deliver the right message to the right audience, at the right resolution, at the right time. Then that can be deployed across all of your assets that you need. Positioning is really a big thing.
SG: Knowing Kate’s work and knowing the work of other top folks who do positioning, to your point about aligning employees, it also has to be true. A big part of this is making sure that whatever you do go out with externally is going to be resonant internally, and that’s one thing I also see people tripping on.
GK: Another thing is actually convincing them that marketing is a worthwhile investment. You have a lot of very sophisticated technologists and scientists who are founders, and they’ll dismiss marketing out of hand because they feel like it’s a distraction. They’ll say, “This is an incredible idea and amazing technology. Why should I have to sell people on this idea?” As they get more into the weeds of recruiting people to join them, getting investors signed up, getting commercial partnerships in order — they understand the value of learning to tell their story, to share a truthful narrative that really looks at the potential of their company. And they recognize the strategic value of it to them as the leader of that company.
SG: One thing that has changed in five years, and certainly in 10 years, is just the number of journalists who cover anything. There’s a dwindling number and it’s more competitive than ever to get coverage. You have these founders who are going to go through all this positioning work, and then that payoff of getting a story at the end, it’s hard to promise. No matter how cool they are. Do you believe that to be true? I also see reporters saying, “Sorry, I don’t cover this because I’m going to run towards the fire, not towards these people making these things that may cure cancer, because frankly, it’s kind of boring. But the fire is really interesting.” So, I guess, how do you help founders manage the question — should we be doing more traditional media relations? What are the pitfalls and why can’t we get anyone to care about us?
GK: It looks different for different companies at different life stages. This is an area that unifies our portfolio across industries. I know it’s getting harder and harder to get coverage of a seed or an A-stage investment if it’s below a certain dollar threshold. But I would also give reporters out there a little bit more credit than that. This is an area where we are very fortunate to have the types of portfolio companies that we do have that are worth covering. Many reporters are looking for compelling and interesting companies that are hard charging towards solutions in our food systems, our climate systems, transportation and more.
If you’re getting started, we advise our companies that you want to get something in the media out there. When a potential employee or a potential business relationship Googles you, because that’s what they do, you want something to show up that’s not just your website. Securing that announcement, even if it’s a small dollar amount, and even if it’s on the wire. I’m not a huge wire person at all, but as a last resort, you just want to get something out there.
After that, it’s really dependent on what business they’re in and how important that ongoing coverage is. Regardless of the coverage that they’re seeking, it is never a bad idea to build relationships for years and to offer yourself as a founder with a unique perspective on a particular industry. Just go in for a conversation, on the record, off the record, completely up to the reporter, to be there as a resource for those journalists.
SG: Especially in these spaces where people are really just trying to understand context and learn. They understand this to become bigger over time. Journalists, like anyone else, just want to be smart, want to be educated and want to be able to find a resource on a particular topic.
GK: I read a piece in Vox this morning about how there’s a huge mismatch between the jobs that are available and the job seekers. The world is changing very quickly, and you see a similar dynamic playing out in media. There are a number of very talented journalists out there. But a number of the companies that are being formed and growing quickly, they’re doing so in completely novel industries in ways that no one has seen before.
There is a two-way street where founders can, and investors can do this too — and we took this approach for the first three, four years at Obvious. We were just reaching out to reporters to say to them, we are recognizing these trend lines in computational biology, in the rapid scale-up of production robotics, in the electrification of public transportation, as well as EV toll. We had just enough credibility to be dangerous with the investments that we had made. We didn’t have any exits, we were a startup venture firm. But they were a receptive audience. They want to hear perspectives. As long as you do it from a genuine place, which we did, and which I think founders can really do, in the long run it can work out.
SG: Media relations is one tool, but companies can also develop their own content, do social media. They might have this other VC investor who just keeps on telling them to go direct. How do you help them contextualize all the different tools that they have in the woodshed?
GK: This very much depends on industry. But I wouldn’t advise goin all in on one particular channel or strategy. You always want to diversify the ways in which you are connecting with different audiences. Any founder is going to have multiple targets that they are trying to engage with simultaneously. You almost, by definition, have to be active on multiple platforms.
I think a lot of people who look at what Andreessen are doing, they’re looking at it and writing about it almost angrily. I don’t think I ever have read a quote of anyone on the Andreessen team saying, “The media is completely useless, and they serve no purpose.” You can go direct and create a robust presence, and they’re doing it on steroids, and I respect it, and that team is topnotch.
But you’ve got to take a multichannel approach, you’ve got to take the long view. Because the pendulum swings, it swings back and forth. There are some incredible reporting outfits right now, Tech Review, Wired, with Nick Thompson going to The Atlantic. You see what they have at The Information. You have this proliferation of reporters who are doing their own thing on Substack. Some people are sticking on Medium. Journalism is not dead.
SG: Every single day I feel like I wake up and I see some new climate-related publication, or a traditional outlet doing climate stuff in a better or more interesting way, which didn’t exist two years ago. That could come true for almost any one of these sub sectors that you’re dealing with. How do you think that the climate tech conversation has changed recently? What do you see as maybe the opportunities now that perhaps didn’t exist when people were still finding their way through the dark there?
GK: This moment in time is different because we have evolved from coverage largely being siloed in more niche publications like GreenBiz, Greentech Media and those places, to much larger outlets trying to figure out how to cover it. That’s a totally legitimate struggle because climate touches everything. It’s a food conversation. It’s a transportation conversation. It’s a building of physical structures conversation. It’s a forest management conversation. It’s so many things that touch so many verticals within a particular media organization. The way it has evolved so far, I can’t even comment on it because I couldn’t even tell you what it looks like. It’s kind of an amorphous moving target.
If down the road, I worked as an EIC at a publication or a media outlet, I might take almost a d.school approach in academia. When the design school at Stanford was launched, it was very much a conundrum for academia, because academia is so accustomed to its silos. When it comes to covering climate and having sophisticated and deep explorations and investigations, not only on the problems, but on the solutions, it might be quite interesting to see how a climate desk could cut across these traditional sections that we see in publications and media in general. I think that’s eventually how it will shake out.
SG: Do you think that climate tech companies are getting the awareness that they deserve? I mean, it’s obviously a broad-stroke statement, there’s so many different kinds out there. At the same time we’re all still in this collective discovery process around either how terrible things are going to become, or what the potential solutions could be to solve them. Every day, we’re kind of ping-ponging back and forth. You are working with these companies on a day in, day out basis — do you sometimes feel like, “Oh, I wish people only understood this,” or, “If The New York Times can only cover these types of companies, we would be having a different conversation, or funding might be headed in a different direction.” Or do you feel like everything is appropriate because we are in this state of flux?
GK: I wish there was more coverage. Many of our leading journalism outlets could take a lesson from Courtney Martin and David Bornstein created with the Solutions Journalism Network. I think everyone should get SJN-trained so we’re not just covering the car crashes and the fires and all that. There’s also this outstanding question, what is a climate tech company? Beyond Meat and Miyoko’s Creamery have extraordinary environmental impact if you take the lifecycle analysis of eating cashew milk cheese and eating a Beyond Burger or an Impossible Burger. It’s leaps and bounds better for the environment, and aggregated across the entire supply chain of those products, they have incredible impact.
But a carbon removal company, carbon sequestration company, or we have a company that I just published a profile on today, Sinai Technologies, which is carbon accounting. They try to figure out ways to internally price that carbon, and then mitigate that carbon. That seems like a straightforward climate tech solution. We’re still trying to figure out exactly what a climate tech company is, and is partly an American thing. You know? We want the solution.
I see all these calls for a Manhattan Project for climate, and I’m like, “Yeah. That’s not how this is going to work.” This is going to take a lot of tremendous, brave actions across a multitude of industries. Yes, it’s going to require us to figure out ways to measure and reduce and sequester carbon. That seems pretty straightforward, but there’s a whole lot of other stuff out there. We got water problems. We got forest problems. We got food problems. We want to make it so simple. To borrow a friend’s phrase, there is a reductive seduction that we all want to be able to focus on. This is also a uniquely Silicon Valley thing, which is the engineer’s mindset of — solve the problem.
We’ve got to continue to back up and be reflective of how dynamic and challenging the scope of the problem is, but find a way to galvanize people to action with an urgency that you would around a particular discrete project of one, like a Manhattan Project.
SG: Energy, and also a sense of optimism in some respects.
GK: I am over all of the climate fatalism.
SG: It may be not fatalistic, but it’s maybe cynicism or skepticism seeping into cynicism. I see a lot, whether it’s Twitter chatter or actual media reports, about companies that they say they’re doing this, but it only does this, and that’s not enough. Right? Microsoft’s doing this carbon sequestering thing, like, “It’s only one thing and it only takes in this much carbon. You would need this many to do that.” But it doesn’t take into account all the other elements. I think we need to be appropriately skeptical of companies making false claims. Right? At the same time, every company’s not going to be able to solve for everything.
I see a little bit of this energy around all the ESG backlash, which is appropriate in many respects, but at the same time, some companies are going two steps forward and one step back as they’re growing. What’s the right way to have that conversation externally? Some companies feel afraid to even show that they may not have met all their goals, or they couldn’t live up to something. But the goal is still there, and they’re going to get there. All this because they’re trying in public.
These are the things if you’re a technology company building the calendar app, no one will care what you were doing. People care about this stuff, and appropriately so because of the societal impact. But there’s still going to be those iterations.
GK: I can tell you how this plays out as venture investors. There are two aspects to this. One, on the investment side, we are constantly faced with the challenge of — are we investing in transformative technologies that will fundamentally remake a particular industry, or should we be investing in something that makes an industry less bad? We keep coming back to this, it’s really the first principle of our investment, which has to do with investing in transformative technologies that are harnessed responsibly.
Take Diamond Foundry. Diamond mining is terrible — it’s terrible for the environment, horrible labor practices, it fuels cartel activity. It’s not good on any front. Diamond Foundry has completely removed the need for mining without removing the diamond. It’s a carbon-free way to grow diamonds in a plasma reactor in a foundry that is completely hydro-powered. We’re looking for those transformative solutions. And we believe that from a climate standpoint, talented people want to work for those types of companies. We need to build more companies like that so that we have less of the, “Hey, I’m a cattle company that is looking to publish a report on how we are maybe feeding our cows more efficiently, even though it’s a factory farm.” I think those are important, I’m not dismissing those out of hand, but we need some transformative practice, and that’s it on a macro level.
Then on a micro level, I really believe that companies underestimate the number of actions they can take to dramatically improve their climate impact. I’m a believer in the B Impact Assessment as something that will force operators to really consider every single aspect of their operation, and how they can do everything from ordering compostable plates from a local manufacturer rather than getting the big plastic sleeve that you order on Amazon. Decades ago Walmart decided to take all the plastic lids off of their store-branded yogurt, and they were able to add up how much they saved in fuel costs and fuel usage on their trucks just from swapping out that one thing. It was astronomical.
For companies that set targets in public markets, they may be ambitious carbon reduction targets that are quite visible, and it may be tough to compromise on that front. But when it comes to smaller companies that may not be in public markets, even large companies, they have more control. They have more agency to be able to take more dramatic action in the day-to-day that will add up to some great change. Yes, I’m an idealist, I’m a romantic, and I’m an optimist, but we can solve a lot of this with smaller actions that may not require the big marketing billboards of, “We’re carbon-neutral, and look what we’re doing.” But with people’s genuine intentions to improve their operations, and then to talk about it when it’s context-appropriate with the right audience.
Don’t go spending money with your advertising campaign on a Super Bowl ad about how you’re going to go carbon-neutral by 2040. Why don’t you take the five million bucks that you spent on that spot and do something meaningful with it internally?
SG: Speaking of simplicity and optimism, later today, maybe tomorrow, it’ll start getting smoky again in the Bay Area. Tell us about your wildfire project, and maybe why it’s indicative of how we need to reframe how we communicate about climate issues.
GK: About a year ago I started a little listening tour on all things fire. I had moved recently to Petaluma, which is a place that I’d wanted to live with my family for a long time, and we had that double whammy of the pandemic and the smoke. You can’t be inside, you can’t go outside. It was pretty tough. I needed to find a way to channel that. In that process I met Misha Chellam, who runs an organization called the Council on Technology & Society, which is like the Council on Foreign Relations, but for tech leaders and domestic issues. I met Misha, Kim-Mai Cutler actually reintroduced us. Kim-Mai is at Initialized Capital, a former reporter, now investor at Initialized. And we just started setting up phone calls with intelligent people who have been dedicated to issues around this for years, and learning more about what is happening with the megafires these days. Why are they different? Is this climate-induced? Is this a forest management issue? What exactly is happening?
We spoke to foundations, we spoke to startup founders, people within California government, people within the federal government, Cal Fire and we slowly started to build this small group. We are about to launch a nonprofit that is purely dedicated to ending the megafire crisis. We learned from our research, there is actually no organization whose sole purpose is to end the megafire crisis. This is where I get a little frustrated with some of our journalism, but many media outlets are turning the corner on this. So much of the reporting that I had seen was about how this is the end of the world, this is all because of climate and there’s nothing else to blame. When if you dig in a little bit deeper, it doesn’t take that much research to find that our megafire crisis is due to 100 years of fire suppression tactics, bad zoning and unintended consequences of well-intended policy, like the Clean Air Act and all of what the California Air Resources Board has done.
It is an issue that has many, in the words of The Big Lebowski, lots of ins and outs and what have yous. It’s really complicated. We’re trying to bring both a more sophisticated look at the issue itself, but also take a really authoritative stance on the solutions that we focus on to take this forward. We’ve recently signed up Michael Wara at the Stanford Woods Institute and George Whitesides, who was most recently CEO of Virgin Galactic, and with Kim and with Misha, we’re moving forward. There’s a lot of things that we have in the works that I can’t really talk about right now, but part of this is to just change the narrative on what we can do about it, what our agency is.
I published a piece about how the megafire crisis is solvable. Apart from journalists who reached out to me, because there was some great coverage on the issues, James Temple at MIT Tech Review, Liz Weil at ProPublica, they’ve done great reporting on this. Apart from that, I had friends reach out to me and say, “Thank you for the optimism. Thank you for helping me understand that we can do something about this.”
SG: You mean I don’t have to move to Detroit or Buffalo?
GK: Exactly. Oh, but by the way, if you move to Minnesota, you’re still going to get walloped with Dixie fire smoke. Part of the big reframe on the issue as well is this is a national threat. 90% of the organic fruits and vegetables that people eat in this country come from California, and with toxic ash raining down on that soil, not only is it terrible for farmers, it’s bad for your food. The smoke is going to Minnesota. I was back East in August, and I stepped out of the car to pick blueberries with my daughter, and I smelled wildfire smoke in Western Massachusetts. So, this is on all of us, and in addition to the fact that 60% of the land in California, the forest land, is federal land, this is of national concern, but this is something that we can solve.
SG: To your point, the conventional wisdom has slowly changed. Someone mentions wildfires now, and you’ll inevitably see on Twitter, the third comment will be, “Well, I’ve just seen this ProPublica article about Native-American suppression techniques,” which obviously hardly no one knew about three years ago or four years ago.
GK: Right now, the big thing is in the reconciliation bill. The Department of Agriculture has a $14 billion earmark from the House whose sole purpose would be hazardous fuel mitigation. That is a huge step forward. The Senate only had about $650 million earmarked. We’re already seeing movement on the policy side as well.
On the funding side, that’s one very important step, but it’s a first step. After that, we’re going to need to galvanize thousands of people to pick up shovels, McLeods and blowtorches under well-supervised, trained people — begin to thin out the fuel. I harken back to the Student Conservation Corps in the ’30s, and the movements of late with City Year, and what Alan Khazei has done. There are unifying, exciting ways that we can solve a lot of problems at once. Not only our forest fire challenges, but also, if we can just bring some people together and have a little pride in our country.
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